FINANCE MINISTRY

a-real-bold-move:-fm-announces-significant-tax-cut-to-spur-growth

A real bold move: FM announces significant tax cut to spur growth

Few economists call it ‘a real bold move’. This is not mere nitpicking, this is not tidbits, this is a significant tax reduction. Is it so?

Union Finance Minister Nirmala Sitharaman today surprised the business world with a slew of measures to brave economic slowdown. As FinMin announced Indian firms will have the option to pay income tax at 22 percent if they don't avail any exemptions or incentives as effective tax for these companies comes to 25.17 per cent inclusive of all surcharge and cesses.

To spur growth, corporate tax cut will be brought through an ordinance besides that domestic firms will not have to pay minimum alternate tax, no tax surcharge on capital gains on sale of securities, including derivatives in the hands of FPIs. There will be no tax on listed companies' share buybacks announced before July 5, 2019. In another big move, the government has decides to allow spend CSR of 2 per cent on incubators run by PSUs.

It is believed that companies will benefit significantly from the move as it will put more money in the hand of corporate, enabling them to invest more.

20 Sep 2019
investment-of-lic-in-private-banks-and-many-psbs-erodes

Investment of LIC in private banks and many PSBs erodes

Investment of LIC in IDBI Bank has erodes by more than half over the past year or so and also the value of its investments in other PSBs plunged. Plunge in price of PSB stocks and dilution of its stake owing to capital infusion by the government has eroded its wealth in these banks. Besides IDBI Bank, LIC has lost over ₹4,800 crore since June 2018.

 

Further the merger move would hurt insurance company more in future. Around 20-30 per cent dilution in the book value of the merged entities — PNB, Canara Bank, Union Bank and Indian Bank — over the next year or so will lead to LIC’s value of holdings in PSU Banks erode further.

 

The government infusing capital into PSBs eroded value for investors. This is because most of the PSBs trade at a steep discount to their book value and hence the government infusing capital at such low valuations immediately leads to dilution in equity base.

05 Sep 2019
a-real-bold-move:-fm-announces-significant-tax-cut-to-spur-growth

A real bold move: FM announces significant tax cut to spur growth

By IndianMandarins 20 Sep 2019

Few economists call it ‘a real bold move’. This is not mere nitpicking, this is not tidbits, this is a significant tax reduction. Is it so?

Union Finance Minister Nirmala Sitharaman today surprised the business world with a slew of measures to brave economic slowdown. As FinMin announced Indian firms will have the option to pay income tax at 22 percent if they don't avail any exemptions or incentives as effective tax for these companies comes to 25.17 per cent inclusive of all surcharge and cesses.

To spur growth, corporate tax cut will be brought through an ordinance besides that domestic firms will not have to pay minimum alternate tax, no tax surcharge on capital gains on sale of securities, including derivatives in the hands of FPIs. There will be no tax on listed companies' share buybacks announced before July 5, 2019. In another big move, the government has decides to allow spend CSR of 2 per cent on incubators run by PSUs.

It is believed that companies will benefit significantly from the move as it will put more money in the hand of corporate, enabling them to invest more.

investment-of-lic-in-private-banks-and-many-psbs-erodes

Investment of LIC in private banks and many PSBs erodes

By IndianMandarins 05 Sep 2019

Investment of LIC in IDBI Bank has erodes by more than half over the past year or so and also the value of its investments in other PSBs plunged. Plunge in price of PSB stocks and dilution of its stake owing to capital infusion by the government has eroded its wealth in these banks. Besides IDBI Bank, LIC has lost over ₹4,800 crore since June 2018.

 

Further the merger move would hurt insurance company more in future. Around 20-30 per cent dilution in the book value of the merged entities — PNB, Canara Bank, Union Bank and Indian Bank — over the next year or so will lead to LIC’s value of holdings in PSU Banks erode further.

 

The government infusing capital into PSBs eroded value for investors. This is because most of the PSBs trade at a steep discount to their book value and hence the government infusing capital at such low valuations immediately leads to dilution in equity base.

empanelment-for-principal-chief-commissioner-(it)-post-cleared

Empanelment for Principal Chief Commissioner (IT) post cleared

By IndianMandarins 10 Mar 2019

The ACC has cleared the empanelment of IRS (Income Tax) officers for promotion to the grade of Principal Chief Commissioner of Income Tax for the panel year 2018 (Supplementary Panel) and 2019 (Regular Panel).

 

The Supplementary Panel (Yr 2018) includes Binod Kumar (IRS IT:1983), T P Krishna Kumar (IRS IT:1983), Pranab Kumar Das (IRS IT:1984), B Murali Kumar Das (IRS IT:1983), N Sankaran (IRS IT:1984), Santosh Kumar Singh (IRS IT:1985), Pramod Kumar Gupta (IRS IT:1984), and Narendra Prasad Sinha (IRS IT:1984).

 

The Extended Panel (Yr 2018) includes Rajni Kant Gupta (IRS IT:1984), Sanjay Kumar Mishra (IRS IT:1984), Virender Kumar Saksena (IRS IT:1984), Vinod Kumar Pandey (IRS IT:1984), and Shambhu Datta Jha (IRS IT:1984).

 

Ten IRS IT officers are empaneled to become Principal Chief Commissioner (Income Tax) (Yr 2019) of which eight were in Regular Panel and two in the Extended Panel.

 

The Regular Panel (Yr 2019) includes Satish Kumar Gupta (IRS IT:1984), Kishore Kumar Vyawahare (IRS IT:1984), Krishan Mohan Prasad (IRS IT:1984), Praveen Kumar (IRS IT:1985), Ajay Kumar Chauhan (IRS IT:1984), Sunali Arora (IRS IT:1984), Anuradha Bhatia (IRS IT:1984), and Usha S Nair (IRS IT:1984).

 

The Extended Panel (Yr 2019) includes Ajai Das Mehrotra (IRS IT:1984) and Rajiv Jain (IRS IT:1984).

 

It may be mentioned that the Extended Panel (Yr 2018) will be operational in the event officer(s) included in the regular-panel/extended-panel are not becoming available for promotion due to retirement/being away on deputation during the vacancy year 2018.

interim-budget-without-fm-arun-jaitley?

Interim budget without FM Arun Jaitley?

By IndianMandarins 17 Jan 2019

Expenditure Secretary AN Jha's service was extended for a period of one month beginning 31 Jan 2019 to take care of the budget in the absence of FM Arun Jaitley who is, reportedly, US for health-treatment and may not be back at the time of the budget presentation.

 

It is pointed out that it wasn't sheer coincidence that Jha's extension and Jaitley's departure took place on the same day.


Further, it was expected that the NaMo administration may appoint Sushil Chandra (CBDT Chairman) as a Member of the CEC but that also seems to have been put on the backburner because of Jaitley's health condition. 

 

In recent years, Jaitley has emerged as a trouble-shooter for the Govt. Be it demonetization, CBI, GST, Rafael, RS debate, he functioned as the most credible defender of the Govt.

novel-rbi-way-to-buy-peace-with-finmin

Novel RBI way to buy peace with FinMin

By IndianMandarins 21 Nov 2018

The RBI is said to have bought peace with the desperately hawkish FinMin by relieving the pressure on the Centre government finances by way of capital infusion.

 

If it had continued with the capital conservation buffer (CCB) mandate of 2.5 percent by March 2019, the Centre would have had to provide an additional Rs 36,000-odd crore for banks' capital infusion (based on Common Equity Tier CET levels as of September 2018).

 

This burden is now reduced by about Rs14,000 crore by the RBI board's decision to tinker only with the CCB and not the much-debated higher capital requirement of 9 percent for banks.

 

It is argued that CCB relief will only benefit very few banks that currently maintain the CCB higher than the mandated requirement of 1.875 percent. One rudimentary calculation shows that the move has relieved the pressure on the Centre’s fiscal by about Rs14,000 crore, it is unlikely to boost lending by freeing up capital for PSU banks.

fin-min-seeks-input-to-prepare-2019-20-budget

Fin Min seeks input to prepare 2019-20 budget

By IndianMandarins 29 Oct 2018

The Finance Ministry has sought adequate inputs from different central ministries forArun Jaitley’s Budget Speech, which would be the last budget of the current BJP-led NDA government before the 2019 general polls. Earlier this month, the ministry began the budgetary exercise for 2019-20. Meetings will be held with ministries of steel, power, and housing and urban development to finalise revised expenditure for the current fiscal and projections for the next financial year. The meetings are scheduled to continue till November 16. The General Budget is presented on February 1.

 

The finance ministry has requested the ministries to send material related with their departments that may merit inclusion in the finance minister’s budget speech for 2019-20 by November 15, according to a communication by the finance ministry to all secretaries. In view of the upcoming General Elections, the government is likely to come out with an interim budget also referred to as Vote-on-Account.

 

Finance Minister Jaitley is scheduled to present his 6th consecutive Budget with 2019 being Vote-on-Account.

 

As per practice, a Vote-on-Account or approval for essential government spending for a limited period is taken in an election year and a full-fledged budget presented by the new government.

 

Ministries are now allocated their budgeted funds from the start of the financial year beginning April. This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.

dopt-seeks-clarifications-on-railways-cadre-review

DoPT seeks clarifications on Railways cadre review

By IndianMandarins 29 Oct 2015

The Department of Personnel and Training (DoPT) has queried the Railway Board about the various facets of its old policy of creating 'work charged posts'. Since these high-level posts that include the posts in the rank of joint secretary and additional secretary are created for executing specific posts, officials manning these posts may or may not be swelling the top ranks in the railways. While seeking the details and clarifications about these posts created in the past five to ten years, the DoPT also wants to know whether the creation of these posts are at all vetted by the Finance Ministry. Ironically, it also wants to know whether these moves also vetted by it.

 

The DoPT has further asked whether the Railways have used these 'work charged posts' to promote their own officers and carry out more recruitment. These queries were posted to the Railway Board following the latter moving up a proposal to create more high-level posts in the rank of joint secretary and additional secretary as part of its cadre review exercise.

 

The Railways had earlier proposed that 75 per cent of the total "work charged posts" be included to its total cadre strength, and 2.5 per cent of these posts be upgraded to top levels. The data provided by the Railway Board constitute the basis for questions framed by the DoPT. For instance, the latter's understanding is that the civil engineering department creates one senior administrative grade or joint secretary-equivalent post for every Rs 96 crore of establishment cost of a project.

 

The other cadres of electrical, accounts, signalling and stores that are normally involved in project execution have different yardsticks for creation of posts based on similar calculations. Usually, most of these posts are not phased out, but are transferred elsewhere. To get a clear picture about the cadre management in the railways, the DoPT has also sought details on the number of posts created for projects where the work was outsourced or tenders were invited.

 

The logic is that, in a project where the job of the Railways is limited to awarding tenders, the creation of a large number of posts is undesirable. Queries have also been posted on the procedures followed in projects executed through joint ventures and public-private partnership.

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