In order to weed out the hassle of sending by post a hard copy of e-filed return, the Income Tax department has decided to bring in the facility of electronic signatures for taxpayers to endorse their bonafides.The Central Board of Direct Taxes (CBDT), the apex office to formulate policies for the Income Tax department, has decided to implement the new mechanism by the end of the next financial year in March, 2015.Official sources privy to the development told PTI that the CBDT will get in touch with the Union Ministries of Law and Communications and Information Technology to establish the legal position and technology requirements respectively before it operationalises the new protocols for the e-returns called 'ITRV'."It has to be seen what will be the procedure to obtain electronic or digital signature by the taxpayers. There should not be an additional cost or procedural burden for the taxpayer who opts to file his or her I-T return online," a senior official said.In case of digital signatures (used by corporate entities as of now), a bonafide statement that verifies the identity of the sender, it is required to be created by paying a fee and this requires regular renewal, which is why this is being seen as a burden on salaried class and other categories of small taxpayers.The department, within the same time-frame, is also desirous of enabling the e-filing of Tax Deducted at Source (TDS) statements through its official web portal which is used by taxpayers currently to file their electronic returns.As per the norms in force at present, a taxpayer who files an e-return has to mandatorily send a copy of the same by post to the I-T department's Central Processing Centre (CPC) in Bengaluru in south India.(PTI)
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The level of bad loans at Indian banks is a "concern" but is not "scary", Reserve Bank of India (RBI) Governor Raghuram Rajan said in a newspaper interview published on Sunday. A prolonged economic slowdown has hit Indian banks' balance sheets, with stressed loans - those categorised as bad and restructured - amounting to about 10 percent of all loans. Fitch Ratings expects stressed assets to reach 14 percent of loans by March next year. The bulk of these bad loans are related to infrastructure projects, which have made banks circumspect over lending. "Is it of concern? Yes. Is it scary? No," Rajan told the Times of India, adding "...the point is there are two or three silver linings in the cloud of distressed assets." He said many delayed infrastructure projects were "getting back on stream" as the economy improved, and booming equity markets will also help banks raise the required capital. He also downplayed concerns that rising bad loans would lead to a liquidity crisis in the Indian banking system similar to the one witnessed globally after the Lehman Brothers went bust in 2008. "Unlike the banking crisis in the West, where the worry was who would pony up the money, here there is no uncertainty," he said. "The government will do it. It has never let any bank it owns go under." New Delhi has been injecting funds into state lenders to help them meet minimal capital ratios mandated by Basel III norms. This year it will infuse 112 billion rupees. But analysts say more funds will be needed. With its finances in dire straits, the government plans to sell off a part of its holdings in the banks to help bridge their capital shortfall. While a sluggish economy is the main reason for a rise in distressed assets, a RBI report last week also blamed lending to certain "excessively leveraged" groups. The launch of a corruption investigation at state-controlled Syndicate Bank has raised broader concerns about weak oversight, graft and politically directed lending at state banks. Rajan said a change in the process of appointments at these banks will help address the issue. "When you are putting someone in charge of 5 trillion rupees of assets, you need an appointment process which is state-of-the-art," he said. "I think you can improve the process tremendously without going through the radical step of privatization." (Reuters)
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Retirement fund body EPFO on Tuesday (26 August) announced 8.75 per cent rate of interest on provident fund deposits for the current fiscal, a move which would benefit its over five crore subscribers across the country.The decision to retain interest rate of 8.75 per cent was taken at a meeting of EPFO's apex decision making body the Central Board of Trustees chaired by Labour Minister Narendra Singh Tomar here in the capital."EPFO will provide 8.75 per cent rate of interest on PF deposits for 2014-15," Tomar told reporters after CBT meeting.As per practice, now the Employees' Provident Fund Organisation's (EPFO) trustees' decision would be implemented after the concurrence of the finance ministry.EPFO's Central Provident Fund Commissioner K K Jalan said, "The benefit under the Employees' Deposit Linked Insurance (EDLI) Scheme would be increased to a maximum sum assured of Rs 3.6 lakh from existing Rs 1.56 lakh."The sum assured under EDLI is provided in proportion to monthly wage ceiling which is Rs 6,500 at present. It would be enhanced to Rs 15,000 per month soon.Senior Labour Ministry officials present in the meeting apprised the board that the notification regarding enhancement of wage ceiling has been sent to press after Law Ministry's clearance and will be reality soon.They also told that the notification providing minimum monthly pension entitlement of Rs 1,000 under the Employees' Pension Scheme run by EPFO will also be notified simultaneously. After notification, around 28 lakh pensioners getting less than Rs 1,000 per month would immediately benefit.At present all those employees with basic wages of up to Rs 6,500 per month at time of joining, can become member of EPFO schemes. Now with increase in wage ceiling around 50 lakh more workers are expected to come under the ambit of EPFO.The minister also revealed that the board has decided to appoint credit rating agency CRISIL as consultant for the third time to engage new fund managers and evaluate their performance for three-year term beginning April 1, 2015. (PTI)
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The benchmark BSE Sensex retreated from record highs by falling 202 points to dip below the 26,000 mark in mid-session trade on Tuesday (8 July) after the rail budget failed to impress investors.Besides a weak Asian trend and lower opening in Europe further influenced the trading sentiment, brokers said.The BSE 30-share Sensex after hitting a new record high of 26,190.44 points in opening trade, retreated to 25,897.33, showing a fall of 202.75 points, or 0.77 per cent.Similarly, the broad-based National Stock Exchange index Nifty lost 42.25 points, or 0.54 per cent, to 7,744.90 after hitting its life-time high of 7,808.85.Share prices of companies that cater to the railway sector came under pressure and tanked up to 12.15 per cent despite important announcements made by Railway Minister Sadananda Gowda in his maiden rail budget.Major losers were Texmaco Rail, Titagarh Wagons, Kalindee Rail Nirman, Kernex Micro, Commercial Eng., BEML, Stone India and Bartronics.The government proposed in the rail budget to attract investment from domestic and foreign players in infrastructure.Among BSE-30 shares, Sesa Sterlite fell 3.89 per cent, Tata Steel by 1.31 per cent, Hindalco by 0.95 per cent, Larsen and Toubro by 1.29 per cent, SBI 1.15 per cent and Reliance Industries 1.31 per cent, dragged down the Sensex.Globally Hong Kong's Hang Seng index was down 0.10 per cent, while Japan's Nikkei shed 0.14 per cent. European markets opened in negative territory.(PTI)
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The Reserve Bank on Thursday (21 August) said the economy is likely to grow at 5.5 per cent in the current fiscal as it sees pick-up in manufacturing and investment."Signs of improvement in mining and manufacturing activity, expected pick-up in investments, improved availability of financial resources to the private sector with lower draft of government on financial savings of the households amid fiscal consolidation, improved external demand and stabilising global commodity prices are expected to support the recovery."Accordingly, the economy could grow in the range of 5.5 to 6 per cent this fiscal," the RBI said in its annual report for 2013-14.The central bank, however, warned that the downside risks to growth could play out if global recovery slows, geopolitical tensions intensify or monsoon weakens again in the rest of the season.The Economic Survey 2013-14 has projected a growth of 5.4 to 5.9 per cent in 2014-15.As of August 13, the all India cumulative rainfall deficiency in the current monsoon season was placed at 18 per cent of the long period average (LPA) as against an excess of 12 per cent in the year-ago period. The monsoon has improved since mid-July when the deficiency was 43 per cent.The report said even if rainfall is normal in the rest of the monsoon season, some rainfall deficiency will stay.The RBI said its inflation outlook remains unchanged from the baseline inflation trajectory it had indicated at the beginning of the year, when it committed to disinflationary glide path of taking consumer price index (CPI) inflation to 8 per cent by January 2015.After remaining above 8 per cent in April and May, retail inflation moderated to 7.5 per cent in June mainly due to favourable base effect.However, CPI increased to 8 per cent in July as prices of vegetables increased substantially on the back of deficient monsoon rainfall."Recent increase in inflation driven by vegetable price spike could be temporary as there are early indications that the price corrections are underway," the RBI said. The RBI said while inflation trends during the rest of 2014-15 will also be conditional on several risk factors and the timing and extent of further revisions in administered prices, the inflation projection for 2014-15 will remain within reach.The report said though the balance of risks around the medium-term inflation path and especially the target of 6 per cent by January 2016 is still to the upside, the RBI will remain committed to supporting the disinflationary process.The central bank further said the risks associated with twin deficit risks are expected to stay moderate. It said the fiscal deficit is likely to come down further this fiscal."The rebuilding of forex reserves in recent months will help the country buffer the economy against potential shocks," the central bank said. According to the latest RBI report, the forex kitty swelled to a little over USD 319 billion for the week to August 8.During this fiscal, the forex reserves swelled by 12 per cent to USD 316.14 billion as of June 30, 2014, up from USD 282.45 billion a year ago.The current account deficit though is likely to widen from the levels in 2013-14, it is expected to remain within the sustainable level, the report said."The external sector is far more resilient than before, but risks associated with quicker monetary tightening by advanced economies stay," the RBI said.(Agencies)
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Given the general despondency in the power sector in India over the past couple of years and the multiple attempts by Jaiprakash Associates to raise money, the Rs 950-crore qualified institutional placement (QIP) of shares by its subsidiary, Jaiprakash Power Ventures, was no mean feat. Facilitated by Credit Suisse, the QIP, a sub-category under the head ‘institutional equity placement’, is the largest in the power sector in four years. It opened on 19 February 2013 and closed on 22 February, with a minimum impact on the company’s scrip. Suren Jain, MD and CFO, says the company chose the QIP route over a public issue or any other mode of raising funds, due to the interest shown by institutions and also because a public issue is a long-drawn process and tends to impact the stock. According to Jain, the money raised from the QIP was used as equity in the Nigrie thermal power project (2 x 660 MW) in Madhya Pradesh and the Bara thermal project (3 x 660 MW) in Uttar Pradesh. Jain believes the deal reinforces faith in the power sector and demonstrates that “companies that deliver can raise money even in difficult times”. While admitting that fuel security and policy limbo issues were impacting Jaiprakash Power’s project execution capabilities, Jain expressed confidence that the company would grow exponentially, given that the country remains power deficient. Prior to the QIP, Jaiprakash Power had raised funds in 2010 and 2011, using a mix of options — offer for sale, convertible bonds and an initial public offer. This time around, before settling on Credit Suisse, the power company was in talks with a number of banks. Fund estimates promised by most banks ranged between $100 and $135 million. Once the Swiss financiers were brought in, they chose to go to the market with a larger deal size, using it as a form of assurance to investors that Jaiprakash Power would not return to the market anytime soon to either liquidate assets or raise more money. Jaiprakash Power’s QIP fared better than its peers in the power sector largely on account of its existing hydropower capacity — 1,800 MW at the time, says Credit Suisse. Another point working in its favour were the captive mines for its Madhya Pradesh project. Credit Suisse turned the three main challenges of the power sector — fuel security, long gestation period and the funding gap/strained cash flow — to Jaiprakash Power’s advantage. “These (challenges) were our main focus areas when working out the QIP,” explains Sumit Jalan, head of the Indian equity capital market business at Credit Suisse. The company’s hydropower projects and captive mines helped the bank increase the deal size and set investors’ doubts at rest. On recent reports of Jaiprakash Power selling two hydropower plants in Himachal Pradesh, Jain, while rubbishing them, says the company is in the process of creating assets.(This story was published in BW | Businessworld Issue Dated 24-03-2014)
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Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed optimism on India's growth rate going beyond the 5 per cent mark soon. "The economy has been growing at a flat rate of 5 per cent and hopefully we will see it picking up in the near future," he told PTI on the sidelines of a special talk at Oxford University on 5 May. Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation. "I have always stressed that stimulating growth and controlling inflation are not opposed to each other. Inflation is what is standing in the way of India's growth," he added. Rajan was addressing student members of the Oxford Union Society (OUS) on his way to Switzerland, where he has meetings planned with the Bank for International Settlements (BIS) on May 11 and 12. He stressed that his comments to the students were off the record and would not address any political issues as things will be clear only on May 16, when the general election results are announced. Rajan also expressed confidence that whichever government takes over, will lay a clear path to revive growth as he answered a series of questions on the state of the Indian economy from students. The senior economist joined a league of distinguished speakers at the OUS, which has hosted Queen Elizabeth II, the Dalai Lama and Mother Teresa in the past. (PTI)
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Under flak from various quarters for raising rates, RBI Governor Raghuram Rajan said on Wednesday (26 February) the central bank is committed to the "strongest growth possible" and stressed it is on the same page as the Finance Ministry on this front. "Note that the RBI is committed to getting the strongest growth possible; there is no difference between us and North Block on this," said Rajan, who has hiked rates thrice since taking over as Governor in September. He was speaking at a fixed income industry (Fimmda-PDAI) event here where the media was not allowed and only given a copy of the speech. North Block, which houses the Ministry of Finance, has not been pleased with the Reserve Bank's rate increases, given their impact on investor sentiment and growth in general. Rajan justified his actions, saying the best way to foster sustainable growth in the current circumstances is through monetary stability, which is bringing down inflation over a reasonable period of time. The Governor, who went against the majority view of an internal panel advising on the monetary policy and surprised all by hiking rates in January, also reiterated the central bank's determination to get retail inflation down to 8 per cent by January 2015 and 6 per cent by January 2016. He explained that even though some people may believe that in the short-run, the RBI's rate hikes may impact growth, the best way for a central bank to generate growth is to bring down inflation. "Sooner or later, the public always understands what the central bank is doing, whether for the good or for the bad," he said. (PTI)
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