Charges for preferential seating, check-in baggage, meals etc are borne out of DGCA Circular of March subjected to certain ridersSharp hike in ticket cancellation charges, proposal to charge passengers for their check-in baggage or charging extra for window /aisle seats by domestic carriers: any such special charges levied on the airline passengers over and above the air-ticket price stems out of a circular issued in March this year by the office of the Director General for Civil Aviation (DGCA).On March 24, the DGCA had issued the “Air Transport Circular 1 of 2015” titled ‘Unbundle of services and fees by scheduled airlines’. The circular said: “Considering the fact that unbundling of services and charges thereto has the potential to make basic fare more affordable and provides consumer an option of paying for the services which he/she wishes to avail, it has been decided by the Government to allow following services to be unbundled and charged separately on opt-in basis. These include Preferential seating, meal/snack/drink charges (except drinking water), Charges for using airline lounges, check-in baggage charges, sports equipment charges, musical instrument carriage, and fee for special declaration of valuable baggage (allow for higher unit on carrier liability).”The circular, however, came with certain riders: “The unbundled services must be provided on “opt-in” basis and not on “opt-out” basis. Charges for the unbundled services shall be fixed amount and shall not vary with the base fare for a particular sector/flight. Changes, if any, should be announced at least 30 days in advance by the airlines; and the scheduled airlines shall display the unbundled services and charges thereto on their respective websites in a transparent and conspicuous manner.” The riders also ensured that the airlines will be responsible for ensuring that the charges for the unbundled services are displayed by the travel portals/travel agents too,” it said.Taking a cue from this circular, which sources say is born out of years of continuous presentations and convincing the aviations authorities by the domestic airlines, three Indian low cost carriers had sent in their proposal to offer lower fare for passengers who fly only with cabin baggage. This low fare option was suggested to be in addition to the regular fare offered currently where 15 kg of check-in baggage is allowed. According to DGCA officials, the proposal will be examined to see whether the low cost carriers give substantial benefit to flyers for not carrying check-in baggage and avoid a situation where the 15-kg baggage is taken without adequate advantage to the flyer.In effect, this suggestion entails the option of offering two sets of fares to the air traveller for the same destination - low fares (around Rs 500-1,000 less depending upon the airfare) for only hand baggage and the regular ones (with 15 kg of baggage allowed).A similar initiative was undertaken by AirAsia India -- a JV of Malaysia's AirAsia and Tata Group -- in 2014 summer. But the carrier had to abandon the plans after a public outcry. Now, such a plan is part of the circular issued by the DGCA itself.Hiking Cancellation ChargesBut where the domestic carriers seems to have goofed up is the unilateral hike in ticket cancellation charges by not one but three airlines - IndiGo, SpiceJet and Jet Airways. DGCA has now begin a probe into the matter, officials said. In the meanwhile, the Air Passengers Association of India (APAI) said it would also approach the Competition Commission of India (CCI) on the issue citing it as an incident of cartelisation and an unfair business practice.Last weekend, SpiceJet raised its ticket cancellation charges for both domestic as well as international travel. According to the revised fees, which came into immediate effect, the airline is deducting Rs 1,800 as cancellation fees for a domestic ticket while the charges for cancelling an international ticket would be Rs 2,250. Spicejet, reports suggest, followed in the footsteps of IndiGo and Jet Airways. Both these airlines had steeply increased their cancellation charges in April.IndiGo's cancellation charges range between Rs 1,250 and Rs 2,250 depending on the number of days left before scheduled departure. Minimum cancellation charges, which have been pegged at Rs 1,250, are applicable only if the ticket has been cancelled one month or more before the date of departure. Jet's ticket cancellation charges range between Rs 500 and Rs 2,750 depending on the class of fare.ashish.sinha@businessworld.in
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With $14 billion investment in Greece in 2014, China can be its knight in shining armour, says Nilanjan BanikMr Alexis Tsipras, Prime Minister of Greece is a worried man. His country's inability to pay IMF Euro 1.5 billion means Greece is on the verge of being denied billion of Euros worth of future loan which perhaps can save Greece from the impending financial crisis, but at the expense of following austerity measures. However, if he has to follow austerity measures such as cutting the budgetary allocation for pensions, raising domestic tax, and reforming labour laws, then he would be seen as a man reneging on his promises on the basis of which he won the election. In fact, voters in most part of Europe do not like reforms (mainly in the areas of pensions, labours and immigration), and would rather punish the parties in favour of austerity measures. The unfortunate part is, elsewhere in Europe be it United Kingdom, France, Spain, or Greece, where economic crisis is still a central part, people may have to pay a price for being myopic, and not being able to appreciate the long-term gains that may be forthcoming from institutional reforms. Because of economic crisis in Greece, there is a general sense of pessimism about future earning prospects.In order to understand this crisis, we have to step a little back into history. Soon after the Second World War, when Europe was devastated, policymakers in the region wanted to re-build Europe on the premise of socialist capitalism. The underlying idea is that when the market is at a nascent stage, the state will ensure that a labour market comes into play and jobs become available. For the elderly, and those without jobs, the state will take care through a benevolent social security system — paying unemployment benefit and pensions.The objective is noble, but to make the system efficient the government has to ensure that it collects funds through taxation to pay dole for the unemployed and pension for the retired. Dole and pension are expenditures for the government, and to pay for it, the government has to collect taxes. The principal source of tax is corporate income tax (contributing to nearly 80 per cent of the total tax collection), indirect tax (such as excise and service tax) and direct income tax (that is, taxing the working class).At the time of recession when businesses are not forthcoming, or when people find it hard to get a job, it is quite natural that tax collection will be inadequate. Therefore, the government will meet its welfare objective (that is, to pay for dole and pensions) by printing money or by borrowing. Both are perfect recipes for increasing the budget deficit and the public debt.A higher budget deficit can be sustained, provided the economy is growing. However, economic growth is continuously falling in the Euro Zone — 3.4 per cent during the 1970s, 2.4 per cent during the 1980s, 2.2 per cent during the 90s, and around 1 per cent between 2001 and 2013.A reason for this is lack of institutional reforms. In a socialist capitalist structure, wages are protected by trade unions. This is irrespective of labour productivity and firms' ability to earn profit. Add to this, is Europe's ageing population, which is likely to increase further in the future. To maintain a stable population, 2.1 children should be born to each woman in an economy, assuming an average death rate applicable to the world's population.In contrast, the figures for some Euro-Zone economies are much lower: 1.38 for Greece, 1.39 for Spain, 1.41 for Italy and 1.94 for the UK. For Spain and Greece, the over-65-year population will increase from around 17 per cent now to 25 per cent by 2030. The bottomline: Europe has fewer younger people to work, to pay for the expensive welfare programme.A natural suggestion would be to reform the labour and pension laws (dubbed as austerity measures), and slacken the immigration laws. A closer look at European democracies suggests it is run by the insiders made up of pensioners, trade union leaders, public sector workers and big farmers. The outsiders consisting of small numbers of immigrants, the youth and small private entrepreneurs have little say.It is a classic case of a socialist democracy in which the insiders are myopic, care too much about present benefits, and are deliberately voting parties to power that support their cause. On the contrary, the outsiders are quite powerless.Even issues such as changes in labour immigration laws are stalled. A flexible labour immigration clause is expected to resolve issues related to the dearth of a young skilled labour force. The brain drain from developing countries such as India and China has helped fuel economic growth in the US, but not in Europe.Lack of austerity measures in the form of institutional reforms is reflected in the form of the ever-increasing debt to GDP ratio. Cumulative public debt as a percentage of GDP for many of the Euro Zone countries is already more than 100 per cent — around 132 per cent for Italy, 177 per cent for Greece, 123 per cent for Ireland, 111 per cent for Cyprus, and 129 per cent for Portugal.Besides, dissimilar macro-economic conditions (reflected in the debt-GDP ratio) may even threaten the existence of the European Union (EU). This is because it renders a common macro-economic policy — expansionary monetary/fiscal policy during a recession and contractionary monetary/fiscal policy during an expansion — ineffective.But Europe is diverse, and when Greece is facing recession and Germany is doing well, then following an expansionary monetary policy may help Greece but will heat up the German economy. In fact, as Greece is part of EU, it does not have the autonomy of devaluing its currency, Drachma, and thereby make its exports more competitive.The only silver lining is the China factor. With Greece under firing line, China is likely to lose out most. The share of Chinese investment in the troubled European states such as Portugal, Ireland, Italy, Greece and Spain, rose from 10 per cent before 2011 to 30 per cent annually between 2012 and 2014. In fact share of Chinese investment in Europe rose from near zero in 2000 to Euro 14 billion annually in 2014. China can be a knight in shining armour for Greece.(The author, Nilanjan Banik, is with Mahindra EcoleCentrale. He is also a Fellow with CUTS International, ARTNet-UNESCAP researcher, and author of the book titled, The Indian Economy: A Macro Economic Perspective. All comments to nilbanik@gmail.com).
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After the elections are over, Paswan will once again trudge back into oblivion, writes Manish Kumar PathakRam Vilas Paswan, turned 69 on Sunday. The political giant of Bihar, outlined his main focus; to rid the state of the Nitish-Lalu combine and put in place a National Democratic Alliance government.Paswan, has forever been on the political horizon of Bihar, and yet he has never assumed a position of prominence, and has always remained a side-kick of the eventual chief ministers of the state. Paswan, started his political career in 1969, which was eight years before Lalu Prasad Yadav entered the parliament, and 16 years before Nitish Kumar was elected MLA. The current stature of the three leaders vividly explains the position Paswan has been relegated into.It is very intriguing that a person with so much experience and presence in the state, has never been in-charge of his own fortunes, and has always remained in the background, somewhere reigning in the shadows of others. Perhaps, it is do with the opportunist nature of politics, or perhaps it is the voracity of reaping benefits of power, Paswan has forever been a part in the Centre, as an alliance of the governments irrespective of the ideology (he has served under six different Prime Ministers). The political nuances have been so cleverly used by him that inspite of not having a raging presence in the state (number-wise), managing New Delhi has never been an issue for him.So, has he lost his own sheen, by trying to please the bigger leaders? Has he gambled way too far, to drag himself out of any prominence. Other leaders, from Lalu to Nitish, from Sushil Modi to Ravi Shankar Prasad have started late and have leap-frogged him. His prominence has dwindled so much that there are not even any muted utterances of him being the potential Chief Minister candidate. Also, in an attempt to stay relevant in the NDA he has withdrawn his name from the list of aspirants for the post of Chief Minister! Sums up the career of Paswan!Bihar has always thrown interesting political alignments, and Ram Vilas Paswan, has been present somewhere every time, and in these coming elections too he will important in the caste –driven politics of the state. And after the elections are over, he will once again trudge back into oblivion.
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Jan Dhan Yojana, Aadhaar and Mobile form the JAM Number TrinityWell, when this whole exercise began a couple of years ago, it was known as direct subsidy transfer. Later on, it became direct benefit transfer. Now the Narendra Modi government calls it the Jan Dhan Yojana, Aadhaar and Mobile (JAM) Number Trinity.JAM is a just a catchy acronym of a programme that allows Indian citizens to authenticate themselves by using their unique 12-digit Aadhaar numbers, to receive the subsidy amount directly in their bank accounts opened through the Jan Dhan Yojana, and to use the mobile banking platform to carry out money transactions if their bank branches are inaccessible. Joe C MathewThe seriousness, the government attaches to JAM, can be understood from the Economic Survey 2014-15, which states that if the JAM Number Trinity can be seamlessly linked, and all subsidies rolled into one or a few monthly transfers, “nirvana” or the real progress in terms of direct income support to the poor may finally be possible in India.We are not going to discuss about the merit of the programme, but about the current status of the JAM infrastructure, as that is the basic pillar on which the entire programme has been fashioned today. Let’s begin with the Pradhan Mantri Jan Dhan Yojna, an ambitious programme launched in August 2014. The target was to achieve universal financial inclusion by helping 750 million unbanked households in the country to open bank accounts by January 26, 2015. The government has certainly missed that deadline, as official data indicate that till 24 June 2015, Indian banks had opened only 98.98 million rural accounts and 65.3 million urban accounts under this scheme. Among these accounts, 85.18 million are zero balance accounts, or bank accounts opened by the poor for essentially availing the subsidy and other government social security payments – the potential JAM beneficiaries.Next comes the generation of Aadhaar numbers for the citizens and link it to their Jan Dhan bank accounts for the purpose of authentication. Official figures indicate that as on April 20, 2015, the Unique Identification Authority of India has enrolled 67 per cent of the total population. In other words, 817.82 million Aadhaar numbers were assigned to people out of a total population of 1.21 billion (on the basis of 2011 census). Not a bad achievement, though Adhaar seeding of Jan Dhan accounts stood at a dismal low, 64.18 million, at that time.Finally, the just released Socio Economic and Caste Census (SECC) 2011 data tells us that 71 per cent of rural households already own mobile connection, the third component of the JAM strategy. The SECC data on urban population is not yet ready, but the number of rural households itself is an indication of the task ahead. Over 50 million or 29 per cent of India’s 179.17 million rural households needs mobile connectivity for achieving “nirvana” through successful application of the JAM Number Trinity.The question that needs to be asked now is not whether Jan Dhan bank account enrolment, aadhaar generation and mobile penetration can create an ideal platform for financial security, but by when.When will JAM become an inclusive platform for the government to try out its experiments on providing financial security to its 800 million vulnerable population?
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Greeks voted on Sunday (5 July) whether to accept or reject the tough terms of an aid offer to stave off financial collapse, in a referendum that may determine their future in Europe's common currency.Held against a backdrop of default, shuttered banks and threats of financial apocalypse, the vote was too close to call and looked certain to herald yet more turbulence whichever way it went.The country of 11 million people is deeply divided over whether to accept an offer by international creditors that left-wing Prime Minister Alexis Tsipras, elected in January on a promise to end years of crippling austerity, calls a "humiliation".He is urging a resounding 'No', saying it would give him a strengthened mandate to return to negotiations and demand a better deal, including a writedown on Greece's massive debt.His European partners, however, say rejection would set Greece on a path out of the euro, with potentially far-reaching consequences for the global economy and Europe's grand project of an unbreakable union."I voted 'No' to the 'Yes' that our European partners insist I choose," said Eleni Deligainni, 43, in Athens. "I have been jobless for nearly four years and was telling myself to be patient ... but we've had enough deprivation and unemployment."Voting on whether to accept more taxes and pension cuts would be divisive in any nation at the best of times.In Greece, the choice is faced by an angry and exhausted population who, after five years of pension cuts, falling salaries and rising taxes, have now suffered through a week of capital controls imposed to prevent the collapse of the nation's financial system.Pensioners besieging bank gates to claim their retirement benefits, only to leave empty-handed and in tears, have become a symbol of the nation's dramatic fall over the past decade, from the heady days of the 2004 Athens Olympics to the ignominy of bankruptcy and bailout.Tsipras, a 40-year-old former student activist, has framed the referendum as a matter of national dignity and the future course of Europe."As of tomorrow we will have opened a new road for all the peoples of Europe," he said after voting in Athens, "a road that leads back to the founding values of democracy and solidarity in Europe."A 'No' vote, he said, "will send a message of determination, not only to stay in Europe but to live with dignity in Europe."Not everyone agreed."DignityY""You call this dignity, to stand in line at teller machines for a few euros?" asked pensioner Yannis Kontis, 76, after voting in the capital. "I voted 'Yes' so we can stay with Europe."Polls close at 7 p.m. (1600 GMT), with the first official projection of the result expected at 9 p.m.Four opinion polls published on Friday showed the 'Yes' vote marginally ahead. A fifth put the 'No' camp 0.5 percentage points in front. All were well within the margin of error.Called at eight days' notice, the referendum offers Greece a 'Yes' or 'No' vote on a proposal that is no longer on the table.Given the chaos of the past week, in which Greece became the first developed economy to default on a loan to the International Monetary Fund, a new bailout package would probably entail harsher terms than those on offer even last week.Anxious Greeks rallying for a 'Yes' vote also say Greece has been handed a raw deal but that the alternative, a collapse of the banks and a return of the old drachma currency, would be far worse.The 'No' camp says Greece cannot afford more of the austerity that has left one in four without a job.If Greeks vote 'Yes' to the bailout, the government has indicated it will resign -- triggering a new chapter of uncertainty as political parties try to cobble together a national unity government to keep talks with lenders going until elections are held.European creditors have said a 'Yes' vote will resurrect hopes of aid to Greece. A 'No', they say, will represent rejection of the rules that bind the euro zone nations, leaving Greece to fend for itself."If they (Greeks) say 'No', they will have to introduce another currency after the referendum because the euro is not available as a means of payment," Martin Schulz, the president of the European Parliament, said in remarks broadcast on Germany's Deutschlandfunk radio on Sunday."And how are they going to pay salaries? How are they going to pay pensions? As soon as someone introduces a new currency, they exit the euro zone."Much will depend on the European Central Bank, which on Monday morning will review its emergency liquidity line to Greek banks, keeping them afloat.The ECB could decide to freeze the liquidity or cut it off altogether if Greeks vote 'No', or if Athens subsequently defaults on a bond redemption to the ECB on July 20.An inconclusive result may sow further confusion, with the potential for violent protests."The nightmare result would be 51-49 percent in either direction," a senior German official said. "And the chances of this are not insignificant."(Reuters}
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Vivan Sharan on why the unfolding Greek drama has little appeal for Indian mediaThe week that was will be forever etched in European history but will have little recall value in India. In 2009, the Greeks first announced that they had been underestimating their fiscal deficits for many years.Without a sovereign currency that could be devalued, and lacking the structural underpinnings to address its deficits, the economy quickly became acasualty of the European experiment. A series of loans, at market rates, were offeredto Greece by the European Central Bank (ECB) and the International Monetary Fund (IMF). To the surprise of very few close observers of the Greek economy,it defaulted on a proportion (1.57 billion euros) of its debts owed to the IMF, on 30th June. With many more debt deadlines to follow, this was the first such default of an advanced country.Simultaneously through the week, Indian Prime Time reportage and debates have centred on the excesses and pitfalls of ‘VIP culture’.Admittedly, aside from some nominal historical association with Alexander the Great, known to mosttelevision watching middle class Indians as ‘Sikandar’, Greece has never really been of any particular interest. Unlike the Swiss Alps and their integral place in Bollywood history the Mykonos islands and the Parthenon have never quite managed to pique Indian curiosities. Superficial association aside, what is being scripted in Europe, is nothing short of a recalibration of Westphalian sovereignty. But does this demandPrime Timecoverage?The ‘European’ decision not to restructure Greek debts early on itself was largely motivated by the imperative to preserve European banking assets as well as the erstwhile Greek Government’s own resistance to the ‘humiliating’ proposition.Instead of a long term solution, successive bailout packages were conceived by the ECB, IMF and the European Commission (EC), also known as the ‘Troika’,along with stringent ‘austerity’ measures. The assumption was that through a mix of tax increases, spending cuts and structural reforms, the Greek economy would be able to grow, and therefore repay its debts.And with incremental adjustments to Greek debt, Europe kicked the can down the road.The Greek economy has lost 25 per cent of its GDP since such austerity measures were first prescribed. What is starker perhaps is that the country faces 60 per cent unemployment among youth. These rather sobering realities prompted the Greek people to vote out the establishment earlier this year. A ‘radical’ left of centre party, Syriza, was voted in. The leaders of Syriza in turn have been defiant in the face of successive negotiationdeadlines set by the Troika, for adopting more stringent measures in exchange for credit extension. Vivan SharanThe stakes in Europe are high. Syriza has called for a referendum this Sunday. The outcome will decide whether or not Greece will accept the latest austerity package in exchange for credit. Martin Schulz, the President of the European Parliament, and Jean-Claude Juncker, the President of the European Commission have both made explicit public statements urging the Greek people to vote for more austerity and effectively for extending their current tribulations and staying in the Eurozone. To reiterate in simpler terms, the leaders of the primary institutions of European integration are attempting to influence the democratic process within one of their member states.The short answer to whether this demands Prime Time coverage in India would be no. This is for a variety of reasons, some of which have been highlighted by the latest Socio-Economic and Caste Census released by the Government recently. Nearly half of the rural households surveyed meet one or more of the deprivation criteria specified by the survey – a rude shock for many.It would make ample sense then, for Prime Time news to focus on this and engage informed experts in non-partisan debates on India’sdevelopment cleavages. However, development debates do not beget television ratings. This is simply not what viewers want to watch. India’s socio-economic realities seem to be immaterial compared to the ostentatiousness of its political leaders and their lack of civic sense. After all why should the ‘common’ man, who is (surprisingly) able to afford flight tickets, be inconvenienced by politicians? Let us not forget that all men are created equal at least when it comes to boarding flights.This‘common’ Indian is easily impressed by shrill Prime Time anchors who have fire in their bellies and can openly challenge the new government on VIP culture, despite the ‘big brother’ type image ascribed to it by the intelligentsia. The Prime Minister is in turn worried. He has been repeatedly reprimanding his Ministers, demanding conduct that is befitting of their posts. The signal from the Prime Time coverage is clear. Politicians must refine their civic sensibilities, and apologize for any arrogance that may be caught on camera. Once this is achieved, their jobs are half done, chronic poverty, growing social inequities, and critical infrastructure deficits notwithstanding.Perhaps it is not a crime for India to be insular. The country has problems that make Greece’s worries or larger political trends in Europe seem insignificant. But if it chooses to remain inward looking without a sense of what it should expect its politicians to deliver, India will be stuck in neutral gear. It will be up to the whims and fancies of politicians alone, rather than the broader society, to define the constituents of ‘national interest’. And this may conveniently continue to reflect the collective self-interests of those in power and those who benefit from it, including the Indian media which moonlights as the ‘voice of the people’. There are hard numbers to prove that the deadline for systemic change is already upon the countryand hopefully it does not need a Troika of its own to bully it into acceptance. Incremental and cosmetic changes will simply not cut it.The author, Vivan Sharan, is Partner, Koan Advisory Group and Visiting Fellow, Observer Research Foundation
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Last year, the number of Foreign Tourist Arrivals (FTAs) in India was 7.46 million, about half the number of international visitors (15.1 million) to travel to the small island city state of Singapore. To boost tourism in the country, Indian government recently announced that citizens from 43 countries can avail the e-visa facility at seven more airports. Last year in November, Indian government allowed the e-visa facility at nine international airports in India, namely, Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bengaluru, Kochi, Thiruvananthapuram and Goa.Such moves have been expected to give a big boost to the tourism industry as the tourists are not required to go through the long process of visiting the embassy and getting the visa approved much before the travel date.In this current format, to get an e-visa, tourists can upload the documents and pay the required fees from the designated website and can get the electronic version of the visa within 96 hours.Aloke Bajpai, CEO and co-founder of web and mobile travel search app ixigo.com informs, “The volume of queries and visits at their search engine have increased by 25 per cent by foreign tourists if you compare the data of January to June from 2014 to 2015. In fact we are already seeing a lot of inbound queries for October and November when the tourist season will begin again this year.” But, the FTAs during the period January- April 2015 were 28.21 lakh with a growth of 2.7 per cent, as compared to the FTAs of 27.47 lakh in January- April 2014. The numbers don’t show a great increase as one would have expected.Bajpai adds: “Last year, when the government announced this facility, we saw some cases where people took a flight to India presuming they will get a visa on arrival and were flown back to their country. There was a lot of miscommunication in the earlier days. Though it has been simplified now, but still a lot more can be done to communicate the new process and make it smoother.”Maahesh Aiyer, Chief Operating Officer- South, The Lemon Tree Hotel Company sees it as a overall positive step, “This move will not affect group travel because they are planned much ahead of schedule, but it will boost the last minute travel. In fact, this will be good for the travel and hospitality industry as one gets a higher realisation from customers on last minute bookings.Bajpai suggests, and rightly so “The government should think about offering visa on arrival to a smaller subset of countries as it allows for a more spontaneous travel. South East Asia is an attractive travel destination for Indians because you can plan immediately and get visa on arrival after landing in the country, without worrying about it beforehand. In the current format, collating documents and uploading still takes time, though it is better than before, but it hasn’t changed the behaviour of travellers much.”What India can do is focus on countries only a few hours away by flight. Tourists from China contribute to the highest number of foreign travellers in most of the countries today. “In Sri Lanka, China contributes to 70 per cent of tourist year on year. In India they are contributing only 2-3 per cent in terms of tourist composition and there is a lot of scope for growth here,” says Aiyer.
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The Government has notified the rules for calculating overseas income and assets under the stringent foreign black money law that came into force on July 1. The value of the overseas assets, including immovable property, jewellery and precious stones, archaeological collections and paintings, shares and securities and shares in unlisted firms abroad will be calculated at the fair market value, the rules notified by the CBDT said today. The value of an overseas bank account will be the sum of all deposits made in the account since its opening, the rules said. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, provides for a total of tax and penalty of 120 per cent on the income or assets held abroad after the expiry of a one-time 90-day 'compliance window' provided for persons to come clean. Any income or asset declared during this period which ends on September 30, would attract a total of 60 per cent tax and penalty, without penal provisions like jail term. They will have time till December 31 to pay the levies. The rules notified today provide for the way foreign income and assets would be valued for calculation of tax and penalty both for the compliance period and beyond its expiry. The fair market value of an immovable property will be higher from the acquisition cost or the price that the property shall fetch in open market on the date of valuation. The same principle would also be applicable for valuing bullion, jewellery or precious stone as well as archaeological collections, drawings, paintings and sculptures or work of art. For valuing shares and securities of listed entities, the rules said the fair market value will be the higher of the cost of acquisition or average of the lowest and highest price on the date of valuation. (PTI)
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As part of its ongoing and regular efforts to make mergers and acquisition (M&A) filing requirements simpler and readily acceptable to various stakeholders, the Competition Commission of India (CCI) has revised its Combination Regulations, making them more forward looking, in keeping with some of the best practices in other jurisdictions.The CCI, at the time of publishing the draft amendments on its website in March, 2015, invited comments from all stakeholders as a part of its consultative process. While giving inputs and suggestions on the amendments, the stakeholders welcomed the same, as the amendments now provide greater clarity and transparency and help in avoiding undue delays.A key change brought about by the present amendments is in relation to the definition of the term “other document”. To bring in more certainty, scope of the term “other document” has now been limited to a communication conveying the intention to make an acquisition to a Statutory Authority.Further, the proposed amendments provide flexibility to parties regarding signing of the notice. Under the present amendments, any person duly authorised by the board of directors may sign the notice. Further, the number of copies of notice to be filed with the Commission has also been reduced.In keeping with the requests received from stakeholders, CCI has also revised Form I required to be filed for notifying combination. In addition to the same, notes to the forms would be published to provide guidance to the notifying parties regarding the information that is required to be filed in a notice.Further, to bring in greater transparency regarding the review process, the amendments provide that a summary of every combination under review will be published on the website of CCI. Such publication will provide stakeholders an opportunity to submit their comments to CCI regarding the proposed combination.CCI has also modified the timelines for Phase-I review from thirty calendar days to thirty working days and has also given itself a clock stop of fifteen working days during Phase I to seek comments from third parties.ashish.sinha@businessworld.in
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The move is aimed at shielding government companies from strict provisions of new Companies Act, 2013 After waiting for almost two years, now most of the Government owned companies have been granted a slew of exemptions under the new Companies Act, 2013. While many of the exemptions are copied from the old Companies Act 1956, there are some noticeable new exemptions too.For example, the Government companies are now not required to specify the policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters which are otherwise applicable to all companies. Also, there is no restriction on the number of directors a Government company can have. For non-Government companies, the new company laws caps the number of directors to a maximum of 15. Of course, non-Government companies can add directors beyond the 15 by passing a special resolution, which then will have to be communicated to the government.The Government companies will also be exempted from provisions relating to proportional representation for appointment of directors on the Board. Non-Government companies have to have proportional representations of directors on their respective board.A Government company is also not required to comply with provisions of section 196 dealing with the restriction on appointing or re-appointing any person as its managing director, whole-time director or manager for a term exceeding five years at a time.A Government company is also exempted of provisions which specify limits for overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. This is not the case for non-Government companies.The provisions of Section 203 with respect to appointment of key managerial personnel, holding of office, period within which appointment to be made in case of vacation of office of key managerial personnel (KMP), will not apply to a managing director or Chief Executive Officer or manager and in their absence, a whole-time director of the Government company.Section 185 prohibiting granting of loans to directors and to any other person in whom director is interested shall not apply to Government companies in case such company obtains approval before making any loan or giving any guarantee.Another key exemption pertains to the provisions of related party transactions when a Government company is entering into contract or arrangement with another Government company. Section 188 of the new company laws prohibits companies from entering into related party transactions exceeding specified values without obtaining prior approval of shareholder and also restricts related party (who is a party to the contract) to abstain from voting. ashish.sinha@businessworld.in
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