1. Civils 2015 CSAT GS Solved Key with Question
2. Civils 2015 CSAT Paper 2 Key
Download Civils 2015 Prelims GS Paper-2
Sunday, 23 August 2015
Friday, 21 August 2015
[TSPSC] TSPSC 770 Assistant Executive Engineering Jobs for Civil Engineering Graduates in Telangana - Study Material
Telangana State Public Service Commission released notification for 770 Assistant Executive Engineers (Civil) in various engineering services.
Important Dates::
- Start of online application submission: 20.08.2015.
- Last date: 03.09.2015.
- The examination is likely to be held on 20.09.2015.
Eligibility::
Qualification: B.Tech or BE in Civil Engineering from a recognised University
Age Limit: 44 years 04/07/2015
Scheme of Examination ::
Download SSC CGL 2015 Tire 1 Question Paper held on 16th August 2015
SSC CGL 2015 held on Morning Shift of 16/08/2015
Desktop Links – |
SSC CGL 2015 held on Evening Shift of 16/08/2015
Desktop Links – |
Thursday, 20 August 2015
Padma Vidhushan 2016 | Padma Bhushan 2016 | Padma Sri 2016 awards Nominations Called for
Nominations for Padma Awards 2016 invited by September 15, 2015
Nominations for the Padma Awards, 2016 is presently open and the last date for receipt of the nominations for the Padma Awards 2016 is September 15, 2015.
Recommendations / nominations may be sent at the address mentioned below in the prescribed proforma along with a brief narrative citation (maximum 800 words):
The Home Minister/ the Home Secretary
Government of India
Ministry of Home Affairs
North Block
New Delhi-110001
Nominations received without the prescribed proforma and citation will not be considered.
For further details click ‘Awards and Medals’ on the Union Home Ministry’s website: www.mha.nic.in
***
KSD/PK/BK
Guidelines for Selection of MD & CEOs in Public Sector Banks (PSBS) Other Than Five Large Public Sector Banks
Appointments Committee of Cabinet (ACC) has approved the guidelines for selection of MD & CEOs in Public Sector Banks (PSBs) other than five large Public Sector Banks. Executive Directors of Nationalised Banks, DMDs of IDBI Bank and MDs of Associate Banks of SBI who have risen from the Associate Bank Services, with one year of service as ED/DMD/MD and who have two years remaining service are eligible to consideration as MD & CEO. The selection will be made by the Appointments Board as per the existing methodology of interaction of the candidates with three panels of the Sub-committee of the Appointments Board. The candidates will be rated out of 100 marks with 50 marks to be awarded for APARs of five years and 50 marks assigned on the basis of performance during interaction with the Sub-committee. The guidelines has also laid down the eligibility criteria for the post of Executive Directors of the nationalized banks. General Managers of nationalized Banks and CGMs of Associate Banks of SBI who have risen from the Associate Banks Service, and who have completed two years of service are eligible for consideration for the post of Executive Director.
The selection process is to be initiated in the next month.
Thursday, 13 August 2015
India's Freedom Struggle (1857-1947) | India's struggle for Independence
On the occasion of India's divine ceremony on 15th August we should be well known regarding India's struggle towards Independence. Hence, lets know about India's freedom struggle.
Indian
Freedom Struggle (1857-1947)
In ancient times, people from all over the world
were keen to come to India. The Aryans came from Central Europe and settled
down in India.The Persians followed by the Iranians and Parsis immigrated to
India. Then came the Moghuls and they too settled down permanently in India.
Chengis Khan, the Mongolian, invaded and looted India many times. Alexander the
Great too, came to conquer India but went back after a battle with Porus. He-en
Tsang from China came in pursuit of knowledge and to visit the ancient Indian
universities of Nalanda and Takshila. Columbus wanted to come to India, but
instead landed on the shores of America. Vasco da Gama from Portugal came to
trade his country's goods in return for Indian spices. The French came and
established their colonies in India.
Lastly, the Britishers came and ruled over India
for nearly 200 years. After the battle of Plassey in 1757, the British achieved
political power in India. And their paramountcy was established during the
tenure of Lord Dalhousie, who became the Governor- General in 1848. He annexed
Punjab, Peshawar and the Pathan tribes in the north-west of India. And by 1856,
the British conquest and its authority were firmly established. And while the
British power gained its heights during the middle of the 19th century,
the discontent of the local rulers, the peasantry, the intellectuals, common
masses as also of the soldiers who became unemployed due to the disbanding of
the armies of various states that were annexed by the British, became
widespread. This soon broke out into a revolt which assumed the dimensions of
the 1857 Mutiny.
The Indian Mutiny of 1857
The conquest of India, which could be said to have
begun with the Battle of Plassey (1757), was practically completed by the end
of Dalhousie's tenure in 1856. It had been by no means a smooth affair as the
simmering discontent of the people manifested itself in many localized revolt
during this period. However, the Mutiny of 1857, which began with a revolt of
the military soldiers at Meerut, soon became widespread and posed a grave
challenge to the British rule. Even though the British succeeded in crushing it
within a year, it was certainly a popular revolt in which the Indian rulers,
the masses and the militia participated so enthusiastically that it came to be
regarded as the First War of Indian Independence.
Introduction of zamindari system by the British,
where the peasants were ruined through exorbitant charges made from them by the
new class of landlords. The craftsmen were destroyed by the influx of the
British manufactured goods. The religion and the caste system which formed the
firm foundation of the traditional Indian society was endangered by the British
administration. The Indian soldiers as well as people in administration could
not rise in hierarchy as the senior jobs were reserved for the Europeans. Thus,
there was all-round discontent and disgust against the British rule, which
burst out in a revolt by the 'sepoys' at Meerut whose religious sentiments were
offended when they were given new cartridges greased with cow and pig fat,
whose covering had to be stripped out by biting with the mouth before using
them in rifles. The Hindu as well as the Muslim soldiers, who refused to use
such cartridges, were arrested which resulted in a revolt by their fellow
soldiers on May 9, 1857.
The rebel forces soon captured Delhi and the revolt
spread to a wider area and there was uprising in almost all parts of the
country. The most ferocious battles were fought in Delhi, Awadh, Rohilkhand,
Bundelkhand, Allahabad, Agra, Meerut and western Bihar. The rebellious forces
under the commands of Kanwar Singh in Bihar and Bakht Khan in Delhi gave a
stunning blow to the British. In Kanpur, Nana Sahib was proclaimed as the
Peshwa and the brave leader Tantya Tope led his troops. Rani Lakshmibai was
proclaimed the ruler of Jhansi who led her troops in the heroic battles with
the British. The Hindus, the Muslims, the Sikhs and all the other brave sons of
India fought shoulder to shoulder to throw out the British. The revolt was
controlled by the British within one year, it began from Meerut on 10 May 1857
and ended in Gwalior on 20 June 1858.
End of the East India Company
Consequent to the failure of the Revolt of 1857
rebellion, one also saw the end of the East India Company's rule in India and
many important changes took place in the British Government's policy towards
India which sought to strengthen the British rule through winning over the
Indian princes, the chiefs and the landlords. Queen Victoria's Proclamation of
November 1, 1858 declared that thereafter India would be governed by and in the
name of the British Monarch through a Secretary of State.
The Governor General was given title of Viceroy,
which meant the representative of the Monarch. Queen Victoria assumed the title
of the Empress of India and thus gave the British Government unlimited powers
to intervene in the internal affair of the Indian states. In brief, the British
paramountcy over India, including the Indian States, was firmly established.
The British gave their support to the loyal princes, zamindar and local chiefs
but neglected the educated people and the common masses. They also promoted the
other interests like those of the British merchants, industrialists, planters
and civil servants. The people of India, as such, did not have any say in running
the government or formulation of its policies. Consequently, people's disgust
with the British rule kept mounting, which gave rise to the birth of Indian
National Movement.
The leadership of the freedom movement passed into
the hands of reformists like Raja Rammohan Roy, Bankim Chandra and Ishwar
Chandra Vidyasagar. During this time, the binding psychological concept of
National Unity was also forged in the fire of the struggle against a common
foreign oppressor.
Raja Rammohan Roy (1772-1833) founded the Brahmo
Samaj in 1828 which aimed at purging the society of all its evil practices. He
worked for eradicating evils like sati, child marriage and purdah system,
championed widow marriage and women's education and favoured English system of
education in India. It was through his effort that sati was declared a legal
offence by the British.
Swami Vivekananda (1863-1902) the disciple of
Ramakrishna Paramahamsa, established the Ramkrishna Mission at Belur in 1897.
He championed the supremacy of Vedantic philosophy. His talk at the Chicago
(USA) Conference of World Religions in 1893 made the westerners realize the
greatness of Hinduism for the first time.
Formation of Indian National
Congress (INC)
The foundations of the Indian National Movement
were laid by Suredranath Banerjee with the formation of Indian Association at
Calcutta in 1876. The aim of the Association was to represent the views of the
educated middle class, inspire the Indian community to take the value of united
action. The Indian Association was, in a way, the forerunner of the Indian
National Congress, which was founded, with the help of A.O. Hume, a retired
British official. The birth of Indian National Congress (INC) in 1885 marked
the entry of new educated middle-class into politics and transformed the Indian
political horizon. The first session of the Indian National Congress was held
in Bombay in December 1885 under the president ship of Womesh Chandra Banerjee
and was attended among others by and Badr-uddin-Tyabji.
At the turn of the century, the freedom movement
reached out to the common unlettered man through the launching of the
"Swadeshi Movement" by leaders such as Bal Gangadhar Tilak and
Aurobindo Ghose. The Congress session at Calcutta in 1906, presided by Dadabhai
Naoroji, gave a call for attainment of 'Swaraj' a type of self-government
elected by the people within the British Dominion, as it prevailed in Canada
and Australia, which were also the parts of the British Empire.
Meanwhile, in 1909, the British Government
announced certain reforms in the structure of Government in India which are
known as Morley-Minto Reforms. But these reforms came as a disappointment as
they did not mark any advance towards the establishment of a representative
Government. The provision of special representation of the Muslim was seen as a
threat to the Hindu-Muslim unity on which the strength of the National Movement
rested. So, these reforms were vehemently opposed by all the leaders, including
the Muslim leader Muhammad Ali Jinnah. Subsequently, King George V made two
announcements in Delhi: firstly, the partition of Bengal, which had been
effected in 1905, was annulled and, secondly, it was announced that the capital
of India was to be shifted from Calcutta to Delhi.
The disgust with the reforms announced in 1909 led
to the intensification of the struggle for Swaraj. While, on one side, the
activists led by the great leaders like Bal Gangadhar Tilak, Lala Lajpat Rai
and Bipin Chandra Pal waged a virtual war against the British, on the other
side, the revolutionaries stepped up their violent activities There was a
widespread unrest in the country. To add to the already growing discontent
among the people, Rowlatt Act was passed in 1919, which empowered the
Government to put people in jail without trial. This caused widespread
indignation, led to massive demonstration and hartals, which the Government
repressed with brutal measures like the Jaliawalla Bagh massacre, where
thousand of unarmed peaceful people were gunned down on the order of General Dyer.
Jallianwala Bagh Massacre
Jalianwala Bagh massacre of April 13, 1919 was one
of the most inhuman acts of the British rulers in India. The people of Punjab
gathered on the auspicious day of Baisakhi at Jalianwala Bagh, adjacent to
Golden Temple (Amritsar), to lodge their protest peacefully against persecution
by the British Indian Government. General Dyer appeared suddenly with his armed
police force and fired indiscriminately at innocent empty handed people leaving
hundreds of people dead, including women and children.
After the First World War (1914-1918), Mohandas
Karamchand Gandhi became the undisputed leader of the Congress. During this
struggle, Mahatma Gandhi had developed the novel technique of non-violent
agitation, which he called 'Satyagraha', loosely translated as 'moral
domination'. Gandhi, himself a devout Hindu, also espoused a total moral
philosophy of tolerance, brotherhood of all religions, non-violence (ahimsa)
and of simple living. With this, new leaders like Jawaharlal Nehru and Subhash
Chandra Bose also emerged on the scene and advocated the adoption of complete
independence as the goal of the National Movement.
The Non-Cooperation Movement
The Non-Cooperation Movement was pitched in under leadership
of Mahatma Gandhi and the Indian National Congress from September 1920 to
February 1922, marking a new awakening in the Indian Independence Movement.
After a series of events including the Jallianwala Bagh Massacre, Gandhiji
realised that there was no prospect of getting any fair treatment at the hands
of British, so he planned to withdraw the nation's co-operation from the
British Government, thus launching the Non-Cooperation Movement and thereby
marring the administrative set up of the country. This movement was a great
success as it got massive encouragement to millions of Indians. This movement
almost shook the British authorities.
Simon Commission
The Non-cooperation movement failed. Therefore
there was a lull in political activities. The Simon Commission was sent to
India in 1927 by the British Government to suggest further reforms in the
structure of Indian Government. The Commission did not include any Indian
member and the Government showed no intention of accepting the demand for Swaraj.
Therefore, it sparked a wave of protests all over the country and the Congress
as well as the Muslim League gave a call to boycott it under the leadership of
Lala Lajpat Rai. The crowds were lathi charged and Lala Lajpat Rai, also called
Sher-e-Punjab (Lion of Punjab) died of the blows received in an agitation.
Civil Disobedience Movement
Mahatma Gandhi led the Civil Disobedience Movement
that was launched in the Congress Session of December 1929. The aim of this
movement was a complete disobedience of the orders of the British Government.
During this movement it was decided that India would celebrate 26th January
as Independence Day all over the country. On 26th January 1930,
meetings were held all over the country and the Congress tricolour was hoisted.
The British Government tried to repress the movement and resorted to brutal
firing, killing hundreds of people. Thousands were arrested along with Gandhiji
and Jawaharlal Nehru. But the movement spread to all the four corners of the
country Following this, Round Table Conferences were arranged by the British
and Gandhiji attended the second Round Table Conference at London. But nothing
came out of the conference and the Civil Disobedience Movement was revived.
During this time, Bhagat Singh, Sukhdev and Rajguru
were arrested on the charges of throwing a bomb in the Central Assembly Hall
(which is now Lok Sabha) in Delhi, to demonstrate against the autocratic alien
rule. They were hanged to death on March 23, 1931.
Quit India Movement
In August 1942, Gandhiji started the 'Quit India
Movement' and decided to launch a mass civil disobedience movement 'Do or Die'
call to force the British to leave India. The movement was followed,
nonetheless, by large-scale violence directed at railway stations, telegraph
offices, government buildings, and other emblems and institutions of colonial
rule. There were widespread acts of sabotage, and the government held Gandhi
responsible for these acts of violence, suggesting that they were a deliberate
act of Congress policy. However, all the prominent leaders were arrested, the
Congress was banned and the police and army were brought out to suppress the
movement.
Meanwhile, Netaji Subhash Chandra Bose, who
stealthily ran away from the British detention in Calcutta, reached foreign
lands and organized the Indian National Army (INA) to overthrow the British
from India.
The Second World War broke out in September of 1939
and without consulting the Indian leaders, India was declared a warring state
(on behalf of the British) by the Governor General. Subhash Chandra Bose, with
the help of Japan, preceded fighting the British forces and not only freed
Andaman and Nicobar Islands from the Britishers but also entered the
north-eastern border of India. But in 1945 Japan was defeated and Netaji
proceeded from Japan through an aeroplane to a place of safety but met with an
accident and it was given out that he died in that air-crash itself.
"Give me blood and I shall give you
freedom" - was one of the most popular statements made by him, where he
urges the people of India to join him in his freedom movement.
Partition of India and Pakistan
At the conclusion of the Second World War, the
Labour Party, under Prime Minister Clement Richard Attlee, came to power in
Britain. The Labour Party was largely sympathetic towards Indian people for
freedom. A Cabinet Mission was sent to India in March 1946, which after a
careful study of the Indian political scenario, proposed the formation of an
interim Government and convening of a Constituent Assembly comprising members
elected by the provincial legislatures and nominees of the Indian states. An
interim Government was formed headed by Jawaharlal Nehru. However, the Muslim
League refused to participate in the deliberations of the Constituent Assembly
and pressed for the separate state for Pakistan. Lord Mountbatten, the Viceroy
of India, presented a plan for the division of India into India and Pakistan,
and the Indian leaders had no choice but to accept the division, as the Muslim
League was adamant.
Thus, India became free at the stroke of midnight,
on August 14, 1947. (Since then, every year India celebrates its Independence
Day on 15th August). Jawaharlal Nehru became the first Prime
Minster of free India and continued his term till 1964. Giving voice to the
sentiments of the nation, Prime Minister, Pandit Jawaharlal Nehru said,
Long
years ago we made a tryst with destiny, and now the time comes when we will redeem
our pledge, not wholly or in full measure, but very substantially. At the
stroke of the midnight hour, when the world sleeps, India will awake to life
and freedom. A moment comes, which comes but rarely in history, when we step
out from the old to the new, when an age ends and when the soul of a nation,
long suppressed, finds utterance.... We end today a period of ill fortune, and
India discovers herself again.
Earlier, a Constituent Assembly was formed in July
1946, to frame the Constitution of India and Dr. Rajendra Prasad was
elected its President. The Constitution of India which was adopted by the
Constituent Assembly on 26th November 1949. On January 26,
1950, the Constitution was came into force and Dr. Rajendra Prasad
was elected the first President of India.
Union Budget 2015 of India
Comments on the Budget
- · The Indian economy decelerated from an 8.4 per cent growth rate in GDP in 2003-04 to 4.8 per cent in 2013-14.The UPA’s decade of economic decline has been wrongly attributed to the global economic meltdown
- · This budget is aimed at achieving growth and fiscal consolidation in a sustainable environment.
- · Budget crafted keeping in mind long term gains [Budget 15-16 is different from the budgets post 1997 Budget (P.Chidambaram budget)]
- · The Budget strives to attain a balance in the government’s agenda to maintain fiscal discipline and simultaneously bolster growth
- · It plans to achieve its goals through increasing the tax base and planned capital expenditure, while digitising subsidy transfers
- · Infrastructure and manufacturing are the two sectors, where it emphasises its attention on.
- · Additional fiscal space is being used to fund infrastructure investment. Having a pre-existing regulatory mechanism for approvals, infrastructure bonds and a comprehensive bankruptcy code are steps in the right direction.
- · Revitalising the PPP model, with the sovereign bearing a major part of the risk would lead to a much needed rebalancing and crowding in of the private sector.
- · Establishment of a National Investment & Infrastructure Fund for Rs. 20,000 crore will assist in funding infrastructure projects
- · A proposal to set up five new Ultra Mega Power Projects, each of 4000 MW in the plug-and-play mode is welcoming
- · Clarity on the implementation of the GST in 2016, staggered reduction of corporate tax, deferring GAAR by two years and increasing defence expenditure is a welcome move for the Make in India initiative
- · Tweaking the customs duty on raw material augurs well in revamping the inverted duty structure.
- · The intent towards avoidance of retrospective taxation is commendable.
- · Setting up a Public Debt Management Agency (PDMA) will bring both India’s external borrowings and domestic debt under one roof. This will lead to the debt market being at par with the equity market thereby leading to deepening of the Indian Bond market.
- · A proposal to overhaul capital gains taxes paves the way for the listing of Real Estate Investment Trusts (REITs).
- · An autonomous Bank Board Bureau would help in overhauling the governance structure of public sector banks.
- · Gold monetisation and investment in the National Pension Scheme is a move towards creating an alternate financial asset class that would channelise public savings towards asset creation.
- · A comprehensive Bill for curbing black money and incentivising digital transfer of funds would encourage the inflow of liquidity into the real economy.
- · Abolishing wealth tax and taxing the super-rich attempts is a prudent move to reduce inequality.
- · The Rs 20,000 crore National Investment and Infrastructure Fund (NIIF), the proposal to float tax-free infrastructure bonds and the various other steps for boosting infrastructure are welcome ones indeed.
- · The proposal to launch a National Skills Mission to enhance employability is another extremely welcome step
- · Overall, the budget ensures a path towards sustainable growth
- Targets and expectations
- · Estimated GDP growth for 2014-15 is 7.4%. Growth in 2015-16 is expected to be between 8 to 8.5%.
- · Fiscal deficit of 3% in 3 years. Thus, for the next three years, targets are: 3.9%, for 2015-16; 3.5% for 2016-17; and, 3.0% for 2017-18.
- · Inflation targeting 6%
Energy sector
·
India cannot grow at
double-digit pace without adequate power to drive its industries
·
Aim: To reach a power capacity
of 1,25,000 MW by 2022 with major emphasis on clean energy
Positives
·
Proposal to set up five UMPPs
(Ultra Mega Power Projects)
·
The conclusion of the coal
auction process is sure to add to the positive sentiment.
·
35 per cent of India’s
generation capacity is privately-owned
Negatives
·
The increase in the clean fuel
cess from Rs.100 to Rs. 200 per tonne
·
6.30 per cent hike in the
freight rates for coal
·
the budget is silent on several
other structural issues dogging the sector involving power evacuation and
distribution.
Financial sector
·
The three notable aspects are
the
1.
focus on innovation,
2.
steps towards structural
strengthening, and
3.
move to develop various
segments of the financial sector.
·
Other key highlights include
1.
steps to channelise savings
from physical assets to financial ones,
2.
enhance financial inclusion,
and
3.
remove constraints for foreign
investors.
MUDRA Bank
·
Budget laid a clear emphasis on
enhancing innovation in the financial sector.
·
Proposal to set-up Micro Units Development and Refinance
Agency (MUDRA Bank) will enable microfinance
institutions to lend to individual-run micro-enterprises.
On the Innovation front
·
Clarity and rationalisation of
taxation rules for Real Estate Investment Trusts (REITs) and Infrastructure
Investment Trusts (InvITs) will pave the way for these new vehicles to be
introduced during the year.
·
This will benefit real estate
players having lease-generating commercial assets and infrastructure developers
with operating projects.
·
The plan to set-up the National
Investment and Infrastructure Fund (NIIF) for taking equity in infrastructure
projects will catalyse the infrastructure investments.
·
With the approval for Gujarat
International Finance Tec-City (GIFT), India will take baby steps towards
developing as a global financial centre.
·
Finally, the planned Trade
Receivables Discounting System (TReDS) will help SMEs to reduce their working
capital cycle.
·
Once implemented, these
innovations have a potential to significantly develop the Indian financial
sector to support multiple stakeholders and industries.
On the Structural front
·
Finance Minister has announced
reforms in the bankruptcy law, which will effectively address the
non-performing assets challenge for banks in the long term.
·
Allowing large non-banking
finance companies (NBFCs) to use the SARFAESI Act will significantly augment
their recovery efforts.
·
The proposed merger of
Securities and Exchange board of India (SEBI) and Forward Markets Commission
(FMC) will ensure better regulatory supervision of financial markets that are
becoming increasingly complex.
·
The establishment of a Bank
Boards Bureau to select heads of government-owned PSU banks and drive their
capital management strategies will also strengthen the sector.
·
Finally, path towards a Bank
Holding Company over the medium term will enhance governance practices and
allow better visibility of capital for public sector banks.
·
Another notable push has been
given to the alternate asset management, insurance, pension, and asset
management sectors.
·
Alternate Investment Funds have
been made pass-through from an income tax perspective and foreign investment
has also been allowed.This has the potential to significantly increase the flow
of funds to real estate, start-ups and early stage companies and infrastructure
projects through professionally managed specialised structure
·
Given the large investment
needs, the bond markets and banking sector are expected to play a critical role
in providing the necessary debt funding.
·
Similarly, a higher capital
allocation for public sector banks would have prepared them well for growth, as
well as to meet their current challenges.
Taxation Reforms
·
putting off the implementation
of General Anti-Avoidance Rule (GAAR) by two more years
·
GST withheld till 2016
·
The perennial problem of
subsidies falls into this category (expenditure reform).
·
Fiscal federalism received a
boost with the Fourteenth Finance Commission awarding a larger share of gross
tax revenues to the States and the reduced space available to the Centre has
been cited as one reason for going slow on fiscal consolidation.
·
The budget has promised to
reduce corporation tax from 30 to 25 per cent over the next four years.
·
Abolishment of wealth tax,
similar to what the government did in 1986 in relation to estate duty, is a
welcome step. Replacement of this tax with a 2 per cent surcharge on the
super-rich is a clever act of substituting a more effective way of recovering
tax on the rich rather than tax on assets.
Participatory Notes
·
crony/crooked facilitator for
black money-based portfolio investment.
·
The Budget does not treat PNs
as a time bomb and to seek to abolish this derivative, as the Tarapore
Committee had wanted (so it is still left the way it is. Instead seriouds
measure will be taken to combat the menace of black money)
Factors that can positively impact growth
·
demographic dividend,
·
12 months a year of
farm-friendly weather
·
a highly competitive, skilled
and semi-skilled labour force and
·
low wage rates at the national
level, the advantages of which have already been proved to the world by the
outsourcing phenomenon.
Infromal Sector
·
‘fund the unfunded’ 58 million
micro and small businesses in the non-formal sector.
·
This sectoris unique to India.
While in other countries the informal sector is largely illegal, in India, it
is non-formal because government policies have not reached it.
·
These 58 million non-formal
micro businesses generate millions of rural and semi-urban entrepreneurs and
provide 128 million jobs.
·
Two-thirds of these units are
operated by Scheduled Castes, Scheduled Tribes and Other Backward Classes.
·
Yet, this Kamadhenu of job
creation gets only 4 per cent of its credit needs from banks.
·
The sector now borrows at
usurious rates of interest of 120 per cent and beyond.
·
they have posted the fastest
growth among all segments of the Indian economy. But economic policymaking in
India continued to ignore them
What has changed this time
·
In the last budget, the Modi
government had announced a committee to structure a new financial architecture
for this sector. The Reserve Bank of India reportedly opposed any new
architecture.
·
But this Budget has gone ahead
and announced a new financial architecture, the Micro Units Development Refinance Agency
(MUDRA), for the non-formal sector with a corpus
of Rs.20,000 crore and budgetary support of Rs.3,000 crore for credit
guarantee.
·
MUDRA will come into existence
by a separate law.
·
This will fund the millions of
entrepreneurs by an innovative financial architecture that will integrate the
existing private financiers of small businesses as last-mile lenders.
·
It is a completely indigenous,
India-centric and innovative solution for the most job-intensive, yet totally
credit-starved, segment of an economy unique to India.
·
The MUDRA idea requires
millions of private financial intermediaries, who are currently providing
finance to non-formal businesses, to be registered and integrated into the new
architecture as the last mile delivery instrumentalities.
Monetisation of gold
·
monetisation of gold — creating
and circulating money based on gold.
·
Modern economists would dismiss
gold as a wasteful item; as a “relic of barbarism.”
·
through the sovereign gold
bonds proposed in the Budget, the government can generate a substantial gold
stock as buffer stock, India can aggregate its demand for gold and use that
power in the international market.
·
If it builds a decent buffer
stock, it can play the global gold market which, barring China perhaps, no
other country can, because only in India private gold consumption is as high as
a fourth of the world’s.
·
Despite that, India has no gold
refining and standardisation infrastructure. This new policy will help build
this.
·
government would introduce gold
deposit schemes in a bid to curb imports of the yellow metal, a key contributor
to the current account deficit of India
·
Over 20,000 tonnes of gold lies
idle with Indian households without being traded or monetised. India does not
produce gold and imports 800-1,000 tonnes of it every year, hurting the trade
balance.
·
Indians mainly prefer to hold
their gold in the form of ornaments, and the Finance Minister wants these to be
put into productive use.
·
Mr. Jaitley said he planned to
offer a gold monetisation scheme and a sovereign gold bond as an alternative to
buying metal gold. He did not offer a time frame for them.
·
The new scheme [gold
monetisation] will allow the depositors of gold to earn interest in their metal
accounts, and jewellers to obtain loans in their metal account. Banks/other
dealers would also be able to monetise this gold
·
On gold bonds, he said it would
carry a fixed rate of interest and be redeemable in cash in terms of the face
value of gold at the time of redemption.
·
The government will start work
on developing an Indian gold coin, carrying the image of Ashok Chakra. “Such an
Indian gold coin will help reduce the demand for coins minted outside India and
help recycle the gold available in the country
·
Challenges
·
The only concern is that unless
full tax immunity is granted to gold to be lodged in bonds, the entire stock of
black gold may not enter monetisation.
·
The idea of gold monetisation
also calls for a massive campaign to convince the millions of Indians
possessing gold to look at gold bonds as equal to gold itself.
Insurance
·
A large proportion of India’s
population is without insurance of any kind -- health, accidental or life.
Worryingly, as our young population ages, it is also going to be pension-less
·
2011 Census, which showed that
India’s southern States had already achieved replacement levels of fertility,
and the country would need to start dealing with a growing proportion of
elderly people in its population.
·
Mr. Jaitley announced three
insurance schemes — Pradhan Mantri Suraksha BimaYojna, which will cover
accidental death risk of Rs. 2 lakh for a premium of Rs. 12 per year, Atal
Pension Yojana, a contributory pension scheme, and the Pradhan MantriJeevanJyotiBimaYojana,
to provide both natural and accidental death cover of Rs. 2 lakh with a premium
of Rs. 330 per year, for the age group 18-50.
·
For the Atal Pension Yojana,
the government will contribute 50 per cent of the beneficiaries’ premium up to
Rs. 1,000 per year for five years in new Jan Dhan accounts opened before
December 31, 2015.
·
The budget had additional
offers for senior citizens. Mr. Jaitley proposed the creation of a Senior
Citizen Welfare Fund which would appropriate unclaimed deposits in the Public
Provident Fund and the Employee Provident Fund.
Criticism
·
criticised the government for
failing to enact a comprehensive universal pension scheme
·
the government has cut
allocations to the National Social Assistance Programme, which provides
pensions to the elderly, widows and differently abled people, by Rs. 1,000
crore in the new budget.
·
accident insurance for Rs.2
lakh at Rs.12 per annum; for life insurance at a premium of Rs.330 per annum
and lifelong pension on an annual premium of up to Rs.1,000, each to be
contributed by the beneficiary and the government equally. This ambitious plan
aims to reach crores of poor Indians.
·
The insurance and pension idea
also needs mobilisation of crores of beneficiaries into the network.
Women Safety
·
Nirbhaya fund gets Rs. 1,000
crore
Middle class
·
In this Budget, the middle
class has little to cheer about.
·
Smile on their faces only after
abolishing personal income tax.current minimum taxable limit unchanged at Rs.
2.5 lakh
·
The tax deduction limit for individuals,
which provides deduction in respect of investment in saving instruments such as
Provident Fund, Equity Linked Savings Scheme, life insurance premium, housing
loan repayment and National Savings Scheme, was left unchanged at Rs. 1.5 lakh
Salaried middle class
·
disappointment for the salaried
middle-class individual with neither an increase in the minimum taxable limit
nor reduction in personal tax rates
·
Instead it offered marginal
benefits by increasing exemption limits for premium payments on health
insurance and additional exemption for contribution towards the New Pension
Scheme (NPS).
·
For an individual tax payer,
what is new in terms of deductions is the increase in the health insurance
premium to Rs. 25,000 from Rs.15,000 and increase in transport allowance to Rs.
19,200 a year from Rs. 9,600 a year. Also there is an additional exemption of
Rs. 50,000 contribution towards the NPS.
·
Instead focussed on increasing
the tax exemptions on premium payment towards health insurance and contribution
towards pension, among others.
Senior Citizens
·
For senior citizens, the
medical premium limit was increased to Rs. 30,000 from Rs. 20,000.
·
For those above the age of 80
not covered under medical insurance, a deduction of up to Rs. 30,000 towards
medical expenditure is allowed.
Black money
·
Rolling out a multipronged
strategy to clamp down on the parallel economy
·
proposed the introduction of
two comprehensive Bills in the current Parliament session to tackle black money
— both on the domestic and international front.
·
The government will soon
introduce a Bill on black money to specifically deal with illicit money stashed
abroad and another, the Benami Transactions (Prohibition) Bill, to enable
confiscation of benami property, particularly in real estate, and enable
prosecution of offenders.
·
Under the proposed law on black
money, concealment of income and assets and evasion of tax on foreign assets
will be declared a non-compoundable offence, punishable with upto 10 years’
rigorous imprisonment and penalty at the rate of 300 per cent tax.
·
Offenders will no more have the
option of approaching the Settlement Commission.
·
Abettors, whether individuals,
companies or financial institutions, will also be prosecuted and penalised.
·
The proposed law will make it
mandatory for beneficial owners or beneficiaries of foreign assets of any value
to file returns. Assessees will be bound to quote the date of opening of
foreign accounts.
No exemptions
·
Non-filing or inadequate
disclosure will attract up to seven years’ imprisonment, whereas
income/undisclosed income from undisclosed/disclosed assets abroad will be
taxable at the maximum marginal rate. In such cases, no exemptions or
deductions will be allowed.
Seizure clause
·
Under the proposed law, the
government will also make concealment or tax evasion on foreign assets a
predicate offence under the Prevention of Money Laundering Act (PMLA), enabling
prosecution of offenders, besides attachment and confiscation of unaccounted
assets situated abroad.
·
The definition of “proceeds of
crime” under the Act is accordingly being amended to facilitate confiscation of
assets in India equivalent to such a property, if it cannot be forfeited.
·
False declarations or documents
in business transactions relating to Customs is also being made punishable
under PMLA.
·
The government plans to amend
the Foreign Exchange Management Act to enable seizure of domestic assets of a
value equivalent to foreign exchange/security or immovable property located
abroad, held in violation of the Act. Such violations will also attract up to
five years’ punishment and penalty.
Curbs on advance
·
Besides, Income Tax Act
provisions are being improved to prohibit acceptance or payment of an advance
of Rs.20,000 or more in cash for purchase of immovable property, levying
penalty of equal amount.
·
While quoting PAN will be made
mandatory for purchase/sale exceeding value of Rs.1 lakh, third-party reporting
entities will have to furnish details of foreign currency sales and
cross-border transactions. The common practice of splitting of reportable
transactions to evade detection will also be addressed.
Defence
·
Modest hike in outlay for
Defence
·
“one rank, one pension” (OROP)
scheme found no mention in the Union Budget
·
The methodology of calculating
OROP is pending between the Services and the Defence Ministries
·
With a major modernisation
drive under way, the defence budget was increased by a modest Rs. 24,000 crore
over the previous year’s to Rs. 2,46,727 crore.
·
This is 7.7 per cent over the
budget estimates of 2013-14 and about 11 per cent over the revised estimates of
Rs. 2,22,370 crore.
·
Of the allocation of Rs.
2,46,727 crore, revenue expenditure gets Rs. 1,52,139 crore and capital
expenditure Rs. 94,588 crore.
·
However, committed liabilities
within the capital budget are so high that it leaves little money for new
acquisitions.
Realty Sector
·
Budget fails to confer industry
status to realty sector’ or the affordable housing segment and
·
there are only few positives
from the thrust on infrastructure, which could benefit the real estate sector.
·
The Finance Minister said the
government proposed to build two crore houses in urban areas and four crore
houses in rural areas under the ‘Housing for all by 2022’ scheme. This could
potentially boost the sector.
·
sadly the budget does not give
any direction towards executing this
·
With regard to Real Estate
Investment Trusts (REITs) and Infrastructure Investment Trusts (INViTs), the
Finance Minister said the treatment granted to the sponsor on offloading of
units at the time of listing will be same as that granted if the shareholding
of the special purpose vehicle (SPV) had been offloaded at the stage of direct
listing. Further, rental income from real estate assets directly held by REITs
are proposed to be allowed to pass through and taxed in the hands of the unit
holders of the REIT.
·
Higher service tax from 12.36
to 14 per cent will increase the cost of housing.
·
On the positive side, the
withdrawal of wealth tax could boost investments by the middle-class and some
sections of high net-worth individuals.
·
Lowering of corporate tax by 5
per cent in the next few years could attract investments.
Investment environment for corporates, foreign players
·
right noises to corporates and
foreign investors, by assuring a stable tax regime and ease of doing business
in India.
·
lower the corporate tax rate
over the next four years to 25 per cent from 30 per cent.
·
This will lead to higher level
of investment, higher growth and more jobs. This process of reduction has to be
necessarily accompanied by rationalisation and removal of various kinds of tax
exemptions and incentives for corporate taxpayers, which incidentally account
for a large number of tax disputes
·
The budget also said the key
tax reform in the form of goods and services tax (GST) would be rolled out from
April 1, 2016
·
inverted duty structure by
reducing basic customs duty on inputs, intermediates and reduction in Special
Additional Duty to incentivise manufacturers.
·
Increase in service tax rate to
14 per cent and pruning of negative list as a precursor for GST, Cenvat credit
time limit increased from 6 months to 1 year
·
In one of the key moves for
offering clarity mainly to foreign investors, the budget deferred the
implementation of the controversial General Anti-Avoidance Rules or (GAAR)
until 2017.
·
gave an assurance of quick
resolutions for pending tax disputes.
·
He removed the distinction
between direct and portfolio investors, a move which would encourage foreign
investors to take stakes in Indian firms.
·
“There has also been an attempt
to address the key issues of the investors like clarity on REITs and
non-applicability of minimum alternative tax on foreign portfolio investors.
·
Reduction in tax rate on royalty
payments to 10 per cent etc. will help boost business confidence
·
The budget also raised the
threshold for applicability of transfer pricing norms to Rs. 20 crore from Rs.
5 crore.
·
This will significantly reduce
the compliance burden for a large number of taxpayers. This is a welcome move
and shows the intent of the government to reduce the pains of the honest
taxpayer
Healthcare
·
Union Finance Minister
ArunJaitley’s announcement of new AIIMS-like institutions, tax sops for those
who buy health insurance, and Rs. 33,150 crore allocation has given the health
sector little to cheer.
·
Though the draft of the
government’s new national health policy wants public health expenditure to
increase to 2.5 per cent of the GDP, the allocation seems insufficient to meet
the government’s ambitious universal health assurance mission that includes
free diagnostics and drugs up to a certain quantum, besides improved services.
·
The medical community feels
that opening of new All India Institutes of Medical Sciences in Jammu and
Kashmir, Punjab, Tamil Nadu, Himachal Pradesh and Assam in itself holds little
meaning, till the government provides quality doctors.
·
Mr. Jaitley’s push to health
insurance has also received a mixed response. India has a sizeable population
without insurance. The Minister himself admitted: “A large proportion of
India’s population is without insurance of any kind — health, accidental or
life.”
·
By encouraging private insurance,
we are pushing the middle class towards private health care. This will also
lead to a dual structure, in which there will be tax breaks for those who can
afford insurance and poorly resourced public provisions for those who can’t pay
·
The plan to run a scheme for
giving physical aids and assisted living devices to senior citizens, living
below the poverty line, has met with public approval, though there are wide
gaps in geriatric care
·
Senior citizens are always an
ignored part of the budget, but this one seems to have addressed it partially
through the reduction of health insurance premium. But what about senior
citizens who do not have health insurance cover?
·
The decision not to increase
import duty on medical devices and to bring down service tax on ambulance has
also been welcomed.
·
100 per cent automatic FDI
route in medical device industry.
·
Didn’t make the ‘Buy India’
policy mandatory
·
Ambulance services have been
exempted from tax, and basic custom duty, and artificial hearts have been taken
off countervailing duty, a move that will help patients.
Infrastructure
·
weak corporate balance sheets,
an impaired banking system, difficulty of exit, and the deficiencies of the
public-private partnership model in infrastructure” held back private
investments.
·
sought to set right India’s
troubled infrastructure sector with increased public investments
·
Our infrastructure does not
match our growth ambitions. There is a pressing need to increase public
investment
·
Rs. 70,000 crore more as
investments in infrastructure
·
A large chunk of the allocation
will go toward roads and railways.
·
Minister proposed measures such
as simplified bankruptcy laws, a mechanism for easier regulatory clearances,
and revisiting of the public-private partnership model.
·
A national investment and
infrastructure fund was announced, with an annual flow of Rs. 20,000 crore.
·
All these are measures to get
the private sector serious about infrastructure again
·
would use the space created by
relaxing the fiscal deficit targets to fund infrastructure. (Fiscal deficit,
the excess of expenditure over revenues, will now be reduced slower than
earlier proposed, freeing up more money).
·
Another source of funds will
come about through the conversion of the excise duty on petrol and diesel of
Rs. 4 a litre into road cess. This cess has been estimated to bring in Rs.
40,000 crore.
Bankruptcy law reform
·
would be key to “improving the
ease of doing business,” something the earlier Acts failed to do.
·
The plan to make regulatory
clearances easier involved creating a system with a pre-existing regulatory
mechanism.
·
five new ultra mega power
projects, each of 4,000-megawatt capacity.
·
The Minister intends to allow
tax-free infrastructure bonds for rail, road and irrigation projects. One of
the key proposals is to rework public private partnerships.
·
For the model to work, the
Minister indicated the “sovereign will have to bear a major part of the risk
without, of course, absorbing it entirely.”
Comprehensive ‘Bankruptcy Code’ proposed
·
In a bid to improve the ease of
doing business environment in the country, Finance Minister ArunJaitley on
Saturday said the government will unveil a comprehensive Bankruptcy Code in the
current fiscal.
·
“Bankruptcy law reform, that
brings about legal certainty and speed, has been identified as a key priority
for improving the ease of doing business,” he said in the Budget 2015-16
presented to Parliament.
·
“SICA [Sick Industrial
Companies Act] and BIFR [Bureau for Industrial and Financial Reconstruction]
have failed in achieving these objectives. We will bring a comprehensive
Bankruptcy Code in fiscal 2015-16, that will meet global standards and provide
necessary judicial capacity,” he said.
New money-sharing regime is in
No budgetry support
·
For eight schemes and
programmes, the Union government has completely stopped its budgetary support
·
The government has decided to
delink eight Centrally Sponsored Schemes (CSS), including National e-Governance
Plan, Backward Regions Grant Funds, Modernisation of Police Forces and Rajiv
Gandhi Panchayat SashaktikaranAbhiyaan (RGPSA), from its support.
Greater share of the states
·
For an additional 24 schemes,
States will now have to shoulder a greater burden as the Union government takes
a step back.
·
These include flagship schemes,
including the Swachh Bharat Abhiyaan, the National Health Mission, the
RashtriyaMadhyamikShikshaAbhiyaan, the Integrated Child Development Scheme, the
National AIDS and STD Control Programme and the Rural Housing scheme.
Fully centre funded
·
Thirty-one schemes, including
the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the
Mid Day Meal Scheme, the SarvaShikshaAbhiyaan and scholarship schemes, will
remain fully funded by the Central government.
Things that will costs more
·
Smoking and consumption of
tobacco in other forms will be more expensive. Excise duty is being increased
by 25 per cent on cigarettes of length not exceeding 65 mm and by 15 per cent
on cigarettes of other lengths.
·
the increase in service tax
will make a whole lot of services costlier, including air travel, eating out
and paying bills.
·
Subsequently, eating out at
restaurants, stay in hotels, air travel, cable and DTH services, services at
beauty parlours, courier service, credit and debit card services, dry cleaning
of clothes, stock brokering, asset management and insurance that require
service of another party will become expensive.Plastic bags and sacks will
become costlier as the tariff rate of excise duty has been hiked to 18 per cent
from 12 per cent. Cement will become more expensive with excise duty being
increased to Rs. 1,000 a tonne from Rs. 900 a tonne.
·
Aerated, flavoured drinks and
packaged water will cost more as excise duty has gone up to 18 per cent from 12
per cent.
Things that will costs less
·
Products that will turn cheaper
include leather footwear, locally made mobile phones, tablets, microwave ovens,
peanut butter, packaged fruits, ambulance service and agarbattis.
·
To facilitate a smooth
transition to the levy of tax on services by both the Centre and the States, it
is proposed to increase the present rate of service tax, plus education cesses,
from 12.36 per cent to a consolidated rate of 14 per cent
·
commonly used items by reducing
duties. Leather footwear priced above Rs. 1,000 a pair will cost less as excise
duty has gone down to 6 per cent from 12 per cent. Packaged fruits and
vegetables will become cheaper as pre-cooling, ripening, retail packing and
labelling have been exempted from service tax.
·
Excise duty on locally made
mobile phones, LED/LCD panels, LED lights and LED Lamps has been cut.
·
Microwave ovens are likely to
become cheaper as a key component, magnetron, has been exempted from basic
customs duty as against 5 per cent earlier. Refrigerator prices could also come
down.
·
Similarly, solar water heaters
will be less expensive
·
Agarbatti prices will come down
as the item will now attract nil excise duty.”
·
Visits to a museum, zoo,
national park, wildlife sanctuary or tiger reserve will become cheaper with Mr.
Jaitley exempting such activities from service tax.
Clean energy sector
·
Though budget reiterated
government’s ambitious capacity addition plans in renewable energy sector, it
failed to talk about funds towards development of clean energy, feels the
industry.
·
Besides seeking priority sector
lending status, the industry was expecting government announcements with regard
to access of low cost funds and various other avenues such as ECBs (external
commercial borrowings). But no announcement was made on finance side.
·
The government has set an
ambitious target of generating 175,000 MW of energy through renewable energy
sources by 2022. In this, solar is expected to contribute 100,000 MW (current 3
GW to 100 GW), followed by wind (60,000 MW), biomass (10,000 MW) and small
hydro (5000 MW). As of December 2014, India’s total renewable energy installed
capacity stood at 33,792 MW.
·
Unlike rail and roads, tax free
bonds have not been specifically proposed for renewable energy.
·
However, the proposal to
increase the clean energy CessRs. 100 to Rs. 200 will benefit the industry as
it would significantly boost the National Clean Energy Fund
Farming
·
Irrigation, organic farming
take centre stage
·
Pradhan Mantri Gram
SinchaiYojna aimed at ‘per drop more crop’ and ParamparagatKrishiVikasYojna
(organic farming) as the two most important progammes in the farm sector to
enhance productivity and production.
·
He announced an allocation of
Rs. 5,300 crore for micro-irrigation, watershed development and the
“sinchaiyojna’’ and Rs. 300 crore for organic farming with a request to state
governments to “chip in’’ for both.
·
Prime Minister Narendra Modi
had recently launched the Soil Health Card Scheme from Suratgarh in Rajasthan.
·
Recognising that agriculture
incomes were under stress, Mr. Jaitley announced that a Unified National
Agriculture Market would be set up to increase farmers’ incomes with an
“incidental’’ advantage of moderating increase in prices which has been the
bane of many a government. “While farmers are no longer in the clutches of
traders, his produce does not command the best national price’’
·
Farm credit underpins the
efforts of hardworking farmers. Raising the farm credit target by Rs. 50,000
crore to Rs. 8.5 lakh crore for 2015-16, which he expects banks to surpass.
·
At the same time to support the
sector through effective and “hassle-free” agriculture credit with a special
focus on small and marginal farmers, the Finance Minister allocated Rs. 25,000
crore to the corpus on small and marginal farmers.
·
However, funding for the UPA
flagship programmes of RashtriyaKrishiVikasYojna has been reduced and the
National Food Security Mission, Extension programme and crop insurance schemes
have been ignored.
MGNREA
·
set aside Rs. 34,699 crore for
the programme with the promise that Rs. 5,000 crore would be thrown in if
additional resources are mobilised from tax buoyancy.
Domestic electronics
·
To promote domestic electronics
manufacturing, the government removed 4 per cent special additional duty on PC
parts but computer makers lamented absence of any incentive for export of ‘Made
in India’ IT products.
·
Finance Minister ArunJaitley
proposed removal of 4 per cent special additional duty (SAD) on PC components
and imposition of education cess on imported electronic products to spur
domestic manufacturing.
·
I propose to fully exempt all
goods, except populated printed circuit boards for use in manufacture of ITA
bound items from SAD and reduce the SAD on imports of certain other inputs and
raw materials subject to actual user condition
·
The government has proposed to
impose basic customs duty at 10 per cent on specified telecom products that are
outside the purview of the Information Technology Agreement (ITA).
·
introduction of the much
awaited GST from next year, which is aimed at rejuvenating the industry, will
mitigate cascading and double taxation in a major way and pave the way for a
common national market, making manufacturing more competitive.
Ports
·
Ports to set sail on
corporatisation
·
Union Finance Minister
ArunJaitley has asked major ports to go in for corporatisation and become
companies under the Companies Act.
·
Presenting the Union Budget, he
said the private sector had shown that minor ports could be an attractive
investment.
·
Ports in the public sector need
to both attract such investment as well as leverage the huge land resources
lying unused with them. To enable us to do so, ports in public sector will be
encouraged to corporatise, and become companies under the Companies Act
·
The Kamarajar Port is the first
corporate port in the country.
School Education
·
Centre drops out of school
education
·
The allocation for the
Department of School Education and Literacy in the Union Human Resource
Development Ministry has seen a drastic drop
·
effective administration of
school education essentially a job of the States
·
The overall allocation for
education sector, including higher education, is Rs. 68,968 crore.
Private equity industry
·
This has truly been a
breakthrough budget for the private equity/venture capital industry.
·
Tax pass-through for all
category I and category II funds, and the ability to blend foreign capital in
AIFs, will provide significantly greater access to funds for Indian private
equity/venture capital industry.
·
Two budget measures that will
greatly accelerate the availability of debt capital to unlisted mid-sized
companies are:
(1) enabling NBFCs (mid-sized) with SARFAESI Act and
(2) MSME refinancing mechanism through the MUDRA Bank.
·
These measure give greater
protection to the lending NBFCs, and hence enhance their ability to lend
particularly at the growth stages of companies.
·
The clarifications on permanent
establishment regarding India-focused offshore fund managers in India is a good
initial platform to enable offshore fund managers to operate from India.
Public Sector Banks
·
In order to improve the
governance of Public Sector banks, the government intends to set up an
autonomous Bank Board Bureau.
·
The Bureau will search and
select heads of Public Sector banks and help them in developing differentiated
strategies and capital raising plans through innovative financial methods and
instruments.
·
This would be an interim step
towards establishing a holding and investment company for banks.
·
This is in line with
recommendations made in the Nayak Committee wherein the government stake in the
banks be transferred to a separate bank investment company, which will be
professionally managed and be able to raise resources.
·
The holding company concept has
been successfully implemented elsewhere in the world. One good example
described in the report is the UK Financial Investments
SARFAESI Act to cover NBFCs
·
The Budget proposal to treat
non-banking financial companies (NBFCs) as financial institutions under the
SARFAESI Act will be a big boost to the sector.
·
A long-standing demand of the
industry, this will allow NBFCs to enjoy the benefits that presently apply only
to banks.
·
To bring parity in regulation
of NBFCs with other financial institutions in matters relates to recovery.
·
It is proposed that NBFCs
registered with RBI and having asset size of Rs.500 crore and above will be
considered for notifications as ‘financial institution’ in terms of the
SARFAESI Act, 2002
·
NBFCs are not covered under the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest (SARFAESI) Act.
·
Though the Reserve Bank of
India has tightened the NPA recognition norms, it has not laid out clear
guidelines either on the recovery mechanism or the provisions for NBFCs to take
action against defaulters under SARFAESI Act.
·
Most of the NBFCs are unable to
recover bad debts. There have been lakhs of cases that are dragged to court
every year by NBFCs. Hence, the working group of RBI, headed by UshaThorat, had
recommended that the Act be extended to cover the NBFCs also.
·
Thus, the budget announcement
is a big boost to NBFCs. The measure will help strengthen the recovery
capabilities of NBFCs. The Sarfaesi Act was enacted to facilitate banks and
financial institutions to realise long-term assets, improve recovery by
exercising powers to take possession of securities, and sell them in order to
reduce NPAs.
·
It is a huge positive for
NBFCs. This will enable lending with greater confidence as they can be assured
of speedier recovery
Textile Industry
·
Textile industry disappointed
·
allocation for the Technology
Upgradation Fund Scheme had been reduced to Rs.1,520 crore for 2015-16 from
Rs.1,864 crore allocated for 2014-15.
·
Payments under the scheme were
pending for the last three quarters and the provision had to be doubled to
disburse the pending amount.
·
need to remove import duty and
reduce Central Excise on man-made fibres. Indian man-made fibres were 23 per
cent higher compared to international price and, therefore, the growth of the
sector in the country was stagnant.
Time deposits to include recurring deposits too
·
The budget has proposed to
amend the definition of ‘time deposits’ so as to include recurring deposits within
its scope for the purpose of deduction of tax
·
However, the existing threshold
limit of Rs. 10,000 for non-deduction of tax shall also be applicable in case
of interest payment on recurring deposits to safeguard interests of small
depositors.
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