Holidaying this long weekend? Railway over flight is the traveller's choice

However, attractive pricing has given airlines an edge over the railways among youngsters

It is widely believed that the Indian railways is struggling to retain its customer base, which it is losing to various airlines. However, if the numbers are to be believed, the rail route is still the most favoured mode of transport for weekend travellers.

According to industry estimates, approximately 1.5 million Indians will be taking flights over the coming weekend starting from August 12, while the number of people travelling in non-suburban trains alone will come to around 44 million. Last year, during the same time, the railways carried 42 million passengers, while airlines carried only 1.2 million.

economy news

"While about 1.5 million Indians will be travelling via flights over the four-day-long weekend, people travelling in non-suburban trains (intercity) will be around 44 million. That's roughly about 29 times more travellers in trains versus flights," said Aloke Bajpai, chief executive officer and co-founder of Ixigo, an online travel platform. According to Ixigo data, the top-most holiday destinations for train travellers are Goa, Jammu, Tirupati, and Amritsar, while flight travellers prefer Goa, Leh, Kochi, and Udaipur.

According to Paytm, weekday versus weekend travel patterns of Indians reveal that people between 25-35 years of age were 26 per cent more likely to travel on weekends, while people below 40 years were 17 per cent more likely to travel on long weekends. There was hardly any deviation in weekend versus weekday travel patterns of senior citizens, implying that long weekends don't excite them too much......read more

 

Two vehicles set afire in Darjeeling, woman GJM activist held

Activists also took out a rally and raised slogans in support of Gorkhaland

 

Two vehicles were set ablaze by the Gorkhaland agitators in the Darjeeling hills on Wednesday amidst special security arrangements as the indefinite shutdown called by the Gorkha Janmukti Morcha (GJM) entered its 56th day.

A woman GJM activist was arrested from Darjeeling for her alleged involvement in the violence and arson that took place in the hills in June, a senior police officer said.

According to the police, in the morning, a truck carrying newspapers was set on fire by the agitators in Kurseong and another truck carrying food supplies was set ablaze in Kalimpong in the early hours.(economy news)

With the GJM threatening to step up the agitation in view of the expiry of its "deadline" to the Centre for intervention to resolve the crisis, the police and security personnel have made special security arrangements in the hills and are keeping a tight vigil to avoid any untoward incident.

Like Tuesday, a police contingent was seen marching towards Singhmari in Darjeeling town, where the GJM head office is located.

The police contingent went up to Patlebas, a stronghold of GJM supremo Bimal Gurung.

Both Singhmari and Patlebas have witnessed several incidents of violence involving the GJM activists and police in the last couple of months......read more

Now, Aadhaar may be made mandatory for buying shares, mutual funds

When the new rule will come into effect and whether Aadhaar will completely replace PAN is not known

The government might soon make Aadhaar mandatory for buying shares and mutual funds to prevent the conversion of black money into white through the stock market, the Economic Times reported on Thursday.

According to the financial daily, the government and the Securities and Exchange Board of India (Sebi) are planning to link financial market transactions to Aadhaar after, according to two sources cited by the report, the former came to realise that the permanent account number (PAN) might not be sufficient in putting an end to tax evasion.

"We have been told that making Aadhaar compulsory is in the offing," a top official with a financial services firm told the financial daily. (economic policy)

However, according to a CEO of a brokerage firm, who spoke to the financial daily on the condition of anonymity, the move could unsettle some "regional players" who could see a "dip in activity even in IPO market". However, the source said this dip would be temporary. According to the unnamed CEO, these players would be worried over how many clients would remain once Aadhaar is made mandatory.

According to the report, when such a compulsory linking will come into effect is unclear. Further, it is not known yet whether the Aadhaar will serve as the sole identification number for financial market transactions, thereby replacing the PAN.

Is PAN not enough?

Brokers who spoke to the financial daily said that PAN has not been able to prevent people from using the stock market for money laundering. They said that multiple PANs and fake demat accounts were being used to bring in black money into the stock market.

(Read more)

Five major reasons could be assigned to the demise of the Flipkart-Snapdeal deal

Something did not go right on the weekend of July 29/30. There was an important meeting scheduled between Snapdeal-Flipkart deal for Monday, July 31, which was canceled. This sounded the death knell of the merger deal between the two e-commerce giants. Earlier on July 26, the board of Jasper, the holding company of Snapdeal, had given a go-ahead to continue negotiations for a Snapdeal sale to Flipkart, based on an enhanced buyout offer of $850 million by Flipkart two weeks earlier.

Five major reasons could be assigned to the demise of the deal.

1. Kunal Bahl and Rohit Bansal - the two founders were always opposed to the deal. In the days and weeks preceding the calling off of the deal, Kunal had managed to persuade some of the important board members on his vision of a Taobao and Rakuten like market place, which he called Snapdeal 2.0. Patterned on Alibaba’s Taobao and eBay, Kunal apparently convinced his Board that Snapdeal 2.0 would be an asset-light, local market place which would be much easier for sellers to sell on. The company would shed significant weight, go down from the existing 1,200 employees to perhaps 300 employees in the new avatar. The new Snapdeal would not any longer be into the competitive one-day-two-day delivery system, but would focus on operational efficiencies of its sellers, focusing on cost efficiencies. Basically, what Kunal must have told his board was that the acquisition of eBay by Flipkart had left a void in the ‘market-place’ space in India where the e-commerce entity merely acts as the mall, allowing sellers to open their own outlets, and therefore, playing the role of a destination and real estate owner only. Alibaba in China has perfected this model through Taobao. Bahl sold Snapdeal 2.0 as the Taobao of India.

2. Some of Snapdeal’s minority shareholders, including Azim Premji had protested and opposed the proposed pay outs under the Flipkart deal to Nexus Venture Partners, Kalaari Capital and to the Snapdeal founders, Kunal and Rohit. Snapdeal co-founders Kunal Bahl and Rohit Bansal were likely to receive $30 million in cash each from SoftBank after their exit from the company. Kalaari and Nexus were to receive $60 million from SoftBank, in addition to equity in Flipkart. This special treatment to select shareholders, orchestrated by SoftBank to buy their peace, irked other shareholders....

>>>read more<<<

 

War of words over Rajiv Kumar's column on foreign influence in policymaking

While Bibek Debroy echoed his view in Twitter, Pronob Sen questioned Kumar's conclusion

economy news: A war of words over foreign influence on Indian policymaking broke out on Tuesday after NITI Aayog vice-chairman-designate Rajiv Kumar suggested in a newspaper column that Indian-American economists were fading away as part of the ongoing policy transformation in the government.

Kumar had referred to the exit of incumbent NITI Aayog Vice Chairman Arvind Panagariya and former Reserve Bank of India (RBI) governor Raghuram Rajan, and wrote that “if Lutyens’ Delhi rumours are to be believed, more such resignations can come”. Rajiv Kumar also said that as a result of this transformation, the country might witness appointment of individuals with much better understanding of India’s ground realities.

While Bibek Debroy, Kumar’s future colleague in the NITI Aayog, took to Twitter to echo his view, former chief statistician and principal director in the erstwhile Planning Commission Pronab Sen questioned Kumar’s conclusion.

“The foreign influence wanes, So read the weather vanes. Filthy lucre of a foreign land/ Has sullied many a hand/ And fogged the brains,” Debroy tweeted.

The tweet got an avalanche of response and the sarcasm was evident. Washington-based Sadanand Dhume responded: “All this is very well/ But it’s hard to sell/ Cambridge as a native school/ Oxford as a gurukul/ How some manage, pray tell.”

Kumar did his D.Phil from Oxford, and Debroy was in Cambridge.

Panagariya, who will be returning to Columbia University in the US as professor, told a TV channel that he did not want to comment on the issue. He also refused to talk about his precedessor or successor.

Author Ravi Mantha wrote, “Rushed back from distant shores / to join the rushing tide./ Stepped into manure for an uncertain tenure./ But luckily kept our foreign sinecure.”

Sen, now country director for the International Growth Centre’s (IGC) India Central Programme, was more straightforward in his response. “I don’t think it is an issue of whether home-grown economists are better than those who have worked abroad. To me the real issue is what your axiomatic approach to economics is.”....

read full story

What dual power play? I quit because Columbia wanted me: Arvind Panagariya

Arvind Panagariya abruptly resigned as vice-chairman of NITI Aayog to resume teaching in the US

Arvind Panagariya, who abruptly resigned as vice-chairman of NITI Aayog to resume teaching in the US, today said he did not know at the time of joining that his term will be co-terminus with that of the government even as he dismissed suggestions of two power centres forcing his exit.

In an interview with PTI, Panagariya, 64, cited several examples of how western universities are very stringent about not extending leaves, which is what forced him to return to Columbia University at the end of the month even though the Prime Minister's Office wanted him to continue till 2019.

Asked if knew of such rules why did he not make it clear to the government about his return to teaching when he was appointed the first vice chief of the policy body in 2015, he said he was not told that his term would run concurrently with the term of Prime Minister Narendra Modi.

economy news

"I did not know my tenure will be co-terminus with the government, how would I know? Is there a letter?" he said, adding he accepted the appointment after a phone call came from the Prime Minister's Office.

On the phone, he said he was told he will be vice-chairman and "beyond that I knew nothing. I said OK. I want to do this so I accepted."

Also read :   Air India's vegetarian menu will help airline save Rs 20 crore annually

Panagariya, who took over the reins of a body that was set up after dismantling the Planning Commission that used to set five-year growth roadmaps, dismissed reports of any differences or dual power centres in NITI Aayog were reasons for his exit.

"No, no, no," he said, when asked if the numerous occasions NITI Aayog had the difference of opinions with other wings of the government was the reason for his exit.

He also dismissed the existence of dual power centres in NITI Aayog saying, "You go and talk to my staff." "You have to ask those who are writing those reports ...(READ MORE)

Axis Bank cuts savings bank deposits rate to 3.5% on deposits below Rs 50 lakh

Bank to continue to pay 4% interest on deposits of above Rs 50 lakh

economy policy: Private sector lender Axis Bank has reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh.

However, the bank will continue to pay four per cent interest on deposits of above Rs 50 lakh. The new interest rates will be effective from August 8, Axis Bank said in its filing with the BSE.

Axis Bank’s action follows the decision by State Bank of India (SBI) and Bank of Baroda to reduce rates on savings deposits. SBI was the first bank to cut the savings deposit rate by 50 basis points to 3.5 per cent for deposits up to Rs 1 crore. Bank of Baroda had cut the rate to 3.5 per cent on deposits of up to Rs 50 lakh.

While Kotak Mahindra Bank retained the existing rates of five per cent on savings deposits up to Rs 1 lakh and 6 per cent on deposits between Rs 1 lakh and Rs 1 crore, it reduced the rate on savings deposits of amounts above Rs 1 crore and up to Rs 5 crore from six per cent to 5.5 per cent. The interest rate on deposits of over Rs 5 crores was retained at 5.5 per cent. Karnataka Bank, too, had tweaked the interest rate on savings deposits.

SBI Managing Director Rajnish Kumar had said that it was a choice between increasing MCLR (marginal cost of funds-based lending rate) or reduce the savings bank rates.

A hike in lending rates would have meant an increase in equated monthly instalments (EMIs) for retail, small and medium enterprises, and farm loans. SBI opted to cut savings rate, helping to maintain MCLR at the existing level, he said.

US may lose Indian talent, competitive edge due to H-1B clampdown: Report

                                                                                                                                                       

The brain-gain to India under H-1B outweighs any brain-drain, both countries' economies                                            have gained                                          

    

Clampdown on H-1B programme will make it difficult for the US IT sector to attract open talent from countries like India and America might lose its competitive edge, a top American think-tank has said.

As the Trump administration is carrying out a review of the non-immigrant visas, the Center for Global Development (CGD) in a report said that H-1B visa, the most sought after by Indian IT professionals, is beneficial for both India and the US.

"It is really important to make sure that the I-T sectors from both countries are allowed to attract the right kind of people, because they really allow for innovation and growth in both the countries," Gaurav Khanna, fellow at the CGD and co- author of the research paper, said.

The report titled 'The IT Boom and Other Unintended Consequences of Chasing the American Dream' takes an in-depth look at how the H-1B visa programme affects both the US and Indian economies.

"Both the economies have really benefited from the H-1B programme," he told PTI.

economy news 

"What our paper is really trying to stress, is that on average the US is better off because of the H-1B programme. So clamping down on the H-1B programme will basically not allow the US IT sector to attract the open talent from places like India. The US might then lose its competitive edge in IT production," he warned, adding that IT companies might move to countries like Canada in the event of large scale clampdown on H-1B visas.

Khanna said the research has shown that India has been a beneficiary of brain-gain, rather than brain drain due to the visa programme....(READ MORE)

New NITI Vice-Chairman Rajiv Kumar hints at more exits after Panagariya

According to a column by Kumar, foreign influence on Indian policy making is fading under Modi

Under Narendra Modi, foreign influence on Indian policy making is fading away, writes Rajiv Kumar, who has been selected to replace Arvind Panagariya as the new vice-chairman of the NITI Aayog. In a column published by Hindi daily Dainik Jagran, while referring to Panagariya's exit earlier this month and Raghuram Rajan's decision last year to return to academia after completing his three-year stint as the RBI governor, Kumar writes that if "rumours in Lutyens’ Delhi" are to be believed, more such resignations may occur.

According to Kumar's column, as the "Anglo-American" influence fades, India may see the appointment of homegrown experts who understand its ground realities better than their foreign counterparts and who will be willing to stay and work until the end of their terms.

(economy policy)

Kumar, who holds a DPhil in Economics from the Oxford University and a Ph.D. from the Lucknow University, also argues in his column that it has taken a long time for the Indian policy establishment to shed what he describes as its "Macaulayist mentality".

Kumar writes that in the past, experts emerging from domestic academic institutions have been turned down for high-ranking government positions in favour of their foreign counterparts. As a result, Kumar argues, Indian policies have been influenced by organisations like the IMF, the World Bank, and the foreign universities that these imported experts revere.

As reported earlier, Kumar, a homegrown economist who likes to keep a low profile, is currently a senior fellow at the Centre for Policy Research (CPR) and has also served as the director of the Indian Council for Research on International Economic Relations (ICRIER). CPR and ICRIER are two of the biggest think-tanks in the country....

>>>read full story <<<

Demonetisation effect: Advance tax collections up 42%, returns filed up 25%

Returns filed by this date stood at 28.3 mn against 22.7 mn in corresponding period of 2016-17

The effect of demonetisation was clearly seen in the growth of returns and taxes paid by individuals by 5, the extended deadline for filing income tax returns.

The number of returns filed by this date stood at 28.3 million against 22.7 million during the corresponding period 2016-2017, registering an increase of 24.7 per cent. The growth in the same period last year was 9.9 per cent.

The growth in returns filed by individuals is 25.3 per cent with 27.9 million having been received up to August five against 22.3 million in the corresponding period of FY 2016-2017.(economy news)

"This clearly shows that a substantial number of new tax payers have been brought into the tax net subsequent to demonetisation," the Central Board of Direct Taxes (CBDT) said in a statement here.

The effect of demonetisation is also clearly visible in the growth in direct tax collections.

Advance tax collections of personal income tax showed a growth of about 41.79 per cent as on August 5 over the corresponding period in FY 2016-2017. Personal income tax under self-assessment tax (SAT) grew at 34.25 per cent over the corresponding period in FY 2016-2017.

"The figures amply demonstrate the positive results of the Government's commitment to fighting the menace of black money. CBDT is committed in its resolve to eradicate tax evasion in a non-intrusive manner and widening of tax base," the statement said.

Sound economics, good investment: Should you opt for Bharat 22 ETF?

ETFs have become a preferred vehicle for parking the long-term money

Mayuresh Joshi is Fund Manager at Angel Broking

Last week, the government announced Bharat 22 ETFs, an exchange traded fd of 22 large cap shares. While the composition includes mostly profit-making, dividend paying public sector companies, the government is also including some shares of blue chip companies like ITC, Larsen & Toubro and Axis Bank held under the Special Undertaking of Unit Trust of India or SUUTI.

Economic news

The government observed in the release that over the past 3 years to June 2017, assets under management of exchange traded funds in India surged five times to just under Rs 54,000 crore. The release also emphasized that exchange traded funds or ETFs are a popular class of funds globally. Assets under management are expected to grow to $7 trillion by 2021 from $4 trillion today. There is merit in the argument the government has made in the press release.

ETFs have become a preferred vehicle for parking the long-term money. Sovereign Wealth Funds and Pension Funds worldwide love them. While the average cost of fund management is high in active funds, it is much lower in exchange-traded funds. At the same time, they are relatively less risky with well-defined assets under management. The liquidity of these funds is also high since they are listed on stock exchanges.

So if you make a checklist of investments, ETFs  tick most of the boxes.

Why good economics?

The government's move to create Bharat 22 will allow it to raise money for meeting the disinvestment target. The budget estimate puts it at over Rs 72,000 crore. So far, in 2017-18, it has only managed to raise Rs 9,300 crore. The timing is just about right if they launch it now. This is because stock markets are at a record high and new investors attracted to India are looking for assets like blue chip company shares. The government could raise a significant amount of money by transferring some of the direct holding to the ETF. The release issued last week does not comment on the timing and the amount the government proposes to receive through this....

READ MORE

 

Over 1 million PANs deleted: Check if your card is still active

A person can not be registered with more than one PAN

number

As on July 27, 11,44,211 duplicate PANS have been identified. PAN is the key identifier of taxable entity and aggregator of all financial transactions undertaken by one person.

More than one million permanent account numbers (PANs) were deleted or de-activated by the government, in a move to check fake identities. Reportedly, as on July 27, 11,44,211 duplicate PANS have been identified, said Indian Express. PAN is the key identifier of taxable entity and aggregator of all financial transactions undertaken by one person.

As per government rules, a person cannot be registered with more than one PAN number. The Indian Express reported that the government also detected fake PAN cards which were allotted to non-existing individuals or to people who have submitted false information about themselves.

How to check if your PAN is still active

1. Visit the Income Tax e-filing portal - www.incometaxindiaefiling.gov.in

2. On the homepage, under the ‘Services’ tab, click ‘Know your PAN’

3. The website will take you to a new page where you will be asked to enter - name, gender, religion, date of birth, registered mobile number and click ‘Submit’.

Over 1 million PANs deleted: Check if your card is still active

4. Enter the OTP or one-time password received on the registered mobile number and click on Validate.

5. If your PAN is valid, it will show as ‘Active’ under the remarks column.

Over 1 million PANs deleted: Check if your card is still active

PANs were deactivated during 2004-2007 too.....

(read full story)

 

Missed the ITR deadline? Here's what you need to do next

Filing returns after the due date can have repercussions even if there are no pending liabilities

Filing income tax (I-T) returns on time is every taxpayer’s responsibility and there are several benefits extended to the individual for the same. On the other hand, filing returns after the due date can have repercussions for the taxpayer even if there are no pending tax liabilities. However, if you have missed the deadline, you can file a belated return.

What is a belated return?

A belated I-T return can be filed after the due date but before the end of the assessment year. Belated returns have to be filed within one year from the end of the relevant financial year. Hence, if you need to file your return for financial year 2015-16, the assessment year will be 2016-17 and the belated return can be filed by March 31, 2017. Similarly, if you must file your return for financial year 2016-17, you must do so by March 31, 2018 — the end of assessment year 2017-18.
The procedure to file a belated return is the same as filing the return within the due date. Log into your e-filing account on the I-T department’s website, select the applicable ITR form and assessment year, and proceed. For example, if you are filing the return for financial year 2015-16, select assessment year 2016-17.

Economy news 

Consequences of filing late returns

Missing the deadline or delay in payment of dues against past tax liabilities can lead to:

• Penalties and interests: In the case of an unpaid tax amount, the assessee is charged a penal interest under Section 234A and 234B per month till the liability is paid off. After the deadline, a further interest of one per cent per month will have to be paid under Section 234C as well.

• Interest on refunds: Under a provision in the Income Tax Act, an individual is eligible to receive an interest on the excess tax they have paid from April 1 of the assessment year till the date the amount is refunded to the taxpayer. However, after the due date, the assessee will be paid interest on TDS after August 1. This means that you will lose out the interest accrued from April to July.

• No carrying forward of losses: Individuals can carry forward capital losses up to eight subsequent assessment years to be set off against future capital gains arising in the following years. However, if the income tax return is not filed by the due date, taxpayers will not be allowed to carry forward any losses.

GST Council may finalise e-way rules tomorrow

GST provision requires goods more than Rs 50,000 to be pre-registered online before it can be moved

 

 

The GST Council is likely to lower tax rate tomorrow on job works making fabric to garments to 5 per cent and put in place a mechanism for online registration of goods above a certain value before they can be transported.

The Council, headed by Finance Minister Arun Jaitley, will also review at its meeting the implementation of the new Goods and Services Tax (GST) regime since July 1 and may finalise a mechanism to operationalise anti-profiteering provision to protect consumer interest.

Central Board of Excise and Customs (CBEC) Chairperson Vanaja Sarna said the movement of goods between states has smoothened with 25 out of 29 states abolishing check posts.(economy policy)

"About 25 states have removed those check posts. So far, it has been going all right," she told PTI.

This would further smoothen after e-way bill in GST that requires any goods more than Rs 50,000 in value to be pre- registered online before it can be moved is implemented.

"As the e-way bill process for the whole of India gets panned out, we should be able to do something which will be better," Sarna said.

She, however, declined to comment on whether the threshold in e-way bill will be retained at Rs 50,000 amid demands from various quarters to raise it.

>>>READ MORE<<<

 

Modi govt to introduce Housing Challenge to boost affordable homes for all

While allotting ground floors, preference will be given to differently abled and older persons 

Economy news: After successful implementation of Smart City Challenge aimed at improving livability in Indian cities, the government is set to boost its Housing for All scheme, where a competition — Housing Challenge — would be conducted to select the most cost-effective technology to provide affordable housing for citizens....

What is 'Housing for All' scheme?

The government has identified 305 cities and towns in nine states for the beginning of construction housing projects for the urban poor.

The construction of the first 10,000 dwelling units in the first phase of ‘Housing for all’ project under the Pradhan Mantri Awas Yojna (PMAY) will begin in Maloya in August, the Indian Express reported.

Out of the 10,000 units, there will be 3,500 dwelling units for the economically weaker section, 3,000 for low-income group, 2,000 for the middle-income group (MIG-I) and 1,500 for MIG-II.

Condition for PMAYBeneficiary max age: 70 years
Economic Weaker Section: Annual income less than Rs 300,000

Lower Income Group: Annual income Rs 3,00,001 to 6,00,000

The beneficiary should not have an own dwelling unit in his name or in the name of any family member in any part of India.

Features of the scheme

The features of the scheme are that the government will provide an interest subsidy of 6.5 per cent on housing loans availed by the beneficiaries for a period of 20 years under credit link subsidy scheme (CLSS) from the start of a loan.
The houses would be constructed through a technology that is eco-friendly. While allotting ground floors in any housing scheme under PMAY, preference will be given to differently abled and older persons.

>>>READ MORE<<<

20 Indians, including politicians, movie stars have Swiss accounts: Whistleblower

If Federal Court rules in his favour, Rudolf Elmer would release data from Julius Baer bank

In the quiet village of Rorbas, just outside Zurich, Rudolf M. Elmer has been fighting a 12-year-long legal battle against the centuries-old traditions of Swiss banking secrecy. Elmer, who ran the Caribbean operations of the Swiss bank, Julius Baer, for eight years before being dismissed in 2002, was part of the first wave of Swiss bank whistleblowers who helped expose the inner workings of a system that helped the world’s rich and multi-nationals conglomerates evade billions of dollars in taxes through offshore financial structures and tax havens.

In 2011, he was tried for sharing information about tax evasion, money laundering and other financial violations with US tax authorities and WikiLeaks. Over the past six years, Elmer has been imprisoned for 200 days, some of it in solitary confinement, and has fended off an orchestrated harassment campaign against his family...

 #Economypolicy

Edited excerpts:It’s been 15 years since you left Julius Baer and since then we’ve seen more whistleblowers, leaking greater amounts of data on illicit global financial flows. But we’ve also seen some international cooperation over cracking down on tax evasion. How much have things changed?

Well, the question is have things really changed? It looks like to the man on the street that there is a lot of change going on in favour of the public over the last 15 years. In my view, generally speaking, yes there is a lot of talk. But actually not that much has changed, to be crystal clear....

(CLICK HERE FOR FULL STORY)

Chocolate mithais to attract 5% GST, Centre clarifies

Rates for kulfi, dosa batter, portable toilets spelt out

Sandesh, with or without chocolate, will be taxed at 5 per cent, the government clarified on Thursday along with the goods and services tax (GST) rates for other items, including rakhis, idli-dosa batter and kulfi.

However, ambiguity persisted over whether the tax rate for plastic furniture would be 28 per cent as furniture or 18 per cent as plastic items. The sharp jump in tax on car leasing is also expected to be taken up in the GST Council meeting on Saturday.

“Sandesh, whether or not containing chocolate, will attract 5 per cent GST,” the government clarified on Thursday.

#Economynews 

The clarification comes amid reports that sweet shops have discontinued chocolate barfis and chocolate sandesh. The GST rate on chocolates is 28 per cent and Indian sweets are taxed at 5 per cent. Although milk is exempt in the GST, khoya, or concentrated milk, will attract 5 per cent GST.

“Sweet shops in Kolkata were in panic over different GST rates based on the types of sweets and ingredients. Now the government has clarified that the GST rate on all Indian sweets is 5 per cent,” said Archit Gupta, founder and chief executive officer of ClearTax.

The GST was implemented on July 1 and subsumed most indirect taxes such as excise duty, service tax and value-added tax.

The government also clarified that kulfi — the Indian frozen dessert — would attract 18 per cent GST, like ice-cream. Besides, idli-dosa batter would attract 18 per cent GST under the food mixes category, it said.

>>>READ MORE<<<

Rupee set to shed gains, weaken to 65 if dollar revives: Reuters poll

Chinese yuan is forecast to weaken to 6.90 per dollar a year

In 12 month's time the Chinese yuan will have erased most of its gains made this year, provided the US Federal Reserve sticks to its tightening path, boosting the greenback, a Reuters poll showed.

Having strengthened more than 3 per cent since the start of 2017, the yuan is forecast to weaken to 6.90 per US dollar in a year, according to the poll of over 60 foreign exchange analysts taken July 27-Aug 2.

It was trading around 6.72 on Wednesday.

While the US dollar should benefit when the Fed starts shrinking its balance sheet, which it has said it expected to do "relatively soon", it could falter again if the central bank fails to follow through with a rate hike later this year. 

At the start of the year, traders had expected faster rate hikes from the Fed and some form of stimulus from the new Trump administration would drive the dollar up strongly against emerging currencies.(economy policy)

But, the greenback has instead taken a beating on fading hopes that President Trump will be able to push through deep tax cuts and massive infrastructure spending.

That has brightened the outlook for Asian currencies.

Strong Chinese economic data over recent months has cooled worries over the yuan's weakening, leaving further scope for the People's Bank of China (PBOC) to tighten the country's domestic liquidity conditions.

>>>READ MORE<<<

Prices of subsidised LPG zoom 16 per cent since Modi took charge

Global crude oil prices have slumped by 49 per cent during the same period

The prices of subsidised cooking gas zoomed by 16 per cent, from Rs 414 per cylinder when the Bharatiya Janata Party (BJP) government came to power in May 2014 to Rs 479.77 in August 2017, despite global crude oil prices dipping by about 49 per cent.

The Narendra Modi-led government had stormed to power in 2014 on the back of serious corruption charges against the Congress-led regime and the rise in prices of commodities like cooking gas, against which the BJP had raised its voice. Interestingly, the price of liquefied petroleum gas (LPG) was revised 22 times by oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) since May 2014, when the BJP government took charge.

However, on the back of a 49 per cent drop in international crude prices, from $102.71 a barrel on May 30, 2014, to $52.16 (Brent crude) on August 3, 2017, prices of non-subsidised cylinders dipped 44 per cent, from Rs 928.50 per cylinder in May 2014 to Rs 524 in August 2017.

#Economynews

Also, in an effort to reduce the subsidy burden or to completely do away with the subsidy, OMCs are authorised to increase prices of subsidised domestic LPG cylinders by Rs 4 per month till March 2018. "The government stands committed and will continue to provide subsidy assistance to the needy and poor households," said an official close to the development.

The subsidy amount on a 14.2-kg cylinder transferred to the accounts of Delhi consumers stands at Rs 86.54 currently, which the government wants to do away with or reduce to the range of Rs 40 per cylinder by March 2018. The current national average of LPG subsidy per cylinder comes to the tune of about Rs 58 per cylinder.

>>>READ MORE<<<

GST woes: India's gold imports to fall in H2; smuggling seen rising, says WGC

There have been fears the tax increase could stoke under-the-counter buying in India

India's gold imports will likely drop in the second-half of the year from the first six months after jewellers rushed to stock up ahead of new taxes introduced on July 1, the World Gold Council (WGC) said on Thursday.

Faltering appetite in a country where gold is used in everything from investment to wedding gifts could rein in a rally in global prices, trading near their highest level in seven weeks. (economy policy)

"Expecting higher (taxes), certainly some of the imports and some of the demand from the second-half were advanced in the June quarter," Somasundaram PR, Managing Director of WGC's India operations, told Reuters.

As part of a new nationwide sales tax regime introduced in July, the goods and services tax (GST) on gold jumped to 3 percent from 1.2 percent previously. Jewellers have to pay that tax when buying gold imported by banks, while their customers must also pay when making purchases.

India is the world's No.2 gold consumer. The country's demand for the metal in the first-half rose 30 percent from a year ago to 298.4 tonnes, but imports during the period more than doubled to 518.6 tonnes, the WGC said in a report published on Thursday.

India's gold imports typically strengthen in the second-half of the year as the precious metal is considered an auspicious gift at festivals such as Diwali and Dussehra.

Indian gold demand is expected to remain subdued for a few weeks as "consumers who have recently purchased are unlikely to do so again in the short term", the WGC said.

There have been fears the tax increase could stoke under-the-counter buying in India, where millions of people store chunks of their wealth in bullion and jewellery.

>>>READ MORE<<<

IIT-Delhi gets 50 proposals for research on cow milk, urine, dung and ghee

The proposals from different academic and research institutions were made under the Scientific Validation and Research on Panchgavya

The Indian Insititute of Technology, Delhi, has received about 50 proposals for research on benefits of cow milk and urine, the government informed Parliament on Wednesday.

The government, however, said that it had not set up any panel to carry out research on cow derivatives. (economy news)

The proposals from different academic and research institutions were made under the Scientific Validation and Research on Panchgavya (SVAROP).

Minister of State for Science and Technology Y.S. Chowdhary said a national brainstorming-cum-consultative workshop on SVAROP was organised by IIT-Delhi, in which scientists and researchers from academic/reserach institutions and government agencies, including IITs, Ministry of AYUSH, Ministry of Science and Technology, and others participated.

"The Department of Science and Technology has constituted a National Steering Committee to initiate a national programme on SVAROP," Chowdhary said.

Full text of RBI policy: Repo rate cut by 25 bps to 6%

The MPC noted that inflation excluding food and fuel has fallen significantly over the past 3 months

economy news : The Reserve Bank of India on Wednesday cut its main policy rate by a quarter percentage point to a more than 6-1/2 year low after inflation slumped.

RBI cut its repo rate by 25 basis points to 6.00 per cent - the lowest since November 2010 - as a slump in food prices sent June consumer inflation to a more than five-year low of 1.54 per cent.

The MPC noted that some of the upside risks to inflation have either reduced or not materialised:

(i) the baseline path of headline inflation excluding the HRA impact has fallen below the projection made in June to a little above 4 per cent by Q4

(ii) inflation excluding food and fuel has fallen significantly over the past three months

(iii) the roll-out of the GST has been smooth and the monsoon normal. Consequently, some space has opened up for monetary policy accommodation, given the dynamics of the output gap. Accordingly, the MPC decided to reduce the policy repo rate by 25 basis points

Here is the full of text of 'Third Bi-monthly Monetary Policy Statement, 2017-18 Resolution of the Monetary Policy Committee (MPC) Reserve Bank of India':

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:

•reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.25 per cent to 6.0 per cent with immediate effect.

Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 per cent......Read full article 

Arvind Panagariya quits NITI Aayog: Meet the advocate of growth-boosting policies

Rajasthan University product, presently Columbia Univ professor, considered an advocate of growth-boosting and market-oriented policies

Renowned Columbia University professor Arvind Panagariya will be the first vice-chairman of the newly created NITI Aayog (the prime minster will be chairman), at a time when the world is looking at India to shed years of slack economic growth.

His first big challenge will be to give a firm direction and focus to NITI Aayog, the first name being an acronym for National Institution for Transforming India. It is supposed to play a different role from the command-oriented Planning Commission of India.

A Business Standard columnist till now, Panagariya, in an article published in this newspaper on December 30, 2014, said the government’s real test would be in the next Budget document. And that without a clear road map of reforms in it, the dream of “good days” (acche din) might become history.  (economy news)

He’d also favoured a slight relaxation in the fiscal consolidation schedule when Finance Minister Arun Jaitley presented his maiden Budget six months earlier, to spur economic activities. A point also made in the Mid-Year Analysis for 2014-15, penned by Chief Economic Adviser Arvind Subramanian.

Panagariya, mentored by renowned trade economist Jagdish Bhagwati, was most recently credited as one of the brains behind labour law reforms in Rajasthan. He was vice-chairman of the Rajasthan chief minister's economic advisory council.

Born on September 30, 1952, he has been a supporter of the prime minister’s economic policies and openly spoken on the success of the latter's tenure as chief minister of Gujarat.... (READ MORE)

Demonetisation: RBI will give junked notes' figure after counting, says FM

Arun Jaitley says final figures will come out once the fake notes were weeded out

Finance Minister Arun Jaitley Tuesday said the RBI is in the process of counting scrapped currency notes and will come out with the final figures once the fake notes were weeded out.
Answering oft-repeated questions over the issue, he said in the Lok Sabha that the Reserve Bank had received the last tranche of scrapped currency notes of Rs 500 and Rs 1,000 only in July and the central bank would take time in counting the billions of notes.

Economy News policy

On November 8 last year, the government had scrapped high denomination currency notes of Rs 500 and Rs 1,000 which amounted to around 86 per cent of the currency in circulation.
Replying to a discussion on supplementary demands for grants in the Lok Sabha, Jaitley said one of the major benefits of demonetisation was squeezing of funds for terrorists in Jammu and Kashmir and naxalites in Chhattisgarh.

On questions regarding the amount of scrapped currency deposited back in the banks, the finance minister said, "Today they (RBI) have to count every currency note. They have to take the fake currency out...That exercise the RBI is taken to a very advanced level."

The minister said since March demands were being raised for disclosure of the amount of scrapped currency deposited in the banks but it can not be done over night.

"...I am hearing that argument 'tell us the currency'. Please study the subject closely. And therefore as soon as they (RBI) complete this exercise, the figure will be placed by them before the country along with the figure of fake currency," he added.....(READ MORE)

Doklam standoff: Does it make sense for India to mount barricades at Doklam?

If both sides do not fully explore a diplomatic resolution, a military confrontation may occur soon

The current standoff between India and China around Doklam in Bhutan could well turn into a military confrontation unless saner counsel prevails all around. The Chinese have held a live exercise in the Tibetan plateau and made it very clear that Indian withdrawal is a pre-condition for any talks. President Xi Jinping has made cryptic remarks about the Peoples’ Liberation Army defeating “all invasions”. Beijing has also explained its position to foreign diplomats and made it clear that its troops are being patient but will not be so indefinitely. Given the public posturing and rhetoric, it is clear that the Chinese side has said and done too much to pull back without a loss of face.

economy news 

India, too, has demonstrated its determination to not let China go ahead with construction of the road on territory that is seen as Bhutanese. The Modi government has explained its viewpoint in an all-party meeting. The main opposition parties have not questioned the government on this issue so far. All of them have publicly stated their support for the government, as it is ‘an issue of national security’. The government has also authorised the army to directly procure the spares, ammunition etc. required for a short war.

If both sides stick to their positions and do not fully explore a diplomatic resolution of the crisis, a military confrontation may become inevitable. As each side weighs its options, it is essential that India carefully assesses the costs and benefits of what may lie ahead if matters deteriorate.

Countries fight wars for military or political reasons. What would be India’s reason if conflict breaks out with China? Have Indian soldiers been sent to Doklam because not halting the Chinese at this point will irrevocably jeopardise the defences of India? If so, a war might perhaps be unavoidable. However, a reflection on the broad military situation is in order here.

The ‘Chicken’s Neck’ bogeyman

In various quarters, it has been said that the Chinese move to build a road in Doklam threatens the Siliguri corridor, which is the lifeline to the seven states of the Northeast. Is this really the case?

For China, any substantial success in the mountains is dependent on opening up a road axis. What is the strategic importance of Doklam from this perspective? Does Doklam give China a road axis to the Siliguri corridor, one which is not available elsewhere? It may be seen that a much better road axis is already available close by, where China is already sitting on a road head. Just a few kilometres from Doklam, the axis is already available: Yatung (Tibet)-Nathu La-Gangtok- Siliguri. China has been bringing convoys on this road up to Nathu La for decades now. The capture of Nathu La will provide multiple options with existing roads – to Gangtok or to Kalimpong – both further leading to Siliguri...... (READ MORE)

Govt's stand on driverless cars akin to opposition to computers in 1980s

Before India simply shuts the door on driverless cars, it needs to see the opportunities it offers

The Union Transport Minister Nitin Gadkari has gone all out to declare, “No driverless cars will be allowed in India". The National Institute for Transforming India (NITI Aayog) was established under the incumbent National Democratic Alliance (NDA) government in January 2015 as a premier policy think tank to encourage innovation in India and promote the country as a knowledge hub. Therefore, is Gadkari saying that innovation is not welcome in India?

Let’s rewind a little. When Rajiv Gandhi first introduced computers in 1985 to revolutionise India’s communication, he met with much criticism and opposition. Similar concerns were raised back then too. People feared the introduction of computers in offices and departments would kill thousands of jobs. (economy policy)

However, though thousands of jobs were killed, the introduction of computers also ended up creating millions of other jobs. Back then, nobody had imagined the number of jobs computers would create in the world. In fact, they continue to create jobs even today, for not just managing computers, creating software, analysing data but even in the area of information curation and dissemination. And the same will happen when, if ever, driverless cars come to India.

The present government, under its various innovative moves, introduced Digital India mission and has been pushing for Smart Cities, Green Cities, Skill India and Make in India since it came to power in 2014.

Even the previous government had taken some key steps in the direction by laying down the Science, Technology and Innovation Policy in 2013, aimed at strategically transforming various sectors. Around this time, last year, Prime Minister Narendra Modi had even called for “transformative changes” (rather than incremental) “with drastic policy reforms”.(READ MORE)

Over 21,00,000 Indians applied for H-1B visa in last 11 years: Report

On an average, their salary over the last 11 years has been USD 92,317 and an overwhelming majority of them are masters or bachelor's degree holder.

More than 21 lakh Indian technology professionals have applied for H-1B work visas in the last 11 years, an official report has said.

The report of the US Citizenship and Immigration Services (USCIS) has also refuted the impression that those who applied for the visa were not highly qualified.

On an average, their salary over the last 11 years has been USD 92,317 and an overwhelming majority of them are masters or bachelor's degree holder.

According to the report since 2007 till June this year, the USCIS received 3.4 million (34 lakh) H-1B visas applications, of which people from India accounted for 21 lakh. During the same period, the US issued H-1B visas to 26 lakh people, the USCIS said in its report, which however does not give countrywide breakdown.

In terms of number of H-1B applications between 2007 and 2017, India is followed by a distant China with 296,313 H-1B applications, Philippines (85,918), South Korea (77,359), and Canada (68,228). (ECONOMY & POLICY NEWS)

The report said majority (23 lakh) of the beneficiary of H-1B visas were in the age group of 25-34, and 20 lakh came from the computer related occupation category. Computer was followed by architecture, engineering, and surveying (318,670), education (244,000), administrative specialisations (245,000), and medicine and health (185,000).(READ MORE)