General Awareness : Economy - March, 2015

(General Awareness For Bank's Exams) Economy

March -2015

Good response for residential properties at SBI’s e-auction

State Bank of India (SBI), successfully completed the e-auction of around Rs.1,200-crore worth of stressed assets with a good number of bids for residential properties, said a senior official.
The bank had put on auction a mix of offices/shops/apartments/factory buildings and others numbering 300 properties.
Mr. Malhotra said the number of hits was large on the two websites where the properties were auctioned and the speed got slowed down.
“We had extended the auction time to compensate for the slow speed,” he said.
According to him, the bank had saved sizable outgo in terms of advertisement spend for auctioning the stressed assets.
As per the norms, advertisements should be given in two newspapers for every property auction but this time, the bank had consolidated all the properties to be auctioned and hence saved good sum, he said.
Agreeing that not all the 300 properties got sold, he said based on the feedback and the data collated, the bank would decide on going for next round of e-auction.
He said the banking major had taken a first step in this arena and could be the trend setter for others.

Facebook buys The Find

Facebook has waded further into e-commerce with the acquisition of shopping search engine TheFind.com. Terms of the deal were not disclosed.
Members of TheFind team are joining Facebook, where they plan to put their technology to work making ads at the leading social network ‘more relevant’, according to the post.
The acquisition will result in TheFind.com shutting down in the next few weeks.
Facebook has been playing catch-up regarding searching for information at the social network and becoming a middle-man of sorts for online commerce. “Together, we believe we can make the Facebook ads experience even more relevant and better for consumers,’’ the social network said in statement
TheFind — “Everything you need when shopping to quickly decide what to buy and where to buy it’’ — will shutter the Silicon Valley base it has operated from since launching in 2006 and move team members to Facebook’s campus in Menlo Park, California.

Britain applies to join Chinese-led Asian bank

Britain has applied to join a proposed Chinese-led Asian regional bank that Washington worries will undercut institutions such as the
World Bank.
The British Treasury said it will join talks this month on the Asian Infrastructure Investment Bank’s structure and governance arrangements.
China proposed the bank in 2013 and has pledged to put up most of its initial $50 billion in capital. Twenty-one other governments including the Philippines, Thailand, New Zealand and Vietnam have said they want to join.
The United States has expressed concern the bank will allow looser lending standards for the environment, labour rights and financial transparency, undercutting the World Bank and International Monetary Fund.
The British Treasury said it would try to ensure the Asian bank “embodies the best standards.”

Work on GST rollout on track, says Shaktikanta Das

The Narendra Modi government is working on full throttle to implement the Goods and Services Tax (GST), a key indirect tax reform, from April 1, 2016, said Union Revenue Secretary Shaktikanta Das.
He also pointed out that several committees and sub-committees, comprising Centre and State finance and taxation officers were working on aspects such as business processes and reporting systems. A special purpose vehicle was working on the IT backbone for the rollout, he added.
“Doubts have been raised about the implementation timeline. I want to confirm that work related to implementation is very much on,” Mr. Das said at an interactive session, organised by the Confederation of Indian Industry (CII).
Mr. Das said all States and political formations were on board. He was hopeful that the bill on GST would go through in the current session of Parliament.
Mr. Das also said that there would not be much revenue loss due to transition to GST.
Mr. Das said the government had agreed to compensate States for GST loss for the first five years on a differing basis. He also pointed out that the manufacturing States would lose more than the consumption States. That was why a one per cent origin-based tax had been included with a sunset clause of two years, he pointed out
He also said that GST would be tax buoyant while terming the 42 per cent devolution of Centre’s net taxes to the States as a big bang reform.
Mr. Das also said the plan to reduce corporate tax rates was done to make India competitive with other ASEAN countries as an investment destination.

LIC to invest Rs.1.50 lakh crore in Railways

The Life Insurance Corporation of India (LIC) will provide Rs.1.50 lakh crore in the next five years to the Railways for funding projects.
The move is in line with Railway Minister Suresh Prabhu’s plan to look for funds outside of budgetary support and tap low-cost long-term funds. The Railways will need Rs.8.50 lakh crore in the next five years for various projects.
“There would be a five-year moratorium on interest and loan repayment, and the rest of the terms would be negotiated while signing the finance assistance agreement,” a press statement said.
As per the memorandum of understanding signed between the two parties, the LIC will make available the funds to the Railways and its entities from 2015-16.
According to the latest Railway budget, its total Plan budget is Rs.1 lakh crore for 2015-16.
RBI issues new norms for sale of bad loans
In a boost to banks, which are facing rising asset quality issues, the Reserve Bank of India, allowed such lenders to reverse the excess provision on sale of bad loans to their profit and loss account, provided the transaction took place before February 26, 2014.
The central bank had on the February 3 monetary policy day had said that it would issue the final guidelines on this front after banks requested it to include the provision to those sales took place before February 26, 2014, as well.
The move is aimed at incentivising banks to recover appropriate value in respect of NPAs (non-performing assets)
Almost all banks, including private sector players, have been reporting higher NPAs and lower profits as they have to make more provisions for bad loans, which crossed 5.5 per cent as at the end of December. Together with restructured loans, the total pain on the system is close to 12 per cent
The new guidelines extending the sale period prior to February, 2014, will help banks report better numbers and, thus, take a little pain off their back. From April 1, banks will have to make full provision — 5 per cent of the bad asset — if they have restructured the loan, and the entire amount if the asset in corporate debt restructuring (CDR) turns bad.
The apex bank said the new guidelines will be applicable if only the excess is for a value higher than the bank’s net book value (NBV).
Further, the notification said, “The quantum of excess provision reversed to profit and loss account will be limited to the extent to which cash received exceeds the NBV of the NPAs sold.”
It also made it mandatory for banks to report the quantum of such excess provision reversed to the profit and loss account in the financial statements of the bank under ‘notes to accounts.’ Bad loans in public sector banks more than tripled to about Rs.2.17 lakh crore in three years to March, 2014.
The move is aimed at incentivizing banks to recover appropriate value in respect of NPAs.
IMF raises India growth forecast to 7.2 % this fiscal
The International Monetary Fund (IMF) has forecast India will grow 7.5 per cent in 2015-16, up from 7.2 per cent in the current year, a projection less optimistic than that of the Modi government.]
In the Union budget 2015, the government estimated growth of up to 8.5 per cent in 2015-16.
The Indian economy is the bright spot in the global landscape, becoming one of the fastest-growing big emerging market economies in the world, the IMF said in an official statement.
The report stressed the urgency of certain key reforms, including the bottlenecks in the energy, mining and power sectors; infrastructure gaps, land acquisition processes and environmental clearances.
In its annual assessment of the Indian economy in the mandatory Article IV annual report, the IMF said that India’s vulnerabilities have receded more than those of most emerging markets and sentiment has been revived.
“The Indian economy is reviving, helped by positive policy actions that have improved confidence and lower global oil prices…To continue on this trend, India needs to revitalise the investment cycle and accelerate structural reforms,” according to the statement.
“New investment project announcements have started to pick up, particularly in the power and transport sectors,” said IMF Mission Chief for India Paul Cashin. He also noted that bolstering financial sector health and further financial inclusion would support growth going forward.
Mr. Cashin said that while India is well placed to cope with external shocks, there are possible risks on the horizon, both external and domestic.
These include spillovers from weak global growth and potential global financial market volatility that could be disruptive, including from any unexpected developments as the United States begins to raise its interest rates.
On the domestic front, the weaknesses in corporate balance sheets, especially in light of the increase in corporate leverage of the past few years, and worsening bank asset quality bear watching, as they could weigh on growth.
The IMF report also said that India’s economic profile recently got a lift as the country improved the way it measures economic output.
“The revised national accounts series incorporates numerous conceptual and methodological improvements that make them more consistent with international best practices,” it said adding that the report itself was prepared before the revisions were released by the Central Statistics Office.
Mr. Cashin also gave thumbs up to the Modi government’s recent move to introduce a flexible inflation-targeting framework. “It will help deliver low and stable inflation, and diminish the prospect of renewed bouts of high inflation,” he said.
Among the reforms the report recommended are steps in the agriculture sector for efficient procurement, distribution, and storage of food in the public system. Greater flexibility in labour markets and improvements in education for meeting the rising shortages of skilled labour were among the key reforms suggested.

RIL heads the list of top 10 asset firms

At the end of 2014, India has 68 billionaires and occupies the seventh slot in that club globally.
The Ministry of Corporate Affairs has come out with the names of top ten corporates having assets ranging from Rs.89,000 crore to Rs.3.68 lakh crore, based on the balance sheets filed for March 2014.
Finance Minister Arun Jaitley, released the list containing eight public sector firms and two private sector firms (Reliance Industries and Housing Development Finance Corp).
RIL occupies the first slot among the corporates, in terms of assets, with over Rs.3.68 lakh crore for the year ended March 2014.
The second slot is taken by Indian Oil Corp with assets of Rs.2.52 lakh crore.
The latest list contains asset details of 4.16 lakh firms valued at Rs.117.08 lakh crore.
The share of top 10 firms, at Rs.17.89 lakh crore, accounts for 15.3 per cent of the overall value.
HDFC was in the third slot, followed by Power Finance Corp, NTPC, Rural Electrification Corp, Power Grid Corp, LIC Housing Finance, Steel Authority of India and Bharat Sanchar Nigam Ltd. PFC’s assets stand at Rs.1.94 lakh crore, NTPC at Rs.1.80 lakh crore, REC at Rs.1.53 lakh crore, Power Grid at Rs.1.40 lakh crore LIC Housing Finance at Rs.95,777 crore, SAIL at Rs.91,962 crore and BSNL at Rs.89,333 crore.
The list contains eight public sector firms and two private sector firms.

Black money taxable at highest rates

Under the new law on black money, the offence will be made non-compoundable and offenders will not be permitted to approach the Settlement Commission. Undisclosed incomes or returns from foreign assets will be taxable at the maximum marginal rate and exemptions or deductions which may otherwise be applicable in such cases, shall not be allowed.
The offence of concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money- laundering Act, 2002. This provision would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution against persons indulging in laundering of black money, Revenue Secretary Shaktikanta Das told.
Union Finance Minister Arun Jaitley had said in his budget speech that he would introduce the law in Parliament during the current session. Under it, he had said, it would be mandatory to disclose all overseas bank accounts and assets to the tax authorities and concealment of income or assets held overseas could attract a jail term of up to 10 years.
The government has also said that ahead of the law’s enforcement, it would provide a one-time compliance window of a few months
Das said the penalty during the compliance window could be lower than 300 per cent — the rate Mr. Jaitley had said in his budget speech would apply to the concealment of income and assets overseas under the new law.

Govt working to wrest Khadi trademark from German firm

Government is working in tandem with the Khadi and Village Industries Commission (KVIC) to expedite the process of de-registering ‘Khadi’ trademark in the European Union by a German company, Parliament was informed .
KVIC has also initiated the process to register ‘Khadi’ trademark in India and internationally.
The German company, named Khadi Natureprodukte GbR, has registered ‘Khadi’ as a trademark with the European agency, OHIM (Office for Harmonisation in the Internal Market).
Spain-based OHIM is the nodal agency for Trademarks and Design Registration in the European Union.
“Indian Embassies abroad have been in touch with the authorities of European Union for cancellation of the registration of Khadi as a trademark,” Micro Small and Medium Enterprises Minister of State Giriraj Singh informed the Lok Sabha in a written reply.
The government, KVIC and the Indian Embassies are working in tandem to expedite the process of de-registering the trademark of Khadi, he added.
Singh said the process to register for international trademarks for ‘Khadi’ is being done in two stages — first at national level and second at international level.
He added that KVIC has filed an application to register ’Khadi’ as a word mark under IPR Authority in Mumbai.
“This mark has been filed for 27 classes under IPR Act covering various products relevant to KVIC comprising of Khadi fabrics and village industries,” Singh said.
Online registration for ‘Khadi’ as a “Word mark” has already been done and application for International IPR under Madrid Protocol has been filed for the US, European Union and Russia and China, he added.
KVIC is a statutory body engaged in promoting and developing khadi and village industries.
Shiv Nadar Foundation sells shares in HCL Technologies
The Shiv Nadar Foundation, a philanthropic arm of Shiv Nadar, Founder and Chairman of HCL, sold its entire stake in HCL Technologies for Rs.1,109 crore in the open market.
The proceeds are expected to be used for various objectives and initiatives of the foundation.
Established in 1994, the Shiv Nadar Foundation supports education and art. It runs institutions such as Shiv Nadar University, Shiv Nadar School and Kiran Nadar Museum of Art, among others.
Mr. Nadar has so far committed around Rs.6,000 crore from his wealth to philanthropy. The foundation has already spent around Rs.3,000 crore on philanthropic initiatives until March 31, 2014.
Under the initiative, Mr. Nadar wants to build prestigious educational institutions and improve the lot of the underprivileged by tackling critical parameters. He is also looking for a ‘one-size-fits-all’ model to solve India’s basic problems of water, education, employability, health and infrastructure.
According to bulk deal data on Bombay Stock Exchange, 56 lakh shares (0.8 per cent stake) were sold at Rs.1,980.18 a share, at a discount to the firm’s closing price of Rs. 2,064.75 on Thursday last.
“This transaction has been concluded at one go at a discount to the last closing price of HCL Technologies share to avoid any overhang in the market for shareholders of HCL Technologies,” Shiv Nadar Foundation said in a statement.
• The Foundation said the sale was done to fulfil the governance, tax and legal regulations that required it to the sell the shares before March 31, 2015. It ha
reviously sold HCL Technologies shares in February 2012.
• After the transaction was announced, HCL Technologies shares declined to day’s low of Rs. 1,975. However, it recovered and closed flat at Rs. 2067.35 on the BSE.

Industrialist Deepak Khaitan passes away

City based industrialist Deepak Khaitan (60), passed away after a prolonged spell of illness. He was 60 and is survived by his wife, son and daughter.
He was the eldest son of B.M. Khaitan and had in his fold major companies like Eveready Industries, Mcnally Bharat and Kilburn Engineering. He is perhaps best known for the acquisition of the Eveready brand from the Union Carbide.
The turnover of the group is around Rs. 6,000 crores.
News Corp acquires VCCircle Network
• The Rupert Murdoch-led firm has signed a definitive agreement to acquire media firm VCCircle Network for an undisclosed sum.
• Rupert Murdoch-led News Corp has signed a definitive agreement to acquire media firm VCCircle Network for an undisclosed sum.
• This is the third investment by News Corp in India.
• Previously, it had invested in financial advisory start-up firm BigDecisions.com and realty portal PropTiger.com.
• In a statement, News Corp said it has signed “a definitive agreement to acquire VCCircle Network, which includes VCCircle.com, Techcircle.in, VCCEdge, VCCircle Training, in addition to a premium-content driven conference business.”
• Terms of the acquisition, which is expected to close by March, were not disclosed.
• Commenting on the announcement, News Corp Chief Executive Robert Thomson said: “India is an increasingly meaningful part of our portfolio, which is itself increasingly digital and global.”
• VCCircle Network is owned by Mosaic Media Ventures and has about 100 employees across India, with its headquarters
in Noida.
• VCCircle Network Founder and CEO P V Sahad and the management group will become part of News Corp’s India team.
• Sahad will report to News Corp Senior Vice President (Strategy) Raju Narisetti, the statement said.
• In November 2014, News Corp had acquired 25 per cent stake in Indian realty portal PropTiger.com for USD 30 million (Rs 185 crore) as part of its strategy to expand presence in digital media.
• It had picked up stake in Singapore-based Elara Technologies Pte Ltd, the parent firm of PropTiger.com.
• In the following month, News Corp announced acquisition of BigDecisions.com for an undisclosed sum. The portal was set up by Manish Shah and Gaurav Roy in early 2013.

Walmart India appoints Ashwin Mittal as CFO

Walmart India announced Ashwin Mittal as the new Chief Financial Officer and Javier Rojo as Head of Real Estate and Business Development. Mr. Mittal will replace Jill Anderson, the present CFO, the company statement said.

Apple to join Dow blue-chip index

U.S. tech giant Apple will join the blue-chip Dow Jones Industrial Index later this month, replacing telecom company AT&T, S&P Dow Jones Indices announced.
The inclusion of the iPhone and iPad maker in the elite list of 30 top companies comes long after Apple had become the biggest U.S. company by market capitalisation, now with a value of more than $730 billion.
The change will take effect March 19, S&P Dow Jones said.
No tax on premature withdrawal of private PF below Rs. 30,000
Members of private provident fund trusts need not have to pay tax on premature withdrawals if the amount is either less than Rs. 30,000 or their tax liability is nil even after including the withdrawn sum to their income.
A proposal to this effect is contained the Budget 2015-16. As per existing provisions in respect of such premature withdrawal, the trustees of the recognisedprovident funds (trusts) shall deduct tax as computed at the time of payment.
• Under the existing EPF & MP Act (Employees’ Provident Funds and Miscellaneous Provisions Act), withdrawal shall be taxable if the employee makes withdraal before continuous service of five years (other than the cases of termination due to ill health, closure of business, etc) and does not opt for transfer of balance to new employer.
It is proposed to insert a new provision in the Act for deduction of tax at the rate of 10 per cent on premature withdrawal from Employees Provident Fund Scheme (EPFS).

NPCI links 15 cr bank accounts with Aadhaar

• National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments system in India, said that it reached a major milestone of successfully linking 15 crore bank accounts with Aadhaar number.
• Beneficiaries of all types of government subsidies /benefit transfers are expected to be brought under the linkage programme very soon.
• “The current focus is on linking the bank accounts of 17 crore DBTL (direct benefit transfer for LPG) beneficiaries with Aadhaar numbers, latest by June 30, 2015,” NPCI stated in a release.

TRAI asks Vodafone to stop using 111 service

The Telecom Regulatory Authority of India (TRAI) directed Vodafone to stop using ‘111’ for offering customer care services, as it violates the national numbering plan, and submit a compliance report by March 10.
In a direction to Vodafone, TRAI said that the Department of Telecom had issued the national numbering plan 2003, wherein the number 111 to 115 have not been allocated for any type of services and have been kept as ‘spare’
However, the authority said it observed from the advertisement on the website of Vodafone that customers were being urged to call ‘111’ to get Internet settings on their handset for pre-paid data offers, post-paid 3G data packs, self help for data services, Blackberry Internet offers and to find out the balance.
“Now therefore, in exercise of the powers conferred upon it... the authority hereby directs Vodafone India to discontinue use of level ‘111’ and submit compliance report latest by March 10,” TRAI said.

Financial sector set on a path towards innovation

•The budget outlines several much-needed measures for development of the financial sector.
\The three notable aspects are the focus on innovation, steps towards structural strengthening, and move to develop various segments of the financial sector.
Other key highlights include steps to channelise savings from physical assets to financial ones, enhance financial inclusion, and remove constraints for foreign investors.
Some more, though, was expected for debt markets and public sector banks.
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.
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 side, to strengthen the sector, the 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. In this context, greater attention on steps to develop the bond markets would have complemented the investments push of the budget.
• Similarly, a higher capital allocation for public sector banks would have prepared them well for growth, as well as to meet their current challenges.

Full electrification by 2022

Giving a major boost to the government’s plans to make India energy surplus by 2019 and to provide electricity to each household by 2022, the government proposed five new Ultra Mega Power Projects (UMPPs), each of 4,000 MW which will come up in the plug-and-play mode enabling investors to start these plants without much delay.
Out of the 4 UMPPs announced earlier, two (Mundra and Sasan) are operational now.
Presenting the Union budget, Finance Minister Arun Jaitley said all clearances and linkages would be in place for these five new UMPPs before the projects are awarded through a transparent auction system.
He also said the second unit of Kudankulam Nuclear Power Station would be commissioned in 2015-2016. Apart from this the budget has also made several provisions for the growth of Renewable Energy sector in the country.
• By 2022, the government announced plans to have 1,75,000 MW of renewable energy generation (100000 MW solar, 60,000 wind and 15,000 MW other technology). Solar energy will get the biggest in capacity from 3,500 MW now to 1,00,000 in 7 years.
• According to experts the government’s intention to drive new investment in power generation is a welcome and necessary move, but to continue to attract investors, the government must revive the distribution sector.
• The government has decided to increase clean energy cess on coal from Rs 100/tonnes to Rs 200/tonnes which will help mobilise funds for clean energy initiates.
Changes in corporate tax regime to reduce disputes: Jaitley
• The proposal to correct the corporate tax regime by lowering the tax rate and removing the exemptions will lead to higher level of investment, higher growth and more jobs, Union Finance Minister Arun Jaitley said in his budget speech in Parliament.
• The proposed changes, he said, would come into effect from the next financial year.
• At 30 per cent, the basic rate of corporate tax in India is higher, he argued, than the rates prevalent in the other major Asian economies, making the domestic industry uncompetitive. Still, the effective collection is just about 23 per cent, the Finance Minister said.
• Further, the regime of exemptions has led to pressure groups, litigation and loss of revenue and it also gives room for avoidable discretion, he said.
• In the Budget, the Finance Ministry has estimates that the revenue collected under corporate tax will go up marginally during 2015-16 to Rs. 4,70,628 crore against Rs. 4,26,079 crore during the current year.

Nirbhaya fund Gets Rs. 1,000 crore

The 2015-16 budget pledged a ‘top-up’ of Rs.1,000 crore to the already existing Nirbhaya Fund for ensuring safety of women, while slashing the allocation to the women and child ministry by over half.
The Women and Child Development Ministry received Rs. 21,193 crore in last year’s budget, an improvement over the RS. 18,584 crore in 2013-14 .
This year however, in his second outing, Mr. Jaitley slashed it to Rs.10,351 crore, while earmarking Rs.79,258 crore for ongoing schemes related to welfare of women.
The Nirbhaya fund, set up by the UPA government in the aftermath of the December 16 Delhi gangrape, has made more news for being alarmingly underutilised than for making any significant improvement to women’s safety.
Besides monetary allocations, Mr. Jaitley spelled out a moderate push for small savings for educating the girl child under the Sukanya Samriddhi initiative.
The government had adopted gender budgeting (or gender-responsive budgeting) in 2005 to help advance gender equality through comprehensive and integrated planning by several government departments.
4-D solution for banking industry
The Economic Survey 2014-15 has proposed a 4-D prescription to the Indian banking sector, which is hobbled by policy constraints, which create double financial repression, and, by structural factors, impede competition.
The four Ds include:
De-regulation (addressing the statutory liquidity ratio (SLR) and priority sector lending (PSL)),
Differentiation (within the public sector banks in relation to recapitalisation, shrinking balance sheets, and ownership),
Diversification (of source of funding within and outside banking), and Disinterring (by improving exit mechanisms). Highlights of Union Budget 2015
FM’s Budget speech dwelt on agriculture, public investments in infrastructure, manufacturing and social sector spending.
States to be equal partners in economic growth; move to making India cashless society; social sector programmes to continue.
Some of the challenges mentioned by the Finance Minister are: poor agricultural income, decline in manufacturing ; and the need for fiscal discipline.
Here are sector-wise highlights:

TAXATION

1 Abolition of Wealth Tax.
2 Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
3. Rate of corporate tax to be reduced to 25% over next four years.
4. Total exemption of up to Rs. 4,44,200 can be achieved.
5. 100% exemption for contribution to Swachch Bharat, apart from CSR.
6. Service tax increased to14 per cent.

AGRICULTURE

1. Rs. 25,000 crore for Rural Infrastructure Development Bank.
2. Rs. 5,300 crore to support Micro Irrigation Programme.
3. Farmers credit - target of 8.5 lakh crore.

INFRASTRUCTURE

1. Rs. 70,000 crores to Infrastructure sector.
2. Tax-free bonds for projects in rail road and irrigation
3. PPP model for infrastructure development to be revitalised and govt. to bear majority of the risk.
4. Rs. 150 crore allocated for Research & Development
5. NITI to be established and involvement of entrepreneurs, researchers to foster scientific innovations.
6. Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.

EDUCATION

1. AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
2. IIT in Karnataka; Indian Institute of Mines in Dhanbad to be upgraded to IIT.
3. PG institute of Horticulture in Armtisar.
4. Kerala to have University of Disability Studies
5. Centre of film production, animation and gaming to come up in Arunachal Pradesh.
6. IIM for Jammu and Kashmir and Andhra Pradesh.

DEFENCE

1. Rs. 2,46,726 crore for Defence.
2. Focus on Make in India for quick manufacturing of Defence equipment.

WELFARE SCHEMES

1. 50,000 toilets constructed under Swachh Bharath Abhiyan.
2. Two other programmes to be introduced- GST & JAM Trinity. GST will be implemented by April 2016.
3. MUDRA bank will refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
4. Housing for all by 2020.
5. Upgradation 80,000 secondary schools.
6. DBT will be further be expanded from 1 crore to 10.3 crore.
7. For the Atal Pension Yojna, govt. will contribute 50% of the premium limited to Rs. 1000 a year.
8. New scheme for physical aids and assisted living devices for people aged over 80 .
9. Govt to use Rs. 9000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
10. Rs. 5,000 crore additional allocation for MGNREGA.
11. Govt. to create universal social security system for all Indians.

RENEWABLE ENERGY

1. Rs. 75 crore for electric cars production.
2. Renewable energy target for 2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro

TOURISM

1. Develpoment schemes for churches and convents in old Goa; Hampi, Elephanta caves, Forests of Rajasthan, Leh palace, Varanasi , Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be under the new toursim scheme.
2. Visa on Arrival for 150 countries.
Budget 2015 : Glossary of terms used in Budget
Here is a ready reckoner for some of these terms.

Disinvestment Receipts

The term refers to the money raised by the Government through disinvestment, or the sale of its equity stake in companies it owns.
Fiscal Responsibility and Budget Management Act
The Act is an attempt to make the Government adhere to a phased plan to reduce fiscal deficit, which denotes an excess of expenditure over revenue.

Dividend Distribution Tax

This is a tax levied on companies that pay out dividends to its shareholders, i.e. share a portion of earnings with them.

Venture Capital Funds

These are funds that invest in startups, a financially riskier proposition than investing in established companies.

Securities Transaction Tax

It is a tax on all transactions done over the stock exchanges involving securities such as shares, derivatives, and equity-linked mutual funds.

Wholesale Price Index (WPI)

It is a measure of inflation, or price change, arrived at after regularly measuring the prices of a slew of wholesale goods.

Consumer Price Index (CPI)

It is a measure of inflation, or price change, arrived at after regularly measuring the prices of a slew of household goods and services.

Capital Gains Tax

It is a tax on the gains that ensue when an asset is sold for a price higher than what it was bought for.

Value-Added Tax (VAT)

It is a tax on the value added to a product at each stage of distribution, so that inputs that go into making the product aren’t taxed more than once.

Ad Valorem Tax

This is charged as a percentage of the value of a good or service, not at a specific rate per unit.

Advance Pricing Agreement (APA)

It is an agreement between a taxpaying entity and the taxman that indicates how the former will price transactions with its associates.

Fiscal Policy

It is what a Government does to influence the course of an economy through decisions on taxes and spending.

Monetary Policy

It is what a central bank does to influence the course of an economy through decisions on money supply and interest rate.

Direct Tax

A tax such as the income-tax, which has to be borne by the person it or entity it is imposed on.

Indirect Tax

A tax on goods and services, typically, levied on an entity but paid by another.

Direct Taxes Code (DTC)

India’s likely replacement to the long-standing Income Tax Act, the Direct Taxes Code is meant to make direct tax laws simpler and more efficient.

Goods and Services Tax (GST)

Proposed to be rolled out in India from April 1, 2016, the GST seeks to make the indirect tax structure simpler and efficient by replacing a slew of levies such as octroi, central sales tax, State sales tax, entry tax and so on.

External Commercial Borrowing (ECB)

ECBs refer to commercial loans with a minimum three-year maturity that can be raised from lenders from overseas where interest rates are lower than in India.
Fiscal Consolidation
The term refers to the things a Government does to maintain good fiscal health — cut debt and wasteful expenditure and improve revenue opportunities.

Current Account Deficit

It is a trade measure that shows the value of a country’s imports of goods and services to be higher than the value of its exports.
White Paper outlines challenges of Railways

Railway Minister Suresh Prabhu tabled a white paper before presenting the budget .
The paper delineates the challenges before the Railways — how it is “perched on a precipice but is capable of flying off and attaining great heights.”
A plan for the ‘railways of tomorrow’ has been outlined.
The organisation has suffered from considerable under-investment during the last several years, said Railway Minister Mr. Prabhu in the paper. As a consequence, capacity augmentation has suffered and so has the quality of service.
Resources have been insufficient for improving customer satisfaction and introducing technological improvements. Investments in safety have also been insufficient.
The status paper is the first in a series of three documents.
The budget, being the second, lays down a five-year action plan of the Ministry in bringing about a turnaround.
Finally, during the course of the current year, Indian Railways will bring out a Vision 2030 document which will contain a blueprint of the long-term development.
Prabhu proposed a paradigm change with faster trains, swanky stations and skilled staff and flagged areas in need of ‘urgent attention’ such as cleanliness, punctuality of services, safety, terminal quality, capacity of trains, food quality, passenger security and ease of booking tickets.
The five-year plan is to undertake measures to ensure delivering safe and punctual services, increasing average speed by 50 per cent and increasing loading to 1.5 billion tonnes.

Highlights of Railway Budget 2015

The key themes of the Budget were in line with Prime Minister Narendra Modi’s initiatives - Swachch Bharat Mission, Make in India and Digital India.

The most-expected part about this year’s Railway Budget - there is no increase in passsenger rail fares.
Rs.8.5 lakh crore will be invested in Railways in next 5 years.
‘Operation 5 mins’, wherein passengers travellling unreserved can purchase a ticket in 5 minutes.
Bio toilets and airplane-type vaccum toilets in trains.
Surveillance cameras in select coaches and ladies compartments for women’s safety without compromising on privacy.
Rail tickets can now be booked 120 days in advance.
Speed on nine railway corridors to go up to 200 km per hour.
Wi-Fi in more stations, mobile phone charging facilities in all train compartments.
Facility of online booking of wheelchair for senior citizens.
Satellite railway terminals in major cities
Centrally managed Rail Display Network is expected to be introduced in over 2K stations over the next 2 years.
All india 24/7 helpline - 138 from March 2015 ; Toll free No.182 for security.
917 road under-bridges and over-bridges to be constructed to replace 3,438 railway crossings; at a cost of Rs. 6,581 crore.
Four Railway Research Centres to start in four universities.
Details about new trains and increased frequency will be announced later in this session of Parliament after review.

What is the investment plan?

The Railway Budget envisages an investment of Rs. 8.5 lakh crore in next five years.

How is it going to be mobilized?

The Minister suggested that the money could be raised from multiple sources - from multilateral development banks to pension funds.
What is the action plan in the sphere fund raising?
Go in for partnership with key stakeholders - States, PSUs, partner with multilateral and bi-lateral organizations other governments to gain access to long-term financing. Also, get technology from overseas. The private sector could be roped in to improve last-mile connectivity, expand fleet of rolling stock and modernize station infrastructure.

What is the thrust?

The thrust will be on revamping management practices, systems, processes, and re-tooling of human resources.
What is the proposal on capacity augmentation?
De-congesting networks with basket of traffic-generating projects will be the priority
Priority to last-mile connectivity projects
Fast-track sanctioned works on 7,000 kms of double/third/fourth lines
Commissioning 1200 km in 2015-16 at an investment of Rs. 8,686 crore, 84% higher Y-O-Y.
Commissioning 800 km of gauge conversion targeted in current fiscal.
77 projects covering 9,400 km of doubling/tripling/quadrupling works along with electrification, covering almost all States, at a cost of Rs. 96,182 crore, which is over 2700% higher in terms of amount sanctioned.
Traffic facility work is a top priority with an outlay of Rs. 2374 crore .
Award of 750 km of civil contracts and 1300 km of system contracts in 2015-16 on Dedicated
Freight Corridor (DFC); 55 km section of Eastern DFC to be completed in the current year.
Preliminary engineering-cum-traffic survey (PETS) for four other DFCs in progress.\
Acceleration of pace of Railway electrification: 6,608 route kilometers sanctioned for 2015-16, an increase of 1330% over the previous year.

SEBI slaps Rs.86 cr penalty on DLF

The Securities and Exchange Board of India (SEBI), penalised the real estate major, DLF, and other connected entities by levying a penalty of Rs.86 crore for violating capital market regulations by engaging in fraudulent and unfair trade practices.
SEBI penalised DLF Rs.26 crore and other top officials including, K.P. Singh, Rajiv Singh and Pia Singh, another Rs.26 crore. Further, SEBI fined another related 35 entities, including individuals, Rs.34 crore.
The case is pertaining to the irregularities and non-disclosure violations related to its 2007 initial public offering (IPO).
DLF said it did not violate any law and it will challenge the SEBI order. DLF further said that the company and its board were guided by and acted on the advise of “eminent legal advisors, merchant bankers and audit firms” while formulating its IPO documents. “We are presently reviewing the said orders and after taking appropriate legal advice, we will challenge the said Orders in appeal,” DLF said in a statement.
Cabinet approves agreement on BRICS development bank
The Union Cabinet, chaired by Prime Minister Narendra Modi, gave approval for establishing the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement (CRA).
Heads of the five nation BRICS group — Brazil, Russia, India, China and South Africa — decided at their sixth summit in Fortaleza in July last year to create a development bank as well as a reserve fund to finance infrastructure projects and other sustainable development projects.
The $100 billion BRICS CRA would help countries deal with short-term liquidity pressures, provide mutual support and further strengthen financial stability.
The agreement will enter into force and the Bank begin operations only after all member-countries deposit their instruments of ratification with Brazil.
The release added that signing of the agreement for the establishment of the New Development Bank was expected to allow India to raise and obtain more resources for the much-needed infrastructure development, the lack of which was coming in the way of inclusiveness and growth.
Besides, the governance structure and decision-making in the Bank would be equitable unlike the existing multilateral development banks, it added.
India will hold the Presidency of the New Development Bank for the first six years. The Bank will be based in Shanghai, China’s financial hub.

CommonFloor launches new solution

Online real estate platform CommonFloor launched its virtual reality application CommonFloor Retina.
The application, available for customers using Android platforms, will allows buyers to view and assess builder properties.
According to a press release, the solution offers ‘real’ property experience for the seekers allowing them to view or review and assess multiple properties from anywhere at any point of time.
At present, the feature is only available on Android phones like Nexus 4, MotoG 2nd Gen, Samsung Galaxy 4, MotoX, One Plus and Xiaomi Mi3.
Industrialist Bhadrashyam Kothari passes away
Mr. Bhadrashyam Kothari, prominent industrialist and Chairman and Managing Director, Kothari Sugars and Chemicals, died at Houston, in the U.S., after a brief illness. His passing was peaceful, surrounded by his family members. He was 53.
As an industrialist, he brought to bear a visionary leadership to his group and displayed a pioneering spirit in venturing into new areas opened up by the economic reforms. He was also deeply involved in philanthropy and the promotion of education.

Rajan warns against ‘Appellate Raj’

In a veiled attack on suggestions made by the government-appointed Financial Sector Legislative Reforms Commission (FSLRC) panel for overhaul of financial sector laws, Reserve Bank of India Governor Raghuram Rajan, said the country should not end up in ‘Appellate Raj’ after escaping the ‘License Permit Raj.’
The comments assume significance in the wake of the high-profile FSLRC having suggested creating a single appellate authority for all financial sector watchdogs, including the RBI.
The proposal, which was aimed at providing checks and balances for decisions made by the regulators, has been hanging fire for a long time due to opposition from various quarters, including the RBI.

New accounting standard rules notified

Moving closer to the implementation of new accounting norms, the government has notified the rules for the Indian Accounting Standards (Ind AS), which will be mandatory for companies from April 1, 2016.
Ind AS norms, which are converged with global standards IFRS, can be followed by corporates on a voluntary basis from April 1, this year.
For companies having net worth of Rs.500 crore or more, the new norms would be mandatory from April 1, 2016. In a notification, the Corporate Affairs Ministry said the ‘Companies (Ind AS) Rules 2015’ would come into force with effect from April 1. Last month, the ministry had announced the Ind AS roadmap.

Videocon launches Wi-Fi enabled ACs

Consumer electronics major Videocon Industries, unveiled a range of Wi-Fi enabled ACs to expand its presence in the highly competitive domestic air-conditioner (AC) market.
The new Wi-Fi AC can be controlled from anywhere in the world through an app on a smartphone.
It uses the Wi-Fi network at the consumer’s home to connect with a smartphone and receives signals on any 2G, 3G and 4G devices.
The company, launched four new split ACs from 1-1.5 tonnes belonging to the Wi-Fi series. These are priced between Rs.35,990 and Rs.41,990.
The focus markets for the range are Tamil Nadu, Maharashtra, Gujarat, Kerala and Delhi. The range is to be launched nation-wide in the next few days.

Godrej Properties joins hands with Snapdeal

Realty firm Godrej Properties said it has tied up with Snapdeal to offer online booking of its real estate projects.
Godrej Properties already offers online booking through its website and has added this additional sales channel to further enhance customer access, the company said.
The tie-up with Snapdeal will offer customers increased flexibility and unique offers at the time of booking, it added.

Snapdeal buys fashion portal Exclusively.com

Expanding its presence in the high-end fashion segment, online marketplace Snapdeal has acquired luxury fashion portal Exclusively.com for an undisclosed amount.
With this acquisition, the city-based firm that gets a little over $1 billion in gross merchandise value (GMV) from its fashion business expects this figure to touch $2 billion by the end of the current calendar year.

Hyundai launches new Verna

Hyundai Motor India, launched the updated version of its mid-size sedan Verna, priced between Rs.7.74 lakh and Rs.12.19 lakh (ex-showroom Delhi).
The new Verna that will compete with Honda City and Maruti Ciaz, will be available in both petrol and diesel options and have ten variants.
For the April 2014-January 2015 period this fiscal, Honda City sold 61,102 units, while Maruti Ciaz, which was launched in October last year, sold 23,490 units till January.

Aero India 2015 to focus on ‘Make in India’

‘Aero India 2015’ will be inaugurated by Prime Minister Narendra Modi at Bengaluru on February 18, with the theme squarely focused on ‘Make in India’ in aerospace, defence, civil aviation and airport infrastructure in line with the government’s mantra.
“We want to set ‘Make in India’ as the major theme of the exhibition and see it progress in the defence sector also,” Defence Production Secretary G. Mohan Kumar said.
A global CEOs conference will be chaired by Defence Minister Manohar Parrikar. Around 300 CEOs from Indian and foreign companies are expected to attend the conference.

SEBI plans profiling of major investors to boost surveillance

To strengthen its surveillance activities, capital markets watchdog Securities and Exchange Board of India (SEBI) is planning to conduct ‘profiling’ of major investors in different segments of the market to understand their trading patterns and the impact on the market.
This follows SEBI having put in place mechanisms for risk profiling of the brokers and listed companies so as to understand the associated risk.
This has become more important in cases of algorithmic or high-frequency trades, as the impact of the trading activities of major investors or traders could be quite big and really fast, requiring a very robust surveillance system, he added.
To help it better regulate the marketplace and strengthen its surveillance system, SEBI has adopted a supervision model based on risk levels for various market entities including brokers and mutual funds.
Under the new model, various market entities are being divided into four groups — very low risk, low risk, medium risk and high risk — and the quantum of surveillance and number of inspections increase as per the risk level.
This new supervision regime has been put in place as per recommendations of an independent global consultant and the subsequent suggestions made by an internal task force at SEBI, while taking into account practices followed by many overseas regulators.
The move would help the existing surveillance system take care of most of the smaller offences, so that the investigation resources are utilised more effectively to tackle serious violations in the market place.

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