FCNR(B) concessional swap facility availability narrows to timely mobilised deposits amid rupee depreciation and foreign currency inflow concerns. Foreign-exchange conditions reflected rupee depreciation amid weak domestic equity markets and higher crude oil prices. FCNR(B) concessional swap facility availability is confined to foreign currency deposits mobilised by banks within the revised cut-off period, replacing the previously longer mobilisation window. The facility is intended to encourage foreign currency inflows, while banks use the FCNR(B) scheme to mobilise foreign currency deposits through attractive interest rates.
Banking sector review panel will align future growth with financial stability, inclusion and consumer protection through government recommendations. High Level Committee on Banking for Viksit Bharat is proposed to comprehensively review the banking sector and align it with India's next phase of growth. It is intended to safeguard financial stability, financial inclusion and consumer protection, while providing views and recommendations to the Government on banking-sector development and reform.
Prime Minister Internship Scheme enhances youth employability through paid industry exposure, cross-field learning, workplace readiness and potential full-time employment. The Prime Minister Internship Scheme provides paid internships with leading companies across India to improve youth employability through practical workplace exposure, industry experience and skills development. It addresses the gap between classroom learning and employers' expectations of workplace readiness. Participation is not confined to academic qualifications, allowing youth to pursue fields of interest and gain hands-on professional learning. Strong internship performance may lead to full-time roles, while the scheme stresses responsible work where errors may affect quality, consumer safety and organisational reputation.
SAFTA origin fraud in areca imports allegedly enabled improper duty exemption through false Bangladeshi-origin declarations. SAFTA preferential duty treatment for areca-nut imports was allegedly misused by falsely declaring goods originating in South-East Asian countries as Bangladeshi origin. Since areca nuts normally attract 100% basic customs duty, the scheme sought to obtain the full SAFTA exemption reserved for qualifying Bangladeshi goods meeting Rules of Origin requirements. The alleged mechanism included routing goods through Bangladesh, changing containers and bags, using improperly obtained Certificates of Origin, and facilitating clearance through importers, Customs Brokers and IEC holders. Investigative findings also indicated cash proceeds, hawala channels and dummy entities.
FCNR(B) concessional swap facility closure may reduce temporary foreign-currency inflow support and heighten rupee weakness concerns. The Reserve Bank of India restricted its concessional swap facility for FCNR(B) deposits to deposits mobilised by August 31, advancing the earlier cut-off date. The facility was intended to encourage foreign-currency inflows, while banks mobilise such deposits through attractive interest rates. Market commentary indicated that existing inflows may support the rupee in the near term, but the curtailed availability of the facility could reduce this temporary cushion and increase depreciation risk.
Temporary tariff suspension for earthquake recovery is sought to ease pressure on affected Colombian businesses. Temporary suspension of high tariffs on Colombian products has been sought to support business recovery following a severe earthquake declared a natural disaster. The request links tariff relief to economic disruption affecting businesses amid extensive destruction, injuries and missing persons. United States emergency assistance has been provided through food, shelter and health supplies, while no response to the tariff-suspension request had been reported.
Port-led industrial development and direct export operations aim to expand logistics infrastructure, market access and trade connectivity. Mission Samudra is proposed as a port-led industrial and logistics development programme linked to the commencement of export-import operations at Vizhinjam seaport. It covers industrial clusters, new cities, port connectivity, logistics, development initiatives, programme management and capacity building. Direct export shipments are intended to improve overseas-market access and reduce transit time and logistics costs, particularly for small and medium enterprises. The framework also anticipates growth in warehousing, cold storage, container freight stations and logistics parks, supported by private participation and road and rail connectivity.
Electric vehicle export diversification strengthens India's presence across European, Asia-Pacific and Latin American markets through expanding overseas demand. India's electric motor car exports expanded sharply in the first quarter of 2026-27, reflecting increased international acceptance and competitiveness of India-manufactured electric vehicles. Europe became the principal export destination, led by Spain and the United Kingdom, with further demand across several European markets. Exports also reached Asia-Pacific markets, Nepal and emerging Latin American destinations. This wider market presence reflects improving quality and safety standards, stronger integration into global electric-vehicle supply chains, and diversification of India's electric-vehicle export profile.
LPG production preparedness requires refiners and upstream producers to maintain capacity and increase output during supply constraints. Government has established a standing LPG production preparedness framework under which refining companies, oil marketing companies and upstream producers may be directed to increase production during supply constraints. Companies must maintain adequate LPG storage, evacuation and transportation infrastructure and pursue technically and economically feasible production-enhancing measures. Written directions may prescribe production quantities and periods, including restrictions on alternative uses of input streams required for LPG. The production schedule is updated twice yearly to reflect new facilities and added capacity from infrastructure, technology and distribution improvements.
Free trade agreement market access requires MSMEs, farmers and exporters to meet global quality standards. Free trade agreements expand market-access opportunities for Indian MSMEs, exporters and producers through reduced or eliminated import duties on traded goods. Textiles, machinery, medicines, seafood and agricultural products can access international markets where they meet global standards and remain competitively priced. Farmers and producers are encouraged to develop export-oriented products, including chemical-free agricultural produce, while MSMEs may use preferential trade access to support manufacturing, exports, employment and growth.
Chemical-free farming can strengthen agricultural exports by meeting global standards and responding to rising international demand. Chemical-free farming is urged to meet growing global demand and expand agricultural exports. Agricultural products must meet global parameters to facilitate access to international markets, including markets opened through free trade agreements. Food processing, export-oriented farm production, and global branding of traditional cuisine, millets, spices, fruits and flowers are identified as important elements of agriculture and food production policy.
Voluntary foreign asset disclosure allows eligible taxpayers to regularise overseas holdings with immunity from further tax, penalties and prosecution. FAST-DS permits eligible taxpayers to disclose specified undisclosed foreign assets, foreign income, and foreign assets omitted from return schedules. Undisclosed assets or income not previously offered to tax may be declared up to Rs 1 crore on payment of an effective 60 per cent levy, based on fair market value as of 31 March 2026. Assets already offered to tax, or acquired during non-resident status but omitted from the return schedule, may be declared up to Rs 5 crore on payment of a fee. Valid declarations provide immunity from further tax, penalty and prosecution, while declared amounts are excluded from total income.
Global pharmaceutical leadership is urged through Indian firms achieving top-five status, supported by generic manufacturing and export capacity. Indian pharmaceutical companies are urged to attain representation among the world's five leading pharmaceutical firms, despite India's established position as a major producer of generic medicines. India has a broad manufacturing base, supplies generic medicines across numerous therapeutic categories, and exports to worldwide markets including highly regulated jurisdictions. Although pharmaceutical exports and the domestic market have expanded, Indian firms have not yet secured positions among the largest global companies. Greater international scale may be supported through acquisitions and expanded established-brand and branded-generic operations.
Foreign asset voluntary disclosure permits eligible small taxpayers to regularise qualifying assets through tax, additional levy, and statutory immunity. FAST-DS permits eligible small taxpayers to voluntarily disclose specified foreign assets or foreign income. It covers undisclosed foreign assets or income not offered to tax, subject to an aggregate value threshold of Rs 1 crore, and certain foreign assets omitted from the relevant return schedule, subject to a Rs 5 crore threshold and prescribed fee. Payment comprises 30 per cent tax and an additional equal amount. Disclosed income or investment is excluded from total income, with immunity from further tax, penalty and prosecution under the Black Money Act for the disclosed asset or income.
Free trade agreement opportunities require MSMEs to meet global standards and expand exports across textiles, machinery, medicines and seafood. Free trade agreements are presented as export-market opportunities for Indian MSMEs because they reduce or eliminate import duties on a substantial range of traded goods. MSMEs are urged to expand exports of textiles, machinery, medicines and seafood, including shrimp, by meeting global quality standards and offering products competitively. Their export role is linked to self-reliance and their significant contribution to manufacturing, exports, GDP and employment.
Windfall gains tax on petroleum exports was reduced to support domestic fuel availability and limit export price advantages. Special additional excise duty (windfall gains tax) on exports of petrol, diesel and aviation turbine fuel was reduced from 15 August 2026. Petrol export duty was reduced to nil, and export-duty rates on diesel and ATF were lowered. Duty rates for petrol and diesel cleared for domestic consumption remained unchanged. The export-duty framework seeks to maintain domestic petroleum-product availability and limit export advantages arising from higher global crude oil prices amid West Asia tensions.
Energy self-reliance drives diversified fuel sourcing, expanded offshore exploration, and domestic capacity to reduce geopolitical supply vulnerability. Energy security policy seeks to reduce exposure to geopolitical pressure and supply disruption caused by dependence on overseas fuel and strategic maritime routes. India is diversifying crude oil and LNG sourcing while strengthening domestic hydrocarbon production through offshore exploration, seismic surveys, exploratory drilling and shared infrastructure. Expanded access to sedimentary basins is intended to unlock domestic oil and gas resources. Wider piped natural gas coverage, solar generation, critical-mineral exploration, and nuclear and other non-fossil energy sources support the broader objective of energy self-reliance.
Current account deficit widened as merchandise trade imbalance expanded, despite stronger services surplus, transfers, and positive capital inflows. India's current account deficit widened in June 2026, principally because merchandise imports increased faster than exports and expanded the merchandise trade deficit. A higher services surplus, increased net transfers and a narrower net income deficit provided partial offsets. Net capital inflows, including foreign direct investment and foreign portfolio investment, supported a positive overall monthly balance. During the April-June quarter, despite increased services surplus and net transfers, the overall balance shifted to a deficit as the merchandise trade deficit widened.
Concessional foreign-currency swap facility closes early for new FCNR(B) deposits while ECB and OFCB access remains available. The concessional swap facility for FCNR(B) deposits encourages foreign-currency inflows and supports foreign-exchange liquidity. New FCNR(B) deposits eligible for the facility must be mobilised by 31 August 2026, while swaps for eligible deposits may be availed until 11 September 2026. The swap arrangement for External Commercial Borrowings and Overseas Foreign Currency Borrowings remains available until 31 December 2026.
Insurance grievance redressal requires initial insurer complaint, prompt acknowledgement, and escalation through integrated monitoring channels when resolution remains unsatisfactory. Insurance policyholder grievances must first be raised with the concerned insurer, whose Grievance Redressal Officer and Board-level monitoring committee oversee redressal. Complaints received through digital channels, correspondence or call centres are recorded in the insurer's Complaints Management System, integrated with Bima Bharosa. Insurers must acknowledge complaints immediately and resolve them within 14 days. Where no response is received within a reasonable period or the response is unsatisfactory, policyholders may escalate through Bima Bharosa or designated helplines, email or physical correspondence.
Finance Minister, Shri Pranab Mukherjee's opening speech, delivered in the Lok Sabha today, at the beginning of consideration of the Finance Bill-2010, is as follows:
"As I rise to move the Finance Bill, 2010 for consideration of this august House, it is with some satisfaction that I report the positive developments in the Indian economy in the last few months. The turnaround of the economy which started in the second quarter of 2009-10 is likely to result in a growth of 7.2 per cent for the full year 2009-10 as indicated in the Advance Estimates of the Central Statistical Organisation.
The upward shift in India's growth trajectory has been anchored strongly in robust growth in consumption. The salutary impact of the fiscal stimulus along with the monetary measures implemented by the RBI, facilitated the growth recovery by regenerating the investment impulses and private spending.
In the Budget for 2010-11, I have initiated a partial roll back of stimulus measures and a resumption of the fiscal consolidation process with fiscal deficit at 5.5 per cent of GDP. The Medium Term Fiscal Policy Statement 2010-11 provides the roadmap with fiscal deficit declining to 4.8 per cent of GDP in 2011-12 and further to 4.1 per cent of GDP in 2012-13. A focus on bringing down the level of public debt as envisaged in the Thirteenth Finance Commission's Report and as announced in the Budget for 2010-11 would anchor the fiscal consolidation process in a sustainable debt framework
. Inflation
The year 2009 started with low WPI inflation of 1.3 per cent in April, 2009, which relapsed to the negative zone during June to August, 2009. The WPI inflation turned positive in September 2009, thereafter, an upward trend has been observed. Clearly, the current levels of inflation are elevated and more generalized and the WPI inflation in March 2010 stood at 9.9 per cent. What has led to deep concern is the double-digit food inflation. The gradual increase in food inflation observed till December 2009 was due to expectations of supply-side constraints of food items, especially due to unfavorable south-west monsoon. As per the Second Advance Estimates of production of food grains for 2009-10, the total food grains production has been estimated at 216.85 million tones, which is about 5 per cent lower than the second advance estimate of last year.
The Government has utmost concern about the current price situation. We have taken a number of short term and medium term measures to improve domestic availability of essential commodities and to moderate inflation. These include: reducing import duties for rice, wheat, pulses, edible oils and sugar to zero; allowing import of raw sugar at zero duty under open general licence; removing levy obligation for imported raw sugar and white/ refined sugar; banning export of non-basmati rice, edible oils and pulses and imposing stock limit orders in the case of paddy, rice, pulses, sugar, edible oils and edible oilseeds. A Core Group of Chief Ministers and Central Ministers has been constituted on 15th March, 2010 to discuss issues related to prices of essential commodities. Besides, to protect the interest of poor and vulnerable sections of the society, the Central Issue Prices for rice and wheat have been kept unrevised at 2002 levels.
We have sufficient stocks of wheat and rice to meet the demands of the Public Distribution System and other welfare schemes. As on 15.4.2010, 25.4 millions of wheat in RMS 2009-10 and 25.9 million tonnes of rice have been procured in KMS 2009-10 (October to September). The Central Pool stock of wheat is at a high of 183.88 lakh tonnes and of rice at 269.50 lakh tonnes as on 1.3.2010.
In the case of pulses, the shortfall of domestic production has been made up by higher imports. Considerable support has been provided to the Public Distribution System. For pulses and edible oil, the Government is bearing a subsidy of Rs.10 per kg. and Rs.15 per kg. respectively for distribution through PDS/Fair Price Shops. The Core Group of Chief Ministers and Central Ministers held its first meeting on 8th April, 2010. Three Working Groups consisting of Chief Ministers of various States are now engaged in drawing up recommendations on agricultural production, consumer affairs and food and public distribution. The reports are expected by the middle of June, 2010.
Indications of softening of food inflation are clearly visible. There has been a significant decline from the peak food inflation of over 20 per cent recorded in December 2009 to 17.7 per cent in March 2010. Besides, the inflation in essential commodities also declined from the peak of 23.8 per cent in January 2010 to 19.8 per cent in March 2010. It is expected that this decline would continue in the recent months uninterruptedly.
The monetary policy stance has also been gradually fine-tuned by RBI to face the inflationary challenges. The Repo Rate has been increased from 5 per cent to 5.25 per cent and Reverse Repo Rate from 3.50 per cent to 3.75 per cent. The CRR has also been increased from 5.75 per cent to 6 per cent. These measures are expected to anchor the inflationary expectations.
Growth Prospects
While the slowdown in agriculture, inflicted by the monsoon failure, poses concern on the food and food prices front, the impressive recovery achieved by the Indian industry in the recent months is heartening. The Index of Industrial Production recorded a growth of 10.1 per cent during April-February 2009-10, compared to 3.0 per cent during April-February 2008-09. While both manufacturing and mining grew around 10 per cent, electricity grew at 5.8 per cent during April-February 2009-10. All the major segments of industry except consumer non-durables staged a strong recovery. The intermediate goods grew at 13.7 per cent and consumer durables recorded an appreciable 25.5 per cent growth in April- February 2009-10. The growth of capital goods at 18.2 per cent in April- February 2009-10, on top of their reasonable growth in the previous year, is indicative of the pickup in investment demand.
Tax Reform
I have already informed the House that the Government is firmly committed to the goal of comprehensive tax reform through the introduction of the Direct Taxes Code (DTC) as well as the Goods and Services Tax (GST). I am happy to inform the Hon'ble Members that, in the case of DTC, the process of consultation with the stakeholders for revising the first draft is almost over. We expect to place a revised Discussion Paper in the public domain by next month. After a quick round of consultations with some of the major stakeholders, we should be able to submit the draft legislation to Parliament in the monsoon session.
I have indicated my intent to introduce GST in the country with effect from 1st April, 2011. Central Government is closely engaged with the Empowered Committee of the State Finance Ministers in finalizing the GST design. Some of the States apprehend that they may lose some revenue in the initial years of the GST regime. Central Government is willing to provide compensation to the States for these initial years, provided there is agreement on the broad framework for a common threshold for Goods and Services between the Centre and the States; common exemption lists between the Centre and the States; mechanism to check deviations and acceptable level of overall GST rates. The design and modalities of providing this compensation would be worked out in discussion with the State Governments and the Empowered Committee.
Outlook for 2010-11
There are several factors that have emerged from the performance of the economy in the recent period which augur well for the Indian economy. Attesting the impressive recovery of the industrial sector, there is a revival in investment and private consumption demand, though demand recovery is yet to attain the pre-2008 momentum. The favourable capital market conditions with improvement in capital flows and business sentiments are also encouraging. There is also a significant pick-up in corporate earnings and profits. The outlook is further brightened by the fact that a normal monsoon is predicted this year.
Going by these indications and considering that agriculture had a set-back in 2009-10 and is only gradually getting back to the projected path, the Indian economy is expected to grow around 8.5 during 2010-11 and to breach the 9 per cent mark in 2011-12.
Since the presentation of the Budget on 26th February, 2010, we have received a large number of representations and suggestions both from trade and industry as well as my colleagues in this august House. While some seek modifications to the existing proposals, others have urged for fresh reliefs. Some valuable suggestions were also made by the Hon'ble members during the general discussion on the Budget in the first phase of this session. I expect to receive many more suggestions in the course of the ensuing discussion on the Finance Bill. I shall cover the reliefs we propose to grant, the amendments that we seek in the Bill and our response to the issues that are raised in discussions, in my reply.
With these words, Madam Speaker, I move for consideration of the Finance Bill, 2010."
Goods and Services Tax proposed with central compensation mechanism to states, aligning common thresholds and exemptions.
The Government proposes fiscal consolidation together with targeted measures to moderate inflation and secure food availability, including zero duty imports, export restrictions, stock limits, and PDS subsidies; monetary policy has been tightened to anchor expectations. Concurrently, comprehensive tax reform is advanced through consultation on the Direct Taxes Code and a planned introduction of the Goods and Services Tax with a State compensation mechanism conditional on agreed common thresholds, exemptions and deviation controls.
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