The Indian Economy in an Ever More Volatile and Complex World - Special Address by Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India at the 13t...
Fiscal responsibility limits frame cautions on new projects as budgetary discipline rather than financial crisis. Finance-department advice treats fiscal indicators as grounds for restraint in approving additional expenditure rather than as evidence that funds are unavailable. Funding new projects may be difficult until additional resources are mobilised or allocations already approved are reallocated. Project proposals lacking budgetary provision or earmarked funding may create cash-flow pressures and fiscal-management challenges, requiring deferment until resources are finalised.
Corporate document forgery allegations trigger investigation into unauthorised insolvency consortium participation and disputed share transfers. An FIR concerns alleged cheating, forgery, criminal conspiracy, corporate-document misuse, and unauthorised financial liabilities arising from participation in a corporate insolvency resolution process. Allegations include entering a consortium arrangement without the Parekh Group's knowledge or authorisation, reliance on a fabricated and unapproved board resolution, and unauthorised transfer of shares to a group-controlled entity. Investigation covers disputed-record authenticity, alleged digital-signature misuse, and financial transaction trails.
Energy security shapes continued Russian crude sourcing as alternative suppliers replace shortfalls amid potential sanctions-related restrictions. Russian crude imports are operating near 1.8 million barrels daily in September, with refinery maintenance, stronger Chinese buying, and disruptions to Russian export infrastructure constraining availability. Middle Eastern supply, especially from Iraq and Saudi Arabia, has offset reduced Russian volumes. Potential tougher restrictions on countries purchasing Russian oil could complicate procurement, but energy security and tight physical oil markets make a significant near-term reduction in Russian crude purchases unlikely. Replacement remains technically possible but may raise procurement costs and competition for medium-grade crude.
Direct tax payment gateway integration enables nationwide payments through digital options, branch channels, and customers' respective internet-banking services. IDFC FIRST Bank's payment-gateway integration for Central Board of Direct Taxes collections enables Direct Tax payments through UPI, credit cards, debit cards, Retail and Corporate Internet Banking, and branch-based cheque, demand draft, or cash payments. Customers of other banks may use their own internet-banking facilities through the gateway. Taxpayers create a challan on the Income Tax e-Filing Portal, select Payment Gateway and IDFC FIRST Bank, choose a payment mode, complete payment, and download or print the paid challan. Payment confirmations are also accessible.
Insurance distribution controls target commissions, expenses and loan-linked sales, reshaping bancassurance arrangements and intermediary remuneration structures. IRDAI's consultation proposals for insurance distribution contemplate lower Expenses of Management limits, tighter commission controls, and greater control over loan-linked insurance practices. The prospective framework concerns insurer and intermediary remuneration, distribution expenses, and bancassurance fee structures. Reported concerns centre on potential effects on insurer earnings, intermediary economics, and lending-linked distribution arrangements; the measures are not described as final operative obligations or enforcement action.
Personal loan eligibility and repayment planning: loan variants and digital applications remain subject to assessment, verification, and applicable terms. Eligible customers may seek collateral-free personal loans within stated amount, tenure and interest-rate ranges. Loan amount, interest rate and tenure determine the EMI and total interest payable, while calculator results are estimates rather than final repayment obligations. Eligibility includes nationality, age, employment and credit-score conditions, but approval, final pricing and loan amount remain subject to lender assessment, document verification and applicable terms. Online applications require personal, financial and employment details and KYC verification.
Nidhi company deposits lack insurance protection, requiring verification of government declaration before relying on high-return promises. Each company seeking to function as a Nidhi must file Form NDH-4 for declaration or updated Nidhi status and comply with the Companies Act, 2013 and applicable Nidhi Rules. Nidhi companies may accept deposits and grant loans only to members. Public investors should verify declared Nidhi status rather than rely on unusually high-return promises, agent representations, or informal assurances. Deposits with Nidhi companies are not insured by the Deposit Insurance and Credit Guarantee Corporation, and recovery may be difficult where a company fails or fraud occurs.
FCNR(B) liquidity deployment remains within banks' discretion, guided by credit pipelines, asset-liability positions, and prudent underwriting standards. Banks retain full discretion to deploy liquidity mobilised through FCNR(B) deposits, based on their credit pipeline, lending proposals, liquidity outlook and asset-liability position. No sector-specific direction applies to use of these funds. FCNR(B) deposits are fixed-term foreign-currency deposits in which principal and interest are repayable in the same foreign currency, protecting non-resident depositors from direct rupee exchange-rate risk. Continued prudent credit appraisal and underwriting standards are expected.
Compulsory Muslim marriage registration shifts registration to registrars under a statewide procedural framework, with local officials authorised when needed. Compulsory registration of Muslim marriages will operate under the Assam Muslim Marriage Registration (Compulsory) Rules, 2026, framed under the Assam Compulsory Registration of Muslim Marriage and Divorces Act, 2024. Registration will be undertaken by registrars, with panchayat-level officials potentially authorised where application volumes require additional capacity. The framework addresses the registration forum after kazis were barred from registering Muslim marriages.
Macroeconomic resilience supports fiscal consolidation, financial-sector stability, and orderly foreign-exchange management through persistent global and market shocks. Policy management emphasises clear communication, policy certainty, macroeconomic and financial-sector stability, efficient use of buffers, and sustained structural reform. Fiscal prudence is treated as necessary to avoid unsustainable stimulus and preserve long-term stability. External-sector resilience rests on services exports and remittances, while oil and gold shocks and weaker capital inflows have created temporary balance-of-payments pressure. Further improvement is linked to lower oil dependence, export diversification, trade agreements, capital inflows and orderly foreign-exchange market management.
Software export growth strengthens IT ecosystem as campus expansion supports startup activity, infrastructure development, and skilled employment. Software export revenue generated by Technopark reached Rs 17,092 crore in FY 2025-26, reflecting year-on-year growth of approximately 17.3 per cent. Growth is attributed to IT infrastructure, a skilled talent base, and company performance. Technopark also operates as an IT and ITeS hub and startup ecosystem centre, with ongoing campus development intended to expand its position among major IT hubs.
Artificial intelligence centre of excellence partnership advances industry-aligned training, supervised internships, startup mentorship, and applied research collaboration. IIEST Shibpur and Tata Consultancy Services have entered into a Memorandum of Understanding to establish an Artificial Intelligence Centre of Excellence at the Electrical Engineering Department's high-performance computing laboratory. The collaboration supports industry-aligned training, professional certifications, practical projects, supervised internships, startup mentorship, curriculum benchmarking, and applied research in natural language processing, computer vision, image processing, and advanced data analytics.
Money-laundering searches prompt protests over alleged political misuse while operations continue at public development offices and residences. Enforcement Directorate search and survey operations connected with a money-laundering investigation continued at development authority offices and premises linked with housing administration, a realty company, and private residences. AAP workers protested against the searches, alleging political and administrative pressure through central investigative agencies. The party further alleged that the operations could disrupt the development authority's functioning and impede Punjab government welfare schemes.
Money-laundering investigation procedure raises allegations over FIR registration, conflict concerns, and the choice between police, vigilance, or federal inquiry. A police inquiry, rather than a Vigilance inquiry, was directed following an Enforcement Directorate communication seeking registration of an FIR for cognizable offences. It was contended that FIR registration should be dealt with by the police and that governmental or ministerial intervention would raise concerns where a person facing allegations is involved in deciding the investigative course. A transfer to a federal investigative agency was sought on grounds of investigative independence and perceived conflict of interest.
Trade truce extension maintains tariff pauses and export-restriction rollbacks while negotiations continue on broader economic commitments. United States-China trade relations may remain governed by the Busan Agreement through January 10 under a stated two-month extension, though Chinese official confirmation is pending. The arrangement maintains pauses on elevated tariffs and prior rollbacks of restrictions affecting critical minerals and high-technology exports. Negotiations may produce a broader economic package or further continuation of existing terms, while implementation of agreed commitments is under review. The parties have also proposed reciprocal alerts on AI-related hacking incidents involving national-security concerns.
Gold Smuggling Enforcement: Concealed foreign-origin gold recovered from vehicles and a traveller, with arrests under customs law. Gold-smuggling enforcement involved the seizure of approximately 21 kg of foreign-origin gold in two operations and the arrest of five persons under the Customs Act, 1962. Gold bars were recovered from sophisticated vehicle-chassis cavities, while gold bars and cut pieces were recovered from a passenger's specially designed cotton waist belt. The operations concerned suspected cross-border gold movement and targeted organised smuggling networks using sophisticated concealment methods.
Cross-border gold smuggling enforcement resulted in Customs Act seizures after coordinated recovery of foreign-origin gold from border locations and a passenger. Cross-border smuggling of foreign-origin gold through the Bangladesh route led to coordinated recoveries and seizures under the Customs Act, 1962. Gold recovered near the India-Bangladesh border was taken over for customs proceedings, including a seizure under Section 110. Foreign-origin gold concealed by a train passenger was also recovered and seized, with investigation indicating its smuggling from Bangladesh.
BRICS tax cooperation creates standing platforms for international taxation, revenue statistics, professional capacity building and peer learning. India-led BRICS tax cooperation established standing Working Groups on International Taxation and Transfer Pricing and Revenue Statistics, providing institutional platforms extending beyond individual Chairships. It also institutionalised an annual Young Tax Professionals Capacity Building Programme, launched the BRICS Tax Cross-Learning Lab for peer learning on client-centric administration and human-resources practices, and approved the Terms of Reference for the BRICS Tax Support Network.
Wildlife trafficking enforcement applies protected-species safeguards to seized Tokay Geckos and enables further statutory action against suspected illegal trade. Wildlife-trafficking enforcement led to interception of two persons and seizure of 86 live Tokay Geckos under the Wildlife (Protection) Act, 1972. Tokay Geckos receive Schedule I protection under that legislation and are listed in Appendix II of CITES, regulating international trade. The persons and recovered geckos were transferred to the Mariani Range Forest Office for further action.
Restricted firecracker imports concealed through misdeclaration trigger seizure and criminal investigation under customs enforcement law. Concealment of restricted firecrackers within an import container declared as bottles and wallpaper resulted in customs seizure under the Customs Act, 1962. Firecracker imports are restricted under the Foreign Trade Policy and require valid Directorate General of Foreign Trade authorisation and a Petroleum and Explosives Safety Organisation licence under the Explosives Rules, 2008. Investigation into attempted clandestine clearance led to the arrest under the Customs Act of a key syndicate member alleged to have orchestrated the import.
CHAPTER I - MINIMUM ALTERNATE TAX - GROSS ASSETS VIS-À-VIS BOOK PROFIT - Revised Discussion Paper – Direct Tax Code (DTC) 1. Chapter XIII of theDiscussion Paper on the DTC deals with Minimum Alternate Tax (MAT). As stated in the Discussion Paper, a company would ordinarily be liable to tax in respect of its total income. However, owing to tax incentives, the liability on total income, in many cases, has been found to be extremely low or even zero. Internationally, a variety of economic bases and methods are used to calculate presumptive income so as to overcome the problem of excessive tax incentives. These presumptions could be based on net wealth, value of assets used in business or gross receipts of the enterprise.
1.1 The DTC has proposed a Minimum Alternate Tax (MAT) on companies calculated with reference to the "value of gross assets". The economic rationale for the assets tax is that investors can expect ex-ante to earn a specified average rate of return on their assets, hence it provides an incentive for efficiency.
1.2 It has been proposed in the DTC that the "value of gross assets" will be the aggregate of the value of gross block of fixed assets of the company, the value of capital works in progress of the company, the book value of all other assets of the company, as on the last day of the relevant financial year, as reduced by the accumulated depreciation on the value of the gross block of the fixed assets and the debit balance of the profit and loss account if included in the book value of other assets. The rate of MAT will be 0.25 per cent of the value of gross assets in the case of banking companies and 2 per cent of the value of gross assets in the case of all other companies. The MAT will be a final tax. Hence, it will not be allowed to be carried forward for claiming tax credit in subsequent years.
2. The following major issues have been raised regarding the proposed MAT on gross assets :
i) Computation of MAT with reference to gross value of assets will require all companies to pay tax even if they are loss making companies or operating in a cyclical downturn. An asset based MAT does not have a proximate linkage with a particular year‟s income or turnover. An asset based MAT on loss making companies would result in significant hardship since they would not have the resources to pay the tax. While one „incentive for efficiency‟ argument could be that such companies could shut down or restructure their businesses, such an argument would not be valid for businesses where losses may be inherent over long periods of the business cycle. Income tax should be on real income and any method for presuming income should also be reasonable enough to come closer to the real income.
(ii) The return on assets is one of the indicators for evaluating the performance of companies. However, it is not reasonable to apply this for newly set up infrastructure companies which have long gestation periods. Since the proposed MAT regime does not provide any exemption for gestation period, investment costs in new businesses will be higher on account of the MAT when compared to old businesses which already have a depreciated asset base. Similarly, for companies undergoing major expansion resulting in the value of assets being much higher, the MAT may be much greater than the income tax liability.
(iii) In the case of corporates under liquidation, a levy of a presumptive asset tax till the time the company is dissolved is not reasonable.
(iv) Assuming the same net income as a percentage of gross assets for all taxpayers is not practical as this would vary depending on the industry concerned, the degree of integration of the particular enterprise, and the type of product or service provided.
(v) The inclusion of „capital works in progress„ which is not used in the business and does not contribute in revenue generation would distort the asset based tax. Taxation should be based on net worth and not on gross assets.
(vi) The asset based MAT does not cover situations where there are multiple tiers of subsidiaries for handling separate businesses or investments. There would be a cascading effect of the asset based MAT in such cases.
(vii) The proposed MAT does not allow for any carry forward which would result in a corporate paying more overall tax in a low profit year without there being any relief against above average profits earned in a subsequent year.
(viii) The DTC proposes „investment linked‟ incentives to specified sectors for investment. The application of asset based MAT on companies operating in such sectors contradicts this policy.
3. Some of the issues raised by stakeholders (such as MAT credit) can be addressed by making appropriate changes in the proposed scheme of the asset based MAT. However, there may be practical difficulties and unintended consequences, particularly in the case of loss making companies and companies having a long gestation period. It is, therefore, proposed to compute MAT with reference to book profit.
Asset-based Minimum Alternate Tax risks burdening loss-making and long-gestation firms, prompting a shift to book-profit calculation.
The paper critiques the DTC proposal to compute Minimum Alternate Tax (MAT) on the value of gross assets-comprising gross block, capital works in progress and book value of other assets less depreciation-and notes MAT would be a final tax. It records stakeholder concerns that an asset based MAT burdens loss making and long gestation companies, includes non revenue assets, causes cascading effects in multi tier groups, conflicts with investment linked incentives, and lacks carry forward relief. Consequently, the paper proposes computing MAT with reference to book profit.
Note: It is a system-generated summary and is for quick reference only.
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