Loading...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 News - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ----
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ----
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ----
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    PM Jan Dhan Yojana Completes 12 Years of Transforming India’s Financial Inclusion Landscape
    Rassense Becomes First Indian CFS Company to Cross 5,000+ Employees; On Track to Cross INR 600 Crore in Revenue
    SVC Bank's Nationwide Cyber Safety Drive Reaches Over 19,061 Citizens Across 213 Housing Societies
    'Not haircut but mundan': Cong on NCLT clearing Subhash Chandra's Rs 6.5 crore payout
    Keralam: Escaped Assam prisoner reaches police station for Aadhaar card, flees again
    Women's Savings Account: Features that make opening one worth it
    Best Pension Plans and Annuity Plans in India 2026: A Full Comparison
    Rupee rises 4 paise to 95.40 against US dollar in early trade
    Minister of State for Commerce and Industry and Electronics & Information Technology Shri Jitin Prasada Concludes Official Visit to Morocco; Co-Chairs...
    Hyderabad police caution citizens against ''Hybrid Cyber Fraud''
    Hoping to work towards further expanding scope of India-Japan trade pact: Goyal
    Bajaj Finance Personal Loan Offers Limited-Time Rewards During Loan Utsav 2026
    Commerce and Industry Minister Shri Piyush Goyal Highlights India’s Growing Startup Ecosystem at India–Japan Startup Roundtable in Tokyo
    Sugar prices rise again by Re 1 per kg to Rs 65 in retail market
    SIDBI organizes a conclave of the Heads of Regional Rural Banks (RRBs) on expanding SIDBI-RRB MSME Co-Lending arrangement
    SC sets aside show cause notice to Tata Steel over input tax credit availed during FY19-23
    HC flags fraudulent use of Aadhaar by infiltrators to get Indian citizenship; calls for action
    IVCA Welcomes Consultative Approach on Draft FEMA NDI Rules
    India to be among top 5 Nestle markets in coming years, a major export hub : Global CEO
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
August 27, 2026
Show AI Summary
Financial inclusion through basic bank accounts enables direct welfare transfers, digital payments, insurance access and credit for excluded households.
PMJDY provides unbanked adults with basic bank accounts without minimum-balance or maintenance-charge requirements, free RuPay debit cards with accident insurance cover, and eligible overdraft support. Through the JAM framework, PMJDY accounts enable direct transfer of welfare benefits using bank accounts, Aadhaar-based biometric verification and mobile connectivity, reducing intermediary involvement and delays. The scheme emphasises rural, semi-urban, marginalised and women account holders while supporting access to insurance, pensions, savings, digital payments and credit, including MUDRA loans.
August 27, 2026
Show AI Summary
Contract food services expansion strengthens Rassense's nationwide institutional operations through new academic partnerships and technology-led service delivery.
Rassense Pvt Ltd reports crossing a workforce of more than 5,000 employees and projects revenue exceeding INR 600 crore. Its contract food services operations serve educational institutions, corporate campuses, healthcare facilities and industrial locations. New operations at IIM Jammu, IIM Bangalore and IIT Guwahati strengthen its nationwide institutional presence. Expansion is supported by academic institution partnerships, local workforce development, operational excellence, and technology-led capabilities in food production, food waste reduction and supply-chain management.
August 27, 2026
Show AI Summary
Cyber fraud awareness promotes safe digital banking by teaching customers to verify communications, protect credentials, and report suspicious transactions.
Cyber-fraud awareness and digital banking safety were promoted through community sessions addressing phishing, impersonation, OTP and UPI fraud, QR-code scams, digital-arrest fraud, and fraudulent customer-care calls. Participants were guided to identify authentic banking communications, avoid sharing confidential credentials, verify callers and links before acting, and promptly report suspected unauthorised transactions. Customer vigilance, financial literacy, and institutional security measures were emphasised as complementary safeguards against digital financial fraud.
August 27, 2026
Show AI Summary
Personal insolvency repayment plans may be approved despite minimal creditor recovery when requisite voting support and comparative valuation support them.
Personal insolvency repayment plan approval was granted under the Insolvency and Bankruptcy Code, 2016, despite objections that creditor recoveries were negligible and the proposed payment uncertain. The plan received 80.81 per cent voting support, while dissenting creditors held less than 20 per cent voting share. Valuation showed that the debtor's personal estate was materially below the offered amount, and rejection could result in bankruptcy and lower recovery. Assessment of settlement adequacy was treated as a matter of creditor commercial wisdom.
August 27, 2026
Show AI Summary
Prison escape security lapses prompt coordinated tracing measures, transport monitoring, inter-state alerts, and a detailed custodial-security inquiry.
Prison escape and custodial-security lapses arose after a detainee escaped from Aluva Sub Jail, allegedly by using an under-construction structure within the premises to cross the compound wall. Following his later appearance at a police station seeking return of his Aadhaar card, search measures included a lookout circular, information sharing with police stations, railway-security coordination, and alerting police in Assam. A detailed inquiry has been initiated into the prison-security deficiencies enabling the escape.
August 27, 2026
Show AI Summary
Women's savings account selection depends on practical benefits, charges, eligibility, and banking needs rather than the account label.
Women's Savings Accounts may provide standard banking facilities together with additional services or benefits for eligible women. Their suitability depends on practical use of digital banking, transfers, payments, alerts, debit-card facilities, accessibility, security features, charges, and minimum-balance conditions. Since regular Savings Accounts may offer comparable facilities, the additional benefits should be assessed against associated costs and conditions. Selection should be based on comparison of eligibility, facilities, balance requirements, benefits, customer support, and authentication safeguards rather than the account's women-focused label alone.
August 27, 2026
Show AI Summary
Retirement annuity selection prioritises payout structure, taxation, insurer strength and flexibility over brand comparison for informed retirement decisions.
Retirement planning may combine market-linked accumulation during working years, deferred annuities that lock future guaranteed income, and immediate annuities that convert retirement savings into regular payments. Annuity choice depends on whether the priority is higher income, continuation for a surviving spouse, or return of capital on death. Product comparison should consider market-linked growth versus income certainty, taxation of annuity income at applicable slab rates, insurer strength, and flexibility in deferment, payout frequency and policy loans.
August 27, 2026
Show AI Summary
Foreign exchange inflows through deposit and borrowing measures provided near-term rupee support amid lower crude prices.
Reserve Bank special measures relating to FCNR(B) deposits, Overseas Foreign Currency Borrowings and External Commercial Borrowings were identified as attracting foreign-exchange inflows and providing near-term support to the rupee. The Reserve Bank became a net dollar buyer in June after two months of sales to support the rupee. The FCNR(B) window remained open until August 31, while the market outlook anticipated broader rupee depreciation over subsequent weeks.
August 27, 2026
Show AI Summary
Preferential trade agreement exploration advances bilateral market access, pharmaceutical cooperation, investment partnerships, and diversified trade.
India-Morocco economic cooperation is expanded through the seventh Joint Commission framework, targeting deeper and more diversified trade, investment, industrial collaboration and market access across goods and services. An India-Morocco Joint Working Group is to examine bilateral trade opportunities and the feasibility of a preferential trade agreement, including tariff and non-tariff barriers, improved market access and trade facilitation. Cooperation also addresses pharmaceutical market authorisation and approval timelines, food safety, sustainable agriculture, renewable energy, artificial intelligence, healthcare, and phosphates and fertilisers.
August 26, 2026
Show AI Summary
Hybrid cyber fraud exploits stolen smartphones and intercepted verification codes to compromise digital banking and payment accounts.
Hybrid cyber fraud combines physical smartphone theft with digital financial exploitation. Offenders obtain screen-lock credentials, steal devices and use control of the active SIM card to intercept verification codes and reset UPI and digital banking credentials. Preventive measures include withholding PINs, passwords and OTPs; avoiding storage of financial and identity records on phones; and immediately blocking the SIM card and freezing digital banking and UPI services after a theft.
August 26, 2026
Show AI Summary
CEPA review aims to expand bilateral trade engagement, address export barriers, and support regulatory registrations for exporters.
India and Japan are considering a review of the Comprehensive Economic Partnership Agreement to make the bilateral trade framework more contemporary and expand its scope, scale and commercial opportunities. The review is linked to balanced trade and to identifying export barriers arising from procedural requirements, language issues and time involved in market access. Regulatory compliance assistance may support product registrations required for overseas markets, including costly chemical registrations and pharmaceutical registrations.
August 26, 2026
Show AI Summary
Personal loan reward eligibility depends on successful campaign-period disbursal, alongside review of borrowing costs and repayment capacity.
Loan Utsav 2026 provides a limited-period reward bundle to eligible customers whose personal loan is successfully disbursed during the campaign period, subject to applicable terms and conditions. Personal loans are collateral-free and available subject to eligibility, customer profile, documentation and applicable loan terms. Applicants may choose a loan amount and repayment tenure based on their requirements. Extended tenures can reduce monthly EMI obligations but may increase total interest payable. Customers should review interest rates, EMI, processing charges, other loan costs and repayment capacity before accepting a loan offer.
August 26, 2026
Show AI Summary
Deep-tech investment cooperation advances through capital corridors, innovation bridges, manufacturing integration and startup pitching platforms for cross-border growth.
India-Japan startup cooperation is proposed to advance through a deep-tech capital corridor, a two-way innovation bridge, manufacturing and technology integration, and joint startup pitching platforms. Collaboration is directed towards patient capital, early-stage research, deep-tech commercialisation, technology validation, precision manufacturing, investment and market access. The partnership also emphasises MSME integration with startups and global supply chains, co-investment mechanisms, plug-and-play infrastructure, and institutional links among universities, research institutions, incubators and industry.
August 26, 2026
Show AI Summary
Sugar price-control measures combine raw-sugar imports, stockholding limits and export restrictions to curb retail price pressures.
Sugar price-control measures combine authorised raw-sugar imports, stockholding limits for dealers and bulk consumers, and an existing export prohibition to address elevated domestic prices. Imports are permitted within the specified period, while stockholding restrictions seek to curb speculation and hoarding. Retail prices continued to rise despite lower ex-mill prices, and the regulatory approach focuses on augmenting supply, limiting stock accumulation, and preventing export-related pressure on domestic availability.
August 26, 2026
Show AI Summary
Alternative dispute resolution enabled settlement of long-pending disputes, alongside reporting on court administration and regulatory compliance concerns.
Legal developments include resolution of long-pending tenancy, commercial and property disputes through a special Lok Adalat mechanism, including a digitally signed international settlement. Other matters concern a challenge to a riot-related murder conviction, allegations of administrative irregularities and selective case listing, fast-track court pendency, cancellation of a recruitment process following suspected examination malpractice, fraudulent identity documents used to claim citizenship, medical-qualification standards, and opposition to uranium exploration and mining.
August 26, 2026
Show AI Summary
MSME co-lending supports digital paperless credit delivery through rural banks for underserved rural and semi-urban enterprises.
SIDBI-RRB MSME co-lending arrangement is proposed for expansion to increase credit access for micro, small and medium enterprises in rural and semi-urban areas. The arrangement combines SIDBI's understanding of MSME credit requirements with Regional Rural Banks' local reach. SIDBI's Co-Lending Origination Platform provides an end-to-end digital credit process intended to enable faster, paperless loan processing, in-principle sanction communication, documentation and direct account disbursement without branch visits.
August 26, 2026
Show AI Summary
Input tax credit mismatch alone cannot support fraud-based GST demand without an assessing officer's recorded satisfaction of fraud or suppression.
Section 74 GST demand proceedings require the assessing officer's independent satisfaction of fraud, wilful misstatement or suppression of facts. An input tax credit mismatch or alleged short payment alone cannot establish these conditions. Unsupported assertions of suppression for invoking extended limitation are insufficient, and audit objections cannot replace the assessing officer's satisfaction. A show cause-cum-demand notice lacking factual allegations of a deliberate device to evade tax or avail excess input tax credit is vulnerable.
August 26, 2026
Show AI Summary
Fraudulent Aadhaar procurement exposes identity-verification gaps and prompts disclosure, expedited investigation, deportation, and statutory review measures.
Fraudulent procurement of Aadhaar and other identity documents by foreign nationals who infiltrate borders may undermine identity verification, immigration control and national security. Coordinated action is required to trace and deport such persons, prevent re-entry, strengthen document verification, and complete investigations without delay. Amendments to the Aadhaar Act are to be considered to assist investigating agencies, while a dedicated procedure is required to address border infiltration and human trafficking. Aadhaar enrolment records are to be supplied to police, followed by timely deportation proceedings.
August 26, 2026
Show AI Summary
Foreign investment liberalisation proposals receive industry support, subject to preserving AIF treatment, grandfathering, and prospective application.
Proposed foreign-investment liberalisation, including treatment of stakes below 10 per cent and a greater role for market forces in valuation, is welcomed. Preservation of the existing treatment of Alternative Investment Funds under the IOCC framework is emphasised, together with grandfathering of transactions and funds undertaken under the current regulatory position. Newly introduced requirements should operate prospectively to support a simpler, predictable and investment-friendly foreign-investment framework.
August 26, 2026
Show AI Summary
India market expansion guides Nestle 's volume-led growth, export-hub development and long-term investment without compromising product quality.
Nestle 's India strategy focuses on volume-led growth, wider consumer reach, portfolio development, efficiency improvements and sustained long-term investment. Growth is intended to combine increased household penetration with pricing, premiumisation, affordability and value offerings. India is also intended to develop further as a production and export hub for global markets, supported by manufacturing capacity and expanding overseas supplies. Product quality and consumer interests remain constraints on the pace of expansion.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Showing Results for : Reset Filters

Highlights Of Hon’ble Finance Minister’s Speech During Debate On Prices In Lok Sabha Today 4 August 2010

August 4, 2010

Contents
Summary
Note

Note

-

Bookmark

Print

Print

I am grateful to the Leader of Opposition for raising the issue of high taxation of petroleum products.  She is correct if taxes go down, the commodities will become cheaper and it will provide a great relief to the consumer.  It is precisely for this reason that my Government has undertaken the single biggest reform in taxation in the form of GST.  As a matter of fact, the principal opposition parties in their manifesto had promised that if voted to power, they will bring in GST. Implementation of GST depends on the cooperation and support of all political parties as constitutional amendments have to be made.  I do hope all the political parties who have expressed grave concern on the price rise and plight of 'Aam Admi' will convert this concern into real action by whole heartedly supporting GST. It's a win win situation for every one.

Inflation has been a matter of grave concern to the Government—more so, for me and my colleagues, Agriculture and Petroleum Minister who have had to take tough decisions in the face of shrill criticism from my friends on the other side of the House.

The Government has been fully aware of its responsibility and has taken determined steps since the end of last year to contain inflation.

In June 2010, the inflation as measured by the Wholesale Price Index (WPI) was10.6 per cent. Among the components, prices of food items rose by to 10.4 per cent, those of fuels by 14.3  per cent and those of manufactured products by 6.7  per cent. Both the aggregate indices and their components point towards pressure fromsupply side factors like food, fuel and commodity prices and demand side factors as the recovery becomes stronger and domestic capacity constraints in many sectors are being reached.

I must remind the hon'ble Members that inflation is a complex problem and it has to be handled with utmost care. In a democratic country, we cannot control inflation by law and decree. In the 60s, 70s and 80s, some nations tried to control inflation by having the government fix the prices. The predominant effect of this was disappearance of goods from the shops. In other words, goods were cheap but not available. At the same time, black markets flourished. We certainly do not want to create such a situation in India. Our priorities in this regard are as follows:

Goods especially food items should be easily available and accessible to people at large.

Remunerative prices be given to those producing and providing goods and services so that producers are encouraged to produce more.

To ensure that the goods including food items are  provided to vulnerable section of society at subsidised prices through an efficient and effective public distribution system.

In order to address the concern of Aam Admi, my Government has given them entitlement to work, information and education for their children backed by legal enactment. Rs 2,31,000 crore has been given to implement right to education which will be shared by Centre and States in ratio of 65:35 respectively.

A policy package has to be carefully crafted to contain inflationary pressures, maintain the growth momentum and restore the fiscal health of the economy.

Let me begin with the food prices. Inflation was very high at the end of last year and even at the start of this year. In the last week of November 2009, the weekly food price inflation stood at over 21 per cent. In February 2010, when I stood up to present the Budget in this House, food price inflation was close to 18 per cent. As a result of the steps taken by the Government, the food price inflation now has come down to 9.67 per cent !

Food prices rose sharply in the later part of 2009 because of the relatively weak south-west monsoon that year. The moderation in prices in response to a good Rabi harvest was gradual even when the harvest came into the markets. An important reason for this was that many of the crops like pulses which contributed significantly to the rising rate of inflation are grown only during the Kharif season. Prices of such crops were not appreciably impacted by the Rabi harvest.

The performance of the south-west monsoon so far this year has been very good. We are looking forward to a bumper Kharif crop and when larger supplies come in at harvest time, it will lead to significant fall in prices of food items.

I, as the Finance Minister, cannot afford to ignore the role of structural factors leading to high food prices. A recent study by NCAER indicates decreasing share of low income households and increasing share of high income households for the period 2001-02 to 2009-10. While 34.6 per cent households were in the low income category in 2001-02, the corresponding figure in 2009-10 is 17.9 per cent. For the same period, the percentage of middle income households has gone up from 58.0 per cent to 61.6 per cent. The high income households have risen from7.3 per cent in 2001-02 to 20.5 per cent in 2009-10. In absolute terms, in 2009-10, India has 46.7 million high income households as compared to 41 million low income households. The middle income households have increased to 140.7 million out of the total of 228.4 million Indian households.

As large numbers of households see their incomes growing as a result of sustained rapid growth, their food consumption patterns are changing. Households are consuming more and more pulses, dairy products, vegetables and sugar.

The entire agriculture system has to gear up to increase the productivity of food items. Growing demand is an inevitable consequence of rapid and inclusive growth.

In my Budget for the year 2010-11, I presented a four-pronged strategy of increasing production, reducing wastages, providing credit to the farmers and giving boost to the agro industry. We have to take the Green Revolution to the eastern region of the country, conserve the gains made in the green revolution areas and organize 60,000 pulses and oil seed villages at the earliest and create food storage capacities and cold chains to preserve food.

We have taken concrete steps in that direction. As a result of policy interventions, the area sown under all Kharif crops has increased to 758.67 lakh hectares from 698.10 lakh hectares last year. The area under foodgrains has increased from 340.61 lakh hectares to 368.36 lakh hectares. Area under pulses and oilseeds has gone up from 75.45 lakh hectares to 87.36 lakh hectares.

To put more money in the hands of farmers, the MSP of wheat has been increased from Rs.640 in 2004 to Rs.1100 per quintal in 2009 - an increase of 70%. Forpaddy, MSP has moved from Rs.560 to Rs.1000 per quintal - an increase of 79  per cent. The new Nutrient Based Fertilizer Policy is being implemented vigorously and is likely to show positive and early results in near future.

To increase production of pulses during Kharif 2010-11, the MSP of Tur, Urad and Moong has been increased substantially. For Tur, it has been raised from Rs.2300 to Rs.3000 per quintal, for Urad from Rs.2520 to Rs.2900 per quintal, Moong from Rs.2760 to Rs.3170 per quintal. As a direct subsidy, farmers have also been provided an additional incentive at the rate of Rs.5 per kg for these pulses sold during the harvest/arrival period of two months to designated procurement agencies.

To make the life of Aam Admi easier, we are taking pro-active steps to revamp the supply chains management. A package of measures including investment linked tax concessions, attractive schemes for encouraging investment in the creation of modern warehousing facilities and establishment of cold chains has already been put in place. We have accordingly amended the The Income Tax Act 1961 to encourage construction of more warehousing facilities by giving tax exemptions to those contributing for the same.

A committee of Chief Ministers has been set up which has been interacting regularly with the Prime Minister, Agriculture Minister and the Finance Minister to find prompt and effective solutions to the problems of agriculture and supply side management.

ANNOUNCEMENTS

Enhancement of allocation for APL families

The Central Issue Price (CIP) of foodgrains meant for the Public Distribution System has remained static since 2002, despite the increasing cost of procurement, in order to ensure food security. The CIP for rice is fixed at Rs 5.65 per kg for BPL and Rs 3 per kg for AAY and while wheat is at Rs 4.15 per kg for BPL and Rs 2 per kg for AAY. For pulses and edible oils, the Government of India is bearing a subsidy of Rs 10 per kg and Rs 15 per kg respectively for distribution of these items through PDS/Fair price shops.

Recently, the Government has also decided on providing, an additional allocation of 4.57 lakh tonnes of foodgrains per month for APL families at the prevailing APL CIP. This is applicable initially for a period of six months to those States where APL allocations are below 15 kg per family per month.

Increase in Guarantee period under the Scheme for construction of godowns through private entrepreneurs.

During last three years, the procurement of foodgrains has increased substantially in several States which has led to an increase in the requirement of covered storage space. The stock of foodgrains in the Central Pool was 583.55 lakh tonnes as on 1.7.2010. As a result, substantial quantity of wheat had to be kept in open in Cover and Plinth (CAP) storage. We have taken several steps to construct additional storage space for storage of procured foodgrains.

Government is releasing funds as equity to Food Corporation of India (FCI) and as grants-in-aid to the North-Eastern States, including Sikkim and J&K, for construction of storage godowns under a Plan Scheme. For the Eleventh Five Year Plan, Rs. 149 crores has been allocated for the purpose. Action is afoot to create 5.25 lakh tones of additional storage capacity in the North-Eastern States with an investment of Rs.568 crores.

However, the Plan funds are not sufficient to meet the additional storage capacity requirements. To bridge the identified storage gap, a scheme was formulated in July, 2008 for construction of godowns through private entrepreneurs. The identification of storage capacity is based on consumption requirement in consuming States and stock levels in procuring States. Additional capacity of 127.65 lakh tonnes has been identified in 15 States for construction under the scheme. Some more capacity is being identified in Decentralized Procurement (DCP) States. The scheme has also been extended to CWC and SWCs where they own land with a six year guarantee and about 8 lakh tonnes capacity is being constructed by them.

            To make the scheme more attractive, the guarantee is now being extended to 10 years. This will encourage private entrepreneurs to take up construction of new godowns under the scheme.

On the energy and commodities front, rising prices during the second half of 2009 and the first half of 2010 reflected the widespread perception that the global economy was out of recession and that the recovery, though slow, would be steady. Also, the rapid resurgence of growth in Emerging Market Economies (EMEs), especially India and China, would contribute to a firming up of demand for these goods.  The overhang of liquidity in global financial markets, which is constantly in search of higher returns also contributed to the re-emergence of energy and commodities as an asset class. These factors combined to accelerate inflation in these components of the WPI.

However, as we look to the second half of the 2010 and beyond, the global economic environment seems to have taken a turn for the worse. There are clear signs that the US recovery is weaker than earlier thought. Europe is dealing with its fiscal risks through aggressive austerity measures. Most significantly, China after busting out of its slowdown, is now again decelerating, at least partly in response to policy measures aimed at controlling a rapid real estate price build-up.

Given these developments, the outlook for energy and commodities prices is one of continuing moderation. To my mind, this should eliminate one significant source of pressure on prices.

From India's perspective, with particular reference to inflation management, these changes in global conditions offered an opportunity for undertaking pricing reforms in the petroleum sector. In fact, the recent increase in domestic petroleum product prices may well be more than off-set, as deregulated domestic prices adjust to a lower international crude oil prices.

Both these supply-side factors, therefore, point conclusively to a significant moderation of inflation over the second half of the current fiscal year.

The third contributor to inflation is pressure from demand. There is no question that the strong recovery, desirable as it is, has contributed to an acceleration of prices. The Reserve Bank of India has been sensitive to these pressures from January onwards when it began a calibrated adjustment of its policy stance to achieve two objectives. First, it needed to withdraw exceptional infusion of liquidity that had been made as a part of the stimulus packages. Then it needed to raise short-term interest rates to levels that would rein in demand, but not to the point of putting a sharp break on the ongoing recovery. The actions taken so far on both the liquidity and interest rate fronts are expected to have an impact on inflation during the second half of the current year.

To sum up, while recognizing that inflation reached unacceptable levels in the first half of 2010, it is expected that all the three major drivers will soften during the second half. Some of this is due to good fortune, some to a fragile global economy and some to a timely and appropriate policy response which will contribute to bringing inflation down without disrupting growth.

On GST, stated position

After careful consideration of the issues raised by the Empowered Committee of State Finance Ministers, we have revised our position to accommodate the concerns of the State Governments. The Central Government is willing to consider a phased approach for the introduction of GST. In a departure from its earlier stand, the Central Government is also willing to accept a dual rate structure in the transitory phase leading eventually to a "model GST".

The revised position on some of the key issues is as follows:

Exempted List

At present, 99 commodities are in the exempted list of VAT. States propose to keep these in the exempted list of SGST. The Central Government would align its exemption list with the State list and keep these 99 commodities as exempted commodities under CGST as well. Similarly, precious metals, bullion and other similar commodities are proposed to be taxed at 1% under CGST so that the 1% list is common both for SGST and CGST. The Centre proposes to shift the remaining commodities which are in the exempted category under Central Excise to the lower rate of the CGST.

Exemption Threshold

As has been agreed in the earlier meeting of EC, uniform threshold for all dealers with a turnover upto Rs.10 lakh per annum will be exempted both from CGST and SGST. The same threshold will apply to the services.

Threshold for compounding for small dealers

Ideally the threshold for compounding (option to pay tax at a fixed percentage of turnover without input tax credit) should be uniform for CGST and SGST at Rs.50 lakh per annum. However, Centre could consider a higher threshold of Rs. 1 crore if the States also agree to raise the limit.

Rate Structure

As you would recall in the meeting held on 13th January, 2010, FM had clearly stated that the ideal position would be to adopt a single rate structure with a common rate for goods and services. However, to facilitate the introduction of GST regime by 1st April, 2011, the Central Government proposes to keep CGST merit/lower rate for goods at 6% and standard rate at 10%. The services will be charged at 8%. Our request to the States will be to consider keeping the same rates i.e. the lower rate for SGST at 6%, standard rate at 10% and services at 8%. This mutually supportive approach will ensure that we have a single rate for CGST and SGST in the range of 12 to 20% in the first year of GST introduction. The peak effective rate will be about 15% which will be quite acceptable to the trade and industry. Eventually, it will settle down to a level of 16 to 18% for both CGST and SGST which will mean an effective rate of 12%.

In the second year of implementation of GST depending upon the revenue receipt by the Centre and the States and payment of compensation by Government of India to the States, the standard rate for SGST and CGST may be reduced to 9% retaining the lower rate at 6%. During the third year of implementation based on our experience and depending upon the buoyancy of revenue receipt and payment of compensation by the Government of India, the standard rate may be reduced to 8% and lower rate increased to 8% and services retained at 8% both for CGST and SGST. Thus, in a phased manner, we will be able to achieve a single CGST and SGST rate for both goods and services.

Topics

Acts Income Tax