1. The government today said it would infuse Rs 16,500 crore into public sector banks to ensure that they had a minimum Tier-I capital adequacy ratio of 8 per cent by March 2011.Out of the Rs 16,500 crore, Rs 15,000 will come from the World Bank. The World Bank has agreed to give a $2-billion loan for re-capitalising government-owned banks. As on December 31, at least four banks’ Tier-I capital was less than 8 per cent. These are UCO Bank (6.5%), IDBI Bank (6.6%), Bank of Maharashtra and Central Bank of India (7.14%). Some more banks may fall below the 8% level by the end of March as loan growth, muted for the first nine months of 2009-10, has picked up in the fourth quarter. According to the Reserve Bank of India’s norms, the minimum capital adequacy ratio for banks is 9%, with Tier-I capital of at least 6%.
2. Finance Minister Pranab Mukherjee today exuded confidence the economy would soon break the double-digit growth barrier and said the stimulus measures will not be fully withdrawn until a robust recovery is achieved. Mukherjee, however, remained concerned over high food inflation and the ambiguous nature of recovery in exports due to the uncertainty prevailing in the developed economies. "...I feel the fundamentals of the economy are strong. The positives from our recent performance outweigh the negatives, so that one can hope to see the economy breaking the double-digit growth barrier in the very near future, which is essential for reducing poverty in the country," Mukherjee said in his address to the 82nd AGM of FICCI.
3. Life becomes Saral for salaried-- Two-page Saral-II form for individual salaried taxpayers for coming assessment year.
4. Finance Minister Pranab Mukherjee presented a please-all Budget, that broadly focused on fiscal stabilisation. Broadens income tax slabs; gives away Rs 26,000 cr in tax breaks
Cenvat raised from 8% to 10%
Direct Taxes Code, GST by April 2011
Withdraws service tax exemption on Railway goods transport
MAT up from 15% to 18%
Targets Rs 75,000 crore from disinvestment, spectrum sale
The salaried class received some generous relief, with the upper limit for the lowest income tax slab of 10% raised to Rs 5 lakh from Rs 3 lakh earlier.
The corporate sector, however, was slapped with a higher minimum alternate tax (MAT) at 18 per cent, compared to 15 per cent earlier, but the reduction in surcharge by 2.5 percentage points to 7.5 per cent will offset much of the higher MAT impact.
The roll-back of the fiscal stimulus, introduced 15 months ago, began with a two percentage point increase in the Cenvat rate, a move that did not perturb industry leaders who had feared a bigger cutback.
Proponents of fiscal rectitude, too, were kept reasonably satisfied with the reduction in the fiscal deficit to 5.5 per cent of gross domestic product (GDP) for next year, down from 6.7 per cent in 2009-10.
5. A host of non-banking finance companies such as IDFC, Aditya Birla Financial Services, Reliance Capital, Religare Enterprises and Indiabulls is planning to queue at the Reserve Bank of India to seek banking licences. Following Finance Minister Pranab Mukherjee’s announcement of RBI’s intent to grant fresh bank licences, smaller finance companies such as Srei and Shriram Transport have also expressed their intent to approach the regulator. Foreign banks, most of which operate in the country as branches of an overseas subsidiary, are unlikely to apply given the higher tax that they would have to shell out on setting up an Indian banking company. Besides, many of the global banks are going slow on overseas expansion due to the stress in their home markets. In the last five years, RBI has not given any fresh licences.
2. Finance Minister Pranab Mukherjee today exuded confidence the economy would soon break the double-digit growth barrier and said the stimulus measures will not be fully withdrawn until a robust recovery is achieved. Mukherjee, however, remained concerned over high food inflation and the ambiguous nature of recovery in exports due to the uncertainty prevailing in the developed economies. "...I feel the fundamentals of the economy are strong. The positives from our recent performance outweigh the negatives, so that one can hope to see the economy breaking the double-digit growth barrier in the very near future, which is essential for reducing poverty in the country," Mukherjee said in his address to the 82nd AGM of FICCI.
3. Life becomes Saral for salaried-- Two-page Saral-II form for individual salaried taxpayers for coming assessment year.
4. Finance Minister Pranab Mukherjee presented a please-all Budget, that broadly focused on fiscal stabilisation. Broadens income tax slabs; gives away Rs 26,000 cr in tax breaks
Cenvat raised from 8% to 10%
Direct Taxes Code, GST by April 2011
Withdraws service tax exemption on Railway goods transport
MAT up from 15% to 18%
Targets Rs 75,000 crore from disinvestment, spectrum sale
The salaried class received some generous relief, with the upper limit for the lowest income tax slab of 10% raised to Rs 5 lakh from Rs 3 lakh earlier.
The corporate sector, however, was slapped with a higher minimum alternate tax (MAT) at 18 per cent, compared to 15 per cent earlier, but the reduction in surcharge by 2.5 percentage points to 7.5 per cent will offset much of the higher MAT impact.
The roll-back of the fiscal stimulus, introduced 15 months ago, began with a two percentage point increase in the Cenvat rate, a move that did not perturb industry leaders who had feared a bigger cutback.
Proponents of fiscal rectitude, too, were kept reasonably satisfied with the reduction in the fiscal deficit to 5.5 per cent of gross domestic product (GDP) for next year, down from 6.7 per cent in 2009-10.
5. A host of non-banking finance companies such as IDFC, Aditya Birla Financial Services, Reliance Capital, Religare Enterprises and Indiabulls is planning to queue at the Reserve Bank of India to seek banking licences. Following Finance Minister Pranab Mukherjee’s announcement of RBI’s intent to grant fresh bank licences, smaller finance companies such as Srei and Shriram Transport have also expressed their intent to approach the regulator. Foreign banks, most of which operate in the country as branches of an overseas subsidiary, are unlikely to apply given the higher tax that they would have to shell out on setting up an Indian banking company. Besides, many of the global banks are going slow on overseas expansion due to the stress in their home markets. In the last five years, RBI has not given any fresh licences.
