The CAG has called for close monitoring of call book items worth over Rs74,000 crore and asked the Finance Ministry to look into them to find out how many of them could be really retained
Over Rs74,000 crore in central excise and service tax revenue is pending realisation for 2012 -13 on various grounds, including that of injunction or appeal.
In its report, the Comptroller and Auditor General (CAG) said that a total of 37,652 cases involving revenue of Rs74,861.71 crore to Rs53,521.86 crore related to central excise and Rs21,339.85 crore as service tax — is pending in the ‘call book’ as of 31 March 2013.
A call book acts as a set of records of those central excise and service tax cases where the demand could not be realised due to reasons such as the department having gone in appeal and injunction from courts.
The CAG, while giving out the figure, called for close monitoring of call book items which are of “very high” value and asked Finance Ministry to look into them to find out how many of them could be really retained.
“We tabulated the performance of the department in respect of call book clearance in central excise during recent years and noted that the pendency of cases in the call book is still very high, indicating the need for close monitoring of the process of review of call book items,” the report said.
The call book pendency of central excise cases was Rs46,727.46 crore and Rs42,207.90 crore during 2011-12 and 2010-11, respectively.
The CAG said that the number of call book cases and the revenue involved in case of customs duty both rose during 2012-13, “indicating the need for close monitoring, including monitoring of the efficacy of the monthly review process”.
As per the instructions of Central Board of Excise and Customs (CBEC), call book cases need to be reviewed on a monthly basis. The review may result in “substantial reduction” in the number of unconfirmed demands in the call book, the instructions state.
The call book pendency of service tax cases was Rs20,273.45 crore and Rs15,667.47 crore during 2011-12 and 2010-11, respectively, adds the CAG report which was tabled in Parliament in July this year.
Fareed Zakaria, quoting Ruchir Sharma and a Morgan Stanley research study, wrote that delayed reforms by Narendra Modi might get punished; Indian markets may retreat just as in Japan. But the Nikkei is now trading at a multi-year high
Narendra Modi, India’s prime minister, "radiates confidence", writes American journalist Fareed Zakaria, who had been an anti-Modi writer not too long ago. "The public lauds him, world leaders court him and the Bombay Stock Exchange continues to soar,” he says.
Zakaria, whose interview with Modi appeared on CNN yesterday, also mentions that “Modi’s honeymoon is coming to an end at home. In a series of by-elections, his party has done surprisingly poorly.” This makes Zakaria wonder if the problem with the new Prime Minister "turns out to be not that he is too bold but rather that he is not bold enough."
While he is entitled to his political opinion and to change it as often as he likes, Zakaria trips up while commenting on an unrelated area: the stock market. He quotes a research by Ruchir Sharma, head of Emerging Markets and Global Macro at Morgan Stanley Investment Management, saying “in those countries where leaders have wasted their honeymoon and delayed reforms too long, markets retreat, giving back most of their early gains.”
Looking back over the last 20 years at how the stock markets reacted to national elections in the world’s 20 largest democracies, “it becomes clear,” says Sharma, “that markets embrace the rise of new leaders, particularly if the new leaders arise in troubled economies, are seen as promising reformers, and win the election with a decisive mandate.”
In his research he found that “during the 18 months centred around the elections, the stock market outperformed the global average by a stunning 42 percentage points — with most of that gain coming before the vote”. In the second year, “those who failed to deliver — whether undone by political resistance, some new crisis, or the limits of their own competence — were getting punished by the market,” he argues.
Sharma, in his article titled ‘Modi should learn from Japan’s Abe that leaders who don’t deliver on reforms are punished’. points out that those who fail to deliver on reform — like Boris Yeltsin in Russia, Thabo Mbeki in South Africa, or Joseph Estrada in the Philippines — have been punished by democracy’s scorekeepers, the voters and the markets. Those who deliver — like Kim Dae Jung in South Korea, Luiz Inacio Lula da Silva during his first term in Brazil, or Susilo Bambang Yudhoyono during his first term in Indonesia — have been rewarded with high approval ratings and sustained bull markets.
Taking the example of Japan, Zakaria says, “Prime Minister Shinzo Abe eagerly embraced those policies that were politically popular — easy money and public spending — but never followed through on tough structural reforms. As a result, growth and stock market performance in Japan have slumped.” Quoting approvingly from this study, Zakaria argues that some of the recent stockmarket gains in India could disappear if Modi does not act quickly.
There is a small problem with this conclusion though. Zakaria, who has been accused of passing off other people’s stuff as his own, is plain wrong this time, for depending on this second-hand opinion sourced from Ruchir Sharma.
Shinzo Abe became the Prime Minister in December 2012. By December 2013, the Nikkei, Japan’s stock market index, was up by more than 60% over the year. While the Japanese market slipped by 10%-12% since the beginning of 2014, it is now back near its multi-year high and the trend is now firmly upwards.
Sharma had written in his analysis, that it is also too early to judge Modi, who seems to be starting with a small-bore strategy similar to the one to which Abe has retreated.
“While there are signs of the economy picking up,” he mentions, “in financial circles there are already rumblings of discontent over Modi’s failure to articulate a programme of major reforms.” “The political honeymoon for new leaders,” he cautions, “lasts no more than 12 to 18 months. In the second year, the market often passes judgement on new leaders, as seen in Japan,” wrote Ruchir. While this impressed Zakaria, it has turned out to be wrong.
CBI said, the Finance Minister was competent to give approval of upto Rs600 crore but Chidambaram approved Aircel-Maxis deal, worth $800 million or about Rs3,500 crore
The Central Bureau of Investigation (CBI) on Monday told the special 2G court that it was investigating former Finance Minister P Chidambaram's role in the Aircel-Maxis case.
The agency contended that the Finance Minister was competent to give approval of upto Rs600 crore but Chidambaram approved the deal that was worth $800 million or about Rs3,500 crore.
It said that the matter should have been referred to the Cabinet Committee on Economic Affairs (CCEA) and they are probing as to how Chidambaram gave the approval.
"For investment of over Rs600 crore, CCEA was competent to give approval. This is under investigation and we have not concluded the probe on this aspect yet," CBI prosecutor KK Goel said.