The overall advance tax collections are estimated to have grown by 12% in the September quarter against the budget target of 19%. For top 100 companies, the growth was a modest 9.9%
Mumbai: Union finance and revenue secretary RS Gujral on Thursday flagged concerns over the dip in direct tax collection growth, saying it was indicative of a ‘slowdown in the economy”, reports PTI.
Pointing out to disappointing advance tax collection for the second quarter, Mr Gujral said, “There has been a decline. It does indicate a certain slowdown in the economy.”
“The government would monitor the space as we go along,” he added.
The overall advance tax collections are estimated to have grown by 12% in the September quarter against the budget target of 19%. For top 100 companies, the growth was a modest 9.9%.
Fears have been expressed earlier that weakening global economic environment and repeated rate hikes by the Reserve Bank of India (RBI) in its quest to tame the uncomfortable inflation number are having an adverse impact on the economy.
According to the official data, growth in factory output also slowed down to 3.5% for the month of August.
On the indirect taxes front, Mr Gujral sounded confident of achieving the targeted number of Rs3.92 lakh crore, in spite of the Rs36,000 crore hit on account of cut in excise and customs duties on petroleum products in wake of rising global crude prices.
The finance and revenue secretary did not give a direct answer when asked if the government would achieve its target of collecting Rs40,000 crore from the disinvestment programme this fiscal.
“You cannot disinvest without taking the timing into account. The market situation needs to be taken into account because you are disinvesting government shareholding in these companies,” he said.
The department of economic affairs on Wednesday had said it was considering other options like asking public sector undertakings to buyback government equity so that the target was achieved.
“If there is any decline from the Rs40,000 crore which has been assessed, that would be taken care of from the other aspects that are there,” Mr Gujral said, without elaborating.
A shortfall in collections from the divestment proceeds would not affect any planned spending by the government on social programmes, he stressed.
When asked about the problems emanating from US (slowdown in growth) and the European Union (sovereign debt troubles) and its impact on exports, Mr Gujral said the uncertainty is bound to exist for at least one year.
He, however, said that the country’s exports would not go down in absolute terms though there may be some slowdown in percentage terms due to base effect.
The recommendations of the committee, headed by former Reserve Bank of India (RBI) governor Bimal Jalan and submitted to market regulator SEBI in November last year, would be discussed at a workshop organised by the industry chamber Ficci in New Delhi
New Delhi: Senior government officials and top stock exchange executives will discuss on Friday the long-pending proposals made by a Securities and Exchange Board of India (SEBI)-appointed panel for sweeping changes on how the bourses should be owned and run, reports PTI.
The recommendations of the committee, headed by former Reserve Bank of India (RBI) governor Bimal Jalan and submitted to market regulator SEBI in November last year, would be discussed at a workshop organised by the industry chamber Ficci here.
Those expected to participate in the discussions include economic affairs secretary R Gopalan, joint secretary (capital markets) Thomas Mathew, and Mr Jalan himself.
Besides, top executives of three national stock exchanges—NSE, BSE and MCX-SX—as also representatives from a host of smaller bourses and other market entities are expected to be present alongside other industry experts.
The implementation of the recommendations made by the Jalan committee has been pending for almost a year now.
Among other proposals, it has strongly recommended capping the profitability of bourses and barring them from getting listed to safeguard their front-line regulatory role.
The committee, set up in January 2010 for review of ownership and governance norms for market infrastructure institutions, submitted its report to SEBI in November last year. SEBI then invited comments on it till 31st December.
The proposals generated intense debate and opposition was raised to proposals like non-listing of bourses and cap on profitability, terming them as anti-investor measures.
In the wake of stiff opposition to the proposals, SEBI later put the ball in the government’s court.
Thereafter, a committee was set up by the ministry of corporate affairs (MCA) to discuss the proposed rules, which held its consultations in May.
In its meeting with the representatives from the bourses, industry bodies, accounting bodies and other market entities, the MCA sought suggestions a roadmap for segregation of regulatory and commercial roles of the exchanges.
It was proposed that steps need to be taken to keep the front-line regulatory role of the bourses unaffected by their profit-making and other business interests after they become publicly held companies following their listing.
On its part, the SEBI board has not been even discussing the matter in its last few board meetings, as it was waiting for suggestions from the government on the contentious issues emanating from the Jalan committee proposals.
It is expected that the matter could come up for the SEBI board’s consideration in its next meeting, once the government takes a final view after consultations with various parties.
The increase in the government’s borrowing plan has been necessitated due to a switch taking place from National Small Saving Funds (NSSF) into dated securities, economic affairs secretary R Gopalan said
New Delhi: The government on Thursday announced that it will increase its market borrowings by Rs52,800 crore to Rs4.7 lakh crore in 2011-12, but said the fiscal deficit target of 4.6% remains intact, reports PTI.
“We are increasing the gross borrowings for the second half (of the fiscal) by Rs52,800 crore. The reason is...small savings collection has gone down...,” economic affairs secretary R Gopalan told reporters here.
With this, the gross market borrowing for the full fiscal 2011-12 will rise to Rs4.7 lakh crore, up from the budgeted Rs4.17 lakh crore. In the previous fiscal, the gross borrowing was Rs4.37 lakh crore.
In the first half of this fiscal (April-September), the government had borrowed Rs2.5 lakh crore through dated securities.
Now, in the October-March period, the scheduled borrowing would be Rs2.2 lakh crore. The net borrowings will work out to around Rs4 lakh crore for the entire fiscal.
Mr Gopalan said the fiscal deficit target of 4.6% of the gross domestic product (GDP) (Rs4.12 lakh crore) will remain intact even as the borrowings increase.
“There is switch taking place from National Small Saving Funds (NSSF) into dated securities. Also we need to work to shore up the cash balance. It has nothing to do with fiscal deficit computation. The target of fiscal deficit remains unchanged,” he said.
Mr Gopalan said there was an increased need to go for dated securities, instead of depending on small savings, as the government had to bridge its fiscal deficit.
The finance ministry also said that borrowing calendar has been programmed in such a way that there remains enough credit for the private sector.
Overall, officials said, small savings have gone down because the interest rates offered by banks are higher than those offered by instruments such as the post office schemes.
Budget calculations were made with estimation of Rs24,000 crore in NSSF, but instead the fund dipped by Rs35,000 crore, a ministry official said.
On the other hand, the government’s opening balance was only about Rs16,000 crore, as against the expectations of Rs24,000 crore due to withdrawals by different departments in the last 15 days of March.
On whether additional market borrowings will squeeze out credit for private sector, the official said, “The borrowing calendar has been planned in such a way private sector borrowings are not crowded out.”