FM asks taxmen in Mumbai to pull up socks to meet collection target

The Mumbai region, which contributes over a third of the overall direct tax collection, has been targeting a 33% increase in income tax collections at Rs2.04 lakh crore for the fiscal, but has achieved a meagre 4% jump in advance tax collections

MumbaiNew Delhi: Amid fears of slippage in revenue, finance minister Pranab Mukherjee has asked taxmen of the Mumbai region, which accounts for one-third of direct taxes mop-up, to pull up their socks to achieve collection target, reports PTI.

The finance minister “exhorted the tax officers to put their best foot forward to achieve the Budget collection target fixed for the Mumbai region,” Income Tax department said in a statement on Tuesday.

The Mumbai region contributes over a third of the overall direct tax collection. It has been targeting a 33% increase in income tax collections at Rs2.04 lakh crore for the fiscal, but has achieved a meagre 4% jump in advance tax collections. In the direct tax segment, advance tax contributes the most.

After taking stock of revenue collection of Mumbai region over the weekend, Mr Mukherjee on Tuesday held a similar meeting of taxmen of North Zone in New Delhi and also asked them to step up the tax collection exercise.

The meeting was also attended by chiefs of Central Board of Direct Taxes and Central Board of Excise and Customs.

Earlier, the finance minister had had meetings with tax officials of East and West zones.

At the Mumbai meeting, finance secretary RS Gujral had said that present times are “very critical” as a “steep decline” in gross domestic product (GDP) growth is resulting in a dip in the levy collections.

He said companies in the banking, finance and insurance sector, which account for half of the collections in the Mumbai region, are facing difficult time and the region will have to depend on sectors like software, pharma, FMCG and infrastructure, which are showing healthy increase, to achieve the target.

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Economic growth to slip to 7% in 2011-12: Planning Commission

“Whether we can go back to 9% very next year is not likely, but I think we should be targeting in India, to do a lot better than 7% that we will do this year,” Planning Commission deputy chairman Montek Singh Ahluwalia said on Tuesday

New Delhi: The Planning Commission on Tuesday said the country’s economic growth in the current fiscal will slip to 7% from 8.5% a year ago and may not touch 9% in the next financial year, reports PTI.

“Whether we can go back to 9% very next year is not likely, but I think we should be targetting in India, to do a lot better than 7% that we will do this year,” Planning Commission deputy chairman Montek Singh Ahluwalia said while addressing an automobile industry event.

Prime minister Manmohan Singh on Sunday while addressing 10th Pravasi Bharatiya Divas in Jaipur had said, “The Indian economy is expected to grow by about 7% this financial year ending 31st March.”

The country had recorded an economic growth rate of 8.5% in 2010-11 and was initially estimated to grow by 9% in the current fiscal. The growth rate projection, however, was scaled down gradually by the Reserve Bank of India (RBI) as well as the finance ministry.

The growth rate in the first half of the current fiscal slipped to 7.3% from 8.6% in the year ago period. In the second quarter the expansion was 6.9%, the lowest in nine quarters.

Mr Ahluwalia said, “We need to revive investment climate to achieve higher economic growth.”

Stressing the need for expediting the infrastructure development required for high growth, he said, “There are big infrastructure projects which are stuck. Those need to be unstuck.”

The government, he added, is trying to identify major investment constraints to boost economic growth.

On monetary policy, Mr Ahluwalia said, “Lower interest rates likely only when fiscal deficit is down.”

It is expected that the fiscal deficit will be more than the Budget estimate of 4.6% of the gross domestic product (GDP) this fiscal.

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SEBI seeks overhaul of ‘collective investment scheme’ rules

 

While SEBI is the regulatory authority for collective investment schemes, a number of other government agencies and departments also govern similar investment products and a lack of clarity in this regard comes in the way of bringing the guilty to book, a SEBI official said

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has sought a complete overhaul of the current regulations for ‘collective investment schemes’, as it fears that loopholes in current rules allow for gullible investors being taken for a ride, reports PTI.

In a ‘collective investment scheme (CIS)’ the payments are pooled in by the investors for certain pre-specified purposes and profits or income are later shared among them.

However, there have been numerous cases of investors being cheated in the name of CISs and in many cases the operators of these schemes disappear after some time and the investors are left in a lurch.

A senior official at SEBI said that more than one lakh investor complaints are currently pending with it, and in most of the cases the matter is sub-judice since long.

While SEBI is the regulatory authority for such schemes, a number of other government agencies and departments also govern similar investment products and a lack of clarity in this regard comes in the way of bringing the guilty to book, the official added.

Some of the most famous CISs are related to investments for real estate properties, plantation and agriculture industry and art funds, among others.

In a board memorandum submitted during its last meeting on 3rd January, SEBI said that “it is clear that certain individuals/companies are able to raise money from gullible individuals by taking advantage of the loopholes in the legal provisions and also taking advantage of lack of clarity about roles of different agencies like MCA, SEBI, RBI, state governments, registered co-operative societies, etc.”

SEBI further told its board, which includes nominees from the MCA (ministry of corporate affairs), finance ministry and RBI, that certain exemptions in the current regulations also “leave scope for people to take a stand that their scheme is not a collective investment scheme and that they have got relevant licenses/approvals from the competent authorities.”

“There appears to be a need to bring this matter under one principal regulator to deal with all cases where pooling of money is taking place and investments are being made,” SEBI said.

It further said that various exemptions also needed to be either completely removed or drastically pruned and “in case of pruning, there is need to provide criteria such as maximum number of investors or the minimum amount intended to be raised beyond which all have to get registered with the principal regulator.”

As per SEBI, there is only one entity registered with SEBI as a collective investment management company, but it has not launched any scheme as yet.

On the other hand, as many as 32 cases are currently under examination for applicability of SEBI (CIS) Regulations, while there are 1.09 lakh complaints pertaining to CIS.

“With regard to these complaints, it may be noted that since most of the CIS related cases are currently sub-judice, the redressal of such complaints depends on the outcome of these cases,” SEBI said.

The government had first decide to frame CIS regulations and named SEBI as a regulator in 1997, after a number of agro-based and plantation companies in 1990s started raising money from public through agro and plantation bonds.

Thereafter, it was made mandatory for all such companies to register with SEBI. The existing entities were also asked to get registered with SEBI, and those not being able to get a go-ahead were asked to wind up their operations.

As per SEBI, 664 CIS entities had raised Rs3,518 crore in 1998-99. Out of these 664 CIS entities, 54 CIS entities wound up their schemes and refunded the money to the investors.

None of the companies that applied for registration at the time were found to be eligible for final registration as a collective investment management company under the SEBI (CIS) regulations.

SEBI had issued directions to the remaining 610 entities directing them to refund the money collected under the schemes with returns due to investors as per the terms of the offer within a period of one month from the date of the order.

Subsequently, 21 CIS entities wound up their schemes and repaid the investors. Hence a total of 75 CIS entities had wound up their schemes and refunded the money to investors.

In 19 cases, courts had imposed stay orders/ appointed official liquidators/administrators.

Against the remaining entities that failed to wind up their schemes and repay the investors, SEBI took actions such as prosecution, sough their winding up and initiation of criminal proceedings.

Some of the CIS cases listed out by SEBI include an entity that claimed to be involved in the sale of trees to investors whereas in reality it was having collective investment schemes in the guise of this business.

In another case an entity had invited contributions to invest in land and allotted land to investors.

SEBI said that the CIS regulations were incorporated at a time when large scale funds were mopped up by plantation and agro companies and investors lost money.

“While there has been a change in market dynamics of investment management activities over a period of time, the regulations have remained constant.

“Moreover, the definition of CIS is broad in nature leaving room for many activities to fall under the purview of CIS Regulations. Hence, re-examination of CIS regulations may be considered to clearly specify its scope,” it noted.

The regulator also said that it often receives complaints against certain activities such as multi-level marketing (MLM) companies, art funds, time sharing schemes or arrangement that claim that they do not come under the domain of any regulatory authority.

 

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