Citizens' Issues
India sets up multi-agency probe team on 'Panama Papers' expose

As per a statement issued by his ministry, the probe team will comprise officers from the Central Board of Direct Taxes' Financial Intelligence Unit, its Tax Research Unit as also officials from the Reserve Bank of India

 

Prime Minister Narendra Modi on Monday ordered a multi-agency probe team on the global expose by International Consortium of Investigative Journalists (ICIJ), dubbed the "Panama Papers", which found over 500 Indians also had alleged offshore links.
 
"A multi-agency group is being formed to monitor the black money trail," Finance Minister Arun Jaitley said here after the expose was published in The Indian Express. "Details of the assets worth Rs.6,500 crore has already been found," he added.
 
As per a statement issued by his ministry, the probe team will comprise officers from the Central Board of Direct Taxes' Financial Intelligence Unit, its Tax Research Unit as also officials from the Reserve Bank of India.
 
"The group will monitor the flow of information in each one of the case. The government will take all the necessary actions as required to get maximum information from all sources including from foreign governments to help in the investigation process," the statement added.
 
The journalists' consortium had said late on Sunday that its members and more than 100 other news organisations around the globe have found offshore links of some of the planet's most prominent people. The list included over 500 Indians. 
 
The details of the Indians with such offshore funds were published in The Indian Express. But whether or not such funds exist, and also if they were illegal is what the probe team ordered by Modi is expected to look into.
 
"In terms of size, the Panama Papers is likely the biggest leak of inside information in history - more than 11.5 million documents - and it is equally likely to be one of the most explosive in the nature of its revelations," the consortium said of its investigation published.
 
In the context of the commitment of the central government to bring out undisclosed money both from abroad and from within the country, information brought out by any investigative journalism was welcome, the finance ministry said. 
 
The ministry said in the past too, based on the investigations by ICIJ in 2013 -- that showed the links of 700 Indians with business connection with off-shore entities -- the agencies of the government were able to identify 434 persons as Indian residents. 
 
It also said 184 persons admitted their relationship with such off-shore entities/transactions.
 
"Although, in the previous report of ICIJ, information relating to financial transactions/bank accounts was not available, the government authorities have detected credit in the undisclosed foreign accounts of such Indian persons in excess of Rs.2,000 crores."
 
As a consequence, 52 prosecution complaints have been filed against the alleged offenders so far.
 
"The government is committed to detecting and preventing the generation of black money. In this context the expose of Panama Papers will further help the government in meeting the objective," the finance ministry added.
 
The government expressed concern that tax havens were making countries like India suffer tax losses.
 
"The recent initiative of 'Base Erosion' and 'Profit Shifting' (BEPS) will help India and other countries in checking the practice of tax-avoidance through such tax havens. India is also fully committed to the BEPS initiative."
 
In India, The Indian Express ran several pages of the investigation reports alleging, among other names, Bollywood superstarts Amitabh Bachchan and Aishwarya Rai, being directors in companies in Panama. 
 
The two did not immediately respond despite efforts to contact them. Aishwarya Rai's media adviser told the newspaper that the information was false. The spokesperson for Aishwarya Rai said "no" when IANS asked her if she intended to issue a statement.
 
Among those named in the report were Sameer Gehlaut of India Bulls and K.P. Singh of DLF. Vinod Adani, elder brother of industrialist Gautam Adani, politician Shishir Bajoria from West Bengal and Anurag Kejriwal of Loksatta Party were also alleged to have set up companies in tax havens.
 
Bajoria told the paper that that "erroneous beneficial owner information" was given by mistake. 
 
The Express said it had carried out the investigations spread over eight months with several global newspapers. Many of the other persons named in the Express reports responded, some denying while others maintaining that they had worked within the laws of the country.
 
Among the global leaders named were 12 current and former world leaders, including Pakistan Prime Minister Nawaz Sharif's family members. It also sought to reveal how associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow firms.
 
In Russia, the state-run media organisations were silent on the subject. In Pakistan, however, Sharif's son Hussain told Geo News that his family had not done anything wrong.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex are on an uptrend again – Monday closing report
A close below 7,700 would be the first sign of a trend change
 
We had mentioned in Friday’s closing report that Sensex, Nifty might give up some gains if it closed below 7,570. Nifty did not go below 7,700 and closed with small gains of upto 0.59%. The trends of the major indices in the course of the day’s trading are given in the table below:
 
 
Given that investors were expected to be cautious ahead of the monetary policy review on Tuesday, the key indices of the Indian equity markets traded flat initially then and closed strongly. Investors' sentiments were buoyed by a positive close to the US markets on Friday and stable Asian market today.  The BSE's market breadth favoured the bulls -- with 1,644 advances and 968 declines.
 
At the new fiscal's first bi-monthly monetary policy review due on Tuesday, RBI Governor Raghuram Rajan is widely expected to cut interest rates by at least a quarter of a percentage point on the back of the union budget's fiscal prudence measures, reduction in small savings interest rates and low inflation. At its sixth and the fiscal's final bi-monthly monetary policy review in February, Reserve Bank of India (RBI) kept its key lending rate unchanged at 6.75%.
 
"The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on inflation," Rajan said in his policy statement at the time. The government has cut the small savings interest rate by up to 1.3%, facilitating an RBI rate cut. India's annual retail inflation eased to 5.18% in February from 5.69% in the month before even as the 12-month wholesale inflation was in the negative for the 16th straight month, official data showed last month. Rajan, last month, kept the cards close to his chest on possible easing of monetary policy with rate cuts, but said the government's decision to stick to its fiscal targets was comforting. He also said economic recovery in the country was not smooth, particularly after data on index of industrial production (IIP), released by the Central Statistics Office last month, showed India's factory output had logged a decline in January for the third straight month.
 
Global private equity fund Blackstone on Monday announced buying a majority stake (60.5%) in Mphasis, a leading IT services player, from Hewlett Packard Enterprises (HPE) in a deal valued between Rs5,466 crore and Rs7,287 crore. "As per the Takeover Code in India, the transaction will trigger a mandatory open offer to purchase the HPE's additional 26% shares," Blackstone said in a statement on the deal. In a regulatory filing to the Indian stock exchanges NSE and BSE, Blackstone said it would buy HPE's equity holding at Rs430 per share. The shares of Mphasis, however, declined Rs13.90 or 2.95% to Rs453.60 from an opening price of Rs472.30 and previous closing rate of Rs467.20 on the BSE in post-noon trading. Though Blackstone has agreed to buy 84% of HPE's stake at Rs430 per share, it will purchase an additional 16% through an open offer from the public, as permitted by the securities laws. Mphasis shares closed at Rs454.45, down 2.77% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 

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Real Estate Bill: Problem half-solved?
While the Bill protects consumer interest, faster approvals are also crucial for developers to prevent delays. In this regard, the Bill falls short and thus the problem is only half-solved, says Liases Foras
 
The Real Estate Regulatory Bill aims at reducing delays and ensuring faster completion through transparency, accountability and efficiency. "While the bill protects consumer interest, faster approvals are also crucial for developers to prevent delays. Against this backdrop, regulatory authorities aim to promote single window system of clearances for real estate projects, wherein the projects and promoters both can be graded along with digitisation of land records. However, the bill has a long way to go as far as faster sanctioning process is concerned. Thus, the problem is only half-solved," says Liases Foras Real Estate Rating & Research Pvt Ltd. 
 
Project delays are the biggest menace for the Indian real estate and one of the key reasons for sky-high prices, Liases Foras says, adding with the new Bill, sales will happen on carpet area, which is a practice followed in the developed countries such as Singapore and UK. Secondly, the escrow account will help in curbing diversion and misuse of funds, thus ruling out speculative practices, it added. 
 
According to Liases Foras, incomplete projects have a huge negative bearing on India's gross domestic product (GDP). It says, "Delay in completion is a menace that has plagued the sector since long. For our analysis, we have considered all the total supply across all the 25 cities under our coverage universe. About 34% of this supply is more than 12-months delayed. This estimated delay of residential projects amounts to 1.32% of GDP (2014-15) at current prices."
 
 
These cities include, Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bangalore, Chennai, Pune, Ahmedabad, Hyderabad, Surat, Kolkata, Chandigarh, Vadodara, Jaipur, Indore, Lucknow, Bhopal, Nagpur, Coimbatore, Nashik, Goa, Cochin, Mangalore, Thiruvananthapuram, Palghar, Boisar, Kanpur, Bhubaneswar, Rajkot and Patna.
 
Based on Liases Foras' data, Urban Development Minister M Venkaiah Naidu had said, "As per available information for 27 major cities including 15 capitals, 2,349 to 4,488 new housing projects were launched every year between 2011 and 2015. Thus in these 27 cities during these last five years, a total of 17,526 projects were launched with a total investment value of Rs13,69,820 crore".
 
The Rajya Sabha approval to the much awaited Real Estate Regulatory Bill proves there is indeed light at the end of tunnel, Liases Foras said, adding, most of the lacunae in the functioning of the sector can be attributed to lack of clearly defined regulatory norms. However, it can now be said that things will gradually fall into place.
 
Delays in project completion, misuse of funds by developers and ambiguity over saleable area parameter are few things that have depleted buyer's trust over the years. This Bill based on three major foundation stones, Transparency, Accountability and Efficiency has the power to tie all loose ends in the real estate sector. A genuine intention has been leveraged and the impact of this Act will be large.  
 
 
Besides delays, the realty sector is flush with huge inventory. At present, the inventory across major cities in India stands at one million units, clocking in a growth of approximately 22% on an annual basis. As per National Housing Bank (NHB), the housing shortage is estimated around 18 million units in urban India. "Currently, 2.85 lakh units are sold on a yearly basis and fulfil this shortage, sales have to grow more than five times. This is required for the inventory to be sustainable. In order to boost sales there has to be rationalisation of prices. Unless there is an uptick in sales, market would never be able to absorb additional stock which would lead to a decline in new supply," Liases Foras said.
 
A nation's economy has its foundation in consumer confidence. The Bill will be instrumental in alleviating dwindling confidence and weak sentiment that prevails across the sector. With increased transparency, Liases Foras feels real estate sector will start to look up and find itself on a global footing.
 
The Government of India has also mooted an ambitious policy called "Housing for All" for the urban poor, and without the proper regulatory mechanism in place, this policy will be unable to yield the desired results. 
 
"The amendments are in the right direction, but it is imperative that they be implemented within the time frame when the momentum is intact. With the Cabinet nod to the amendments, the Bill is very close to becoming an Act, after which it's the State's responsibility to bring it to effect by appropriate measures," Liases Foras concluded.
 

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COMMENTS

manoharlalsharma

1 year ago

Real Estate Bill: Problem half-solved? yes u r rightly said to make full-proof it is the departments obligation of concerned approvals be in order to complete its' job within in a time bound period.

SRINIVAS SHENOY

1 year ago

The Real Estate Regulatory Bill, which was long overdue has finally seen the light of the day. In Maharashtra the Real Estate regulator.should be put in place expeditiously, as the State was keen on having it's own Real Estate Regulatory laws for the real estate sector. Thus if the state government machinery gears up,the Real Estate Regulatory Act can be immediately put in place, without bureaucracy hurdles in its way resulting in providing immediate relief to the harassed purchasers.

manoharlalsharma

1 year ago

Real Estate Bill: Problem half-solved? ; it is nothing but expanded version of MOFA with some editions and corrected.

SRINIVAS SHENOY

1 year ago

Hope the housing regulator, for the realty sector in Maharashtra,is appointed, without any further delay. Hoping the above act will come into force without any further delay.

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