Taxation
Maharashtra legislature unanimously ratifies GST
After a heated debate, both houses of the Maharashtra legislature on Monday unanimously ratified the Goods and Services Tax (GST) Bill, making it the ninth state in the country to do so.
 
The GST Bill was recently passed in both houses of Parliament and its ratification by various state legislatures is currently underway.
 
With the GST Bill, India will shed its complex taxation rules and enter a single tax regime replacing around 17 indirect taxes.
 
Moving a resolution in support of the Bill, Finance Minister Sudhir Mungantiwar said the GST Bill would abolish as many as 17 different types of taxes and lead to lowering of inflation.
 
"Transparency would increase and corrupt practices will be curbed and having a common tax structure would benefit the country's economy. In Maharashtra, the manufacturing and services sectors would get a boost due to GST," he said.
 
He pointed out that GST would help eliminate the competition among states for levying taxes and such a tax is already implemented in 125 countries around the world.
 
Mungantiwar rejected the contention that it will fuel inflation or entail losses for civic bodies and said the government would ensure it would not suffer loss of a single paise.
 
This year, the GST may lead to certain losses for various civic bodies in the state, but he assured it would be reimbursed by the Centre.
 
Participating in the debate, Leader of Opposition in the assembly Radhakrishna Vikhe-Patil (Congress) asked the ruling Bharatiya Janata Party-Shiv Sena alliance "not to grab credit for GST which was brought by the UPA Government in 2010".
 
"The NDA government at the Centre is creating a misleading impression that it is doing something new for the country. However, it was the then Congress Finance Minister P. Chidambaram who had brought the GST Bill as part of the Congress's 'One Country, One Tax' policy initiative. So the BJP should refrain from taking the credit for it," he argued.
 
He added that the Congres had been attempting to bring in the GST since the past five years, but it was stalled by the BJP and the legislation languished.
 
"This is belated wisdom which has dawned on the BJP. It's become a fashion these days to ask what the Congress-UPA did in the past 60 years. The GST was one of the significant achievements of the Congress. The BJP is merely doing copy-paste-rename of schemes and programmes of the Congress," Vikhe-Patil said.
 
Referring to changing times, Leader of Opposition in the Council Dhananjay Munde (NCP) said that when Narendra Modi was Gujarat Chief Minister, he had staunchly opposed GST and now as Prime Minister, he is pleading for the same GST brought by the Congress.
 
"However, in the larger interest of the state, we are supporting GST," Munde declared.
 
The GST Bill has been supported by all political parties in the state though they have expressed their doubts and reservations over certain issues.
 
The GST Bill has already been ratified by several states, including Assam, Gujarat, Jharkhand, Bihar, Madhya Pradesh, Himachal Pradesh, Chhattisgarh and Nagaland, with more states like Delhi, Uttar Pradesh and Goa expected to follow suit soon.
 
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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RBI to train its focus on mis-selling of insurance policies by banks
The Reserve Bank of India (RBI) will train its focus on "mis-selling" of insurance products by banks to their customers and also see whether new regulations are needed for protection of banking customers, Governor Raghuram Rajan said.
 
In his foreword to RBI's annual report for 2015-16, released on Monday, he said as more institutions and technologies bring more people into the financial system, the RBI has to make sure they are adequately informed and protected.
 
Referring to the code - Charter of Customer Rights - that banks had to follow in dealing with the customers, brought out by RBI in 2015, Rajan said the banks were asked to appoint an internal ombudsman to monitor grievance redressal process.
 
"We now will examine how banks are faring, and whether further regulations are needed to strengthen consumer protection. In particular, we will focus this year on the issue of mis-selling, especially of insurance products," he said.
 
Complaints are heard from life insurance policyholders against banks for mis-selling of policies.
 
"We will also focus on enhancing our communication with the broader public, with a view to informing them on what they need to do to take best advantage of financial opportunities, as well as protecting themselves," Rajan said.
 
He said the RBI will work to enhance grievance redressal procedures, both within the financial institutions, and if the customer is still unsatisfied, subsequently through the RBI's ombudsman scheme.
 
Rajan said the grievane redressal mechanism in the rural areas as well as to the weaker sections of the society will be strengthened.
 
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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RBI calls for ownership change of companies with sticky loan accounts
Reserve Bank of India (RBI) Governor Raghuram Rajan on Monday called for ushering new owners or managers for companies whose loans accounts have gone sticky, to improve their operational efficiency.
 
In his foreword to RBI's annual report for 2015-16, released on Monday, he said the asset quality review initiated during the year under review has improved recognition of non-performing assets (NPA) and provisioning in banks enormously.
 
"Now more focus should move to improving the operational efficiency of stressed assets, and creating the right capital structure so that all stakeholders can benefit. This implies simultaneous action on two fronts," Rajan said.
 
According to him, where it is necessary, new management teams have to be brought in, sometimes as owners, and where not possible, as managers.
 
"Creative search for new management teams, including the possible use of public sector firms or private sector agents, is necessary, as are well-structured performance incentives such as bonuses for meeting cash flow/ profit benchmarks and stock options.
 
"If the loan is already an NPA, there is no limit to the kind of restructuring that is possible. If standard but the project is struggling, we have a variety of schemes by which a more sensible capital structure can be crafted for the project," Rajan said.
 
Adding a rider Rajan said some of the current difficulties faced by banks are due to an unrealistic application by banks of a scheme so as to postpone recognition of a loan turning NPA rather than because of a carefully-analysed move to effect management or capital structure change.
 
"RBI will continue monitoring to see that schemes are used as warranted," he said.
 
Rajan also called for more competition in the financial sector so as to increase efficiency.
 
"The most appropriate institutions will prevail when the competitive arena is level, so we have to remove regulatory privileges as well as impediments, wherever possible, especially those that are biased towards some form of ownership or some particular institutional form," he added.
 
According to him, one of the critical components of the medium term strategy in the financial sector will be to strengthen the public sector banks in all aspects, including governance, cost structure, and balance sheets.
 
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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