New Delhi: The government today said it is not considering any proposal to either shift the financial year to January-December or to merge railway budget with the general budget, reports PTI.
"There is no move in the ministry of finance, Government of India for any change of financial year from April-March to January-December or for merger of the railway budget with the union budget", an official statement said.
The clarification comes in wake of media reports that the finance ministry is contemplating to merge the railway and general budgets and change the financial year.
The financial year runs from 1st April to 31st March and the period is used for government's annual accounting and taxation purposes.
As for the budgets, the railway budget is presented traditionally by the railway minister few days before the general budget, which is unveiled by the finance minister in the Lok Sabha on the last working day of February.
MCX-SX, promoted by Financial Technologies, was prevented from launching equities trading in India. But it faced no troubles in launching two new exchanges in six weeks, first in Singapore and then in Mauritius
Three weeks after the Indian regulator Securities and Exchange Board of India (SEBI) decided to throw out the application of MCX-SX to launch equity trading, today on 18th October, the Global Board of Trade (GBOT), the first international multi-asset class exchange based in Mauritius, has gone live. GBOT has been promoted by Financial Technologies, promoter of MCX and MCX-SX.
GBOT will offer a basket of commodity derivative products including metals, energy, soft agricultural products, as well as currency derivatives. The launch of GBOT makes it FT's second exchange launch within a space of six weeks. Its latest success not only consolidates its lead as the leading exchange group from Asia but holds a mirror to the Indian regulatory system which denied MCX-SX an equity trading platform.
GBOT was inaugurated on 16th October by Dr Navinchandra Ramgoolam, prime minister of the Republic of Mauritius. It is instructive to hear what Dr Ramgoolam said during the launch: "GBOT has the advantage of having Financial Technologies India Ltd as (the) parent company. Mr Jignesh Shah is a bold entrepreneur with exceptional business acumen. FT has chosen Mauritius after careful and rigorous analysis for setting up a multi-asset exchange."
Mauritius considered it a privilege to have FT as a partner, which it chose "after careful and rigorous analysis." In sharp contrast, consider how SEBI treated the FT group, which is setting up exchanges in a vast swathe of countries from Africa to Asia and Middle East to South East Asia. After granting it the permission to launch a currency exchange in August 2008, SEBI officials have strung along FT-promoted MCX-SX for two years with the promise of clearing its application for equity trading. During this period, MCX-SX was bleeding, since its key rival, the highly profitable National Stock Exchange, was running its currency exchange for free. Later, SEBI allowed NSE to launch other currency products while refusing MCX-SX the same permission. This prevented MCX-SX to broad-base its shareholders and bring down the promoters' holding. To deal with this, MCX-SX had to reduce its capital to comply with SEBI's shareholding norms for exchange ownership. This move was followed by a deafening silence from SEBI, forcing MCX-SX to approach the High Court for a quicker decision, especially since MCX-SX was living on temporary license for the currency segment. Finally, on 23rd September, SEBI, which was dragging its feet all these years, threw out MCX-SX's application with a 68-page order with selective facts and dubious logic, laced with humiliating language. MCX-SX is now bleeding, running a currency exchange with no permission to expand into even currency options.
To make matters hotter for it, SEBI has cleared the launch of a third currency exchange, the United Stock Exchange, without bothering about the possibility that USX is likely to die an early death, because it has no revenue model. Interestingly, neither SEBI, nor RBI or USE have responded to our queries on how USE hopes to earn revenues, make money and survive. This will leave NSE with a monopoly in the currency segment, with SEBI's help, and without having to compete for its monopoly position. Ironically, while MCX-SX cannot expand any more in India, GBOT will offer currency derivatives products such as USD/MUR, ZAR/USD, EUR/USD, GBP/USD and JPY/USD futures. For the first time worldwide, two African currency futures will be traded.
Given the flow of events, FT and MCX allege, with some justification, that SEBI's approach all along has been to throttle MCX-SX's business itself. The beneficiary of this is the National Stock Exchange, which controls 94% of equity market trading in India. Indeed, the successful launch of exchanges in Singapore and Mauritius raises valid questions about SEBI's motive as far as dealing with MCX-SX is concerned. While Singapore is a far more advanced financial centre than India, given its quality of institutions, governance standards and quality of regulation, Mauritius too is a key financial centre through which billions of dollars flow. The Indian government, SEBI and RBI do not have a problem with such equity fund inflows into India through Mauritius, which have boosted Indian markets to almost their all-time highs and are the cause of huge trading volumes on the NSE.
Having successfully launched two new exchanges in quick succession in two important locations in Asia, FT may well feel victimised in its home base especially since the group operates 10 exchanges and six related ventures which include clearing, depository, information vending, and payment gateway among others.
New Delhi: Interim pension regulator Pension Fund Regulatory and Development Authority (PFRDA) today exuded confidence that the proposed Fiscal Stability and Development Council (FSDC) will resolve all inter-regulatory issues, reports PTI.
"We have to see how it (FSDC) functions, but I have absolutely no doubt that it will be able to sort out all the inter-regulatory issues," PFRDA chairman Yogesh Agarwal told reporters on the sidelines of a function organised by the PHD Chamber of Commerce here.
PFRDA is proposed to be one of the members of the FSDC along with other financial sector regulators —Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority (IRDA).
The body, to be set up soon, will be headed by finance minister Pranab Mukherjee.
Earlier, RBI had expressed reservations that regulators autonomy may be breached by FSDC.
To allay the central bank's fears, the finance ministry had recently decided that the RBI governor will head a sub-committee of FSDC.
Recently, finance minister Pranab Mukherjee had also denied that FSDC would be a super-regulator.
"Let me say clearly that FSDC will not assume the role of super regulator. The existing regulators will enjoy the powers as vested by (respective) Acts," Mr Mukherjee had said.
Noting that an air has been created that FSDC would take the role of a super regulator, he had said, "This is not so."
The purpose of setting up the FSDC, Mr Mukherjee had explained, was to coordinate the work of various financial sector regulators — RBI, SEBI, IRDA and PFRDA.
The finance ministry proposes to shortly announce the framework of FSDC, which will be headed by the finance minister.
Mr Mukherjee had further said that such a council was necessary to resolve conflict among different regulators.
"Certain things are necessary for smooth running of the system," he added.
The basic objective is to provide stability for a healthy development of the financial sector, he had said, adding the FSDC will have representatives from the concerned quarters.