Regulations
Simplify rules for ease of doing business, states told

Admitting that changing the age-old system was not possible overnight, Amitabh Kant, secretary in the department of industrial policy said sustained, persistent and hard work would pave way for ease of doing business in the country

 

The central government has given 98 points to states to simplify rules and procedures for ease of doing business, a senior official said on Monday.
 
"We have given a list of 98 points to the states to act on them with timelines for improving ease of doing business," Amitabh Kant, secretary in the department of industrial policy and promotion secretary told India Inc at a national conference here.
 
Participating in a session on "For ease of doing business in India, acts, rules and forms need to be simplified", he said the processes involving starting, doing and exiting business have to be made simple and friendly.
 
"No act (law) should be more than three pages, no rule more than two pages and no form more than one page," Kant said at the day-long session, organised by the Confederation of Indian Industry (CII).
 
Admitting that changing the age-old system was not possible overnight, he said sustained, persistent and hard work would pave way for ease of doing business in the country.
 
"For ease of trading across borders, we have to reduce forms to three from 14 for exports and three for imports using the e-biz platform," he noted.
 
Though many state governments have taken initiative to promote ease of doing business, Kant regretted that the country had not allowed micro, small and medium enterprises (MSMEs) to grow into big business.
 
A recent industrial study revealed that MSMEs accounted for 84 percent of industrial employment across the country, with 67 percent of it (84 percent) coming from micro units.
 
"To help MSMEs to grow into big business, we need size, scale and speed," Kant observed.
 
In his adress, Hero Corporate Services Ltd chairman Sunil Kant Munjal said that India had to create an environment to attract domestic and foreign investment and make it easy to start, run and shut down.
 
"All pillars, including political, bureaucracy and judicial need to support economic activity," he said.
 
Bosch Ltd managing director Steffen Berns observed that the country manufactured eight times more cars and 3.5 times more tractors in 2014 than in 1996.
 
"India has become the sixth largest manufacturer of cars and largest maker of tractors, though other countries have moved faster over the last decade," he said, noting india, to catch up with the others, had to build world class infrastructure, rationalize taxes, streamline labour laws and simplify the approval process for greater transparency.
 
An agreement was signed on the occasion by CII and Lee Kuan Yew School of Public Policy, National University of Singapore to create a master plan on ease of doing business in India - Vision 2020.
 

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Cairn India moves HC against tax demand

The company allegedly failed to pay taxes on gains made by its former parent in a share transfer transaction in fiscal 2006-07

 

Cairn India on Monday moved Delhi High Court seeking quashing of income tax department's demand order to pay Rs20,495 crore tax.
 
The company allegedly failed to pay taxes on gains made by its former parent in a share transfer transaction in fiscal 2006-07.
 
The company, part of the Anil Aggarwal-controlled Vedanta group, moved the court against income tax department's order asking it to pay the tax and a direction to tax authorities to take no coercive steps for recovery of demand.
 
Cairn India said that the tax proceedings should be quashed as these were initiated after a lapse of more than six years from the end of 2006-07. The plea said that the courts have held that proceedings should be initiated within a reasonable period of four years.
 
It said that it cannot be penalised because it could not have withheld tax anticipating a retrospective amendment.
 
"There was no taxable gain and, accordingly, no liability to withhold tax on the date of payment," it said.
 
The tax demand is for alleged failure to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK Holdings Limited (CUHL), the erstwhile parent of Cairn India, a subsidiary of Cairn Energy Plc. The Rs20,495 crore tax demand comprises Rs10,248 crore tax and Rs10,247 interest.
 

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Morgan Stanley sees 'Achhe Din' for India

Morgan Stanley has forecasted a sustainable lower inflation path of 5% to be achieved from April, and expects inflation to decelerate to 4.75% by December this year

 

With the rural wage growth coming down to a nine-year low at 5.5% this January and inflation seemingly stabilizing, India is bracing for a long period of higher sustainable growth and lower prices, financial services firm Morgan Stanley said on Monday.
 
"We are more constructive on inflation outlook and we expect the retail price index to decelerate to 4.75% by this December against the consensus estimate of 5.8%. We also expect growth momentum to pick up, but do not expect a rise in inflationary pressure," Chetan Ahya from US based Morgan Stanley said in a statement.
 
He said the rural wage, which is a crucial factor in the Indian economy, has come down to a nine-year low at 5.5% from a steep 20% during 2013-14 and a chain of "favourable factors" influencing retail inflation trend is on the way.
 
"Comparing the drivers of inflation between the two cycles we see that domestic factors are moving along similar lines as in the 2003-05 cycle and decline in global commodity prices are an added support in the current cycle," he said.
 
The firm has forecasted a sustainable lower inflation path of 5% to be achieved from April, and expects inflation to decelerate to 4.75% by December this year.
 
"Based on our expectation of the inflation trajectory, we believe the Reserve Bank (of India) could lower rates by a further 75-100 bps in 2015. Also we believe deposit rates are to decline significantly and more than policy rates," he said.
 
According to the company, while the growth rate exceeded nine percent and averaged at 7.9%, inflation remained stable and low averaging at four percent with food inflation averaging 3.2% and non-food inflation averaging 4.5%.

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