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Nirmala Sitharaman to Meet GST Council, State FMs for Pre-Budget Discussion on December 21-22

suimt — Tue, 12 Nov 2024 07:57:03 +0000

Last Updated:November 12, 2024, 13:27 IST

The meeting assumes significance as states finance ministers would present their recommendations for 2025-26 Budget to be unveiled on February 1, 2025.

In the 55th GST Council meeting, the much-awaited decision on exemption or lower GST rate on health and life insurance would be taken.

Union Finance Minister Nirmala Sitharaman is likely to meet her state counterparts on December 21-22 for pre-budget consultations and meeting of the GST Council, an official said. The meeting assumes significance as states finance ministers would present their recommendations for 2025-26 Budget to be unveiled on February 1, 2025.

The 55th GST Council meeting would be held during one of these two days in which the much awaited decision on exemption or lower GST rate on health and life insurance would be taken.

The Council may also take up some rationalisation exercise and reduce tax rates on a host of common items from 12 per cent to 5 per cent as per the recommendations of a panel of state ministers.

The two-day meeting is slated to take place in Rajasthan, either in Jaisalmer or Jodhpur, the official added.

Last month, the group of ministers (GoM) on health and life insurance GST broadly agreed on exempting insurance premiums paid for term life insurance policies, and senior citizens’ health insurance from GST.

Also, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted. However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.

The GST Council in its 54th meeting on September 9 had tasked the GoM to finalise the report on GST levy on insurance by October-end.

Separately, the GoM on GST rate rationalisation has also suggested that the GST Council rejig tax rates on a host of goods, including packaged drinking water, bicycles, exercise notebooks, luxury wrist watches, and shoes. This rate rejig is expect to result in revenue gain of about Rs 22,000 crore.

The GoM on rate rationalisation proposed reducing GST on packaged drinking water of 20 litre and above to 5 per cent from 18 per cent. If the GoM’s recommendation is accepted by the GST Council, GST on bicycles costing less than Rs 10,000 will be reduced to 5 per cent from 12 per cent.

Also, GST on exercise notebooks will be reduced to 5 per cent from 12 per cent. The GoM also proposed hiking GST on shoes above Rs 15,000/pair from 18 per cent to 28 per cent. It also proposed hiking GST on wrist watches costing above Rs 25,000 from 18 per cent to 28 per cent.

Bihar Deputy Chief Minister Samrat Chaudhary is the convenor of the 13- member GoM on health and life insurance and 6-member GoM on rate rationalisation.

Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent. Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. The average GST rate has fallen below the revenue neutral rate of 15.3 per cent, prompting the need to start discussions on GST rate rationalisation.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)

News business » tax Nirmala Sitharaman to Meet GST Council, State FMs for Pre-Budget Discussion on December 21-22

FM Sitharaman pitches for 'fair' sovereign credit ratings, IMF reforms

suimt — Sun, 27 Oct 2024 00:23:51 +0000

NEW DELHI: Finance minister Nirmala Sitharaman has said there is a need for sovereign ratings to adequately account for emerging market and developing economies (EMDEs) economic fundamentals to ensure that the cost of capital for them and their ability to attract private capital is factored in.
Speaking in Washington at the IMFC’s plenary session, Sitharaman also underlined engagement with credit rating agencies and called for improvements in methodology to ensure they capture the fundamentals reflecting the ability and willingness to repay.
Policymakers have been calling on credit rating agencies to ensure their ratings accurately reflect the fundamentals of emerging economies and their default risk. India has in the past called for an upgrade in the country’s sovereign ratings given robust growth and solid fiscal consolidation measures.
Sitharaman also said the global economy had shown “remarkable resilience” and output was nearing its potential in some major economies while inflation has generally moderated and moved closer to the central banks’ targets.
The FM cautioned that there are several downside risks, including growing geopolitical tensions. She emphasised that the IMF’s surveillance and policy guidance remain vital for countries with debt vulnerabilities. However, IMF should remain even handed in its policy advice.
A finance ministry post on X quoted the FM as saying that the current global order warrants governance reforms in major global institutions including IMF.
Sitharaman lauded IMF for its readiness to build bridges in a fragmented world and sought that it remains future ready to serve by tailoring its surveillance, lending, and capacity development to the needs of members after taking due cognisance of IMF’s core competency as well as resource availability within the organisation.

Sitharaman Urges IMF, World Bank to stick to core competencies, warns against long-term donor dependency

Aseem — Wed, 23 Oct 2024 16:49:25 +0000

New Delhi: The International Monetary Fund (IMF) and the World Bank (WB) should not drift away from their core competencies, as their decisions impact the global monetary systems, finance minister Nirmala Sitharaman warned on Wednesday.

Speaking at a discussion on “Bretton Woods Institutions at 80: Priorities for the Next Decade,” held on the sidelines of the 2024 World Bank and IMF annual meeting in Washington, Sitharaman emphasized that multilateral institutions like the IMF should avoid venturing into areas beyond their core expertise.

“Your core business is what you have to focus on. I would think that is the most important thing because if you don’t address it, the global monetary systems are going to be adversely impacted,” she said.

Sitharaman stressed the need for careful evaluation of financial assistance, noting that resources are finite and long-term, cautioning that concessional finance and donor support should not become indefinite, as it could undermine the intended short-term objectives.

“The evaluation exercise, which is being carried on in the World Bank, (and the IMF) should be more transparent, I would think, and consultative, and it should reflect the interests of all countries who the Bretton Woods institutions are helping,” Sitharaman added.

Sitharaman called for a shift in thinking in the Bretton Woods institutions to meet the needs of the next decade.

“I think we need to have a road map for concrete reform-based steps that have to be initiated because we’ve started doing that during India’s presidency of (G20), after a lot of introspection, inclusion, and so on,” she added.

A key focus of the 2023 Indian G20 presidency was on reforming multilateral development banks (MDBs) to improve their contribution to global development financing.

An International Expert Group (IEG) headed by N.K. Singh, an economist and former bureaucrat, along with Lawrence Summers, former US treasury secretary, released a two-part report on strengthening MDBs which suggested various reforms

Among other things, the first part of the Singh-Summers report suggested an increase in MDBs’ annual spending by $3 trillion by 2030, including $1.8 trillion for additional climate action and $1.2 trillion for achieving other sustainable development goals (SDGs).

The second part of the report stated the need for MDBs to mobilize $240 billion in private capital by shifting from risk avoidance to informed risk-taking, apart from introducing new lending instruments like pooled portfolio guarantees and hybrid capital.

Following the release of the report in 2023, in a joint statement MDBs, including the World Bank, agreed on the need for transformative changes in the operating models and financing capabilities as suggested by the expert committee headed by Singh and Summers.

“We talked about tripling the size of the lending of the institutions by 2030. We talked about dramatic changes in the speed with which they came to conclusions and delivered resources. We spoke about different levels of cooperation with and engagement with the private sector that were qualitatively and not merely quantitatively different,” Summers, also part of the discussions, said.

“The (Bretton Woods) institutions have to say things and do things that capture the imagination of the world. There have been moments when they did that when they sketched visions and put many, many billions of dollars behind the transition,” he added.

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Need to digitize urban land records after 625,000 villages, says minister

Aseem — Tue, 22 Oct 2024 14:48:47 +0000

New Delhi: As rural land records evolve, urban land management must also rise to meet the demand of rapid urbanization, said minister of state for Rural development Chandra Sekhar Pemmasani in New Delhi on Tuesday, adding that India has already digitized land records of 625,000 villages across the country.

More than administrative tools, accurate land records are the backbone of socio-economic planning, public service delivery, and conflict resolution, the minister of state said at the workshop on surveying for urban land records, according to a press release.

Use of technology to reduce disputes

Pemmasani’s remarks underscore the central government’s focus on using technology in land records to reduce disputes. In July, union finance minister Nirmala Sitharaman announced major reforms about land, labour, and technology in her budget speech.

These would include assigning a Unique Land Parcel Identification Number (ULPIN), also known as “Bhu-Aadhaar,” to all land pieces, digitizing cadastral maps, conducting surveys of map sub-divisions based on current ownership, establishing a land registry, and linking it to the farmers’ registry for rural land.

Urban land records would also be digitized using GIS mapping tools, the finance minister had said, adding that states would be incentivized to implement these reforms faster with 50-year interest free loans.

Pemmasani called for using digital technology to avoid errors in recording land measurements. Using tools such as drones, aircraft-based surveys, and satellite imagery can provide accurate maps and reduce human error, he said.

“By creating spatially enabled land records we can resolve longstanding issues such as overlapping ownership claims, inconsistent land valuations, and boundary disputes,” he said.

“The time has come to move beyond traditional costly and time-consuming surveys and adapt these advanced technologies for a new era in urban governance,” the minister said.

The department of land resources launched a pilot to digitize urban land records in as many as 130 cities in the country in the next one year. This plan, named the “National geospatial Knowledge-based land Survey of urban Habitations (NAKSHA)”, aims to complete the exercise in 4,900 cities in the next five years.

Speakers from industry partners and international experts from US, Spain, South Korea, France, Germany, Netherlands, UK, Japan and Australia presented their views during the workshop.

Govt seeks public comments for income tax law revamp

suimt — Mon, 07 Oct 2024 18:00:48 +0000

NEW DELHI: The govt-appointed committee to rework the Income Tax Act has sought public inputs and suggestions in four categories for simplification of language, steps to reduce litigation, ease compliance requirements, and identification of redundant or obsolete provisions, clearly indicating the direction in which it is working.
In her budget speech finance minister Nirmala Sitharaman had announced a review of the 63-year-old law, the latest after at least two earlier attempts were aborted by govt.The first committee, which led to the circulation of the Income Tax Code during P Chidambaram’s stint, remained a stillborn after Pranab Mukherjee opted to ignore the recommendations.
Similarly, an earlier exercise undertaken by the Narendra Modi govt, which had set up an expert committee, is seen to have been jettisoned by the income tax department despite Prime Minister himself speaking about the need to review the provisions. On both occasions officials argued that the recommendations have been incorporated into the law.
This time, Sitharaman has opted for an internal committee of officials to suggest changes and it is expected that based on the feedback the committee will submit its report, some of which could find its way into the budget. The committee’s recommendations are also expected to be discussed widely and public comments may be sought.
The current Income Tax Act is seen to have become too bulky and with several exemptions having been done away with and the business processes undergoing an overhaul, many officials believe that it is time to rewrite the law.
In a statement, the Central Board of Direct Taxes said, comments and inputs can be shared through the income tax e-filing portal.

India has to move fast to break into global supply chains; rich country goal feasible: Jagdish Bhagwati

Aseem — Sun, 06 Oct 2024 11:13:08 +0000

The influential American economist of Indian origin said it was possible for India to have a long period of strong growth and become a developed economy, while many developed nations are vulnerable to geopolitical turmoil.

“We will definitely make it. In contrast, many of the developed economies are not sound at all, as they are more affected by geopolitical stress points like the Russia-Ukraine conflict. They are also going to get involved in what happens with China in the Far East. So, we can no longer count on the western powers to remain ahead.”

Also read | Prudent for global biz to diversify supply chains: FM

“We, on the other hand, are not involved in such events at the moment. Therefore, if we keep up where we are now in terms of our current outstanding rate of growth and everything that finance minister Nirmala Sitharaman and Prime Minister Narendra Modi talked about, if that keeps up, we will be way ahead of the West,” Bhagwati said.

“So I am optimistic on that ground.”

Bhagwati was referring to Modi’s pledge last week to carry out structural reforms and inclusive growth, where he emphasized that the first three months of the National Democratic Alliance government’s third term in office was marked by a strong commitment to jobs and skills, sustainable growth, innovation, infrastructure building, quality of life and rapid growth.

Sitharaman has also expressed confidence that there would be “the steepest rise” in living standards in India in coming days.

The finance ministry had in its monthly economic review for August noted that trends indicated a strong foundation of macroeconomic stability in the country with steady growth, investment, employment and inflation trends, but flagged continued uncertainty in global economic prospects and advised monitoring of trends like the buildup of automobile inventory and slowing of fast-moving consumer goods in urban areas in the June quarter. Policymakers also are keeping an eye on fears of a recession in advanced economies.

Also read | ‘R&D support can deepen India’s share in global supply chains’

Bhagwati believes India should act fast and get a bigger share in global supply chains.

“With the global supply chain involving China getting broken, instead of moving in, we allowed other countries to break into it. Bangladesh was one of them. We have to make sure that we build up our own supply chains. We are thinking about it, but we have to move fast because if other supply chains get established, then it is all the more difficult to break into them,” he said.

To get a larger share of global trade, India also has to be more competitive and lower tariffs will help, he said. “Imports and exports are not independent; they are linked together. For exports to work and to build supply chains, we have to be able to import raw materials and components which make our supplies more competitive. If you suddenly run out of components, who will trust your supply chain? Certainty of supply chain is a very critical aspect. We have to be very smart,” Bhagwati said. Lower tariffs enable countries to import more and feed their supply chains, he said.

“Sometimes in the political economy, we see pressure getting built up to lower tariffs,” Bhagwati said, referring to former US president Donald Trump’s description of Indian customs tariffs as high. Trump, who had described India a “tariff king” in his first term in office, said in September India was an “abuser” of tariffs.

Last year, India reduced customs duty on several products imported from the US, including apples, almonds, lentils and chickpeas. That was part of removal of retaliatory duty imposed on US exports in 2019 after the US raised import duty on certain items.

Read more | India, US working on $1 bn multilateral financing for clean energy supply chain

“We have to be active with the World Trade Organization to make sure the things of interest to us remain free from trade tariffs and restrictions. And I think we are aware of that,” Bhagwati said.

The only way India can take full advantage of its demographic dividend is by attracting investment in new productive capacity in both manufacturing and services, which can employ people, he said.

“There are two ways to do it. One is to invest yourself and the other is to invite foreign capital. In our case, foreign capital is willing to come in and create jobs because we have skilled manpower… We have to maximize that advantage and try and say look, ‘We will give you good terms and so on, come and invest and use our manpower,’ because the skilled manpower also then gets doubly trained and get additional skills. Thus, it creates the manpower resources for more investments to come in. It has a virtuous, snowballing effect.”