Under the new guidelines, every international transaction exceeding Rs 50,000 will face enhanced scrutiny. Reporting entities must now identify clients for such transactions, verify their identity, and clarify the purpose of the business if it is not clearly defined.
For the second half of the current fiscal year, the Centre will borrow Rs 6.55 trillion, or 42.45 per cent of its total gross market borrowing of USD 15.43 trillion for the entire FY24. The finance ministry announced in a statement on Tuesday that the borrowing will be done through dated securities, including Rs 20,000 crore through the issuing of Sovereign Green Bonds.
The government would continue to borrow according to its annual borrowing plan, but in response to market demand for longer-duration securities, the ministry stated, it will issue 50-year securities for the first time.
According to the ministry, the borrowing programme is decided upon after consultation with the RBI. In FY 2024, the Centre has budgeted a Rs 15.43 trillion gross market borrowing. Through 20 weekly auctions, spanning throughout securities with maturities of 3, 5, 7, 10, 14, 30, 40, and 50 years, with various shares, the borrowing for the second half of the year will be completed.
In her budget address for FY24, finance minister Nirmala Sitharaman predicted a fiscal deficit of USD 17.86 trillion, or 5.9 per cent of the nominal gross domestic product (GDP), for the year. By FY26, the Centre wants to have a budget deficit that is less than 4.5 per cent of GDP. The borrowing portion (including sovereign green bonds) will be distributed as follows: 3 years (6.11 per cent), 5 years (11.45 per cent), 7 years (9.16 per cent), 10 years (22.90 per cent), 14 years (15.27 per cent), 30 years (12.21 per cent), 40 years (18.32 per cent), and 50 years (4.58 per cent).
Securities will be switched in order to even out the redemption profile. Switch auctions totaling Rs 51,597 crore out of the Rs 1 trillion budgeted switch amount have already been held. The remaining switch auctions will take place in the second half.
As per the government’s expectations, gross tax revenues may exceed the Rs 27.6 lakh crore FY23 budget estimates by at least Rs 3-3.5 lakh crore. A nominal GDP growth projected the budget for FY23 at 11.1 per cent. The actual growth, however, may be much higher due to the high inflation
The Centre is expecting to perform better than the budgeted FY23 fiscal deficit target which is fixed at 6.4 per cent of GDP (gross domestic product). The reasons quoted behind this are buoyant revenues, according to a media report.
Various ministries may lack to utilise their full allocation for the year in order to provide a cushion to the finance ministry for meeting the sharply higher requirement for food, fertiliser and petroleum subsidies. The growth of nominal gross domestic product (GDP), which was recorded higher-than-budgeted, may also help deficit numbers.
As per the government’s expectations, gross tax revenues may exceed the Rs 27.6 lakh crore FY23 budget estimates by at least Rs 3-3.5 lakh crore.
Revenues have been buoyant with both direct taxes and the Goods and Service Tax (GST) recording a strong growth. In order to cool down inflation, the brunt of the tax cuts have softened, the central excise collections.
Also, the windfall tax imposed on domestic crude may not yield much. This can be due to the government losing commensurate revenues on profit petroleum, according to the media report.
Expectedly, the disinvestment too will be less than the Rs 65,000 crore estimated for FY23 and privatisation of public sector banks may not be taken up this financial year. The Single Nodal Account for the management of Central Sector Scheme (CSS) funds, has also reset the release of funds for welfare and development schemes. It was a significant expenditure reform.
On the basis of utilisation, the funds are released directly to the states, which has streamlined the process. Spending, however, has been slow as the new system settled down. States too have substantial unspent amounts.
This may result in many ministries not be able to use FY23 budgets fully, which will enable the finance ministry to meet demands elsewhere without derailing the fiscal deficit. The total expenditure budget accounts for FY23 is Rs 39.4 lakh crore. The government, during the first half, spent Rs 18.2 lakh crore which is 46.2 per cent of the full fiscal estimate. In contrast, the collection made by centre is 52.7 per cent of the budgeted receipts during the first half of the fiscal.
A nominal GDP growth projected the budget for FY23 at 11.1 per cent. The actual growth, however, may be much higher due to the high inflation. The nominal GDP growth reported during the first quarter of the fiscal year was 26.7 per cent.
Previously a report stated that a surge from Rs 7.5 trillion in the current FY to Rs 10 trillion in FY24, may be see in capex. The government has launched 14 PLI schemes 2020 only. Expectedly such schemes may boost manufacturing by 500 billion dollar by 2025, according to a media house. The PLI schemes were put out with an outlay of Rs 51,311 crore in March 2020
The central government may make announcements of seven to eight new production-linked incentive (PLI) schemes in the upcoming Union Budget, to boost the privatisation further. Such schemes will cover segments such as textiles, electronic components, furniture, toys and leather, reported a media house.
There might be surge in capital expenditure target according to media reports. Previously a report stated that a surge from Rs 7.5 trillion in the current FY to Rs 10 trillion in FY24, may be see in capex.
A media house had reported that this will play important role for the NDA government too with the upcoming 2024 general election. Also, the Centre will keep tapping states and central public sector enterprises in order to raise their capex.
The government has launched 14 PLI schemes 2020 only. Expectedly such schemes may boost manufacturing by 500 billion dollar by 2025, according to a media house. The PLI schemes were put out with an outlay of Rs 51,311 crore in March 2020.
Mobile components, pharma ingredients and medical device manufacturing companies were given these schemes. Later then in November 2020 during second round, in total 11 schemes were rolled out with an outlay of Rs 1.46 trillion. Segments like food products, drones and telecom formed part of it.
The private investors faced a slowdown during the second half of FY23 and so responding to them, the centre is trying to give boost.
The demand side of the economy could not be impacted much through PLI schemes. During higher inflation, it means that there would be no surge in prices further, turning them into a safe choice.
The recommended grant is released by the Department of Expenditure to the recommended states in 12 equated monthly installments
The central government has released the revenue deficit grant (RDG) of Rs 7,183.42 crore released to 14 states, said the Ministry of Finance in a statement. With the release of the seventh installment for October 2022, the total amount of RDG released to the states in 2022-23 has gone up to Rs. 50,282.92 crore.
The post-devolution revenue deficit (PDRD) grant has been released as per the recommendations of the Fifteenth Finance Commission, the statement added. The Fifteenth Finance Commission has recommended a total PDRD grant of Rs 86,201 crore to 14 states for the financial year 2022-23. The recommended grant is released by the Department of Expenditure to the recommended states in 12 equated monthly installments.
The states who have been recommended for the PDRD grant are Andhra Pradesh, Assam, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tripura, Uttarakhand and West Bengal.
The government had set up 7th Pay Commission in February, 2014. The recommendations of the panel were effective from January 1, 2016
The government is not considering setting up 8th Pay Commission for central government employees, Minister of State for Finance Pankaj Chaudhary informed Lok Sabha on Monday.
“No such proposal is under consideration with the government for constitution of 8th Central Pay Commission for the central government employees,” Chaudhary said in a written reply to a question if the government proposes to ensure timely constitution of Pay Commission for central government employees so that it could be implemented on January 1, 2026.
ln order to compensate central government employees for erosion in the real value of their salaries on account of inflation, dearness allowances (DA) is paid to them and the rate of DA is revised periodically every six months on the basis of rate of inflation as per All lndia Consumer Price lndex for Industrial Workers released by Labour Bureau under the Ministry of Labour & Employment, he said.
The government had set up 7th Pay Commission in February, 2014. The recommendations of the panel were effective from January 1, 2016.
(PTI)
He said that 5,93,316 claims were paid amounting to Rs 11,866.32 crore under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Total 1,00,255 claims were paid amounting to Rs 1,990.57 crore under Pradhan Mantri Suraksha Bima Yojana (PMSBY), said Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Lok Sabha.
He said that 5,93,316 claims were paid amounting to Rs 11,866.32 crore under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
The minister stated that the government constituted a committee, headed by a member of the insurance regulatory and development authority of India (IRDAI), for reviewing premium rates for PMJJBY and PMSBY.
“The committee, inter-alia, recommended upward revision of premium rates for PMSBY and PMJJBY in order to keep the schemes viable,” he said.
Subsequently, the minister stated that IRDAI, during its review of the schemes in 2022, also recommended an increase in premium rates as the aggregate claim ratios for PMJJBY and PMSBY were more than 100 per cent each, for the period up to 31 March 2022 since inception.
Keeping in view the recommendation of the government-constituted committee and IRDAI, the premium rates of the schemes have been revised from Rs 330 to Rs 436 per annum per subscriber under PMJJBY and from Rs 12 to Rs 20 per annum per subscriber under PMSBY, he said.
Exchanges levy exchange transaction fees upon the broker which may be passed down to clients, he said, adding, the transaction fee is mentioned in the contract note issued to client by the broker
There is no plan to introduce cryptocurrency by the government, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha on Tuesday.
Currently, cryptocurrencies are unregulated in India, he said in a written reply.
“RBI does not issue a cryptocurrency. Traditional paper currency is a legal tender and is issued by RBI in terms of provisions of the RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC),” he said.
RBI is currently working towards a phased implementation strategy for the introduction of CBDC and examining use cases that could be implemented with little or no disruption, he said in another reply
The introduction of CBDC has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, etc, he added.
Printing of notes have declined over a period of time, he said, adding, during 2019-20 notes worth Rs 4,378 crore were printed which came down to Rs 4,012 crore in 2020-21.
Replying to another question, he said, financial health of the country includes many facets.
“Stable stock market along with well-functioning and sophisticated market infrastructure is one indicator to assess a country’s financial health. The stock markets are indicative of economic growth in the medium to long term as the stock prices reflect the market’s expectation on future corporate earnings/profitability and hence the underlying confidence in economy,” he said.
However, he said, in the short run, the stock markets are mostly driven by the economic and geopolitical events.
Exchanges levy exchange transaction fees upon the broker which may be passed down to clients, he said, adding, the transaction fee is mentioned in the contract note issued to client by the broker.
The taxes levied on sale and purchase of stocks including the taxes levied by exchanges are mentioned in the contract note issued to clients at the end of each day of trading by the broker, he said.
(PTI)
This was the 10th installment of the PDRD grant released to the states. So far, an amount of Rs. 98,710 crore has been released to eligible States as Post Devolution Revenue Deficit Grant in the current financial year, it said.
The Ministry of Finance on Thursday released a monthly post-devolution revenue deficit (PDRD) grant of Rs. 9,871 crore to 17 States.
This was the 10th installment of the PDRD grant released to the states. So far, an amount of Rs. 98,710 crore has been released to eligible States as Post Devolution Revenue Deficit Grant in the current financial year, it said.
The grants are released to the States as per the recommendations of the Fifteenth Finance Commission to meet the gap in revenue accounts of the states post-devolution. The commission has recommended PDRD grants to 17 States and the same is being released in monthly instalments, the ministry said.
The Fifteenth Finance Commission has recommended a total post-devolution revenue deficit grant of Rs. 1,18,452 crore to 17 States in the financial year 2021-22. Out of this, an amount of Rs. 98,710 crore (83.33 per cent) has been released so far.
The States who have been recommended for the PDRD grant are Andhra Pradesh, Assam, Haryana, Himachal Pradesh, Karnataka, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttarakhand and West Bengal.
When the Factoring Bill came to the Standing Committee on Finance, the government was opening up factoring to more non-banking financial companies and enabling more NBFCs to participate in that.
The government is working to bring changes in the GST Act and other public platforms so that companies can utilise data to grow big in size and scale, Jayant Sinha, Chairperson, Parliament Standing Committee on Finance, said on Thursday.
“Public platforms such as UPI and Aadhaar are very important platforms. Even then, for us to leapfrog, we have to do more in terms of public platforms,” Sinha said while speaking at the Assocham e-summit on ‘Non-Banking Finance Companies & Infrastructure Financing: Transforming the Financial Lending Landscape’.
When the Factoring Bill came to the Standing Committee on Finance, the government was opening up factoring to more non-banking financial companies and enabling more NBFCs to participate in that.
“But even as we were doing that we were not addressing some important platform and data related issues. That is why we suggested that anything that is on GST as an invoice should automatically be gone to TReDS as well. Then it can be used on TReDS to finance receivables and so on.
“So, that was the recommendation of the committee, and I am very happy to tell you it was accepted by the government,” Sinha said.
However, he said, any change will need statutory backing through legislation, as the GSTN (GST Network) does not enable the usage of data within GSTN for any other purpose.
So, there is a need to change not only the central GST Act but all the state GSTN Acts to enable GSTN invoices to automatically get on to TReDS or other platforms, he added.
TReDS is a platform that facilitates discounting of invoices for MSMEs from corporate buyers through multiple financiers.
He said GST is fast becoming the commercial backbone of this country, and the government is doing all the necessary changes that will be required to support the businesses.
For India to leapfrog and become a globally competitive economy of the size of USD 10 trillion, public platforms, as well as private innovation, need to work in tandem, he said.
While making public platforms frictionless is 10 per cent of the story, 90 per cent of the story lies with the private players and businesses to innovate.
“So, those are the kind of things we are working on right now, and there is a report that we will be putting out on strengthening credit flow to MSMEs, and we would welcome input from NBFCs on that…
“Private sector innovation is required on top of these public platforms. The good news today is that there is ample capital available. Because of the great exits and tremendous capital that we have in the market right now, there is plenty of capital available to support high-quality businesses,” Sinha said.
(PTI)