QBiz: EPF May Return in New Avatar, ‘Giveitup’ Saves Rs 4,166 Cr

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A worker unloads liquefied petroleum gas (LPG) cooking cylinders from a supply truck outside a distribution centre. (Photo: Reuters)

1. EPF Tax May Return in New Packaging: Livemint

The controversy over it may have settled down for now, but the employees’ provident fund (EPF) tax will likely return with a different name and approach. The Central government is now figuring out the mechanics of levying the EPF tax on people who earn higher salaries, according to two government officials who requested anonymity.

And this time, the tax will be well-deliberated, well-planned, and the government ready with a plan to effectively mitigate any backlash, they added. Indeed, it won’t even be called a tax.

The idea is to achieve, at least for this segment of individuals, some parity between EPF and the National Pension System.

The budget proposal was for a straightforward tax on withdrawals from the EPF.

Read more here.

2. Govt May Seek Mallya’s Extradition if Necessary, Says FinMin Official: ET

Vijay Mallya’s creditors plan to intensify efforts to recover dues worth Rs 9,000 crore by selling assets pledged by him but banks failed to convince the Supreme Court to order his presence at the next hearing of their case against the businessman, reports The Economic Times. Attorney-General Mukul Rohatgi said Mallya was most likely in London, having left the country a week ago.

The government will take all steps, including seeking extradition if required, to bring Mallya back, said a senior finance ministry official. India may also ask the UK government to ensure that a $75-million payment from Diageo to Mallya is withheld, he said.

CBI officials said Mallya had left the country despite a lookout notice issued at the agency’s request by the immigration authorities last year. Sources at the agency said Mallya had been questioned thrice.

The Business Standard reports five serving and former executives of the IDBI Bank, mentioned in a probe report by the CBI will be questioned by the Enforcement Directorate (ED) over a Rs 950-crore loan sanctioned to Kingfisher Airlines in 2009.

The report points out the loan was misused by Vijay Mallya and was diverted abroad on false claims. It also says there was a slew of meetings between Mallya and key bank executives as the Kingfisher Airlines was going under.

The CBI has shared its findings with the ED, which recently filed a case against Mallya, Kingfisher Airlines and IDBI Bank executives.

3. Millions Give Up LPG Subsidy, Save Government Rs 4,166 Crore: BS

A year after Prime Minister Narendra Modi made a call to the well-heeled to give up their cooking gas subsidy, the campaign seems to have worked. The number of consumers who have responded to the “Giveitup” campaign has touched a 8.22 million, helping the government save Rs 4,166 crore.

Each of these 8.2 million families has surrendered an annual LPG subsidy worth Rs 5,000. For the government, the savings are around Rs 4,166 crore - a tenth of the allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

The initiative asking consumers to give up their LPG subsidy had been on since 2012, but the movement gathered pace in the past year due to a massive outreach programme run by the petroleum ministry.

Read more here.

4. Big Bang Decisions Today, With Higher Pricing Power, Gas Output to Look Up Again: FE

The Cabinet Committee on Economic Affairs (CCEA) will likely decide on a clutch of reform proposals aimed at giving the much-needed impetus to the country’s under-performing upstream hydrocarbon sector on Thursday.

Topping the CCEA agenda will be the Budget proposal to accord gradual marketing freedom and higher pricing power to producers of natural gas from unexploited difficult areas, but the committee might also usher in single-licence system for all forms of hydrocarbons.

Along with these incentives for investors, the revenue-sharing regime where the government’s remuneration over the life cycle of an asset is directly linked to the output levels and price could also be brought in.

Read more here.

5. Reforms in India Will be Slow, Tedious Says Morgan Stanley: FE

Big bang reforms will not be the operating template for India and the process will be a ‘slow and tedious one’, says a Morgan Stanley report. The global financial services major said that the recently announced Budget for 2016-17 has proved once again that major reform initiatives will not be the operating template for the country.

Reforms in India will be a slow and tedious process, requiring the buy-in of the opposition and the bureaucracy.
Morgan Stanley report

Since the beginning of this year, Indian markets have seen heavy volatility largely owing to high fluctuations in global markets led by the Shanghai Composite and domestic events such as the Union Budget, it said.

Read more here.

6. Govt Agency Also Wilful Defaulter: BS

Vijay Mallya has elite company: Nafed, a Union government agency, too, is a fellow wilful defaulter on the list published by the Punjab National Bank (PNB). The list of defaulters was published by the bank last month.

National Agricultural Co-operative Marketing Federation of India, or Nafed, a six-decade-old autonomous body under Union Ministry of Agriculture, figures at number 218 on the list, about 150 places below Mallya’s Kingfisher Airlines.

The Nafed has outstanding dues of Rs 224.26 crore as of 15 February .

Like Kingfisher, proceedings have been initiated under the Sarfaesi Act, the list showed.

It also listed seven other banks to which Nafed owed money. These are the State Bank of India, the Central Bank of India, the Syndicate Bank, the Oriental Bank of Commerce, the State Bank of Bikaner and Jaipur, the Bank of Maharashtra and the Federal Bank.

Read more here.

7. Govt Cuts Bt Cotton Royalty Fees by 74 Percent: Livemint

India on Wednesday cut prices of genetically modified cotton seeds and slashed royalty fees by 74 percent, disregarding global seed major Monsanto’s threat to re-evaluate its India business if such a move is considered.

The maximum sale price of genetically modified Bollgard II cotton seeds was reduced to Rs 800 (per 450gm packet) from Rs 830-1,000 earlier, according to a notification made public on Wednesday evening.

The sharpest cut is on royalty or trait fees. They were reduced by 74 percent, from Rs.163 per packet to Rs.43 (excluding taxes). The latest prices will come into effect from the next kharif crop season, sowing for which begins in June.

While the move will benefit nearly 8 million cotton farmers in India, it raises concerns about the country’s intellectual property rights regime.

8. Narendra Modi Seeks Political Consenus For GST Law: Livemint

Prime Minister Narendra Modi has made a fresh pitch for political consensus around the early passage of a constitutional amendment bill that will enable the rollout of the goods and services tax (GST).

But his speech in the Rajya Sabha—part of the motion of thanks to President Pranab Mukherjee’s address to both houses of Parliament at the beginning of the budget session—was hyper critical of the Congress and other opposition parties and could potentially trigger a sharp reaction, undoing any efforts to generate consensus.

In his speech, which stayed on the pro-poor theme evident in the 2016 Union budget, Modi told members of the Rajya Sabha that the next round of economic reforms was awaiting their consent.

The country is awaiting the goods and services tax. Lok Sabha has accepted it, but the bill is pending in the Rajya Sabha. The upper house should give vision to the country and pending bills should be cleared to push forward reforms.
Narendra Modi, Prime Minister 

Read more here.

9. Startups Begin to Renege on Offers: ET

A few months after Indian startups set records in hiring from premier engineering and management schools, some have begun to renege on their offers or are marking down salaries.

Hiring by startups at college campuses during the November-January placement season had surged as emerging businesses competed to recruit the best talent, but the recent funding crunch is forcing them to focus on profitability and paring costs. Investors weary of startups burning their cash too fast without building solid businesses have increased pressure on them to clean up and improve their strategies, and hiring has become a big casualty of this.

Startups begin to renege on offers; Ola, Snapdeal absent from placements this academic year, a stark contrast from a few months back when leading startups lobbied with top engineering schools for top slots at campus placements rivalling global technology giants such as Google.

Read more here.

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