QBiz: Vodafone Begins Tax Row Talks, UB Officials Under Scanner

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The income tax department vs the UK-based Vodafone Group. (Photo: Reuters)

1. Govt Agrees to Changes Suggested by Parliamentary Panel on Bankruptcy Bill: Livemint

The government has agreed to incorporate the changes suggested by a joint parliamentary committee (JPC) to the Insolvency and Bankruptcy Code Bill and will introduce the draft law in the current session of Parliament, economic affairs secretary Shaktikanta Das was quoted saying in a Livemint report.

The JPC report has come. We were actively participating in the deliberations of the committee. I don’t expect any official amendment to the JPC’s recommendations because most of the recommendations they have made are based on interaction with government officials. It is an outcome of a very close and positive interaction. Now the effort of the government is to enact it
Shaktikanta Das, Economic Affairs Secretary

The Bill is expected to be put before the cabinet for approval soon, Das said.

2. Vodafone & Govt Begin Talks to Settle Rs 14,200-Cr Tax Row: ET

The government and Vodafone may have hardened their positions in public but behind the scenes both sides have begun talks aimed at an amicable settlement of their festering dispute over taxes according to The Economic Times.

There have indicators such as Vodafone’s recently unveiled initial public offering plans which suggest there’s been a move towards some sort of understanding.

Another indication of a rapprochement is that the government hasn’t yet moved the Supreme Court against a Bombay High Court verdict in a separate transfer pricing case as planned.

3. Rural Credit Raised by Self-Help Groups up 40 Percent at Rs 30,000 Cr in FY16: ET

Rural credit raised by self-help groups in India through their bank linkage programme grew more than 40 percent in 2015-16 to about Rs 30,000 crore, providing a glimmer of hope for the rural economy grappling with an acute drought, poor farm output and a tough agriculture market, reports The Economic Times.

The self-help groups or SHGs have mobilised credit of about Rs 70,000 crore since they were formed in 2011 to fund creation of social capital in villages that could lift non-farm jobs.

The credit off-take during the fiscal bucked the trend of registering highest growth in the southern states. States including Bihar, Jharkhand, Uttar Pradesh saw a near doubling of credit demand, with more women getting skilled to take up economic activities and a growth in the overall SHG numbers.

4. Non-Financial FDI Firms See 19 Percent Growth in Net During FY15: FE

Net profit of non-government non-financial (NGNF) foreign direct investment (FDI) companies increased by 19.7 percent to $576,649 million in 2014-15, according to a Reserve Bank of India release.

Net profit (Profit after Tax) growth improved to 19.7 percent in 2014-15 as compared with 11.8 percent in the previous year

The net profit of these companies was at $481,804 million in 2013-14, showed the data.

The data relates to 3,320 non-government non-financial (NGNF) foreign direct investment companies which closed their accounts during the period April 2014 to March 2015.

RBI has said the data is based on the Ministry of Corporate Affairs (MCA) systems.

5. Wilful Defaulters Owe Rs 66,000 Cr to Govt Banks: BS

There were 7,686 wilful defaulters owing Rs 66,190 crore to state-owned banks as of December 2015, Minister of State for Finance told the Rajya Sabha. Sinha also said that the total outstanding amount in top 100 non-performing accounts (NPAs) with public sector banks (PSBs) was Rs 1.73 lakh crore as of December 2015.

Sinha further adds that the number of wilful defaulters of PSBs rose from 5,554 to 7,686 in three years to December 2015 while the amount involved more than doubled to Rs 66,190 crore from Rs 27,749 crore.

The total exposure of top 50 defaulters of PSBs as of December 2015 was Rs 1,21,832 crore.

6. UB Group Officials Grilled on Inter-Corporate Loans: HBL

The CBI and the Enforcement Directorate have started the process of questioning several former mid- and senior-officials of the UB Group on issues concerning inter-corporate loans to Kingfisher Airlines, reports Hindu Business Line.

The report states that the first to be questioned were senior officials like former President of the UB Group Ravi Nedungadi and Kingfisher Airlines’ CFO A Raghunathan, who were repeatedly summoned to the offices of the investigating agencies. The agencies have now started interrogating officials at the level of sectional heads of finance, accounts and legal affairs.

The main line of questioning concerns inter-corporate loans given to Kingfisher Airlines by other UB Group companies. Apparently, inter-corporate loans were provided to the airline at higher interest rate than the working capital provided by the banks.

7. Banks Tell Essar Steel to Find a Buyer by the End of June: Livemint

Creditors have given Essar Steel India Ltd till the end of June to find a buyer for a majority equity stake in the company, as per people quoted in the Livemint report. If that doesn’t happen, the banks will find a buyer themselves, the report adds.

Loans to Essar Steel, which is controlled by the Ruia family, are among a large pile of bad loans banks are trying to clean off their balance sheets. Essar Steel said in November that it had around Rs 30,000 crore of debt on its books.

“The message has been communicated to the promoters that we cannot keep waiting. If they are unable to close a deal by June, then banks may have to drive this sale,” as per a bank official quoted.

8. Panel Slams Govt for Slashing Funds for Crucial Projects to Fund ‘Make in India’ Scheme: BS

A Parliamentary panel has pulled up the government for curtailing the expenses for crucial projects while funding initiatives like ‘Make in India’ according to Financial Express.

The committee is constrained to observe that allocations to many crucial projects were slashed in the year 2015-16 in view of funding ambitious projects like Make in India initiative.
Parliamentary Standing Committee Report

However, the Department of Industrial Policy and Promotion (DIPP) could only utilise 40 percent of the budget estimate for the initiative till December 2015.

The committee “strongly feels that the department should have been pro-active over timely utilisation of the funds available in the most effective manner”, it said.

It also said that an expenditure to the tune of 40 percent under the scheme for investment promotion for Make in India till December 2015 reflects lack of imagination and preparation of blueprint to promote India as an investment destination.

9. Centre Owes Rs 61,000 Crore to FCI as Food Subsidy: HBL

The Centre owes Rs 61,000 crore as food subsidy to government-owned Food Corporation of India following lower Budget allocation, compelling it to raise a short-term loan of Rs 70, 820 crore in 2015-16.

According to the Hindu Business Line, this was about 20 percent higher than Rs 59,415 crore raised in 2014-15. In 2013-14, it had raised Rs 35,510 crore as short-term loan. 

The outstanding arrear of food subsidy in case of FCI, as on March 31, 2016 was about ₹61,000 crore
Ram Vilas Paswan, Food Minister

He further added that this was due to the lower Budget allocation of about Rs 1,03,300 crore for food subsidy in 2016-17, against the demand of Rs 1,29,000 crore.

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