1. LIC Listing May Take About a Year, Says Finance Secretary Rajiv Kumar
The listing of Life Insurance Corporation (LIC) will likely take about one year and the government is not willing to sell more than 10 percent stake in the insurance behemoth.
“We are already in touch with the Department of Investment and Public Asset Management (Dipam) to understand all the processes involved. The LIC Act will have to be amended. It’s not possible to do it in six months and may take around one year,” Finance Secretary Rajiv Kumar said in a media interaction on Sunday.
Kumar said the idea behind the listing of LIC was to “bring in more transparency and allow the company to share gains with its stakeholders”. “It is very important as it will bring in the disclosure norms,” he said.
(Source: Business Standard)
2. WeWork Appoints Us Real Estate Industry Veteran Sandeep Mathrani as CEO
Softbank-backed office sharing firm WeWork named real estate industry veteran Sandeep Mathrani as its new chief executive on Saturday, 1 February.
Mathrani will join the company as the CEO from February 18, 2020 and will report to Marcelo Claure, who will remain as executive chairman, the company said in a statement. Mathrani succeeds co-CEOs Sebastian Gunningham and Artie Minson, WeWork said.
Both Gunningham and Minson will remain with the company at least through a transition period to ensure a smooth onboarding process, the company said.
(Source: Business Standard)
3. Companies Likely to Change Dividend Tax Policy After Budget Changes
Indian companies may well change the way they return capital to shareholders after alternations in dividend tax policy. An analysis of S&P BSE 500 companies suggests that promoters of Indian private-sector companies in particular could end up paying at least 20 per cent more as additional tax on the same dividend income.
They are likely to explore alternative ways, including buybacks, to pay back shareholders, according to experts. The Union Budget on Saturday said dividends would be taxed in the hands of shareholders.
(Source: Business Standard)
4. NRI Tax to Only Impact India Earnings, Govt Clarifies
In what seemed like a partial rollback, the Finance Ministry on Sunday, 2 February, clarified that non-resident Indians (NRIs) would be liable to pay tax only on income derived from business or profession in India.
The Union Budget had proposed on Saturday that NRIs had to pay up taxes on global earnings if they were not paying in any other jurisdiction or country, generating much debate.
The ministry said it was an anti-abuse provision amid growing instances of NRIs shifting their stay in low or no-tax jurisdiction to avoid tax payment in India.
(Source: Business Standard)
5. India INC Left Yearning for Missing Consumers After Union Budget
Nothing is certain but death and taxes, yet ahead of the Union budget, companies and their investors were almost certain that the government would cut taxes on individuals to boost sagging consumption.
While the finance minister did cut taxes, the announcement came with a big caveat, and has resulted in a plethora of internet jokes on one hand, and great disappointment among companies and investors on the other.
Sameer Shah, head of finance for India and Saarc at Godrej Consumer Products Ltd (GCPL), said: “The budget does let down as far as consumption revival goes. There is more of prose than the numbers part of it. While the new personal tax slabs look good optically, one really needs to evaluate how much of this would translate into consumption growth."
(Source: Mint)
6. Tax Sops to Boost Investment in Infrastructure Sector
Tax sops announced in the Budget are expected to boost investment into the cash-strapped infrastructure sector, industry players said.
The government on Saturday, 1 February, announced 100% tax exemption on long-term capital gains, dividend and interest on investment into infrastructure made by sovereign wealth funds (SWFs). It also brought tax treatment of unlisted infrastructure investment trusts (InvITs) at par with listed ones. The roads sector may significantly benefit from the announcements.
(Source: The Financial Express)
7. Budget 2020 Has Struck the Right Chord Between Growth and Fiscal Deficit
The budget has struck the right chord between enabling growth and managing fiscal deficit. It has hallmarks of continuity with change. There is an apparent rural pivot, with new initiatives aimed at doubling income of farmers, and enhancing livelihood opportunities for rural youth, women and underprivileged. Continuing social sector schemes of the first term, the Budget has outlined new initiatives under three themes — aspirational India, economic development and caring society.
(Source: The Financial Express)
8. Small Banks May Get a Trust Vote With Hike in Deposit Insurance
The Union budget proposal to raise deposit insurance fivefold is expected to increase confidence in small private sector banks, small finance banks and cooperative banks, two industry officials said.
Against the backdrop of a shaky financial system and the recent collapse of the Punjab and Maharashtra Co-operative (PMC) Bank, the Union budget proposed to raise deposit insurance to ₹5 lakh per depositor from the existing ₹1 lakh. The greater cover is likely to assuage depositors and restore some faith in the financial system.
(Source: Mint)
9. Centre Woos Foreign Portfolio Investors to Help Revive Growth
Finance minister Nirmala Sitharaman took several measures to woo foreign portfolio investors (FPIs) after the misstep last year on imposing a surcharge on investors which were registered as a trust. The steps showcase how the government is seeking to tap private capital, especially foreign funds, to revive economic growth at a time when the government’s balance sheet is stretched.
These include a withholding tax rate of 5% for FPIs investing in the bond market, eliminating the dividend distribution tax (DDT), letting them claim credit in home jurisdiction, almost a total exemption for sovereign wealth funds if they invest in infrastructure and other notified priority sectors.
(Source: Mint)
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