Year End Review: Highlights of the Achievements of the Ministry of Finance
During
the current fiscal, Ministry of Finance has undertaken various initiatives and
measures for enhancing the Revenue Collection ,easing and formulating the
Taxation policy, Fiscal consolidation , improving the Economic Growth and there
by contributing to the Nation building. The major highlights of the
achievements of the Ministry are as follows:
DEPARTMENT OF ECONOMIC AFFAIRS (DEA)
During
the current fiscal, Department of Economic Affairs (DEA), Ministry of Finance
has undertaken various initiatives for enhancing the Economic Growth and
ensuring the Fiscal Stability of the economy.
The
major highlights of the achievements of the Department are as follows:
INFLATION
Wholesale
Price Index (WPI): WPI inflation has declined from 6.0 per
cent in 2013-14 to 2.0 per cent in 2014-15 and -3.5 per cent during April to
October 2015. WPI has been negative since November 2014 and is placed at -3.8
per cent in October 2015. WPI Food inflation has also shown steady decline from
6.0 per cent in January 2015 to 1.7 per cent in October 2015. Inflation in Fuel
& power stood at -16.3 per cent in October 2015 compared to -17.7 per cent
in the previous month and -11.0 in January 2015. Inflation for Manufactured
products decreased to -1.7 per cent in October 2015 as compared to 1.0 per cent
in January 2015.
Consumer
Price Indices (CPIs): CPI-New Series inflation for 2014-15
declined to 5.9 per cent from 9.5 per cent in 2013-14, has remained below 5.5
per cent since January 2015. During 2015-16 (Apr-Oct), average CPI inflation
was 4.7 percent and stood at 5.0 per cent in October 2015. Inflation in terms
of Consumer Food Price Index (CFPI) has come down to 5.2 per cent in October
2015 from a high of 6.9 per cent as reported in February 2015.
Inflation based
on CPI-Industrial Workers for September 2015 stood at 5.1 per cent as compared
to 7.2 reported in January 2015. Inflation based on CPI-Agricultural Labour and
CPI-Rural Labour declined to 3.5 per cent and 3.7 per cent respectively in September
2015 as compared to 6.2 per cent and 6.5 per cent in January 2015.
Measures
taken to control inflation
The measures
taken by the Government along with decline in global oil and commodity prices
have contributed towards achieving low inflation. The measures taken by
Government include, advising states to allow free movement of fruits and
vegetables by delisting them from the APMC Act, banning of export of all pulses
(except kabuli channa and organic pulses and lentils upto certain quantity), zero
import duty on pulses and onion, empowering States/UTs to impose
stock limits in respect of onion, pulses, edible oil, and edible oilseeds under
the Essential Commodities Act, modest increase in minimum support
prices in last two years etc. The vigilant monetary policy stance by the RBI
and adoption of a Monetary Policy Framework agreement between Government and
RBI has also led to moderation in inflation by bringing in an element of
certainty of action by the RBI.
MONETARY POLICY
During 2015, policy (Repo) rate has been
cut by 125 basis points, signalling a period of easing of monetary policy.
Taking into account the continuous decline in inflation and with a view to spur
growth, the last cut in the policy rates by 50 basis points to 6.75 percent was
undertaken by the RBI on September 29, 2015.Overall, the RBI stance continues
to be accommodative.
Government of India and RBI have signed
a Monetary Policy Framework agreement in February 2015. The objective of this
framework is to primarily maintain price stability, while keeping in mind the
objective of growth. As per the agreement, RBI would set the policy interest
rates and would aim to bring inflation below 6 percent by January 2016 and
within a band of 4 percent with (+/-) 2 percent for 2016-17 and all subsequent
years. The agreement has brought in an element of certainty for the market with
regard to action by the RBI in managing inflation.
BANKING
Permission has been accorded by RBI for setting up
Payment Banks and Small Finance Banks to improve financial inclusion. RBI has
accorded in principle approval to 11entities to form Payment Banks in August
2015 to 10 entities to form ‘Small Finance Banks’ in September 2015. The
minimum paid-up equity capital for Payments Banks shall be Rs. 100 crore, of
which the promoter’s contribution would be minimum 40 percent of paid-up equity
capital for the first 5 years of commencement of the business.
·
For recapitalizing the public sector banks, Government has
already provided adequate funds in this financial year. An amount of Rs.12,000
crore has already been provided n the Supplementary Demand passed by the
Parliament, in addition to Rs.7,940 crores already provided in the budget of FY
2015-16.
·
Government announced MISSION
INDRADHANUSH in August 2015, which attempts to revamp public sector
banks and to address problems impacting their performance including governance,
accountability and capitalization. This includes:
A
seven-member Bank Board Bureau, which will oversee the appointments process at
public sector banks and provide advisory services.
On
the basis of best global practices, to separate the post of Chairman and
Managing Director by prescribing that in the subsequent vacancies, CEO will get
the designation of MD & CEO and there would be another person who would be
appointed as non-Executive Chairman of PSBs.
Government
proposes to make available Rs.70,000 crores out of budgetary allocations for
bank capitalization in the next four years.
De-stressing
public sector banks by strengthening risk control measures and NPA disclosures.
No interference from Government and Banks are encouraged to
take their decision independently keeping the commercial interest of the
organization in mind.
New framework for measuring performance of public
sector banks.
Continuing
with the governance reforms.
FINANCIAL
SECTOR
·
Approval accorded for
setting up of the proposed Rs 20,000-crore National Investment and
Infrastructure Fund (NIIF).
·
Approval given for
foreign investment in the Alternative Investment Funds (AIF). Foreign
investment will now be permitted in AIFs, which are set up as registered trust,
incorporated company or limited liability partnership.
·
With the objective of having a more predictable regime for
investment by the foreign portfolio investors (FPI), RBI has set out the medium
term framework (MTF) for FPI limits in debt securities. The limits for FPI
investment in debt securities will henceforth be announced/ fixed in rupee
terms. The limits for FPI investment in the central government securities will
be increased in phases to 5 per cent of the outstanding stock by March 2018. In
aggregate terms, this is expected to open up room for additional investment of
₹1,200 billion in the limit for central government securities by March
2018 over and above the existing limit of ₹1,535 billion for all
government securities (G-sec).Additionally, there will be a separate limit for
investment by FPIs in the State Development Loans (SDLs), to be increased in
phases to reach 2 per cent of the outstanding stock by March 2018. This would
amount to an additional limit of about ₹500 billion by March 2018.
·
Forward Market Commission (FMC) was
merged with Securities Exchange Board of India (SEBI) on September 28, 2015
with a view to strengthen the regulation of commodity forward markets.
TAX-FREE
BONDS
Government
of India has allowed the issuance of Tax-free bonds of Rs 40000 crore during
the Financial Year 2015-16, by Central Public Sector
Enterprise (CPSE) such as National Highways Authority of
India (NHAI), Indian Railways Finance Corporation (IRFC), Housing and Urban
Development Corporation (HUDCO), Indian Renewable Energy Development Agency
(IREDA), Power Finance Corporation Limited (PFC), Rural Electrification
Corporation Limited (REC), National Thermal Power Corporation Limited
(NTPC).The following categories of investors can subscribe to these Bonds:
Retail
Individual Investors (RIIs),Qualified Institutional Buyers (QIBs),Corporates
(including statutory corporations), trusts, partnership firms, Limited
Liability Partnerships, co-operative banks, regional rural Banks and other
legal entities, subject to compliance with their respective Acts, and High
Networth Individuals (HNIs).These Bonds are issued for ten (10) or fifteen (15)
or twenty (20) years. Further details of terms & conditions of Tax Free
Bonds for the FY 2015-16 can be accessible at:
THE
11TH INDIA- SAUDI ARABIA JOINT COMMISSION
The
11th India- Saudi Arabia Joint Commission Meeting (JCM) was held
during 26-28th May, 2015 at New Delhi. A wide range of issues,
including cooperation in trade and commerce, higher education, health,
communication, culture and IT were discussed. Both sides also acknowledged the
need to explore investment opportunities in both countries.
ENABLING ENVIRONMENT FOR PUBLIC PRIVATE PARTNERSHIPS (PPPS)
IN INDIA
Initiatives by Government of India for promoting PPPs: Government of India (GoI) has been placing strong emphasis on the
use of Public Private Partnerships (PPPs) as a strategy for expanding the
provision of infrastructure services. Several initiatives have been taken to
create an enabling framework for PPPs:
Ø The appraisal mechanism for the PPP projects has been streamlined
to ensure speedy appraisal of projects, eliminate delays, adopt international
best practices and have uniformity in appraisal mechanism and guidelines.
Ø The Public Private Partnership Appraisal Committee (PPPAC) set
up for the appraisal of PPP projects posed by Central Line Ministries and
Departments has so far in 2015 approved 13 central projects proposal with
TPC of Rs.21817.03crore (USD 3636.17 million).
Ø The Government had created a Viability Gap Funding Scheme for
PPP projects. Infrastructure projects are often not commercially viable on
account of having substantial sunk investment and low returns. However, they
continue to be economically essential. Accordingly, the Viability Gap Funding
Scheme has been formulated which provides financial support in the form of
grants, one time or deferred, to infrastructure projects undertaken through
public private partnerships with a view to make them commercially viable. The
Scheme provides total Viability Gap Funding up to twenty percent of the total
project. The Government or statutory entity that owns the project may, if it so
decides, provides additional grants out of its budget up to further twenty
percent of the total project cost. Viability Gap Funding. During the current
calendar year i.e. 2015, so far Empowered Institution has granted in-principle
approval for 5 projects with a Total project cost of 901.00 crore (USD 150.16
million). Like-wise, EI also granted Final Approval to 9 projects of
1119.66crore (USD 186.61 million)[1] in various sectors with VGF component of Rs. 166.7 crore (USD
27.78 million).
Ø Municipal Borrowing- Government
has initiated a pilot project for developing
a framework to build capacities of Urban Local Bodies ( ULBs) to raise
financing through the Capital Markets for financing infrastructure projects
(normally PPPs). The pilot initiative aims to develop a replicable model
and related documents and demonstration of the model through a successful pilot
transaction for an ULB. Guidelines for issuance of Municipal Bonds in India
have been notified
Ø Knowledge Resources: As
part of wide ranging efforts for knowledge dissemination on PPPs, DEA has
developed tool kits and knowledge products for use of PPP practitioners. These
include:
(i)
Post Award Contract Management: Department of Economic Affairs (DEA) has developed Post-Award
Contract Management Guidance Material for Highways, Ports and Education
sectors. The material is aimed at providing guidance and support to Project
Authorities, especially in ensuring routine monitoring and also management of
key risks that can emerge during the post-award phase of the project. Further,
the Manuals are accompanied by user-friendly, interactive Online Toolkits that
can be used by Project Authorities for practical application-oriented
assistance in project management activities. The Guidance Material and the
Online Toolkits will be available to users on the Department’s website for
PPPs, i.e., www.pppinindia.com.
(ii)
Framework for Renegotiation of PPP
Contracts: A report on a suggested
framework for renegotiation of PPP contracts has been developed, which focuses
on changes that may need to be made in the contractual and institutional
arrangement post award of the projects. Work on the identification of the legal
clauses in the concession agreement is underway. The well researched guidance
note for Renegotiation Framework particular focus on the National Highway and
Major Port concessions. The model clauses based on established thresholds for
renegotiation are being drafted, to distinguish quantified bid percentages and
qualitative “materiality” type considerations.
FINANCIAL
STABILITY AND DEVELOPMENT COUNCIL (FSDC)
The
Financial Stability and Development Council (FSDC) under the Chairmanship of
Finance Minister with Heads of Financial Sector regulatory authorities, and
Secretaries of concerned Departments and Chief Economic Adviser (CEA) as
members, monitors macro prudential supervision of the economy including functioning
of large financial conglomerates, and addresses inter-regulatory coordination
and financial sector development issues, including issues relating to financial
literacy and financial inclusion.
From
January 2015 to November, 2015 the Council had held two meetings on May 15,
2015 and 5th November, 2015. In these meetings, important issues
concerning financial stability and development inter regulatory coordination
and also challenges facing the economy were deliberated. The major issues
include external sector vulnerabilities, focus on future financial sector
reforms, Corporate Bond Market Development, Prevention & detection of Fraud
in banks & building effective deterrence, rising bank NPAs and corporate
sector balance sheet stress, and harmonization and convergence of regulations
relating to securities market & commodity derivatives market.
The
FSDC Sub-committee set-up under the chairmanship of Governor, RBI met two times
and deliberated on issues such as Account Aggregation for Financial Assets, global
and domestic developments impinging on financial stability, Corporate Bond
Market Development, Foreign Account Tax Compliance Act (FATCA), developing a
comprehensive financial resolution regime etc. Various Technical Groups have
been set-up under FSDC Sub-Committee such as Inter Regulatory Technical Group
(IRTG), Technical Group on Financial Inclusion and Financial Literacy (TGFIL),
Inter Regulatory Forum on Financial Conglomerates (IRF-FCs) and Early Warning
Group (EWG) met during the period to discuss issues in accordance with their
mandate.
FSB Peer Review of India
As
a part of FSB commitment, India has volunteered to undergo FSB peer review, for
the first time, in 2015, the Terms of Reference (TOR) for which has been
finalized. The topics being covered under the review are (i) macro prudential
policy framework and (ii) regulation and supervision of NBFCs.
ESTABLISHMENT OF NEW DEVELOPMENT BANK (NDB)
New
Development Bank has been established by BRICS countries in Shanghai, China.
The Bank will mobilize resources for infrastructure and sustainable development
projects in BRICS countries, other emerging economies and developing countries.
It will complement the existing efforts of multilateral and regional financial
institutions. Mr. K.V. Kamath, has taken over as the first President of the
Bank. NDB is expected to make its first lending by April, 2016.
ESTABLISHMENT
OF BRICS CONTINGENT RESERVE ARRANGEMENT (CRA)
Most
of the foundation work for the establishment of CRA by BRICS countries has been
completed in 2015. The Governing Council Procedural Rules and Standing
Committee Procedural Rules were approved by the Governing Council in its
inaugural meeting held on September 4, 2015. The establishment of a
self-managed contingent reserve arrangement would have a positive precautionary
effect, help BRICS countries forestall short-term liquidity pressures, provide
mutual support and further strengthen financial stability. It would also
contribute to strengthening the global financial safety net and complement
existing international arrangements as an additional line of defense.
SAARC
and SDF Meetings
(i)
The
7th Meeting of SAARC Finance Ministers and Finance Secretaries were held on
19th and 20th of August, 2015. The Indian delegation for these Meetings were
led by Shri Jayant Sinha, Minister of State (Finance). Some of the major issues
that were deliberated in these meeting were currency swap arrangements among
SAARC member nations, facilitating greater flow of capital and intra-regional
investment and developments in SAARCFINANCE.
(ii)
The
4th Meeting of the SDF Governing Council was held on 20th August, 2015. The
meeting mainly discussed on the ways of strengthening SAARC Development Fund
and establishing its ways forward.
(iii)
The
21st and 22nd Board Meetings of SAARC Development Fund were held in April and
August 2015 respectively.
(iv)
The
Union Cabinet on 18th of November 2015 has approved the extension of the
validity of the Framework on Currency Swap Arrangement for SAARC Member
Countries with amendments for two more years up to November 2017.
INTRODUCTION
OF SCHEME TO SUPPORT COMPANIES BIDDING ABROAD
Government
of India has on 16th September, 2015 approved a scheme for
providing a concessional financing scheme to support Indian companies bidding
for strategically important infrastructure projects abroad. This scheme is
aligned with the ‘Make in India’ programme of Government.
INDIA
BECOMES A SIGNATORY TO AIIB
India
along with other countries signed the Articles of Agreement of the Bank on June
29th, 2015. AIIB is a multilateral
development bank proposed to be located in Beijing which will foster
sustainable economic development, create wealth and improve infrastructure
connectivity in Asia by investing in infrastructure and other productive
sectors. The process of ratification of the Articles of Agreement is underway.
G20 SUMMIT 2015
The
G20 Summit 2015 was held on 15-16 November 2015 in Antalya, Turkey. Prime
Minster led the Indian delegation. The Summit marks the culmination of a year
long process of inter-governmental meetings led by the Finance Minister Arun
Jaitley, Sherpa Dr Panagariya, and official representatives from Government of
India. G20 focuses on issues of economic and financial cooperation. At this
year’s Summit in Antalya, Leaders committed to undertake a number of concrete
actions to strengthen the global economy, make global growth more inclusive,
enhance the resilience of the international financial system, mobilize
investment to raise long-term growth, strengthen multilateral trading system
and implement previous commitments on economic reform and labour markets.
GOLD SCHEMES
Introduction of Gold
Monetization Schemes
The scheme was announced in Budget 2015-16 with the aim of
mobilizing the gold lying idle with households and trusts and deploying it for
productive use. The scheme was launched by the Prime Minister of India on 5th November,
2015. The scheme will benefit the manufacturers of gold jewellery who are
largely small and medium scale enterprises, by making gold available to them.
It will also benefit the common man by allowing him/her to earn interest on
their holdings of gold.
Introduction of Sovereign Gold Bond Scheme
The scheme was announced in Budget 2015-16 with the view to
provide a new financial instrument of investment to public at large and for
reducing the demand for physical gold. The scheme was launched by the Prime
Minister of India on 5th November, 2015.In the long-run, this
scheme will help in reducing the country’s demand for import of gold, to a
large extent. In the first tranche issuance of the bonds which was open from 6th November,
2015 to 30thNovember, 2015 approximately 250 crore worth SGBs
were subscribed to.
Introduction of Indian Gold Coin
The scheme was announced in Budget 2015-16 with the view to
promote indigenously minted national gold coins. The scheme is aligned
with the ‘Make in India’ programme of the Government. The scheme was
launched by the Prime Minister of India on 5th November, 2015.
CREATION OF “NATIONAL INVESTMENT AND INFRASTRUCTURE FUND”
(“NIIF”)
The
Government of India has put investment in infrastructure as one of the core
elements of its economic programme. The Union Finance
Minister Shri Arun Jaitley made the announcement of setting-up of a National
Investment and Infrastructure Fund (NIIF)
in his Budget Speech 2015-16 .To maximize economic impact mainly through
infrastructure development in commercially viable projects, both greenfield and
brownfield, including stalled projects, NIIF has been created with the aim to
attract investment from both domestic and international sources. The NIIF will
be established as one or more Alternate Investment Funds (AIF) under the
Securities and Exchange Board of India (SEBI) Regulations. The initial authorized
corpus of NIIF would be Rs. 20,000 crore, which may be raised from time to
time. Government’s contribution/share in the corpus will be 49 per cent in each
entity set up as an AIF and will neither be increased beyond, nor allowed to
fall below 49%. The whole of 49 per cent would be contributed by Government
directly.
NIIF
would solicit equity participation from strategic anchor partners. The
contribution of Government of India to NIIF would enable it to be seen
virtually as a sovereign fund and is expected to attract overseas
sovereign/quasi-sovereign/multilateral/bilateral investors to co-invest in it.
Government’s funds, each year, to each entity set-up as an AIF for executing
its functions based on its annual plan, would be provided as required.
Cash-rich Central Public Sector Enterprises could contribute to the Fund which
would be over and above the Government’s 49%. Similarly, domestic pension and
provident funds and National Small Savings Fund may also provide funds to the
NIIF.
The NIIF will be
established as a Trust/other legal entity from both the point of view of
taxation and flexibility. To oversee the activities of
the NIIF, it has been decided to
constitute a Governing Council with the following composition:-
(i) Finance
Minister
- Chairman
(ii) Secretary,
DEA
- Member
(iii) Secretary,
Financial
Services
- Member
(iv) Ms Arundhati Bhattacharya
- Member
(v) Shri
Hemendra
Kothari
- Member
(vi) Shri T.V. Mohandas
Pai
- Member
The mandate of the Governing Council includes the approval of the
following matters:
a. Guidelines for Investment of Trust property/Corpus
of NIIF;
b. Parameters for appointment and performance of investment
managers/ advisors;
c. Any other matter related or incidental thereto.
Government recently
invited applications for the post of CEO for NIIF who
would be responsible for the overall management and operations of the Fund.
ODA PLUS LOANS – A new loan
instrument namely “ODA Plus” was approved by the Hon’ble Finance Minister to meet
additional financial needs for large infrastructure projects which do not fall
within the agreed priority areas under Indo-German Bilateral Development
Cooperation. Following two projects have been approved/posed to German side for
funding under “ODA Plus”:
ü Chennai
Water Production and Demand Management Programme at Nemmeli, Chennai – Euro 100
million
ü Nagpur
Metro Rail Project – Euro 500 million
ONE
WORLD WITHOUT HUNGER – A SPECIAL INITIATIVE
launched by G/o Germany was approved to support the eradication of malnutrition
and hunger and the securing of long-term food security for a growing global
population, and this initiative will be implemented through
bilateral/multilateral development cooperation and through partnerships with
private sector and civil society. Under this initiative total four projects,
totaling Euro 21.05 million, have been identified, 3 projects (euro 11.05)
million are under technical cooperation and 1 under financial cooperation (euro
10 million on grant basis).
SOLAR
ENERGY PARTNERSHIP: A Memorandum of Understanding was
facilitated and signed between MNRE and German government to support Solar
Energy Partnership based concessional loans in the range of 1 billion euro over
the next five years.
LOAN/
AGREEMENT SIGNED DURING THE YEAR:
a)
‘Green
Energy Corridors’ project in r/o Himachal Pradesh Power Transmission
Corporation Limited (Euro 57 million)–Loan Agreement – with KfW (German
Development Bank)
b)
‘Green
Energy Corridors’ project in r/o APTRANSCO (Euro 68 million) – with KfW (German
Development Bank)
c)
‘Promotion
of Microfinance and Micro Enterprises’ (Euro 55 million without sovereign
guarantee) – Signed b/w SIDBI and KfW (German Development Bank)
d)
Bangalore
Metro Rail Project Phase II (Euro 200 million) – with AFD (French Development
Bank)
BILATERAL
TECHNICAL AND FINANCIAL COOPERATION:
Annual
Negotiation Meetings with Germany and France (AFD) were successfully held
respectively on 28-29 September, 2015 and 8-9 October, 2015. Germany has
committed EUR 1,490.60 million (approx. Rs. 11,000 crore) for bilateral
Technical and Financial Cooperation for the period of 2015. French assistance
would be around 250 million for this year.
Extension of the Indian Development and Economic Assistance Scheme:
The
Government of India has been extending Lines of Credit to Africa and other
developing countries since 2005-06. The scheme has been granted second
extension for another five years i.e. from 2015-16 to 2019-20 with the approval
of CCEA.
Review
of Policy on Bilateral Official Development Assistance for Development
Cooperation with Bilateral Partners:
India
has a requirement to accelerate growth through creation of additional
infrastructure which requires extensive capital investment. It has therefore
been decided that Official Development Assistance may be accepted from other
countries also besides the existing bilateral partners. Finance Minister and
External Affairs Minister, with the approval of Prime Minister, are authorized
to accept any such proposal. It has also been decided to accept offers for
bilateral assistance in the form of special loans in addition to the assistance
on the normal route.
Agreement
on Urban Water, Sanitation and Hygiene (WASH):
An
agreement in this regard was signed between Department of Economic Affairs and
U.S. Government (through USAID) on 30th September, 2015. Under this
agreement, the Govt. of India and USAID will work together to share expertise,
best practices, innovation and technologies in support of India’s efforts to
strengthen access to clean water, sanitation and hygiene in urban areas.
MoU
on Financial Inclusion:
A
Memorandum of Understanding to support ‘Financial inclusion’ under Pradhan
Mantri Jan Dhan Yojana (PMJDY) was signed between Department of Economic
Affairs and U.S. Government (through USAID) on 4th November, 2015.
The MoF and USAID are now working towards signing of an agreement in this
regard. Under this agreement, the Government of India and USAID will work
together to support financial inclusion through expanded payments acceptance
networks and other efforts.
Grant
Agreements signed with U.S. Trade and Development Agency (USTDA):
Following
three (03) grant agreements were signed recently with USTDA:-
(i)
USTDA
grant to Airports Authority of India to partially fund the technical assistance
cost of goods and services required for a technical assistance on the
‘Provision 2 Body Scanner System Pilot’ project in India.
(ii) USTDA
grant to partially fund the cost of goods and services required for feasibility
study on the ‘Bottom Upgrading Project of Bharat Petroleum Corporation Ltd. at
Mumbai Refinery in India’.
(ii)
USTDA
grant to partially fund the cost of goods and services required for developing
PPP framework in Indian Railway.
New
loans negotiated and signed with the World Bank and ADB during 2015
With
a view to providing a fillip to the infrastructure sector, several new loans
have been negotiated and signed with the World Bank and ADB during 2015. This
includes IBRD loan of US$ 650 million negotiated with the World Bank for the
third phase of the EDFC project. The total loan committed by the World Bank
for the 3-phased EDFC project is US$ 2725 million. This project will augment
freight carriage throughout the eastern dedicated freight corridor between
Ludhiana and Kolkata. Another project negotiated and signed is the Tamil Nadu
Road Sector Project for World Bank loan of US$ 300 million. Besides the Tamil
Nadu Sustainable Urban Development Project for World Bank loan of US$ 300
million has been signed on 3.6.2015.
PROJECTS INCLUDING NATIONAL INITIATIVES SWACHH BHARAT AND SMART
CITIES MISSIONS
(i) A
strong pipeline of urban projects fully aligned with the Government of India’s
strategy in Power, urban and Solar sector and national initiatives like Swachh
Bharat and Smart Cities Missions have been developed. These projects once
delivered will significantly strengthen urban service delivery and power sector
in project States, such as UP, MP, Jharkhand and Karnataka.
(ii)
The World Bank would provide financial assistance to Swachh Bharat Mission
(Gramin) to the tune of US $ 1500 million. It would help the country in
reducing open defecation in rural areas, achieving and sustaining Open
defecation Free (ODF) status of villages, and enhancing access to solid and
liquid based management. The project has been negotiated with the World Bank,
and is likely to be implemented in a few months.
There
has been significant focus on Education and Skill Development sector. A robust
pipeline for education projects, particularly in the areas of skill development
has been developed with National level programme like Skill and Employability
Enhancement Programme (SEEP), Nai Manzil programme for minority youth and State
level Skill Development programs in Jharkhand and Uttarakhand. Projects for
providing Solar infrastructure & installation at rooftop PV has also been
posed to World Bank and ADB.
**************************************************************************
DEPARTMENT OF REVENUE
INDIRECT TAX COLLECTIONS
In October 2015, indirect tax revenue (provisional) collections
increased by 36.8% compared with collections made in October 2014.
Cumulatively, during April-October 2015, indirect tax collections increased by
35.9% over the collections made during the same period last year, while, the
target growth rate for 2015-16 is 18.8%. Overall, in monetary terms, the
indirect tax revenue (provisional) collections increased to Rs 3,82,860
crore during April-October 2015 from Rs.2,81,798 crore during April-October
2014. In the month of October 2015 alone, the collections increased to Rs.58, 691
crore from Rs.42, 897 crore in October 2014.Collections on account of Central
Excise increased from Rs.87,588 crore in April-October 2014 to Rs.1, 47,685
crore in April-October 2015 and thereby registering an increase of 68.6 %. In
case of Service Tax, collections increased from Rs. 89,379 crore in
April-October 2014 to Rs. 1, 12,727 crore in April-October 2015 and thereby
registering an increase of 26.1 %. Collections on account of Customs increased
from Rs. 1, 04,831 crore in April-October 2014 to Rs. 1, 22,448 crore in
April-October 2015 and thereby registering an increase of 16.8 %.
These collections continue to suggest a healthy growth in the
underlying tax base
Indirect Tax Collections: April to October 2015 (Rs. in crore)
Tax head
|
Target growth rate for 2015-16 (in %)
|
Revenue: April-October
|
||||
|
|
2013-14
|
2014-15
|
2015-16
|
% Growth 2014-15
|
% Growth
2015-16
|
Customs
|
10.9
|
98707
|
104831
|
122448
|
6.2
|
16.8
|
Central Excise
|
21.2
|
89444
|
87588
|
147685
|
-2.1
|
68.6
|
Service Tax
|
24.8
|
81758
|
89379
|
112727
|
9.3
|
26.1
|
Total
|
18.8
|
269909
|
281798
|
382860
|
4.4
|
35.9
|
‘The
underlying theme of the “BUDGET 2015-16 indirect tax” proposals was job
creation through revival of growth and investment and promotion of domestic
manufacturing and ‘Make in India’; ‘Minimum government and maximum governance’
to improve the ease of doing business; Improving the quality of life and public
health through Swachh Bharat initiatives; and Stand alone proposals to maximise
benefits to the economy.
EASE
OF DOING BUSINESS
DIRECT TAXES
Measures taken through Finance (No. 2) Act, 2014
·
Introduction
of a “Roll Back” provision in the Advanced Pricing Agreement (APA) scheme so
that an APA entered into for future transactions is also applicable to
international transactions undertaken in previous four years in specified
circumstances.
·
Introduction
of range concept for determination of arm’s length price in transfer pricing
regulations. Necessary rules have also been framed in this regard.
·
To
allow use of multiple year data for comparability analysis under transfer
pricing regulations.
·
Resident taxpayers enabled to obtain an advance ruling in respect
of their income tax liability above a defined threshold.
·
The scope of the Income-tax Settlement Commission enlarged.
·
High Level Committee has been set up to interact with trade and
industry on a regular basis and ascertain areas where clarity in tax laws is
required and based on their recommendation the Central Boards of Direct and
Indirect Taxes would issue appropriate clarifications in a time bound manner,
wherever considered necessary.
Measures taken through Finance Bill, 2015
·
Section
9 of the Income-tax Act was amended by Finance Act, 2012 to clarify that if an
asset, being a share of, or interest, in a company or an entity derives its
value, directly or indirectly, substantially from an asset situated in India,
the gain arising from transfer of such share or interest shall be taxable in
India. Taking into account the recommendations made by the Expert Committee
and the concerns raised by the various stakeholders, the provisions of Section
9 of Income-tax Act has been amended so as to clarify certain terms used in
amended provisions to remove any ambiguity thereby to reduce litigation.
·
The
threshold limit for applicability of transfer pricing regulations to specified
domestic transactions increased from Rs. 5 crore to Rs. 20 crore.
·
Safe
harbour rules have been provided to cover state power utilities in respect of
transaction related to supply, transmission, wheeling of electricity.
·
Clarification
with respect to the long pending demand relating to the period of stay for the
purpose of deciding the residential status of seafarers, who are Indian
Citizen, going on the international voyage, has been brought.
·
‘Yoga’
has been included as a specific category of activity in the definition of
‘charitable purpose’ and also to provide relief for activities in the nature of
business undertaken by genuine charitable organizations subject to the condition
that income from such activity is less than 20% of the total receipts.
·
Tax
neutrality on transfer of units of a scheme of a Mutual Fund under the process
of consolidation of schemes of Mutual Funds as per SEBI Regulations, 1996 has
been provided.
·
A
mechanism to pre-empt the repetitive appeals by the revenue in the same
assessee’s case on the same question of law year after year has been provided.
·
The
levy of Wealth-tax has been abolished with effect from 2016-17 (Assessment
Year) for reducing the compliance burden on the tax payers.
Non-adversarial
tax regime
·
The
Central Board of Direct Taxes has issued detailed instructions to its field
formations to ensure that the dignity of the taxpayers is respected while
dealing with them, no frivolous demands are raised and no unnecessary
litigation is continued.
Issues
relating to taxation of foreign companies, having no permanent establishment in
India, have been under consideration of the Government. In this regard, the
Government has already clarified the inapplicability of MAT provisions to
FIIs/FPIs. The Government has now considered the issue of applicability of MAT
under section 115JB of the Income-tax Act to foreign companies having no place
of business/permanent establishment in India. After due consideration of the
various aspects of the matter, the Government has decided that with effect from
01.04.2001 the provisions of section 115JB shall not be applicable to a foreign
company if —
•
the foreign company is a resident of a country having DTAA with India and such
foreign company does not have a permanent establishment within the definition
of the term in the relevant DTAA, or
•
the foreign company is a resident of a country which does not have a DTAA with
India and such foreign company is not required to seek registration under
section 592 of the Companies Act 1956 or section 380 of the Companies Act 2013.
An appropriate amendment to the Income-tax Act in this regard will be carried
out.
INDIRECT
TAXES
Reduction in
number of levies:Education
Cess and Secondary & Higher Education Cess on excisable goods have been
subsumed in Basic Excise duty. Similarly, Education Cess and Secondary &
Higher Education Cess on excisable services have been subsumed in Service Tax
with effect from 01.06.2015.
Registration in
two days:Registration
in Central Excise as well as in Service Tax to be granted with two working
days. Verification of documents and premises to be carried out after the grant
of the registration.
Digital
Signature and preserving records in electronic form: Legal provisions
have been amended to prescribe that a manufacturer may use digital signature on
invoices and may preserve records in electronic format. Further, a
notification and an instruction has been issued to prescribe procedure,
safeguards and conditions for using digital signature on invoice and preserving
documents in electronic format. Similarly, Service tax assesses have been
allowed to issue digitally signed invoices and maintain other records
electronically.
Simplification
of procedure for payment of Excise duty and availment of CENVAT credit: The facility of
electronic payment of duty has been extended to all Central Excise assessees.
Further, for availing of CENVAT credit of service tax paid under reverse charge
mechanism, the condition of having made the payment of consideration to the
service provider has been done away with.
Time limit for
taking CENVAT: Time
limit for taking CENVAT credit of duty/tax paid on inputs and input services
has been increased from six months to one year.
Transfer/Sale/Re-Export
Of Plant/Equipment By Projects Financed by UN etc.:-Plants
& Equipment supplied / imported prior to 2008 for use in projects financed
by the UN or an international organization could not be transferred / sold out
/re-exported from the project site. Amendments to the notification concerned
were made which allowed such goods to be transferred / sold / re-exported from
the project site subject to certain conditions.
Exemption
in respect of wind operated electricity generators:-With
a view to reduce litigation and to improve ease of doing business in the
important sector of non-conventional energy, CBEC has issued circular on
20.10.2015 to clarify that parts, such as, tower, nacelle, rotor, blades, wind
turbine controller etc. of Wind Operated Electricity Generators (WOEG) are
eligible for exemption from Central Excise duty.
Point
to taxation for reverse charge mechanism:-To
bring certainty in the determination of point of taxation in case of reverse
charge mechanism, it has been provided that point of taxation will be the
payment date or three months from the date of invoice, whichever is earlier.
Ensure certainty
and uniformity in valuation of the goods for the purposes of levy of excise
duty:
·
All
goods falling under Chapter sub-heading 2101 20, including iced tea, are being
notified under section 4A of the Central Excise Act for the purpose of
assessment of Central Excise duty with reference to the Retail Sale Price with
an abatement of 30%. Such goods are also being included in the Third Schedule
to the Central Excise Act, 1944.
·
Goods,
such as lemonade and other beverages, are being notified under section 4A of
the Central Excise Act for the purpose of assessment of Central Excise duty
with reference to the Retail Sale Price with an abatement of 35%. Such goods
are also being included in the Third Schedule to the Central Excise Act, 1944.
Simplification
of processes for trade facilitation:
·
24X7
Customs clearance facility established in 17 airports and 18 seaports.
·
Single Window Project -Online message exchange:
Single Window provides a common platform to EXIM trade to meet requirements of
all regulatory agencies (such as, Animal Quarantine, Plant Quarantine, Drug
Controller, Textile Committee etc) through message exchange. Single Window
Scheme, established since1.04.15, helps in ease of doing business, reducing
transaction costs, enhancing transparency, reducing duplicity and cost of
compliance and optimal utilisation of resources, through an electronic online
message exchange facility between Customs and the Food Safety and Standards
Authority of India (FSSAI) and the Department of Plant Protection, Quarantine
and Storage (PQIS) at JNPT (NhavaSheva), ICD, Tughlakabad and ICD, Patparganj.
·
To
facilitate trade and to simplify procedures, number of mandatory documents has
been reduced to three, except for import and export of special nature
under preferential agreements etc.
- Special Notified Zone for trading of rough diamonds: Consequent to Hon’ble Prime Minister’s announcement to make India into a hub for trading of rough diamonds, a ‘Special Notified Zone’ was operationalised at Bharat Diamond Bourse at Mumbai. The procedure envisages major diamond mining companies bringing in rough diamonds for display and/or auctions to be conducted within the customs area and re-exporting the unsold consignments.
·
Adoption of Digital Signature:
To dispense with requirement of physical submission of documents and encourage
paper-less working, with effect from 01.04.2015, on an optional basis, the
facility of 'Digital Signature' has been introduced for importers, exporters,
airlines, shipping lines etc. However, for importers registered under the
'Accredited Client Programme' (ACP), digital signatures are mandatory with
effect from 01.05.2015. Introduction of digital signature will maintain data
integrity and reduce cost of compliance.
·
Setting Up of Customs Clearance Facilitation
Committee (CCFC): To ensure expeditious clearance of EXIM
goods, a high level administrative Committee, i.e., 'Customs Clearance
Facilitation Committee' (CCFC) has been put in place at every major Customs
seaport and airport under the chairmanship of Chief Commissioner of
Customs/Commissioner of Customs and include senior most functionaries of other
organisations present at aircargo for identifying and resolving bottlenecks, if
any, in the clearance procedure of imported and export goods; and resolving
grievances of members of the trade and industry in regard to clearance process
of imported and export goods. Similarly, at Central level, a 'Central Customs Clearance
Facilitation Committee' has also been set up under the chairmanship of Revenue
Secretary to address the issue relating to customs clearance and infrastructure
impacting clearance of goods.
·
Advance Passenger Information System (APIS)
:-The Advance Passenger Information System (APIS) application was rolled out at
03 more international airport namely Calicut, Trivandrum and Trichy during the
month of June, 2015. With this access to the application has now been made
available at 12 international airports in the country.
·
Precious Cargo Customs Clearance Centre (PCCCC):- This
module was made operational and few selected exporters have started using this
module. This enabled filing of approximately 200 electronics Shipping Bills
per day worth to the tune of Rs. 150 crore per day of precious cargo.
·
Revised of limit for prosecution:-For
evasion of tax under the Customs Act by wrongful declaration of exemption or
duty drawback, the limits have been revised to Rs. 1 crore from Rs. 10 lakh.
Similar revisions regarding value of goods have been carried out for appraisal
of tax during import or export. However, there shall be no lower limit for
arrest and prosecution in cases of smuggling of fake Indian currency notes,
arms, ammunition and explosives, and endangered species.
·
Cenvat
Credit Rules, 2004 have been amended so as to allow credit of Education Cess
and Secondary and Higher Education Cess (subsumed under Service tax with effect
from 1st June, 2015) paid on inputs/input services and capital
goods to be utilized for payment of service tax in specified circumstances.
RELIEF GIVEN TO TAXPAYERS
Measures
taken through Finance (No. 2) Act, 2014
·
Personal
Income-tax exemption limit raised by Rs 50,000/- that is, from Rs 2 lakh to Rs
2.5 lakh in the case of individual taxpayers, below the age of 60 years.
Exemption limit raised from Rs 2.5 lakh to Rs 3 lakh in the case of senior
citizens i.e. individuals of the age of 60 years but below the age of 80 years.
·
Investment
limit under section 80C of the Income-tax Act raised from Rs 1 lakh to Rs 1.5
lakh. This would encourage domestic investment in long term savings.
·
Deduction
limit on account of interest on loan in respect of self-occupied house property
raised from Rs.1.5 lakh to Rs.2 lakh. This would reduce the burden for middle
and lower middle class for whom housing continues to be an area of concern due
to high cost of financing.
Measures taken through Finance Act, 2015
With a view to encourage savings and to promote
health care among individual taxpayers, a number of measures have been taken by
way of incentives under the Income-tax Act. Some of these are enumerated
below:-
·
Investment
in Sukanya Samriddhi Scheme will be eligible for deduction u/s 80C and
any payment from the scheme shall not be liable to tax.
·
The
limit of deduction u/s 80D of the Income-tax Act has been increased from Rs.
15,000/- to Rs. 25,000/- on health insurance premium (in case of senior citizen
from Rs. 20,000/- to Rs. 30,000/-). Deduction of expenditure of similar amount
in case of a very senior citizen not eligible to take health insurance has been
allowed.
·
The
limit of deduction in case of very senior citizens u/s 80DDB of the
Income-tax Act on expenditure on account of specified diseases has been
increased from Rs. 60,000/- to Rs. 80,000/-. Further, rule 11DD of the
Income-tax Rules have been amended to relax the condition of obtaining the
certificate for claiming expenditure under section 80DDB in respect of
specified ailments from a specialist working in a Government hospital. As per
amended Rule 11DD, the prescription can be issued by any specialist mentioned
in the amended Rule. Henceforth, it will not be mandatory to obtain a certificate
from a specialist working in a Government hospital.
·
The
limit of deduction u/s 80DD of the Income-tax Act in respect of maintenance,
including medical treatment of a dependant who is a person with disability, has
been increased from Rs. 50,000/- to Rs. 75,000/-. The limit of deduction has
been increased from Rs. 1 lakh to Rs. 1.25 lakh in case of severe disability.
·
The
limit of deduction u/s 80U of the Income-tax Act in case of a person with
disability, has been increased from Rs. 50,000/- to Rs. 75,000/-. The
limit of deduction has been increased from Rs. 1 lakh to Rs. 1.25 lakh in case
of severe disability.
·
The
limit of deduction u/s 80CCC of the Income-tax Act on account of contribution
to a pension fund of LIC or IRDA approved insurer has been increased
from Rs. 1 lakh to Rs. 1.5 lakh.
·
The
limit of deduction u/s 80CCD of the Income-tax Act on account of contribution
by the employee to National Pension Scheme (NPS) has been increased from
Rs. 1 lakh to Rs. 1.50 lakh. A deduction of Rs. 50,000/- over and above the
limit of Rs. 1.50 lakh to any individual who makes contribution to NPS has been
allowed.
·
Sub-clause
(ii) of clause (14) of section 10 of the Income-tax Act, 1961 provides that any
allowance granted to the assessee either to meet his personal expenses at the
place where the duties of his office or employment of profit are ordinarily
performed by him or at the place where he ordinarily resides, or to compensate
him for the increased cost of living, as may be prescribed and to the extent as
may be prescribed shall not be included in the total income of the assessee.
Rule 2BB of the Income-tax Rules, 1962 prescribes such allowances. Rule 2BB was
amended vide Notification No. S.O.1002 (E) dated 13th April, 2015
and transport allowance exemption granted to an employee to meet his
expenditure for the purpose of commuting between the place of his residence and
the place of his duty was increased from Rs. 800/- per month to Rs.1600/-
per month and transport allowance exemption granted to an employee who is
blind or orthopedically handicapped with disability of lower extremities, to
meet his expenditure for the purpose of commuting between the place of his
residence and the place of his duty was increased from Rs. 1600/- per month to
Rs.3200/- per month. The benefit of exemption up to 3200/- per month in respect
of transport allowance has also been extended to an employee who is deaf and
dumb to meet his expenditure for the purpose of commuting between the place of
his residence and the place of his duty.
·
The
facility of filing self-declaration of non-deduction of tax by the recipients
of taxable maturity proceeds of life insurance policy has been provided.
·
Under
the existing provisions of the Income-tax Act, an individual buying an
immovable property from a resident is required to deduct tax but is not
required to obtain TAN for depositing the tax so deducted. The same facility
has been extended to an individual or HUF purchasing an immovable property from
a non-resident.
MEASURES
TAKEN FOR THE INTERESTS OF DOMESTIC FARMERS
·
Basic customs duty was increased on sugar from 15% to 25% which
was later increased to 40%.
·
Excise duty was exempted on ethanol produced from molasses
generated from cane crushed in the sugar season 2015-16 i.e. 1st October, 2015
onwards, for supply to the public sector oil marketing companies, namely,
Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. or Bharat
Petroleum Corporation Ltd., for the purposes of blending with petrol. Also,
input tax credit was allowed to manufacturers of such exempted ethanol.
·
Basic customs duty was increased on crude edible oils (of
vegetable origin) from 7.5% to 12.5% and refined edible oils (of vegetable
origin) from 15% to 20%.
·
Basic customs duty was increased on ghee, butter and butter oil
from 30% to 40% for a period upto and inclusive of the 31st day of March, 2016.
·
Basic customs duty of 10% was imposed on wheat which was later
increased to 25% for a period up to 31.03.2016.
·
The Customs duty concession for import of white butter, butter oil and anhydrous milk fat(AMF)
upto TRQ of 15,000 MT at Nil import duty was
withdrawn.
MEASURES
TO IMPROVE THE QUALITY OF LIFE AND PUBLIC HEALTH THROUGH SWACHH BHARAT
INITIATIVES
·
Clean Energy Cess levied on coal, lignite and peat was increased
from Rs.100 per tonne to Rs.200 per tonne.
·
Concessional customs and excise duty rates on specified parts of
Electrically Operated Vehicles and Hybrid Vehicles, available upto 31.03.2015,
was extended upto 31.03.2016.
·
Excise duty on sacks and bags of polymers of ethylene other than
for industrial use was increased from 12% to 15%.
·
An enabling provision was made to empower the Central Government
to impose a Swachh Bharat Cess on all or certain taxable services at a rate of
2% on the value of such taxable services. The provision has been implemented
with effect from 15th November, 2015 and Swachh Bharat Cess at the
rate of 0.5% has been made applicable on all services except those which are
exemptfrom Service Tax or are in the negative list.The proceeds from this Cess
would be utilized for Swachh Bharat initiatives.
·
Service provided
by a Common Effluent Treatment Plant operator for treatment of effluent was
exempted.
Measures
to promote Public Health
·
Excise duty on cigarettes was increased by 25% for cigarettes of
length not exceeding 65 mm and by 15% for cigarettes of other lengths. Similar
increases have been made on cigars, cheroots and cigarillos. Also, maximum
speed of packing machine was specified as a factor relevant to production for
determining excise duty payable under the Compounded Levy Scheme presently
applicable to pan masala, gutkha and chewing tobacco. Accordingly, deemed
production and duty payable per machine per month are being notified with
reference to the speed range in which the maximum speed of a packing machine
falls.
·
Life-saving drugs
and medicines imported by an individual for personal use are fully exempted from basis customs duty,
additional duty of customs, validity of certificate required for this purpose
has been extended for one year for regular users of such drugs.
Miscellaneous Measures
·
In
order to give impetus to banking in rural areas under thePradhanMantri Jan
DhanYojana(PMJDY) Scheme, specified services provided by Business
Facilitators/Business Correspondents with respect to a Basic Saving Bank
Deposit (BSBD) Account covered by PradhanMantri Jan DhanYojana in a banking
company’s rural area branches has been exempted from Service Tax.
·
In
keeping with the declaration of 21 June as the International Day of Yoga by UN
General Assembly, charitable activities relating to advancement of Yoga have
been exempted from Service Tax.
·
Exemption of Services provided to Government etc.:-To
avoid disputes, exemption in respect of services provided to Government or
local authority or governmental authority, by way of water supply, public
health, sanitation conservancy, solid waste management or slum improvement and up
gradation has been made more specific.
·
Rationalization work contracts:-
Categories of works contracts have been rationalized to reduce litigation and
improve compliance with a uniform service tax of 14% on 70% of the gross value
of service.
·
Innovative
Programmes Launched :The
initiatives outlines in the preceding paragraphs are aimed at facilitating
trade and achieving ease of doing business. Improvement of the facilitation
measures is a continuous process, launched to help the trade to obtain optimum
services of the Department with minimal human interface, without compromising
the interest of revenue.
MEASURES TAKEN FOR PROMOTION OF GROWTH, INVESTMENT,
MANUFACTURING AND JOB CREATION:
Measures taken through Finance (No. 2)
Act, 2014
·
Investment
allowance at the rate of 15 percent to a manufacturing company that invests
more than Rs 25 crore in any year in new plant and machinery. The benefit to be
available for three years i.e. for investments upto 31.03.2017, so as to
incentivize smaller entrepreneurs in manufacturing sector.
·
10
year tax holiday extended to the undertakings which begin generation,
distribution and transmission of power by 31.03.2017. As supply of power
continues to be a major area of concern for the country, stability in the
policy will help the investors to plan their investments better.
·
Conducive
tax regime has been provided for Infrastructure Investment Trusts and Real
Estate Investment Trusts to be set up in accordance with regulations of the
Securities and Exchange Board of India. This would facilitate growth in
Infrastructure and construction sectors which have a significant role in the
revival of the economy and generation of jobs.
·
Accelerated
depreciation on wind power projects has been decided to be restored.
·
Income
arising to foreign portfolio investors from transaction in securities to be
treated as capital gains. This would remove uncertainty
in taxation on account of characterization of their income and would encourage
flow of funds from FIIs.
·
Concessional
rate of 15 percent on foreign dividends has been allowed without any sunset
date.
·
The
eligible date of borrowing in foreign currency extended from 30.06.2015 to
30.06.2017 for a concessional tax rate of 5 percent on interest payments. Tax
incentive extended to all types of bonds instead of only infrastructure bonds.
Measures proposed through Finance
Bill, 2015
·
With
a view to streamline the taxation regime of Alternative Investment Funds
(AIFs), pass through status to all the sub-categories of category-I and also to
category-II AIFs governed by the regulations of Securities and Exchange Board
of India (SEBI) has been provided.
·
With
a view to facilitate relocation of fund managers of offshore funds in India,
the permanent establishment (PE) norms have been modified.
·
Additional
investment allowance (@15%) and additional depreciation to new manufacturing
units set-up during the period 01.04.2015 to 31.03.2020 in notified areas of
Andhra Pradesh, Bihar, West Bengal and Telangana has been provided.
·
The
period of applicability of reduced rate of tax at 5% in respect of income of
foreign investors (FII and QFI) from corporate bonds and government securities
has been extended from 31.5.2015 to 30.06.2017.
·
With
a view to obviate the problems faced by small companies and to facilitate the
inflow of technology, the rate of tax on royalty and fees for technical
services has been reduced from 25% to 10%.
·
With
a view to facilitate generation of employment, the tax benefit in the form of
30 % deduction of additional wages for 3 years has been extended to every
‘person’ (rather than to only a company) deriving profits from manufacture of
goods in a factory and paying wages to new regular workmen in excess of 50 workmen
employed during the year.
Reduction
in duty on certain inputs to address the problem of duty inversion:
·
‘Metal
parts’ for use in the manufacture of electrical insulators.
·
Ethylene-Propylene-non-conjugated-Diene
Rubber (EPDM), Water blocking tape
and
Mica glass tape for use in the manufacture of insulated wires and cables.
·
Magnetron
upto 1 KW for use in the manufacture of microwave ovens.
·
C-
Block for Compressor, Over Load Protector (OLP) & Positive thermal
co-efficient and Crank Shaft for compressor, for use in the manufacture of
Refrigerator compressors.
·
Zeolite,
ceria zirconia compounds and cerium compounds for use in the manufacture of
washcoats, which are further used in manufacture of catalytic converters.
·
Anthraquinone
for manufacture of hydrogen peroxide.
·
Sulphuric
acid for use in the manufacture of fertilizers.
·
Parts
and components of Digital Still Image Video Camera capable of recording video
with minimum resolution of 800x600 pixels, at minimum 23 frames per second, for
at least 30 minutes in a single sequence, using the maximum storage (including
the expanded) capacity.
Reduction
in Basic Customs Duty to reduce the cost of raw materials required for further
manufacture and thereby induce domestic venue addition:
·
Ethylene
dichloride (EDC), vinyl chloride monomer (VCM) and styrene monomer (SM) from
2.5% to 2%.
·
Isoprene
and Liquefied butanes from 5% to 2.5%.
·
Butyl
acrylate from 7.5% to 5%.
·
Ulexite
ore from 2.5% to Nil.
·
Antimony
metal, antimony waste and scrap from 5% to 2.5%.
·
Specified
components for use in the manufacture of specified CNC lathe machines and
machining centres from 7.5% to 2.5%.
·
Certain
specified inputs for use in the manufacture of flexible medical video
endoscopes from 5% to 2.5%.
·
HDPE
for use in the manufacture of telecommunication grade optical fibre cables from
7.5% to Nil.
·
Black
Light Unit Module for use in the manufacture of LCD/LED TV panels from 10% to
Nil.
·
Organic
LED (OLED) TV panels from 10% to Nil.
·
CVD
and SAD are being fully exempted on specified raw materials [battery, titanium,
palladium wire, eutectic wire, silicone resins and rubbers, solder paste, reed
switch, diodes, transistors, capacitors, controllers, coils (steel), tubing
(silicone)] for use in the manufacture of pacemakers.
·
Evacuated
Tubes with three layers of solar selective coating for use in the manufacture
of solar water heater and system to Nil.
·
Active
Energy Controller (AEC) for use in the manufacture of Renewable Power System
(RPS) Inverters to 5%, subject to certification by MNRE.
·
Parts,
components and accessories (falling under any Chapter) for use in the
manufacture of tablet computers and their sub-parts for use in manufacture of
parts, components and accessories are being fully exempted from BCD, CVD and
SAD.
Reduction
in SAD to address the problem of CENVAT credit accumulation:
·
All
goods except populated PCBs, falling under any Chapter of the Customs Tariff,
for use in manufacture of ITA bound goods from 4% to Nil.
·
Naphtha,
ethylene dichloride (EDC), vinyl chloride monomer (VCM) and styrene monomer
(SM) for manufacture of excisable goods from 4% to 2%.
·
Metal
scrap of iron & steel, copper, brass and aluminium from 4% to 2%.
·
Inputs
for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures
and LED lamps from 4% to Nil.
Miscellaneous:
·
Export
duty on upgraded ilmenite is being reduced from 5% to 2.5%.
·
Excise
duty structure for mobiles handsets including cellular phones is being changed
from 1% without CENVAT credit or 6% with CENVAT credit to 1% without CENVAT
credit or 12.5% with CENVAT credit.
·
Excise
duty structure of 2% without CENVAT credit or 12.5% with CENVAT credit is being
prescribed for tablet computers.
·
Basic
Customs Duty on Digital Still Image Video Camera capable of recording video
with minimum resolution of 800x600 pixels, at minimum 23 frames per second, for
at least 30 minutes in a single sequence, using the maximum storage (including
the expanded) capacity is being reduced to Nil. Basic Customs Duty on parts and
components of these cameras is also being reduced from 5% to Nil.
·
Concessional
customs duty structure of Nil Basic Customs Duty, 6% CVD and Nil SAD on
specified parts of electrically operated vehicles and hybrid vehicles,
presently available upto 31.03.2015, is being extended upto 31.03.2016.
Excise
duty structure on certain goods is being restructured as follows:
·
Wafers
for use in the manufacture of integrated circuit (IC) modules for smart cards
from 12% to 6%.
·
Inputs for use in the manufacture of LED drivers and MCPCB for LED lights,
fixtures and LED lamps from 12% to 6%.
·
Mobiles
handsets, including cellular phones from 1% without CENVAT credit or 6% with
CENVAT credit to 1% without CENVAT credit or 12.5% with CENVAT credit. NCCD of
1% on mobile handsets including cellular phones remains unchanged.
·
Tablet
computers from 12% to 2% without CENVAT credit or 12.5% with CENVAT credit.
·
Specified raw materials [battery, titanium, palladium wire,
eutectic wire, silicone resins and rubbers, solder paste, reed switch, diodes,
transistors, capacitors, controllers, coils (steel), tubing (silicone)] for use
in the manufacture of pacemakers to Nil.
·
Pig
iron SG grade and Ferro-silicon-magnesium for use in the manufacture of cast
components of wind operated electricity generators to Nil, subject to
certification by MNRE.
·
Solar
water heater and system from 12% to Nil without CENVAT credit or 12.5% with
CENVAT credit.
·
Round
copper wire and tin alloys for use in the manufacture of Solar PV ribbon for
manufacture of solar PV cells to Nil subject to certification by Department of
Electronics and Information Technology (DeitY).
Miscellaneous:
·
Excise
duty on leather footwear (footwear with uppers made of leather of heading 4107
or 4112 to 4114) of Retail Sale Price of more than ` 1000 per pair from 12% to
6%.
·
Excise
duty levied on the value of duty paid on rails for manufacture of railway or
tramway track construction material is being exempted retrospectively for the
period from 17.03.2012 to 02.02.2014, if no CENVAT credit of duty paid on such
rails is availed.
·
Reduction in abatement limit:-Uniform
abatement of 70% from gross value prescribed for transport by rail, road and
vessel. Service Tax in all these cases will now be charged on 30% of the gross
value of such service subject to non-availment of Cenvat Credit on inputs,
capital goods and input services.
·
In order to allocate additional resources to infrastructure,
the effective rates of Additional Duty of Customs / Excise levied
on Petrol and High Speed Diesel Oil [commonly known as Road Cess] have been
increased from Rs.2 per litre to Rs.6 per litre.
MEASURES TAKEN FOR SIMPLIFICATION OF PROCEDURES AND BETTER
TAXPAYER SERVICES:
Issue of PAN: PAN
(Permanent Account Number) is a 10 digit alpha-numeric number allotted by the
Income Tax Department to taxpayers and to the persons who apply for it under
the Income Tax Act, 1961. PAN number enables the department to link all
transactions of the “person” with the department. These transactions include
tax payments, TDS/TCS credits, returns of income, specified transactions,
correspondence, and so on. PAN, thus, acts as an identifier for the “person”
with the Income tax department. In fact, PAN has now taken on the role of
“identifier” beyond the Income tax department as it is now required for various
activities like opening of bank account, opening of demat accounts, obtaining
registration for Service Tax, Sales Tax / VAT, Excise registration etc.
PAN
database has shown steady growth in tune with economic progress. The
progressive number of PANs allotted till 31st March, 2015 is
22,32,47,190. During the current year (up to 31st March 2015) 1,86,04,948PANs
have been allotted.
E-Biz
programme is a mission mode project of Department of Industrial Policy and
Promotion (DIPP), Ministry of Commerce and Industry to facilitate the investors
by providing SINGLE WINDOW clearance like licensing, environment & land clearances,
approvals from various ministries and departments for start-up businesses.
Level -1 integration of PAN & TAN services with E-biz platform has been
completed.
E-filing of Income Tax Returns: The
e-filing project is an eminent e-governance and e-delivery measure taken by the
Income Tax Department for providing web- enabled services to the taxpayers. The
project aims at enabling e-filing of Income tax returns, audit reports and
other Forms prescribed under the Income Tax over Internet directly by taxpayers
and through e-return intermediaries (ERIs).The project also provides other web-
enabled services to facilitate public private participation in the filing of
returns.
In
Financial Year, 2014-15, 341.73 Lakh returns were received through e-filing,
representing a growth of around 15.14% as compared to the last year. In
F.Y.2015-16, 2.06 Crore returns have been received on the e-filing portal till
07.09.2015 registering an increase of 26.12% over the corresponding period of
the preceding financial year. As on 07.09.2015 Central Processing Centre
Processed 45.18 Lakh Returns Relating to the A.Y. 2015-16 and issued refunds to
22.14 lakh taxpayers for the A.Y.2015-16. More than 90% of the returns filed in
FY 2015-16 have been filed electronically.
Centralized Processing Center (CPC)
for Income Tax Returns: This
project enables Centralized Processing of all e-filed Income Tax returns, and all
paper returns also of Karnataka and Goa, at Bengaluru. CPC has processed in
excess of 9.25 crore E- Returns till 31st March 2015 against the
projected 2.7 crore e-filed returns that CPC was to process in the initial 5
years. CPC has processed 3.07 crore returns of income during Financial Year
2014-15 with a growth rate of 26%, over 2.44 crores processed during Financial
Year 2013-14. CPC has achieved a peak processing capacity of 3.78 lakh returns
per day.
Refund Banker: The Refund Banker project has enabled
system driven process for determination, generation, issue, dispatch and credit
of refunds. This project has made the process of delivery of refund completely
automated, speedy and transparent. The refund is directly credited to the bank
account of the taxpayer through ECS as soon as it is determined.
A
web based status tracking facility in collaboration with India Post and
National Securities Depository Ltd. (NSDL) is available under the Scheme. Call
centre facility with toll free number 1800-42-59-760 is also available for
tracking status of refunds issued through the scheme.There has been a steady
increase in number and percentage of refunds issued through the scheme. During
Financial Year, 2014- 2015, the percentage of refunds issued through the scheme
was 99.84% of the total number of refunds issued all over India.
E-Payment of taxes: The E-Payment project has enabled online
payment of all direct taxes using net banking facility. The scheme provides for
ease of payment anytime, anywhere. With effect from 1 April, 2008, e-payment of
direct taxes was made mandatory for all Companies and auditable cases covered
by section 44AB of I. T. Act. E-payment facility has been now extended to 30
agency banks collecting direct taxes. SBI has started the e-payment facility
online through its debit cards as well. Facility of payment of direct taxes has
been launched through ATMs of certain banks.In Financial Year 2014-15 the count
and amount of e-tax payments was 64.20 % and 87.00% respectively.
Project Insight:The
Income Tax Department has initiated ‘Project Insight’ on Data Warehouse
and Business Intelligence (DW&BI) platform to strengthen the non-intrusive
information driven approach for improving compliance and effective utilization
of information in all areas of tax administration.
The
Project will integrate
enterprise data warehouse, data mining, web mining, predictive modelling, data
exchange, master data management, centralized processing, compliance risk
management and case analysis capabilities. A Compliance Management Centralized
Processing Centre (CMCPC) will also be set up under the Project to
handle
resource intensive repetitive tasks and ensure optimum
resource mobilizationwithin ITD for
high skill work. The Project is
also envisaged to meet the requirements relating to Foreign Account Tax
Compliance Act (FATCA), Common Reporting Standard (CRS) and Automatic Exchange
of Information.The project is expected to be rolled out in 2016.
Income Tax Business Application(ITBA)_:
Income
Tax Business Application is the flagship project of the Department for
automating all the processes of the Department in the foreseeable future. The
project involves re-writing of the existing application, adding yet untouched
processes and automating the Human Resource related aspects of the Department.
The project is distinct in so far as a single vendor is responsible for
hardware application as well as its performance and the performance is
calibrated against strict Service Level Agreements. The Project is being rolled
out in the current Financial Year.
Project Name: OLTAS (Online Tax
Accounting System)
OLTAS
project integrates online tax payments made by tax payers with the running
ledger accounts of tax payers maintained by the income tax department for tax
credit. OLTAS functions in close coordination with RBI, Agency Banks and TIN
(presently being managed by NSDL).
The
objective of OLTAS project was to do away with the paper trail for tax credit
and paper validation system. OLTAS project has been one of the landmark
e-governance initiatives undertaken by the department. Under the project, all
payments made in bank are uploaded on T+3 basis. Cash payment can be mapped
with the bank and the assessee with PAN/TAN irrespective of the place of
payment. A country wide network of 30 agency banks and their 13,000 branches
including 3 private sector banks are authorized by the RBI for collecting
direct tax payments under OLTAS.
Project AST
AST
refers to the existing core module of the Income Tax Department and takes care
of Assessment related functions wherefore it interacts with all the modules
including AIS (PAN), TDS (Tax Deduction At Source), OLTAS (Online Tax
Accounting System), E-filing, CPC-ITR Bengaluru, CIB (including AIR) etc for
obtaining vital information for the functioning of all the modules. The System
takes care that processing in different systems is coordinated and
discrepancies, if any, resolved.
Digitization
of paper returns and maintenance of online registers as well as processing and
post processing activities such as scrutiny, appeal effects, rectification and
penalty proceedings are also done in AST.
Non-filers Monitoring System (NMS)
The
Non-filers Monitoring System (NMS) was implemented as a pilot project to
prioritize action on non-filers with potential tax liabilities. Data analysis
was carried out to identify non-filers about whom specific information was
available in AIR, CIB data and TDS/TCS Returns. NMS cycle 1 (2013) and NMS
Cycle 2 (2014) identified 12.19 lakhand22.09 lakh non-filers with
potential tax liabilities.
NMS
Cycle 3 (for AY 2013-14) identified 44.07 lakh non-filers and NMS
4 (for AY 2014-15)58.95 lakhnon-filerswith potential
tax liabilities. The results of the pilot project are very encouraging and
many taxpayers have paid self-assessment tax and filed returns after initiation
of the pilot project.
A
target to add 1 crore new taxpayers during FY 2015-16 has been set by CBDT for
the field units and all out efforts are underway to achieve the same. 26.59
lakh new taxpayers have been added upto 20th Sep 2015.
National Website of the Income Tax Department http://incometaxindia.gov.in
A
major initiative to enhance taxpayer services was launched by the Income Tax
Department on 22.09.2014 with the
unveiling of the new National Website (www.incometaxindia.gov.in).
This website is a one-stop-shop for all taxpayers, prospective taxpayers,
common citizens, tax professionals, non-residents and even students for
accessing all taxpayer services and information in a simplified and
user-friendly manner. One of the most educative sites, built on state of the
art technology, this website has a
rich repository of more than 100 Tax and allied Laws, Rules, Circulars and
Notifications which are cross-referenced & hyperlinked for users’
convenience and useful features
like the Tax Calendar, Tax
Calculators, Charts & Tables, Tutorials, Utilities, Dictionary, DTAA Treaty
comparison utility, exempted institutions. All Income Tax returns, forms and
challans are available here for downloading in bilingual mode in an easily
fillable format.
Centralized Processing Cell-TDS (CPC-TDS)
The Centralized Processing
Cell for Tax Deduction at source (CPC-TDS) is a technology driven initiative of
the Income Tax Department to put in place Non-Intrusive, Non-Adversarial TDS
administration in the country. The robust technology platform has been
leveraged to provide value added services to more than 15 lakh deductors, 4
crores taxpayers from all over India and abroad and more than 500 officers of the Income Tax Department who are
administering the TDS across India.
It undertakes end to end processing
of TDS statements through a Rule Based Technology enabled system and offers’
e-enabled services that are accessible on any-time, any-where basis with no
cost to the taxpayers / deductors.The rule based automated processing of
‘Statements’ facilitates uniform interpretation of laws results and faster
turnaround time besides ensuring seamless flow of data for tax credits. CPC-TDS
introduces transparency in the processes through online display of information
and provides an integrated platform for tax deductors, taxpayers and the
officers of Income tax department. Centralized Processing Cell (TDS) provides a
comprehensive solution to deductors through ‘Tax Deduction, Reconciliation,
Analysis and Correction Enabling System (TRACES)’ - India is one of the very
few countries to put in place an initiative of this scale for reconciliation of
Tax Deducted at Source.
E-Sahyog:
“E-Sahyaog” pilot project was launched as an online mechanism to
resolve mismatches in income-tax return through end to end e-service obviating
the need to visit income-tax office by the taxpayer.Under this initiative the
Department will provide an end to end e-service using SMS, e-mails to inform
the taxpayers of the mismatch. The taxpayer will simply need to visit the
e-filing portal and log in with their user-ID and password to view mismatch
related information and submit online response on the issue. The responses
submitted online by the taxpayers will be processed and if the response and
other information are found satisfactory as per automated closure rules, the
issue will be closed. The taxpayer can check the updated status by logging in
to the e-filing portal.
E- verification of return of income: To facilitate the taxpayers and to provide end-to-end e-enabled
services, a system of electronic verification of return of income has been
launched by CBDT. A taxpayer can now verify his electronically-filed return
through internet banking portal or through Aaadhar-based authentication
process. For the small taxpayers, an Electronic Verification Code (EVC) can
also be generated through the e-filing website of the Income Tax Department.
Persons using this facility will not be required to submit paper-based ITR-V
verification form to CPC Bengaluru. About 33 lakh e-returns have been verified
through EVC till 07.09.2015.
Constitution of Committee to recommend measures for
simplification of the Income Tax Act, 1961:
A committee under Justice (Retd.) R.V. Easwar has been constituted
to recommend measures for simplification of the Income-tax Act, 1961 with a
view to reduce litigation and promote ease of doing business.
The Government has accepted the report
of Justice A.P. Shah Committee that Minimum Alternate Tax (MAT) is not applicable to Foreign Portfolio Investors (FPIs). Further
it has also been decided that a foreign company not having a permanent
establishment in India shall not be liable to MAT with effect from 01.04.2001.
Accordingly, Instruction No.9/2015 dated 02.09.2015 has been issued to the
field units of the Income Tax Department to keep in abeyance the pending
assessment proceedings in such cases.
Introduction of GST bill in Parliament
in December, 2014:
One
of the most significant achievements of the Government during this year has
been the introduction of Constitution (122nd) Amendment bill, 2014
in the LokSabha on 19.02.2014 to facilitate introduction of Goods and Services
Tax in the country. This Bill has been passed by LokSabha on 06.05.2015.
The
proposed amendment in the Constitution will confer powers both to the
Parliament and State legislatures to make laws for levying GST on the supply of
goods and services in the same transaction. GST will simplify and harmonise the
indirect tax regime in the country. GST will broaden the tax base, and result
in better tax compliance due to a robust IT infrastructure. Due to the
seamless transfer of input tax credit from one state to another in the chain of
value addition, there is an in-built mechanism in the design of GST that would
incentivize tax compliance by traders. It is thus, expected that introduction
of GST will foster a common and seamless Indian market and contribute
significantly to the growth of the economy. Bringing States to a broad
consensus on the issue was an uphill task which this Government achieved
successfullyThe Government proposes to roll out Goods and Services Tax (GST) in
the country in the year 2016.
STEPS TAKEN TO CURB BLACK MONEY:
·
Constitution of
Special Investigation Team(SIT)
Constitution of a Special
Investigation Team (SIT), in May 2014, with two former judges of the Hon'ble
Supreme Court as Chairman and Vice-Chairman, inter alia, to deal with issues
relating to black money stashed abroad;
·
Introduction of
Undisclosed Foreign Income and Assets(Imposition of Tax) Bill, 2015
In
order to fulfill the commitment made by the Government to the people of India
through the Parliament, the Black Money (Undisclosed Foreign Income and Assets
(Imposition of Tax)) Act, 2015 has been enacted. Relevant rules [Black
Money(Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015]
under the said Act have been framed. Explanatory circular and Several
circulars in the form of Frequently Asked Questions(FAQs) have been issued to
clarify provisions relating to one time compliance window under the Act. The
salient features of the Undisclosed Foreign Income and Assets (Imposition of
Tax) Bill, 2015 are as under:-
·
Rate of tax and penalty
- Undisclosed foreign income or assets shall be taxed at the flat rate of 30
percent without any exemption, deduction or set off of any carried forward
losses. The penalty for non-disclosure of income or an asset located outside
India will be equal to three times the amount of tax payable thereon, i.e., 90
percent of the undisclosed income or the value of the undisclosed asset, in
addition to tax payable at 30%.
The
act also provides for stringent penalties and enhanced punishment for violation
of various provisions. Prevention of Money Laundering Act(PMLA), 2002 has been
amended to include offence of tax evasion under this Act, as a scheduled
offence under PMLA.
·
Failure to furnish return in respect of foreign
income or assets shall attract a penalty of Rs.10 lakh.
This will also be punishable with rigorous imprisonment for a term of six
months to seven years. The same amount of penalty is prescribed for cases where
although the assessee has filed a return of income, but he has not disclosed
the foreign income and asset or has furnished inaccurate particulars of the
same.
·
The punishment for willful attempt to evade tax
in relation to a foreign income or an asset located outside India will be
rigorous imprisonment from three years to ten years. In addition, it will also
entail a fine.
·
Abetment
or inducement of another person to make a false return or a false account or
statement or declaration under the Act will be punishable with rigorous
imprisonment from six months to seven years. This provision will also apply to
banks and financial institutions aiding in concealment of foreign income or
assets of resident Indians or falsification of documents.
·
To protect persons holding foreign accounts with
minor balances which may not have been reported out of
oversight or ignorance, it has been provided that failure to report bank
accounts with a maximum balance of upto Rs.5 lakh at any time during the year
will not entail penalty or prosecution.
·
One time compliance opportunity
- The Black Money Act also provided a one-time compliance opportunity for a
limited period (from 1st July, 2015 to 30th September,
2015) to persons who have any undisclosed foreign assets which have hitherto
not been disclosed for the purposes of Income-tax. Such persons were allowed to
file a declaration before the specified tax authority. The declarants are
required to pay tax at the rate of 30 percent and an equal amount by way of
penalty. Such persons will not be prosecuted under the stringent provisions of
the new Act.Rs. 4147 crore of Undisclosed foreign assets have been declared
vide 638 declarations under the one time compliance opportunity.
·
Benami Transactions(Prohibition) Bill
·
As
regards curbing domestic black money, a new and more comprehensive, the Benami
Transactions (Prohibition) Amendment Bill, 2015 has been introduced in LokSabha
to amend the Benami Transactions (Prohibition) Act(BTPA) 1988. The new amended
law will enable confiscation of Benami property and provide for prosecution,
thus blocking a major avenue for generation and holding of black money in the
form of Benami property, especially in real estate.
·
Prevention of Money Laundering
Act(PMLA):
The
offence of concealment of income or evasion of tax in relation to a foreign
asset will be made a predicate offence under the Prevention of Money Laundering
Act, 2002 (PMLA). This provision would enable the enforcement agencies to
attach and confiscate unaccounted assets held abroad and launch prosecution
against persons including in laundering of black money.
Amendment
of PMLA:
The
definition of ‘proceeds of crime’ under PMLA is being amended to enable
attachment and confiscation of equivalent asset in India where the asset
located abroad cannot be forfeited.
·
Inclusion of predicate offences:
- Undisclosed Foreign Income and
Assets(Imposition of Tax) Bill, 2015 also proposes to amend Prevention
of Money Laundering Act (PMLA), 2002 to include offence of tax evasion under
the proposed legislation as a scheduled offence under PMLA.
·
Section 132 of the Customs Act, 1962 has been included in Finance
Bill, 2015 making false declaration as predicate offence.
·
Thus,
in keeping with the commitment of the government for focussed action on black
money front, an unprecedented and multi-pronged attack has been launched to
root out the menace of black money. The Government is confident that this new
law will act as a strong deterrent and curb the menace of black money stashed
abroad by Indians.
·
FEMA
·
Necessary amendments has been proposed in the FEMA by inserting
Section 37 (1), (2) & (3) vide clause 168 of the Finance Bill, 2015
incorporating special provisions relating to assets held outside India in
contravention of section 4. The Foreign Exchange Management Act, 1999 (FEMA) is
also being amended to the effect that if any foreign exchange, foreign security
or any immovable property situated outside India is held in contravention of the
provisions of this Act, then action may be taken for seizure and eventual
confiscation of assets of equivalent value situated in India. These
contraventions are also being made liable for levy of penalty and persecution
with punishment of imprisonment upto five years.
·
Automatic Exchange of Information(AEOI):
·
Joining the global
efforts to combat tax evasion, including supporting implementation of a uniform
global standard on Automatic Exchange of Information on a fully reciprocal basis, facilitating
exchange of information regarding persons hiding money in offshore centres.
·
Legislative
measures, wherever required, including amendment to section 285BA of the Income-tax Act, 1961 vide Finance (No.2) Act, 2014 facilitating
the Automatic Exchange of Information.
·
Limiting Cash
transaction:
·
A
few other measures are also proposed in the Budget for curbing black money
within the country. The Finance Bill includes a proposal to amend the Income
Tax Act to prohibit acceptance or payment of an advance of Rs. 20,000 or more
in cash for purchase of immovable property. Quoting of PAN is being made
mandatory for any purchase or sale exceeding the value of Rs. 1 lakh. The
third party reporting entities would be required to furnish information about foreign
currency sales and cross border transactions. Provision is also being made to
tackle splitting of reportable transactions. To improve enforcement, CBDT and
CBEC will leverage technology and have access to information in each other’s
database.
DEPARTMENT OF FINANCIAL SERVICES (DFS),
Department
of Financial Services (DFS), Ministry of Finance is a nodal department as far
as banking and insurance sector in the country is concerned. In the current
fiscal, Department of Financial Services has taken various initiatives and
launched different Financial Inclusion & Social Security related Schemes in
its pursuit of achieving the goal of Universal Financial Inclusion.
The
major achievements of the Department during the Current Fiscal are as follows :
1.
PRADHAN MANTRI JAN DHAN YOJANA (PMJDY) : "Mera Khata -
Bhagya Vidhaata"
The biggest
financial inclusion initiative in the world was announced by the Prime Minister
on 15th August 2014 and Mega launch was done by him on 28th August 2014 across
the country. This National Mission on Financial Inclusion has an ambitious
objective of covering all households in the country with banking facilities and
having a bank account for each household. It has been emphasized by the Prime
Minister that this is important for including people left-out into the
mainstream of the financial system.
The Government started the PMJDY to provide 'universal access
to banking facilities' starting with "Basic Saving Bank Account" with
an overdraft upto Rs.5000 subject to satisfactory operation in the account for
six months and RuPay Debit card with inbuilt accident insurance cover of Rs. 1
lakh .
Achievements
·
As
on 11th November 2015, Banks have
opened 19.21 Crore accounts under PMJDY with deposit of more than 26819
crores. Rupay cards issued to 16.51 Cr. customers.
·
Two
lakh accounts are opened per day
·
As
on13th November 2015 more than 45.98
lakhs accounts have been offered Overdraft facility. Out of these overdraft
facility has been availed by 8.86 lacs account holders amounting to Rs.
124.95 Lacs.
·
1336 Claims of Life cover
of Rs.30000 and 333 Claims of accident insurance cover of Rs. 1 lakh have been paid till 13th
November 2015.
·
Zero
balance accounts in PMJDY have declined from 76% to 36.50 % from
September 2014 to 11th November 2015.
·
For providing Banking access in the country,
out of total 159920 Sub-Service Areas (SSAs), 126003 SSAs have
been covered through fixed location Bank Mitrs & 33100 SSAs have
been covered through branches as on 13th
November 2015. 817 SSAs are
uncovered due to connectivity issue.
·
To
ensure universal banking access more than 1.26 lakh Bank Mitrs have been
deployed with on- line devices capable of e-KYC based account opening and
significant number with interoperable payment facility.
·
Jan Dhan Yojana features in
Guinness Book of World Records: Guinness
World Records recognised the achievements made under PMJDY for opening
18,096,130 accounts by Banks in a week (from 23 to 29 August, 2014) as a part
of Financial Inclusion Campaign.
·
Payment of wages under
MNREGA: More than Rs 4273
crore have been routed through these accounts till June 2015 towards payment of
wages under MNREGA. (Source: MNREGA, Ministry of Rural Development).
·
DBTL transactions: Transfer of subsidy of more than Rs 17446
crore through Jan Dhan accounts from November 2014 to 31st July
2015. (Source: Ministry of Petroleum & Natural Gas).
Pradhan Mantri Jan - Dhan Yojana
(Accounts Opened as on 02.12.2015)
(All Figures in Crores)
Bank
Name
|
RURAL
|
URBAN
|
TOTAL
|
NO
OF RUPAY CARDS
|
AADHAAR
SEEDED
|
BALANCE
IN ACCOUNTS
|
%
OF ZERO-BALANCE-ACCOUNTS
|
Public
Sector Bank
|
8.39
|
6.80
|
15.20
|
13.46
|
7.03
|
21450.31
|
34.54
|
Regional
Rural Bank
|
2.99
|
0.50
|
3.49
|
2.51
|
0.98
|
4683.38
|
32.09
|
Private
Banks
|
0.44
|
0.29
|
0.73
|
0.64
|
0.23
|
1149.36
|
41.10
|
Total
|
11.82
|
7.60
|
19.41
|
16.61
|
8.24
|
27283.06
|
34.31
|
2. PRADHAN
MANTRI MUDRA YOJANA (PMMY)
: “ FUND THE UNFUNDED”
In the Union Budget 2015-16, the Finance
Minister proposed to create a Micro Units Development Refinance Agency (MUDRA)
Bank. Pradhan
Mantri Mudra Yojana (PMMY) has been launched by the Prime Minister on 8th
April, 2015 to provide formal access to credit for Non –Corporate Small
Business Sector. Any Indian Citizen who has a business plan for a non-farm
sector income generating activity such as manufacturing, processing, trading or
service sector and whose credit need is less than10 lakh can approach either a
Bank, MFI, or NBFC for availing of MUDRA loans under Pradhan Mantri Mudra
Yojana (PMMY).
Categories of
loans:
Ø
Loans
upto Rs. 50,000 - Shishu
Ø
Loans
above Rs.50, 000 and upto Rs. 5.0 lakh - Kishore
Ø
Loans
above Rs.5.0 lakh and upto Rs. 10 lakh - Tarun
MUDRA
Card is an innovative credit product wherein the borrower can avail of credit
in a hassle free and flexible manner. Public Sector Banks
have been allocated a total target of Rs.70,000 crore, and private sector/
Foreign Banks a target of Rs 30000 cr. The RRBs were given a target of Rs 22000
crore. Altogether, the target for loan disbursement under PMMY for F.Y 2015-16
is fixed at 1,22,000 crore.
Achievements
·
Total
Amount disbursed under PMMY- Rs. 45948.28 crore as on 25.11.2015.
·
Total
No of borrowers-66,00,241
·
Women
borrowers-23,50,542
·
New
Entrepreneurs- 3286094
·
SC/ST/OBC
borrowers- 2201944
·
Total
Mudra Card issued - 198499
·
No
of Shishu Loans have nearly gone-up nearly six fold (from 7.2 lac to 47 Lac)
and the amount disbursed shows a 283% hike. (from Rs. 1835 Cr. to Rs 7046 Cr.)
·
In
the Kishore loan category, disbursements have increased by 91% (from Rs. 8156
Cr. to Rs. 15704 Cr.)
·
In
the Tarun Loan category, disbursements have increased by 21% (from Rs. 7851 Cr.
to Rs. 9501 Cr.)
JAN DHAN
SE JAN SURAKSHA
3. ATAL PENSION YOJANA
(APY)
The Government
of India has introduced a pension scheme called the Atal Pension Yojana (APY),
with effect from 1st June, 2015, pursuant to the announcement in the Budget for
2015-16 on creating a universal social security system for all Indians,
especially the poor, the under-privileged and the workers in the unorganised
sector. APY is being administered by the Pension Fund Regulatory and
Development Authority (PFRDA) under the overall administrative and
institutional architecture of the National Pension System (NPS).
APY is being
operationalised through CBS enabled Banks. Public Sector Banks, Private Sector
Banks, Regional Rural Banks, Apex Cooperative Banks and District Central
Cooperative Banks have already started the process of mobilization and registration
of the subscribers’ under Atal Pension Yojana.
Achievements:
A total of 10.35
lakh subscribers have been enrolled under the Scheme as on 24.11.2015.
4. PRADHAN
MANTRI SURAKSHA BIMA YOJANA (PMSBY)
The Pradhan
Mantri Suraksha BimaYojana (PMSBY) is a one year personal accident
insurance scheme, annually renewable offering coverage of Rs. two lakh for
death or permanent total disability and Rs. one lakh for permanent partial
disability due to an accident. It is available to people in the age group of 18
to 70 years.
— Subscription
material made available in all regional languages.
— An exclusive
website www.jansuraksha.gov.in created by DFS with all relevant material /
information, including forms, FAQs etc.
— State wise toll
free numbers allotted to respond to queries of the customers.
Achievements
— Gross
enrolment reported by Banks is 9.16 crore under PMSBY as on 24.11.2015.
— Under
PMSBY the share of Public Sector Banks (including RRBs) is 93.2%.
·
As on 23.11.2015, 1491Claims were registered under PMSBY, 740 have
been disbursed.
5. PRADHAN MANTRI
JEEVAN JYOTI BIMA YOJANA (PMJJBY)
The Pradhan
Mantri Jeevan Jyoti BimaYojana (PMJJBY) is a one year life insurance
scheme, annually renewable offering coverage of Rs. two lakh for death due to
any reason and is available to people in the age group of 18 to 50 years (life
cover up to age 55 on payment of premium after enrolment up to age 50 years).
— Subscription
material made available in all regional languages.
— An exclusive
website www.jansuraksha.gov.in created by DFS with all relevant material /
information, including forms, FAQs etc.
— State wise toll
free numbers allotted to respond to queries of the customers.
Achievements
— Gross
enrolment reported by Banks is 2.86 crore under PJJSBY as on 24.11.2015.
— Under
PMJJBY the share of Public Sector Banks (including RRBs) is 91%.
·
As on 23.11.2015, 8558 were registered under PMJJBY, 5955 have
been disbursed.
***********************
Ø Pre 2014-15: In the pre
2014-15 periods, the approach to disinvestment was based on identification of
stocks on an annual plan basis. This often resulted in problems like delay in
approaching the market, hammering of stocks, overhang, lack of flexibility in
divestment of stocks, etc.
Ø 2014-15:With a view to address
these problems, during last two quarter of 2014-15 a rolling plan approach was
adopted with advance preparation/planning, fast tracking the approval process,
maintaining secrecy so as to avoid hammering of stocks and concluding
disinvestment of Government of India (GoI) shareholdings in CPSEs in a time
bound and focused manner. As a result, the Government could
achieved the highest ever disinvestment receipts of Rs. 24,349 crore
in a single FY 2014-15, that too only in last 6 months period of the financial
year. This is even higher than the annual average of Rs. 9,593 crore between
2000-2014.
Disinvestment Target 2015-16:The budget estimate (BE) for disinvestment during the year 2015-16
is Rs. 69,500 crore. This comprises Rs. 41,000 crore from disinvestment of
Central Public Sector Enterprises (CPSEs) and Rs. 28,500 crore from “strategic
disinvestment”.
Measures
to accelerate the disinvestment process
Ø Keeping
in view the budgeted target of disinvestment for 2015-16, the Department of Disinvestment (DoD) has
taken further measures to accelerate the disinvestment process by taking the
following measures :
v Replacing
annual plan with rolling plans
v Creating
a pipeline of proposals for CPSEs, which at present, are at different stages of
approval.
v Fast
tracking of approval process
v Secrecy
maintained to prevent hammering of stocks
v Changing
system for engagement of intermediaries to speed up transactions.
v Disinvestment
programme made more inclusive by following an approach to reserve 20 per cent
of shares on PSUs-OFS transactions on a case to case basis.
2015-16
Performance
Ø As
a result of these initiatives, the department has been able to raise around Rs.
12,700 crore (approx.) through 4 OFS issues of REC, PFC, DCIL and IOC
Limited during the first two quarters of 2015-16, which itself is a record
achievement when compared with average number of less than 2 issues with an
average amount Rs. 1,458 crore (approx.) raised over the same period between
2009-10 and 2014-15. This is not only the highest of the corresponding period
of any year in the past, but is also higher than the average realization for
the entire financial year between 2000-2014.
Ø Further,
the Government disinvestment programme has done better than the private
sector. Although, PSUs comprise only 12% of the market cap, out of a total
amount of Rs.17,800 crore (approx.)raised in the Indian market, PSUs’
disinvestment accounted for 71% (Rs.12,700 crore) of the funds raised in the
first 6 months of this fiscal year.
DEPARTMENT
OF EXPENDITURE
The highlights of the Achievements
of the initiatives undertaken by the Department of Disinvestment in the
current Fiscal year are as follows:
COOPERATIVE
FEDERALISM
In accordance with the formulation prescribed by Fourteenth (14th)
Finance Commission (FFC), the Annual Borrowing ceiling for States was fixed for
the year 2015-16 at Rs. 3,78,903 crore as against the Annual Borrowing ceiling
of Rs.3,34,989 crore fixed for the States in 2014-15.
Restricting the States to remain within Net Borrowing Ceiling
(NBC) fixed by Ministry of Finance by allowing them to raise borrowings to the
tune of Rs. 2,99,931 crore has resulted in net lower borrowings of Rs. 35,058
crore and consequently kept outstanding Debt/GSDP ratio of States at 24.9 % of
GSDP, well within the FC XIII projection of 30.3% of GSDP.
During the year 2015-16 (Up to 15.12.2015), the States have been
permitted to raise Rs. 3,12,861 crore (Gross) as compared to permission granted
to raise borrowing to the tune of Rs.2,17,488 crore during the corresponding
period in 2014-15.
The
States
have been allowed borrowing permissions to States on quarterly basis in order
to spread out the borrowings evenly over the 2015-16 to avoid bunching at last
movement. This will help the State to borrow at competitive interest rates from
Market.
Prior
concurrence of D/o Expenditure by States for seeking external loan by
multi-lateral agencies, have been dispensed with for improving ease of doing
business.
The
States are required to remain within the borrowings ceiling fixed by the
Ministry of Finance each year and also the fiscal deficits limits & debt to
GSDP norms prescribed by Finance Commissions as incorporated in the FRBMA of
States. In order to streamline the process of accessing external loans, it has
now been decided that there may not be any need to examine the proposals of
State Governments for external loan assistance from the debt sustainability
angle. However, loans under EAPs would be considered by Department of Economic
Affairs (DEA) subject to States confirming/ self certifying on the aspects
given in the guidelines for examining proposals of States availing Structural
Adjustment Loan and other external loan for clearance from debt sustainability
angle.
Finance
Commission Award
v In order to
rationalize public spending leading to improvement in fiscal performance of the
States, Fourteenth Finance
Commission (FFC) has continued the thrust given the earlier Commissions, worked
out a fiscal roadmap for the States as follows:
(i)
Revenue
Deficit – Zero
(ii)
Fiscal Deficit – 3% of GSDP, with additional flexibility of 0.5% on two counts
of
(a)
0.25%
of GSDP on meeting the criteria of IP/TRR ratio of 10% or less
(b) 0.25% of GSDP on
meeting the criteria of Debt/GSDP ratio of 25% or less.
Both these options will
be available to States which are not in Revenue Deficit during last two years.
(iii)
Debt/GSDP
targets for each States separately based on the FD limits reached by them.
v Some of the major
initiatives under FFC are-
Ø
The
FFC has substantially enhanced the share of the States in divisible pool of
Union Taxes from the current 32 % to 42 % during its award period (2015-2020),
which is the biggest ever increase in vertical tax devolution.
Ø
Besides
share of Central taxes, FFC has recommended grants-in-aid to cover Revenue
Deficit of States, Local Body grants (both to rural and urban local bodies) and
grants for augmenting the State’s Disaster Response Fund (SDRF).
Ø
Based
on its recommendations the FFC, the estimated total increase (both from tax
devolution and FFC grants together), in FFC transfers in 2015-16 from 2014-15
is estimated to be about 2.1 lakh crores.
Ø
As
per the recommendations of FFC, the States are expected to gain an increase of
170% (Rs.44,77,472 crore against Rs.16,58,355 crore) over actual transfers
received against award of 13th FC award. Of which, with an increase
of 178% in tax devolution, an amount of Rs.39,48,188 crore is expected to flow
to the States. Similarly, with an increase of 124% in grants-in-aid Rs.5,29,284
crore is about to flow to the States during award period of FFC.
Substantial
increase in tax devolution and grant-in-aid recommended by FFC are expected to
add substantial spending capacity through States’ budgets and give fiscal
autonomy to the States. A major step in the process has been achieved by
transferring more resources to the States in the nature of untied funds so that
States may make and implement schemes or programmes which are best suited to
the local needs, requirements and aspirations of people. This will afford
required flexibility to the States to address meaningfully the contextual needs
and to develop as per their genius.
Releases
of Finance Commission recommended grants
Ø During
2014-15, Rs. 61,813 crore (96% of allocation) released as per FC XIII
recommendations.
Ø Out
of allocation of Rs. 87,405 crore for 2015-16, under FFC, so far an amount of
Rs. 53293 crore released (61% of allocation) for Revenue Deficit to 11 States,
duly constituted Local bodies and SDRF as on 02.11.2015.
Total
transfers to States under award of FFC, Special Assistance and Externally Aided
Projects (EAPs) during 2015-16 (Up to 10.12.2015)
Resulting
in biggest ever increase in devolution on account of State’s share in sharable
pool of Union taxes recommended by FFC from 2015-16, allows the States greater
autonomy in designing and financing of schemes/projects .
However,
having considered considerable amount of committed spill over liabilities for
projects sanctioned prior to implementation of 14th FFC award,
assistance required in areas of critical nature, support for States covered
under Re-organization Act, support to states to deal with post FFC related
issues etc., an allocation of Rs.20,000 crore has been made in the Union Budget
(2015-16-BE) to provide assistance to the States in the name of Special
Assistance under Central Plan.
An
amount of Rs. 3,98,013 crore (Tax
devolution of Rs.3,36,830 cr. and grants-in-aid of Rs.61,183 cr.)
has been released towards Finance Commission transfers as against Rs.2,76,952
crore (Tax devolution of Rs.2,46,498 cr. and grants-in-aid of Rs.30,454 cr.)
under this head during corresponding period in the last year. Total transfers
(including loan) of Rs. 11,228 crore has been made to the States for EAPs in
comparison to corresponding releases of Rs.11,130 crore made during the last
year.
As
far releases under Special Plan are concerned, an amount of Rs.1368 crore has
so far been released to the States for earmarked purposes. Besides, releases to
the tune of Rs.5499 crore stands released as against NDRF releases of Rs.796
crore made to the States during corresponding period in the last year.
Other
works (Packages announced for Bihar and Jammu and Kashmir)
On
18th August, 2015, the Prime Minister has announced Special package
for Bihar called ‘Bihar package 2015’ for sectoral development in the State. An
amount of Rs. 1,25,003 crore has to be provided for implementation of
infrastructure projects in the areas of Farmer’s Welfare, Education, Skill
Development, Health, Electricity, Rural Roads, Highways, Railways, Airports,
Digital Bihar, Petroleum & Gas, Tourism. The projects approved under the
package would be implemented by the respective line Ministry(s) in phased
manner over a period of 2 to 5 years depending upon commencement of work.
Taking into account financial and physical progress of the projects sanctioned
under the package, necessary budget provisions for funding of the projects are
to be made by the respective administrative Ministry(s). Besides, an amount of
Rs. 40,657 crore has also been agreed for other investments in the State.
Taking into
account post flood relief & restoration and long term
rehabilitation development of the State of J&K was announced by the
Prime Minister on 07.11.2015 for Rs. 80,068 crore including support for Flood
relief, reconstruction, flood management, assistance for small trade &
business, development projects under Road and Highway, Power, New and Renewable
Energy, Health, Human Resource DEVELOPMENT, Skill Development, Sports,
Agriculture and Food Processing, Tourism, Urban Development, Security and
Welfare of displaced people, Pashmina Promotion Project, etc.
DEVELOPMENT EXPENDITURE
During
the period from 1st January, 2015 to 30th November, 2015,
the Expenditure Finance Committee (EFC) chaired by Secretary (Expenditure)
recommended 53 Plan Investment proposals/Schemes of various
Ministries/Departments costing Rs 4,71,121.96 crore.
Also
during the period, Public Investment Board (PIB) chaired by Secretary
(Expenditure) considered and recommended 12 proposals involving an amount of
Rs. 48,691.18 crore as per the following details:
Sl.no
|
Ministry/Department
|
No.
of projects recommended for approval
|
Cost
(In
crore)
|
1.
|
Ministry
of Road Transport and Highways
|
05
|
28501.87
|
2.
|
Ministry
of Urban Development
|
01
|
6928.00
|
3.
|
Ministry
of External Affairs
|
01
|
9375.58
|
4.
|
Ministry
of Power
|
05
|
3886.56
|
|
Total
|
12
|
Rs
48,691.18 crore
|
Plan
Finance-II Division also deals with financial restructuring of Central PSUs on
the recommendations of Bureau for Restructuring of Public Sector Enterprises
(BRPSE). It is also actively involved in working out modalities for financial
assistance to CPSEs, quantification of I&EBR generation for preparation of
budget, finalizing modernization of Plants & Equipments to ensure more
efficiency in production .It is also the Secretariat of National Clean Energy
Fund, in respect of which, guidelines for appraisal/approval of the project
have been issued.
Issues
relating to Food, Fertilizers and Petroleum subsidies, including their
quantification and extension of assistance to the Stake holders are also dealt
with in Plan Finance-II Division. This Division is actively involved along with
the concerned Department/Ministry, in shaping subsidy policy of the Government
so as to ensure effective targeting coupled with minimum burden on the
Government.
SEVENTH CENTRAL PAY COMMISSION
Seventh
Pay Commission has submitted its report to the Ministry. The report is being
analysed. The major recommendation of the report was as follows:
Recommended Date of
implementation: 01.01.2016
Minimum Pay: Based on
the Aykroyd formula, the minimum pay in Government is recommended to be set at ₹18,000
per month.
Maximum Pay: ₹2,25,000
per month for Apex Scale and ₹2,50,000 per
month for Cabinet Secretary and others presently at the same pay level.
Financial Implications:
The total financial impact in the FY 2016-17 is likely to be ₹1,02,100
crore, over the expenditure as per the ‘Business As Usual’ scenario. Of this,
the increase in pay would be ₹39,100 crore,
increase in allowances would be ₹
29,300 crore and increase in pension would be ₹33,700
crore. Out of the total financial impact of ₹1,02,100
crore, ₹73,650
crore will be borne by the General Budget and ₹28,450
crore by the Railway Budget.
In percentage terms the
overall increase in pay & allowances and pensions over the ‘Business As
Usual’ scenario will be 23.55 percent. Within this, the increase in pay will be
16 percent, increase in allowances will be 63 percent, and increase in pension
would be 24 percent.The total impact of the Commission’s recommendations are
expected to entail an increase of 0.65 percentage points in the ratio of
expenditure on (Pay+Allowances+ Pension) to GDP compared to 0.77 percent in
case of VI CPC.The full report is available in the website http://finmin.nic.in/
CENTRAL PENSION ACCOUNTING OFFICE (CPAO)
Highlights
of the initiative taken in the year 2015
(1) Reduction
in paper movement: Paperless movements of digitally signed e-Revision Authority
(Pension Payment Order) from Central Pension Accounting Office (CPAO) to 4
Banks, to start with, have been implemented resulting in saving of time and
operational cost and improvement in efficiency.
(2) To
make successful the digital India Mission of the Government, the pensioners
have been made aware to utilize the benefits of Aadhaar number. Consequently, a
considerable number of pensioners have got seeded their Aadhaar number with
their bank accounts and they have been in a position to avail the facility of
getting their life authenticated on line by using digital life certification in
case they desired so.
(3) With
the help of banks, media and Pensioners Association, pensioners have been
pursued to provide their contact details while submitting Life Certificate for
better service delivery to them.
(4) Life
Certificate format for the pensioner has been modified and provision for
acknowledgement by the bank has been introduced. Further, the bank has to
mention about submission of Life Certificate by the pensioner in the payment
scroll to CPAO to enable monitoring of the same.
(5) As
a step towards making pensioner better informed and empowered, facility of
informing pensioner through S.M.S. of receipt of fresh Pension Payment Order
from the PAO at CPAO and sending Pension Payment Order (Special Seal Authority)
to banks for arranging payment has been provided to those pensioners who have
provided their mobile numbers. As a result pensioner can easily track the
movement of their pension case. This is in addition to already available
facility on the website of CPAO (www.cpao.nic.in)
to pensioner to track their pension processing status at CPAO by providing 12
digit PPO number.
(6) CPAO
in now running fully functional grievance redressal mechanism and a pensioner
can lodge grievance through telephone, website, e-mail, letters or visit. The
queries and grievances of pensioners are attended on highest priority by
qualified personnel.
(7) To
integrate the tracking of pension processing and payment system, a link of
CPAO’s website has been provided to ‘Bhavishya’ System of ‘Pension Tracking’
developed by Department of Pension and Pensioners’ Welfare. This is very good
example of collaboration of departments to provide better services to
pensioners by integrating existing facilities.
(8) Download
facility of Special Seal Authority (PPO) from CPAO’s website by using login and
password provided by CPAO has been given to pensioners. Consequently, they need
not separately approach CPAO to provide a copy of their SSA issued to the
bank. This facility ensures a digital presence of record for pensioner.
(9) With
the implementation of e-scrolls, CPAO in now in a better Position to audit the
monthly payments to pensioners. CPAO can also monitor the payment of first
credit of new pension case.
(10) As
against approved time schedule of 21 days, CPAO has issued Authorities for New
PPOs on an average in 15 days and revision cases in average 11 days.
The above initiatives
based on the extensive use of information technology has not only enhanced
transparency and accountability of the processes of CPAO but it has immensely
taken care of the pensioner’s welfare.
Information
Technology Division (ITD) and Public Financial Management System (PFMS)
PFMS
provides various stakeholders with a real time, reliable and meaningful
management information system and an effective decision support system, as part
of the Digital India initiative of GoI.
1.
The
latest enhancement in the functionalities of PFMS commenced in late 2014,
wherein it has been envisaged that digitisation of accounts shall be achieved
through PFMS and the additional functionalities would be built into PFMS in
different stages. The enhanced application would cater to all Plan and Non Plan
payments of Government of India, all tax and non-Tax receipts and also
functions such as a comprehensive HRMIS and self-contained pension as well as
GPF modules. It is expected that over a period of coming few years, the various
existing standalone systems currently catering to these functions shall be
integrated into PFMS.
2.
The
biggest strength of PFMS is its integration with the banking system in the
country. As a result, PFMS has the unique capability to push online payments to
almost any beneficiary/vendor. At present, PFMS interface is completed with the
Core Banking System (CBS) of all Public Sector Banks (26), Regional Rural Banks
(54), major private sector banks (9), Reserve Bank of India, India post and
Cooperative Banks (2). At present, PFMS is integrated today with the CBS of
93 Banks in the Country.
3.
At
present, the Financial Management functions being delivered by PFMS can be
divided into four broad categories.
·
Fund
Flow Tracking of GoI schemes
·
Direct
Benefit Transfer (DBT)
·
Payment
& Accounting of all GoI transactions (Plan & Non Plan)
·
Non
Tax Receipt Portal (NTRP) for on line collection of GOI not tax receipts.
OFFICE OF CHIEF ADVISER COST
The office of Chief
Adviser Cost is dealing with matters relating to costing and pricing, industry
level studies for determining fair prices, studies on user charges, central
excise abatement matters, cost-benefit analysis of projects, studies on cost
reduction, cost efficiency, appraisal of capital intensive projects,
profitability analysis and application of modern management tools evolving cost
and commercial financial accounting for Ministries/ Departments of Government
of India. Till November 2015, total 8501 number of studies/ reports was
completed by the office of Chief Adviser Cost and out of these 56 reports were
completed during the year 2015 ( up to 30th Nov. 2015).
No comments:
Post a Comment