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Prasanta Sahu

Articles By Prasanta Sahu

581 Articles

Capital Formation: March spending binge salvages states’ capex in FY21

Clearly, additional transfers from the Centre by way of Rs 45,000 crore as tax devolution in excess of the Revised Estimate from the divisible pool due to improved tax receipts in March, eased the stress on states’ finances

The FY21 capex target for all states as per their BEs was Rs 6.5 lakh crore, up 30% on year. State capex is believed to have a greater multiplier effect on the economy, than such spending by the Centre and public sector undertakings.

Govt needs to spend additional Rs 1 lakh crore to distribute free foodgrain under PMGKAY till Diwali

This apart, Monday’s announcement by the government to take over vaccine procurement responsibility from states and provide the prophylactics free of cost to those in the age group of 18-44 years will cost the exchequer an

The Centre will extend the validity of a programme to distribute free grains to 80 crore people until Diwali from June, Prime Minister Narendra Modi said on Monday.

Cut GST on Covid drugs and other items, retain rate for vaccines at 5%: GoM

The GOM, which had time till Tuesday to submit its report, gave it to the Council on Monday itself, a state government official said.

So, if the revenue growth is -3%, additional Rs 63,000 crore become necessary for the states, and out of which West Bengal expects nearly Rs 5,000 crore,” he said.

GST compensation: States set to drive a hard bargain

At least six states – West Bengal, Kerala, Chhattisgarh, Punjab, Tamil Nadu and Odisha – are seeking extension of the compensation period and the relevant cesses on various 'demerit' goods.

Odisha has also sought an extension in compensation period beyond June next year.

Tax devolution: Centre sticks to Budget estimate in May despite revenue shortfall

Going by the previous year’s trend, the Centre may stick to BE for devolution in the initial months and do the adjustments towards the end of this fiscal, to factor in a shortfall in receipts.

The 14th Finance Commission upped states’ share in divisible tax pool to 42% from 32%.

States’ capex down annually despite March spike; tax transfers by Centre, GST aid help avoid a sharper fall

This amounted to bucking the trend of several immediate past years, when states had turned in a better show in fiscal consolidation and capital spending, maintaining a public capex ratio of 5:3.6:3.4 (states, CPSEs and Centre

According to the RBI's customary study of state finances, the total capex roll-out by all states stood at Rs 4.97 lakh crore in FY20, down 20% from the BE of Rs 6.22 lakh crore.

Petroleum central public sector enterprises’ capex rises 25% in April

12 firms set spend target of Rs 1.05 lakh crore in 2021-22

In April 2021, Oil and Natural Gas Corporation (ONGC), the top CPSE player in oil and gas exploration, has achieved a Rs 1,893-crore capex or 6.4% of its 2021-22 target of Rs 29,800 crore compared with 8.5% of the respective target in the year ago month.

Most of Centre’s flagship welfare schemes keep pace despite slowdown

Many of the schemes such as MGNREGA, Ujjwala, NSAP and PM Awas Yojana have seen a big jump in both physical and financial achievements in FY21 as additional succour was provided by the Centre to people affected by Covid-19 (s

For instance, about Rs 31,000 crore was transferred to women Jan Dhan account holders in the last financial year as Covid relief.

Govt’s vaccine spend in April at Rs 4,400 cr

India (Centre and states) spend 1.26% of GDP (FY20BE) on health, way behind Brazil at 6.8%, Turkey 10.5% and Mexico 11.6%. States were estimated to spend about Rs 1.9 lakh crore in FY20BE while the Centre about Rs 77,000 cror

The Select City Walk drive through facility is also providing Covaxin vaccine at the price of Rs 1450 per dose.

Strategic sale: Financial bids for Air India, BPCL likely to be delayed by 3 months to September

“The transaction advisers are in touch with bidders, who have sought extra time for putting in bids for AI. Covid has affected mobility of bidders' representatives…site inspection is not happening,” an official said, ad

With the sweetening of the deal, senior government officials are optimistic of the AI deal going through this time. The bids for AI are likely to be under Rs 20,000 crore.

Front-loading: Centre allows states to borrow 75% of their annual limit in April-December

The idea behind the move is to enable them to regain spending momentum.

The FY22 borrowing by states is seen to be in the region of Rs 8.7 lakh crore, including about Rs 1 lakh crore earmarked for capex, due the mandatory stipulation of 50 bps capex.

New ‘liberal’ policy: States to spend a tidy sum for vaccination drive

India (the Centre and states) spend 1.26% of GDP (FY20BE) on health, way behind Brazil at 6.8%, Turkey 10.5% and Mexico 11.6%. States were estimated to spend spend about Rs 1.9 lakh crore in FY20BE while the Centre about Rs 7

Of course, the actual cost would be much less given that 100% vaccination is unlikely; also a segment of the healthcare workers and other frontline workers who have already received vaccine are in the 18-45 age group.

LIC listing seen challenging in FY22 too

Private valuation firm RBSA Advisors recently estimated LIC’s worth to be between Rs 9.9-11.5 lakh crore.

Listing of LIC, which has a presences in every nook and corner of the country,will likely be hugely positive for LIC for bringing in better governance in the entity.

Monsoon session: Govt to amend key PSB privatisation laws

As many as 14 private banks were nationalised in 1970 by the Indira Gandhi government, followed by another six banks in 1980.

The plan, according to official sources, is to opt for amending the relevant laws in one go, so that the process of PSB privatsiation is not hindered by legal hurdles.

Large CPSEs post record capex of 4.6 lakh crore in FY21

In FY21, state governments have developed cold feet in sustaining the capex tempo, but CPSEs, despite an erosion of their cash surplus and profits in a slowing economy, largely maintained the pace, thanks to constant prodding

Corporate profits are also getting a boost from the huge cost-cuts, but that is hurting the larger economy.

Faceless tax assessment: 60% of allocated cases settled in a year, says CBDT’s Mody

Out of the total 4,12,046 cases assigned to National Faceless Assessment Centre (NFAC) after the faceless appeal scheme was launched in September 2020, notices were issued in 3,64,389 cases and final orders were issued in 14,

“Where there was a case to raise tax demand, it was done and where there was no need to raise demand, no tax claim was made,” Mody said.

Vivad Se Vishwas: Govt nets Rs 54,000 crore, half of it from PSUs

The Centre’s tax resolution scheme ‘Vivad Se Vishwas’ has resolved nearly a third of all direct tax disputes and has netted Rs 54,005 crore in tax revenue, 51% of which are from the central PSUs, Central Board of Direct

Tough FY21: States to buck trend, report capex decline

Capital expenditure by state governments will likely shrink in FY21, bucking the trend of robust growth in fixed asset creation reported by most of them in recent years.

economy

Both tax revenue and expenditure to surpass revised estimates in FY21: Tarun Bajaj

Asked whether there is any evidence of the sharp cut in corporate tax rate prompting companies to make new investments, the official said it was difficult to draw any conclusion as of now.

The Covid pandemic has affected private investment in FY21, but there would be new investments in the coming months, he added.

Sick CPSEs: Stamp duty waiver at SPV stage to fast-track closures

The move, initiated by the department of public enterprises, is to de-link the process of closure of a CPSE from disposal of its immovable assets to avoid any delay in closure of the loss-making entity.

The amendment to the Indian Stamp Act, 1899, is being done via the Finance Act.

2020-21: Net tax receipts seen up by Rs 1.2 lakh crore over revised estimate

Customs collections are seen on target. Since a lot of accounting flexibility is available for the Centre on the GST front due to the floating I-GST account, an estimate of Central GST mop-up at this stage is prone to correct

States yet to restore capex pace

Both tax revenue and capital spending down 15%

Even after liberal transfers by the Centre from the divisible tax pool in the initial months of this fiscal, tax revenues of the 15 states declined by 14% on year during April-January.

‘Software tax’: SC ruling to force tax dept to cough up a tidy sum

Foreign software suppliers will breathe a sigh of relief with the long uncertainty finally reaching a well-founded outcome in their favour,” said Ravi Mahajan, partner at Ernst & Young LLP.

Tax experts said that while a precise estimate of the aggregate TDS amount is not immediately available, they said the refunds, including interest accrued, could add up to Rs 50,000 crore or more.

Inflation targeting: Current target band should be extended for 5 more years, says Niti Aayog vice-chairman Rajiv Kumar

India’s economy regained quite a lot of lost steam in the December quarter, to register a flat growth of 0.4% after two consecutive quarters of deep contraction caused by the pandemic, according to official data.

In FY21, the GDP would contract by 8%, the sharpest drop in recorded history, as per the second advance estimate released recently; the contraction was previously seen at 7.7%.

Covid-19: Vaccine manufacturers to meet PM Modi today to seek ‘right price’

They would also urge the PM against any ceiling on the vaccine price for the private sector, according to a person privy to the matter. Currently, the government procures the vaccines — Covishield and Covaxin — at a fixed

Apart from making efforts to meet the requirements of India, the vaccine major is also trying its best to balance the needs of the rest of the world, he had said.

Independent Directors: Three-fourths central public sector undertakings flout norm

The non-official independent directors are appointed on the Boards of CPSEs by the administrative ministries concerned.

A large number of PSUs are going to be up for grabs in the coming years, with the Budget for FY22 unveiling a new policy in this regard and the prime minister himself lending no-holds-barred support to the policy shift.

Disinvestment: BPCL, Air India deals to conclude by July-August

Even though the department of investment and public asset management (Dipam) had set a target to complete the transactions by June-end, the government may have to give shortlisted bidders a little bit of extra time if needed

On November 16, three bidders showed interest for BPCL buyout — Vedanta, Apollo Global Management and Think Gas.
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