Low inflation shows oil price benefit passed on: Pradhan
Minister defends fuel taxes as shield against shocks if oil prices climb again Oil Minister Dharmendra Pradhan, citing reasonable levels of inflation over the past two years, has strongly dismissed the perception that the government has failed to pass on the benefits of lower oil prices to Indian consumers “Since the last two years, the ballpark figures for inflation have been under control. How come? If we had not passed on the crude oil price benefit to the consumer, the transportation sector would not have seen so much rationality in prices,” Petroleum and Natural Gas Minister Mr. Pradhan said. “Today, 50 per cent of the profitability due to the slide in oil prices has been passed on to consumers. The remaining 50 per cent was kept with the Centre. Of that 50 per cent, 42 per cent is transferred to the states as per the 14th Finance Commission’s recommendations,” the Minister said, stressing that the Centre is focused on funding developmental priorities as a welfare state. He also defended the high taxation on fuels like petrol and diesel as a tool to protect people from a price shock when oil prices start to climb up again. “There is no developed country that has transferred the benefit of sliding oil prices to the consumers in any real way,” Mr Pradhan said. “If you make the consumer vulnerable by exposing him to low prices, then he will feel such a pinch when the prices go up,” he said, hinting at the government’s logic to raise taxes on fuels while global prices fell. Central and state-level taxes now account for around 60 per cent of the final price of petrol and 55 per cent of the final price of diesel in the national capital, as per official data. The minister said that the high proportion of taxes on petrol and diesel could be reduced when oil prices rise again. “That is a strategy. Again and again, I have stated in Parliament that if necessary, at one point of time, knowing the volatility of the oil economy, this could be done. Our first step was to bring some benefit to the customer, then to spend on welfare activities, and third, in the event of prices shooting up, do what we can to alleviate this,” he said. “We talk about energy. Is energy only the diesel that is put in sports utility vehicles (SUVs)? It is also the clean fuel that should go into houses,” Mr Pradhan said, stressing that the Centre has been using the fuel tax receipts to finance critical development programs such as affordable housing, cooking gas connections for the poor and so on. “LPG came in the country in 1955,” he added. “From then to May 2014, India had 130 million active LPG connections. In the last 22 months, we have added 35 million new LPG connections and we have brought in the Ujjwala Yojana where, in the next three years, we will add five crore LPG connections in the names of the women in BPL households, with financial support from the government.” In addition, he pointed to the Power Ministry’s rural electrification programme, saying that the target to electrify the 18,000-odd villages that have so far remained without electricity has also meant a higher expenditure. Highlighting the government’s schemes to provide 1.5 crore houses by 2019, Mr Pradhan said that the erstwhile scheme—Indira Awaas Yojana—has been expanded under this government, which has resulted in a higher expenditure. “We made a provision in the Budget and started spending. Where will the money come from?” he said. D.J. Fluker Womens Jersey
Nod for Rs. 4,300 crore worth of highway projects
The Government on Wednesday approved two highway projects worth around Rs.4,300 crore, among a slew of other decisions. The Cabinet Committee on Economic Affairs gave a nod to the four-laning of the Lucknow-Sultanpur section on National Highway-56 in Uttar Pradesh at an estimated cost of Rs.2844.72 crore. The two-laning, with the formation of four lanes, of the Shimla Bypass (Kaithlighat to Shimla section) on National Highway-22 in Himachal Pradesh was the second project which was approved, at a cost of Rs.1583.18 crore. The Cabinet also approved a proposal to create flexibility in the use of domestic coal. The move is expected to reduce the cost of power generation by 40-50 paise per unit, which will lead to savings of Rs 25,000 per year in around 4-5 years. The adoption of the United Nations Fundamental Principles of Official Statistics was also approved. This adoption is expected to bring “professional independence, impartiality, accountability and transparency in methods of collection, compilation and dissemination of official statistics,” according to the Government. A Memorandum of Understanding signed between the Reserve Bank of India and the Central Bank of the United Arab Emirates on cooperation concerning currency swap agreements was approved.The Cabinet approved the proposal to move, in Parliament, the adoption of the recommendations of the Railway Convention Committee (2014) – dividend of five per cent and four per cent for the years 2014-15 and 2015-16respectively on the capital invested in Railways. Joe Kocur Authentic Jersey
Domestic gas users in major cities need income proof for subsidy claim
Consumers in Tier-I and II cities will have to submit affidavits to their LPG distributors stating that their annual income is below Rs.10 lakh to continue to receive cooking gas subsidy, according to Oil Minister Dharmendra Pradhan.“In the Tier-I and Tier-II cities, when somebody comes to refill gas, they are asked to sign an affidavit regarding their income,” the Minister said. “It is a matter of trust. We have to trust our people, and they are trustworthy. I didn’t believe that 1 crore people would give up their subsidy, but they did.” One crore people While over one crore people have given up LPG subsidy over the past year, an extensive government survey in the most affluent areas of metropolitan cities has revealed that only three per cent of its residents had done so.“We did a market survey of one lakh well-to-do localities in the metros, ones where the proportion of people earning Rs.10 lakh or more would be high — South Delhi, South Mumbai, South Bangalore, Salt Lake City in Kolkata, parts of Pune and Chennai,” Mr.Pradhan told The Hindu. “Only 3 per cent of these people had given up their LPG subsidy.” In March this year, the government sought to use Income Tax records to identify high income earners and sent them messages informing them that they are no longer eligible for subsidised cooking gas. But that plan was dropped, the minister indicated. “If the Income Tax Department is not entitled to share the data, then how would I know (what the data says)?” Mr. Pradhan asked. “The law is the law. It is a matter of privacy. The Finance Ministry is bound by the principle of privacy of Income Tax information,” he said. Now, instead of identifying ineligible beneficiaries, the government has cast the net wider by making it incumbent upon users to submit affidavits declaring that their income is less than Rs.10 lakh. Earlier, oil ministry officials had told The Hindu that 3 lakh people earning Rs.10 lakh or more had been identified using Income Tax data. Last month, Mr. Pradhan said those who had voluntarily given up their LPG subsidy could re-apply for it after a year. In Parliament on April 24, he said that the government had decided to “exclude” those earning Rs.10 lakh or more from the purview of the LPG subsidy. Nick Markakis Jersey
DGCA to conduct a fare audit on 20 routes to ascertain seats sold on higher fare bucket
The Directorate General of Civil Aviation (DGCA) to conduct a fare audit on 20 routes to ascertain the percentage of seats sold on higher fare bucket by airlines. The regulator will ask the airlines to furnish the amount of revenues earned through these highest bucket seats. “We are trying to ascertain the amount of tickets airlines are selling in the highest fare bucket. Based on the response, we will ale a call,” said a senior DGCA official, who did not want to be identified. There is a lot of complaints on airlines charging high fares. Recently, MPs have also complained about airlines charging higher fares. Bradley Pinion Authentic Jersey
Freight Corridor Corp to award Rs 14,000-cr contracts in FY17
Dedicated Freight Corridor Corporation (DFCC), the Indian Railways’ arm implementing the ambitious freight corridor project, will award contracts worth Rs 14,000 crore in the current financial year (2016-17) in a bid to quickly wrap up work and meet the 2019 deadline for commissioning the Rs 82,000-crore project. “By July 2016, we are going to place orders worth Rs 10,000 crore. The balance – around Rs 4,000 crore worth of contracts – will be placed in the rest of the current financial year itself. After this, work will be progressing in every section of DFCC,” said a senior executive. He added the company has so far placed 76 per cent of the contracts for civil works and 63 per cent of electrical contracts, apart from 48 per cent of the total signalling contracts. For the construction of the Eastern Dedicated Freight Corridor, contracts worth Rs 4,000 crore were awarded in 2013 followed by another Rs 5,000 crore contracts in 2014. Last year, the DFCC placed around five contracts for signalling and telecommunication, electrification and civil construction. Similarly, nine contracts were placed for Western Dedicated Freight Corridor. The executive said the government-owned firm placed contracts worth Rs 24,000 crore in 2015-16 for various works on the freight corridor. “This is compared to Rs 13,000 crore worth of contracts placed in previous six years (2009-14),” he said. DFCC’s capex in FY16 stood at Rs 8,600 crore, compared to Rs 2,800 crore in FY15, a three-fold increase. In 2016-17, the company plans an expenditure of Rs 12,500 crore, including Rs 3,500 crore earmarked for land acquisition and the balance Rs 9,000 crore for contractual payments. The DFCC is constructing the 3,350-km-long freight corridor project, including the 1,800 km of its eastern arm between Ludhiana and Dankuni in West Bengal. The Western DFC will come up between Dadri in Uttar Pradesh to Jawaharlal Nehru Port in Mumbai. Brandon Fusco Authentic Jersey
Agra’s smart city plan to be vetted in Lucknow
It missed the bus to smart city-dom the first time round but Agra is not taking any chances now. The city’s initial plan for the second round of Smart City Challenge will be discussed in a state-level meeting in Lucknow. The city is among 12 contenders from UPMoradabad, Aligarh, Saharanpur, Bareilly, Jhansi, Kanpur, Allahabad, Lucknow, Varanasi, Ghaziabad and Rampur are the otherstaking positions on the start line. No UP city qualified in the first round. Gaps in the proposal and new plans will be discussed in the meeting. This time, the city has entrusted the preparation of its smart city proposal (SCP) to Crisil Risk and Infrastructure Solutions Ltd, which drafted Solapur’s successful first-round bid. The same consultant will write Jhansi’s SCP as well. Over the past week, CRIS collected information about the city and verified facts and figures. It is also analysing the first round proposal for improvements. Officials said the previous plan was not weak but was hobbled by improper presentation. This time the emphasis will be on the implementation strategy for plans included in the proposal and preparing a better financial model. Agra municipal commissioner Indravikram Singh said, “A state-level meeting regarding the smart city project will take place at the regional centre for urban studies in Lucknow University, which is also the external agency helping in developing an SCP. The gaps which we have identified will be assessed in the meeting. New plans will be discussed. A presentation will be made on the initial planning for Round 2.” “The revised SCP has to be submitted to Ministry of Urban Development by June 30, 2016,” Singh said. Laquon Treadwell Jersey
Few officers can’t take decision of smart city in Bhopal: BJP minister
State higher education minister and BJP MLA from Bhopal (south west) Umashankar Gupta has said that there was no blueprint for the smart city project in Shivaji Nagar. Talking to TOI, Gupta said, “Some officers cannot take decisions of cutting trees and displacing people. The final decision will be taken by people’s representatives.” A major portion of his constituency will be disturbed in the proposed smart city plan. He said, “The blueprint for the smart city is not yet ready. Few officers of the Bhopal Municipal Corporation (BMC) cannot decide how many trees are to be uprooted and how many houses are to be demolished.” Gupta said the only thing that has been finalised is that the smart city will be developed at Shivaji Nagar. “We have clarified that nobody would be removed without rehabilitation. We have asked the officials to bring their plan. We want them to come up with the details,” he said. Gupta said the chief minister has also spoken on the similar lines. The CM also wants the people to comment on it. “I am MLA of the area. Smart city will not be built for gloom. It will be built for happiness.” Political pundits attribute Gupta’s utterances to the fact that in the present state of affairs, his constituency will be affected badly and he may have to face voters’ ire in the next elections. Jermey Parnell Authentic Jersey
Start-ups formed under limited liability partnerships to get three-year tax holiday
The Modi-led Government has given a boost to the start-up ecosystem in the country by allowing start-ups, set up as limited liability partnerships (LLPs), to be eligible for a three-year tax holiday. This forms part of the 55 amendments moved by Finance Minister Arun Jaitley to the Finance Bill 2016, which was passed by the Lok Sabha on Thursday. With this, the three-stage Budget passage process has been completed in the Lower House. Prior to this amendment covering LLPS, only start-ups set up as a company were eligible for the three-year tax holiday. Allowing a LLP structure would mean that start-ups could enjoy the flexibility of a partnership entity in terms of lesser compliance and at the same time not be required to fork out dividend distribution tax, say tax experts. The other significant amendments include clarification that additional dividend tax of 10 per cent would get triggered once taxpayers’ dividend income (received from domestic company or companies) crosses the ?10-lakh threshold. Hitherto, there was ambiguity whether this additional dividend tax provision applies on the total dividends received by a tax payer or whether this provision is to applied in relation to dividends received from each company per se, said Vikas Vasal, Partner Tax, KPMG in India. According to the Budget proposal, the additional tax on dividends will have to be forked out by individuals, Hindu Undivided Families and firms receiving dividends in excess of ?10 lakh. Meanwhile, the Centre has through the amendments to the Finance Bill put into effect the withdrawal of provident fund related budget announcements. It has also set right an anomaly around capital gains on shares of unlisted companies. Jaitley had, in his Budget speech, mentioned that the holding period for determining long-term capital gains has been reduced to 24 months from 36 months. This has been done by introducing a specific provision in the Finance Bill. “Now long term capital gains arising in case of unlisted shares will enjoy concessional tax treatment, if such shares are held for twenty four months or more. This is a welcome move and will help in transactions relating to transfer of shares of unlisted companies,” Vasal told BusinessLine. Agriculture tax Earlier, replying to the discussions on the Bill in the Lok Sabha, Jaitley said that the Centre has no intent to impose income tax on agricultural income. Under the Constitution, the Centre has no powers to levy tax on agricultural income, Jaitley said. Jaitley also advised States to refrain from imposing any taxes on agriculture incomes although the latter had the power to do so. “Given the situation of our agriculture, it would be advisable not to levy any new taxes,” Jaitley told the Lower House during his reply that lasted for over an hour. Derek Sanderson Womens Jersey
Retailers’ lobby seeks meeting with finance ministry on e-commerce
India’s top retailers’ lobby plans to move the finance ministry to force e-commerce firms to comply with recent rules on online marketplaces. The Retailers’ Association of India (RAI), which recently met officials at the department of industry policy and promotion (DIPP), has now requested a meeting with finance ministry officials, the association’s chief executive officer Kumar Rajagopalan said. While DIPP which announced the new e-commerce policy on 29 March comes under the commerce ministry, the Enforcement Directorate which can make etailers comply comes under the finance ministry. “The Enforcement Directorate needs to take action against everyone who is flouting the online marketplace law,” Rajagopalan said. “The DIPP does not encourage back door entry into retail and has provided the clarifications for marketplace, but its enforcement and execution responsibility falls under the finance ministry,” said Rajagopalan, adding he hopes to meet finance ministry officials after the conclusion of the ongoing parliament session. Retailers have taken up the matter since not much has changed in the operating model of etailers since the policy was announced. According to Rajagopalan, etailers are still offering discounts, they are not making the disclosures regarding sellers on their ecommerce portals, many have private brands and a majority of their revenues comes from one vendor, none of which is not allowed under the marketplace policy. Under the marketplace model, ecommerce companies are simply a platform connecting buyers and sellers. Moreover, no one company can contribute to more than 25% of the business for a marketplace. They are also barred from influencing prices directly or indirectly. The FDI policy covers a wide range of internet companies including online travel agencies, cab-hailing services, hotel start-ups, home services providers, food ordering and grocery delivery apps. In November last year, The Delhi High Court ordered the Enforcement Directorate (ED) to look into 21 ecommerce companies including etailers like Flipkart, Snapdeal, Amazon and Jabong to see if they have flouted the country’s FDI rules, in response to a petition filed by the All India Footwear Manufacturers & Retailers Association’s against the Union government in August. However, the ED never submitted the report and at its latest hearing on Thursday, the government told the Delhi high court that following its clarifications on online marketplaces on 29 March, the petition filed by the All India Footwear Manufacturers and Retailers Association became infructuous, additional solicitor general Sanjay Jain said. The case is expected to come up for hearing on 23 May as the footwear association has asked for time to file its grievances regarding the press note. Ironically, brick-and-mortar retailers have been asking the government to allow FDI in multi-brand retail for over five years. In 2012, the then Congress-led United Progressive Alliance government allowed 51% FDI investment in physical retailers that sell more than one brand or multi-brand retail in some cities, subject to the approval of the state governments and some conditions regarding sourcing. While FDI is restricted in multi-brand brick and mortar retail companies, ecommerce companies like Flipkart and Snapdeal have attracted more than $9 billion in investments from venture capitalists in the past two years, boosting their growth. The exponential growth in the past year had led to predictions that the share of e-commerce in the overall retail market will increase from 2% in 2014 to 11% in 2019, while the share of organized brick-and-mortar retail is expected to fall from 17% to 13%, according to a February 2015 report by property consultant Knight Frank India Pvt. Ltd and RAI. However, in the past six months, etailers have been struggling to raise fresh rounds of funds as investors turn cautious over unproven business models, besides a mix of global macroeconomic factors such as a slowdown in China. In the past three months, three investors including Morgan Stanley Institutional Fund Trust have slashed the value of their holdings in Flipkart. “We will see consolidation taking place online. The valuations and discounts is not sustainable,” said Govind Shrikhande, managing director, Shoppers Stop Ltd, which runs the department store chain by the same name while sharing that etailers have to change their models as per the new law but they haven’t yet done so. D.J. Reader Womens Jersey
Show us law which bans crude export: Delhi high court to govt
The Delhi high court asked the union government to show any statutory source or policy document which barred export of crude in India. Justice Manmohan, hearing a case filed by Cairn India Ltd, a Vedanta group company, asked the government to back up its claim that crude exports are not permitted. “After all, you’re restricting someone’s right to sell (crude). It has to be found in law or some contract,” Manmohan said. “Let me see the policy. When did you frame it?” The court will hear the case next on 18 May, when a response from the government can be expected. Cairn India moved the high court against the Director General of Foreign Trade seeking permission to be permitted to export excess crude it generated from the Barmer oil fields in Rajasthan. Additional solicitor general Tushar Mehta told the court crude oil per se was not allowed to be exported. He said that India had a total refining capacity of 223 million tonnes. However, at present only 38 million tonnes of crude oil is available. It would not be in the interest of the country to export crude, he argued. He stressed that the issue of export of crude was entirely in the realm of policy. Lawyer C.A. Sundaram, representing Cairn, said that they were agreeable to offering the domestic players in the country the first option to buy the crude, but at international prices. He said that neither the government, nor its nominees or public sector refineries were ready to purchase its crude and it was forced to sell to two private refineries—Reliance and Essar. Sundaram said that Cairn had brought $10 billion as investment on promises. But it was being forced to sell at less than standard prices and was not allowed to export either. Cairn India argued in earlier hearings that the foreign trade policy doesn’t bar export of crude. However, Mehta said that the DGFT didn’t permit this export. Justin Gilbert Authentic Jersey