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Depositors to be provided with up to Rs 5 lakh within 90 days even if bank under moratorium, says FM

 

Finance Minister Nirmala Sitharaman today announced that the Union Cabinet has cleared the amendment to the Deposit Insurance Credit Guarantee Corporation (DICGC) Bill 2021, which would provide account holders with an amount of up to Rs 5 lakh within 90 days of bank failure.

The minister stated that the DICGC Bill insures all bank deposits and covers all commercial banks and even foreign bank branches in India are covered under it.

Under the DICGC, each depositor's bank deposit is insured for up to Rs 5 lakh in each bank (for both principal and interest). The increase of insured amount from Rs 1 lakh to Rs 5 lakh will cover 98.3 per cent of all deposit accounts and 50.9 per cent of deposit value, Sitharaman noted.

“Normally, it takes 8-10 years after complete liquidation to get money under insurance; but now, even if there is a moratorium, within 90 days, the process will definitely be completed, giving relief to depositors, the finance minister said.

Apart from the amendment to the DICGC Bill, Cabinet also cleared amendments to the Limited Liability Partnership (LLP) Bill, with an aim to decriminalise various provisions under the law and foster the ease of doing business in the country.

“With the Limited Liability Partnership Amendment Bill, we will have only 22 penal provisions, 7 compoundable offences, 3 non-compoundable offences,” Sitharaman said.

#NirmalaSitharaman
28-July-2021
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Nirmala Sitharaman holds 6th review meeting on CAPEX and infrastructure roadmap

 

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman today held a virtual meeting in New Delhi with senior government officials to discuss the infrastructure roadmap ahead.

This was the 6th review meeting by the Finance Minister with Ministries/Departments on the infrastructure roadmap ahead.

During the meeting, Capital Expenditure (CAPEX) plans of Ministries and their CPSEs, the status of implementation of budget announcements and measures to expedite infrastructure investment were discussed. The meeting was attended by Finance Secretary, Secretary (Economic Affairs), Secretary (Public Enterprises), Secretary (Steel). Secretary (Housing and Urban Affairs), Secretary (Petroleum and Natural Gas) and Secretary (Space) as well as CMDs/CEOs of CPSEs of these Ministries/Departments.

While reviewing the capital expenditure performance of the Ministries and their CPSEs, Finance Minister emphasised that enhanced CAPEX will play a critical role in revitalising the economy post-pandemic and encouraged the Ministries to front-load their capital expenditure. Ministries were also requested to aim to achieve more than their CAPEX targets. Ms Sitharaman said that the Budget for Financial Year 2021-22 provided a capital outlay of Rs 5.54 lakh crore, a sharp increase of 34.5 per cent over the Budget Estimate of 2020-21. However, the efforts from the budgetary side to increase the capital expenditure have to be complemented by the Public Sector Enterprises, she added.

While reviewing the progress, the Finance Minister asked the M/o Housing and Urban Affairs to expedite the capital expenditure and make efforts for front loading it. The M/o Steel was asked to front load capex and facilitate private investment by providing support and removing bottlenecks. The M/o Petroleum and Natural Gas was asked to expedite monetization of assets during FY 2021-22. D/o Space was asked to focus on domestic procurement wherever possible.

Ms Sitharaman also highlighted that the infrastructure expenditure is not just Central Government budgetary expenditure on infrastructure and includes infrastructure spending by State Governments and private sector. It also includes Government expenditure through extra-budgetary resources. Therefore, Ministries are to actively work on getting projects funded through innovative structuring and financing and provide all support to private sector for enhancing infrastructure spending.

The Finance Minister further stated that the Ministries also need to explore Public Private Partnership (PPP) mode for viable projects. Ms Sitharaman also asked the Ministries and their CPSEs to ensure clearance of Micro, Small and Medium Enterprises (MSME) dues by 31st July 2021.

While concluding, the Finance Minister asked the Secretaries of Ministries to push expenditure on large important projects to ensure that the achievement is commensurate with timelines. Ms Sitharaman also asked the Ministries to take up regular reviews of sector-specific projects with the concerned State Governments for effective implementation of the same.

#NirmalaSitharaman
29-June-2021
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Over 9 lakh COVID related claims have been settled by insurance companies

 

More than 9 lakh COVID related claims have been settled by insurance companies for Rs 8642 crore as on 20th April 2021.

In a tweet message, Finance Minister Nirmala Sitharaman said even tele-consultations can be covered under the insurance. IRDAI shall direct companies to prioritise authorisations and settlements of covid cases, she stated.

Ms Sitharaman said reports are being received about some hospitals denying cashless insurance and she has spoken to IRDAI Chairman SC Khuntia to act immediately on the same. 

In March 2020, Covid was included as a part of comprehensive health insurance and cashless treatment was available at networked or even temporary hospitals.

#NirmalaSitharaman #COVID19
23-April-2021
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FM Nirmala Sitharaman attends Second Virtual G20 Finance Ministers and Central Bank Governors Meeting

 

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman participated virtually in the Second G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under the Italian Presidency in New Delhi yesterday to discuss policy responses to global challenges for restoring strong, sustainable, balanced and inclusive growth.

Important points of the meeting:-

  1. The G20 Finance Ministers and Central Bank Governors discussed Updates of the G20 Action Plan in response to COVID-19.
  2. They also discussed supporting the financing needs of the most vulnerable economies, the progress on the international taxation agenda, promoting greener transitions and the pandemic related financial regulation issues.
  3. Ms Sitharaman urged all G20 members to ensure equitable access and widespread distribution of vaccines.
  4. The Finance Minister stated that India has covered over 87 million citizens in its vaccination drive so far and has supplied over 64 million doses to 84 countries, including 10 million doses as a grant.
  5. She urged the G20 High-Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response to draw upon such country experiences.
  6. Ms Sitharaman reflected on the global growth projections and underlined the need for continued coordination amidst the persistence of uncertainties associated with the virus.
  7. She said that the G20 Action Plan has served as a good guidance tool and shaping recovery is the mainstay of its current update. 
  8. Noting the discourse in the G20 on climate change, the Finance Minister emphasised the need for progress on commitments made under the Paris Agreement on climate finance and technology transfer.
  9. Ms Sitharaman suggested that while channelling flows of international financial institutions into green transitions, it should also be recognised that the immediate challenge, particularly for developing and Low-Income Countries, is to restore growth.
  10. For boosting support to the most vulnerable economies, the Finance Minister supported extending the Debt Service Suspension Initiative, by six months, till December 2021.

#G20 #NirmalaSitharaman
08-April-2021
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Private sector has a key role in India's growth recovery, Government will be a good facilitator: Nirmala Sitharaman

 

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said that while the Union Budget 2021-22 provides for enhanced capital expenditure by the Government, it also envisages private sector participation in a big way.

Ms Sitharaman addressed top CEOs at a virtual interaction with the Confederation of Indian Industry (CII) on the Union Budget 2021-22  today.

The Finance Minister elaborated that though the Government will provide some capital for the proposed Development Finance Institution (DFI), the DFI will also raise capital from the market. In addition, the DFI Bill will provide legislative space for private DFIs. Similarly, the Asset Reconstruction Company (ARC) for the management of non-performing assets (NPAs) will be floated as a holding company by the banks themselves, with support from the government.

Sharing the key guiding principles for the budget, Finance Minister emphasised the focus on transparency. Contrary to the expectations of a COVID-19 tax, the Government has chosen to fund the budget stimulus through higher borrowing, rather than increased taxes.

Elaborating on the thrust areas, the Finance Minister expressed that the stress has been on areas with high multipliers such as infrastructure which would facilitate the private sector, such as power, roads, ports, airports, etc. Healthcare and Agriculture have been the other priorities.

Urging for continued dialogue, Ms Sitharaman said that her interactions with CII have helped bring in 'contemporary thinking in policymaking'.  The Finance Minister promised an 'honest leakage-free implementation' of the budget proposals.

Sharing the industry response to the budget proposals, Mr Uday Kotak, President, CII, said that the budget was an example of an outstanding policy document which addresses the needs of the economy. He appreciated the boldness of the announcements and the focus on growth and transparency.

Mr Kotak reassured the Finance Minister that the private sector will help transform India alongside the Government for the common purpose of building a truly great India.

Dr Ajay Bhushan Pandey, Finance and Revenue Secretary, Mr T V Somanathan, Secretary, Expenditure and Mr Tarun Bajaj, Secretary, Economic Affairs besides more than 180 industry captains from across the country, participated in the interaction.

#UnionBudget2021 #NirmalaSitharaman
10-February-2021
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Salient Features in Economic Survey 2020 to 2021

 

India's real GDP is set to record a growth of 11 per cent in 2021-22 and nominal GDP by 15.4 per cent-the highest since independence, according to the Economic Survey 2020-21. The Union Minister for Finance and Corporate Affairs Nirmala Sitharaman presented the Economic Survey 2020-21 in Parliament today.

Salient Features in Economic Survey 2020-21:

The V-shaped economic recovery is supported by the initiation of a mega vaccination drive with hopes of a robust recovery in the services sector and prospects for robust growth in consumption and investment.

The rebound will be led by the low base and continued normalization in economic activities as the rollout of COVID-19 vaccines gathers traction.

The fundamentals of the economy remain strong as gradual scaling back of lockdowns along with the astute support of Atmanirbhar Bharat Mission have placed the economy firmly on the path of revival.

This path would entail a growth in real GDP by 2.4 per cent over the absolute level of 2019-20-implying that the economy would take two years to reach and go past the pre-pandemic level.

These projections are in line with IMF estimate of real GDP growth of 11.5 per cent in 2021-22 for India and 6.8 per cent in 2022-23. India is expected to emerge as the fastest growing economy in the next two years as per IMF.

The Survey says India's GDP is estimated to contract by 7.7 per cent in FY2020-21, composed of a sharp 15.7 per cent decline in the first half and a modest 0.1 per cent fall in the second half.

Sector-wise, agriculture has remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and have been recovering steadily. Government consumption and net exports have cushioned the growth from diving further down.

As anticipated, while the lockdown resulted in a 23.9 per cent contraction in GDP in Q1, the recovery has been a V-shaped one as seen in the 7.5 per cent decline in Q2 and the recovery across all key economic indicators. 

Agriculture is set to cushion the shock of the COVID-19 pandemic on the Indian economy in 2020-21 with a growth of 3.4 per cent in both Q1 and Q2. 

India remained a preferred investment destination in FY 2020-21 with FDI pouring in amidst global asset shifts towards equities and prospects of quicker recovery in emerging economies.

Net FPI inflows recorded an all-time monthly high of US$ 9.8 billion in November 2020, as investors' risk appetite returned, with a renewed search for yield, and US dollar weakened amid global monetary easing and fiscal stimulus packages.

India was the only country among emerging markets to receive equity FII inflows in 2020.

Buoyant Sensex and NIFTY resulted in India's market-capitalisation to Gross Domestic Product (GDP) ratio crossing 100 per cent for the first time since October 2010. This, however, raises concerns on the disconnect between the financial markets and real sector.

Exports are expected to decline by 5.8 per cent and imports by 11.3 per cent in the second half of the year.

India is expected to have a Current Account Surplus of 2 per cent of GDP in FY21, a historic high after 17 years.

#EconomicSurvey #NirmalaSitharaman
29-January-2021
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Union Budget Mobile App launched

 

Union Finance Minister Nirmala Sitharaman launched the "Union Budget Mobile App" today for hassle-free access of Budget documents by Members of Parliament (MPs) and the general public using the simplest form of digital convenience. 

As this year the budget will be paperless, this app will be the single stop for all the answers related to Union Budget.

The mobile App facilitates complete access to 14 Union Budget documents, including the Annual Financial Statement (commonly known as Budget), Demand for Grants (DG), Finance Bill etc. as prescribed by the Constitution.

The user-friendly app has an interface which is embedded with features like downloading, printing, search, zoom in and out, bidirectional scrolling, table of contents and external links, etc. It is bilingual (English & Hindi) and will be available on both Android and iOS platforms. 

The App can also be downloaded from the Union Budget Web Portal (www.indiabudget.gov.in). The App has been developed by the National Informatics Centre (NIC) under the guidance of the Department of Economic Affairs (DEA).

The Budget documents will be available on the Mobile App after the completion of the Budget Speech by the Finance Minister in Parliament on 1st February 2021.

The Halwa ceremony, marking the final stage of the Budget making process for Union Budget 2021-22, was held in North Block here today afternoon in the presence of Union Finance & Corporate Affairs Minister Nirmala Sitharaman. A customary Halwa ceremony is performed every year before the “lock-in” process of Budget preparation begins.

Later, the Finance Minister reviewed the status of the compilation of the Union Budget 2021-22 and extended her best wishes to the officials concerned.

#Budget2021-22 #NirmalaSitharaman #BudgetSession
23-January-2021
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IT relief for Real-estate Developers and Home Buyers

 

As part of the AatmaNirbhar Bharat Package 3.0 as announced by Finance Minister on 12th November 2020 certain income tax relief measures were brought in for real-estate developers and home buyers.

Up to 2018, section 43CA of the Income-tax Act, 1961 (‘the Act’) provided for deeming of the stamp duty value (circle rate) as sale consideration for the transfer of real estate inventory in the case the circle rate exceeded the declared consideration. Consequentially, stamp duty value was deemed as purchase consideration in case of the buyer under section 56(2)(x) of the Act. 

In order to provide relief to real estate developers and buyers, the Finance Act, 2018, provided a safe harbour of 5%. Accordingly, these deeming provisions triggered only where the difference between the sale/purchase consideration and the circle rate was more than 5%. In order to provide further relief in this matter, Finance Act, 2020 increased this safe harbour from 5% to 10%. 

Therefore, currently, the circle rate is deemed to be the sale/purchase consideration for real estate developers and buyers only where the variation between the agreement value and the circle rate is more than 10%.

In order to boost demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, it has been decided to further increase the safe harbour from 10% to 20% under section 43CA of the Act for the period from 12th November 2020 to 30th June 2021 in respect of the only primary sale of residential units of value up to Rs. 2 cr.

Consequential relief by increasing the safe harbour from 10% to 20% shall also be allowed to buyers of these residential units under section 56(2)(x) of the Act for the said period.

Therefore, for these transactions, circle rate shall be deemed as sale/purchase consideration only if the variation between the agreement value and the circle rate is more than 20%.

 

#NirmalaSitharaman #Atmanirbhar
13-November-2020
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FM unveils Atmanirbhar 3.0

Union Finance and Corporate Affairs Minister Nirmala Sitharaman today announced 12 key measures, as part of Government of India's stimulus to the economy, under AatmaNirbhar Bharat 3.0. 

The net stimulus announced today amounts to Rs 2.65 Lakh crore.

Addressing a Press Conference in New Delhi, she also informed that the total stimulus announced by the Government and Reserve Bank of India till date to help the nation tide over the COVID-19 pandemic works out to Rs 29.87 lakh crore, which is 15% of national GDP. Out of this, a stimulus worth 9% of GDP has been provided by the government.

The following are the 12 key announcements under AatmaNirbhar Bharat 3.0 -

1) AatmaNirbhar Bharat Rozgar Yojana

A new scheme to incentivize job creation during COVID-19 recovery has been launched. If EPFO-registered establishments take in new employees without EPFO registration or those who lost jobs earlier, the Yojana will benefit these employees.

Beneficiaries / New Employees under the scheme would be:

- Any new employee joining employment in EPFO registered establishments on monthly wages less than Rs 15,000
- EPF members drawing monthly wage of less than Rs 15,000 who made exit from employment during COVID Pandemic from 01.03.2020 to 30.09.2020 and is employed on or after 01.10.2020.

Central Govt. will provide subsidy for two years in respect of new eligible employees engaged on or after 01.10.2020 at following scale:

- Establishments employing up to 1000 employees: Employee's contributions (12% of Wages) & Employer’s contributions (12% of wages) totalling 24% of wages
- Establishments employing more than 1000 employees: Only Employee's EPF contributions (12% of EPF wages)

The scheme will be effective from October 1, 2020, and operational till 30th June 2021. Certain other eligibility criteria would have to be met, and the Central Government will provide subsidy for two years in respect of newly eligible employees.

2) Emergency Credit Line Guarantee Scheme for MSMEs, businesses, MUDRA borrowers and individuals (loans for business purposes), has been extended till March 31, 2021.

A Credit guarantee support scheme ECLGS 2.0 is being launched for the Healthcare sector and 26 stressed sectors with credit outstanding of above Rs 50 crore and up to Rs 500 Crore as on 29.2.2020stressed due to COVID-19, among other criteria. Entities will get additional credit up to 20% of outstanding credit with a tenor of five years, including 1 year moratorium on principal repayment. This scheme will be available till 31.3.2021.

3) Production Linked Incentive worth Rs 1.46 Lakh Crore to 10 champion sectors.

10 more Champion Sectors will be covered under the Production Linked Incentives Scheme to help boost the competitiveness of domestic manufacturing. This will give a big boost to the economy, investment, exports and job creation. A total amount of nearly 1.5 Lakh Crore has been earmarked across sectors, for the next five years. The ten sectors are - Advance Cell Chemistry Battery, Electronic/Technology Products, Automobiles & Auto Components, Pharmaceuticals Drugs, Telecom & Networking Products, Textile Products, Food Products, High Efficiency Solar PV Modules, White Goods (ACs & LED), and Specialty Steel.

4) Rs 18,000 Crore Additional outlay of for PM Awaas Yojana - Urban

A sum of Rs 18000 cr is being provided for PMAY - Urban over and above Rs 8000 Crore already allocated this year. This will help ground 12 Lakh houses and complete 18 Lakh houses, create additional 78 Lakh jobs and improve production and sale of steel and cement, resulting in multiplier effect on economy.

5) Support for Construction & Infrastructure – Relaxation of Earnest Deposit Money & Performance Security on Government Tenders

To provide ease of doing business and relief to contractors whose money otherwise remains locked up, performance security on contracts has been reduced from 5-10% to 3%. It will also extend to ongoing contracts and Public Sector Enterprises. EMD for tenders will be replaced by Bid Security Declaration. The relaxations in the General Financial Rules will be in force till December 31, 2021.

6) Income Tax relief for Developers & Home Buyers

Differential between circle rate and agreement value in real estate income tax under Section 43 CA of IT Act has been increased from 10% to 20%. This is for primary sale of residential units up to Rs 2 Crore (from date of announcement of this scheme, till June 30 2021). Consequential Relief up to 20% shall also be allowed to buyers of these units under section 56(2)(x) of IT Act for the said period. The Income Tax relief provides the incentive to middle class to buy homes.

7) Platform for Infra Debt Financing

Government will make Rs 6,000 Crore equity investment in debt platform of National Investment and Infrastructure Fund (NIIF), which will help NIIF provide a debt of Rs 1.1 Lakh Crore for infrastructure projects by 2025.

8) Support for Agriculture: Rs 65,000 Crore for subsidized fertilizers

As fertilizer consumption is going up significantly, Rs 65,000 Crore is being provided to ensure increased supply of fertilizers to farmers to enable timely availability of fertilisers in the upcoming crop season.

9) Boost for Rural Employment:

An additional outlay of Rs 10,000 Crore is being provided for PM Garib Kalyan Rozgar Yojana to provide rural employment. This will help accelerate the rural economy.

10) Boost for Project Exports

Rs 3,000 Crore boost is being provided to EXIM Bank for promoting project exports under Indian Development and Economic Assistance Scheme (IDEAS Scheme). This will help EXIM Bank facilitate Lines of Credit development assistance activities and promote exports from India.

11) Capital and Industrial Stimulus

Rs 10,200 Crore additional budget stimulus is being provided for capital and industrial expenditure on domestic defence equipment, industrial infrastructure and green energy.

12) R&D grant for COVID Vaccine

Rs 900 Crore is being provided to Department of Biotechnology for Research and Development of Indian COVID Vaccine.

#Atmanirbhar3.0 #NirmalaSitharaman
12-November-2020
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Age old riches reach the right place

Union Finance and Corporate Affairs Minister Nirmala Sitharaman handed over confiscated ancient and medieval period Antiquities/ Coins to Union Minister of State (IC) for Tourism and Culture, Prahlad Singh Patel, in a ceremony held in New Delhi today.

Union Minister of State for Finance and Corporate Affairs, Anurag Singh Thakur, Finance Secretary Dr Ajay Bhushan Pandey, CBIC Chairman M Ajit Kumar, Members of the Board, Senior Officers of Central Board of Indirect Taxes & Customs, Ministry of Culture and Archaeological Survey of India were present on the occasion.

The 40,282 confiscated coins belong to the Sultanate and Mughal era from the period 1206 to 1720 AD, Princely states such as Kushana, Yaudheya, Guptas, Pratihar, Cholas, Rajputs, Mughals, Marathas, Kashmir and also British India, French and certain Australian coins from the period 1800-1900 AD. The confiscated items also cover 18 antique seal/stamp/religious emblem to be worn by the person having authority by Ruler to execute the Royal orders and 1 Silver Kamarband (waist band) to be worn by Royal/affluent family women.

The case was booked on 21st of June 1994 at Delhi Airport when Customs intercepted two Foreign Nationals who were travelling to Hong Kong and seized a part of these antique coins, copper stamps/seals, silver kamarband (waistband) and other antiquities from them. In the follow up search, the remaining gold coins and articles were seized from a house in the city.

After the completion of due process of law, Indian Customs requested Archaeological Survey of India to ascertain the value of these confiscated antiquities/articles and a committee was formed for valuing these items. The committee submitted its report in January/June 2020 and the value of 40,301 antique items was ascertained at Rs 63.90 crore. Further, in terms of Para 17.9 of the Disposal Manual, 2019 issued by CBIC these confiscated items are being handed over to Archaeological Survey of India by the Department.

#PrahladSinghPatel #NirmalaSitharaman
11-November-2020