News Highlights : 27 September 2016

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CURRENT AFFAIRS SEP 27, 2016

01. Government clears 11 FDI proposals worth Rs 2,325 crore:

An inter-ministerial panel approved 11 proposals entailing foreign direct investment (FDI) inflow of over Rs 2,300 crore. Among the proposals cleared, Sharekhan Ltd would attract foreign investment of Rs 2,060 crore, Finance Ministry sources said. The Sharekhan proposal was for selling 100 per cent stake to BNP Paribas, they said. Besides, Foreign Investment Promotion Board (FIPB), headed by Economic Affairs Secretary Shaktikanta Das, cleared the proposal of Perrigo India worth Rs 253 crore. Other proposals approved included Pepe Jeans and IBM. Of the 11 proposals cleared there would be expected FDI inflow of Rs 2,325 crore, sources said. Out of the 18 foreign investment proposals considered, three including that of Idea Cellular Infrastructure Services and Flag Telecom were deferred for want of more information. The 240th meeting of FIPB rejected 4 proposals. The proposal of Morgan Stanley Rs 95 crore was approved through automatic route. India allows FDI in most sectors through the automatic route, but in certain segments considered sensitive for the economy and security, the proposals have to be first cleared by the FIPB.The government has taken slew of measures in the recent past to boost foreign direct investment into the country.

02. Tax department unveils draft rules for registration under GST :

In less than a week after the first meeting of the GST Council, the tax department came out with three draft rules and their formats relating to registration, invoice and payments which would be finalised by week-end. The Central Board of Excise and Customs (CBEC) has invited comments on draft rules by 28th Sept 2016. The draft rules provide for online registration by residents within three days of submission of application. For non-residents who will come under the purview of GST, they will be required to electronically submit the application for registration at least 5 days prior to the commencement of business and shall also deposit full tax liability in advance. The government aims to implement the new indirect tax regime Goods and Services Tax (GST) from April 1, 2017, and to that effect the GST Council will hold its second meeting on September 30. The meeting would finalise rules for GST. The draft rules also provide that if a tax official fails to take action on registration application within a stipulated time frame, the application for grant of registration shall be deemed to have been approved. As per the draft norms, the applicant seeking registration will have to submit PAN, mobile number, email address on the common portal or through a facilitation centre.

03. France asks Switzerland to hand over 45,000 UBS accounts :

French tax authorities have asked Switzerland to hand over client information for some 45,000 bank accounts as part of a probe into alleged tax fraud, Le Parisien daily said. Swiss banking giant UBS said in July that the Swiss authorities had asked it to provide client information following a French request for international administrative assistance in May. The demand concerns former and current clients living in France, based on data from 2006 to 2008. Le Parisien on 26th Sept 2016 published extracts from a letter dated May 11 from French tax authorities. It said that France was chasing the names of the owners of “more than 45,161 different account numbers.” “The assets of those listed totaled more than 11 billion Swiss francs (11 billion dollars), which could represent a several billion dollar shortfall for the French treasury,” according to the letter written by French tax authorities, the report said. France opened a probe into UBS after former employees blew the whistle over the bank’s alleged system of setting up dual accounts to hide the movement of capital into Switzerland between 2004 and 2012. UBS denies the accusations, arguing that its involvement in such financial operations has not been proven.

04. Sebi reviewing rules for stock brokers; ‘code red’ to flag off misuse of client money:

Stock brokers will have to brace for tighter rules while handling clients' money and stocks. The Securities and Exchange Board of India (Sebi) is carrying out a comprehensive review of rules for stock brokers after it recently came across instances of siphoning of funds and securities from investors' accounts. The policy review — the first such exercise of this magnitude for brokers in the regulator's history — comes in the wake of the regulator receiving hundreds of complaints from investors of Unicon Securities and Kassa Securities, where crores of rupees were siphoned off from clients' accounts. The new rules, which may be announced soon, will mandate a uniform nomenclature for the stock broking industry while handling their clients' and own funds and securities.Sebi will put in place "red flag indicators", which will show whether brokers are misusing clients' funds and securities. These indicators would include percentage change in net worth of the broker and his liability to clients among other things. At present, brokers are required to maintain a certain net worth which varies from exchange to exchange."If the net worth falls below the threshold level, it could be a case of financial distress," said a person familiar with the development.

05. Govt favours e-payment of GST over Rs.10,000:

To make tax payments less cumbersome for taxpayers, the government has proposed that over-the-counter cash payments of Rs.10,000 and above as tax by private companies and traders will not be allowed under the goods and services tax (GST) regime. The draft payment rules, released by the Central Board of Excise and Customs (CBEC), have instead recommended that all tax payments under GST be done electronically through Internet banking, debit/credit card or NEFT/RTGS. Only outstanding dues and funds seized during investigation or recovery by notified persons, officers or government departments may be deposited over-the-counter in cash, according to the draft rules. The CBEC has also issued draft rules for registration and invoices under the GST, both of which depend on electronic interface through the GST network (GSTN) portal. Seeking public comments on the three sets of draft rules by September 28, the CBEC said, “Corresponding changes in the Model GST Law are being carried out separately.” Rules on other issues such as returns are still awaited. The draft rules and formats will be taken up for finalisation by the GST Council when it meets again on September 30.

06. In a first, PSLV puts 8 satellites in two different orbits:

In a first, Indian Space Research Organisation (ISRO)'s PSLV C-35 rocket launched a total of eight satellites, into two different orbits. The 371 kg SCATSAT-1, a satellite for weather-related studies, was placed in the polar sun synchronous orbit at an altitude of 730 km some 17 minutes after the rocket took off from Satish Dhawan Space Centre at Sriharikota at 9.12 a.m. About two hours later, the rocket placed two satellites from two educational institutions (PISAT and PRATHAM), three commercial payloads from Algeria (ALSAT-1B, 2B and 1N) and one each for Canada (NLS-19) and the United States (Pathfinder-1). Announcing the successful launch of all the satellites from the Mission Control Centre, ISRO chairman A.S. Kiran Kumar said the launch marked a "landmark day" in the history of ISRO. The rocket was re-ignited twice during its flight to place the set of satellites in different orbits. Due to the re-ignition, the Monday's launch is by far the longest PSLV launch by ISRO. ISRO said though it had launched several PSLV rockets in the past, this launch is "the first mission of PSLV in which it had launched its payloads into two different orbits," ISRO said. SCATSAT-1, with a life of five years, would provide weather forecasting services through the generation of wind vector products, it said.

07. Kolkata among top 100 global destinations:

The City of Joy has made it to the top 100 in the sixth annual Mastercard Global Destinations Cities Index. Five Indian cities have made it to the top 100 destination cities for 2016. Mumbai, Chennai, Delhi and Pune are the four other cities in the list. Kolkata ranks 62nd in the index.The study is based on data from IATA, National Tourism Boards, IMF and other organisations. Mumbai and Chennai, that stand out as the fastest growing destination cities globally with at least 1million overnight visitors in 2016 so far, ranked at number 14 and 19 respectively. Mumbai further consolidated its position as the only Indian city to enter Asia Pacific's top 10 destination cities in terms of international overnight visitors in 2016. Ranked at number 10, right after Shanghai, the city has received 4.86 million visitors along with a visitor spend of $3.6 billion in 2016 so far.

08. Government panel clears three new airports in Andhra Pradesh :

A government panel gave its 'in principle' approval for three new airports in Andhra Pradesh that are estimated to cost Rs 2,376 crore. Besides, the Steering Committee on Greenfield Airports has given site clearance for the proposed aerodrome at Kothagudem in Telengana. 'In principle' nod has been granted for airport projects at Bhogapuram and Dagadarthi, both in Nellore district, and Orvakallu in Kurnool district, an official release said. The international airport at Bhogapuram would be developed by the Andhra Pradesh government under Public Private Partnership (PPP) at an estimated cost of Rs 2,200 crore to cater to 6.3 million passengers per annum (mppa) in the initial phase, it said. The other two would be developed as domestic no-frills airports with an estimated cost of Rs 88 crore each. While Dagadarthi would be developed under PPP mode, Orvakallu would be taken by the state government itself. Together, these airports would cost Rs 2,376 crore.

09. Oil PSUs spend third of annual capex in 5 months:

State oil firms have spent about a third of their annual planned capex in the first five months of 2016-17 with the upstream firms spending at a faster clip than refiners. Between April and August, state oil firms spent Rs 31,000 crore against the full year target of Rs 88,000 crore. Explorers Oil and Natural Gas, Corp (ONGC), ONGC Videsh and Oil India together spent 43% of the planned Rs 48,000 crore. ONGC Videsh has used up nearly two-thirds of its Rs 14,800 crore target, the fastest among any state oil firms. Its parent, ONGC, has finished just a third of the capital outlay for the year. In the last fiscal year, ONGC had missed its capex target by a fifth while its overseas arm had slipped by about a third. Oil India has spent about Rs 1,400 crore in five months, against an annual target of Rs 4,020 crore. ONGC and Oil India are under pressure from the government to boost production so that India's rising dependence on crude oil imports can be cut. Towards this end, investments in fresh fields and use of new technologies in enhancing recoveries at ageing fields are urgently needed. But lower oil prices for more than two years have weakened investor confidence, slashing global investments in the sector significantly.

10. Government working to give services trade a reforms push :

Worried by the shrinking trade surplus in services, the government is working on a bouquet of reforms to play to the country's core strengths of technology, leisure travel and medical tourism. The commerce department has circulated a cabinet note on domestic reforms to enhance earnings from services exports, detailing measures that can be implemented after due deliberations. "It is work in progress. There are services like IT, tourism, medical tourism, legal and education, which are not our jurisdiction...We can apply our mind but it is up to the line ministries,"said an official, requesting anonymity. The services trade surplus narrowed 9% to $5.36 billion in July from $5.88 billion The department is calling for an overarching strategy dealing with services exports as it is an area of strength that the country can leverage as it enters into trade deals. It has proposed a dedicated body for setting standards in the services sector as also a mandate to the government's think tank, Niti Aayog, to identify steps to boost trade in the sector. The idea is to pinpoint sectors and ensure that they meet world-class standards though targeted measures.