dfa-9-sep

Daily Financial News Analysis – 9th Sep’19 | PDF Download

 

Deal for Cane Farmers

  • A government panel is considering recommending special incentives to dissuade farmers from growing sugarcane in water-scarce areas.
  1. Ever-rising fiscal burden
  2. Depletion of water tables Task force headed by NITI Aayog member Ramesh Chand
  • An incentive of Rs 6,000/acre for farmers in a year to not grow cane in states like Uttar Pradesh and Maharashtra.
  • Idea: bring down area under sugarcane cultivation by about 20%
  • On an average, over 48 lakh hectare of cultivable land has been under sugarcane farming in the last five years.
  •  The reason for farmers in water-scarce regions sticking to sugarcane farming is the support prices, assured market and profitability ensured by the Centre and state governments.
  • Objective: shifting water intensive crops to regions where the natural resource is abundant.

GST on Auto

  • Good and Services Tax (GST) Council meets in Goa on September 20.
  • Heightened expectations: Council will cut the tax rates for a host of categories of automobiles.
  • Revenue authorities at the central and state level are concerned about the potential revenue loss.

  • Automobiles including two-wheelers, attract 28% GST, they also are subjected to cesses that vary from 1- 22% depending on the make of the vehicle.
  •  If GST is reduced from 28% to 18%: government’s GST revenue could take a hit of at least Rs 30,000 crore.
  •  This takes into account gains from the push to sales volumes once taxes are cut.
  • GST Compensation Act doesn’t allow cesses on products that are not placed on the highest slab.
  •  The compensation proceeds are vital for states that are by law guaranteed a 14% year-on-year rise in GST revenue till 2022.

Q) At present, GST rate for electric vehicles is?

  1. 0%
  2. 5%
  3. 12%
  4. 18%

RCEP Meet

  • Pressure mounts to conclude the deal this year.
  • RCEP members have asked India to decide if it wants to remain a part of the proposed trade grouping.
  • Talks were on for India to immediately eliminate tariffs on 28% of the traded goods and more than 35% of the goods in phases.
  • Piyush Goyal attended the plenary session of the 7th RCEP Ministerial Meeting in Bangkok.
  • RCEP has said developments in the global trade environment may affect their individual positions as talks reach a “critical milestone.

Bharat Net

  •  Aims at connecting 2.5 lakh gram panchayats with wired broadband connectivity at 100 Mbps speed.
  • Government’s showpiece project related to Digital India.
  •  FE recently visited Dhanauri Kalan panchayat in Gautam Budh district in Uttar Pradesh, which has been earmarked as a Digital Village inaugurated by communications and IT minister Ravi Shankar Prasad last year, but the services did not look encouraging.
  • Although the panchayat was connected with optical fibre in 2016-end under the phase-I of the BharatNet project, 100 Mbps speed is still not available to consumers in Dhanauri Kalan.
  • The only Common Service Centre (CSC) at the panchayat, which provides home broadband connections as well as acts as a centre where citizens can access Internet on computers for their various needs like taking printouts or applying online for various schemes, is also facing peculiar problems.
  • The Internet remains down for several hours for days due to some cable cuts which happens quite frequently.
  • The cables and Internet are provided and maintained by BSNL.
  •  Speed is only 2 Mpbs, which is much lower than what is being provided by Reliance Jio’s mobile services.

RoSCTL

  • Government aims at administrative easing to boost exports and domestic manufacturing.
  • Government is contemplating a revamp of the Department of Commerce and certain incentive schemes that fall under it.
  • New exports incentives scheme — Rebate of State and Central Taxes and Levies (RoSCTL)

  • RoSCTL is a replacement of the DGFT’s Merchandise Exports from India Scheme (MEIS), which was challenged by the US last year for violating global trade rules.
  • There is a feeling that making the revenue department solely responsible for these schemes will help in ease of doing business and reduce transaction time for exporters.
  • Biswajit Dhar, professor, Jawaharlal Nehru University: “Any such move will only pit ministries against each other because while the finance ministry looks at revenue foregone, export targets and exporters’ concerns are the commerce department’s responsibility. ”

 

 

 

Download Free PDF