RBI announces 50 bps Rate Cut; FM welcomes

The Union Finance Minister Shri Arun Jaitley said that the Government welcomes the Reserve Bank of India (RBI)’s decision to reduce the repo rate to 6.75 percent from 7.25 percent. The Finance Minister was responding to the Monetary Policy announcement made by the Reserve Bank of India today.

The Finance Minister said that constant vigilance is warranted on the inflation front, this action signals that inflationary pressures have moderated significantly and are within the RBI’s comfort zone. He said that the Government is committed to meet its fiscal deficit target to consolidate the gains achieved in reducing the inflation.

The Finance Minister Shri Jaitley further said that this action also signals that the RBI is able to provide policy support to the real economy and help its recovery. He said that the Government looks forward to the transmission of these cuts to the rest of the economy and will work to facilitate this transmission, including by reviewing the framework of small savings. Shri Jaitley said that the rate cut, combined with actions taken and planned by the Government, will help boost confidence and investment, and help realize the economy’s medium-term potential growth rate.

The Finance Minister Shri Jaitley further said that Indian corporates would now be able to raise External Commercial Borrowings (ECB) through rupee denominated offshore bonds with no end use restrictions. He concluded that this would provide additional source of raising resources which would be fully hedged as they are denominated in rupees.

Shri Shaktikanta Das, Secretary, Department of Economic Affairs (DEA), Ministry of Finance said that the Medium Term Framework for FPI investment in Government Securities would bring in predictability for foreign investors. He said that the limits would be increased from existing 3.8% to 5% of the outstanding stock of Government Securities by March 2018 implying increase by about Rs 1,20,000 crore from the existing limit of Rs 1,53,500 crore.

Shri Das said that in the current financial year, Rs.26,000crore would flow in the Government Securities. He said that the increase in FPI limits would bring in greater foreign participation with predictability and would result in higher liquidity in the Indian Government Securities market. He said that for State Development Loans, FPI limits have been fixed for the first time at 2% of the outstanding stock that would amount to about Rs 50,000 crore by March 2018 and Rs.7,000 crore would flow in State Government Securities during the Current Financial Year. This would bring higher liquidity in these State Government bonds.

The Chief Economic Adviser Dr Arvind Subramanian said that the transmission of rate cut is partly by the banks and partly by the market rates coming down. He reiterated that the Government looks forward to the transmission of these cuts to the rest of the economy and will work to facilitate this transmission, including by reviewing the framework of small savings. He said that the Government would review the GDP rate target for the current Financial year after the figures of second quarter are available.

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SBI Launched State Bank ‘Buddy’ – A Mobile Wallet

Hon’ble Union Finance Minister Shri Arun Jaitley, today launched the e-wallet of State Bank of India, branded as “State Bank Buddy” in the presence of Shri Jayant Sinha, Minister of State (Finance), and Dr. Hasmukh Adhia, Secretary Department of Financial Services, and, Smt. Arundhati Bhattacharya, Chairman of State Bank of India.

Speaking on the occasion Shri Jaitley said that the SBI’s size of operation, geographical reach and reach among different segments of India could fascinate anyone. He said that in spite of the constraints faced by public sector over private sector banks, SBI remains the market leader in the social and economic programmes of the state. He cited the examples of Jan Dhan Yojna and Social Security Insurance schemes, wherein SBI performed the commendable job and led others way ahead.

Mr Jaitley further added SBI has always been instrumental in CSR activities. He especially appreciated SBI for throwing its weight behind the small men and said, “it is the marginal men who make the impact”. He commended the efforts of SBI in the digitizing India and visualized the situation where very soon the brick and mortar branches, cheque-books, passbook printing etc will become redundant. This would make transactions cashless, make expenditure and accounting of money easier, thus bringing more and more money in the official net. He said that State Bank Buddy was not specific only for the tech-savvy people, but being in 13 different languages, it would cater to all kinds of users. He further said that with State Bank Buddy, the face of consumer spending in India is going to change.

The Minister of State (Finance), Shri Jayant Sinha while addressing the audience added that SBI is at the centre of the entire financial system, being a banker to every Indian. He further commended SBI for adopting the best practices of CSR activities by setting a separate channel through SBI Foundation.

Ms. Arundhati Bhattacharya, Chairman of State Bank of India, in her address said, “This is one more step in our ambition of becoming the provider-of-choice for customers’ everyday needs: Financial and Non-Financial. Mobile is going to be at the centre of this transformation and State Bank Buddy will help us strengthen our proposition through this medium”. Echoing the Chairman’s thoughts, Mr. B. Sriram, MD; GE, National Banking Group said that “State Bank Buddy will help consumers in secure and convenient digital payments. We are highly excited about our latest digital offering and will continue adding more features and support for more Mobile Platforms including Feature Phones”.

The State Bank Buddy, the mobile wallet application of State Bank Group has been launched in collaboration with Accenture and MasterCard.

The Wallet which has been launched in English, Hindi and 11 other languages has several features like Send money to registered and new users, Ask money and Send reminders to settle dues, transfer additional cash into an account of your choice free of cost, Recharge and Pay Utility Bills instantly, Book for movie tickets, flights and hotel and shop for merchandise.

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Government takes measures to Squeeze the Black Money

The Union Finance Minister Shri Arun Jaitley said that it will be harder days for those who indulge in illegal and illicit transfer of money across the border. He said that world is moving towards transparent regime making it difficult to hide an illicit transfer of money through internet or other modes. The Finance Minister said that the world economy has moved quite closer in recent years and the countries across the world have decided through G-20 and other international forums to cooperate and coordinate with each other in such cases. The Finance Minister Shri Jaitley was speaking at the Enforcement Day function of the Directorate of Enforcement, Ministry of Finance at Vigyan Bhavan here today.

The Union Finance Minister Shri Arun Jaitley further said that the present Government has taken various steps to squeeze the black money including undisclosed assets within and outside the country. He said that our focus is on reasonable tax rates and ease of doing business for incentivising people to abide by laws and avoid evasion of taxes etc.

Earlier speaking on the occasion, Shri Shaktikanta Das, Revenue Secretary said that there are huge challenges before the Enforcement Directorate. He mentioned about three major challenges especially with regard to black money including Hawala transactions through trade based money laundering, accommodation entry cases through fake companies and Ponzi schemes. He said that there is now better coordination and sharing of information among different revenue intelligence agencies including Enforcement Directorate, DRI, DG Central Economic Intelligence Bureau and Financial Intelligence Units among others. He said that Enforcement Directorate has to abridge itself in order to meet these challenges of innovative minds using innovative techniques for illicit transfer of money. He said that intelligence gathering and investigative skills of the officers of the Directorate have to match the innovative minds that are involved in illegal activities. He said that Revenue Department is open for training of officers of the Directorate to upgrade their skills and learn about various new innovative techniques to meet these challenges.

Earlier, in his Opening Remarks, Dr. Rajan Katoch, Director of the Enforcement Directorate said that this Directorate enforces the provisions of two special laws i.e. Foreign Exchange Management Act (FEMA),1999 and Prevention of Money Laundering Act (PMLA), 2002. He said that the Directorate has completed 59 years of its existence and entered in its 60th year as the first Enforcement Unit was formed on 1st May, 1956. He said that since coming into force of PMLA in 2005, the Directorate has traced and attached laundered assets worth Rs, 9003 crores in 492 attachments orders, arrested 51 money launderers and has prosecuted money launderers in 173 cases. Dr. Katoch further said that during 2014-15, the Directorate has completed investigations in 1576 cases and Notices issued under FEMA in 654 cases for an amount of Rs. 7823 crore. He said that the Directorate also finalised FEMA Adjudication proceedings in 818 cases during this period. During 2014-15, Dr. Katoch added that 166 provisional attachment orders were issued for attached laundered assets of Rs. 3657 crores and prosecution of money launderers was launched in 69 cases.

Earlier, the Finance Minister Shri Jaitley also gave awards and Director’s Commendations for outstanding performance and meritorious service to the officers of the Enforcement Directorate as well as to Kolkata and Guwahati Zonal Offices for their best performance and to Ahmedabad and Kochi Zonal Offices for their outstanding performance in 2014-15. -PIB

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FM presents Union Budget in Lok Sabha

Finance Minister Arun Jaitley presented the second Union Budget of NDA coalition government in Lok Sabha today. He reached Lok Sabha ten minutes earlier and met all the opposition leaders in the lower house.

As usual, the budget presentation started at 11 am by the minister. In his address, finance minister said that Indian economy has been one of the fastest growing economies in the world. The economy is likely to achieve the growth rate of 8 per cent in the current fiscal year. Highlighting the macro economic data, the minister said that headline inflation has been moderating and the fiscal deficit declining as well. However, manufacturing sector is the major concern for the economy, but the good news is that, it is revived from the negative steam and moving up. 

Minister praised the government’s policies – Jan Dhan Yojna, Swatch Bharat and Mahatma Gandhi Rural Employment Gurantee Scheme. In the budget, Rs. 5,000 crore additional allocation has been made for MGNREGA.

Other Highlights:

• Abolition of Wealth Tax.
• Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
• Rate of corporate tax to be reduced to 25% over next four years.
• No change in tax slabs.
• Total exemption of up to Rs. 4,44,200 can be achieved.
• 100% exemption for contribution to Swachch Bharat, apart from CSR.
• Service tax increased to14 per cent.
• Rs. 25,000 crore for Rural Infrastructure Development Bank.
• Rs. 70,000 crores to Infrastructure sector.
• AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
• Centre of film production, animation and gaming to come up in Arunachal Pradesh.
• IIM for Jammu and Kashmir and Andhra Pradesh.
• Allocation of Rs. 2,46,726 crore; an increase of 9.87 per cent over last year.
• DBT will be further be expanded from 1 crore to 10.3 crore.
• Develpoment schemes for churches and convents in old Goa; Hampi, Elephanta caves, Forests of Rajasthan, Leh palace, Varanasi, Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be under the new tourism scheme.
• Permanent Establishment norms to be modified to that mere presence of offshore fund managers in the country does not lead to “adverse tax consequences.”

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Economic Reforms Including GST and Insurance Amendment Bill are on the Anvil: FM

Economic Reforms Including GST and Insurance Amendment Bill are on the Anvil: FM; Calls for Large Investment from Domestic and International Investors in Infrastructure Sector


The Union Finance Minister Shri Arun Jaitley said that the Government has taken series of measures to tackle various challenges being faced by the infrastructure sector in the country. The Finance Minister said that many more such measures are in offing in near future. The Finance Minister Shri Jaitley said that he is in discussion with the members of opposition parties to make necessary procedural changes in Land Acquisition Act in order to avoid delay in the implementation of the infrastructure projects. The Finance Minister was delivering the Key Note Address at the Citi’s Investor Summit: “India – Poised for Higher Growth” here today.

The Finance Minister Shri Jaitley further said that various sectors have been opened for foreign direct investment in the infrastructure sector by the present Government. In this regard he specifically mentioned about the defence and power sectors among others. The Finance Minister said that the Government through its Budget has laid down a direction in which the economy is likely to proceed to restore the investors’ confidence. He said that there will not be any movement of economy in contrary direction.

The Finance Minister Shri Jaitley also gave details of various economic reforms which are in the pipeline. In this regard, he specifically mentioned about the Goods and Service Tax (GST) and Insurance Amendment Bill among others. He said that he is expecting that Insurance Amendment Bill will be passed in the forthcoming Winter Session of Parliament. He said that he is in touch with the Parliament Select Committee in this regard and will try to persuade it to give its report at the earliest.

As regards GST, the Finance Minister said that he is in touch with the various State Governments and most of the contentious issues have already been resolved. He said there are two areas including liquor and petroleum products where the States want to have taxation authority. Two States want entry tax and octroi to be kept-out of the purview of the GST. The Finance Minster said that all these issues will be sorted-out soon. He will also apprise the Empowered Committee of State Finance Ministers’ about the draft Constitution Amendment Bill on GST before introducing the same in Parliament.

The Union Finance Minister said that the targets fixed for disinvestment in the current financial year are quite ambitious one but he hopes to achieve that or reach near the same. He said that road shows in this regard are being held in many parts of the world.

The Finance Minister Shri Jaitley said that inflation, especially food inflation has moderated in last few months and global fuel prices have also come down. Therefore, if RBI which is highly professional organization in its wisdom decides to bring down the cost of capital will give a good fillip to the Indian economy.

Along with the Finance Minister, Shri Dinesh Sharma, Additional Secretary, Department of Economic Affairs, Shri S.S. Mundra, Deputy Governor, RBI and Shri Parmit Zhaveri, CEO, Citi Bank were also present on this occasion. The aforesaid Summit was also attended among others by domestic and international investors.

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