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New date of release of Wholesale Price Index (WPI) (Base 2004-05=100) for March 2016



New date of release of Wholesale Price Index (WPI) (Base 2004-05=100) for March 2016

In view of declaration of holiday on 14th April 2016 on account of birthday of Dr. B.R Ambedkar by Government of India, in exercise of power conferred by section 25 of the Negotiable Instruments Act, 1881 (26 of 1881), vide Office Memorandum no. 12/6/2016-JCA-2 dated 21st March 2016 by Department of Personal and Training, it is informed that the WPI for March 2016 will be released on 18th April 2016 instead of 14th April 2016. 

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Modification in the policy for liberalisation of administratively allotted Spectrum
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the modifications in the policy for liberalisation of administratively allotted spectrum where market determined prices were not available. This will facilitate optimal utilisation of spectrum by introducing new technologies, sharing and trading of spectrum.

The most recent recommended reserve price will be taken as the provisional price for liberalisation of administratively allocated spectrum where auction determined price is not available. Subsequent to the completion of the ensuing auction and with the availability of auction determined price, the provisional price already charged will be adjusted with the auction determined price with effect from the date of liberalisation on pro-rata basis.
This decision was taken on the basis of the recommendations of the sector regulator, TRAI and approximately and a sum of Rs.1300 crore is likely to accrue by this process. 

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Government achieves the Tax Revenue Targets for FY 2015-16; Actual collections of Direct & Indirect Tax Revenues in FY 2015-16 is Rs. 14.60 Lakh Crore as against Revised Target (RE) of Rs. 14.55 Lakh crore
The aggregate Budget Estimates (BE) for total Direct and Indirect Tax Revenues for FY 2015-16 was Rs 14.45 Lakh Crore which was revised to Rs 14.55 Lakh Crore (RE). The actual collection (provisional) is Rs 14.60 Lakh Crore. The total collection has exceeded the RE and represents a growth of 17.6% compared to the last financial year.

The Indirect Tax revenue (provisional) collections stand at Rs 7.11 Lakh Crore and has exceeded the BE and RE by Rs 65,618 Crore and Rs 9,885 Crore respectively. This represents a robust growth of 31.1% over revenue receipts in 2014-15.
The Direct Tax revenue collections (prov.) stand at Rs 7.48 Lakh crore which is only slightly lower than the RE of Rs 7.52 Lakh Crore. This represents a growth of 7.61% over the receipts in 2014-15.

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 Cabinet approves recommendations of 14th Finance Commission on fiscal deficit targets and additional fiscal deficit to States during 2015-20

The Union Cabinet chaired by the Hon’ble Prime Minister has today given its approval to Recommendations on Fiscal Deficit Targets and Additional Fiscal Deficit to States during Fourteenth Finance Commission (FFC) award period 2015-20 under the two flexibility options recommended in para 14.64 to 14.67 of its Report (volume – I).

FFC has adopted the fiscal deficit threshold limit of 3 per cent of Gross State Domestic Product (GSDP) for the States. Further, FFC has provided a year-to-year flexibility for additional fiscal deficit to States. FFC, taking into account the development needs and the current macro- economic requirement, provided additional headroom to a maximum of 0.5 per cent over and above the normal limit of 3 per cent in any given year to the States that have a favourable debt-GSDP ratio and interest payments-revenue receipts ratio in the previous two years. However, the flexibility in availing the additional fiscal deficit will be available to State if there is no revenue deficit in the year in which borrowing limits are to be fixed and immediately preceding year.

Since the year 2015-16 is already over, the States will not get any benefit of additional borrowings for 2015-16. However, the implications for the remaining period of FFC award, i.e., 2016-17 to 2019-20, would depend upon respective States’ eligibility based on the criteria prescribed by FFC.

For the year 2016-17, the following fiscal parameters need to be taken into account before determining states eligibility for additional borrowings of 0.5% of GSDP recommended by FFC: (Para 14.64 to 14.67 – Vol. I read with Annexure 14.2 of Vol. II of the FFC Report):

a) The revenue position of the State as per Finance Account for t-2 and as available from Revised Estimates for t-1. To illustrate, for the year 2016-17, the revenue position of the State for 2014-15 (actual as per Finance Accounts) and 2015-16 (RE) would be relevant.

b) The IP/TRR ratio and Debt/GSDP ratio based on the data as contained in Finance Account for t-2. To illustrate, for determining States’ eligibility for 2016-17, the IP/TRR ratio and Debt/GSDP ratio as disclosed in Finance Account of States for 2014-15 would be relevant.

If a State is not able to fully utilise its sanctioned fiscal deficit of 3 per cent of GSDP in any particular year during the 2016-17 to 2018-19 of FFC award period, it will have the option of availing this un-utilised fiscal deficit amount (calculated in rupees) only in the following year but within FFC award period. For the purpose of calculating the unutilised borrowing space, the unutilised fiscal space as compared to FD limit of 3% of GSDP is to be reckoned. Similarly, any additional borrowings availed beyond the State’s entitlements shall be adjusted from Net Borrowing Ceiling of the following year.
There is no financial implication for Government of India as the borrowings are made by the respective State Governments within the fiscal deficit limits laid down by Finance Commission and incorporated in FRBMA of the States. However, the State will get additional space to raise borrowings which may result in much needed Government Expenditure for Capital projects/ infrastructure.

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Acquisition of 51% shareholding by M/s. ATC Asia Pacific Pte. Ltd., Singapore in M/s. Viom Networks Ltd.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval to the proposal of M/s. ATC Asia Pacific Pte. Ltd. Singapore for acquisition of 51% of shareholding in M/s. Viom Networks Limited by way of transfer from existing shareholders.
The approval would result in a total foreign direct investment inflow of Rs.5,856.51 crore into the telecom infrastructure of the country which will spur economic growth, besides fostering inclusiveness and equity. 

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