Second Tranche of Sovereign Gold Bonds

3.16 lakh applications were received by the Banks during the Second Tranche of Sovereign Gold Bonds for a total subscription of 2790 Kilograms of Gold amounting to Rs. 726 crore. 
During the second tranche of Sovereign Gold Bond (SGB) Scheme from 18th January, 2016 to 22nd January, 2016, as per initial figures, 3.16 lakh applications were received for a total subscription of 2790 Kilograms of gold amounting to Rs. 726 crore by the Banks. The actual figure may vary as comprehensive information from all the authorized receiving agencies is under compilation. These Bonds will be issued on February 08, 2016. The top ten receiving agencies in terms of subscription amount are SBI, Indian Bank, Syndicate Bank, ICICI Bank, Bank of India , Punjab and Sind Bank, Andhra Bank , Canara Bank, PNB, and Central Bank of India. 

The trend during the Second Tranche of SGB shows that the scheme is gradually picking-up amongst the investors with increase in awareness and more clarity about the provisions of the scheme.

The Second Tranche of SGB was kept open from 18th to 22nd January, 2016. The Finance Minister Shri Arun Jaitley had addressed the CMDs of the banks through video conference on 14th January, 2016 to discuss their preparedness for the second tranche of the Sovereign Gold Bond Scheme. Review meetings were also held with the Banks in Mumbai and Delhi by Shri Shaktikanta Das, Secretary, Economic Affairs. To increase the awareness amongst potential depositors, the Government had also launched the media campaign through AIR, FM radio, Print media, Mobile SMS, facebook and twitter.

It may be recalled that during the First Tranche of SGB issued during November 2015, 62169 applications were received for a total subscription of 915.953 Kilograms of gold amounting to Rs 246.20 crore by the Banks and Post Offices.

Earlier, the Government had launched the Sovereign Gold Bond (SGB) scheme on 5th November, 2015. The objective of the scheme is to reduce the demand for physical gold and shift a part of the domestic savings used for purchase of gold, into financial savings.

Sovereign Gold Bonds are issued on behalf of Government of India in tranches by RBI, from time to time, on payment of the required amount in rupees. The Bonds are denominated in grams of gold and are restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions. Minimum permissible investment is two grams of gold, value of which is to be paid in rupees. The maximum amount which could be subscribed is 500 grams per person per financial year. Government has fixed the rate of interest on gold bonds for the year 2015-16 as 2.75 % per annum, payable on half yearly basis. The tenor of the Bond is for a period of 8 years with exit option from 5th year onwards. On maturity, the investor will get the equivalent rupee value of the quantum of gold invested at the then prevailing price of gold. Detailed information about the scheme is also available on the website and on the toll free number 18001800000. 
India and ADB Sign $80 Million Loan Agreement to Improve Urban Services in Two North Eastern State Capital Cities of Agartala and Aizwal 
The Asian Development Bank (ADB) and the Government of India signed here today an $80million loan agreement to continue improving infrastructure in two North Eastern State Capital cities.

The loan is the third tranche of a $200 million financing facility under the North Eastern Region Capital cities Development Investment Program and will be used for investments in water supply, solid waste management and sanitation in Agartala and Aizwal. It will also support urban reforms, benefiting nearly a million people in the two cities. Previous program tranches have provided assistance to five other cities in the Northeast—Shillong (Meghalaya), Aizawl (Mizoram), Kohima (Nagaland), Gangtok (Sikkim) and Agartala (Tripura).

The loan agreement was signed by Shri Raj Kumar, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance on behalf of Government of India and Ms Teresa Kho, Country Director, ADB’s India Resident Mission on behalf of Asian Development Bank (ADB). Separate subproject agreements under the third tranche were signed by Shri Parmod Kumar, Director (UD), Sh. B.P. Das, Project Director (SIPMIU), Government of Tripura and Shri Vanlalmawia Renthlei, Joint Secretary, Urban development & Poverty Alleviation Department, Government of Mizoram on behalf of Ministry of Urban Development (MoUD), Government of Tripura and Government of Mizoram respectively.

Urban infrastructure and services in the northeast of the country are grossly inadequate and this third tranche loan will help Agartala and Aizwal improve and expand services, as well as strengthening the institutional, managerial, and financial capacity of service institutions.

The loan will support further investments to increase access to sustainable and improved urban services, with Aizwal and Agartala cities, selected for financing under the third tranche of the program based on their progress on reforms and implementation performance under earlier tranches.”

The third tranche loan from ADB’s ordinary capital resources has a 20-year term. The Ministry of Urban Development is responsible for implementing the tranche 3 activities and overall program, which are both due for completion by June 2019.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. 
Resolution of more than 100 Cases of Transfer Pricing Disputes with USA Under MAP 
One of the significant steps taken by Central Board of Direct Taxes(CBDT to boost investment sentiments among MNCs is the landmark Framework Agreement signed with the Revenue Authorities of USA in January, 2015. This agreement was finalised under the Mutual Agreement Procedure (MAP) provision contained in the India-USA Double Taxation Avoidance Convention (DTAC). The agreement seeks to resolve about 200 past transfer pricing disputes between the two countries in the Information Technology (Software Development) Services [ITS] and Information Technology enabled Services [ITeS] segments. More than 100 cases have already been resolved and some more are expected to be resolved before the end of this fiscal.

Prior to resolution of disputes under the Framework Agreement the US bilateral APA programme was closed to India. The success of the framework Agreement in short period of one year has led to the US Revenue Authorities opening up their bilateral APA programme to India. The USA is expected to begin accepting bilateral APA applications shortly.

The MAP programmes with other countries like Japan and UK are also progressing well with regular meetings and resolution of past disputes. The CBDT is confident that a combination of a robust APA programme and a streamlined MAP programme would be helpful in creating an environment of tax certainty and encourage MNCs to do business in India. 

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