Reservation politics turned the tide as expected.Loksabha passed Companies Bill with mandate on CSR spending!The Bill, which will now travel to the Rajya Sabha, says companies must "ensure" they spend at least 2 per cent of their net profit towards CSR activities as Lok Sabha clears key bill, Bank licence aspirants including Reliance and Religare gear up for entry!
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Lok Sabha was stunned as Bill was torn; scuffles break out with Congressmen seeking to save Sonia.However Lok Sabha is unlikely to pass Quota Bill in this session, The purpose is served. Reservation politics turned the tide as expected.Loksabha passed Companies Bill with mandate on CSR spending!The Bill, which will now travel to the Rajya Sabha, says companies must "ensure" they spend at least 2 per cent of their net profit towards CSR activities as Lok Sabha clears key bill, Bank licence aspirants including Reliance and Religare gear up for entry! The Banking Amendment Bill, a major reforms legislation, on Tuesday got approval of the Lok Sabha after the government dropped the controversial provisions relating to allowing banks to trade in futures and keeping the sector outside the purview of Competition Commission.Shares in non-financial banking companies and most of the major banking stock moved higher on Wednesday after the Lok Sabha passed a banking bill paving way for foreign investments in the sector and establishment of new private bank.While the process may take up 12 months, brokerage firm Credit Suisse is of the view that up to 3-4 licenses may be issued. NBFCs like L&T Finance, LIC Housing Finance, Shriram group, IDFCBSE 1.64 % as well as some corporate groups may apply for a banking license, Credit Suisse said in a note.A day after back to back passage of two key reforms bills in Lok Sabha, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said that this would give positive signal to investors that there is no policy logjam in the country. Yesterday, Lok Sabha passed the Banking (Amendment) Bill and the Companies Bill sitting late in the evening.
Corporate affairs minister Sachin Pilot said CSR would be mandatory for companies like their tax liabilities
The government has introduced the concept of class action suit wherein depositors or a unit of shareholders can sue the firm committing fraud
N scenes considered unprecedented in the Lok Sabha, UPA chairperson and Congress president Sonia Gandhi Wednesday led party members in a scuffle with their Samajwadi Party counterparts after a SP MP snatched the copy of the SC/ST quota in promotions bill from minister V Narayanasamy as he introduced it.
As soon as Narayanasamy stood to introduce the Constitution Amendment Bill for consideration and passing at 3 pm, SP MP from Nagina, Yashvir Singh, walked up to the minister and snatched the copy in his hand before joining party colleagues protesting in the well of the House.
Even before other Congress MPs could react, Sonia left her seat and walked into the well to try and snatch the bill back from Singh. But Singh passed it on to party colleague Neeraj Shekhar (Ballia) who promptly tore it. An agitated Sonia stood in the well before Congress members Vilas Muttemvar and K Bapi Raju rushed aggressively to pounce on Singh.
However, Shekhar and another SP member, Brijbhushan Sharan Singh, formed a human shield to avoid more trouble despite aggressive gestures from Congress members who had rushed to the well. Sonia, meanwhile, was seen suggesting to Narayanasamy to continue with his speech from another copy of the Bill.
Taken aback by the turn of events, Speaker Meira Kumar adjourned the House for the day, leaving SP and Congress members trading charges over what had happened. Sonia briefly watched them before going to Kumar's chamber. Earlier, SP members had disrupted question hour and forced adjournments in the morning, at noon as well as at 2 pm.
Lok Sabha on Tuesday voted to replace India's 56-year-old omnibus Companies Act with the Companies Bill, 2011, that brings the management of the corporate sector in line with global norms. It introduces concepts like responsible self-regulation with adequate disclosure and accountability, ushers in enhanced shareholders' participation and provides for a single forum to approve mergers and acquisitions.The Bill, which will now travel to the Rajya Sabha, has said companies must "ensure" they spend at least 2 per cent of their net profit towards corporate social responsibility (CSR) activities, a move that has drawn both criticism and appreciation from the stakeholders but one that promises to change the way CSR has been perceived so far. Corporate affairs minister Sachin Pilot said CSR would be mandatory for companies like their tax liabilities. "Severity of law is not deterrent, it is surety which is deterrent," he said, adding the companies may engage in promoting education, reducing child mortality and any other matter they feel can contribute for social welfare.Indian Express reports.
The Manmohan model has unleashed India's growth story and shown the world that the country can achieve over 9 per cent growth rate, Finance Minister P Chidambaram said today.
Dismissing allegations that Manmohan-Chidambaram model was responsible for economic slowdown, the Minister told CPI leader Gurudas Dasgupta, "Please do not equate me with the Prime Minister. The Prime Minister is a distinguished economist. I am not. The PM has vast experience, I do not have."
Manmohan model has shown that India can achieve 9 per cent plus growth and how to reduce fiscal deficit to below 3 per cent of the GDP, Chidambaram said debunking the Dasgupta's contention that the economic liberalisation was the root cause of all ills facing the country.
"Do not blame the model, if you blame the model...Manmohan model must also be credited for making India the second fastest growing economy in the world", Chidambaram said, winding up the debate on Banking Amendment Bill.
Dasgupta contended that economic liberalisation initiated by Singh was responsible for growing poverty and economic slowdown.
Four bank employees unions have threatened to go on strike on Thursday to protest against the proposed Banking Laws (Amendment) Bill and mergers of the banks.
"If the strike materialises, a section of the bank's employees may take part in the proposed strike on the said date (December 20), in which case, the normal functioning of the branches or offices of the bank may get affected," Indian Bank said in a filing on the BSE.
The All India Bank Employees Association (AIBEA), Bank Employees Federation of India (BEFI), All India Bank Officers' Association (AIBOA) and National Union of Bank Employees (NUBE) have given a call for one day country-wide strike.
Nevertheless, Corporate entities interested in setting up new banks, including Reliance and Religare, have begun doing the groundwork after a key Bill was passed in the Lok Sabha last evening.
In a major step to reform India's banking sector, the Lok Sabha had passed the Banking Laws (Amendment) Bill, 2011, paving the way for foreign investments in the sector and establishment of new private banks.
The Bill will allows RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10 per cent from 1 per cent.
RBI wanted the government to amend the banking laws before starting the process towards issuance of new banking licences.
The major groups interested in seeking new banking licenses, whenever RBI decides to give them, include Anil Ambani-led Reliance Group, financial services conglomerate Religare group, Larsen & Toubro and Shriram group.
Welcoming the passage of the bill in Lok Sabha, Religare EnterprisesBSE 2.06 % chief Shachindra Nath said that "it is important that new banks are brought in to contribute towards the overall financial inclusion and development agenda".
"We are now waiting for the Bill to be passed in the Upper House and the RBI to come out with its final guidelines post which we would evaluate how we align our banking business model with the regulatory intent," Nath said.
"Given the under penetration of banking and financial services in a country as large as India, it is important that new banks are brought in to contribute towards the overall financial inclusion and development agenda," he said.
"Having said that, this will also pave way for more reforms and investments in the sector," Nath added.
When contacted, a spokesperson for Reliance Capital, the financial services arm of Reliance group, also welcomed the passage of the bill in Lok Sabha, but did not comment further.
Reliance CapitalBSE 0.98 % CEO Sam Ghosh has earlier said that the group is full-prepared from its side for banking foray.
"We are ready. We have been working on this for quite some time... for about one and half years," Ghosh had said in an earlier interview.
While the process of granting new banking licences have been underway for quite some time, the government has recently indicated that a framework could be put in place soon for allowing new players in this business.
The RBI had issued draft guidelines in August 2011 for issuance of new banking licences, while in July 2012 it released the comments and suggestions received by it.
Religare group and Reliance Capital have shown their interest in starting new banks ever since a proposal was floated to issue new licenses.
Addressing Reliance Capital shareholders last year, Chairman Anil Ambani had said that the group's banking entity could be called 'Reliance Bank'.
The Companies Bill, 2011 has gone through several versions since 2008 when it was first introduced. It includes learnings from the Satyam fiasco in its investor protection clauses. The government has also introduced the concept of class action suit wherein depositors or a unit of shareholders can collectively sue the company committing fraud. The Bill will also provide the serious fraud investigation office (SFIO) with powers to conduct searches and seizures on the premise of a fraudulent company. While steering the Bill, Pilot said when Companies Act, 1956, was promulgated there were only 30,000 companies in the country while in 2012, there are 8,50,000 firms in India.Indian Express reports.
Apart from introducing concepts like one person company and making independent directors and company auditors more accountable, the Bill also seeks to keep a tab on remunerations for the board of directors and other executives of the companies to protect the interest of shareholders and workmen. Disapproving of "vulgar display of wealth", Pilot said the law provides that remuneration of a director of a company should not be more than 5 per cent of the net profit.
The new legislation, which is a much shorter than the earlier one has also harmonised the company law framework with sectoral regulations. It has 480 sections compared to over 600 sections in the 1956 Act.
"Since the bill is too important for me to pass, therefore I am bringing the Bill dropping the controversial clauses," Finance Minister P Chidambaram said, winding up the discussion on the Banking Laws (Amendment) Bill, 2011.
The Bill, which seeks to strengthen banking regulation, was later passed by the voice vote after the amendments proposed by the Left Parties were rejected by the House.
The Bill, along with proposed legislations on pension and insurance, was one of the five key reforms measures on the government's agenda during the current session of Parliament.
The government dropped the controversial changes in the Bill in deference to the wishes of Opposition, the Minister said, adding it has accepted all major recommendations of the Standing Committee on Finance.
On the proposal to allow banks to participate in the commodity futures trading, he said, it was based on the recommendations of the Standing Committee on Food and Consumer Affairs and report of the Reserve Bank's working group.
As regards other issues, he said, while RBI would regulate the banking sector, the Competition Commission of India (CCI) would look into competition practices in the banking sector.
The Minister also expressed the commitment of the government to infuse Rs 15,000 crore into public sector banks in the current financial year and retain their basic character.
The Banking Bill also seeks to raise the voting rights of investors in private sector banks to 26 per cent, from 10 per cent. It also allows RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10 per cent, from 1 per cent.
On concerns of members that banking reforms would lead to job losses, the Minister said public sector banks would be hiring about 84,500 people this year and 6,000 branches would be opened every year. "I cannot foresee our banks retrenching anyone. In fact we will recruit many more," Chidambaram said.
He said the Justice B N Srikirishna Committee has given its draft report and once the final report comes, the government would come out with a comprehensive banking law.
On consolidation in the banking sector, Chidambaram said India will need 2-3 world class banks and there would still be over 20 PSBs after mergers. Private sector banks are growing, he said, adding there was no reason why the PSBs should not be encouraged to grow.
Describing the rising NPAs as a matter of concern, but not alarm, Chidambaram said, "This is not the time to tighten the screws. They are not willful defaulters. This is the time to restructure loans."
Rejecting opposition's charge that 'Manmohan-Chidambaram' economic policies were responsible for slowdown, the Minister said, "Do not equate me with Manmohan Singh. I do not have his vast experience.
"Manmohan model showed that we can achieve 9 per cent growth. It also showed how to reduce fiscal deficit. Manmohan model must also be credited for making India the second fastest growing economy," he said.
Chidambaram said the economy, which was going through difficult time, would improve and banks would need funds to lend to the industry. The banks, he added, have enough liquidity.
Participating in the debate, which was marred by two adjournments, BJP, Left and Trinamool Congress demanded that the government should withdraw the controversial amendments.
Unrealistic tax declaration? Only 14.6 lakh people have declared their income of Rs 10 lakh and above for tax purposes, says FM
Finance Minister P Chidambaram today made a case for improving tax information system to augment revenue collection while committing to establishing a stable tax regime.
"Our focus is always to have a reasonably stable tax regime which is in the interest of both the tax payers as well as tax collectors," he said at the Consultative Committee meeting attached to the Finance Ministry.
He emphasised the need for systematic changes including strengthening of the tax information system for better collection of taxes. The government, he said, is fully committed to provide best possible facilities to the tax payers for better tax compliance and revenue augmentation.
At present, there are 3.5 crore people filing income tax returns. Only 14.6 lakh people have declared their income of Rs 10 lakh and above for tax purposes which is not realistic, he said.
Noting that country has moderate rate of income tax as compared to various developed countries, he said "there is lot of scope for better tax compliance and tax collections."
The peak rate of taxation is 30 per cent at present. Highlighting that about 50 per cent tax payers are filing their return through e-mode, the Finance Minister said there is a need for more and more tax payers to electronically file their return as it well help in expediting tax processing and refund process.
The target for collection of direct taxes for the current fiscal is fixed at Rs 5,70,251 crore, he added.
The Finance Minister informed the members that department had refunded Rs 57,000 crore till this time during the current fiscal against Rs 70,000 crore in the same period of the previous fiscal.
The meeting, which was attended by Members of Parliament and secretaries in the Ministry of Finance, also discussed measures for improving relationship with tax payers.
Some members highlighted the need for keeping the tax rates low for better compliance while some suggested that interest on refund may be paid at least at the bank rate of interest.
Passage of Banking, Companies bills to give positive signal: Montek Singh Ahluwalia
"The fact that these important legislations have got through Lok Sabha will send a very positive signal, that fears of policy logjam ... that they are overdone ... that thing do get debated and there are difference of opinion and we do make progress," Ahluwalia said on sidelines of CII Health Summit.
While the Banking Bill would pave the way for entry of more players and investments in the sector, the Companies Bill would ensure transparent corporate governance and safeguard of the interest of small investors and employees.
"I am really very pleased. We were expecting the forward movement. I think the World was expecting to see the forward movement," he said when asked about passage of the two key bills in Lok Sabha.
When asked whether the other key reforms bills on insurance and pension would be taken up in the forthcoming Budget Session, he said, "Sure, they will."
About the review of the government's ambitious cash transfer scheme by the Prime Minister yesterday, he informed that though the scheme would be rolled out on January 1, the actual delivery of cash would happen only in the middle of the month.
"We are starting cash transfer scheme on January 1 that does not mean that delivery on that day only. It will be effective and operational by January 15 as the money is released later on," he said.
Earlier, addressing the health sector entrepreneurs, he assured that the government would not nationalise the health sector and their interest and investments would be protected.
He said that there a lot in health sector which could be done by states as its is a state subject and Centre handles only medical education part.
Ahluwalia assured that there would be special focus on the health during the 12th Plan with larger allocation of fund and greater policy initiative.
India lags several nations in per capita income: Govt
India is lagging behind several countries in per capita income due to different levels of development and various other factors, Parliament was informed today.
"Yes... India continues to be a developing economy," Minister of State for Parliamentary Affairs and Planning Rajeev Shukla told Lok Sabha in a written reply.
He was responding to a query on whether the country is lagging behind several countries in per capita income.
Per capita of income is a measure of the amount of money that is being earned per person.
The Minister said the reasons for differences in the per capita income of different nations can be attributed to the levels of development besides other factors such as natural resource endowments, economic policies, political stability, differences in skills and technologies, population level etc.
India's per capita GDP on Purchasing Power Parity (PPP) basis was USD 3,403 in 2010 and is estimated at USD 3,662.69 in 2011 and USD 3,851.31 in 2012, he added.
The Central Statistics Office has been compiling estimates of rural and urban break up of Per Capita Net Domestic Product (NDP), for the base years of National Accounts Statistics (NAS) series, Shukla said.
"The latest base year is 2004-05. The per capita income at current prices for the year 2004-05 is estimated at Rs 16,414 in rural areas and Rs 44,172 in urban areas."
The per capita net national income rose by 5.2 per cent while wholesale price index based inflation was at 8.9 per cent in 2011-12.
In 2010-11, per capita net national income grew by 6.4 per cent against a WPI inflation rise of 9.6 per cent. In 2009-10, it was 6.6 per cent and 3.8 per cent respectively.
To a query on measures being taken by the government to improve growth momentum and contain inflationary pressures, the Minister said: "On the growth front, steps have been taken to increase Foreign Direct Investment which would contribute to both greater capital inflows and over the long run, higher productivity thereby inducing growth."
Measures have also been taken by the RBI to contain inflation, he added.
"The tight monetary policy followed by RBI has the tendency to typically operate through compression of demand in the short run in order to contain inflation," Shukla said.
Make efforts to attract more FDI: Parliamentary panel to Power Ministry
Amid multiple woes hurting the power sector, a Parliamentary panel today asked the Power Ministry to make efforts to attract more foreign direct investments into the sector.
Currently, Foreign Direct Investment (FDI) up to 100 per cent is permitted in the power sector.
"In the present power sector scenario, all efforts need to be made to attract FDI as these funds bring along new technologies, inputs and skills sets," the Committee on Estimates said in its report tabled in the Lok Sabha.
Citing the Economic Survey 2011-12, the panel -- chaired by Francisco Sardinha -- said there are financial health and viability issues across the entire spectrum of power sector generation, transmission and distribution.
"The Committee therefore strongly reiterate the Ministry of Power should revisit the incentive structure for FDI in power sector and take pro-active steps to attract desired quantum of FDI flows," it said.
Further, the panel emphasised that it is essential that the Ministry also comes out with a blue print to chalk out future strategies in this regard.
A slew of issues such as persisting fuel shortages, poor health of distribution companies and environmental hurdles, are hurting the domestic power sector -- which aims to have a generation capacity addition of about 88,000 MW in the 12th Five-Year Plan (2012-17).
During the 2007-12 period, the country witnessed a capacity addition of 54,964 MW as against the initial target of 78,700 MW.
The Ministry informed the panel that various factors, including environmental issues, resulted in slippage in terms of capacity addition.