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To sideline smugglers, Centre may cut gold import duty in Union budget



India is expected to slash the import duty on gold to undercut smugglers who have been offering hefty discounts as illicit imports boom after COVID-19, denting the market share of banks and refiners, government and industry officials told Reuters.

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A cut in the import duty by the world’s second-biggest consumer could lift retail sales by making gold cheaper ahead of peak demand season and support global prices. It could also revive operations of domestic gold refineries, who have seen their business wither over the past two months as they are unable to compete with grey-market operators.

“The government is aware of problems created by the higher duty structure and they will be fixed soon,” said one government official, who declined to be identified, in response to a question about the possibility of a cut in the import duty.

Grey market operators, who smuggle gold in from overseas and sell it for cash to avoid duties, got a boost in July when the government raised the basic import duty on gold to 12.5% from 7.5% to bring down the trade deficit and support the rupee.

The effective duty is now 18.45%, which includes the 12.5% import duty, 2.5% agriculture infrastructure development cess and other taxes.

Another official said the government was considering bringing the effective rate down to below 12%, adding: “We will take a final call soon.”

The finance ministry declined to comment while the trade ministry did not immediately respond to a request for comment.

An official at the Ministry of Commerce said it was in favour of cutting the import duty on gold and had asked the finance ministry to do so.

“Smuggling is going up,” said the commerce ministry official, adding that the duty could be cut in an upcoming budget.

The July increase in the duty on gold was a welcome boost for the smugglers, who were largely sidelined in 2020 and 2021 because of travel restrictions imposed to contain COVID-19.

The grey market operators are now offering a more than $40 per ounce discount on official domestic prices, which no bank or refiner can match, said James Jose, managing director of refiner CGR Metalloys.

“Substantial reduction in the duty is the only solution to stop smuggling,” Jose said.

Customs and other agencies seized 3,083.6 kg of gold illegally brought in last year up to November, the highest in three years.

Indian gold prices jumped to a record 56,850 rupees per 10 grams last week.

The increase in smuggling has contributed to a decline in legal imports in December by 79% from a year earlier to the lowest level in at least two decades for the month, the commerce ministry estimated.

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Union Budget 2023: Centre plans to table 19 bills during the session



The Narendra Modi government plans to introduce 19 new bills, including The Inter-Services Organisation (Command, Control and Discipline) Bill that aims to empower the commander- in-chief or the officer-in-command of inter-services organisations for maintenance of discipline and proper discharge of their duties. A total of 26 bills, including seven pending bills, will form the legislative agenda of the government in this budget session.

The first half of the session, scheduled till February 13, will be primarily spent on discussing the President’s address to the joint sitting of both Houses and the Budget, and, according to functionaries familiar with the matter, could end on February 10.


The list of bills includes The Development of Enterprises and Services Hubs (DESH) Bill, 2023 that seeks to replace and repeal the Special Economic Zones Act and to frame rules, as well as the Trademarks (Amendment) Bill, 2023 for a convenient and cost-effective way of managing trademarks. Similarly, the government will bring legislation to amend the GI Act to make some of the procedures simpler in order to be more accessible to stakeholders.

The government will also bring three bills related to Jammu and Kashmir: To change the nomenclature of “weak and underprivileged classes (social castes)” in the Jammu and Kashmir Reservation Act to “Other Backward Classes”, inclusion of the Valmiki community as a Scheduled Caste and to revise the list of Scheduled Tribes in Jammu and Kashmir.

ALSO READ: After ‘smart recovery’ from Covid, what do MSMEs expect from Budget 2023

Among the new bills listed for introduction, the Ancient Monuments and Archaeological Sites and Remains (Amendment) Bill, 2023 envisages rationalising the prohibited area and other amendments, the Forest (Conservation) Amendment Bill, 2023 to promote plantation in non-forest areas and conserve forests, and the Coastal Aquaculture Authority (Amendment) Bill, 2023 are seen as important.

Bills to set up a National Dental Commission, the National Nursing and Midwifery Commission, and making the registration of birth and deaths people-friendly are also on the agenda. The government plans to bring legislation to empower the Kalakshetra Foundation to award certificates, diplomas, postgraduate diplomas in arts, crafts and other fields.

The multi-state cooperative authorities amendment bill, being reviewed by a joint committee, has been listed for passage.

Read | Union Budget 2023 to be tabled in Parliament today. Here are 5 big expectations

The government’s floor managers and Lok Sabha floor leaders discussed the agenda for the first half of the budget session in a meeting on Tuesday afternoon. “The government managers indicated that the first half will not have any non-financial legislative agenda. We have roughly eight days in hand in the first half, which would be entirely devoted to the two discussions,” a person who attended the meeting said, asking not to be identified.

After the budget is presented in Parliament on Wednesday, the Business Advisory Committee of both Houses will meet to allot discussions on the demand for grants of individual ministries in the Lok Sabha and Rajya Sabha.

At the meeting of government and opposition leaders on Tuesday, many leaders argued against the session carrying on till February 13. “You can say there was a sense of the House that the session of February 13 could be avoided as parliamentarians will have return to Delhi after a weekend break for just one day of proceedings,” said a senior leader.

Those who attended the meeting pointed out that February 11 and 12 being Saturday and Sunday, “it is better that the first half of the session ends on Friday, February 10. If needed, we are ready to sit for a few extra days in the second half,” according to another person who attended the meeting, and who too did not wish to be identified.

The budget session of Parliament, the longest in a calendar year, is scheduled to have 27 sittings and continue till April 6 with a month-long recess to examine the budget papers, Parliamentary Affairs Minister Pralhad Joshi said earlier.

Parliament will reconvene on March 12 for the second part of the session.

In the last winter session, both Houses were adjourned four working days ahead of the schedule after a number of Opposition leaders demanded adjournment citing Christmas and the festive season. The session, however, saw limited government business and introduction of only seven of the 16 non-financial bills from the government’s agenda.

Traditionally, both Houses approve the motion of thanks to the President’s speech and the Lok Sabha clears the general budget in the first half. The Upper House, with no power to veto any finance bill or budget proposal, only refers it back to the Lok Sabha.

The discussion on demand for grants and the approval for the finance bill takes place in the second half. After the budgetary approvals—part of the government’s constitutional obligation—are over, the government presents its legislative agenda for passage.

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Economic Survey projects GDP growth at 6-6.8% for FY24



India’s GDP will grow at a baseline value of 11% in nominal terms and 6.5% in real terms in 2023-24, according to the 2022-23 Economic Survey, which put real growth in the range of 6-6.8% depending on downside and upside risks.

It added that structural reforms undertaken over the past eight years — GST, inclusion, privatisation, ease of doing business, creation of a public digital infrastructure, and other such — haven’t really paid off on account of shocks to the economy such as balance sheet stress of banks and private sector companies, the pandemic, and a global commodity price shock. As these “fade away”, the “economy is well placed to grow at its potential in the coming decade”, the survey argued.

The survey, tabled in Parliament on January 31 underlined the fact that “agencies worldwide continue to project India has the fastest growing major economy” despite the three shocks of Covid-19, the Russia-Ukraine war, and synchronised policy rate hikes by central banks across the world that led to appreciation of the US dollar and widening of the current account deficit (CAD) in net importing economies.

Also Read | Union Budget 2023 to be tabled in Parliament today. Here are 5 big expectations

The survey credited private consumption and (government driven) capex (capital expenditure) as the principal drivers of growth in 2022-23 even as it underlined that “private capex soon needs to take up the leadership role to put job creation on fast track”.

Chief Economic Adviser V Anantha Nageswaran, the architect of the Economic Survey attributed the reason behind the range to geopolitical uncertainties globally.

He said the survey gave a range between 6% and 6.8% deliberately. “We do understand that global political and economic environment remain still ripe with uncertainties. We have many known-unknowns as well as unknown-unknowns.”


“We also do not know how the speed with which global economy recovers, will lead to the kind of inflation pressures that we saw last year,” he said. In this context, he pointed to the rapid reopening of the Chinese economy. And “as of now” the US economy looks to avoid “a full-fledged formal recession”, he added.

The CEA said international crude oil and industrial metal prices would also impact the GDP growth because they are higher compared to December 2022. “From the Indian standpoint, a moderate to somewhat significant global economic slowdown will [lead to better outcome] because it would lead to lower commodity prices and secession of interest rate tightening in the developed world, weaker dollar, etc.,” he said. “Therefore, in order to make sure, that we fully accommodate the downside risks the band has been kept at 6 to 6.8 %, and baseline number at 6.5 percent.”

The survey identified four key upsides in India’s growth outlook. They are, limited health and economic fallout for the rest of world from the surge in Covid-19 infections in China; inflationary impulses from China’s opening up turning out to be neither significant nor persistent; and recessionary conditions in major advanced economies triggering a cessation of monetary tightening and return of capital flows to India amidst stable domestic inflation below 6%. These three factors, the Economic Survey reasoned, would generate the fourth upside, an improvement in animal spirits providing further impetus to private sector investment.

Commenting on India’s performance in 2022-23 — economic growth “in the range of 6.5-7% — the survey noted that while RBI’s interest rate hikes, widening of CAD, and plateauing export growth, posed downside risks to India’s growth, “the growth estimate for 2022-23 is higher than for almost all major economies and even slightly above the average growth of the Indian economy in the decade leading up to the pandemic”. India’s growth performance, “and that too without the advantage of a base effect”, the survey noted, was “a reflection of India’s underlying economic resilience, of its ability to recoup, renew and reenergise the growth drivers of the economy”, with “the domestic stimulus to growth seamlessly replacing the external stimuli”.

This achievement has been made in a uniquely difficult global economic environment which has suffered three global economic shocks since 2020, unlike in the past when global economic shocks were severe but spread across time, the survey said.

Praising the post-pandemic capex focus in central government spending, the survey underlined that the capex focus in the last two budgets “was not an isolated initiative meant only to address the infrastructure gaps in the country” but “part of a strategic package aimed at crowding-in private investment into an economic landscape broadened by the vacation of non-strategic public sector enterprises (disinvestment) and idling public sector assets”.

Indicating that the government will adhere to its fiscal deficit target for 2022-23 and continue on the fiscal consolidation path in the Union Budget, the survey said that higher buoyancy in both direct taxes and Goods and Services Tax (GST) along with limited growth in revenue expenditure “should ensure the full expending of the capital budget within the budgeted fiscal deficit”.

With concerns around a K-shaped recovery in the Indian economy, the Economic Survey argued that India’s growth performance has been inclusive with the Periodic Labour Force Survey (PLFS) showing a lowering of unemployment rates and increase in labour force participation rate. Schemes such as the Emergency Credit Line Guarantee Scheme (ECLGS) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) also played their part in helping smaller firms and the poor, the survey said.

Lakshmi Iyer, CEO-Investment Advisory at Kotak Investment Advisors Ltd said: “The economic survey has projected FY 2024 growth at 6-6.8%. This seems a tad stretched given the fact that there is a global slowdown, specifically in global exports. It also comes at a time when domestic demand is slowing down initially and we need to be fiscally prudent, especially after almost 3 years of fiscal breach (globally too) due to the pandemic phase.”

Experts are optimistic about India’s growth next year provided the government gives proper policy push. “While there are talks of a global slowdown, expectation continues for India to be the fastest growing economy in the world. Though inflation has been amplified by geo-political challenges, India should quickly create value based global supply chains so as to attain cost effective growth,” said Yezdi Nagporewalla, CEO, KPMG in India.

“The strong balance sheet of banks and corporates are rightly assumed to give a private capex push in addition to the government capex push if the assumptions on the external and demand front are realised,” Sanjeev Krishan, Chairperson, PwC in India, added.

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Union Budget 2023 to be tabled in Parliament today. Here are 5 big expectations



Union finance minister Nirmala Sitharaman will present the Union Budget 2023 in the Lok Sabha in a few hours from now. It will be the last full budget of the Narendra Modi government before it faces the general elections in the summer next year.

When the finance minister begins her address at 11 am, the Indian middle class and India Inc would be keenly waiting for some relief in wake of global meltdown.

On Tuesday, the Economic Survey tabled in Parliament pegged India’s real growth in the range of 6-6.8 per cent depending on the downside and upside risks. The survey underlined the fact that the global agencies continue to project India as the fastest growing major economy despite the Covid-19 shocks, the Russia-Ukraine war and the policy rate hikes by the central banks across the world.


Later, chief economic advisor V Anantha Nageswaran said that the Indian economy is poised to do better on the back of the reforms undertaken by the Centre and expected to clock a 6.5-7 per cent growth in the remaining part of the decade. He added that the inflation by and large is likely to be ‘well behaved’ in the upcoming fiscal barring headwinds.

Here are the five big-ticket expectations from Nirmala Sitharaman’s fifth budget.

1. Income tax relief: The salaried professionals are the taxpayers who have the most expectations from the Budget. The middle class has been hit the hardest by increasing prices of essentials and fuel price hike. The expectations are rife that the finance minister may tweak income-tax slabs to provide middle class a much needed relief. Recently, Sitharaman said she identifies herself as a middle class and understands the pressure faced by the section.

2. Real estate sector: The real estate sector has managed to bounce back following the dry spell due to Covid-19 pandemic. The housing sector is eyeing a robust demand in the upcoming financial year. The key expectations include relaxations in taxes, reduction in stamp duty, reduction in GST on raw materials like cement and steel. Arihant Infrastructures, CMD, Ashok Chhajer told ANI that the government should focus on reducing home loan rates. “The government should reduce home loan rates. The affordable housing segment, which is capped at 45 lakh, should be changed to 60-75 lakh which is the average cost of a house in Metro cities and 2-tier cities,” said Chhajer.

ALSO READ: After ‘smart recovery’ from Covid, what do MSMEs expect from Budget 2023

3. Healthcare: The healthcare sector is expecting more spend on boosting the health infrastructure in the country. According to the Economic Survey tabled in the Parliament, the Centre’s share in the total health expenditure increased from 28.6 per cent in the financial year 2014-15 to 40.6 per cent in 2019-2020. The survey stated the government has also strengthened health infrastructure and prepared itself to address present and future needs, PTI reported.

4. Railways: The Railway budget is included in the Union Budget which will be tabled today. The expectations of general public include controlling train ticket fares, focus on cleanliness in trains, increase in number of trains among others. The students have demanded that Railways run separate trains for them to appear for exams in other cities.

5. Manufacturing: The experts have high expectations from the budget as they feel it will re-energise the manufacturing sector which is trying to recover from the Covid-19 pandemic impact. The sector is expecting new policies, concessions and other schemes for growth.

(With PTI, ANI inputs)

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