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Draft bill to check inter-state chit fund frauds soon: Jaitley

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New Delhi, Aug 3, 2017: The government has prepared a draft law to check frauds by chit fund companies which operate in more states than one, Finance Minister Arun Jaitley said in the Lok Sabha on Thursday. He also declared that criminal and recovery proceedings will be started against defaulters of bank loans who divert money.

“We are bringing out a draft central law for chit fund companies that operate in more than one state, which will be placed in the house for discussion,” Jaitley said, adding that individual state governments had their own laws to deal with such companies operating within the state.

Replying to the debate on the Banking Regulation (Amendment) Bill, 2017, the Minister said that pension schemes for senior citizens run by the Life Insurance Corporation (LIC) that provide 8 per cent interest will dissuade people from putting their savings in chit funds.

Jaitley’s disclosure on the move to check chit funds comes against the backdrop of several chit fund companies duping people of thousands of crores of rupees in several states.

The Minister referred to states like West Bengal, Odisha and Punjab in the context of states having powers to regulate chit funds on their own.

Earlier, members including Pappu Yadav of the RJD demanded strict measures to check the activities of chit funds.

After the Minister’s reply, the house passed the Banking Regulation (Amendment) Bill, 2017, after rejecting a statutory resolution disapproving the Ordinance moved by a Congress member.

Under the bill, the central government may authorise the Reserve Bank of India to issue directions to any banking company to initiate insolvency in respect of a default under the provision of the Insolvency and Bankruptcy Code.

It also has provisions empowering the Reserve Bank of India to issue directions to banks for resolution of stressed assets.

“Many NPA cases could be fraud, as money taken was diverted. These are not routine NPAs. Criminal proceedings will be carried out and bank will start recovery procedure for such accounts,” Jaitley said.

Speaking about the bill, Jaitley said that a company defaulting on loans cannot claim the right of equality in treatment as regards repaying the loans. He said defaulting companies cannot ask why it was being targeted when some other defaulters were being let free.

“No, that cannot be an argument. The system has the capacity to take only a certain number of cases. I’m sure they will take up more case,” he said, referring to the 12 non-performing assets (NPAs) that have been identified for action by the National Company Law Tribunal (NCLT).

The Minister said that the loans, which have turned NPAs, were probably given at a time when the economy was in a “boom” period and they seemed good investment proposals.

“Nobody anticipated global crisis at that time… in last 3-4 years, prices of commodities collapsed. We’re now trying find a solution for this difficult situation,” he said.

“Our laws are obsolete and impeding the recovery process… therefore this mechanism was set up. It will select defaulter, direct banks to move expeditiously against the defaulter. NCLT will dispose of the case within 180 days. This process will recover the public money, so no one should have objection,” he added.

Tracing the background of the NPAs problem of public sector banks (PSBs), Jaitley said that while private sector concentrates on retail lending for car and home loans, PSBs have been much ahead in industry and infrastructure lending for the overall growth of the economy and contribute to spending on social programmes.

The Minister also noted the multiple options available for resolution of stressed assets.

He said the options that the banks could offer the borrower were to exit from the business, bring in a partner for a joint venture, go for resolution through the asset reconstruction companies (ARC) or themselves take a haircut on the loan amount.

“At the end of the day, we need to change. They are national assets and we need to save the companies, have companies which are able to pay the banks,” Jaitley said.

Referring to NPAs which amounted to more than 13 per cent of advances in 2001, the figure came down to less than 3 per cent in 2007-08, Jaitley said.

The sectors most responsible for the accumulated NPAs are steel, power, textiles and infrastructure, he added.

While the debt recovery tribunals (DRTs) set up in the 1990s that liberalised the system, Jaitley said, there were still problems where honest bankers had to decide on loans. They had to operate in the context of the Prevention of Corruption Act (PCA), in which an honest decision can go bad and they had to face the legal consequences.

“Some of our laws are obsolete… For instance, Section 13 of the PCA was drafted in 1988 prior to the liberalisation era to deal essentially with corruption. It can also be extended to decisions honestly taken but may look erroneous from another point of view.”

“Now, we have a complete situation. The consortium of banks or individual bankers when they take decisions… so an oversight committee has been established which will overlook the settlements made and advise them on reasonable settlement,” he said.

The Finance Minister said that a stalemate had developed over the whole NPAs, or bad loans, situation.

“These NPAs are continuing for last 5-7 years, a stalemate situation had been reached. This process had to be broken.”

 

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With 90% tax on petrol & diesel, bringing them under GST impractical: NITI Aayog VC

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New Delhi, June 25: Petroleum is the taxation milch cow for the central and the state governments and it is unlikely to be brought under the Goods and Services Tax (GST) any time soon.

That’s also the view of the Vice Chairman of Niti Aayog, Rajiv Kumar. Several senior ministers have demanded that petroleum products — basically petrol and diesel — be brought under the new taxation regime.

But says Kumar: “It (oil) can’t be brought under GST. That’s because the total state and central taxes on petrol put together are around 90 per cent right now.”

He told IANS in an interview here: “I can’t see how any state will take a cut so huge as the highest rate under the GST is 28 per cent. A new GST band will have to be opened up — and that will be an enormous exercise.”

While supporting “in principle” the idea of bringing all items under the new indirect tax system, he said those talking about doing it now have not thought this through.

“The better way to do this is to first start reducing taxes (on petroleum products) as I have said many times in public. States impose ad-valorem tax on oil and so they all had a windfall gain (when prices rose). There is a need to rationalise it,” he said, adding “states should especially cut taxes.”

Kumar said that both the central and the state governments should start the process of weaning themselves away from their dependence on oil taxation.

According to him, the Central government collects Rs 2.5 lakh crore as tax on oil while almost Rs 2 lakh crore is collected by the states. “From where will they compensate it?” he asks adding that if the taxes are reduced gradually, the burden on the economy will get reduced.

“Higher oil prices are like a tax on the economy. If oil prices are brought down, economic activity will also improve,” Kumar said.

“Once that is achieved, once the revenues have gone up from other sources and the economy has picked up, then you can think of bringing oil under GST. It’s not that easy,” he added.

Ever since the new tax legislation was rolled out on July 1 last year, there had been talk of bringing it under the GST with top government officials and ministers supporting the need for such a move. The Opposition parties, of course, have been clamouring for it.

In December last year, Finance Minister Arun Jaitley had told the Rajya Sabha that the Central government was in favour of bringing petroleum products under the ambit of GST after building a consensus with states.

More recently, in April, when the international crude oil prices were going up sharply, pushing the domestic petrol prices to record levels, BJP President Amit Shah told a rally in Mumbai that efforts were on to bring petrol and diesel under the GST.

From Road Transport and Highways Minister Nitin Gadkari to Petroleum and Naural Gas Minister Dharmendra Pradhan, almost every senior BJP minister has favoured bringing petroleum products under the GST.

Among states, Maharashtra Chief Minister Devendra Fadnavis has also expressed willingness to bring petrol and diesel under GST in his state if a consensus was brought about on it.

Kumar says he was in favour of such a change, but it has to be thought through in practical terms.

“I am just simply saying that let’s not try to hurry it because you would only run into problems as there is a huge dependence on oil,” he said.

“Even electricity should be brought under GST. Everything should be under GST. But I am not sure whether it is worked out yet. Let’s agree to bring it under GST but over a period of time as is practical,” he said.

IANS

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Live: India, Seychelles Sign Six MoUs after PM Modi’s talks with Faure

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New Delhi, June 25 : Following talks between Prime Minister Narendra Modi and President Danny Faure on Monday, , India and Seychelles signed six Memorandums of Understanding at Hyderabad House.

Ministry of External Affairs spokesperson Raveesh Kumar tweeted, “Welcoming the esteemed guest at Hyderabad House! PM @narendramodi received the President of Seychelles Danny Antoine Rollen Faure for bilateral talks. Special ties with a maritime neighbour.” Faure, who is on his first bilateral visit to India, was accorded a ceremonial welcome at the Rashtrapati Bhavan by President Ram Nath Kovind and Prime Minister Modi this morning.

External Affairs Minister Sushma Swaraj also called on the visiting leader and discussed with him expanding bilateral cooperation in key areas, including capacity building and human resource development.

Sushma Swaraj met President  and termed the relationship between both the countries as deep-rooted & historical.

“The relationship which is deep-rooted & historical! EAM @SushmaSwaraj calls on President of #Seychelles Danny Faure in New Delhi. Good discussion on expanding bilateral cooperation in all areas, specially capacity building, human resource development and people-to-people contacts,” Kumar said in a tweet.

 

President of the Republic of Seychelles Danny Faure received ceremonial reception at the Rashtrapati Bhawan in Delhi on Monday. He was received by President Ram Nath Kovind and Prime Minister Narendra Modi on his arrival at Rashtrapati Bhawan, to hold bilateral talks soon.

Seychelles President Danny Faure, who is on six-day visit to India, will hold crucial bilateral talks focussing on defence and security issues with Prime Minister Narendra Modi at Rashtrapati Bhawan on Monday.

Mutually beneficial relationship based on shared values and commitment to the ideals of democracy and development! President of Seychelles Danny Antoine Rollen Faure was accorded a ceremonial welcome @Rashtrapatibhvn by President Ram Nath Kovind and PM @narendramodi, tweets MEA Spokesperson Raveesh Kumar.

His visit to India comes days after Faure government rejected India’s plan to  develop a naval base jointly at Assumption Island in his country. Seychelles signed an agreement with India in 2015 to develop a naval facility at the island which would have given New Delhi a strategic advantage in the Indian Ocean Region.

Faure, who landed in Gujarat on Friday, has arrived in Delhi on Monday after visiting Ahmedabad and Goa, was received by Minister of State for External Affairs MJ Akbar.

“Connected by ‘SAGAR’ – Security and Growth for All in the Region”! President of Seychelles Danny Antoine Rollen Faure warmly received by MoS @mjakbar at Delhi airport on his first bilateral visit to India,” Ministry of External Affairs Spokesperson Raveesh Kumar tweeted.

He visited the Sabarmati Ashram on Saturday, where Mahatma Gandhi lived between 1917 and 1930.

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Bukhari killing: Online hate campaign targets Kashmiris Journalists

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Online hate campaign has now started targeting other Kashmiri journalists eleven days after Rising Kashmir editor Shujaat Bukhari was gunned down by unidentified people.

Kashmiri journalist Ahmed Ali Fayyaz said that unidentified people who had run a online smear campaign against Shujaat Bukhari, are now targeting him and journalist Iftikhar Gilani.

“They have posted our photographs on the same portal with a vitriolic heap of text which vilifies and denigrates us both as ‘dubious characters’, men of ‘hypocritical approach’ et al,” Fayyaz wrote in a Facebook post.

Unidentified people has been carrying out a vilification campaign via blog post titled “Touts who are betraying the Kashmir struggle” and are targeting journalists, businessmen, politicians and activists engaged in so-called Track-II diplomacy as “betrayers” of the “struggle of Kashmir” and for carrying out the “dirty work of defaming (the) Kashmir cause”.

Track-II diplomacy involves consultations between non-governmental entities, individuals and groups seeking to build trust and to keep backchannel communication links open.

The journalist denied that he had ever taken part in a Track-2 diplomatic initiative. “I have never ever claimed to be the ‘saviour of Kashmiri cause’ or someone ‘finding a solution to the Kashmir problem’, he wrote. “I believe this is not a proscribed activity for a journalist but I have been holding the opinion that this job should be left to other organs of the civil society.”

The above said blog had targeted Shujaat Bukhari, eleven days before he was assassinated by three unidentified gunmen in Press Enclave. Meanwhile, security agencies are investigating the blog.

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