PM Modi warns dishonest of ruin after Dec 30, promises more difficult reforms

PM Modi warns dishonest of ruin after Dec 30, promises more difficult reforms

PM Modi warns dishonest of ruin after Dec 30, promises more difficult reforms

Prime Minister Narendra Modi on Saturday said that his government will continue to follow sound and prudent economic policies, to ensure that India has a bright future in the long run.

He further said, “We will not take decisions for short term political point scoring. We will not shy away from taking difficult decisions, if those decisions are in the interest of the country. Demonetisation is an example. It has short term pain but will bring long term gain.”

Modi was addressing a gathering, which included the top functionaries of the Maharashtra government led by the governor and the chief minister, Union finance minister Arun Jaitley, Sebi chairman U K Sinha among others, while inaugurating the Sebi-run National Institute of Securities Markets.

“India’s place as the fastest growing large economy has not come about by accident. To see how far we have travelled, we should look back to 2012-13. The fiscal deficit had reached alarming levels. The currency was falling sharply. Inflation was high. The current account deficit was rising. Confidence was low and foreign investors were turning away from India. India was considered the weakest of the BRICS nations, ” Modi said.

Addressing another gathering at MMRDA ground in the Bandra Kurla Complex (BKC) in Mumbai after laying foundation of various big ticket infrastructure projects, Prime Minister today warned of ruin for the dishonest after the expiry of December 30 deadline for depositing scrapped currency and said they should not underestimate the mood of the country against corruption.

Describing the November 8-9 announcement of cancelling as much as 86 percent or Rs 20.51 trillion worth of currency in circulation as a “difficult decision”, he said, “Demonetisation has (brought about) short-term pains, but it will bring in long-term gains.”

On the need to increase levies on the capital markets in the light of amendments to the many of the bilateral investment and taxation treaties, Modi said, “Those who profit from financial markets must make a fair contribution to nation-building through taxes…. We should consider methods for increasing it in a fair, efficient and transparent way.

“… Now it is time to re-think and come up with a good design which is simple and transparent, but also fair and progressive,” Modi said, adding for various reasons, contribution of tax from those who make money on the markets has been low due to illegal activities and frauds or due to the structure of our tax laws which offers low or zero tax rate is given to certain types of financial income.

Claiming that he has brought back the economy to good health from the brink when it was saddled with high fiscal and current account deficits and high inflation and falling rupee, since he took over in May 2014, Modi said when the global economy is fighting lingering slowdown, “India is being seen as a bright spot. Our growth is projected to remain among the highest in the world.”

Stating that the country’s “place as the fastest growing large economy has not come about by accident,” Modi said to see how far the economy has travelled, we should look back to 2012-13 when “India was the weakest of the Brics nations.”

The Prime Minister exuded confidence that the Goods and Services Tax would be shortly a reality after pending for years.

Though financial markets can play an important role in a modern economy by helping mobilise savings and channelling savings towards productive investments, Modi warned that history has also shown that financial markets can also do heavy damages, if not properly regulated.

Calling for more coordinated regulations in the financial markets, Modi said even though the Forward Markets Commission was abolished and merged with the Sebi to regulate commodities and commex derivatives, the spot market is not regulated now.

Similarly, “agri markets are regulated by the states and many commodities are purchased directly by the poor and the needy, not by investors. Hence the economic and social impact of commodity derivatives is more sensitive,” he said.

For financial markets to function successfully, participants need to be well informed, he said, and noted that the National Institute of Securities Markets is performing the role of educating lakhs of students.

The Prime Minister also called for ensuring that start-ups also approach the stock markets.

Lauding the success of Dalal street in the past 150 years, Modi said for him to “consider the financial markets to be fully successful, they have to meet the following three challenges.

“The primary aim of the market should be to help in raising capital for productive purposes. Derivatives have a use in managing risks but many feel derivatives are dominating the markets and the tail is wagging the dog,” he said.

Noting that most infra projects are financed by the government or through banks, he lamented that capital markets are rarely used for infra financing and opined that for infra projects to be viable, it is very important that the borrowing should be of long duration.

“So my call to you is to find ways to enable the capital markets to provide long-term capital for infra, bond markets must become a source of long term infra finance”.

Stating that he is “disappointed that even now we do not have a municipal bond market,” Modi urged Sebi and the finance ministry to ensure that at least 10 cities issue municipal bonds within one year.

Noting that ultimate success of market is in providing benefits to the millions of farmers, Modi said, “The true measure of success is the impact in villages, not the impact in Dalal Street or Lutyens’ Delhi.”

“By that yardstick, we have a long way to go. Our stock markets need to raise capital in innovative ways for projects in agriculture. Our commodity markets must become useful to our farmers, not just avenues for speculation. People say that derivatives can be used by farmers for reducing their risks. But in practice, hardly any of our farmers uses derivatives.

“Unless we make the commodity markets directly useful to farmers, they are just a costly ornament in our economy, not a useful tool,” the Prime Minister said.

In this context, he asked the Sebi to work for closer linkage between spot markets like e-NAM (the electronic National Agricultural Market) and derivatives markets to benefit farmers.

Stating that the present Budget calendar delays expenditure authorisation to the monsoon onset, which is not a productive season, he said the Budget will be presented in such a manner that this does not happen going forward.

“Government programmes are not active in the productive pre-monsoon months. Hence, this year, we are advancing the date of the Budget so that expenditure is authorised by the time the new financial year begins. This will improve productivity and output.”

-December 24, 2016,New Delhi

 

Demonetisation is only short term pain for long term gain

Demonetisation is only short term pain for long term gain: PM Narendra Modi

Demonetisation is only short term pain for long term gain: PM Narendra Modi

Prime Minister Narendra Modi on Saturday inaugurated the new campus of National Institute of Securities Markets (NISM) in Raigad. Speaking at the inaugural function, Modi said that India is been seen as bright spot and to see how far India has traveled one should look back to 2012-13 when the currency was falling sharply.

Modi articulated that demonetisation is only short term pain for a long term gain.

Prime Minister said his government has transformed economy in the last three years and inflation has been kept low.

He added that even the government’s critics acknowledged the speed of progress.

India has earned a good name for its well regulated securities markets, he said.

Modi also expressed that the public investment has increased in the last three years and progress has been made in the ease of doing business.

Constitutional amendments on GST that remained pending for years have been passed and the long awaited GST will soon be a reality, added PM Modi.

For financial markets to function successfully, participants need to be well informed, said him.

Modi also added that those who profit from financial markets must make a fair contribution to nation-building through taxes.

SEBI should work for closer linkage between spot markets like e-NAM and derivatives markets to benefit farmers, said Modi

Govt will continue with sound economic policies to ensure India’s bright future in long run informed the prime minister

We have made progress and improved ease of doing business and FDI has now reached record levels, shared Modi.

Stock markets need to raise capital in innovative ways for projects in agriculture, Modi said.

He also said that his government is very keen to encourage start-ups as stock markets are essential for the start-up ecosystem.

-December 24, 2016, Raigad

PM Modi calls NITI meeting to review economy amid currency crunch

PM Modi calls NITI meeting to review economy amid currency crunch

PM Modi calls NITI meeting to review economy amid currency crunch

Prime Minister Narendra Modi has called a high-level meeting at NITI Aayog on Tuesday to take stock of the economy and other important issues particularly the currency crunch post demonetisation.

Modi has called the meeting to seek feedback of NITI Aayog members, economists and top officials of various concerned ministries particularly Finance and Commerce & Industries, a highly placed source in the Prime Minister’s office said.

The source said that the government is keen to chalk out a strategy to deal with adverse impact of currency crunch on the economy particularly on unorganised sector where people lost jobs because of currency crunch prevailing since November 8, 2016.

The meeting assumes significance in view of various multilateral agencies and RBI lowering growth forecast for the current fiscal. RBI has reduced the economic growth forecast to 7.1 per cent from 7.6 per cent in its monetary policy review earlier this month.

Multilateral funding agency ADB too lowered growth projection to 7 per cent for the current fiscal from its earlier projection of 7.4 per cent due to the impact of demonetisation on economic activities.

Indian economy expanded by 7.1 per cent and 7.3 per cent in the first and second quarters of 2016-17.

The economists including former Planning Commission Deputy Chairman Montek Singh Ahluwalia has expressed opinions that the demonetisation will disrupt the economy and will pull down the GDP growth rate for the current fiscal by up to two percentage points.

The source said that Prime Minister will also take stock of various initiatives of the NITI Aayog to promote the digital economy like Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana for incentivising digital payment.

The estimated expenditure on the first phase of the scheme (up to April 14, 2017) is likely to be 340 crores.

-December 23, 2016, New Delhi

 

Demonetisation not last action against corruption: Panagariya

Demonetisation not last action against corruption: Panagariya

Terming Prime Minister Narendra Modi’s demonetisation scheme as a “frontal attack” on black money, NITI Ayog vice-chairman Aravind Panagariya today said more such actions are in store to curb corruption.

“If you are asking that demonetisation is the last step to curb corruption, then I will say no. I think more actions will be taken, but in terms of taking action against the existing black money and also in changing the roles, and the policy regime in such a way that future accumulation of black money is also discouraged…. So we need to do both,” Panagariya told a local news channel during his visit to the state to attend a function.Demonetisation

Stating that he should not speculate on the actions to be taken, the NITI Ayog vice-chairman said the Prime Minister has to decide about this in consultation with his advisors.

We will wait and see…,” he said adding, discussion were on and hopefully some action would be seen in the budget.

He said the Union Finance Minister had already had a commitment to streamline the corporate income tax and hopefully some progress would be made.

“Some progress was made last year. Lets hope more progress in the coming year. So simplification of taxes and reduction in the tax rates should discourage accumulation of black money,” Panagariya said.

Replying to a question on the changing scenario in wake of demonetisation scheme, Panagariya said, “There will be some impact in the 2016-17 fiscal because of demonetisation. We have only the five months left.

“In the pre-demonetisation, we did okay and the GDP growth was 7.2 per cent. Currently we don’t have information to access, but I can tell you of 13 analysts and observers, 11 said the impact will be less than one per cent while two predicted a larger impact,” he said.

Asked about the negative impact of demonetisation on the people, Panagariya said, “The people have been with the Prime Minister despite hardships and they are also observing that he is doing it ultimately for the goof of the country.”

“The black money holders are being punished. I will say few governments had this courage to make a frontal attack on black money. The Prime Minister has, in fact, done a frontal assault on black money and people are generally supportive of it,” Panagariya added.

-22 December 2016 | PTI | Bhubaneswar

Demonetisation: ED, CBI carries out raids at various Kerala co-operative banks

Demonetisation: ED, CBI carries out raids at various Kerala co-operative banks

Demonetisation: ED, CBI carries out raids at various Kerala co-operative banks

Weeks after the Narendra Modi government banned use of old Rs 500 and Rs 1,000 notes, many unscrupulous activities in the banking sector has come to the fore.

The Enforcement Directorate and CBI on Thursday carried out raids at co-operative banks in different parts of Kerala.

ED conducted raids at Kannur, Kozhikode, and Thrissur while the CBI officials conducted inspections of records of district co-operative banks in Kollam and Malappuram.

These raids are being conducted to check the records of deposits after November 8.

After banning old 500 and 1,000 rupee notes on November 8, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till December 30.

In perhaps the first case of a top bureaucrat being raided, the house and office of Tamil Nadu Chief Secretary was today searched by Income Tax officials who claimed to have recovered Rs 30 lakh cash in new notes and 5 kgs of gold besides getting “disclosure” about Rs 5 crore of unaccounted income.

With about 35 personnel of CRPF providing security, around 100 Income Tax sleuths, launched the raids as early as 6 am at 15 places, including the office and the residence of Chief Secretary P Rama Mohana Rao, his son Vivek and some relatives in Chennai and Chittoor in neighbouring Andhra Pradesh.

A top Income Tax official said Rs 30 lakh in cash in new notes and 5 kgs of gold were recovered during the raids.

-December 22, 2016, Kerala

 

Demonetisation: Income Tax department seizes Rs 3,185 crore black money, Rs 86 crore in new notes

Demonetisation: Income Tax department seizes Rs 3,185 crore black money, Rs 86 crore in new notes

Waging war against black money hoarders, the Income Tax department has uncovered more than Rs 3,185 crore of black money and seized Rs 86 crore worth new notes in its country-wide drive since the demonetisation of high denomination Rs 500 and Rs 1,000 notes on November 8.

Demonetisation: Income Tax department seizes Rs 3,185 crore black money, Rs 86 crore in new notes

Waging war against black money hoarders, the Income Tax department has uncovered more than Rs 3,185 crore of black money and seized Rs 86 crore worth new notes in its country-wide drive since the demonetisation of high denomination Rs 500 and Rs 1,000 notes on November 8.

News agency PTI attributing to official sources said the taxman carried out a total of 677 search, survey and enquiry operations under the provisions of the Income Tax Act since the note ban was declared on November 8, even as the department has issued over 3,100 notices to various entities on charges of tax evasion and hawala-like dealings.

The report added that the IT department  has seized cash and jewellery worth over Rs 428 crore during the same period even as the new currency seized (majorly Rs 2000 notes) is valued at about Rs 86 crore.

“The total undisclosed income admitted or detected as part of this action, till December 19, is more than Rs 3,185 crore,” they said.

The agency has also referred over 220 cases to its sister agencies like the CBI and the Enforcement Directorate (ED) to probe other financial crimes like money laundering, disproportionate assets and corruption as part of their legal mandate.

The tax officials including Central Board of Direct Taxes (CBDT), banks and regulator RBI are closely coordinating to check tax evasion and illegal profiteering leading to black money.

The tax officials have also been directed to deposit the new currency detected to banks so that it can be utilised to disburse to common public.

-December 20, 2016, New Delhi

 

 

 

 

RBI was adequately prepared for demonetisation; has enough currency stocks to last beyond December 30: Jaitley

RBI was adequately prepared for demonetisation; has enough currency stocks to last beyond December 30: Jaitley

RBI was adequately prepared for demonetisation; has enough currency stocks to last beyond December 30: Jaitley

 RBI was adequately prepared for demonetisation and it has enough currency stocks that will last beyond December 30 said Finance Minister Arun Jaitley.

“There was full preparedness. There was not a single day when RBI had not released adequate currency to banks. There was a certain level of currency that was to be released and there was full preparedness for it,” Jaitley said.

Asked about the currency in circulation, Jaitley said the figures will be made public only after accurate calculation after December 30, the last date for depositing the scrapped currency in banks.

“The currency which got printed might have gone to Post Offices and from there to banks and again back to currency chest so there could be double counting and scope for inaccuracies. So we do not want to guess the figures (of currency in circulation),” he said.

Addressing the media in the national capital, Jaitley on Tuesday said government is planning to offer tax incentives to small traders who are accepting payments through digital mode.

“All small traders, businessmen and workshop owners whose total turnover is less than Rs 2 crore a year may not maintain any books of account and their income was presumed to be 8 percent of turnover. Now this order has been amended. And to the extent that they deal digitally or through cheques and banking transactions the presumptive income will not be 8 percent but will be 6 percent,” Jaitley added.

Under the existing Section 44AD of the Income-Tax Act, 1961, in case of certain assesses (an individual, HUF or a partnership firm other than LLP) carrying on any business having a turnover of Rs 2 crore or less, the profit is deemed to be 8 percent of the total turnover for taxation.

Whoever has old currency must go and deposit it in one go, if somebody goes everyday it raises suspicion, said Jaitley on the new RBI circular which says deposit of banned Rs 500 and Rs 1,000 notes for amount exceeding Rs 5000 shall be made only once per account until December 30.

Prime Minister Narendra Modi, in a televised address to the nation on November 8, had announced that Rs 500 and Rs 1000 notes will no longer be legal tender from November 9.

He had said the government has declared a “decisive war” against black money and corruption.

-December 20, 2016, New Delhi

 

Demonetisation has hit terror outfits hard: Amit Shah

Demonetisation has hit terror outfits hard: Amit Shah

Defending the central government’s demonetisation decision, BJP President Amit Shah said on Sunday that the “bold” move by Prime Minister Narendra Modi has hit terror outfits hard, leaving them penniless.

Addressing a rally of Bharatiya Janata Party’s (BJP) booth-level leaders here on Sunday, Shah said the same people from opposition parties who used to demand that the Modi government should take action against black money, are now opposing the demonetisation move.

“It looks that they (opposition parties) have lost a lot (after the demonetisation),” Shah said.

“The demonetisation move has given a hard blow to terrorism. The terror organisations have been left penniless,” Shah said.

He said that the country needed a surgery to cure it from the cancer of black money and the Modi government has done that.

In an oblique attack on the Congress and its leadership, Shah said it is the BJP which has an ideology and works for welfare of people with a focused target. “We link people with the ideology of BJP,” he said.

“I ask the media, can you say who will be the next President of Congress? Of course, it will be Rahul Gandhi. If any child is born in their family in future, he will be the Congress President in coming years.”

“Have you ever seen a man from a poor family going on to become the Prime Minister? You have to be born in a particular family to become the PM in Congress. But the BJP gives equal opportunity to all workers,” he said.

He said that the Modi government had given powers to the armed forces to give a befitting reply to Pakistan’s unprovoked firing at the border.

Scores of Congress workers were dispersed by the police using water cannons as they protested near the venue of the BJP rally.

Carrying black flags and shouting slogans against the Narendra Modi government and the BJP, especially targeting the demonetisation move, the Congress workers tried to break the police barricade near the rally venue in Sector 27.

The Chandigarh Police used water cannons to disperse protestors and prevent them from coming close to the venue.

The police later rounded up around 200 Congress workers.

– 20 Nov 2016 | IANS | Chandigarh

Demonetisation move bold but far from enough: Chinese media

Demonetisation move bold but far from enough: Chinese media

Terming Prime Minister Narendra Modi‘s demonetisation high value currency notes+ as “startling and bold”, Chinese official media has said it is “far from enough” and India may “look at ideas” from China’s crackdown against corruption which has shown “efficiency”.
500 & 1000
Modi in “a startling and sudden move” demonetised Rs 500 and Rs 1,000 currency notes to “demonstrate that he is truly up for a fiercer fight against black money and corruption+ “, an op-ed article in the state-run Global Times said.

“Modi means well and his decision was made based on the reality in India, since most illegal business in the underground economy is cash-only, and 500 and 1,000 rupee notes constitute over 80 per cent of all cash circulation in India. Nevertheless, we can hardly count on the new rule to fully root out corruption,” the article titled ‘Beijing offers clues for Modi’s new anti-corruption moves’.

Since Modi assumed office, he has carried out a number of measures to crack down on black money, corruption and tax evasion. However, many of them are believed to be “without teeth and can’t begin to scratch the surface of the problems he faces”, it said.

India’s new policy to scrap high value notes is considered a “risky, but a bold and decisive step”, it said.

“And yet, delivering a corruption-free country requires more than banning currency notes. The key should be reforming systems. In this regard, New Delhi might need to look for ideas from Beijing,” it said, referring to the massive anti- graft campaign carried out by President Xi Jinping in which over a million officials at different levels were punished.

Since the 18th National Congress of the Communist Party in 2012, during which Xi was elected as its general secretary, and taking over as the President and military chief launched the anti-graft campaign which also attracted criticism that he used it effectively to consolidate his power emerging as the most powerful Chinese leader after party founder Mao Zedong.

“Over the years, China promoted anti-corruption laws, improved the supervision system, deepened judicial system reforms and adopted measures to make sure the system is transparent,” it said without referring to criticism about the campaign.
“For instance, China’s foreign ministry has lately published information about the families of 12 senior officials on its website in an effort to fight against corruption through familial networks by improving transparency. These steps are taken to ensure that achievements made in the struggle against corruption can be consolidated by laws and systems,” it said.

China is still on its way toward building a comprehensive anti-corruption system. But “compared with India, Beijing’s method has already shown its efficiency”, it said.

“More time is needed to see whether Modi’s new policy will turn into a huge blow against corruption in India. The hard truth is that the corrupt and fraudulent won’t just conduct shady deals by using cash, but with gold, real estate and overseas assets.

“Corruption can be bred in a variety of ways. Blocking the circulation of large currency bills is without question far from enough,” it said.
-PTI | November 14, 2016

Demonetisation to increase eco size, enhance revenue base: FM

Demonetisation to increase eco size, enhance revenue base: FM

Demonetisation of Rs 500 and Rs 1,000 notes will expand the size of economy, increase revenue base and make the system cleaner while preserving its credibility, Finance Minister Arun Jaitley said today.

Addressing the media a day after the government scrapped higher denomination currency, Jaitley said honest citizens would realise that “it pays to be honest and will have the satisfaction to be honest”.

In a surprise move, Prime Minister Narendra Modi yesterday announced demonetisation of Rs 500 and Rs 1,000 notes and introduction of the new Rs 500 and Rs 2,000 ones with additional security features.

The decision, Jaitley said, “will expand the GDP and make (the economy) cleaner. It will push revenue and more money will come into the banking system”.

Admitting that it will cause some inconvenience to the people, he said larger benefits will accrue to the economy in the long term.

As an exception, till November 11 midnight, people will be able to use the withdrawan currency notes for metro tickets, toll plazas, LPG gas cylinders, railway catering and ASI monuments entry, he said, adding that these would be in addition to certain exceptions announced yesterday.

The demonetisation of currency notes, the minister said, is part of the drive undertaken by the NDA government to check the menace of black money in the country. It had earlier come out with two schemes to deal with the problems of black money stashed abroad and kept at home.

Jaitley said: “Entire society has welcomed the decision. India’s credibility will be preserved in the eyes of the world.”

He added that the whole chain of the black economy will run into difficulty after the GST is implemented “as tracking of cash flow will become easier. The move is an attempt to change the spending habit and lifestyle”.

Stressing that the decision is a significant advantage to the economy, the minister said the states too will be benefit with the revenue kitty going up.

– 09 November 2016 | PTI | New Delhi