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Open Budget Survey 2010: India’s Budget has become more transparent

October 28th, 2010

The Indian budgetary system has become more transparent over the years, with the government providing significant information on the Budget, a survey has said.

According to the Open Budget Survey 2010, released by the International Budget Partnership, India’s open budget index (OBI) score improved from 53 in 2006 to 67 in 2010. The survey is released every two years and India’s OBI score in 2008 was 60.

“Several relatively low-income countries such as India, Sri Lanka and Ukraine provided significant information,” it said.

The survey showed South Africa, with an OBI score of 92, provided the most information on its Budget,

Banks refuse to lend MFIs even sanctioned line of credits

October 28th, 2010

In a fresh blow to microfinance institutions, banks are refusing to lend them even a sanctioned line of credit, following recent controversies over opaque corporate governance and interest rates.

The ensuing liquidity crisis has prompted many MFIs to seek a moratorium on loan repayment to banks. MFIs raise 75-80 per cent of their funds via bank borrowings, 15 per cent from equity and another 10 per cent from other sources like cash securities.

Interest rates charged by MFIs vary between 18 per cent and 32 per cent, bankers said.

Asit Pal, executive director at Corporation Bank, confirmed: “We are not sanctioning fresh loans to MFIs, and the line of credit is also on hold.”

Direct Tax collection rises by 17.2 per cent

October 28th, 2010

Revenue through Direct Tax collection rose by 17.2 per cent to around Rs 2.02 lakh crore as on September 30, 2010, which is 47 per cent of the finance ministry’s budgetary target for the current fiscal, Sunil Mitra, revenue secretary, ministry of finance, said.

Speaking to reporters after participating in an interactive session on Direct Taxes Code, organised by Confederation of Indian Industry here, he said tax collection (both direct and indirect) target for the current fiscal is Rs 7.45 lakh crore. “Of this, Rs 3.15 lakh crore will be through indirect tax and Rs 4.30 lakh crore through direct tax”, he said.

SC approves Service tax on leasing services

October 28th, 2010

The Supreme Court has held that banks and financial institutions, including non-banking financial companies, are liable to pay service tax on transactions of leasing and hire purchase of moveable goods.

While bringing such services within the service tax net, a Bench headed by chief justice SH Kapadia has upheld the levy of service tax on hire purchase and leasing transactions, notwithstanding that the same transactions are chargeable to the sales tax (now VAT). The decision in effect has upheld the double taxation of the same transaction of hire purchase and leasing to both the service tax as well as the VAT.

LLP may not get access to cheap overseas funds

October 28th, 2010

Limited liability partnerships in the country may not get access to cheap overseas funds, which could discourage big firms from switching to this form of business that combine the features of companies and partnerships.

The finance ministry and the Reserve Bank of India have opposed changes in the external commercial borrowings (ECB) policy to allow overseas borrowings by LLPs, while responding to a discussion paper on this form of business put out by the department of industrial policy and planning (DIPP), the policymaking body on foreign investment.

The ECB regime should be identical to the one applicable for partnerships, the finance ministry said in response to the paper. The finance ministry is of the view that while FDI can be allowed in this form of business entities, but not overseas debt, said a government official privy to the discussions.

Related companies disclosure norms to be tighten: SEBI

October 28th, 2010

Market regulator SEBI indicated that it could tighten the disclosure norms for transactions between related companies.

“There is a scope for improvement…,” SEBI Chief C.B. Bhave said when asked if the measures taken by SEBI so far with respect to disclosure of related party transactions were enough.

Related party transactions typically involve deals between group companies, companies involved in joint ventures or between a holding company and subsidiaries.

Open Budget Survey 2010: India’s Budget has become more transparent

Banks refuse to lend MFIs even sanctioned line of credits

Direct Tax collection rises by 17.2 per cent

SC approves Service tax on leasing services

LLP may not get access to cheap overseas funds

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