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Central bank autonomy “sacred”: Arvind Subramanian

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Mumbai: With the reins rpt reins of RBI (Reserve Bank of India) governorship passing to an ex-bureaucrat, former chief economic advisor Arvind Subramanian said central bank autonomy is “sacred”, which should not be compromised.

Progress on the steps taken by Governor Shaktikanta Das’ predecessor Urjit Patel to restore financial system integrity will be a key thing to assess any damage to the institution.

“What is going to be key is whether this (restoring financial system agenda) is maintained going forward. That is going to be the yardstick to measure what is happening on the bigger institutional front,” he said, speaking at the Fifth India Economic Conclave here.

 

“RBI has a very good reputation for very good reasons (and) maintaining the functional autonomy in decision-making and governance is absolutely sacred, we must not compromise on that,” he added.

He said under Patel, the RBI has done a “commendable” job on decisions like prompt corrective action (PCA), dealing with NBFCs and also with individual private banks. It can be noted that the weeks before Patel’s resignation, differences between the RBI and government on at least two fronts, PCA and NBFCs, were widely reported.

The government wants the RBI to liberalise the PCA framework so that more banks are able to lend liberally, while it had pitched for strong liquidity support to the NBFC sector, which was outrightly rejected by RBI.

Subramanian hinted there was a bit of “oversight” by the RBI when it comes to NBFCs and the IL&FS crisis. Meanwhile, speaking at the same event, former RBI governor Raghuram Rajan also made a strong pitch for independence of financial regulators.

“These (regulators) are structures which we must strengthen, they have to stand as independent bodies to ensure our growth is healthy and stable,” he said.

Subramanian said the second agenda that was being pursued by Patel was improving on the strengths of RBI and added that this needs to continue. He reiterated that there is excess capital with the RBI, but underscored that it has to be used only for recapitalising dud-assets saddled state-run banks and that too only when they reform their functioning.

The Harvard economist warned that using the excess capital for bridging the fiscal gap would be akin to “raiding the RBI” and hoped that the soon-to-be-appointed committee to look into excess capital will address these aspects.


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CBDT refutes social media rumours on ITR filing, says no change in IT return forms

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New Delhi: The Central Board of Direct Taxes (CBDT) has refuted rumours in social media regarding difficulties in filing return of income by taxpayers, stating that no change has been made in income-tax return (ITR) forms.

“No changes have been made in any of the Income-tax Return (ITR) forms including ITR-2 and ITR-3 since the notification made on April 1 2019, i.e. on the 1st day of the Assessment Year 2019-20,” CBDT said.

“It is reiterated that there are no changes in the notified ITR forms; only the utility has been updated to facilitate the taxpayers. Therefore, the assertion that numerous changes have been made in ITR-2 and ITR-3 on July 11, 2019, does not give a correct picture,” it added.

 

There were reports in social media that the taxpayers were facing difficulties in filing return of income in ITR-2 & ITR-3 due to large scale changes in the ITR form on July 11.

CBDT stated that the software utility for e-filing of all the ITR forms were released long back. The utility for e-filing ITR-2 and ITR-3 was released on May 2 and on May 10 respectively.

However, the software utility update is a dynamic process and is continuously taken up as per the feedback received from the users/filers to ease their experience in electronic filing of returns, it added.

CBDT further clarified that the updating of utility does not hamper filing of return as the taxpayers are allowed to file using the utility which is available at that point of time.

“For example, more than 85 lakh taxpayers have filed returns in ITR-1 till date by using the said utility, which has also undergone update later. Therefore, the impression that the taxpayers are not able to file return due to changes in ITR form is also not correct as more than 1.38 crore taxpayers have already filed their returns by using the utility released till date. Even though the utility is being updated regularly to provide ease to taxpayers, the returns filed by using the previous version of utility will continue to be valid,” it said.

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Lagarde resigns as IMF chief, starting race for her successor

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Washington: International Monetary Fund chief Christine Lagarde submitted her resignation from the global crisis lender, citing more clarity about her nomination to lead the European Central Bank as European legislators approved a new top bureaucrat.

Lagarde said in a statement her resignation was effective Sept 12, firing the starting gun for the IMF’s search for her successor, which is likely to be another European.

“With greater clarity now on the process for my nomination as ECB President and the time it will take, I have made this decision in the best interest of the Fund,” Lagarde said in a statement.

 

She said her resignation would expedite the selection for the next head of the IMF.

IMF succession is expected to be a major topic of discussion among G7 finance ministers and central bank governors meeting on Wednesday and Thursday in Chantilly, France, near Paris amid concerns that slowing global growth and trade conflicts will pressure vulnerable economies.

Lagarde’s resignation, first reported by Reuters, came two weeks after her nomination on July 2 for the ECB’s top job. She did not immediately quit the IMF because of uncertainty over whether the new European Parliament would support her and other new EU leadership positions, sources told Reuters.

Her nomination was part of a package of top officials agreed by EU governments that included German Defence Minister Ursula von der Leyen as European Commission president, who drew Green party opposition.

Later on Tuesday, von der Leyen was approved by the European Parliament in a 383-327 vote.

The European parliament will hold a nonbinding vote on Lagarde’s appointment, which is expected to be finalized by EU leaders at a regular summit on Oct 17-18.

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Centre to launch portal to help Jet Airways staff find jobs, in touch with SpiceJet and IndiGo

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Mumbai: The government may not have extended support to now-defunct Jet Airways, but it has promised to facilitate employment to job-less airline staff.

The Civil Aviation Ministry is in touch with other private airlines such as SpiceJet and IndiGo to assist Jet staff get meaningful employment.

Civil Aviation Minister Hardeep Singh Puri said that a website would be launched listing staff of Jet Airways and help find employment in other private entities.

 

“We are also producing a website which is ready. I wish I had the capacity of telling you that the website is up. Every employee would be listed there and the prospects for their re-employment or employment will be facilitated by the government,” Puri said while replying to Members in the Rajya Sabha on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019.

The Minister, however, said that government cannot assume responsibility for a business failure conducted by a private party.

Referring to Jet Airways, Puri said he was sensitive to (business) failure and willing to see what can be done within the governmental system to cushion that failure.

“But to suggest that a private sector entity goes belly up and the government has to take the responsibility I don`t think that is correct,” the Minister said.

Run out of cash, Jet Airways had suspended its entire operations on April 17. Subsequently, the government re-allocated its slots and foreign traffic rights to rival carriers. Lenders to the airline led by State Bank of India (SBI) have initiated bankruptcy proceedings against it after all attempts to rope in a buyer failed.

Before the airline suspended its operation, it had nearly 20,000 staff on its rolls. Several hundreds of them are learnt to have joined other carriers.

Replying to Members on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, he also countered a comment that airfares had gone up.

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