New Delhi: The finance ministry along with the Prime Minister’s Office (PMO) and the commerce ministry is learnt to have finalised a list of products, which would attract higher import duty under an action-plan by the government, to stem the fall of rupee.
The list includes organic fertiliser, gold and diamond, edible oils, iron and steel, mobile and television parts and LED screens, smartphones and phone system devices.
The new list is likely to be announced on Wednesday.
The list of items, which come under the ‘non-essential’ objects of import, has been drawn after individual ministries submitted their list under similar categories for higher import duties without affecting the growth, official sources said.
The list has been drawn up by a panel, headed by the commerce secretary, in consultation with the finance ministry and the PMO.
Earlier this month the government had announced several measures, including easing of overseas borrowing norms for manufacturing companies, removal of curbs on FPI investments in corporate bonds and tax incentives to masala bonds to support the rupee and check the widening current account deficit (CAD).
The rupee has touched 72.50 against a dollar. Surge in crude oil prices has largely been blamed for the projected widening of CAD and the pressure on the rupee.
As the crude prices increased from around USD 50 a barrel in April 2017 to around USD 70 a barrel towards the end of March 2018, the value of petroleum and crude imports jumped almost 25 per cent from USD 86.9 billion in FY17 to USD 108.6 billion in FY18. It increased CAD from 0.6 per cent of the GDP to 1.9 per cent.
As crude prices continue to rise, some estimates suggest the CAD may widen to 2.8-3 per cent of GDP in FY19.
While crude imports jumped USD 21.7 billion, inward shipments of coal and coke, metal and mineral, non-ferrous metal and iron and steel too rose USD 15.9 billion (nearly 73 per cent of the jump in petroleum and crude imports).
Coal imports have also added to the rupee pressure but the government would not tinker with it as coal-based power plants are already facing the heat and are generating NPAs for banks.
Even gold imports, which had declined from USD 34.4 billion in FY15 to USD 27.5 billion in FY17, jumped to USD 32.9 billion in FY18. Although there were views that gold be spared as the upcoming festival season is a high consumption period, and any curb may increase smuggling of the yellow metal.
The imports of electronic items, including mobile phones, colour TVs, digital cameras, digital processing units and high-end cars have increased 16.2 per cent in FY19. Increase in customs duty would make them more expensive.
Cabinet clears setting up of centralised GST appellate authority
New Delhi: The Union Cabinet on Wednesday approved setting up of a centralised Appellate Authority for Advance Ruling (AAAR) under the goods and services tax that would decide on cases where there are divergent orders at the state level.
The setting up of a centralised AAAR would require amendments to the GST Acts. The centralised authority as an appellate body will only take up cases wherein the Authority for Advance Ruling (AAR) of two states have passed divergent orders.
The Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, and comprising state counterparts, in December decided to establish the centralised AAAR.
“The Cabinet has cleared the GST appellate authority,” a source said after the meeting of the Cabinet headed by Prime Minister Narendra Modi.
In view of the confusion created by contradictory rulings given by different AARs on the same or similar issues, the industry had been demanding a centralised appellate authority that could reconcile the contradictory verdicts of different AARs.
Urbanisation to be big driver of Indian economic growth: Kant
Davos: Urbanisation will be a big driver of economic growth in India going forward, supported by favourable macroeconomic factors, accelerated infrastructure building and continuing reforms, NITI Aayog CEO Amitabh Kant said.
Speaking here at an event on sidelines of the World Economic Forum Annual Meeting, he also said the Indian economy may even exceed the IMF growth forecast of 7.5 per cent for the country.
Kant said IMF has forecast 7.5 per cent growth for India despite a gloomy outlook for the global economy and this itself is good, though there are expectations that this estimate would be surpassed. He said India is giving a big push to urbanisation with more than 100 smart cities being developed.
The country is also using technology in a big way to change the way business and governance is done, he added. Besides a massive infrastructure building is happening, bank credit flow has rebounded and macroeconomic factors like inflation and fiscal deficit are also being supportive, Kant said.
DIPP Secretary Ramesh Abhishek noted that states are competing with each other to attract investments and all political parties have adopted the economic reform process. He listed various reform initiatives undertaken in India, including on areas like ease of doing business, FDI, manufacturing and taxation.
They were speaking at Institutional investors’ breakfast roundtable, organised by the industry chamber CII and Kotak Mahindra Bank. Other participants included CII Director General Chandrajit Banerjee and leaders from Indian and foreign companies.
On questions about some persisting issues in doing business including on tax and insolvency related issues, Abhishek said a lot of efforts have been put in to remove all bottlenecks and starting a business doesn’t take more than a day. Besides, special provisions have been made for startups and angel investors, he added.
Kant said efforts are also being made to remove all physical intervention and digitise the entire process of inter-ministerial and inter-department consultations to fast-track the decisions.
India will surpass China, says Raghuram Rajan
Davos: India will eventually surpass China in economic size and will be in a better position to create the infrastructure being promised by the Chinese side in South Asian countries, former RBI Governor Raghuram Rajan said.
Addressing a session on Strategic Outlook for South Asia, Dr Rajan said that the Indian economy would continue to grow while growth rate is slowing down in China.
“Historically, India had a bigger role in the region but China has now grown much bigger than India and has presented itself as a counter-balance to India in the region,” Dr Rajan said at the WEF Annual Meeting 2019.
“India will become bigger than China eventually as China would slow down and India would continue to grow. So India will be in a better position to create the infrastructure in the region which China is promising today. But this competition is good for the region and it will benefit for sure,” he said.
The comments assume significance with China working on a lot of infrastructure projects across the region. In 2017, India became the sixth largest economy with a GDP of $2.59 trillion while China was the second large with a GDP of $12.23 trillion.
At the same session, Nepal PM K.P. Sharma Oli cited collaboration with China as well as India as reasons for the economic growth.