Jun. 30 – India’s new tax system is projected to earn the government US$15 billion annually through the Goods and Service Tax as well as provide more employment, spread the tax burden and increase exports when it is implemented in April, 2010.
The new tax system, which will replace all major central and state taxes, is expected to lower tax rates by broadening the tax base and minimize exemptions, Vijay Kelkar, Chairman, of the 13th Finance Commission told the Economic Times.
Specific plans for the GST will be announced next week by the Finance Minister Pranab Mukherjee. The GST is set to include construction, real estate and railway activities under its regime to increase government revenue.
Jun. 29 – The Indian government is contemplating raising the foreign direct investment (FDI) cap on FM radio broadcasters and direct-to-home TV service providers.
The FDI limit on broadcasters is to be changed from 20 percent to 24 percent and 49 percent to 74 percent for television service providers, according to the proposal submitted by The Department of Industrial Policy and Promotion (DIPP).
The DIPP’s proposal complies with the new rules governing direct and indirect foreign investment. Recently, the information and broadcasting ministry had approved the clearance of 22 new TV channels.
Jun. 26 – The co-founder of Infosys Technologies has resigned from his post to head the agency tasked to gather data from citizens for the first national identification system.
Nandan Nilekani will lead the National Unique Identification Authority as chairperson with the monumental task of organizing data from the nation’s more than 1 billion citizens. Infosys is one of India’s most successful software companies and it will be the first time a corporate CEO will be given a Cabinet minister’s rank and status in the UPA.
The national ID system will remove the need for Indians to carry multiple identification cards just to be able to do such tasks as availing of public services, getting a telephone connection, paying taxes, voting and claiming benefits.
Jun. 25 – India’s national carrier, Air India (AI), may restructure to become a low-cost carrier as a condition for a government bailout.
“AI’s restructuring plan along with the request for equity infusion-cum-loan has to be submitted to them within a month. Unless a series of measures are taken to improve the airline, it will not be possible for the government to keep supporting in unconditionally. This is one last chance Air India has got,” Aviation minister Praful Patel told the Times of India.
If the restructuring pushes through Air India will start offering low fares for its domestic routes. The company will only maintain its full services on some market segments that are sure to earn profit.
Jun. 25 – Kamal Nath, the recently appointed as minister of road transport and highways, has publicly acknowledged that India’s roads are a mess says that opening up the sector for massive investment and infrastructure spending as a key area for development.
Noting that currently India builds just two kilometers of highway every day, Nath has set a target to increase this to 20 kilometers a day and has established a new financial body, the Roads Finance Corporation, to increase road construction through securitizing the required income and possibly list on the Bombay Stock market to raise funds. The new government has earmarked US$92 billion for road and highway construction with immediate effect until 2012, while the government is inviting bids for over 200 national highway projects covering over 13,000 kilometers of road at this moment. Continue reading
Jun. 24 – The Indian government is considering a series of tax holidays, including a seven year tax break, to assist with the development of exploration in its oil and gas sectors and lessen its dependence on imports.
Currently three quarters of India’s oil and gas consumption is imported, and the decision to approve tax breaks has been under review after the collapse of the nations National Exploration Licensing Policy (NELP) last year.
At immediate stake is the on-going development of the country’s KG Basin, operated in the private sector by Reliance Industries, as well as various state owned oil and natural gas corporations.
Jun. 23 – India’s Tourism Minister, Kumari Selja, will be submitting a set of proposals for industry tax breaks and exemptions to the Finance Minister, Pranab Mukherjee later this week.
The proposal includes a ten-year tax break for new hotels, service tax and excise duty exemptions and allowing hotels to be considered as infrastructure along with airports, sea ports and railways.
“I met with industry stakeholders and will be taking up their demands to the finance minister,” Mr. Selja told the Times of India.
Like the rest of the world, India’s tourism industry has not been doing well because of the global economic crisis which was further aggravated by the tourism fallout caused by the Mumbai terrorist attacks last November.
Jun. 22 – A report made by the Confederation of Indian Industry (CII) predicts that India-U.S. trade will amount to US$320 billion come 2018.
The report called the India-US Economic Relations: The Next Decade, says that given the right conditions, merchandise trade could rise to that amount. Moreover, the CII says that the nuclear agreement between the two countries is the start of a new era in bilateral relationship and allows more trade avenues like nuclear energy
“India intends to import 24 reactors in the next 11-15 years, and could create as many as 20,000 new jobs directly and indirectly in the United States from nuclear trade,” the report added.
U.S. Department of Commerce statistics show that the United States is India’s biggest export market and trading partner with bilateral trade reaching US$14.35 billion in 2000 to US$43.4 billion in 2008. For the first five months of the year, bilateral trade reached US$11.5 billion.