Indian Current Affairs: 30.01.2007

The confusion over the tax treatment of the FIIs investing in Indian equities is set to end soon. FIIs needs not be treated solely as investors; they can be traders too.
Taking a diametrically opposite view from the one adopted by the AAR (Authority for Advance Ruling), the finance ministry, has said that this determination will depend on the facts in each case.
Traders will have to pay 33.7% tax on their business income. Investors, on the other hand, are eligible to have their income treated as capital gains and pay 10% as tax, if the income is derived from sale of shares within a year of their purchase, or not at all, if the shares were held for at a year before they are sold.
FII traders’ tax obligations are subject to provisions of the bilateral tax treaties applicable to them. As per most tax treaties, FIIs are not obliged to pay tax on business income earned as traders, unless they have a permanent establishment in India. Most FIIs do not have a PE in India.

Micro-lending to the economically active poor, both urban and rural, is pegged at around Rs. 7,000 crore, as reflected in bank outstandings.
As against this, estimates put the demand at around Rs. 2 lakh crores.
Women’s World Banking (WWB) is hosting a microfinance summit in Mexico in February, 2007.
The microfinance movement in the country services barely 10% of the 80 mn (8 crores) households that have an appetite for credit. That is only 80 lakhs households are being serviced. Of this, the southern states account for 70%, with Andhra Pradesh alone holding about 60% of the southern market.
In fact, three major MFIs in AP – SKS, Share Micro and Spandana – together reach about 14 lakh households.

Is a form of ‘worm’ (virus attacking cell phones) that propagates through blue-tooth and runs on Symbian mobiles (phones).

Overall subscriber base is set to touch 20 crores.
Wireless subscribers are at 15 crores.
Mobile subscribers are being added at 60 lakhs per month.
In spite of these dazzling figures, rural tele-density is still a lowly 2% compared to over 50% for metros.
Varying estimates suggest that 10% increase in tele-density would lift GDP growth by between 0.6% and 2.5% in an emerging economy like ours.
Our two telecom policies and what they achieved

NTP 1994: It was focused on attracting private investment into telecom and limiting competition in the early stages of the market’s development.
NTP 1999: It sought to unfetter growth by removing artificial licensing boundaries that were rendered irrelevant by advancing technology, and reduced entry barriers permitting an unlimited number of competitors in each circle. As a result, tariffs dropped and subscriber acquisition accelerated. But only in urban centres.

Launched last year (September 2006). It is an integrated SMS, voice and internet portal providing administrative information, weather forecasts, pricing information for fishery and agricultural produce, non-agricultural employment opportunities etc., to rural subscribers at a nominal fee.
Looks like it was a grand success, going by the number of subscribers it is attracting. 9 lakh subscribers within a month of launch. 16 lakh SMS downloads daily. 40,000 visits to internet portal and over 20,000 voice dial-ins.

They provide circumstances in which a taxpayer can follow a simple set of rules under which transfer prices are automatically accepted by the tax authority.

In US almost 50% of the population is exposed to the equity markets through participation in mutual funds.
Expenditure on pensions in India

Total expenditure on pensions by the central government as a percentage of net tax revenue is at 10.56% in 2005-06. This is up from 7.6% in 1990-91.
Pension expenditure of the states has gone from 7% to 14% during the same period.
The combined expenditure (centre plus states) could reach Rs. 100,000 crores by 2010.

Indian Current Affairs