Indian Current Affairs: 14.05.2008

Commodity Transaction Tax that was introduced in this year’s budget is likely to be delayed in getting implemented. This is because the Consumer Affairs Ministry and the PM’s Economic Council wanted a lower CTT.
At present it appears the CTT would increase the cost of transaction in commodities to go up by 800%.
Looks like such taxes will take some time to get implemented. The STT (Securities Transaction Tax) also was implemented with a delay in October of 2004, even though the parliament passed it well before in July, 2004.

The farm loan waiver scheme announced in the budget enabled marginal farmers holding up to 1 hectare and small farmers holding up to 2 hectares, for a complete loan waiver of all loans that were overdue on December 31, 2007 and which remained unpaid until February 29, 2008.
About a quarter of the 40 mn farmers in the country will not be eligible for the scheme because they are a part of the informal system of moneylenders.
Unlike the earlier waivers, this time agriculture and allied activities are also made eligible under the scheme.
NABARD is understood to have recommended that farmers with land holding up to 5 hectares be eligible under the scheme.
As banks are having lakhs of such accounts and as they don’t have any clear guidelines as yet from the government, nobody seems to be sure as to how the scheme will ultimately be implemented.

Perhaps you will remember that a totalisation agreement between two countries is one which exempts the citizens of each country from paying social security benefit costs in the other country, when they are on a short trip to that country.
Though the US has signed such agreement with 16 other countries, it has not been keen to sign one with India, because it feels that the country’s social security structure is vastly different from that of the US’s social security net.
India has so far signed such an agreement only with Belgium. It has been negotiating such agreements with all the EU countries.
Now that the US is keen on having a BIT (Bilateral Investment Treaty) with India, the latter is hoping to clinch a deal on the totalisation agreement also.

The London Interbank-Offered Rate (LIBOR) is based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market) and is set by polling 16 banks each day on the rates they pay for loans in dollars, British pounds, euros and eight other currencies. It’s a reference rate for financial instruments like forward rate agreements, interest rate futures and syndicated loans across currencies.
For the first time since 1998, the British Bankers’ Association (BBA) is considering changing the way it sets the LIBOR, according to chief executive officer Angela Knight.
BBA, the banking group, which represents Citigroup, HSBC and 14 other lenders, asks members each morning to say how much it would cost them to borrow from each other for 15 different periods ranging from a day to a year. The association is under pressure to show the rates are reliable following complaints by investors that financial institutions weren’t telling the truth after the collapse of subprime mortgages nine months ago contaminated credit markets and drove up borrowing costs.
Banks are understating borrowing costs on concern they will be perceived as ‘weakened’ by the credit turmoil that forced banks to record $323 billion of losses and credit-markets write-downs.

J. Harinarayan, the recently retired Chief Secretary of Andhra Pradesh is the new Chairman of IRDA.

The government estimates that the country was short of some 24.7 mn homes at the beginning of the 11^th plan period (2007-08). A significant quantity of this shortage would be at the bottom of the pyramid, low-income segments.

It is a form of lending that is prevalent in the US for the last one decade or so.
Simply put, it is the purchase and sale of future credit-card receivables.
Like regular lenders, merchant cash firms dole out a lump sum to a business house. But rather than requiring that borrowers make a fixed payment at a specific interest rate, these companies collect a piece of a merchant’s total credit-card sales every month – via the credit card processing service – until they recoup the total amount plus a premium.

SEBI has finally cleared a new proposal wherein the application money will remain in the applicant’s bank account till the allotment is finalized.
Investors cannot use the funds even though no physical transfer of money has taken place at the time of the application.
SEBI hopes to eliminate the movement of instruments from application money and refund, thus hastening the whole IPO process.

The Court has ruled that only chartered or cost accountants will be eligible to audit and certify sales tax returns.
On a case filed against the Maharashtra VAT act provisions stipulating that only Chartered and Cost accountants are to audit sales tax returns, the Court said that lawyers and former sales tax officers cannot audit and certify the tax returns.
You may be aware that all businesses whose annual turnover crosses Rs. 40 lakhs have to get their accounts audited by a chartered or cost accountant before they file their sales tax returns.

Indian Current Affairs