1. RBI launches survey to capture retail payment habits in 6 cities
• The Reserve Bank of India (RBI) will capture payment habits of individuals in six cities, including four metropolitan towns. For the purpose, the central bank has launched a `Survey on Retail Payment Habits of Individuals (SRPHi)`.
• According to RBI release, the survey will cover a sample of 6,000 individuals from various socio-economic backgrounds across six cities including Mumbai, Delhi, Kolkata, Chennai, Bengaluru and Guwahati.
• The survey seeks qualitative responses from individuals on their payment habits. The findings may provide some idea about awareness and usage habits of digital payment products.
• The central bank further said that Sigma Research & Consulting Pvt Ltd has been engaged to conduct the fieldwork of the survey on behalf of the RBI.
• Those not approached by the agency can also participate in the survey by sending their responses in a prescribed format available on the RBI`s website.
2. Bimal Jalan to head panel on RBI reserve; Rakesh Mohan to be vice chairman
• Reserve Bank of India has named former Governor Bimal Jalan as the head of the expert panel that will decide on the appropriate size of reserves that the central bank should maintain and the dividend it should give to the government.
• RBI said in a statement that expert committee has been asked to study global practices and suggest if the central bank was holding reserves and buffer capital in surplus of the required.
• It will submit its report in 90 days from the first day of its meeting.
• Former secretary Rakesh Mohan has been named the vice chairman.
• The panel will include Economic Affairs Secretary Subhash Chandra Garg and RBI Deputy Governor NS Vishwanathan.
3. Maharashtra government implements 7th Pay Commission recommendation
• The Maharashtra government implemented the recommendations of the 7th pay commission to its employees which will benefit the officers, employees, teachers from the unaided schools and those from Zilla Parishad institutions.
• Announcing the decision after the cabinet meeting chaired by Chief Minister Devendra Fadnavis, the state finance minister, Sudhir Mungantiwar said the move will benefit as many as 20.50 lakh employees of the state government.
• The employees will get arrears from the retrospective effect from 1st January, 2016 and it will be given in 5 instalments. The total amount that will be disbursed as arrears will be 38655 crore rupees.
• The arrear amount will be credited directly into the GPF account of the employees.
• With the implementation of the 7 pay commission, the government will have to shell out as many as 7,731 crore rupees annually, as arrears.
• The new pay commission coming into effect a Group ‘D’ employee will get 15,000 rupees per month, whereas those from Group ‘C’ will get 18,000 rupees per month.
• The pensioners will also get a hike in their monthly pension.
4. Public Credit Registry (PCR)
• The Reserve Bank of India has shortlisted six major IT companies, including TCS, Wipro and IBM India, to set up a wide-based digital Public Credit Registry (PCR) to capture details of all borrowers and wilful defaulters. The RBI will soon seek request for proposal from the six vendors.
• The PCR will be an extensive database of credit information for India that is accessible to all stakeholders.
• The idea is to capture all relevant information in one large database on the borrower and, in particular, the borrower’s entire set of borrowing contracts and outcomes.
• The proposed PCR will also include data from entities like market regulator Sebi, the corporate affairs ministry, Goods and Service Tax Network (GSTN) and the Insolvency and Bankruptcy Board of India (IBBI) to enable banks and financial institutions to get a 360-degree profile of the existing as well as prospective borrowers on a real-time basis.
• Generally, a PCR is managed by a public authority like the central bank or the banking supervisor, and reporting of loan details to the PCR by lenders and/or borrowers is mandated by law.
• The contractual terms and outcomes covered and the threshold above which the contracts are to be reported vary in different jurisdictions, but the idea is to capture all relevant information in one large database on the borrower, in particular, the borrower’s entire set of borrowing contracts and outcomes.
5. Angel Tax
• Over the past few weeks, several startups have reportedly been receiving notices from the I-T department asking them to clear taxes on the angel funding they raised, and in some cases, levying a penalty for not paying Angel Tax.
• However, this is not the first time that this issue has come up. Startups have been raising the issue of Angel Tax for years, requesting the government to do away with it.
• Angel Tax is a 30% tax that is levied on the funding received by startups from an external investor. However, this 30% tax is levied when startups receive angel funding at a valuation higher than its ‘fair market value’. It is counted as income to the company and is taxed.
• The tax, under section 56(2)(viib), was introduced by in 2012 to fight money laundering.
• The stated rationale was that bribes and commissions could be disguised as angel investments to escape taxes. But given the possibility of this section being used to harass genuine startups, it was rarely invoked.
6. India has formally taken over operations of Iran’s strategic Chabahar Port
• Iran formally handed over the port to India during a first meeting of the follow-up committee for the implementation of the Chabahar Agreement between Iran, Afghanistan, and India held recently in the port city Tehran.
• The Chabahar Agreement was signed in June 2015 and approved by Iran’s Guardian Council in November 2016. Chabahar is being seen as a gateway for trade by India, Iran and Afghanistan with Central Asian countries
• Iran’s Chabahar port is located on the Gulf of Oman and is the only oceanic port of the country. The port gives access to the energy-rich Persian Gulf nations’ southern coast.
• The first and foremost significance of the Chabahar port is the fact that India can bypass Pakistan in transporting goods to Afghanistan. Chabahar port will boost India’s access to Iran, the key gateway to the International North-South Transport Corridor that has sea, rail and road routes between India, Russia, Iran, Europe and Central Asia.
• Chabahar port will be beneficial to India in countering Chinese presence in the Arabian Sea which China is trying to ensure by helping Pakistan develop the Gwadar port. Gwadar port is less than 400 km from Chabahar by road and 100 km by sea.
• From a diplomatic perspective, Chabahar port could be used as a point from where humanitarian operations could be coordinated.
7. Iran presents first budget since US sanctions restored
• Iran`s President Hassan Rouhani presented next year`s budget to parliament, the first since the United States restored sanctions that had been lifted under the nuclear deal.
• Mr Rouhani told the parliament that the sanctions are going to affect people’s lives, the country’s development and economic growth. He called for curbing the government’s dependence on oil income.
• The 47.5 billion dollar budget is less than half the size of last year`s.
• This is primarily due to the severe depreciation of rial following US President Donald Trump`s decision to pull out the multilateral nuclear deal with Iran in May.
8. GST Council Meet
• The GST Council cut rates on 23 commonly used goods and services, including TV screens, movie tickets and power banks. Monitors and TV screens up to 32-inches and power banks will attract 18 per cent GST, as against 28 per cent earlier.
• GST on movie tickets costing up to 100 rupees was cut to 12 per cent from 18 per cent, while tickets over 100 rupees will attract 18 per cent tax, against 28 per cent earlier.
• Briefing media after meeting of the council in New Delhi this evening, Finance Minister Arun Jaitley said, accessories for carriages for specially abled persons have been brought down to 5 per cent.
• He said, the new GST rates will be effective from 1st January next year. The Minister said, the annual revenue implication of the rate cuts will be 5 thousand 500 crore rupees.
• Mr Jaitley said, the services supplied by the banks to Jan-Dhan account holders will be exempted from GST. He said, the Law Fitment Committee will take a view on GST on real estate in the next meeting.
• The Finance Minister said, now 28 percent slab rate is applicable on cement and auto parts and luxury items like Air Conditioner, dishwasher.
• The GST Council meeting has also approved proposal to form a seven Member Group of Ministers to study the revenue trend, including analysing the reasons for structural patterns affecting the revenue collection in some of the states.
• The study would include the underlying reasons for deviation from the revenue collection targets vis a vis original assumptions discussed during the design of GST system, its implementation and related structural issues.