STOCKS BENEFITING FROM BUDGET

Banks

Private Sector - Government to incentivise credit, debit card transactions.

Public Sector- Government intends to announce autonomous bank board bureau and aims for farm credit of Rs 8.5 lakh crore in FY16 (PNB,SBI,BOB would be the major benefitters)

Power (generation & distribution) To increase target of renewable power to 1,75,000 MW, set up 5 ultra mega power projects(stocks like Tata Power, Reliance Power, NTPC, Suzlon would be the major benefiters.

Finance

All NBFCs with size of over Rs 500 cr will get access to SARFAESI (stocks like HDFC, Shriram Transport Finance would be the major benefiters)

Diamond Cutting & Jewellery & Precious Metals

Govt to introduce Indian-made gold coins to reduce demand for foreign coins and proposes to introduce gold monetisation schemes. (stocks like Gitanjali Gems, PC Jwellers would be the major benefiters)

Microfinance

Allocation of Rs. 5300 crore in micro irrigation. Aim for farm credit of 8.5 lakh crore and 20000 crore for mudra bank. (Stocks to benefit would be SKS Micro & Jain Irrigation would be the major benefiters)

Analyst: D K Aggarwal, CMD, SMC Investments and Advisors Ltd

Renewable Sector

Being a high priority area, the budget 2015-16 decided to increase the target of renewable power to 1,75,000 Mw. The budget has attempted to address the short-term challenges for the power sector, and at the same time had laid a roadmap for more comprehensive measures over the medium to long-term as well. The solar energy sector will give a deserving boost to solar companies to increase generation capacity, which is currently a mere one per cent of the country's total energy production.

Healthcare Insurance/ Healthcare

Union Budget 2015-16 was expected to be formative for at least the insurance sector as India's participation in insurance was limited to enterprises whereas insurance as a product is aimed first for the unmitigated lower income group and middle class. Social security and financial inclusion are stepping stones to insurance. Specifically, increase in health insurance premium tax benefit from Rs 15,000 to Rs 25,000 and for Sr citizens Rs 30,000 was much awaited and expected. Also, Finance Minister Arun Jaitley allocated Rs 33,150 crore for the healthcare sector.

Defense Sector

In the budget 2015-16, the allocation for defence for the next financial year will be Rs. 2,46,727 crore as against Rs. 2,22,370 crore in the current year. The government has increased the foreign direct investment (FDI) cap from 26 percent to 49 percent hoping to get more global players into the sector that is currently dominated by Indian companies. The government has also arranged for FDI beyond 49 percent but only on a case-to-case basis with the approval of Cabinet Committee on Security.

Cement

From Japanese investment on road infrastructure to boost in manufacturing sector, from developing symbolic monuments to building smart cities, Housing for all by 2022. The government is plugging all leakages in infrastructure that makes cement an inevitably important sector. The industry has big players with quality management and state of the art infrastructure and will serve as a strength provider to the overall economy.

Infrastructure

Finance minister has underlined its commitment to reviving the investment cycle by increasing public expenditure in capital formation. The government has announced an overall increase of Rs.70,000 crore in investment in infrastructure in 2015-16 over the current year. As stated in the budget Public investment in the new fiscal year will be Rs.1.25 trillion higher than the revised estimates of the last year, of which Rs.70,000 crore will be directed towards capital expenditure. The allocation in the roads sector has been increased by Rs.14,031 crore and that in railways by Rs.10,050 crore. Finance minister, emphasized the need revisit and revitalize the Public Private Partnership or PPP model of infrastructure development. The introduction of tax-free infra bonds for railways and roads are likely to benefit the sector.

courtsey: ET

                                 INCOME TAX OMBUDSMAN

                                                Take His Help To Redress Your Grievances...

INTRODUCTION

As a taxpayer, you may have some very legitimate grievances relating to your income-tax matters or settlement of your claims. You may, for example, feel that the Income-tax Department owes you a certain refund of tax but it is not doing enough to hear your grievance or complaint nor taking action to redress it. You may also be aggrieved about the rude behaviour of officials or their failure to follow instructions and circulars of the Board. In all such cases, you can approach your Income tax Ombudsman. Before you do so, however, you have to ensure that certain conditions are fulfilled. The Ombudsman is governed by, and has to act within, the framework of the Income Tax Ombudsman Guidelines, 2006. This brochure tries to explain to you these guidelines in a simple manner, so that you can approach the Ombudsman for help whenever you need it.

1. ORIGINS AND CURRENT STATUS

The institution of Ombudsman is of Scandinavian origin. The Ombudsman enquires into grievances or complaints against the functioning of a public authority. In our own country, the Income tax Ombudsman is appointed by the Central Government. He is usually a person with vast experience in tax administration, but functions independently of it. At present, the Government has appointed Ombudsman at New Delhi, Mumbai, Chennai, Kanpur. Chandigarh. Kochi. Kolkata, Hyderabad, Bangalore and Ahmedabad. Appointments at other places are under consideration. The territorial jurisdiction of each Ombudsman is indicated in Annex. -I.

2. WHAT GRIEVANCES CAN YOU TAKE TO THE OMBUDSMAN

You can complain to the Ombudsman about your grievances relating to delays in disposal or settlement of claims connected with:

a. issue of refunds:

b. interest waiver petitions;

c. appeal effects;

d. rectificatin applications;

e. release of seized books of account and assets;

f. allotment of PANs/issue of PAN Cards

You can also complain of such matters as failure to:

a. give credit for taxes paid, including tax deducted at source;

b. maintain transparency in selection of cases for scrutiny;

c. follow the guidelines, circulars and instructions of the Central Board of Direct Taxes;

d. observe proper working hours by Income-tax officials;

e. acknowledge letters and documents forwarded by the assessee;

f. maintain or update records and registers leading to harassment- "A person can also complain about any unwarranted rude behaviour of Income Tax officials with assesses."

The list given hereinbefore is illustrative and not exhaustive.

For further details, please refer to clause 9 of the Guidelines.

3. PROCEDURE TO BE FOLLOWED

On receiving your complaint, the Ombudsman will examine it to see if certain basic conditions laid down in the Guidelines have been fulfilled or not. He cannot take notice of the complaint unless these conditions are fulfilled. These conditions are:

i. the complaint should have been signed by the complainant as well as his authorised representative, in case the complainant is represented by such an authorised representative.

ii. the complaint should clearly indicate/provide:

a) the name, address and PAN of the complainant;

b) the name and designation of the official who is being complained against (this should invariably be the junior most officer who has given rise to the grievance, not below the rank of an Income Tax Officer);

c) the facts giving rise to the complaint;

d) supporting documents; and

e) the relief sought from the Ombudsman.

iii. The Ombudsman will accept complaints filed through the electronic media if they are otherwise in order, but the print out of such a complaint has to be signed by the complainant at the earliest. After he does so, the complaint would relate back to the date on which it was first received electronically.

A complaint shall not lie to the Ombudsman unless in the first instance, the complainant had also made a written representation to the superior authority of the officer complained against. Also, a complainant can complain only if he has received no reply and more than one month has passed since he submitted his representation. Alternatively, he can also complain if he has received a reply but he is not satisfied with it, or if his representation has been rejected.

No complaint can be made:

 i. 12 months after the reply was received from the superior authority;

ii. 13 months after the representation was submitted to the superior authority but no reply was received. Remember, the Ombudsman will not take cognizance of the complaint if it has been the subject matter of:

a. an earlier settlement made by the Ombudsman

OR

b. an appeal, revision, reference or writ before any Income-tax authority or a court of law

On receiving a complaint, the Ombudsman shall forward it to the officer complained against and shall endeavour to settle it by an agreement through either conciliation or mediation. If the officer cannot settle the grievance by agreement with the complainant within a period of one month, or such further time as the Ombudsman may allow, the Ombudsman will mediate and try to bring about an agreement. If he still does not succeed, he can make an 'award'.

(For details, see para 7)

4. POWERS

The Ombudsman has the following powers:

i) He can receive complaints on matters indicated in clause 9 of the Guidelines.

ii) He can consider these complaints and settle them either by agreement through conciliation and mediation or by passing an appropriate award.

iii) He can require the Income-tax authority concerned to provide any information or furnish certified copies of relevant documents required by him.

iv) In the event of the failure of an Income-tax authority, to furnish such information or documents (indicated in para iii above), he may draw an adverse inference.

v) He can suggest remedial measures for redressal of grievances.

vi) He can also report his findings to the Secretary, Department of Revenue and Chairman, C.B.D.T.

5. DUTIES

The duties of the Ombudsman are to:

i) Exercise powers of superintendence and control over his office.

ii) Maintain confidentiality of information coming into his possession and not divulge the same to third parties, except with the consent of the person who furnishes such information. He may, however, divulge such information to an opposing party to the dispute in order to reasonably comply with the principles of natural justice.

iii) Protect the taxpayers' rights and reduce their compliance burden.

iv) Identify issues that increase the burden of compliance and bring the same to the notice of the CBDT and Ministry of Finance.

v) Furnish a monthly report to the Chairman, CBDT and Secretary, Department of Revenue recommending appropriate action including that required to be taken against erring officials.

vi) Furnish an annual review of the tax administration to the Chairman, CBDT and Secretary, Department of Revenue.

vii) Compile a list of awards made by him during the financial year and report the same to the Chief Commissioners concerned and Chairman, CBDT so that the same can be taken into account while writing the Annual Confidential Reports of the officials concerned.

6. NATURE OFTHE PROCEEDINGS

The proceedings before the Ombudsman are quasi-judicial in nature. He is not bound by any legal rules of evidence. He is expected at all times to be fair and reasonable while performing his functions.

7. NATURE OF AWARDS

As already indicated, he shall try to settle a complaint by agreement in the first instance. If such agreement is not forthcoming within a month or such further time as the Ombudsman may allow, he may make an award. This shall be a speaking order and shall clearly specify the directions to the authority concerned - including making of an apology. The award, however, cannot affect the quantum of total income or tax assessed or the penalty already imposed. The Ombudsman can award compensation upto Rs. 1,000/- for the loss suffered by the complainant. Such compensation will be the first charge on the budget allotted to the authority complained against. The award shall be binding on the department but it shall be binding on the assessee, only if he issues a letter of acceptance within 15 days of its receipt. If the complainant does not accept the award or fails to furnish a letter of acceptance within 15 days or further period of 15 days if the Ombudsman permits, it shall lapse and be of no effect. If it is accepted by the assessee, the authority complained against has to implement the award within one month of its having been made. Compliance of having done so has to be reported to the Ombudsman.

CHECKLIST

A check list has been prepared to help you file a complaint. This is given below:

1. The complaint has not been signed by the complainant.

2. It has not been signed by the authorized representative.

3. It does not contain :-

a. The name and address of the complainant

b. Supporting documents

c. Details of the relief sought from the Ombudsman.

4. It has been made electronically but the hard copy (print out) does not have the complainant's signatures.

5. The complainant docs not seem to have reported to the immediate superior of the officer complained against.

6. More than one month has not passed before the representation to the immediate superior was filed.

7. The complainant does not appear to be aggrieved with the reply received from the immediate superior.

8. (a) The complaint has been made after the expiry of one year from the receipt of the reply of the immediate superior;

OR

(b) Where no reply has been received from the immediate superior:

the complaint has been filed after the lapse of 13 months from the date of filing of the representation before the immediate superior.

9. The complaint is the subject matter of an earlier proceeding with the OMBUDSMAN.

10. The ground(s) of the complaint is arc aiso the subject matter of a proceeding in appeal, revision, reference or writ before an appellate authority or a revisionary authority or a Court of Law.

11. The ground is not covered by Guideline 9 of the Income Tax Ombudsman Guidelines, 2006.

12. The complainant is represented by an authorised representative but no power of attorney to represent the complainant has been filed before the Ombudsman.

Remember, the answer to every statement in the check list should be negative. A positive response to statements at Sr. Nos. 1 to 7 and 12 would indicate that the complaint is defective and the Ombudsman cannot proceed further to redress your grievance till the defect is removed.

A positive response to statements at Sr. Nos. 8 to 11, on the other hand, would indicate that not only is the complaint defective but it is also incurable No purpose would be served by filing such a complaint.

SOURCE: Income Tax Department (GoI)

Cos Walk Thin Edge in Talent Retention

FINE LINE Organisations have to deftly balance strategies to retain top performers and give poor performers a chance to improve. They peg high performers at a higher percentile, mentor employees and give those at the lowest end a gentle nudge

Organisations are discovering a twin talent challenge in a competitive business environment. While they need to retain top talent, they also need to let go of consistently poor performers. In doing so, they often walk a thin line -are they letting go of the right set of people?
HCL Technologies uses starkly differentiated compensation strategies to separate good talent from the rest.

Top performers get more than 100% performance bonuses provided company targets are met. Low performers get a “claw-back“ incentive -payouts for increasing performance ratings year on year. In spite of all these efforts, if employees still continue to lag behind, they are encouraged to look for opportunities outside the organisation, says R Anand, VP, rewards and career and talent management at HCL Technologies.

Most organisations use a mix of these techniques, besides their own strategies. Pegging high performers at a higher percentile than others, enabling employees to work on live business problems, mentoring and timebound performance improvement programmes are some of the techniques they use.

“Top performers expect the organisation to recognise the value they create with more than just a pat on the back,“ says R Anand, VP, rewards and career and talent management at HCL Technologies. The top 30% are the most productive and expect differentiated rewards, career growth and other benefits, he adds.“These programmes and focus have helped HCL retain their top 30% performers at more than 90% retention levels,“ adds Anand.

The bottom 30% attrition, however, is over 15%. Employees rated in this category are given deferred nominal increases and also less than 100% bonus payouts.

At Tech Mahindra, the top 20% of associates are pegged at a much higher percentile as compared to the others. Consistent top perform ers, called ACErs, go through various interventions including an annual global felicitation ceremony by CXOs along with their families, invitation to thought leadership forums, involvement in special initiatives as well as accelerated career growth opportunities, says Sucharita Palepu, global head ­ people policies and practices.

At MTS India, the differentiation begins with segmentation, wherein key talent across levels is identified. Talent is segmented into key successors, high potentials and subject matter experts (high performers). A mix of strategies which cater to monetary, development and growth needs for an employee is applied.

“Employee churn is a major cause of concern for most telecom players. Talent retention is not easy, especially when 90% of your talent is Gen X and Gen Y,“ says Tarun Katyal, chief HR officer at MTS India.

Non-performers are given opportunities to improve through mentoring and in case they still don’t perform, the company follows a `con sequence management’ policy to promote meritocracy. One of the levers MTS uses is a formalised HIPO (High Potential Employees) attrition rate for all circle heads and human resource employees. “Since this gets reviewed quarterly, it has been very effective to identify problem areas and take remedial action when required,“ says Katyal.

At Whirlpool, high performers are put on action learning projects where participants work on live business problems using techniques they have learnt. This is in addition to bagging critical roles, coaching and mentoring. “It has a long-term impact on the employee’s capability ,“ says Whirlpool India, VP -human resources, Sarthak Raychaudhuri.

More often than not, retaining high performers is a bigger challenge than identifying non performers, says Chandrasekhar Sripada, president and global head of HR at Dr Reddy’s.

“Contrary to popular belief, it is neither compensation nor status needs alone that help retain best talent. The key is to have a deep sense of personalised engagement with top talent -with an empathetic understanding of their lifecycle needs,“ she adds.

While companies have little tolerance for non performance, they give ample opportunities to non performers to improve before showing them the door.

When an employee falls below the performance curve at Abbott, they are put on a 90-day improvement programme that identifies, engages and re-energises talent that needs a bit of a brush-up.

This plan includes feedback, coaching and intense performance monitoring. Nearly 60% of employees who need to be brought up to speed jump back on the performance track, says Ajay Bhatt, regional HR director at Abbott India. “We believe everyone, no matter which bracket of performance they belong to, should be given a fair opportunity to improve,“ he adds.

At HCL, “structured reflection“ -hard hitting but balanced feedback against the required competencies is given to help non-performers focus on specific areas of work, explains Anand of HCL.

By ensuring that the talent that is unable to align with its business processes leaves, companies are working at creating an environment that will help them to transform before taking them off the system.

“It is like creating our tomorrow. Our talent mindset is not only about changing behaviour, it is about rewriting the future altogether through talent management,“ explains Whirlpool’s Raychaudhuri.

“So we could rewrite the future across the critical mass, transform a tired workforce into innovators and a burnt-out culture into one of inspiration, a command-and-control structure into a system in which everyone pulls each other for success,“ he says.

Source: The Economic Times

GENDER DIVIDE

New report on women in STEM reveals gender divide in business roles 

A new global report released by Catalyst, a global non-profit organisation that aims to expand opportunities for women at the workplace, reveals new layers of inequality for women in business roles in STEM (Science, technology, engineering and mathematics) industries. 

According to the report, titled 'High Potentials in Tech-Intensive Industries: The Gender Divide in Business Roles', only 18% of women opted for a business role in a tech-intensive industry immediately following their MBA, compared to 24% of men. 

53% of women who started out in a business role in a tech-intensive industry post-MBA left to take a position in another industry, compared to 31% of men. The report is the first by Catalyst to study men and women in business roles in technology-intensive industries such as high tech and telecommunications, oil and gas, and automotive manufacturing. 

"STEM companies face a serious talent drain as women take their skills elsewhere, but these organisations also have a remarkable opportunity to turn things around by focusing on how they can make all their talent—men and women alike—feel equally valued," Deborah Gillis, president and CEO, Catalyst said in a statement. 

Read more at:

http://economictimes.indiatimes.com/articleshow/44958579.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

PSU BANK HEAD-HUNTING

The government has decided to finalise a new process for selection of chairmen and managing directors and executive directors of public sector banks (PSBs) for all future vacancies, the finance ministry said in a press release on Monday. The release added that a fresh selection process would have to be implemented for filling up existing vacancies wherein the Reserve Bank of India governor or his nominee of the rank of deputy governor should be a part of the selection process. The government would fill up all these vacancies expeditiously, it said.

The government has constituted a committee consisting of secretary (expenditure), secretary (school education) and the RBI governor to examine the selection process adopted for the selections to the posts of chairman and managing directors and executive directors of PSBs for 2014-15.

Once the government receives the committee’s report, it will cancel the current selection process of CMDs and EDs of state-owned lenders.

As a result, eight posts of CMDs and 14 of EDs would require to be filled up de novo. Currently, Indian Overseas Bank, United Bank of India, Canara Bank, Bank of Baroda and Syndicate Bank are headless.

Even disclosing all names won't bring back black money to India

by R Jagannathan

Did we wait so many years to learn that one Chimanlal Lodhiya, a Pradip Burman and a Radha Timblo are being prosecuted for allegedly holding illegal accounts abroad?

The problem with politicising the unearthing of black money and reducing it to a game of name-and-shame is that you end up with zilch: after shouting about it for five years, we have probably alerted the big crooks to move their money elsewhere. Those who have not done so are probably dead or dumb. Or both.

In fact, an Economic Timesreport last week suggested that the Swiss banks were themselves asking some of their clients to get a move on, as they are embarrassed to be handling their dodgy accounts. This may be just the dumb money that still hasn't got the message.

Let’s be clear. We are not going to get more than a few shekels from the money allegedly stashed abroad no matter what we do. The chances are most of the funny money is probably back in India right now, especially since the Indian economy is prepped up to fare better and interest rates abroad are still down in the dumps. Only a fool would keep his money abroad to earn 1 percent interest when the Indian markets are booming and interest rates are still high.

In 2006, according to the Swiss National Bank, Indian national money with Swiss banks was around Rs 41,400 crore. Then the din about foreign accounts started in India, and by 2008 the money started vanishing. In that year, the amount was whittled down to Rs 15,400 crore. In 2013, the figure was down further to Rs 14,000 crore. That’s just about $2.25 billion. The chances are most of that money is legitimately there.

At $2.25 billion, the Indian money in Swiss banks will probably be less than the value of black money sloshing around in south Mumbai’s real estate markets.

The naming-and-shaming routine is thus unlikely to yield much public pleasure for the simple reason that that so much time has elapsed since the account-holders knew their names with the government. The mere fact that these names were with the government means deals have been done to clean up the trail.

The Swiss bank list allegedly containing some 700 names became public knowledge in 2008 when a former HSBC employee stole the data and gave it to the French government. The French government, in turn, decided to share the details with our own government. Surprise: 2008 was when the Swiss bank amounts of Indians fell drastically. But despite having the list, the Indian government acted cagey and decided that it will chase the account-holders directly for tax dues. There is good reason to suspect that the government was not keen to disclose the names as it would have embarrassed politicians - not just in the UPA, but NDA too - and businessmen close to them. Now we are unlikely to be any wiser.

Around mid-2011, The Economic Times reported that the income-tax department in Mumbai had already "secured 17 voluntary disclosures out of the 700 Indians having secret accounts with HSBC Bank, Switzerland."

The question to ask is this: if the government has already managed to get dues paid through backroom deals with some (or many) of the HSBC account-holders in Swiss banks, why are we surprised that the names are not coming out?

As far as the account-holders are concerned, if some of them have already paid their dues and done deals with the taxman, is it possible to haul them up in the court of public opinion and shame them? They can well claim a breach of trust as they may have admitted technical transgressions and compounded their offences or paid their penalties.

Those who didn’t do any deals would have had ample time to move their funds elsewhere – as the Swiss National Bank numbers show – and our disclosing the names now will only lead us to a dead end. No money, no prosecution. The Swiss certainly are not going to confirm the details of dead or closed accounts relating to 2008.

The very fact that only three names have been disclosed six years after the government got them means the trail would have gone cold by now. One can embarrass people by disclosing 700 names, but nothing more will come from it.

The very fact that one of the names disclosed - Chimanlal Lodhiya - is in all TV channels denying he has a Swiss account suggests that name-and-shame is not going to lead anywhere. If he thought he was vulnerable, he wouldn't be so brazen about it.

In fact, the money has probably arrived in India through several routes. The big rise in gold imports we saw in 2011 and 2012 probably was intended to help store the money that returned home. The unexpectedly large surge in the export of some categories of engineering and copper products in 2010-11 may really have been Indian money returning through the overinvoincing route. The sharp increase in FII inflows during those years may also partly have been Indian money returning to our markets.

Some of it went into real estate, when it was booming till 2012; the rest would have gone into stocks from 2013.

Curtsey : www.firstpost.com 

BLACK-SHEEPS!!

Dabur's Pradip Burman among 3 named for holding black money accounts abroad

The Union government has named three persons who are black money account holders in an affidavit to the Supreme Court.

The three persons named are Pradip Burman, director of the Burman group and one of promoters of Dabur group, Pankaj Chimanlal Lodhya, a Rajkot-based bullion trader and Radha S Timblo, a Goa-based miner and owner of Timblo Pvt Ltd.

The Centre told the court that it had no intention to withhold names of persons who have stashed black money abroad and stated that information received from foreign countries will be disclosed in all cases where tax evasion is established.

Every foreign account held by an Indian may not be illegal, the Centre said, adding that names cannot be disclosed unless there is prima facie evidence of wrongdoing.

It also told the court that Switzerland has indicated willingness to provide information on black money in cases where probe has been done by IT department.

Television reports also indicated that four members of the Congress party, including a former minister of the previous UPA regime, are under investigation, and added that their names may be revealed after the probe is completed. Among the four Congress party members are two belonging to powerful political families in the state of Maharashtra, the television reports further stated.

Last week, it was revealed that the Centre was likely to tell the apex court the names of the people against whom strong evidence exists of stashing away black money in Swiss banks in a major step in its crackdown on India's parallel economy.

On Monday, attorney general Mukul Rohatgi is reported to have submitted a supplementary affidavit in the apex court detailing plans to submit the list of names in a sealed envelope.

The court is due to continue hearings on a petition on black money the following day.



Pankaj Chimanlal Lodhya, a Rajkot-based bullion trader.

Prime Minister Narendra Modi's government is moving fast to repatriate hundreds of billions of dollars in slush funds or black money stashed abroad, as part of a wider clampdown on corruption that he promised during his election campaign.

The government is building pressure particularly on Switzerland, seeking details of Indians who have parked unaccounted for money in Switzerland's highly secretive banks. It has quickly implemented a Supreme Court directive to set up a high-powered special investigation team, headed by retired judge M B Shah, to look into the issue.

While there are no official estimates, Global Financial Integrity (GFI), a Washington-based think-tank, has estimated that Indians had parked USD 462 billion in overseas tax havens between 1948 and 2008.

Black money arises mainly from incomes not disclosed to the government usually to avoid taxation, and, sometimes, because of its criminal links. About a third of India's black money transactions are believed to be in real estate, followed by manufacturing and shopping for gold and consumer goods.

Earlier, the BJP government had told the apex court that it could not disclose the names of those who have deposited money in banks abroad as it this would jeopardize tax agreements with nations providing those names to India.

There were murmurs of protest within the ruling BJP that not disclosing names would hurt the party's image after it had made bringing back black money, a key issue in a general election that it won by a landslide. The Centre's stand also drew a strong response from the Congress, which accused it of hypocrisy.

Turning the tables on the Congress, finance minister Arun Jaitley had recently said the disclosing of names of people holding black money accounts will embarrass the opposition party.

The Congress had hit back, daring the government to come out with complete information without indulging in "selective leaks" and pointing out that "the Congress is not going to be blackmailed under any such threat".

Arvind Subramanian to be Chief Economic Advisor

Narendra Modi names Raghuram Rajan ally Arvind Subramanian as chief economic adviser

U.S. based economist Arvind Subramanian became chief economic adviser to the Indian government on Thursday, an appointment that puts a long-time ally of Reserve Bank of India Governor Raghuram Rajan at the heart of economic policy making.

Subramanian announced his appointment at an impromptu news conference, confirming speculation that has swirled for two months over whether he would get the job advising Prime Minister Narendra Modi's new government.

"I have just taken charge as chief economic adviser," he told reporters outside the Finance Ministry. "It is a great honour ... to serve in a government that has a mandate for reform and change."

The presence of Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington, will add intellectual heft to Modi's nationalist cabinet, which is widely seen as lacking bench strength.

Setting out his priorities, Subramanian said: "For any economy like India, two big things are macro-economic stability and, of course, creating the conditions for rapid investments and growth."

He took a handful of questions before driving off in a white government sedan.

Subramanian's appointment creates a crucial back channel for Rajan, the governor of the Reserve Bank of India, to hash out a new monetary policy framework that Finance Minister Arun Jaitley wants to roll out in his annual budget next February.

He worked alongside Rajan in the International Monetary Fund research department that Rajan headed as chief economist for the global lender. He has been described by one associate as the "de facto closest adviser" to the RBI governor.

His appointment followed news earlier that Arvind Mayaram, the most senior civil servant in the Finance Ministry, had been transferred to another job.

Man Worthy of the Praise

Raghuram Rajan Given Best Central Bank Governor Award by Euromoney

Reserve Bank of India Governor Raghuram Rajan has been conferred with the Best Central Bank Governor award for 2014 by Euromoney magazine.

The magazine said Mr Rajan's tough monetary medicine combatted the storm ravaging the deficit-ridden economy in the recent emerging market crisis.

"Now, he is battling vested interests to arouse a sleepy financial system for over one billion people," Euromoney said, adding, "Remarkably, the internationally-renowned economist, who earned acclaim for his warnings in 2005 of an upcoming global crisis of sorts, has, for the past year been true to his word."

Mr Rajan received Euromoney's Central Bank Governor of the Year Award 2014 in Washington on October 10, the RBI said in a release on Wednesday.

"As he confronted capital outflows, the rupee at record lows, and over-blown but palpable fears India was marching towards an Asia-crisis style abyss, Rajan duly administered tough monetary medicine to ailing bond and currency markets," the magazine added.

In January 2003, the American Finance Association awarded Mr Rajan the inaugural Fischer Black Prize for the best finance researcher under the age of 40.

The other awards he has received include the global Indian of the year award from Nasscom in 2011, the Infosys prize for the Economic Sciences in 2012, and the Center for Financial Studies-Deutsche Bank Prize for financial economics in 2013.

Bank of Mexico Governor Agustin Carstens was the winner of the award in 2013.

HDFC Bank's proposal and FIPB's Take

FIPB to decide on HDFC Bank proposal to increase foreign investment limit

 HDFC Bank's fresh proposal seeking enhancement of foreign investmentlimit in the country's second largest private lender is likely to be taken up by the Foreign Investment Promotion Board on October 1. 

The interministerial body's decision on the proposal is very significant for the bank that is now looking to come out with a rights offer for its existing shareholders. "FIPB could take it up in the next meeting," said a government official privy to the development. 

In December last year the Reserve Bank of India had stopped further foreign purchase of HDFC Bank's shares, saying overall foreign shareholding limit of 49% had been reached.

As a result of the ban, the bank's share has underperformed the sector benchmark - against a 54% gain by the Bank Nifty over the past year, HDFC Bank's shares have risen only 33% during the period. 

HDFC Bank had subsequently moved a proposal to seek an increase in the foreign investment limit to 67.55% from 49% but the proposal hit a wall after the Reserve Bank of India, the department of industrial policy and promotion (DIPP) and the department of economic affairs in the finance ministry said that the bank had already breached 74% cap for banking sector. 

All the key authorities had held that its parent housing finance major HDFC's stake in the bank would be considered foreign investment as per a policy change in 2009.

According to a 2009 FDI policy guideline for calculation of foreign investment, any investment by a company in which foreign investors have majority ownership or control is considered foreign investment. Since HDFC has more than 50% foreign investment and qualifies as foreign-owned all the downstream investment it makes is classified as foreign. This implies foreign investment tag for its 22.64% in HDFC Bank. 

Counting this, the total foreign investment in the bank is about 74%, the maximum allowed. Keen to end the uncertainty, HDFC Bank submitted a fresh proposal with adequate changes even before FIPB could take a call on its original proposal. 

The new proposal submitted in August has sought recognition of its existing foreign investment of up to 74%. 

Foreign investments - which include FDI, foreign institutional investment, shares owned by non-resident Indians, foreign currency convertible bonds and convertible preference shares, and ADRs/GDRs - up to 49% in private banks are allowed through the automatic route but any subsequent increase has to be approved by the FIPB. 

HDFC Bank, which went beyond the automatic limit without FIPB's permission, is therefore seeking approval to regularise its move now. 

However, experts say it is unclear whether FIPB will choose to impose 'compounding', or a penalty for violation of foreign investment norms since the breach was a result of a policy change even though the bank had adequate time to meet the new norm. 

VODAFONE AFFAIR

It's not easy to do business in India: Vodafone Group CEO Vittorio Colao

  Vodafone Group CEO Vittorio Colao said the new government had good intentions but needs to overcome bureaucratic delays, take quick decisions and make available enough resources such as spectrum to spur investments. Colao said the company's board would take a decision on increasing its investment inIndia in two week's time. "Do I see this government as a pro-business government, absolutely yes. But, I go around many countries...there are some good intentions, but then the issue is implementation. Therefore, it is very important that India capitalises," Colao, the global head of the world's largest telecom operator, said after unveiling Vodafone India's fourth annual sustainability report. He added it isn't easy to do business in India. "It's complicated, too many relations, too many people can have a say, too many people can block."

He said he would love to list Vodafone India, but the conditions had to be right. "Currently there are lots of complexities or uncertainties."

Vodafone India head Marten Pieters said the next round of spectrum auctions was critical for the company's India growth plans. "Our business has been put up for sale, so anyone can bid for our business."

He explained that in the seven circles where the company's permits expire by March 2016, Vodafone India doesn't have the fallback option of airwaves in another band that it had in the case of the metros where its spectrum was auctioned in February.

"If we don't get spectrum (in the seven circles), we simply have to close down our business because we don't have the fallback option. An IPO today wouldn't really be a realistic option." India's No. 2 carrier is also in the midst of an arbitration to resolve a long-standing .Rs 20,000-crore tax dispute with the Indian government — a result of the retrospective tax amendment of 2012 brought about by the then UPA-I government.

Colao claimed the retrospective issue had backfired on the Indian government. "Was I surprised at the international backlash post the retrospective taxation, I was not surprised. Has this really backfired on India, the answer is yes. This was such an extraordinary thing. I wasn't surprised when India's public image suffered," Colao said. He described the arbitration process to resolve the dispute a "civilised" one but hinted that the company was open to a settlement outside it. "Anything can be done, and nothing can be ruled out."

The Vodafone CEO did not specifically comment on media reports of a possible acquisition of the Tatas' telecom business but said the company was open to consolidation opportunities. Other issues which add to the regulatory uncertainty for Vodafone include lack of clarity on issues such as mergers and acquisitions, and guidelines on spectrum trading and sharing — recommended some months back by the sector regulator but which are yet to be cleared by the telecom department. "We have been discussing M&A rules for may be 4-5 years now," Colao said.

"The government needs to understand that fewer and larger players are better and this pattern is unfolding all over the world." Despite the regulatory uncertainties and the tax issue, Vodafone is betting big on India, which is currently its thirdlargest market, but could soon become the second largest after Germany, given the pace of growth. "We have two hearts — one is Germany and the other is India, provided I am the brain." Showing commitment towards India, Vodafone recently bought out its minority partners to raise its stake to a 100% in its Indian unit. It has invested some .Rs 70,000 crore in the country so far. Speaking on the new government's telecom initiatives, Colao said he applauded the government's Digital India project.

Source : Economics Times

COAL BLOCKS & BANK EXPOSURE

Banks with Rs 1 lakh crore exposure sitting on mine of worries 

The mass cancellation of coal blocks by the Supreme Court has sent banks in a jittery mode as they have extended over Rs 1 lakh crore loans to power plants that were fed by these mines. 

Almost all banks including country's largest lender State Bank of IndiaBSE -2.83 % and private sector ICICI BankBSE -2.89 % have lent to power plants that were put up based on coal from 214 coal blocks alloted since 1993. 

While none of the bankers were willing to go on record on the impact of the Supreme Court ruling, sources said the lenders were assessing their exposure to the cancelled mines. 

"We are glad that this is over with the SC verdict on coal blocks allocation. We now look forward for a quick plan of action for ensuring that coal supplies are not disrupted and thereafter a swift and transparent bidding process for reallocation," SBI Chairperson Arundhati Bhattacharya said. 

Earlier this month she had said: "for SBI, the exposure is only around Rs 4,000 crore, most of which are lent to power units which have fuel linkages with the affected coal blocks." 

According to estimates, another public sector lender IDBI BankBSE -7.70 % has an exposure of Rs 2,000 crore. 

Commenting on Supreme Court judgement, Yes Bank Managing Director Rana Kapoorsaid the exposure of his bank is minimal. 

"As the the court has said that coal supply would be maintained to the power plants, therefore there would not be too much of an adverse impact on banks," he said. 

Risks of banks are well diversified and fairly well spread, he added. 

Bank of BarodaBSE -2.26 % Executive Director Rajan Dhawan said the bank is still making assessment of the exposure to the coal blocks. 

ICICI Bank and HDFC BankBSE 0.25 % when contacted said they are still assessing the impact of the judgement. 

A bench, headed by Chief Justice R M Lodha, quashed allocation of 214 out of 218 coal blocks which were alloted to various companies since 1993. The four blocks saved from cancellations are one each to NTPCBSE -1.09 % and SAIL and two mines allocated to Ultra Mega Power Projects. 

The bench, also comprising justices Madan B Lokur and Kurian Joseph, granted six months breathing time to mining companies to wind up their operations in the coal blocks.

Source: Economic Times