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GST has benefited the poor, empowered the states: FM Sitharaman

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New Delhi, May 6 (IANS) Finance Minister Nirmala Sitharaman said on Monday that two significant milestones have now been achieved in the larger GST architecture with the appointment of the President of the GST Appellate Tribunal (GSTAT) and gross GST collections crossing the landmark of Rs 2 lakh crore, thanks to heightened economic activity in the country.

In a detailed statement on X, the Finance Minister cited figures to show how GST has benefited the poor by reducing taxes on essential goods, and led to greater finances being made available to the states as part of the objective to promote federalism.

She said that GST, which was first mooted by the erstwhile Atal Bihari Vajpayee-led NDA government, was ultimately implemented under the leadership of Prime Minister Narendra Modi after the necessary consensus was carefully built, and the GST Acts were passed by the Parliament in 2016.

She also said that in 10 years, the UPA was unable to achieve political consensus on GST.

The Finance Minister said that before the implementation of GST, India’s indirect tax system was fragmented and complicated, and every state was practically a distinct market in itself with different rules and tax rates.

Inputs for Central excise duty, etc., could not be availed, leading to an increased tax burden on the common people, she said.

The GST streamlined 17 taxes and 13 cesses into a five-tier structure, simplifying the tax regime. The turnover threshold for registration rose to Rs 40 lakh for goods and Rs 20 lakh for services (from Rs 5 lakh on average under VAT). The GST also reduced 495 different submissions (challan, forms, declarations, etc) across states to just 12, she explained.

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The GST simplified compliances through uniform processes, simple registration, single returns, and a fully IT-driven system with minimal physical interface, she added.

The Quarterly Returns with Monthly Payment (QRMP) scheme, with much lower compliances, has benefited over 44 lakh small taxpayers and MSMEs. As per a Deloitte survey (2023), 88 per cent of MSMEs credit GST for cost reductions along with optimised supply chains.

The GST regime has enhanced MSME financing through tools like e-invoicing, TReDS, and the Account Aggregator framework. The number of registered taxpayers under the GST grew to over 1.4 crore from 65 lakh in 2017, the Finance Minister said.

The E-way bill system removed inter-state checkpoints, reducing logistics costs. Trucks travelled 44 per cent more daily, and corruption at tax ‘nakas’ decreased. Consequently, domestic goods’ inter-state trade surged to 35 per cent of GDP in FY22, up from 23.5 per cent in FY18, she pointed out.

The Finance Minister said, “Reflecting a pro-poor approach, the effective weighted average GST rate has consistently fallen since 2017. The Revenue Neutral Rate was suggested to be 15.3 per cent but was lower at 14.4 per cent in 2017, and it has come down to 11.6 per cent in 2019.”

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The GST lowered taxes on many essential items compared to pre-GST rates. Common items like hair oil and soaps saw tax being cut from 28 per cent to 18 per cent.

Electrical appliances are taxed at 12 per cent against 31.5 per cent before. Movie tickets were taxed lower, too. Further tax rate rationalisation has been done since 2017. The National Anti-profiteering Authority has ensured that companies passed the benefits to the consumers, FM Sitharaman said.

The Finance Minister also cited the fact that GST has exempted many essential items and services, such as unbranded food items, certain life-saving drugs, healthcare, education, public transport, sanitary napkins, hearing aid parts, and agricultural services to drive home her point.

She also said that GST exemplifies cooperative federalism in India besides empowering the states.

The GST Council, with a 75 per cent majority vote requirement, assigns one-third voting power to the Centre and two-thirds to the states. Out of the 52 meetings, all decisions but one were reached through consensus.

“As the Chairperson of the GST Council, I have ensured that the voices of all states are heard equally without bias,” she said.

“It is a myth that all GST collections are pocketed by the Centre. GST contributes significantly to state revenues — states receive 100 per cent of the SGST collected in a particular state, and approx. 50 per cent of IGST (i.e. on inter-state trade). A significant portion of CGST, i.e., 42 per cent, is devolved to the the states based on the Finance Commission’s recommendations,” the Finance Minister pointed out.

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She also cited figures to show that GST has improved tax buoyancy from 0.72 (pre-GST) to 1.22 (2018-23). Despite compensation ending, state revenues remain buoyant at 1.15.

The Finance Minister also said that without GST, states’ revenue from subsumed taxes from FY 18-19 to 2023-24 would have been Rs 37.5 lakh crore. With GST, the states’ actual revenue amounted to Rs. 46.56 lakh crore.

She said that despite the GST rate being less than the prescribed Revenue Neutral Rate, and the Covid pandemic affecting the revenues, GST collections (as a percentage of GDP) have now reached the levels they were before GST (both net and gross).

This demonstrates that the Centre and the states, collectively through better tax administration, are able to collect the same revenue with a lower burden on the taxpayers.

“GST is an expression of Modi government’s commitment to‘Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayaas’. Our continuous efforts are towards ensuring that new heights are scaled through better taxpayer services and increased efficiencies instead of increased taxes,” FM Sitharaman said.

–IANS

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India’s growth momentum to continue in April-March quarter of 2024-25: FinMin report

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New Delhi, May 25 (IANS) The Indian economy closed the financial year 2023-24 strongly despite strong external headwinds, and early indications suggest that the growth momentum will continue during the current April-June quarter of 2024-25, according to a Finance Ministry report released on Friday.

“The emerging robust trends in key high-frequency indicators of growth like GST collections, e-way bills, electronic toll collections, sale of vehicles, purchasing managers’ indices, and the value and number of digital transactions attest to the growing strength of the economy,” the Finance Ministry said in its monthly economic review for April.

The industrial and service sectors of the Indian economy are performing well, backed by brisk domestic demand and partially by tentative external demand. This can benefit India’s manufacturing firms as part of the China Plus One strategy.

The EXIM Bank of India has forecast that merchandise exports will post a double-digit growth in Q1 of FY25, the report pointed out.

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The report expects domestic manufacturing to receive stronger export orders due to improved economic activity and consumer sentiment in Europe and a steady US economy. It cites an uptick in India’s exports in April to support the point.

It admits that geopolitical tensions and volatility in global commodity prices, especially of petroleum products, present substantial challenges. “Nonetheless, the expectation is that the macro-economic buffers will help the Indian economy navigate these challenges reasonably smoothly,” the report added.

Factors like the ongoing recovery in the hotel and tourism industry, increased credit flow to transport and real estate segments, policy support, and robust investments in physical and digital infrastructure and logistics will help the services sector. The strong export growth in April 2024 indicates that the momentum in services trade has been carried forward into FY25, it said.

On the inflation front, the report cites the good rabi harvest of wheat and the prediction of a normal Southwest Monsoon as factors that will lead to higher food production and easing of price pressures during 2024-25. The RBI has forecast a 4.9 per cent retail inflation for FY25’s first quarter.

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According to the report, Government initiatives to stabilise the prices of essential food items, including their open market sale, stock monitoring and trade policy measures are helping to stabilise food prices.

“The positive indications in the farm sector should help India firewall against any adverse pressures that may arise from geopolitical tensions and global commodity prices. Likewise, the strong macro-economic buffers of India should help the real sectors of the economy navigate the external headwinds smoothly and continue the growth momentum of the previous year,” the report added.

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RBI fines Hero FinCorp for breach of norms

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Mumbai, May 24 (IANS) The Reserve Bank of India (RBI) has imposed a penalty of Rs 3,10,000 on Hero FinCorp Limited for breach of norms related to the fair practices code for NBFCs.

An RBI inspection has revealed that Hero FinCorp did not convey the terms and conditions of loans in writing to the borrowers in the vernacular language understood by them.

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2023.

Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions.

After considering the company’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, the RBI found, inter alia, that the charge against the company was sustained, warranting imposition of monetary penalty.

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The RBI also said: “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.”

–IANS

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India's forex reserves soar to lifetime high of $648.7 billion

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Mumbai, May 24 (IANS) India’s foreign exchange reserves surged by $4.55 billion to touch a new lifetime high of 648.7 billion mark during the week ended May 17, according to the latest data released by the RBI on Friday.

This is the third consecutive week during which the country’s forex kitty has expanded which augurs well for the macroeconomic fundamentals of the economy as an ample supply of dollars helps to strengthen the rupee.

The country’s forex reserves had increased by $2.56 billion to $644.15 billion during the week ended May 10 and had recorded $3.66 billion rise for the week ended May 3.

India’s foreign exchange reserves had earlier touched a lifetime high of $648.562 billion in April after which they had declined for three weeks in a row by $10.6 billion as the RBI actively intervened in the market to buy dollars to stabilise the rupee.

An increase in the foreign exchange reserves gives the RBI more headroom to stabilise the rupee when it turns volatile.

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This is because the RBI intervenes in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall.

Conversely, a declining forex kitty leaves the RBI less space to intervene in the market to prop up the rupee.

India’s forex reserves, including the central bank’s forward holdings, can now cover more than 11 months of imports, which is a two-year high.

RBI Governor Shaktikanta Das recently referred to the record foreign exchange reserves as a reflection of the strength of the Indian economy.

“It is our prime focus to build a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns,” he remarked while unveiling the first monetary policy review of the current financial year that began on April 1.

–IANS

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At 'Illness to Wellness' awareness session, experts warn undetected thyroid diseases can lead to major health complications

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New Delhi, May 24 (IANS) The ASSOCHAM CSR Council, under the Illness to Wellness initiative, hosted a panel discussion on the eve of World Thyroid Day titled ‘Thyroid Matters: In Health & Disease’ with the primary goal of increasing awareness about thyroid diseases and the need to encourage early treatment of thyroid dysfunctions.

The panel comprised Dr. (Prof.) Chandrakant Sambhaji Pandav, Member, National Council on POSHAN Abhiyan and Former Head, Centre for Community Medicine, All India Institute of Medical Sciences, Delhi; Dr. Subhash K Wangnoo, Senior Consultant – Endocrinologist & Diabetologist, Indraprastha Apollo Hospitals, New Delhi; and Dr. Mudit Sabharwal, Consultant Diabetes & Endocrinology, Fortis La Femme Multi Specialty Hospital and Director and Consultant, Diabetologist, Dharma Diabetes and Metabolic Clinics, Delhi & NCR.

The session was moderated by Dr. Rajesh Kesari, Founder and Director, Total Care Control, Delhi-NCR, and EC Member, RSSDI.

Dr. Pandav explained the importance of awareness in tackling the rise in thyroid diseases. He also mentioned that adequately iodised salt is needed to stave off thyroid diseases.

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“Without awareness, you cannot move forward. Awareness is necessary to ensure early detection of thyroid diseases and can prevent major ailments. Historically, iodine deficiency has been a major cause of thyroid disorders. Although iodization programmes have reduced goiter prevalence, iodine deficiency still exists in some regions,” he said.

Anil Rajput, Chairperson, ASSOCHAM National CSR Council, said: “The increase in the prevalence of thyroid-related health issues warrants heightened awareness and pro-active measures to be put in place with a greater sense of urgency to effectively address this challenge of significant proportions.

“Thyroid ailments affect both men and women with the latter reporting a higher incidence necessitating the need for gender-sensitive approaches to be looked at in greater detail. On World Thyroid Day, it is important to galvanise public awareness about thyroid disorders across all age groups and I am confident that together we can empower individuals, families, and communities to effectively address thyroid ailments and move towards a healthier and more resilient nation.”

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Talking about the symptoms, Dr. Sabharwal said there are two types of thyroid disorders — Hypothyroidism (symptoms include- fatigue, weight gain, dry skin, cold intolerance) and Hyperthyroidism (symptoms include weight loss, heat intolerance, increased appetite)

“A simple exercise like Surya Namaskar can help control/prevent hyperthyroidism. After Covid-19, we have seen a rise in cases of hyperthyroidism. We must remember that cholesterol and diabetes are also linked to thyroid, therefore, people should ensure a healthy lifestyle to prevent health issues like thyroid ailments,” he said.

Dr. Wangnoo said unexpected weakness, postpartum depression in women, and lethargy are signs of thyroid dysfunction to watch out for.

“Thyroid does a lot of work to help metabolise and maintain blood pressure, body temperature and heart rate. Pregnant women also need to be very careful. Postpartum depression is something that women are vulnerable to due to thyroid issues. The intelligence quotient in babies may be affected if there is late detection,” he said.

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–IANS

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Adani Ports to join Sensex from June 24 after BSE rejig

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Mumbai, May 24 (IANS) Adani Ports and Special Economic Zone (SEZ) will be included in the S&P BSE Sensex from June 24.

The BSE benchmark will drop from the index on the same day.

The Asia Index Pvt. Ltd. on Friday announced the reconstitution results for its indices, effective from June 24.

The Adani Ports and Special Economic Zone stock was down 1.83 per cent on Friday at Rs 1,416.90 per share.

An IIFL Alternative Research report said earlier this week that Adani Enterprises is expected to replace Wipro in the benchmark Sensex.

On Friday, positive action was seen in the Adani Group stocks. The Adani Enterprises stock was almost flat at Rs 3,381 apiece on the BSE, while Adani Green Energy shares went up by 1.8 per cent, Adani Total Gas increased by 2.5 per cent, and Adani Energy Solutions rose by 0.50 per cent.

Indian stock indices traded in a sideways range on Friday. At close, Sensex was at 75,410, down 7 points, while Nifty was at 22,957, down nearly 10 points.

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–IANS

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