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OECD brands New Zealand as a 'red tape country'

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Wellington, July 11 (IANS) New Zealand is a country full of regulatory barriers, said a survey released by the Organisation for Economic Cooperation and Development (OECD) on Thursday.

New Zealand Minister for Regulation David Seymour stressed the need for New Zealand’s regulatory reform, citing areas that are found to be particularly overregulated including barriers to foreign direct investment, acquiring licences and permits, and administrative and regulatory burden.

“It is too difficult to invest, and Kiwis have their productivity sapped because of the time spent complying with edicts from Wellington,” Seymour said.

The result from the five-yearly OECD Product Market Regulation Indicators should end any and all doubt that the government must go to war on red tape and regulation, he said.

The quality of regulation in New Zealand is in freefall, from being ranked second in 1998 to twentieth in this year’s survey, he said, adding that it is no coincidence that New Zealand experienced strong productivity growth in the 1990s but has fallen behind since.

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The Ministry for Regulation aims to cut existing red tape with sector reviews, to improve the scrutiny of new laws, and to improve the capability of the regulatory workforce.

“The culture of lawmaking needs real change, so Kiwis spend less time complying, and more time doing. The end result is higher wages and lower living costs,” the minister said.

The OECD survey, of about 1,000 questions, assesses the degree to which policies and regulations promote or inhibit competition in product markets.

–IANS

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'FPI community to play key role in positioning India as 3rd largest economy'

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New Delhi, July 13 (IANS) The net foreign portfolio investor (FPI) inflows turned green this month, both in the equity and debt segment, and as India enters ‘Amritkaal’, the FPI community will play a major role in positioning it as the third largest economy in the world, market experts said on Saturday.

There was a total net inflow of Rs 2,82,338 crore for both equity and debt in FY24.

According to market watchers, the reason for a quick rebound in the capital markets can be attributed to the positive sentiments, a stable government’s assurance on continuity of reforms, tepid US Fed rates, and strong domestic demand.

“The recent announcements in IFSC Gift City for wide participation for foreign and Indian investors has also diverted the international players to allocate a substantial portion of their global portfolio to India markets,” said Manoj Purohit, Partner and leader, FS Tax, Tax and Regulatory Services, BDO India.

In the first week of this month, FPIs infused Rs 7,962 crore in equity while their debt investments in the same period stood at Rs 6,304 crore.

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All eyes are on the budget proposals to be tabled on July 23 which will hopefully announce path-breaking reforms providing India a golden opportunity against the other emerging global markets. “As India enters ‘Amritkaal’, the FPI community will play a major role for the nation to position as the third-largest economy in the world,” said Purohit.

–IANS

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Robust sovereign credit rating agencies need of the hour: Amitabh Kant

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New Delhi, July 13 (IANS) As India embarks on its journey to become ‘Viksit Bharat’ by 2047, it’s important that we have appropriate credit ratings and call out global agencies for biases and lack of transparency for not objectively assessing India’s strong economic fundamentals, G20 Sherpa and former NITI Aayog CEO, Amitabh Kant, said on Saturday.

Addressing the CareEdge Ratings ‘Conversations 2024’ conference in Pune, he said the notion that developing countries offer more risky investments is not solely based on objective financial metrics but is significantly influenced by subjective assessment.

Kant stressed the need for promoting home-grown credit ratings agencies, saying that appropriate sovereign credit ratings are actually a very critical issue that impacts not only India but also the entire emerging economies.

Hailing India’s high growth rate of around 8.2 per cent, he stressed that future growth will come from cutting-edge areas.

According to Najib Shah, Chairman, CareEdge, the world is moving away from domination by a single superpower, a single currency and moving towards a more balanced and complex system that’s emerging and evolving.

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“Such an environment also has implications for the financial situation. Destructive competition between the US and China has ushered in a new era of competing geopolitics and economies. The role of the credit rating agency will be important here for acting in a transparent, competitive, professional manner,” Shah told the gathering.

At the event, Gulshan Malik, Deputy Managing Director, State Bank of India (SBI) said the banking sector in India is adequately capitalised as well as ready to fund the next phase of growth which is very critical.

–IANS

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Centre fixes meeting with states to boost maritime, waterways transport

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New Delhi, July 13, (IANS) The Ministry of Ports, Shipping, and Waterways will convene the State Maritime & Waterways Transport Committees’ meeting on Tuesday to hold discussions for the comprehensive development of maritime and waterways transport across India and expanding its reach to include the remaining states.

The meeting to be held via video conferencing will be chaired by T. K. Ramachandran, Secretary, Ministry of Ports, Shipping, and Waterways, according to an official statement issued on Saturday.

“The meeting will focus on the preparation of state-specific Maritime and Waterways Transport Master Plans, formulation of Maritime Sector Policies, Green Initiatives, Waterways Development, Cruise Tourism, Urban Water Transportation, and the Development of Lighthouses,” the statement added.

Recognising the need for a unified approach to manage and integrate the waterways transportation sector, the Ministry has established State Maritime & Waterways Transport Committees (SMWTCs) to coordinate various initiatives and schemes within each state.

These committees will be pivotal in consolidating efforts and providing focused leadership in the maritime and waterways sector. Each state committee is headed by the Chief Secretary or Additional Chief Secretary and includes representatives from major ports, maritime boards, state PWD, Inland Waterways, Department of Tourism, Department of Fisheries, Railways, NHAI and Customs.

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Currently, SMWTCs have been constituted in 13 states, including Andhra Pradesh, Mizoram, Himachal Pradesh, Nagaland, Puducherry, Rajasthan, Bihar, Assam, Goa, Kerala, Uttar Pradesh, Maharashtra, and Lakshadweep, with plans to establish them in all 30 coastal and waterways states and UTs of India.

The agenda for the meeting includes reviewing the progress made by already constituted SMWTCs, discussing the issues faced by different states along with discussion on implementation of Sagarmala Programme, development of National Maritime Heritage Complex (NMHC) at Lothal, opportunities in Ro-Ro/Ro-Pax/Ferry/Urban Water Transportation, Sagarmala Shipbuilding Clusters, Harit Nauka (Green Transition) Scheme for Inland Waterways, Cargo Promotion Scheme, MoUs with States for Coastal and River Cruise Tourism and support for State Inland Waterway Transport.

Chief Secretaries and Additional Chief Secretaries, as Chairpersons of SMWTCs, will present progress in their states, SMWTC initiatives, state-specific issues, and required support from the Ministry, aiming to review progress, address issues, and foster collaborative solutions to enhance maritime and waterways transport in India.

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–IANS

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India has potential to become world’s 2nd largest economy by 2031: RBI Dy Governor

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Mumbai, July 13 (IANS) Given the country’s innate strengths, it is possible to imagine India striking out into the next decade to become the second largest economy in the world not by 2048, but by 2031, and the largest economy of the world by 2060, RBI Deputy Governor Michael Debabrata Patra has said.

In a speech at the Lal Bahadur Shastri National Academy of Administration, Mussoorie, this week, Patra said there is a traditional advantage that is likely to continue working in favour of India’s growth prospects. The development process has been predominantly driven by capital accumulation, which makes investment the main lever of growth which has stabilised at 31.2 per cent during 2021-23, and is showing signs of acceleration.

In his speech now posted on the RBI website, Patra said: “Historically, India’s investment has been financed by domestic savings, with households being the prime provider of resources to the rest of the economy. In the period 2021-23, the gross domestic saving rate has averaged 30.7 per cent of gross national disposable income. Thus, unlike many countries, India does not have to depend on foreign resources, which play a minor and supplemental role in the growth process.”

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The current account gap in the balance of payments – has remained modest at around 1 per cent of GDP in 2023-24. This provides insulation to the Indian economy from external shocks and imparts viability and strength to the external sector. Illustratively, India’s gross external debt, which is the accumulation of current account deficits over time, is less than 20 per cent of GDP and almost entirely covered by the level of foreign exchange reserves, Patra explained.

Second, the rising growth trajectory on which India is poised is entrenched by macroeconomic and financial stability as inflation has fallen back into the tolerance band around the target of 4 per cent. This reflects the cumulative impact of steadfast monetary policy actions and supply management. In fact, core inflation that excludes food and fuel and is most amenable to monetary policy has fallen to its lowest level ever.

Alongside macroeconomic stability, financial stability is getting reinforced by prudent financial policies and active on-site supervision complemented with off-site surveillance, which harnesses SupTech, big data analytics and cyber security drills. India’s financial sector is predominantly bank-based. Gross non-performing assets (GNPAs) in the banking system have steadily fallen from their peak in March 2018 to 2.8 per cent of total assets by March 2024, he added.

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Another aspect of macroeconomic stability is the ongoing fiscal consolidation. As a result, the general government debt which is estimated at 81.6 per cent of GDP at the end of March 2024 is expected to decline to 78.2 per cent by end of this decade by the IMF. Our projections show that if expenditures are increased on reskilling/upskilling the labour force in the most productive sectors of manufacturing, investing in digitalisation and promoting energy efficiency, the general government debt will fall even further to 73.4 per cent of GDP by 2030-313. This is significant in the context of the IMF’s projections that show the debt ratio as projected to rise to 116.3 per cent in 2028 for advanced economies and to 78.1 per cent for emerging and middle-income countries, Patra said.

He also explained that a potent growth accelerator emerges from India’s favourable demographic dynamics. India’s population is now regarded as its greatest asset in an inter-temporal perspective, especially when the rest of the world ages rapidly and populations shrink. Today, every sixth working-age person in the world is an Indian. India’s demographic dividend is expected to last for more than three decades. Every effort must be made to reap this opportunity, he added.

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Patra pointed out that another growth multiplier is India’s digital revolution. India is emerging as a world leader in leveraging digital technologies for transformative change. The trinity of JAM – Jan Dhan (basic no-frills accounts); Aadhaar (universal unique identification); and mobile phone connections – is expanding the ambit of formal finance, boosting tech start-ups and enabling the targeting of direct benefit transfers. India’s Unified Payment Interface (UPI), an open-ended system that powers multiple bank accounts into a single mobile application is propelling inter-bank peer-to-peer and person-to-merchant transactions seamlessly. Payment systems in India operate on a 24 by 7 by 365 basis. The internationalisation of the UPI is progressing rapidly, the RBI deputy Governor added.

–IANS

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Direct tax collections surge 19.5 pc to Rs 5.74 lakh crore in 2024-25 so far

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New Delhi, July 13 (IANS) The country’s nets direct tax collection posted a robust 19.5 per cent growth to Rs 5.74 lakh as on till July 11 of the current financial year (2024-25) compared to the same period of the previous year, according to the latest figures compiled by the Income Tax Department

Net corporate tax collections from April 1 to July 11 increased 12.5 per cent over the same period last year to Rs 2.1 lakh crore, while personal income tax including securities transaction tax rose 24 per cent to Rs 3.64 lakh crore.

Gross direct tax collections, before refunds, surged 23.2 per cent compared to the same period last to Rs 6.45 lakh, the figures showed.

There has also been a 64.5 per cent increase in direct tax refunds during the current financial year at Rs 70,902 crore between April 1 and July 11.

The buoyancy in tax collections will help the government control the fiscal deficit as it gears up to present the full budget for 2024-15 on July 3.

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The hefty Rs 2.11 lakh crore dividend from the RBI and the robust direct tax and GST collections will give the Finance Minister headroom for pushing ahead with policies aimed at accelerating growth and implementing social welfare schemes aimed at uplifting the poor.

The fiscal deficit has been reduced from more than 9 per cent of GDP in 2020-21 to the targeted level of 5.1 per cent for 2024-25. This has strengthened the macroeconomic fundamentals of the economy. S&P Global Rating raised India’s sovereign rating outlook to ‘positive’ from ‘stable’, citing the country’s improving finances and strong economic growth.

After having presented an interim budget ahead of the Lok Sabha polls, the Finance Minister will now present the full budget for 2024-25 that ensures the economy continues on the high growth trajectory and creates more jobs during the third term of the Modi government.

Sitharaman is expected to increase the exemption limit for income tax to give some relief to the middle class. This would place more disposable income in the hands of consumers and lead to an increase in demand to fuel economic growth.

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–IANS

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