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21 FEBRUARY, 2014
Volume 3, Issue 7
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AN E-WEEKLY FROM THE WESTERN INDIA REGIONAL COUNCIL OF
THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
www.freepressjournal.in
I
ndia pressed for automatic exchange of key finan-
cial information and greater cooperation among
G20 nations to effectively address tax problems
and protect the integrity of the taxation system, reports
PTI.
Participating in the meeting of G20 Finance and Cen-
tral Bank Deputies here, Economic Affairs Secretary
Arvind Mayaram said information sharing should also
address tax avoidance and urged the US to introduce
reciprocity in its Foreign Accounts Tax Compliance Act
to facilitate the exchange of data.
"Automatic exchange of information should not only
address tax evasion, it should also address tax avoid-
ance...tax avoidance should be seen as part of the prob-
lem," he said after the meeting.
The automatic exchange of information should also
cover aspects other than taxation, such as salaries, pen-
sion royalties and dividend, he said.
Mayaram said certain issues were raised about the
Base Erosion and Profit Sharing (BEPS) initiative, which
seeks to address strategies that exploit gaps in tax rules
to make profits disappear for tax purposes or shift prof-
its to places where there is little or no real activity but
low taxes.
He said action on BEPS should not take into account
only the concerns of developed countries because the
elements of their tax-base erosion can be very different
for low-income or developing nations.
"They must interact strongly with developing coun-
tries like India to take our concerns on board in design-
ing the framework under which base erosion can be ar-
rested.We said that we have issues with regard to trans-
fer pricing, transparency...we need to look at that also,"
he said. Work on BEPS, launched by the Organisation
for Economic Co-operation and Development, is sup-
ported by the G20. Mayaram said issues related to
international taxation were also raised amid increasing
globalisation.
Cooperation in tax administration is critical in the
fight against tax avoidance and evasion in protecting
the integrity of tax systems, Mayaram said.
SOURCE: Free Press Journal
www.freepressjournal.in
India for automatic exchange
of key financial info at G20
R
aising concerns of emerging economies
over the impact of tapering, India said
the US Federal Reserve should provide
guidance and withdraw the monetary stimulus in a
calibrated manner.
"There must be some benchmark...Should it be
USD 10 billion every quarter or USD 20
billion...without destabilising the economy.
"Nobody knows how they are going forward. We
want that to be a little more calibrated and one
that takes others into confidence. Central bankers
should be informed as they look into monetary
policies. There has to be guidance," India's Econom-
ic Affairs Secretary Arvind Mayaram said.
The Fed has reduced its monthly bond purchases
by $20 billion to $65 billion on signs of an improv-
ing US economy. The reduction in stimulus,
known as tapering, may affect capital flows to
emerging markets and impact their currencies.
US Fed must provide guidance
on tapering stimulus: India
Microsoft CEO Nadella says Gates, Ballmer test his conviction
I
n his latest interview with the New York
Times, Microsoft's new CEO Satya Nadella
talked about his relationships with former
company heads Steve Ballmer and Bill Gates and
said both "pressure-test you."
The Indian-origin former cloud computing chief
at Microsoft said that Gates is the most analytical-
ly rigorous person and in the first five seconds of a
meeting he would find some logical flaw in some-
thing he has shown him.
Nadella admitted that he used to feel intimated
with Gates in his early days of meeting him, but he
learned that Gates was grounded and one could
push back on him during arguments, The Verge re-
ports.
According to the report, he said that both Gates
and Ballmer test one's conviction and despite
their changed roles at Microsoft, Nadella said that
it was no big deal as they had been working to-
gether closely for around nine years.
After Ballmer stepped down, Nadella was named
as the company's third CEO and Gates assumed an
advisory role.
Nadella said that one of the fantastic things that
only Gates could do inside this campus was to get
everybody energized to bring their 'A' game.
The new CEO has announced 'mobile first, cloud
first' strategy on which Microsoft would be now
stressing upon under his leadership.
Nadella also said that instead of resting on its
laurels the software giant needs to focus more on
reinventing itself and become a company "where
people find deep meaning at work".
The 46-year-old Nadella said in his new role he
would work on reinvention and innovation in the
company in the new technology environment in-
stead of harping about Microsoft's past successes.
"Longevity in this business is about being able
to reinvent yourself or invent the future. In our
case, given 39 years of success, it's more about
reinvention. We've had great successes, but our fu-
ture is not about our past success. It's going to be
about whether we will invent things that are really
going to drive our future," he told the New York
Times.
Nadella revealed that while playing for his
school's cricket team, he got his early leadership
lessons.
Nadella revealed that there was one incident
when he was bowling and throwing very ordinary
stuff when the team's captain took over from him
and got the team a breakthrough, and then let
him take over again.
He said that he never asked the captain why he
did that, but he believed that the captain knew he
would destroy his confidence if he didn't put him
back in, and then Nadella went on to take a lot
more wickets after that, Sydney Morning Herald
reports. -ANI/PTI.
SOURCE: Free Press Journal
Eco Affairs Secy Arvind Mayaram says data
sharing should also address tax avoidance
and urges the US to introduce reciprocity in
its Foreign Accounts Tax Compliance Act to
facilitate the exchange of data
Satya revealed that while playing
for his schools cricket team, he
got his early leadership lessons
2
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www.freepressjournal.in
D
ifferent sections of the soci-
ety, including politicians
and corporates, should work
towards job creation as it is the only
"antidote" that can make the country
prosperous, InfosysBSE 1.02 % Execu-
tive Chairman N R Narayana Murthy
said today.
He also emphasised upon the need
for countries like India to use technol-
ogy in an intelligent way to reduce
poverty and promote transparency in
government as well as corporates.
"The need of the day for all of us, in-
cluding politicians, bureaucrats, acad-
emicians, corporate leaders and civil
societies is to come to a unanimous
conclusion (that) job creation is only
antidote, and only solution to make
country prosperous," Murthy said dur-
ing his address at the foundation
stone laying ceremony of Infosys' new
campus here.
He also said that the government
should use taxes for making lives bet-
ter, particularly of poor people by pro-
viding them basic education, health-
care facilities and so on.
Murthy, who returned last June from
retirement to head the firm, also
stressed on adoption of technology
by the country in order to reduce
poverty.
"Technology is the finest instrument
that God has given us to reduce
poverty in countries like India...one
country that has to embrace technol-
ogy in a very intelligent way," he said.
"We must embrace technology in a
very passionate way so that govern-
ments become accessible to the
poorest of poor, companies can create
more and more jobs leveraging the
power of technology and make lives
of poor people better by helping
them," he added.
Source: PTI
Job creation only solution to make
India prosperous: Narayana Murthy
S
tating that there was a shortage of over 1.5 lakh
trained professionals in the disability sector in 2012, a
parliamentary panel has asked the government to
create better prospects for those looking to work in the area.
In a report tabled in Parliament, the Standing Committee
on Social Justice and Empowerment cited the government's
own data to state that there was a shortfall of 1,58,598 pro-
fessionals in the disability sector in 2012.
Expressing concern, the panel chaired by Hemanand Biswal
said that the primary reason for the shortfall was the poor
compensation and pay packages given to those working in
the sector.
In a landmark judgement, Delhi High Court had in Septem-
ber, 2009, directed Delhi government to ensure equal terms
and conditions of service for special teachers with those hav-
ing diplomas and degrees in general education, the panel
noted.
It recommended that the Department of Disability Affairs
take up with the HRD Ministry and state governments that
matter of giving good pay packages to those working in the
disability sector.
To encourage more young people to take up this noble
profession, these workers should have good promotional av-
enues on a par with those employed in normal schools and
universities, the panel added.
It also said that the national institutes in the disability sec-
tor should get greater funds so that they may fulfil their pri-
mary objective of training manpower, capacity building and
research while catering to patients.
The panel stressed on the need for a legislation for persons
with disabilities which would be in consonance with the UN
Convention on Rights of Persons with Disabilities.
SOURCE: PTI
Employees
going on study
leave must
sign bond:
Government
T
he central government
has made it mandatory
for its employees going
on study leave to sign a bond
confirming their commitment to
put in requisite active service af-
ter expiry of the leave period.
At present, an employee exe-
cutes a bond committing to pay
loans or money incurred on him
by the government before pro-
ceeding on study leave.
The move comes after govern-
ment noticed that such bonds are
being circumvented and officers
who have availed study leave pro-
ceed on prolonged spells of leave
due and admissible to them and
do not put in active service for
the requisite period as mentioned
in the bond executed by them,
the Ministry of Personnel said in
an office memorandum issued to-
day.
The government said relevant
changes in the service rules
would be made and revised
bonds would be issued incorpo-
rating a specific clause confirming
commitment of the an employee
to put in requisite active service
after expiry of the study leave, it
said. There are about 50 lakh cen-
tral government employees.
SOURCE: PTI
W
ith an average pack-
age of over Rs 16 lakh,
students of the Xavier
School of Management ( XLRI)
Jamshedpur has achieved 100 per
cent campus placement for its
2012-14 batch.
Officials of the premier B-school
said the final recruitment process
saw participation from 103 re-
cruiters recently which made 254
offers for a batch of 245 students.
The recruitment ended on the
fourth day and the median salary
of the batch was over 16.25 lakh
per annum, they said.
This year around 32 new re-
cruiters joined the campus place-
ment.
BFSI and consulting firms recruit-
ed from the institute in large num-
bers with around 50 per cent of
business management students
being offered roles in finance and
consulting domains.
Students of XLRI's human re-
sources programme secured excel-
lent job offers across sectors like
consulting, FMCG and general
management, officials said.
At least 79 students were offered
PPOs (Pre-Placement Offers) from
their summer internships, a near
25 per cent increase over the past
year.
SOURCE: PTI
100 per cent
campus
placement
at XLRI
Improve job prospects in disability
sector: Parliamentary panel to govt
STATE BANK OF INDIA MAY SLOW
HIRING IN NEXT FEW YEARS
S
tate Bank of IndiaBSE 1.46 %,
the country's largest lender,
may go slow on recruitments
during the next 2-3 years, a top bank
official said here today.
According to A Krishna Kumar, Man-
aging Director, the bank will try to
maintain the employee strength at
current levels even as it keeps expan-
sion programmes in mind.
"We will see the extent of people
who are retiring from the bank from
all levels. So to that (extent) we may
look at replenishing that stock. We will
not try to increase. Right now, we have
2.23 lakh people working with us," Ku-
mar said.
By March 2014, the employee
strength may fall to 2.2 lakh, he said.
"So we will try to keep the figure
constant between 2.2 and 2.23 lakh
over the next few years. By reducing
the staff all of a sudden, the other ac-
tivity does not function effectively. But
at the same time I should not increase
my staff so much that my productivity
and my expense becomes an issue,"
Kumar told reporters at a press confer-
ence.
As per SBI, the head count reduced
by nearly 5,000 between March and
December 2013. For the first nine
months of the current financial year,
SBI incurred Rs 17,225 crore towards
staff expenses, up 35 per cent over the
same period last year.
SOURCE: PTI
3
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www.freepressjournal.in
O
ver 40.72 lakh high value spenders are un-
der the scanner of the Income Tax depart-
ment which plans to check potential eva-
sion instances before the closing of the financial year
on March 31, reports PTI.
According to data, the department has information
on 40,72,829 persons who had made cash deposits
amounting to Rs 10 lakh
or more in their saving
bank accounts in the
current fiscal.
"With technical solu-
tions at the department's
disposal, there is a lot of
information that is readily
available to the authori-
ties. "We just want to send
the across the message
that nothing in clandes-
tine and the department
would get to know every
transaction especially
high value ones," a senior
I-T department official
said.
Amongst other informa-
tion that the department
possesses is that
40,40,396 people who
purchased mutual fund
units of Rs 2 lakh or more,
bonds or debentures of
Rs 5 lakh or more, shares issued by companies of Rs 1
lakh or more and bonds issued by RBI of Rs 5 lakh
and above. The tax department's official
data prepared recently also states that 15,55,220 per-
sons purchased or sold immovable property worth
Rs 30 lakh or more; 20,61,443 persons made pay-
ments of Rs 2 lakh or more in a year against their
credit card bills; people who received interest income
of Rs 50,000 and above from banks and people who
purchased bullion or jewellery of Rs 5 lakh or more.
The I-T department, sources said, has also send no-
tices for non-filing of taxes to close to 12 lakh people
and entities even as many more such notices are in
the offing.
With the enhancement of technology, a lot of elec-
tronic data is now available to tax sleuths including
that from the Financial Intelligence Unit (FIU) which
has a specific task of looking for suspicious and high-
value money transfer cases in the country's banking
and economic channels. The I-T department, by re-
leasing such data, intends to bring all such transac-
tions into the tax net before the closing of the 2013-
14 fiscal on March 31 and garner as much revenue as
possible.
Failure to declare correct income and liability is
now taken on a priority basis in the department and
defaulters stand to be penalised upto 300 % on the
evaded tax and prosecution in a court of law is also
initiated, the official said.
SOURCE: Free Press Journal
40.72 lakh high spenders in
the country under tax lens
T
he Bombay High Court will hear a fresh
PIL seeking transfer of a probe by
Mumbai police into the alleged Rs
5,500-crore scam involving National Spot Ex-
change Ltd (NSEL) and Jignesh Shah, to CBI on
Monday.
The PIL filed by activist Ketan Tirodkar argues
that since the scam has national and interna-
tional ramifications only CBI has the necessary
jurisdiction to probe this matter. The case per-
tains to alleged financial embezzlements by
Multi-Commodity Exchange (MCX) and the Fi-
nancial Technologies India Ltd (FTIL).
The Economic Offences Wing (EOW) of Mum-
bai Police is currently probing the case. Though
a bunch of PILs were filed in the high court,
Tirodkar's PIL would come up for hearing today.
The petition alleged those arrested so far like
Nilesh Patel, a major borrower, and three em-
ployees of NSEL, including Anjani Sinha, were
mere pawns in the game while concerted ef-
forts were made to project Shah, the alleged
mastermind in the fraud as a "victim".
"This attempt to project the mastermind of the
scam as a victim of conspiracy by his employees
and borrowers is an outcome of the pressure of
vested interests in the corridors of power who
have been benefitted by the NSEL-MCX-FTIL tri-
angular operations", according to the PIL.
During the market stint of MCX, NSEL and
FTIL, Shah launched many international plat-
forms (Bourses and Trading companies) in tax-
heavens, namely Mauritius, Botswana in Africa,
Singapore and in Middle-east nations such as
Dubai and Bahrain, to take advantage of the
Double Taxation Avoidance Agreement [DTAA]
signed by India as a member of a Consortium of
multiple nations, the PIL alleged. The company
generated free cash flow of 234 mln pound ster-
ling during Oct-Dec, Tata Motors Chief Financial
Officer C. Ramakrishnan said during a press con-
ference here.
SOURCE: Free Press Journal
HC to hear fresh PIL
against NSEL and
Jignesh Shah today
T
he government has pushed the sale of its
residual stake in Hindustan Zinc and Balco to
the next financial year and hopes to meet a
disinvestment target that's been more than halved by
offloading Indian Oil and BHEL shares and setting up a
CPSE Exchange Traded Fund. The centre estimates Rs
36,925 crore from disinvestment proceeds in 2014-15.
The disinvestment target for the current financial
year was slashed by about 60 per cent to Rs 16,027
crore from Rs 40,000 crore, according to the Interim
Budget for 2014-15. So far, the exchequer has re-
ceived about Rs 3,500 crore from PSU stake sales, leav-
ing about Rs 12,500 crore to be mobilised from selling
shares in Indian Oil Corporation, BHEL and the CPSE
ETF. The government also expects to raise Rs 38,954
crore in the next financial year from communication
services including proceeds from spectrum auction
and related charges.
The Department of Telecom has recently concluded
the spectrum auction for radiowaves in the 900 Mhz
and 1800 Mhz bands that lasted 10 days and fetched
the government Rs 61,162 crore, of which Rs 18,296.36
crore will flow to the exchequer within this fiscal, end-
ing March 31.
The targeted mop-up from the sale of the govern-
ment's residual stake in private companies, too, has
been lowered to Rs 3,000 crore in this financial year
from a budgeted Rs 14,000 crore, by way of selling Axis
Bank shares held by Specified Undertaking of the Unit
Trust of India (SUUTI). "We are selling only a
part of SUUTI stake in Axis Bank this fiscal. Whether the
other part will be sold next year is too early to say," Fi-
nance Minister P Chidambaram said.
The government expects to sell its remaining stake
in Hindustan Zinc (HZL) and Balco in 2014-15. It sold
majority stakes in the two companies to the Vedanta
Group during 2001-2003 and now holds 29.54% in
HZL and 49% in Bharat Aluminium Company (Balco).
"The decision to divest stake in HZL and Balco
stands. The process takes time and in our estimate the
process cannot be completed before March 31," Eco-
nomic Affairs Secretary Arvind Mayaram said, adding
that the receipts from the two stake sales will be bud-
geted in the next fiscal (2014-15).
The government also holds some stake in Larsen &
Toubro and ITC through SUUTI. It proposes to mo-
bilise Rs 15,000 crore from the stake sale in HZL and
Balco. The Central Public Sector Enterprises (CPSE)
Exchange Traded Fund would consist of listed CPSE
stocks.
SOURCE: Free Press Journal
Govt eyes Rs 39k cr from spectrum sale, Rs 37k cr from disinvestment
Economic Affairs Secy Arvind Mayaram says
selloff of govt's remaining stake in Hind Zinc
and Balco will only happen next fiscal
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F
inance Minister P Chi-
dambaram may dole out some
sops while doing a tightrope
walk to keep the fiscal deficit under
check when he presents the interim
budget for 2014-15 in Parliament today
ahead of the Lok Sabha elections.
Along with the budget, he will pres-
ent a vote-on-account to seek Parlia-
ment's sanction for spending till July.
The full Budget for 2014-15 will be pre-
sented by the new government in
June-July.
By tradition, the interim budget does
not contain proposals seeking to tinker
with direct taxes, nor are there any poli-
cy announcements, although there
may be some sops for the common
man and sectors that need help. Earlier,
Chidambaram had indicated he may
tweak excise duties and service tax
rates in the interim budget in an appar-
ent bid to boost the economy, but he
may not pursue key reform legislation
due to lack of political consensus.
As per current indications, the fiscal
deficit this financial year is expected to
be less than 4.8 % of GDP estimated in
the budget, mainly on account of ex-
penditure compression and higher re-
alisation from the 2G spectrum auction.
To support the manufacturing sector,
the Finance Minister may cut excise
duty for the auto sector, extend interest
subsidy schemes on bank loans to ex-
porters, farmers, and offer tax conces-
sions for poorer regions.
It would be interesting to see if Chi-
dambaram continues with the super-
rich tax in 2014-15 as well, but indica-
tions are he may choose not to since it
would need amendment of the law. In
the last Budget, the government im-
posed a 10 % surcharge for a year
(2013-14 fiscal) on people earning in-
come above Rs 1 crore. It covered
42,800 individuals and entities.
The minister is expected to use the
opportunity to highlight the achieve-
ments of the UPA-II government and
focus on how the government has
been able to contain the fiscal deficit
and the current account deficit (CAD),
notwithstanding the difficult global sit-
uation.
Chidambaram may explain why eco-
nomic growth slowed to a decade's low
of 4.5 % in 2012-13 and outline steps
taken by the government to put India
back on a high-growth trajectory.
Although the Central Statistics Office
(CSO) has estimated a growth rate at
4.9 % in this financial year, Prime Minis-
ter Manmohan Singh had said it would
exceed 5 % once the figures were re-
vised. Key reform measures such as the
insurance bill, the goods and services
tax (GST) and the direct tax code (DTC)
are not likely to be taken up by the out-
going UPA government for want of po-
litical consensus.
The government, sources said, will
come out with revised estimates for tax
collection in 2013-14 and projections
for the next financial year.
The fiscal consolidation road map re-
quires the government to contain the
fiscal deficit at 4.2 % of GDP in 2014-15.
Chidambaram had on several occa-
sions said he had drawn a red line for
the fiscal deficit and it would not be
breached. The gap could be 4.6-4.7 % of
GDP. The CAD, which was a major con-
cern last year, is likely to narrow to be-
low USD 50 billion, or 2.5 % of GDP. It
had touched a record high of USD 88.2
billion, or 4.8 % of GDP, in 2012-13.
SOURCE: Free Press Journal
A
n inter-ministerial panel has
recommended deallocation
of 29 coal blocks of compa-
nies such as Essar Power, Hindalco, Tata
Power and Jindal Steel and Power Ltd,
and has suggested "no action at pres-
ent" for 30 other blocks.
The IMG recommended dealloca-
tion of Chakla and Ashok Karkatta
coal blocks in Jharkhand allocated to
Essar Power; Tubed coal block in
Jharkhand jointly allocated to Hin-
dalco Industries and Tata Power and
Gare Palma IV/6 in Chhattisgarh
jointly alloted to firms like JSPL and
Nalwa Sponge Iron Ltd, among oth-
ers, according to a Coal Ministry doc-
ument. While in the case of two
coal blocks -- Kotre Basantpur and
Pachmo in Jharkhand -- allocated to
Tata Steel, the IMG has recommend-
ed that the mines are "liable to be
deallocated" and the "decision (on
the same) to be taken by the govern-
ment in view of the court case," the
document said.
According to a JSPL spokesperson,
"Our company has challenged the
purported action of MOC (Ministry of
Coal) before the High Court of Delhi
who vide its order dated 12.2.2014
has ordered status quo with respect
to coal block in question and the
matter is subjudice.
"We have not been communicated
so far the purported cancellation of
coal block Gare IV/6 by MOC, GOI
(Government of India) till date."
Reacting to the development, Essar
Power official said: "We haven't yet
got any communication from the
government (on recommendation
for deallocation of Chakla and Ashok
Karkatta coal blocks."
Hindalco Industries was unavail-
able for comments.
SOURCE: PTI
FM to walk tightrope on Interim Budget
IMG for deallocating coal mines of Essar Power, Jindal, others
Ahead of elections, Finance
Minister P Chidambaram may
offer sops to woo voters, cut
taxes to aid industry and project a
lower fiscal deficit while
presenting the interim budget for
the coming financial year today