NEW DELHI: India has expressed strong opposition to the $46 billion China-Pakistan Economic Corridor (CPEC) project, which is the key to Beijing's ambitious 'One-Belt, One-Road' initiative, even as it slammed Islamabad for not taking concrete steps to stop crossborder terrorism. "The CPEC passing through Pakistan-occupied-Kashmir challenges Indian sovereignty," said the Union defence ministry in its annual report submitted to Parliament on Wednesday. In the past too, India has criticised the Chinese-funded CPEC, which links China's Muslim dominated Xinjiang province to the Gwadar deep-sea port in Pakistan, because it passes through Gilgit-Baltistan in PoK, which New Delhi considers its own territory.

During the G-20 summit at Hangzhou in September last year, PM Narendra Modi had expressed India's concerns over the CPEC in his bilateral meeting with Chinese President Xi Jinping, holding that the two countries needed to be "sensitive" to each other's strategic interests. Taking note of China's significant restructuring of its People's Liberation Army to boost its offensive military capabilities, the defence ministry also reiterated India's support for freedom of navigation and overflight, and unimpeached commerce, based on international laws in the contentious South China Sea. New Delhi has taken to criticising Beijing's strongarm tactics in the South China Sea , even as it slowly but steadily builds military ties with countries like Vietnam, Malaysia and others locked in territorial disputes with China in the region. "India undertakes various activities, including cooperation in the oil and gas sector, with littoral states of South China Sea (Vietnam, for instance)...India believes that states should resolve disputes through peaceful means....," said the MoD. Turning to Pakistan, the MoD said: "Although the (Pakistani) military has made efforts to improve the security situation in the country, it has avoided taking action against jihadi and terror outfits that target Pakistan's neighbours."

News source: Economics Times


Posted On Friday, 17 March 2017 10:08


NEW DELHI: India on Thursday slammed Pakistan for its unilateral action to make Gilgit-Baltistan the fifth province of the neighbouring country and asserted that such actions have no legal validity. “The position of the government on Jammu & Kashmir is consistent and well known. The entire state of J&K was acceded to India in 1947. It has been, is and will always be, an integral part of India. A part of Jammu & Kashmir has been under illegal occupation of Pakistan.  Any unilateral step by Pakistan to alter the status of that part will have no basis in law and will be completely unacceptable,” MEA spokesperson Gopal Baglay said when asked to comment on Islamabad’s action at a media briefing here.  It will also be a violation of the agreement between the two countries to address all issues bilaterally through peaceful means, which was enshrined in the Shimla Agreement of 1972 and reiterated through the Lahore Declaration in 1999, Baglay said.

“I must also say that such a step will not camouflage the illegality of Pakistan’s occupation of parts of Jammu & Kashmir and the gravely concerning and serious human rights violations there, as well as denial of democracy to the people there,” he said.  The MEA spokesperson also rejected Pakistan’s effort and intention to meddle in India’s internal affairs, including in judicial process. “We also totally reject the completely untenable link sought to be established by Pakistan with any other matter currently under purview of the Indian courts. A strong Indian democracy and justice system need no self-serving sermons, that too from a country like Pakistan.”  “Pakistan is well advised to refrain from interfering in the internal affairs of India in any form; not to resort to denial from the reality of terrorism emanating from its soil; and take action to dismantle the infrastructure of terrorism in the territory under its control.”

News source: Economics Times

Posted On Friday, 17 March 2017 10:01


A 10 March research paper prepared by the staff at the Reserve Bank of India (RBI)’s monetary policy department tells us that the 8 November demonetisation move by Prime Minister Narendra Modi has not done any major damage to the economy so far. Instead, the note ban promises several positives to the economy in the medium to long term, the preliminary assessment says. The RBI distances itself from the observations saying these are not its official views, but entirely belongs to those of the contributing staff.

The core theme of the paper is that “demonetisation has had some negative macroeconomic impact, which, however, has been transient as remonetisation has moved at an accelerated pace in last twelve weeks" — a view the RBI and government have maintained so far. More importantly, demonetisation is expected to have a positive impact over the medium to long term, the paper says. “In particular, there is expected to be greater formalisation of the economy with increased use of digital payments. The reduced use of cash will also lead to greater intermediation by the formal financial sector of the economy, which should, inter alia, help improve monetary transmission,” it says.

Here are some of the observations in the paper:

Economy: Demonetisation impacted various sectors of the economy; however, the adverse impact, in general, was short-lived as it was felt mainly in November and December 2016. The impact moderated significantly in January and dissipated by and large by mid-February 2017, reflecting an accelerated pace of remonetisation. The GVA growth in Q3 of 2016-17 was felt mostly in real estate and construction, but because of stronger growth in agriculture, manufacturing, electricity, and mining, the overall impact on GVA growth was modest. With remonetisation progressing at a fast pace, the adverse impact is expected to have reversed from the latter part of Q4 of 2016-17. GVA growth is estimated to recover significantly in 2017-18. But what about the protruding disconnect between GDP and other high frequency macro indicators? Read an earlier comment on this here.

Banks: With the return of SBNs (specified bank notes or invalidated old notes), currency in circulation declined and deposits with banks surged. The share of ‘investment in government securities’ on the asset side of banks’ balance sheet increased significantly. Large surplus liquidity led to a significant improvement in monetary policy transmission as reflected in a significant decline in deposit and lending interest rates. The sharp increase in low cost CASA (low cost) deposits by banks is expected to have increased banks’ net interest income.

News source: First Post

Posted On Friday, 17 March 2017 09:57


Finance Minister Arun Jaitley on Thursday said that all GST laws including the State GST and Union Territory GST have been approved by the GST Council.  The approval paves way for the tabling of GST Bill in the current session of the Parliament. The Council has already cleared Central GST (CGST) and integrated GST (IGST) Bills and the Compensation legislation.  Here are the highlights of what Finance Minister Arun Jaitley said at the press conference after GST Council meet:

  1. Cess on sin goods is 12 per cent, capped at 15 per cent.
    State GST and UT GST cleared by GST Council.
    Laws will be taken to cabinet and then to the parliament for approval
    Some marginal correction in remaining regulations will be required.
    Any supply made to SEZ will be zero rated.
    Commerce Ministry proposal on SEZ approved by GST Council
    Have kept a provision of ad valerom and specific duties for cigarette and tobacco
    Tobacco cess capped at 290 per cent ad valorem
    Cess capped at 15 percent for luxury cars and aerated drinks.
    Coal cess capped at Rs400/tonne
    Pan Masala cess capped at 135 per cent ad valorem
    Not decided to levy cess on bidis for now.
    July 1 is tentatively the roll out date for GST. Have sufficient buffer time till July 1
    Fitment of various commodities will be approved in the meeting of March 31
    Next meeting of Council to be held on March 31.

  2. Last year in August, the Rajya Sabha cleared a bill that amended the Constitution to enable India's biggest tax reform - GST. GST is a proposed system of indirect taxation merging most of the existing taxes into single system of taxation. It was introduced as The Constitution (One Hundred and First Amendment) Act 2016. GST would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the central and state governments. The GST is consumption based tax levied on the supply of Goods and Services which means it would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. Once it is in force, GST will replace at least 17 state and central taxes.

  3. News source: Business Today

Posted On Friday, 17 March 2017 09:38


Holding of more than 10 notes of the junked Rs 500 and Rs 1,000 currency is now illegal, with a new law coming into effect after the President's assent. The Specified Bank Notes (Cessation of Liabilities) Bill, 2017, received the assent of the President on February 27 and has since then become a law, official sources said. The legislation, which was passed by Parliament last month, makes holding, transfer and receiving of the old 500 and 1,000 rupee notes a criminal offence. It also ends the liability of the Reserve Bank of India (RBI) and the government on the currency notes demonetised in November last year.
It prohibits holding of "more than 10 notes in total, irrespective of the denomination" after expiry of the 50-day deadline on December 30 for depositing the junked currency in banks or post offices.
However, holding of up to 25 notes is provided for "the purposes of study, research or numismatics".
Violation is "punishable with fine which may extend to Rs 10,000 or five times the amount of the face value of the specified bank notes involved in the contravention, whichever is higher".
The Indian citizen, who was outside the country between November 9 and December 30, now has a grace period up to March 31 to tender the demonetised notes.
This grace period was provided subject to condition that the he or she makes a declaration of being outside India in the 50 days immediately following the November 8 demonetisation decision.
False declaration is punishable with a fine of at least Rs 50,000.

News source: Business Today

Posted On Thursday, 02 March 2017 07:06
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