Subbarao is RBI governor till 2013

Speculation that the government may want a more pliant governor at the helm of the central bank proved to be bunkum. The government announced that D Subbarao would be the governor of the Reserve Bank of India, for two more years, providing continuity on the monetary policy front. He will now retire as the RBI governor on September 4, 2013.

No dual pricing for diesel, no tax hikes either

Pranab Mukherjee, finance minister, spoke to a gathering of industrialists on Saturday at the National Conference of the Confederation of Indian Industry, assuring them that the government had no intention of adopting regressive policy measures. He said that dual pricing for diesel is not on the cards and neither is the government planning any fresh tax hikes.

Corporate Income Tax: small benefits, but SEZs dealt a MAT blow

The Special Economic Zone tax bonanza will end, if the Budget proposals pass in their current form. Barring this, the Budget does not have any nasty surprises for companies.

Highlights:
The corporate surcharge has been lowered from 7.5% to 5%. That reduces the effective corporate tax rate from 33.2% to 32.4%, which is a nice, even if small, relief for Indian companies. The new rate will be 30% plus a 5% surcharge, which works out to 31.5%, and after adding the education cess of 3%, it works out to 32.4%.

Budget gives New Pension System a boost

The Budget 2011-12 has made the New Pension System more attractive. It has made two rule changes which will help both individuals and their employers. The NPS is the pension system applicable to new government employees and is also open to all citizens, to save for their retirement, and is run as per the regulations of the Pension Fund Regulatory and Development Authority.

Individual Income Tax: loose change for the salaried, hurrah for the elders

The government did not disappoint on expectations that it would increase the tax exemption limit for individuals. But it did nothing very dramatic on this front.

Rail Budget: no fare hikes, poor finances and some clever accounting

It was a foregone conclusion that the railway minister Mamata Banerjee would keep fares unchanged in the current railway budget. Even if it was needed to get the railway’s finances back on track.

The railway minister is seeking to cultivate a people-friendly image, the outcome of which is a zero-fare hike policy. With elections due in her home state of West Bengal, despite the railway’s flagging financials, there was no way she would want to hike fares.

New Income Tax Code: lower rates, fewer exemptions

Finance Minister Pranab Mukherjee stuck to his promise made in his Budget speech and has put the draft Direct Tax Code in the public domain. The government is asking for comments, before it is introduced in parliament. Over the years, the Income Tax Act, 1961, has been supplemented by several amendments, interpretations and rules.

Indian government to issue C-bills

Short term borrowings are a part of any company’s life. These are needed to tide over temporary cash shortages or even to meet normal working capital needs. Since the needs are temporary, companies do not mind paying a slightly higher rate of interest. But when governments start dipping into the till to meet short term requirements, the consequences can be interesting, if not disruptive.
 

Cross border mergers, coming soon in India

Bharti Airtel and MTN have extended their negotiations for a cross-border M&A transaction, a first in India's telecom industry. Even as the two sides thrash out terms, the Indian government is considering making two-way cross-border mergers and amalgamations a reality.
 

Mini-Budget 2009-10 for the real estate industry

The Finance Minister Pranab Mukherjee has proposed amendments to the Budget. It is customary for the FM to take in suggestions from various sides and introduce any necessary amendments. The FM has said that the priority was to provide a stimulus to economic activity.
 

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