Pandemonium erupted in Parliament&#39;s Upper House, Rajya Sabha today with the Congress staging a walkout after Prime Minister Narendra Modi&#39;s jibe at former PM Manmohan Singh over 
corruption.

Modi, who was replying to the Motion of Thanks for the President&#39;s budget address said, &quot;For almost 35 years, Manmohan Singhji had a lot of influence on country&#39;s economic policies. Is there not a single taint on him. Only Manmohan Singh understands the art of taking bath in a bathroom wearing a raincoat.&quot;

He was alluding to the fact that the former PM&#39;s name was not singled out for corruption despite the fact that his UPA-led government was implicated in a series of corruption scandals including the allocation of coal blocks, spectrum and telecom licenses.

Senior Congress leader P Chidambaram said it was &quot;unbecoming of a prime minister to malign a former prime minister in such a manner&quot;.

&quot;Walked out as protest, such harsh and ugly comments not acceptable. No PM in past made such comments about a former PM,&quot; the former finance minister said.

It is unbecoming of a prime minister to use such language for a former PM, unbecoming for anyone to say such harsh ugly statement,&quot; Chidambaram said.

Senior Congress leader Ahmad Patel said he was &quot;speechless&quot; after the PM&#39;s remarks. Congress politician Kapil Sibal described the allegations as &quot;unsustainable&quot; and said Modi was being &quot;arrogant&quot;.

&quot;Look at his arrogance, he chooses to speak when everyone else is done and then makes unsubstantiated allegations,&quot; Kapil Sibal said.
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PM Modi also defended demonetisation, stating that no other country in the world had taken such a big decision and that it would be a case study across world universities. He said banks had received a lot of cash and interest rates had fallen down after demonetisation.

&quot;There wasn&#39;t a decision as big taken anywhere in the world.This can become a big case study for the world universities. The massive decision that India took,&quot; Modi said. Worlds&#39; economists don&#39;t know parameters to assess it. What India did will be a case study for economists worldwide,&quot; Modi added. &quot;You quote foreign economists, I can quote 10 of them on the fact that such an action hasn&#39;t been taken in the world ever.&quot;

Modi also said the fight against corruption was not political and that only political parties were opposing demonetisation. &quot;The government and the people were together during the period of demonetisation. For the first time, a horizontal divide was visible. Mood of the people completely different from mood of politicians,&quot; Modi said.

The Lower House of Parliament, Lok Sabha, yesterday, passed by a voice vote the Motion of Thanks to President&#39;s address amid protests by the Opposition led by the Congress party after the PM attacked them for &quot;dynastic politics.&quot; 
 
The President makes a special address to a joint sitting of both houses of Parliament at the beginning of the first session of the year, usually the Budget Session, outlining the legislative and policy achievements during the preceding year and the roadmap for the year ahead.

After being approved by the Cabinet, the address is followed by a motion of thanks moved in each House by ruling party MPs, followed by discussions that last up to three or four days and conclude with the PM replying to the points raised during the discussion.

After the PM&#39;s reply, MPs vote on the motion of thanks and some may move amendments to the address.

 
(WION)
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The Congress staged a walkout from Parliament after Modi's remark that Manmohan Singh had been shielded from corruption allegations

Pandemonium erupted in Parliament's Upper House, Rajya Sabha today with the Congress staging a walkout after Prime Minister Narendra Modi's jibe at former PM Manmohan Singh over corruption. Modi, who was replying to the Motion of Thanks for the President's budget address said, "For almost 35 years, Manmohan Singhji had a lot of influence on country's economic policies. Is there not a single taint on him. Only Manmohan Singh understands the art of taking bath in a bathroom wearing a raincoat." He was alluding to the fact that the former PM's name was not singled out for corruption despite the fact that his UPA-led government was implicated in a series of corruption scandals including the allocation of coal blocks, spectrum and telecom licenses. Senior Congress leader P Chidambaram said it was "unbecoming of a prime minister to malign a former prime minister in such a manner". "Walked out as protest, such harsh and ugly comments not acceptable. No PM in past made such comments about a former PM," the former finance minister said. It is unbecoming of a prime minister to use such language for a former PM, unbecoming for anyone to say such harsh ugly statement," Chidambaram said. Senior Congress leader Ahmad Patel said he was "speechless" after the PM's remarks. Congress politician Kapil Sibal described the allegations as "unsustainable" and said Modi was being "arrogant". "Look at his arrogance, he chooses to speak when everyone else is done and then makes unsubstantiated allegations," Kapil Sibal said. PM Modi also defended demonetisation, stating that no other country in the world had taken such a big decision and that it would be a case study across world universities. He said banks had received a lot of cash and interest rates had fallen down after demonetisation. "There wasn't a decision as big taken anywhere in the world.This can become a big case study for the world universities. The massive decision that India took," Modi said. Worlds' economists don't know parameters to assess it. What India did will be a case study for economists worldwide," Modi added. "You quote foreign economists, I can quote 10 of them on the fact that such an action hasn't been taken in the world ever." Modi also said the fight against corruption was not political and that only political parties were opposing demonetisation. "The government and the people were together during the period of demonetisation. For the first time, a horizontal divide was visible. Mood of the people completely different from mood of politicians," Modi said. The Lower House of Parliament, Lok Sabha, yesterday, passed by a voice vote the Motion of Thanks to President's address amid protests by the Opposition led by the Congress party after the PM attacked them for "dynastic politics." The President makes a special address to a joint sitting of both houses of Parliament at the beginning of the first session of the year, usually the Budget Session, outlining the legislative and policy achievements during the preceding year and the roadmap for the year ahead. After being approved by the Cabinet, the address is followed by a motion of thanks moved in each House by ruling party MPs, followed by discussions that last up to three or four days and conclude with the PM replying to the points raised during the discussion. After the PM's reply, MPs vote on the motion of thanks and some may move amendments to the address. (WION)

PM Modi's 'raincoat' jibe against ex-PM Manmohan Singh angers Congress

India&#39;s income tax department has scanned one crore accounts for unaccounted money and identified 18 lakh people with &quot;suspicious deposits&quot; of over Rs 5 lakhs.

It has asked these depositors to explain the source of their funds, PTI reported.&nbsp;The tax department was looking at suspicious deposits siphoned&nbsp;off into bank accounts after demonetisation as a part of &#39;Operation Clean Money&#39; launched by it on January 31.&nbsp;

It has sent SMS and emails to 18 lakh people who have made suspicious deposits of Rs 5 lakh and above between November 10 and December 30.

Sources told PTI the department is scrutinising all categories of accounts and will send out more SMS/emails for suspicious deposits under &quot;Operation Clean Money&quot;.

It has also asked taxpayers to e-verify the deposits they made in their accounts after&nbsp;demonetisation&nbsp;on November 8 and respond to queries of any mismatch on the tax e-filing portal.

The tax department has run big data analytics through more than one-crore accounts in its data bank and matched them with the taxpayer profile of the holder, a top source told PTI.

&quot;We have initially matched 1-crore accounts with the profile in our database and identified 18 lakh people with suspicious deposits of over Rs 5 lakh. We will expand the scope of data analytics further and match the profiles with our data base,&quot; the source told PTI.

&quot;If the cash in hand is as per the balance sheet, no questions will be asked and the case would be closed. We have put enough safeguard to ensure that there is no harassment to taxpayers,&quot; the source added.&nbsp;

&quot;If the department is convinced with the reply of the assessee, the case will be closed and that will be communicated by SMS and email. But, in case of unsatisfactory reply, the decision to issue notice will be taken by Assistant Commissioner and Commissioner rank officers,&quot; the source said.

In order to reduce harassment of taxpayers, the revenue department has mandated only officers in the rank of Assistant Commissioners and above to issue notices in case of unsatisfactory response received about bank deposits post demonetisation.

Cash transactions above Rs 3 lakh to invite 100% penalty: Government

In a bid to curb black money, the government has also said it will impose a steep penalty on those accepting cash in excess of Rs 3 lakh while settling any transaction.

A ban on cash transaction of more than Rs 3 lakh has been proposed in the Budget for 2017-18.

Revenue secretary Hasmukh Adhia told PTI on Saturday the penalty for cash transaction will be steep and the receiver will have to pay an amount equivalent to the cash received.

&quot;Supposing you do a transaction of Rs 4 lakh in cash, then the penalty would be Rs 4 lakh. If you do a transaction of Rs 50 lakh, penalty would be Rs 50 lakh,&quot; he&nbsp;told PTI, adding that the penalty will be levied on the receiver.

The government says it intends to track all large cash transactions to disincentivise people from generating black money and also to also curb the avenues of conspicuous consumption through cash.

People with large sum of unaccounted money usually spend it on holidaying or buying luxury items like cars, watches and jewellery. The new cash curbs will mean that such spending avenues are curtailed, the revenue secretary said.&nbsp;

(WION with inputs from PTI)

The tax department has sent SMS and emails to 18 lakh people who have made suspicious deposits of Rs 5 lakh

India's income tax department has scanned one crore accounts for unaccounted money and identified 18 lakh people with "suspicious deposits" of over Rs 5 lakhs. It has asked these depositors to explain the source of their funds, PTI reported. The tax department was looking at suspicious deposits siphoned off into bank accounts after demonetisation as a part of 'Operation Clean Money' launched by it on January 31. It has sent SMS and emails to 18 lakh people who have made suspicious deposits of Rs 5 lakh and above between November 10 and December 30. Sources told PTI the department is scrutinising all categories of accounts and will send out more SMS/emails for suspicious deposits under "Operation Clean Money". It has also asked taxpayers to e-verify the deposits they made in their accounts after demonetisation on November 8 and respond to queries of any mismatch on the tax e-filing portal. The tax department has run big data analytics through more than one-crore accounts in its data bank and matched them with the taxpayer profile of the holder, a top source told PTI. "We have initially matched 1-crore accounts with the profile in our database and identified 18 lakh people with suspicious deposits of over Rs 5 lakh. We will expand the scope of data analytics further and match the profiles with our data base," the source told PTI. "If the cash in hand is as per the balance sheet, no questions will be asked and the case would be closed. We have put enough safeguard to ensure that there is no harassment to taxpayers," the source added. "If the department is convinced with the reply of the assessee, the case will be closed and that will be communicated by SMS and email. But, in case of unsatisfactory reply, the decision to issue notice will be taken by Assistant Commissioner and Commissioner rank officers," the source said. In order to reduce harassment of taxpayers, the revenue department has mandated only officers in the rank of Assistant Commissioners and above to issue notices in case of unsatisfactory response received about bank deposits post demonetisation. Cash transactions above Rs 3 lakh to invite 100% penalty: Government In a bid to curb black money, the government has also said it will impose a steep penalty on those accepting cash in excess of Rs 3 lakh while settling any transaction. A ban on cash transaction of more than Rs 3 lakh has been proposed in the Budget for 2017-18. Revenue secretary Hasmukh Adhia told PTI on Saturday the penalty for cash transaction will be steep and the receiver will have to pay an amount equivalent to the cash received. "Supposing you do a transaction of Rs 4 lakh in cash, then the penalty would be Rs 4 lakh. If you do a transaction of Rs 50 lakh, penalty would be Rs 50 lakh," he told PTI, adding that the penalty will be levied on the receiver. The government says it intends to track all large cash transactions to disincentivise people from generating black money and also to also curb the avenues of conspicuous consumption through cash. People with large sum of unaccounted money usually spend it on holidaying or buying luxury items like cars, watches and jewellery. The new cash curbs will mean that such spending avenues are curtailed, the revenue secretary said. (WION with inputs from PTI)

India's I-T department scans 1 crore accounts, identifies 18 lakh 'suspicious deposits'

India&#39;s economic affairs secretary Shaktikanta Das said today (February 3) that the process of remonetisation was &quot;nearly complete&quot; since there were practically no restrictions on withdrawals and the only remaining restriction was the weekly limit of Rs 24,000 on savings bank accounts.

The economic affairs secretary said the remonetisation process reached near-completion less than 90 days after Prime Minister Narendra Modi announced the demonetisation of old Rs 500 and 1,000 notes on November 8.

&quot;All restrictions have been removed except on savings bank account of Rs 24,000 per week. This (removal of withdrawal limit) is also a matter of time,&quot; he told PTI in an interview.

&quot;Only a few withdraw Rs 1 lakh a month. Therefore, effectively and practically today, there is no restriction. I think the process of remonetisation is near-complete. I am using the word near-complete because this Rs 24,000 limit is there,&quot; he said.&nbsp;

&quot;In less than 90 days, the whole process of remonetisation is almost complete. This speaks volumes about the way the remonetisation has been completed.&quot;

He further said currency supply and management were the responsibility of the Reserve Bank of India and the central bank will take a call in the near future on lifting the only remaining restriction, which is weekly withdrawal of Rs 24,000 from a savings bank account.

The emphasis will be on providing lower denomination notes, Shaktikanta Das said.

Earlier in the week, the central bank had announced lifting of restrictions on daily withdrawal of cash from current and overdraft accounts as well as ATMs.

It had also promised to review the weekly limit in the near future depending on the pace of remonetisation.

The government and RBI had imposed limits on withdrawal of money from ATMs and banks after the cash crunch which followed the scrapping of old Rs 500 and Rs 1000 notes.

It had put the withdrawal limit Rs 2,000 per day from ATMs and Rs 10,000 per week from banks. Customers holding current or overdraft or cash credit accounts were allowed to withdraw up to Rs 50,000 in a week.

 
These limits, however, were gradually eased, with RBI pumping in new notes of Rs 500 and Rs 2,000.

Towards November end, RBI increased the cap on savings bank withdrawals to Rs 24,000 a week.

Early in January, withdrawals from ATMs were further relaxed to Rs 4,500 per day from ATMs, but the weekly withdrawal limits were retained. On January 16, RBI enhanced the ATM withdrawals further to Rs 10,000 a day, while keeping the weekly limits at Rs 24,000.

Withdrawal limits from current accounts, overdraft and cash credit accounts were enhanced to Rs 1,00,000 per week

(WION with inputs from PTI) 
&nbsp;

Economic affairs secretary Shaktikanta Das said removal of withdrawal limit of Rs 24,000 on savings bank accounts was a matter of time

India's economic affairs secretary Shaktikanta Das said today (February 3) that the process of remonetisation was "nearly complete" since there were practically no restrictions on withdrawals and the only remaining restriction was the weekly limit of Rs 24,000 on savings bank accounts. The economic affairs secretary said the remonetisation process reached near-completion less than 90 days after Prime Minister Narendra Modi announced the demonetisation of old Rs 500 and 1,000 notes on November 8. "All restrictions have been removed except on savings bank account of Rs 24,000 per week. This (removal of withdrawal limit) is also a matter of time," he told PTI in an interview. "Only a few withdraw Rs 1 lakh a month. Therefore, effectively and practically today, there is no restriction. I think the process of remonetisation is near-complete. I am using the word near-complete because this Rs 24,000 limit is there," he said. "In less than 90 days, the whole process of remonetisation is almost complete. This speaks volumes about the way the remonetisation has been completed." He further said currency supply and management were the responsibility of the Reserve Bank of India and the central bank will take a call in the near future on lifting the only remaining restriction, which is weekly withdrawal of Rs 24,000 from a savings bank account. The emphasis will be on providing lower denomination notes, Shaktikanta Das said. Earlier in the week, the central bank had announced lifting of restrictions on daily withdrawal of cash from current and overdraft accounts as well as ATMs. It had also promised to review the weekly limit in the near future depending on the pace of remonetisation. The government and RBI had imposed limits on withdrawal of money from ATMs and banks after the cash crunch which followed the scrapping of old Rs 500 and Rs 1000 notes. It had put the withdrawal limit Rs 2,000 per day from ATMs and Rs 10,000 per week from banks. Customers holding current or overdraft or cash credit accounts were allowed to withdraw up to Rs 50,000 in a week. These limits, however, were gradually eased, with RBI pumping in new notes of Rs 500 and Rs 2,000. Towards November end, RBI increased the cap on savings bank withdrawals to Rs 24,000 a week. Early in January, withdrawals from ATMs were further relaxed to Rs 4,500 per day from ATMs, but the weekly withdrawal limits were retained. On January 16, RBI enhanced the ATM withdrawals further to Rs 10,000 a day, while keeping the weekly limits at Rs 24,000. Withdrawal limits from current accounts, overdraft and cash credit accounts were enhanced to Rs 1,00,000 per week (WION with inputs from PTI)

Remonetisation nearly complete, Rs 24,000 weekly limit only remaining restriction: Indian govt

It is not yet clear as to how much of the specified bank notes (Rs 500 and Rs 1000) have not returned to the banking system. However, the impact of demonetisation on the economy is now becoming clear.

All available estimates from the official central statistical office (CSO) to rating agencies to international agencies, such as the International Monetary Fund (IMF) and the World Bank have lowered their forecast for the growth rate of the economy. While the official statistics has not included the estimates of the months after demonetisation, the slowdown of the economy does have implications for income distribution as well as government&rsquo;s ability to spend.

The budget tomorrow will be important not just for the signals for reviving the economy but also for measures to insulate the poor from the after effects of the demonetisation.

Macro-economic indicators of the economy have already pointed out the fragility of economic growth. The declining trend in exports has not been arrested, and the decline in private investment also suggests a decline&nbsp;in demand in the economy. While all these point out to an urgent need to&nbsp;revive economic activities&nbsp;in an uncertain international environment, there&nbsp;is also the need&nbsp;to&nbsp;provide&nbsp;relief to the poor and informal workers in the economy.

&nbsp;

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<h5>The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned</h5>
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&nbsp;

There is now enough evidence to suggest that the worst hit as a result of the liquidity squeeze after demonetisation have been the informal sector workers and the agricultural sector in particular.

While this may not have impacted the sowing figures, given that last year was the second year of a back to back drought, it is clear that the agricultural and the rural sector has been going through distress. This was only partly a result of the drought in 2014 and 2015. A large part of the distress was also due to falling agricultural commodity prices since August 2014. The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned.

There has been a&nbsp;declining profitability in agriculture for most of the crops and the growth rate of real agricultural wage in rural areas have been falling in real terms. This is unprecedented in the recent history, and the data indicate that the decline in real wages since November 2013 is the worst.

The rural poor not only have been suffering from declining profitability and wages in agriculture, but also from declining non-farm activity.

The biggest deceleration has been in construction, which was also the sector which absorbed majority of the workers in rural areas in the non-farm sector. Recent estimates from the CSO suggest that the growth of construction sector has reached its lowest at 2.9 per cent&nbsp;by the first advance estimates. The decline in availability of employment opportunities and a decline in real wages, cumulatively contributed to the already vulnerable situation of rural poor. Recent data from automobile sale, notably motorcycle sales and the sale of durable goods suggest a sharp decline in sales of these, confirming a slump in rural demand.

It is in this context that the budget of this year is expected to not only provide relief to the middle class and the poor but also take steps to revive the economy. The decline in private investment since last year has also meant that the onus of increasing investment falls on the government. However, with the expected pay out for seventh pay commission and increase in interest payments, the room for manoeuvrability is all the less in this year&rsquo;s budget.

The final factor that will make budget making a challenging exercise is the slowdown in revenue generation due to the deceleration in growth rate of economic activity. Global trend in protectionism also adds to the uncertainty in commodity prices, including petroleum products but also for ability of exports to cover up for the deficit in demand.

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<h5>The only option for reviving the economy is through increased expenditure of poverty alleviation programmes</h5>
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&nbsp;

Clearly, the only option for reviving the economy is through increased expenditure of poverty alleviation programmes. This will not only help revive demand in the rural economy, already suffering from demand depression in the last two years but also help alleviate some of the suffering for the poor after the demonetisation. This will require ramping up expenditure on existing social security measures such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) but also strengthening National Food Security Act and other rural development expenditure.

There is already some evidence that the demand for work under MGNREGA has increased by 60 per cent&nbsp;after demonetisation, aided by the return of migrant workers to their rural bases. The increase in spending on rural employment and rural infrastructure will not only boost employment generation but will also push up rural wages and economic activity in rural areas.

While such a step may appear to be fiscally difficult given the government&rsquo;s commitment to bring down the fiscal deficit, the need for a fiscal stimulus was never greater. The revival of demand is also the only option given the limits of monetary policy. With increasing likelihood of non-performing assets increasing, the urgency of increasing credit off-take is also the surest way of insulating the banking sector from the crisis of low credit and high deposit situation they are in.

The National Democratic Alliance (NDA) government has now completed half of its term. So far the economy has not shown signs of the promised recovery. The fear at this juncture is not just the failure of revival of the economy but also the likelihood of the economy getting into stagnation. This budget provides the last opportunity for the government to revive the economy and the only way out is to inject demand in the rural economy.

(WION)

This year's budget will be important for signals for reviving the economy, but also to insulate the poor from the effects of demonetisation

It is not yet clear as to how much of the specified bank notes (Rs 500 and Rs 1000) have not returned to the banking system. However, the impact of demonetisation on the economy is now becoming clear. All available estimates from the official central statistical office (CSO) to rating agencies to international agencies, such as the International Monetary Fund (IMF) and the World Bank have lowered their forecast for the growth rate of the economy. While the official statistics has not included the estimates of the months after demonetisation, the slowdown of the economy does have implications for income distribution as well as government’s ability to spend. The budget tomorrow will be important not just for the signals for reviving the economy but also for measures to insulate the poor from the after effects of the demonetisation. Macro-economic indicators of the economy have already pointed out the fragility of economic growth. The declining trend in exports has not been arrested, and the decline in private investment also suggests a decline in demand in the economy. While all these point out to an urgent need to revive economic activities in an uncertain international environment, there is also the need to provide relief to the poor and informal workers in the economy. The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned × There is now enough evidence to suggest that the worst hit as a result of the liquidity squeeze after demonetisation have been the informal sector workers and the agricultural sector in particular. While this may not have impacted the sowing figures, given that last year was the second year of a back to back drought, it is clear that the agricultural and the rural sector has been going through distress. This was only partly a result of the drought in 2014 and 2015. A large part of the distress was also due to falling agricultural commodity prices since August 2014. The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned. There has been a declining profitability in agriculture for most of the crops and the growth rate of real agricultural wage in rural areas have been falling in real terms. This is unprecedented in the recent history, and the data indicate that the decline in real wages since November 2013 is the worst. The rural poor not only have been suffering from declining profitability and wages in agriculture, but also from declining non-farm activity. The biggest deceleration has been in construction, which was also the sector which absorbed majority of the workers in rural areas in the non-farm sector. Recent estimates from the CSO suggest that the growth of construction sector has reached its lowest at 2.9 per cent by the first advance estimates. The decline in availability of employment opportunities and a decline in real wages, cumulatively contributed to the already vulnerable situation of rural poor. Recent data from automobile sale, notably motorcycle sales and the sale of durable goods suggest a sharp decline in sales of these, confirming a slump in rural demand. It is in this context that the budget of this year is expected to not only provide relief to the middle class and the poor but also take steps to revive the economy. The decline in private investment since last year has also meant that the onus of increasing investment falls on the government. However, with the expected pay out for seventh pay commission and increase in interest payments, the room for manoeuvrability is all the less in this year’s budget. The final factor that will make budget making a challenging exercise is the slowdown in revenue generation due to the deceleration in growth rate of economic activity. Global trend in protectionism also adds to the uncertainty in commodity prices, including petroleum products but also for ability of exports to cover up for the deficit in demand. The only option for reviving the economy is through increased expenditure of poverty alleviation programmes × Clearly, the only option for reviving the economy is through increased expenditure of poverty alleviation programmes. This will not only help revive demand in the rural economy, already suffering from demand depression in the last two years but also help alleviate some of the suffering for the poor after the demonetisation. This will require ramping up expenditure on existing social security measures such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) but also strengthening National Food Security Act and other rural development expenditure. There is already some evidence that the demand for work under MGNREGA has increased by 60 per cent after demonetisation, aided by the return of migrant workers to their rural bases. The increase in spending on rural employment and rural infrastructure will not only boost employment generation but will also push up rural wages and economic activity in rural areas. While such a step may appear to be fiscally difficult given the government’s commitment to bring down the fiscal deficit, the need for a fiscal stimulus was never greater. The revival of demand is also the only option given the limits of monetary policy. With increasing likelihood of non-performing assets increasing, the urgency of increasing credit off-take is also the surest way of insulating the banking sector from the crisis of low credit and high deposit situation they are in. The National Democratic Alliance (NDA) government has now completed half of its term. So far the economy has not shown signs of the promised recovery. The fear at this juncture is not just the failure of revival of the economy but also the likelihood of the economy getting into stagnation. This budget provides the last opportunity for the government to revive the economy and the only way out is to inject demand in the rural economy. (WION)

Inequality and the Indian budget

By Tejal&nbsp;Yerunkar

Prime Minister Narendra Modi and Finance Minister Arun Jaitley will meet NITI Aayog officials, economists and experts on Tuesday to get their views on the upcoming Budget 2017-18.&nbsp;

According to the Business Standard <a href="http://www.business-standard.com/budget/article/pm-jaitley-meet-niti-aayog-officials-experts-today-to-discuss-budget-116122700008_1.html">report</a>, 13 people -- from the NITI Aayog, economists and other experts -- will make presentations to the government.

The pre-budget meeting of the government will begin at 4:30 pm on Tuesday.&nbsp;

The meeting&#39;s theme is &quot;Economic Policy Reform, Road Ahead&quot; and will see discussions on job creation, skill development, agriculture and other Budget-related issues.&nbsp;

The RBI has reduced the country&#39;s economic growth forecast to 7.1% from 7.6% in its monetary policy review earlier this month.

The Asian Development Bank (ADB) also slashed its growth projection for the country, for the current fiscal, to 7% from an earlier 7.4% because of the impact of demonetisation on economic activities.

The Business Standard news report, quoting&nbsp;an official, said the PM would also take stock of Aayog initiatives to promote digital payments, such as the Lucky Grahak Yojana and the Digi Dhan Vyapaar Yojana.&nbsp;

Moreover, the PM will also discuss the status of the economy with NITI Aayog experts against the backdrop of the currency crunch post demonetisation and ways to speed up growth.

(To read more, go to <a href="http://www.zeebiz.com/">zeebiz.com</a>)

They will discuss job creation, skill development, and agriculture

By Tejal Yerunkar Prime Minister Narendra Modi and Finance Minister Arun Jaitley will meet NITI Aayog officials, economists and experts on Tuesday to get their views on the upcoming Budget 2017-18. According to the Business Standard report, 13 people -- from the NITI Aayog, economists and other experts -- will make presentations to the government. The pre-budget meeting of the government will begin at 4:30 pm on Tuesday. The meeting's theme is "Economic Policy Reform, Road Ahead" and will see discussions on job creation, skill development, agriculture and other Budget-related issues. The RBI has reduced the country's economic growth forecast to 7.1% from 7.6% in its monetary policy review earlier this month. The Asian Development Bank (ADB) also slashed its growth projection for the country, for the current fiscal, to 7% from an earlier 7.4% because of the impact of demonetisation on economic activities. The Business Standard news report, quoting an official, said the PM would also take stock of Aayog initiatives to promote digital payments, such as the Lucky Grahak Yojana and the Digi Dhan Vyapaar Yojana. Moreover, the PM will also discuss the status of the economy with NITI Aayog experts against the backdrop of the currency crunch post demonetisation and ways to speed up growth. (To read more, go to zeebiz.com)

Modi, Jaitley to hold pre-Budget meeting with NITI Aayog, economists today

Initiating a stringent action against black money holders post notes ban, India&#39;s Income Tax department said it has issued 87 notices and has frozen bank deposits worth crores in 42 cases nationwide under the newly enforced Benami Transactions Act which attracts a heavy penalty and rigorous jail term of a maximum seven&nbsp;years.

Post the demonetisation order of the government on November 8 last year, the department had carried out public advertisements and had warned people against depositing their unaccounted old currency in someone else&#39;s bank account saying such an act would attract criminal charges under the Benami Property Transactions Act, 1988, applicable on both movable and immovable property, that has been enforced from November 1, 2016.

&quot;After in-depth investigations, the I-T department has issued 87 notices under section 24 of the said Act (notice and attachment of property involved in benami transaction). A total of 42 properties, largely money worth crores in bank accounts and an immovable property&nbsp;of benamidars have been attached,&quot; officials said citing an analysis report.

The I-T department is the nodal department to enforce the said act in India. They said the taxman has issued numerous summons under the Benami Transactions Act and is in the process of issuing more.

The decision, they said, to slap the stringent provisions of the Benami Transactions Act was taken after analysing serious cases where the illegalities were blatant and suspect cash was deposited in either benami accounts or Jan Dhan or dormant accounts.

The taxman had initiated a nationwide operation to identify suspect bank accounts where huge cash deposits have been made post-November 8 when the government demonetised the Rs 500 and Rs 1000 currency notes.

Officials said the act empowers the taxman to confiscate and prosecute both the depositor and the person whose illegal money he or she has &quot;adjusted&quot; in their account.

&quot;Such an arrangement where a person deposits old currency of Rs 500 and Rs 1000 in the bank account of another person with an understanding that the account holder shall return his money in new currency, the transaction shall be regarded as benami transaction under the said act.

&quot;The person who deposits old currency in the bank account shall be treated as beneficial owner and the person in whose bank account the old currency has been deposited shall be categorised under this law as a benamidar,&quot; a senior official had explained earlier.&nbsp;

(PTI)

The taxman had initiated a nationwide operation to identify suspect bank accounts where huge cash deposits were made after November 8.

Initiating a stringent action against black money holders post notes ban, India's Income Tax department said it has issued 87 notices and has frozen bank deposits worth crores in 42 cases nationwide under the newly enforced Benami Transactions Act which attracts a heavy penalty and rigorous jail term of a maximum seven years. Post the demonetisation order of the government on November 8 last year, the department had carried out public advertisements and had warned people against depositing their unaccounted old currency in someone else's bank account saying such an act would attract criminal charges under the Benami Property Transactions Act, 1988, applicable on both movable and immovable property, that has been enforced from November 1, 2016. "After in-depth investigations, the I-T department has issued 87 notices under section 24 of the said Act (notice and attachment of property involved in benami transaction). A total of 42 properties, largely money worth crores in bank accounts and an immovable property of benamidars have been attached," officials said citing an analysis report. The I-T department is the nodal department to enforce the said act in India. They said the taxman has issued numerous summons under the Benami Transactions Act and is in the process of issuing more. The decision, they said, to slap the stringent provisions of the Benami Transactions Act was taken after analysing serious cases where the illegalities were blatant and suspect cash was deposited in either benami accounts or Jan Dhan or dormant accounts. The taxman had initiated a nationwide operation to identify suspect bank accounts where huge cash deposits have been made post-November 8 when the government demonetised the Rs 500 and Rs 1000 currency notes. Officials said the act empowers the taxman to confiscate and prosecute both the depositor and the person whose illegal money he or she has "adjusted" in their account. "Such an arrangement where a person deposits old currency of Rs 500 and Rs 1000 in the bank account of another person with an understanding that the account holder shall return his money in new currency, the transaction shall be regarded as benami transaction under the said act. "The person who deposits old currency in the bank account shall be treated as beneficial owner and the person in whose bank account the old currency has been deposited shall be categorised under this law as a benamidar," a senior official had explained earlier. (PTI)

Post-demonetisation, IT department issues 87 notices, freezes bank accounts

India&#39;s central bank said on Monday that limits placed on daily cash withdrawal from&nbsp;ATMs and current accounts in the wake of demonetisation would be withdrawn from February 1.

RBI has also removed all limits on cash withdrawals from current accounts, cash credit accounts, overdraft accounts with immediate effect. 
 
India&#39;s central bank added that the weekly limit of Rs 24,000 on cheque withdrawals from savings bank accounts will continue, but promised to review this in the near future depending on the pace of remonetisation.&nbsp;PTI reported. 
 
&quot;The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future,&quot; it said.

Banks, however, have been asked to fix their own limits, was the case before the demonetisation of Rs 500 and Rs 1000 notes on November 8, 2016. 
&nbsp;

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Limits placed on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with immediate effect: RBI
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Limits placed on cash withdrawals from ATMs stand withdrawn from Feb 01. Banks may,at their discretion,have their own operating limits:RBI
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It further said that banks have been &quot;urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode.&quot;

In a surprise move, PM Modi announced demonetisation&nbsp;on November 8 to curb the spread of black money and counterfeit currency and to bring unaccounted wealth into the mainstream economy. The government also placed a withdrawal limit of Rs 2000 a day in &nbsp;ATMs and Rs 10,000 per day and Rs 20,000 per week in banks&nbsp;in view of currency shortage following demonetisation.

These limits, however, were gradually eased with RBI pumping in new notes of Rs 500 and Rs 2000.&nbsp;

The withdrawal limit from ATMs was increased to Rs 4,500 per day from ATMs from January 1. The weekly withdrawal limit from banks stood at Rs 24,000. On January 16, the RBI again raised the cash withdrawal limit from ATMs to Rs 10,000

On January 16, the RBI again raised the cash withdrawal limit from ATMs to Rs 10,000 from Rs 4500 while keeping the weekly withdrawl limit from banks unchanged at Rs 24,000. It had also raised the current account withdrawl limit to Rs 1,00,000 from Rs 50,000. 
&nbsp;

(WION with inputs from ANI)

The RBI said the weekly limit of Rs 24,000 on cheque withdrawals from savings bank accounts will continue

India's central bank said on Monday that limits placed on daily cash withdrawal from ATMs and current accounts in the wake of demonetisation would be withdrawn from February 1. RBI has also removed all limits on cash withdrawals from current accounts, cash credit accounts, overdraft accounts with immediate effect. India's central bank added that the weekly limit of Rs 24,000 on cheque withdrawals from savings bank accounts will continue, but promised to review this in the near future depending on the pace of remonetisation. PTI reported. "The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future," it said. Banks, however, have been asked to fix their own limits, was the case before the demonetisation of Rs 500 and Rs 1000 notes on November 8, 2016. RBI: Limits on Cash withdrawals from Bank accounts and ATMs - Restoration of status quo ante — ANI (@ANI_news) January 30, 2017 × Limits placed on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with immediate effect: RBI — ANI (@ANI_news) January 30, 2017 × Limits placed on cash withdrawals from ATMs stand withdrawn from Feb 01. Banks may,at their discretion,have their own operating limits:RBI — ANI (@ANI_news) January 30, 2017 × It further said that banks have been "urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode." In a surprise move, PM Modi announced demonetisation on November 8 to curb the spread of black money and counterfeit currency and to bring unaccounted wealth into the mainstream economy. The government also placed a withdrawal limit of Rs 2000 a day in ATMs and Rs 10,000 per day and Rs 20,000 per week in banks in view of currency shortage following demonetisation. These limits, however, were gradually eased with RBI pumping in new notes of Rs 500 and Rs 2000. The withdrawal limit from ATMs was increased to Rs 4,500 per day from ATMs from January 1. The weekly withdrawal limit from banks stood at Rs 24,000. On January 16, the RBI again raised the cash withdrawal limit from ATMs to Rs 10,000 On January 16, the RBI again raised the cash withdrawal limit from ATMs to Rs 10,000 from Rs 4500 while keeping the weekly withdrawl limit from banks unchanged at Rs 24,000. It had also raised the current account withdrawl limit to Rs 1,00,000 from Rs 50,000. (WION with inputs from ANI)

No limit on cash withdrawal from ATMs February 1 onwards: India's central bank

India&#39;s central bank, the Reserve Bank of India (RBI) on Sunday rejected the Election Commission&#39;s request to enhance the weekly cash-withdrawal limit for candidates contesting the upcoming&nbsp;elections in five states,&nbsp;prompting an angry reaction from the poll panel. 
 
The Election Commission had written to the RBI on Wednesday, asking it to increase the weekly withdrawal limit for candidates contesting the assembly elections to Rs 2 lakh from Rs 24,000 per week. It had asked for the facility to be extended till March 11, the day of counting. The EC wrote another letter to the RBI on Friday (January 28), expressing its concern at the &#39;&ccedil;ursory manner&#39; in which the central bank was dealing with the issue.

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Candidates are bound to open an election account for meeting poll-related expenditure which is monitored by the poll panel.

But RBI said that it was not possible for it to hike the limit at this stage.

An apparently peeved Commission has now written back to RBI Governor Urjit Patel expressing &quot;serious concern about the cursory manner in which the issue has been dealt with&quot;.

&quot;...(It) appears that the RBI has not realised the gravity of the situation...It is reiterated that it is the constitutional mandate of the Commission to conduct free and fair elections and to provide level-playing field to all candidates...In order to facilitate proper conduct of elections, it is imperative that directions issued by the Commission are complied with,&quot; the poll panel said.

It urged the central bank to reconsider the proposal.

The Commission had told RBI Governor Urjit Patel that it has been apprised of the problems candidates were facing due to withdrawal limits imposed after demonetisation, PTI had reported.&nbsp; 
 
The poll panel&nbsp;said with a weekly withdrawal limit of Rs 24,000, a candidate would be able to withdraw Rs 96,000 in cash during the election process which lasts for three&nbsp;to four weeks.&nbsp;

It reminded the Central bank that as per law, candidates contesting assembly polls in Uttar Pradesh, Uttarakhand and Punjab can spend Rs 28 lakh for electioneering. The limit in Goa and Manipur is Rs 20 lakh.&nbsp;

(WION with inputs from PTI)

The RBI rejected the Election Commission's request to increase the withdrawal limit. A peeved EC has has now written back to RBI Governor

India's central bank, the Reserve Bank of India (RBI) on Sunday rejected the Election Commission's request to enhance the weekly cash-withdrawal limit for candidates contesting the upcoming elections in five states, prompting an angry reaction from the poll panel. The Election Commission had written to the RBI on Wednesday, asking it to increase the weekly withdrawal limit for candidates contesting the assembly elections to Rs 2 lakh from Rs 24,000 per week. It had asked for the facility to be extended till March 11, the day of counting. The EC wrote another letter to the RBI on Friday (January 28), expressing its concern at the 'çursory manner' in which the central bank was dealing with the issue. EC wrote to RBI Governor Urjit Patel on issue of cash withdrawal limits for candidates pic.twitter.com/b7RkWsbyKN — ANI (@ANI_news) January 29, 2017 × Candidates are bound to open an election account for meeting poll-related expenditure which is monitored by the poll panel. But RBI said that it was not possible for it to hike the limit at this stage. An apparently peeved Commission has now written back to RBI Governor Urjit Patel expressing "serious concern about the cursory manner in which the issue has been dealt with". "...(It) appears that the RBI has not realised the gravity of the situation...It is reiterated that it is the constitutional mandate of the Commission to conduct free and fair elections and to provide level-playing field to all candidates...In order to facilitate proper conduct of elections, it is imperative that directions issued by the Commission are complied with," the poll panel said. It urged the central bank to reconsider the proposal. The Commission had told RBI Governor Urjit Patel that it has been apprised of the problems candidates were facing due to withdrawal limits imposed after demonetisation, PTI had reported. The poll panel said with a weekly withdrawal limit of Rs 24,000, a candidate would be able to withdraw Rs 96,000 in cash during the election process which lasts for three to four weeks. It reminded the Central bank that as per law, candidates contesting assembly polls in Uttar Pradesh, Uttarakhand and Punjab can spend Rs 28 lakh for electioneering. The limit in Goa and Manipur is Rs 20 lakh. (WION with inputs from PTI)

India's central bank, poll panel spar over enhancing cash withdrawal limit for election candidates

India pushed ahead with its decision to scrap banknotes even as the Reserve Bank of India&#39;s (RBI) own board expressed concern whether the cash could be replaced quickly enough, the central bank has said in written testimony to parliament.

The revelation comes amid growing criticism about whether the central bank and the government had sufficiently assessed the potential fallout from the November 8 ban of about 86 per cent of the cash then in circulation.

Prime Minister Narendra Modi&#39;s shock move caused a severe cash shortage that brought large parts of the economy to a virtual standstill, as the central bank struggled to print new 500-rupee and 2,000-rupee notes to replace the old currency.

A copy of the private testimony to a parliament panel, seen by Reuters, showed the central bank had also warned the government of &quot;possible inconvenience to the public for some time,&quot; among the potential consequences of the massive exercise.

Despite its own doubts, the testimony showed, the RBI board approved the plan to ban 500-rupee and 1,000-rupee notes, as it believed the move would rein in counterfeiting and reliance on cash, and pull unaccounted cash into the financial system.

&quot;It might not immediately be possible to replace these notes fully in terms of both value and volume,&quot; the board felt at a meeting ahead of Modi&#39;s November 8 announcement, according to the central bank submission.

But the RBI&#39;s board ultimately believed that &quot;corrective&quot; action could be taken and decided to recommend the move, the document showed. The RBI also believed the impact of such an exercise would be &quot;transitory&quot;, given its efforts to quickly replace the old notes, it said in the testimony.

The RBI&#39;s endorsement of the government action has drawn strong criticism from several former policymakers, including former Prime Minister Manmohan Singh, the architect of India&#39;s 1991 financial reforms and a former central bank governor.

The document also notes the proposal to ban the cash had come from the government, in a letter a day before the announcement that advised the RBI to &quot;immediately&quot; put the plan before its board for approval.

Under India&#39;s RBI Act, such a move was necessary.

The central bank did not immediately respond to Reuters` request for comments on its submission to parliament.

&quot;Painful&quot; for RBI

Since Modi declared the ban, the central bank has been forced to announce a barrage of measures to soften the impact, including several high-profile reversals, undermining confidence in it.

In a letter to RBI Governor Urjit Patel, unions of central bank employees called such criticism &quot;painful&quot;, and accused the government of steering decisions behind the replacement of the banned notes, saying that &quot;blatantly encroaches&quot; on the central bank&#39;s jurisdiction.

The government, however, has denied it was taking the decisions during the implementation, saying that it was merely cooperating with the RBI and reiterating that it fully respected the autonomy of the central bank.

Power and Coal Minister Piyush Goyal said such cooperation was necessary, since it involved an unprecedented &quot;exercise&quot; and that the flurry of action showed India`s flexibility in taking the necessary measures.&nbsp;

&quot;They never had got an experience of this kind of a war-type situation,&quot; Goyal said, referring to the RBI. &quot;So, every organization which is doing this is doing it for the first time. You will learn as you go along.&quot;

Previous banknote bans have not had such a dramatic impact as they removed only a small fraction of cash from circulation.&nbsp;

(Reuters) 
&nbsp;

The RBI clarified that it ultimately believed that 'corrective' action could be taken and decided to recommend the move

India pushed ahead with its decision to scrap banknotes even as the Reserve Bank of India's (RBI) own board expressed concern whether the cash could be replaced quickly enough, the central bank has said in written testimony to parliament. The revelation comes amid growing criticism about whether the central bank and the government had sufficiently assessed the potential fallout from the November 8 ban of about 86 per cent of the cash then in circulation. Prime Minister Narendra Modi's shock move caused a severe cash shortage that brought large parts of the economy to a virtual standstill, as the central bank struggled to print new 500-rupee and 2,000-rupee notes to replace the old currency. A copy of the private testimony to a parliament panel, seen by Reuters, showed the central bank had also warned the government of "possible inconvenience to the public for some time," among the potential consequences of the massive exercise. Despite its own doubts, the testimony showed, the RBI board approved the plan to ban 500-rupee and 1,000-rupee notes, as it believed the move would rein in counterfeiting and reliance on cash, and pull unaccounted cash into the financial system. "It might not immediately be possible to replace these notes fully in terms of both value and volume," the board felt at a meeting ahead of Modi's November 8 announcement, according to the central bank submission. But the RBI's board ultimately believed that "corrective" action could be taken and decided to recommend the move, the document showed. The RBI also believed the impact of such an exercise would be "transitory", given its efforts to quickly replace the old notes, it said in the testimony. The RBI's endorsement of the government action has drawn strong criticism from several former policymakers, including former Prime Minister Manmohan Singh, the architect of India's 1991 financial reforms and a former central bank governor. The document also notes the proposal to ban the cash had come from the government, in a letter a day before the announcement that advised the RBI to "immediately" put the plan before its board for approval. Under India's RBI Act, such a move was necessary. The central bank did not immediately respond to Reuters` request for comments on its submission to parliament. "Painful" for RBI Since Modi declared the ban, the central bank has been forced to announce a barrage of measures to soften the impact, including several high-profile reversals, undermining confidence in it. In a letter to RBI Governor Urjit Patel, unions of central bank employees called such criticism "painful", and accused the government of steering decisions behind the replacement of the banned notes, saying that "blatantly encroaches" on the central bank's jurisdiction. The government, however, has denied it was taking the decisions during the implementation, saying that it was merely cooperating with the RBI and reiterating that it fully respected the autonomy of the central bank. Power and Coal Minister Piyush Goyal said such cooperation was necessary, since it involved an unprecedented "exercise" and that the flurry of action showed India`s flexibility in taking the necessary measures. "They never had got an experience of this kind of a war-type situation," Goyal said, referring to the RBI. "So, every organization which is doing this is doing it for the first time. You will learn as you go along." Previous banknote bans have not had such a dramatic impact as they removed only a small fraction of cash from circulation. (Reuters)

Govt went ahead with demonetisation despite 'central bank concerns'

The Public Accounts Committee (PAC) of the Indian Parliament headed by KV Thomas grilled the Governor of Reserve Bank of India on Friday. Highly placed sources confirmed to WION that when members asked Urjit Patel as to who took the decision for demonetisation, Urjit Patel chose to remain silent.&nbsp;

PAC also saw a&nbsp;heated debate between the opposition and ruling party members as some members said that committee meeting was on the state of the&nbsp;economy and not demonetisation per say. Sources also said that there were many questions on demonetisation on which Urjit Patel chose to remain silent or gave general answers.

The committee members also asked the RBI governor to look into cases of irregular deposits in the cooperative banks of which he took note of. Some members also requested the RBI that it must look into the issue of cess which is charged when a digital transaction takes place. The members were of the opinion that the current reprieve should continue till things normalise in the economic system.

Sources said that Patel will be called again for questioning as many questions remained answered. Both the PAC and the Standing Committee of Finance are looking into the issue of demonetisation. 
 
(WION)

Highly placed sources told WION that Urjit Patel chose to remain silent or gave generic replies to several questions

The Public Accounts Committee (PAC) of the Indian Parliament headed by KV Thomas grilled the Governor of Reserve Bank of India on Friday. Highly placed sources confirmed to WION that when members asked Urjit Patel as to who took the decision for demonetisation, Urjit Patel chose to remain silent. PAC also saw a heated debate between the opposition and ruling party members as some members said that committee meeting was on the state of the economy and not demonetisation per say. Sources also said that there were many questions on demonetisation on which Urjit Patel chose to remain silent or gave general answers. The committee members also asked the RBI governor to look into cases of irregular deposits in the cooperative banks of which he took note of. Some members also requested the RBI that it must look into the issue of cess which is charged when a digital transaction takes place. The members were of the opinion that the current reprieve should continue till things normalise in the economic system. Sources said that Patel will be called again for questioning as many questions remained answered. Both the PAC and the Standing Committee of Finance are looking into the issue of demonetisation. (WION)

India's central bank chief remains mum during demonetisation grilling

The IMF has cut India&#39;s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the &quot;temporary negative consumption shock&quot; of demonetisation, days after the World Bank also decelerated India&#39;s growth estimates.

&quot;In India, the growth forecast for the current (2016-17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative,&quot; the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released today.

Despite IMF&#39;s downward revision of India&#39;s growth rate and a slight upward revision of China&#39;s growth projections, India continues to be the fastest-growing country among emerging economies. In 2016, China with 6.7 per cent edged past India (6.6) by 0.1 percentage point. In 2018, China&#39;s growth rate is projected to be 6 per cent against India&#39;s 7.7 per cent.

The growth forecast for 2017 was revised up for China (to 6.5 per cent, 0.3 percentage point above the October forecast) on expectations of continued policy support, the IMF said. India&#39;s growth rate in 2017 as per the latest IMG projections is 7.2 per cent.

The IMF said that after a lacklustre out turn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. In 2018, China&#39;s growth rate is projected to be 6 per cent against India&#39;s 7.7 per cent.

The global growth for 2016 is now estimated at 3.1 per cent, in line with the October 2016 forecast. Economic activity in both advanced economies and emerging market and developing economies (EMDEs) is forecast to accelerate in 2017-18, with global growth projected to be 3.4 per cent and 3.6 per cent, respectively, again unchanged from the October forecasts, it said. As per new IMF projections, India&#39;s growth in 2016 is now estimated to be 6.6 per cent as against 7.6 per cent earlier forecast.

In 2017, IMF has projected a growth rate of 7.2 per cent as against its previous forecast of 7.6 per cent.The Indian economy is likely to revive to go back to its previously estimated growth rate of 7.7 per cent in 2018, according to the WEO update.

The cut in India&#39;s growth rates comes days after the World Bank decelerated India&#39;s GDP growth for 2016-17 fiscal to 7 per cent from its previous estimate of 7.6 per cent citing the impact of demonetisation. But forecast issued on January 11 said that India would regain momentum in the following years with a growth of 7.6 per cent and 7.8 per cent due to a reform initiatives.

(PTI)

The reason given was the 'temporary negative consumption shock' of demonetisation

The IMF has cut India's growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the "temporary negative consumption shock" of demonetisation, days after the World Bank also decelerated India's growth estimates. "In India, the growth forecast for the current (2016-17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative," the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released today. Despite IMF's downward revision of India's growth rate and a slight upward revision of China's growth projections, India continues to be the fastest-growing country among emerging economies. In 2016, China with 6.7 per cent edged past India (6.6) by 0.1 percentage point. In 2018, China's growth rate is projected to be 6 per cent against India's 7.7 per cent. The growth forecast for 2017 was revised up for China (to 6.5 per cent, 0.3 percentage point above the October forecast) on expectations of continued policy support, the IMF said. India's growth rate in 2017 as per the latest IMG projections is 7.2 per cent. The IMF said that after a lacklustre out turn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. In 2018, China's growth rate is projected to be 6 per cent against India's 7.7 per cent. The global growth for 2016 is now estimated at 3.1 per cent, in line with the October 2016 forecast. Economic activity in both advanced economies and emerging market and developing economies (EMDEs) is forecast to accelerate in 2017-18, with global growth projected to be 3.4 per cent and 3.6 per cent, respectively, again unchanged from the October forecasts, it said. As per new IMF projections, India's growth in 2016 is now estimated to be 6.6 per cent as against 7.6 per cent earlier forecast. In 2017, IMF has projected a growth rate of 7.2 per cent as against its previous forecast of 7.6 per cent.The Indian economy is likely to revive to go back to its previously estimated growth rate of 7.7 per cent in 2018, according to the WEO update. The cut in India's growth rates comes days after the World Bank decelerated India's GDP growth for 2016-17 fiscal to 7 per cent from its previous estimate of 7.6 per cent citing the impact of demonetisation. But forecast issued on January 11 said that India would regain momentum in the following years with a growth of 7.6 per cent and 7.8 per cent due to a reform initiatives. (PTI)

Demonetisation: IMF cuts India's growth forecast from 7.6 to 6.6%

The Reserve Bank of India (RBI) increased the daily cash withdrawal limit from Rs 4,500 to Rs 10,000 ($146.84) from ATMs on Monday, effective immediately.&nbsp;

The central bank also increased the withdrawal limit&nbsp;from current accounts to Rs 100,000 per week from Rs 50,000, and will also include overdraft as well as cash credit accounts. However, the overall weekly withdrawal limit of Rs 24,000&nbsp;per card will remain the same.&nbsp;

After demonetisation, the withdrawal limit had been set at Rs 2,500 per day and per&nbsp;card, and was increased to Rs 4,500 on January 1.&nbsp;

According to analysts, the withdrawal limits are likely to remain in place until the RBI is able to supply a sufficient amount of notes.&nbsp;

(WION with inputs from Reuters)

&nbsp;

The Reserve Bank of India hiked the daily withdrawal limit from Rs 4,500 to Rs 10,000, but the weekly limit remains at Rs 24,000 per card

The Reserve Bank of India (RBI) increased the daily cash withdrawal limit from Rs 4,500 to Rs 10,000 ($146.84) from ATMs on Monday, effective immediately. The central bank also increased the withdrawal limit from current accounts to Rs 100,000 per week from Rs 50,000, and will also include overdraft as well as cash credit accounts. However, the overall weekly withdrawal limit of Rs 24,000 per card will remain the same. After demonetisation, the withdrawal limit had been set at Rs 2,500 per day and per card, and was increased to Rs 4,500 on January 1. According to analysts, the withdrawal limits are likely to remain in place until the RBI is able to supply a sufficient amount of notes. (WION with inputs from Reuters)

Demonetisation: Cash withdrawal limit increased to Rs 10,000

RBI employees who felt &ldquo;humiliated&rdquo; by events since the demonetisation move on Friday wrote a letter to RBI chief Urjit Patel against operational &quot;mismanagement&quot; in the exercise, the Press Trust of India reported.

In a letter addressed to Patel, they termed the appointment of a senior finance ministry official as a &quot;blatant encroachment&quot; on RBI&rsquo;s exclusive jurisdiction on currency management and accused the government of &quot;impinging on RBI autonomy&quot;.

&quot;An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained,&quot; the United Forum of Reserve Bank Officers and Employees said in the letter.

The letter also said the RBI&#39;s autonomy and image have been &ldquo;dented beyond repair&quot;.

At least two of the four signatories, Samir Ghosh of All India Reserve Bank Employees&#39; Association and Suryakant Mahadik of All India Reserve Bank Workers&#39; Federation, confirmed the writing of the letter, PTI reported.

The other signatories are CM Paulsil of All India Reserve Bank Officers&#39; Association and RN Vatsa of RBI Officers&#39; Association.

&quot;May we request that as the Governor of RBI, its highest functionary, and protector of its autonomy and prestige, you will please do the needful urgently to do away with this unwarranted interference from the Ministry of Finance, and assure the staff accordingly, as the staff feel humiliated,&quot; the letter said.

&ldquo;We want to reiterate that the RBI is fully capable of coordinating its currency chest operations. We do not need assistance from anywhere,&rdquo; the forum leaders said.

(WION with inputs from PTI)

Their letter complained about the operational 'mismanagement' of demonetisation and the government impinging on the central bank's autonomy

RBI employees who felt “humiliated” by events since the demonetisation move on Friday wrote a letter to RBI chief Urjit Patel against operational "mismanagement" in the exercise, the Press Trust of India reported. In a letter addressed to Patel, they termed the appointment of a senior finance ministry official as a "blatant encroachment" on RBI’s exclusive jurisdiction on currency management and accused the government of "impinging on RBI autonomy". "An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained," the United Forum of Reserve Bank Officers and Employees said in the letter. The letter also said the RBI's autonomy and image have been “dented beyond repair". At least two of the four signatories, Samir Ghosh of All India Reserve Bank Employees' Association and Suryakant Mahadik of All India Reserve Bank Workers' Federation, confirmed the writing of the letter, PTI reported. The other signatories are CM Paulsil of All India Reserve Bank Officers' Association and RN Vatsa of RBI Officers' Association. "May we request that as the Governor of RBI, its highest functionary, and protector of its autonomy and prestige, you will please do the needful urgently to do away with this unwarranted interference from the Ministry of Finance, and assure the staff accordingly, as the staff feel humiliated," the letter said. “We want to reiterate that the RBI is fully capable of coordinating its currency chest operations. We do not need assistance from anywhere,” the forum leaders said. (WION with inputs from PTI)

'Humiliated' RBI staff write to Urjit Patel, say bank's image 'dented beyond repair'

&nbsp;

&nbsp;

As the hustle and bustle over demonetisation shows signs of slowly ebbing away, the question of the hour is, how will&nbsp; the Indian government use demonetisation to empower the poor?

Free market thinkers, such as economist C.K. Prahalad, were categorical in their pronouncement that one of the best ways to empower the poor would be to generate additional income for them. Prahalad reasoned, India&rsquo;s acute poverty could be far&nbsp;quickly tackled if the poor consumers situated at the Bottom of the Pyramid (BoP) markets get access to&nbsp;a formal financial support system.&nbsp;

&nbsp;Over a decade ago, Prahalad observed that the total market for credit in rural India is INR 15,000 billion; moneylenders mostly supply this need at 100 per cent interest rate. Unfortunately, the nationalised banks have just scratched the surface, providing only INR 40 billion of the total need.&nbsp;

Prahalad saw the economic potential of bridging this lacuna by bringing organised banking to the poor: &quot;even if the organized sector only got to INR 10,000 billion and reduced the interest rate from 100 per cent to 20 per cent, you can calculate the income generated for the poor.&rdquo;&nbsp;

&nbsp;

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<h5>Four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million</h5>
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Unfortunately, however, until as late as 2014 only 40 per cent of India&rsquo;s population had bank accounts. To counter the trend, the Modi Government has introduced Jan Dhan account for over 250 million Indians that are operational at zero balance.&nbsp;

Courtesy the newly introduced banking scheme, PricewaterhouseCoopers <a href="http://www.cnbc.com/2015/10/15/india-sees-massive-drop-in-unbanked-population.html">reports</a>, the unbanked population in India dropped by a whopping 57 per cent;&nbsp; four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million.&nbsp;

A week after demonetisation, the finance ministry stated that as of 16 November 2016, INR 640 billion had been deposited in Jan Dhan accounts. Despite this success, the Prime Minister&#39;s People&#39;s Wealth Scheme website <a href="http://pmjdy.gov.in/account">reports</a> that close to a quarter of these accounts have zero balance.&nbsp;

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<h5>Slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most</h5>
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For the sake of argument, if we say half of this unbanked population is destitute and in no position to own INR 500 and INR 1000 notes, it leaves over 100 million who had cash but did not have the facility to deposit their high denomination notes in the banking system. This is, indeed significant and distressing.&nbsp;

&nbsp;

More traumatic is the fact that the slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most, simply because if the rich spend less than the poor earn less. Like it or not, a large part of what the rich spend goes as daily wages for the poor in the manufacturing sector, service sector, and farm sector as well as those working as domestic help.&nbsp;

So, if demonetisation has hurt the rich spenders by squeezing cash flow off the economy, it has hurt the poor even more because it hurt their earnings.

In India&rsquo;s shrill Left versus Right political discourse, the Opposition has highlighted the acute distress of the cash-starved poor. Whereas the government has touted the long term benefits of its digitalisation move.&nbsp;

As per initial reports, the artisans employed, particularly in the unorganised cottage industries, such as weaving, pottery and carpentry have been the hardest hit, followed by the farming sector. Not surprisingly, the Muslims who are predominant in these sectors have been the one hit hardest by demonetisation.&nbsp;

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<h5>This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most</h5>
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&nbsp;This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most. This is possibly the reason why the ruling party is less sensitive to the woes of the affected populace without realising that deep distress has taken the sheen out of the demonetisation drive.&nbsp;

Also, resourceful moneylenders have stepped into the cash vacuum. They were the only source of ready cash for the unbanked, albeit at high interest rates. Professor Prahalad would not have possibly envisaged that the effort to bring the population into the banking sector would have unwittingly pushed nearly a 100 million of the rural poor into the arms of the loan sharks.&nbsp;

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<h5>A process based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders</h5>
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&nbsp;

The Indian government would do well to boost micro-credit and simplify terms of lending for Jan Dhan account holders to make demonetisation a pro-poor move. As shown by Grameen Bank of Bangladesh or even Bandhan Bank in India, micro-financing has seen much better success rate globally in terms of rate of return than retail or commercial banking. Licenses to 10 micro finance units have been granted by Reserve Bank of India in September 2015, making it possible to take micro financing in India rapidly to scalable levels.&nbsp;

Now that most of the INR 14,000 billion of currency in circulation have returned to the banks, it has increased bank liabilities dramatically. Unless the cash is quickly circulated back into the economy, the banks will have to shell out interests worth billions of rupees in the coming year, that could splash ink on their balance sheets.&nbsp; The simple way to do it quickly would be to offer micro-credit on the Jan Dhan deposits without additional paperwork.&nbsp;

For instance, a process-based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders. This would be of great benefit to a fifth of India&rsquo;s population who have recently entered the banking system.&nbsp;

For Prime Minister Narendra Modi, fighting to gain people&#39;s approval in four major poll-bound Indian states, this step would translate into good economics as well as good politics.&nbsp;

&nbsp;

&nbsp;

The Indian government should use the surge in Jan Dhan accounts following demonetisation to extend micro loans to the poor

As the hustle and bustle over demonetisation shows signs of slowly ebbing away, the question of the hour is, how will the Indian government use demonetisation to empower the poor? Free market thinkers, such as economist C.K. Prahalad, were categorical in their pronouncement that one of the best ways to empower the poor would be to generate additional income for them. Prahalad reasoned, India’s acute poverty could be far quickly tackled if the poor consumers situated at the Bottom of the Pyramid (BoP) markets get access to a formal financial support system. Over a decade ago, Prahalad observed that the total market for credit in rural India is INR 15,000 billion; moneylenders mostly supply this need at 100 per cent interest rate. Unfortunately, the nationalised banks have just scratched the surface, providing only INR 40 billion of the total need. Prahalad saw the economic potential of bridging this lacuna by bringing organised banking to the poor: "even if the organized sector only got to INR 10,000 billion and reduced the interest rate from 100 per cent to 20 per cent, you can calculate the income generated for the poor.” Four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million × Unfortunately, however, until as late as 2014 only 40 per cent of India’s population had bank accounts. To counter the trend, the Modi Government has introduced Jan Dhan account for over 250 million Indians that are operational at zero balance. Courtesy the newly introduced banking scheme, PricewaterhouseCoopers reports, the unbanked population in India dropped by a whopping 57 per cent; four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million. A week after demonetisation, the finance ministry stated that as of 16 November 2016, INR 640 billion had been deposited in Jan Dhan accounts. Despite this success, the Prime Minister's People's Wealth Scheme website reports that close to a quarter of these accounts have zero balance. Slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most × For the sake of argument, if we say half of this unbanked population is destitute and in no position to own INR 500 and INR 1000 notes, it leaves over 100 million who had cash but did not have the facility to deposit their high denomination notes in the banking system. This is, indeed significant and distressing. More traumatic is the fact that the slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most, simply because if the rich spend less than the poor earn less. Like it or not, a large part of what the rich spend goes as daily wages for the poor in the manufacturing sector, service sector, and farm sector as well as those working as domestic help. So, if demonetisation has hurt the rich spenders by squeezing cash flow off the economy, it has hurt the poor even more because it hurt their earnings. In India’s shrill Left versus Right political discourse, the Opposition has highlighted the acute distress of the cash-starved poor. Whereas the government has touted the long term benefits of its digitalisation move. As per initial reports, the artisans employed, particularly in the unorganised cottage industries, such as weaving, pottery and carpentry have been the hardest hit, followed by the farming sector. Not surprisingly, the Muslims who are predominant in these sectors have been the one hit hardest by demonetisation. This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most × This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most. This is possibly the reason why the ruling party is less sensitive to the woes of the affected populace without realising that deep distress has taken the sheen out of the demonetisation drive. Also, resourceful moneylenders have stepped into the cash vacuum. They were the only source of ready cash for the unbanked, albeit at high interest rates. Professor Prahalad would not have possibly envisaged that the effort to bring the population into the banking sector would have unwittingly pushed nearly a 100 million of the rural poor into the arms of the loan sharks. A process based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders × The Indian government would do well to boost micro-credit and simplify terms of lending for Jan Dhan account holders to make demonetisation a pro-poor move. As shown by Grameen Bank of Bangladesh or even Bandhan Bank in India, micro-financing has seen much better success rate globally in terms of rate of return than retail or commercial banking. Licenses to 10 micro finance units have been granted by Reserve Bank of India in September 2015, making it possible to take micro financing in India rapidly to scalable levels. Now that most of the INR 14,000 billion of currency in circulation have returned to the banks, it has increased bank liabilities dramatically. Unless the cash is quickly circulated back into the economy, the banks will have to shell out interests worth billions of rupees in the coming year, that could splash ink on their balance sheets. The simple way to do it quickly would be to offer micro-credit on the Jan Dhan deposits without additional paperwork. For instance, a process-based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders. This would be of great benefit to a fifth of India’s population who have recently entered the banking system. For Prime Minister Narendra Modi, fighting to gain people's approval in four major poll-bound Indian states, this step would translate into good economics as well as good politics.

Empowering the poor: Has demonetisation boosted micro-credit?

Continuing the fight against demonetisation the Trinamool Congress (TMC) on Wednesday asserted that the currency swap has adversely affected the nation, asserting that the ruling party has been carrying out a &#39;political vendetta&#39; against all parties opposing demonetisation.

Taking their agitation against banning of high denomination notes forward, TMC leader Derek O` Brien said that 45 MP&#39;s of West Bengal along with &nbsp;chief minister Mamata Banerjee will meet President Pranab Mukherjee later today to discuss the ill effect of demonetisation on the nation.

&quot;The Trinamool Congress has been holding protests across the country, in fact in nine states, today is the third day in Delhi. The state of the nation is not good. Our 45 MP&#39;s will go and talk to the President today and we are very thankful for him to give us time at 2 pm today. We will also give him a memorandum&quot; said Brien.

The TMC MP also slammed the Bharatiya Janata party (BJP) for launching a&nbsp;political vendetta against their movement opposing demonetisation and said, &quot;The political vendetta launched by BJP on our party or any other opposing its demonetisation move is not right.&quot;

The TMC earlier this week launched countrywide protest demanding the&nbsp;removal of Prime Minister Narendra Modi to &quot;save the country&quot;.

Terming as &quot;flop show&quot; Prime Minister Modi&#39;s 8 November decision of spiking Rs 1,000 and Rs 500 notes, Trinamool supremo and West Bengal chief minister Banerjee said the party will hold demonstrations in Odisha, Punjab, Bihar, Manipur, Tripura,&nbsp; 
Assam and Jharkhand, besides West Bengal and the national capital.&nbsp;

(ANI)&nbsp;

TMC leader Derek O` Brien said that they will meet the President today to discuss the ill effect of demonetisation on the nation

Continuing the fight against demonetisation the Trinamool Congress (TMC) on Wednesday asserted that the currency swap has adversely affected the nation, asserting that the ruling party has been carrying out a 'political vendetta' against all parties opposing demonetisation. Taking their agitation against banning of high denomination notes forward, TMC leader Derek O` Brien said that 45 MP's of West Bengal along with chief minister Mamata Banerjee will meet President Pranab Mukherjee later today to discuss the ill effect of demonetisation on the nation. "The Trinamool Congress has been holding protests across the country, in fact in nine states, today is the third day in Delhi. The state of the nation is not good. Our 45 MP's will go and talk to the President today and we are very thankful for him to give us time at 2 pm today. We will also give him a memorandum" said Brien. The TMC MP also slammed the Bharatiya Janata party (BJP) for launching a political vendetta against their movement opposing demonetisation and said, "The political vendetta launched by BJP on our party or any other opposing its demonetisation move is not right." The TMC earlier this week launched countrywide protest demanding the removal of Prime Minister Narendra Modi to "save the country". Terming as "flop show" Prime Minister Modi's 8 November decision of spiking Rs 1,000 and Rs 500 notes, Trinamool supremo and West Bengal chief minister Banerjee said the party will hold demonstrations in Odisha, Punjab, Bihar, Manipur, Tripura, Assam and Jharkhand, besides West Bengal and the national capital. (ANI)

Demonetisation: TMC targets BJP for 'political vendetta' on opposing parties

&nbsp;

The Indian Income Tax department is looking into over Rs 16,000 crore deposited in different accounts of cooperative banks. More than Rs 2 lakh have been deposited in over 60 lakh bank 
accounts post-demonetisation.

&quot;Rs 3-4 lakh crore of evaded income has been deposited in banks post-demonetisation,&quot; Income Tax official said. &quot;Rs 25,000 crore has been deposited in cash in dormant bank accounts post-demonetisation,&quot; tax officials added.

Nearly Rs 80,000 crore of repayment of loans have been done in cash post-demonetisation, tax officials have concluded.

The Indian Income Tax department is looking into over Rs 16,000 crore deposited in different accounts of cooperative banks.

The Indian Income Tax department is looking into over Rs 16,000 crore deposited in different accounts of cooperative banks. More than Rs 2 lakh have been deposited in over 60 lakh bank accounts post-demonetisation. "Rs 3-4 lakh crore of evaded income has been deposited in banks post-demonetisation," Income Tax official said. "Rs 25,000 crore has been deposited in cash in dormant bank accounts post-demonetisation," tax officials added. Nearly Rs 80,000 crore of repayment of loans have been done in cash post-demonetisation, tax officials have concluded.

Rs 25,000 crore deposited in cash post-demonetisation: I-T department

Two persons have been arrested for allegedly printing counterfeit notes of Rs 500 and Rs 2000 denominations and circulating them in weekly markets in South West Delhi, with police seizing fake notes of the face value of Rs six lakhs from them.

The team probing the matter found that a syndicate, operating in Uttam Nagar, Dwarka among others, is involved in printing and circulating fake currency in the market to hamper country&#39;s economy, District Commissioner of Police (South West) Surender Kumar said.

Several incidents of circulation of fake Indian currency notes have come to light in localities of the capital including Dwarka and Uttam Nagar after the Indian government demonetised Rs 500 and Rs 1000 notes on November 8.

On January 9, acting on a tip-off that two persons in possession of fake currency notes were trading it at 50 per cent of the amount, a constable was deployed as a decoy customer, who along with a shadow witness, struck the deal with the accused persons.

&quot;A trap was laid near Shamshan Ghat, Kiran Garden, Bindapur and at about 4 pm, accused persons Ashish (23) and Krishan Bhardwaj (25) arrived there and each handed over fake notes of the face value of Rs 4000 to the constable and received Rs 2000 from him,&quot; said the officer.

The raiding party arrested both the accused, he said.

&quot;During investigation, Fake Indian Currency Notes (FICN) of Rs 2000 and Rs 500 denomination of the face value of Rs 6,10,500 were seized from them. Computer and printing equipments used for printing the notes were also seized from their possession,&quot; said the officer.

The mastermind of the fake currency racket has been identified as Ashish, a mobile phone technician and Krishan.

The duo printed the fake notes with the help of high quality scanner and printer and used to circulate it in the weekly markets. They had even lent money to their friends, asking them to pay half of the amount, he said.

&quot;The duo came in contact around two years back and conspired to print fake currency, initially of Rs 100 and circulated it. A dispute arose on the issue of distribution of earned money and both parted ways,&quot; the officer said, adding they later patched up.&nbsp; 
 
(PTI)

The accused were allegedly printing counterfeit notes of Rs 500 and Rs 2000 denominations and circulating them in weekly markets

Two persons have been arrested for allegedly printing counterfeit notes of Rs 500 and Rs 2000 denominations and circulating them in weekly markets in South West Delhi, with police seizing fake notes of the face value of Rs six lakhs from them. The team probing the matter found that a syndicate, operating in Uttam Nagar, Dwarka among others, is involved in printing and circulating fake currency in the market to hamper country's economy, District Commissioner of Police (South West) Surender Kumar said. Several incidents of circulation of fake Indian currency notes have come to light in localities of the capital including Dwarka and Uttam Nagar after the Indian government demonetised Rs 500 and Rs 1000 notes on November 8. On January 9, acting on a tip-off that two persons in possession of fake currency notes were trading it at 50 per cent of the amount, a constable was deployed as a decoy customer, who along with a shadow witness, struck the deal with the accused persons. "A trap was laid near Shamshan Ghat, Kiran Garden, Bindapur and at about 4 pm, accused persons Ashish (23) and Krishan Bhardwaj (25) arrived there and each handed over fake notes of the face value of Rs 4000 to the constable and received Rs 2000 from him," said the officer. The raiding party arrested both the accused, he said. "During investigation, Fake Indian Currency Notes (FICN) of Rs 2000 and Rs 500 denomination of the face value of Rs 6,10,500 were seized from them. Computer and printing equipments used for printing the notes were also seized from their possession," said the officer. The mastermind of the fake currency racket has been identified as Ashish, a mobile phone technician and Krishan. The duo printed the fake notes with the help of high quality scanner and printer and used to circulate it in the weekly markets. They had even lent money to their friends, asking them to pay half of the amount, he said. "The duo came in contact around two years back and conspired to print fake currency, initially of Rs 100 and circulated it. A dispute arose on the issue of distribution of earned money and both parted ways," the officer said, adding they later patched up. (PTI)

Demonetisation: 2 arrested for printing, circulating fake notes in India capital

As it analyses bank deposits post-demonetisation, the government has found nearly Rs 25,000 crore ($3.7 billion) cash was deposited in dormant bank accounts while an estimated Rs 3-4 lakh (around $44 billion)&nbsp;crore of tax-evaded income could have been deposited into banks during 50-day window provided to get rid of junked Rs 500 and Rs 1000 notes.

A senior official said the Income Tax department has been asked to scrutinise details and send notices to depositors of of Rs 3-4 lakh crore (around $44 billion) on which tax could have been evaded.

&quot;We now have trunkloads of data, analysis of which shows that more than Rs 2 lakh was deposited in over 60 lakh bank accounts post demonetisation. The total amount deposited in these accounts is more than 7.34 lakh crore ($107 billion),&quot; he said.

More than Rs 10,700 crore ($1.5 billion) cash was deposited in different accounts in the North Eastern states since November 9, he said adding the Income Tax department and the Enforcement Directorate &mdash; the country&#39;s economic enforcing agency &mdash; are looking into over Rs 16,000 crore ($2.3 billion) deposited in different accounts of cooperative banks.

Also, it has come to light that Rs 25,000 crore ($3.6 billion) cash was deposited in dormant bank accounts while nearly Rs 80,000 crore ($11.7 billion) of repayment of loans was done in cash since November 8, 2016 when the government demonetised old 500 and 1000 rupee notes.

Holders of the old currency were given an option to exchange or deposit them in bank accounts till December 30.

&quot;Starting from November 8, 2016 various reports were called for from the banks based on different threshold of cash deposits made by different categories of persons. The reports were collated and analysed based on intelligence which has been available in the government data bases,&quot; the official said.

After an in-depth analysis, these reports have been disseminated to the Income Tax (I-T) department, the Enforcement Directorate (ED) and other Law Enforcement Agencies.

Of the 60 lakh bank accounts that saw more than Rs 2 lakh ($2,931) of cash deposits, more than 6.80 lakh accounts have found matches in the existing database of various reports available with Government.

&quot;These have been flagged while disseminating to I-T Department,&quot; he said adding the details of cash deposits totalling to more than Rs 10,700 crore (($1.5 billion)&nbsp;in different accounts in the North-Eastern states have also been disseminated.

Also, the I-T department and the ED have been provided with the details of cash deposits of more than Rs 16,000 crore ($2.3 billion) in different accounts of various kinds of cooperative banks. 
 
The deposits of more than Rs 13,000 crore ($1.9 billion) in Regional Rural Banks have also been disseminated.

Besides, &quot;cash deposits in terrorist-affected states have also been disseminated to the concerned law enforcement agencies and appropriate actions have been taken in such cases,&quot; he said.

The official said cash deposits of Rs 2 lakh to Rs 2.5 lakh per account, totalling to Rs 42,000 crore ($6 billion), are found to have common PAN, mobile number or address. The same would be looked into in detail by the Income-Tax department.

The government has got the deposits in Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts analysed in detail and amounts of cash deposited under different threshold in different regions of the country and shared it with the I-T department.

&quot;All cash deposits of more than one lakh rupees in cash under PMJDY accounts would also be looked into, based on the intelligence inputs,&quot; he said.

It has come to the notice of the government that more than Rs 25,000 crore ($3.6 billion) have been deposited in cash in re-activated dormant bank accounts and the details have also been shared with the Income Tax department.

Similarly, nearly Rs 80,000 crore ($11.7 billion) of repayment of loans in cash above a certain threshold post demonetisation has also been shared with law enforcement agencies.

&quot;The Income Tax department has undertaken numerous actions, both intrusive and non-intrusive, based on the intelligence and in turn referred a number of cases for parallel investigation by the ED and CBI. The actions have unearthed non-filers, huge amounts of unaccounted income and shell companies,&quot; the official said without giving details.

The Income Tax department is also undertaking data analysis and comprehensive matching of the huge intelligence inputs with government databases to have a more effective and focused intrusive and non-intrusive actions in the coming days.

&quot;It is already taking actions in cases where cash deposits above Rs 50,000 ($732) have been made without quoting of PAN,&quot; he said.

&quot;The Income Tax department is using tools and its sources to identify each of these persons and is confident that there would a big expansion in the tax base and a quantum jump in direct tax collection,&quot; the official added.

(PTI)

A senior official said the Income Tax department has been asked to send notices to the depositors suspected of evading tax

As it analyses bank deposits post-demonetisation, the government has found nearly Rs 25,000 crore ($3.7 billion) cash was deposited in dormant bank accounts while an estimated Rs 3-4 lakh (around $44 billion) crore of tax-evaded income could have been deposited into banks during 50-day window provided to get rid of junked Rs 500 and Rs 1000 notes. A senior official said the Income Tax department has been asked to scrutinise details and send notices to depositors of of Rs 3-4 lakh crore (around $44 billion) on which tax could have been evaded. "We now have trunkloads of data, analysis of which shows that more than Rs 2 lakh was deposited in over 60 lakh bank accounts post demonetisation. The total amount deposited in these accounts is more than 7.34 lakh crore ($107 billion)," he said. More than Rs 10,700 crore ($1.5 billion) cash was deposited in different accounts in the North Eastern states since November 9, he said adding the Income Tax department and the Enforcement Directorate — the country's economic enforcing agency — are looking into over Rs 16,000 crore ($2.3 billion) deposited in different accounts of cooperative banks. Also, it has come to light that Rs 25,000 crore ($3.6 billion) cash was deposited in dormant bank accounts while nearly Rs 80,000 crore ($11.7 billion) of repayment of loans was done in cash since November 8, 2016 when the government demonetised old 500 and 1000 rupee notes. Holders of the old currency were given an option to exchange or deposit them in bank accounts till December 30. "Starting from November 8, 2016 various reports were called for from the banks based on different threshold of cash deposits made by different categories of persons. The reports were collated and analysed based on intelligence which has been available in the government data bases," the official said. After an in-depth analysis, these reports have been disseminated to the Income Tax (I-T) department, the Enforcement Directorate (ED) and other Law Enforcement Agencies. Of the 60 lakh bank accounts that saw more than Rs 2 lakh ($2,931) of cash deposits, more than 6.80 lakh accounts have found matches in the existing database of various reports available with Government. "These have been flagged while disseminating to I-T Department," he said adding the details of cash deposits totalling to more than Rs 10,700 crore (($1.5 billion) in different accounts in the North-Eastern states have also been disseminated. Also, the I-T department and the ED have been provided with the details of cash deposits of more than Rs 16,000 crore ($2.3 billion) in different accounts of various kinds of cooperative banks. The deposits of more than Rs 13,000 crore ($1.9 billion) in Regional Rural Banks have also been disseminated. Besides, "cash deposits in terrorist-affected states have also been disseminated to the concerned law enforcement agencies and appropriate actions have been taken in such cases," he said. The official said cash deposits of Rs 2 lakh to Rs 2.5 lakh per account, totalling to Rs 42,000 crore ($6 billion), are found to have common PAN, mobile number or address. The same would be looked into in detail by the Income-Tax department. The government has got the deposits in Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts analysed in detail and amounts of cash deposited under different threshold in different regions of the country and shared it with the I-T department. "All cash deposits of more than one lakh rupees in cash under PMJDY accounts would also be looked into, based on the intelligence inputs," he said. It has come to the notice of the government that more than Rs 25,000 crore ($3.6 billion) have been deposited in cash in re-activated dormant bank accounts and the details have also been shared with the Income Tax department. Similarly, nearly Rs 80,000 crore ($11.7 billion) of repayment of loans in cash above a certain threshold post demonetisation has also been shared with law enforcement agencies. "The Income Tax department has undertaken numerous actions, both intrusive and non-intrusive, based on the intelligence and in turn referred a number of cases for parallel investigation by the ED and CBI. The actions have unearthed non-filers, huge amounts of unaccounted income and shell companies," the official said without giving details. The Income Tax department is also undertaking data analysis and comprehensive matching of the huge intelligence inputs with government databases to have a more effective and focused intrusive and non-intrusive actions in the coming days. "It is already taking actions in cases where cash deposits above Rs 50,000 ($732) have been made without quoting of PAN," he said. "The Income Tax department is using tools and its sources to identify each of these persons and is confident that there would a big expansion in the tax base and a quantum jump in direct tax collection," the official added. (PTI)

At least $44 billion of tax  evaded income deposited in banks after demonetisation: Govt

Credit and debit cards will continue to be accepted at petrol pumps even after January 13 without customers having to pay transaction charges, the government said today.

Banks and oil companies are in discussions as to who should bear these charges, it said a day after averting a crisis that would have hit millions of people as oil pump owners threatened to stop taking card payments.

&quot;Merchant Discount Rate (MDR) charges will be levied as per RBI guidelines but who will take the hit? Banks, oil marketing companies are discussing,&quot; Petroleum Minister Dharmendra Pradhan told reporters after meeting Finance Minister Arun Jaitley on the issue.

&quot;We had assured yesterday also that since retail outlets, petrol pump owners work as commission agents, we will not pass on the cost to them,&quot; he said.

Petrol pump operators had yesterday threatened to stop accepting card payments after banks said the transaction charges of up to 1 per cent will have to be borne by them.&nbsp;

The crisis was averted after banks agreed not to insist on transaction charges for five more days, leading to pump&nbsp;owners deferring their plans till January 13.

Pradhan said the government stands by its decision that customers using non-cash digital modes of payments will not have to pay any transaction charge.

Also, the 0.75 per cent discount on fuel rate for using digital payments will continue.

&quot;Banks and oil marketing companies (OMCs) are discussing the issue. In the coming days a mechanism will be worked out under which customers or petrol pump owners will not bear the cost,&quot; he said.

Pradhan said the government had in February last year issued a circular saying customers will not have to bear the MDR charges on digital transactions so as to help the country move towards digital transaction and less cash economy.

&quot;Government will ensure implementation of that decision,&quot; he said.

&quot;In the coming days whatever digital transactions happens especially in petrol pumps, the burden will not be passed on to customers,&quot; Pradhan added.

When a card payment is made using a POS machine, service charges are levied. All stakeholders are discussing who will bear these, he said.

(PTI)

Banks and oil companies are in discussions as to who should bear the transaction charges

Credit and debit cards will continue to be accepted at petrol pumps even after January 13 without customers having to pay transaction charges, the government said today. Banks and oil companies are in discussions as to who should bear these charges, it said a day after averting a crisis that would have hit millions of people as oil pump owners threatened to stop taking card payments. "Merchant Discount Rate (MDR) charges will be levied as per RBI guidelines but who will take the hit? Banks, oil marketing companies are discussing," Petroleum Minister Dharmendra Pradhan told reporters after meeting Finance Minister Arun Jaitley on the issue. "We had assured yesterday also that since retail outlets, petrol pump owners work as commission agents, we will not pass on the cost to them," he said. Petrol pump operators had yesterday threatened to stop accepting card payments after banks said the transaction charges of up to 1 per cent will have to be borne by them. The crisis was averted after banks agreed not to insist on transaction charges for five more days, leading to pump owners deferring their plans till January 13. Pradhan said the government stands by its decision that customers using non-cash digital modes of payments will not have to pay any transaction charge. Also, the 0.75 per cent discount on fuel rate for using digital payments will continue. "Banks and oil marketing companies (OMCs) are discussing the issue. In the coming days a mechanism will be worked out under which customers or petrol pump owners will not bear the cost," he said. Pradhan said the government had in February last year issued a circular saying customers will not have to bear the MDR charges on digital transactions so as to help the country move towards digital transaction and less cash economy. "Government will ensure implementation of that decision," he said. "In the coming days whatever digital transactions happens especially in petrol pumps, the burden will not be passed on to customers," Pradhan added. When a card payment is made using a POS machine, service charges are levied. All stakeholders are discussing who will bear these, he said. (PTI)

Indian government: Petrol pumps to continue accepting card payments even after Jan 13, no transaction charge for customers

The Public Accounts Committee (PAC) of Parliament can call Prime Minister Narendra Modi on the issue of demonetisation if it is not satisfied with the answers given by top finance ministry officials and the RBI Governor Urjit Patel, to whom a detailed questionnaire has been sent.

A PAC meeting on this issue has been called on January 20th, in which the Reserve Bank of Indian (RBI) Governor Urjit Patel, Finance Secretary Ashok Lavasa and Economic Affairs Secretary Shaktikanta Das will be present.

&quot;We have not yet received answers for the questions we have sent to them. They will reply few days before the January 20th meeting. Their replies will be discussed in detail,&quot; PAC Chairman and senior Congress leader K V Thomas told PTI.

Asked if the PAC would call the Prime Minister if replies were not satisfactory, he said: &quot;The committee has all right to 
call anybody involved in the matter. But that will depend on the outcome of the January 20th meeting. We can call PM on demonetisation issue if members unanimously decide.&quot;

In a meeting with the PM after demonetisation announcement made on November 8, Thomas said, &quot;I had met him and he said that the situation will be normal after 50 days by December-end. But it does not looks like&quot;.

So, PAC decided to call the top officials involved in the decision making process this month, he said, adding that the demonetisation has impacted the country&#39;s economy.

&quot;The PM is misleading the country to satisfy his ego. He is trying to justify his wrong decisions. He has done in a callous manner by introducing Rs 2,000 notes,&quot; he said.

&quot;In a country where there is a call drop problem and telecom facilities are not smooth, how can PM expect e-transactions would take place on mobiles. Do we have sufficient infrastructure?&quot; he questioned.

Asked what kind of questionnaire been sent to the RBI chief and top finance ministry officials, Thomas said that the PAC has raised questions on all aspects of demonetisation.

Among key questions sought are:&nbsp;Who were involved in the decision-making, how much money has come back into banks after demonetisation, is there a law that can restrict people&#39;s access their money, how much money has been pumped back into the system, if black money issue has been addressed and the impact on the economy and poor.

The PAC, which scrutinises the reports of the Comptroller and Auditor General (CAG), takes suo motu note of the important matters.

(PTI)

If unsatisfied with answers given by RBI Governor Urjit Patel to a detailed questionnaire on demonetisation, Modi himself will be called on

The Public Accounts Committee (PAC) of Parliament can call Prime Minister Narendra Modi on the issue of demonetisation if it is not satisfied with the answers given by top finance ministry officials and the RBI Governor Urjit Patel, to whom a detailed questionnaire has been sent. A PAC meeting on this issue has been called on January 20th, in which the Reserve Bank of Indian (RBI) Governor Urjit Patel, Finance Secretary Ashok Lavasa and Economic Affairs Secretary Shaktikanta Das will be present. "We have not yet received answers for the questions we have sent to them. They will reply few days before the January 20th meeting. Their replies will be discussed in detail," PAC Chairman and senior Congress leader K V Thomas told PTI. Asked if the PAC would call the Prime Minister if replies were not satisfactory, he said: "The committee has all right to call anybody involved in the matter. But that will depend on the outcome of the January 20th meeting. We can call PM on demonetisation issue if members unanimously decide." In a meeting with the PM after demonetisation announcement made on November 8, Thomas said, "I had met him and he said that the situation will be normal after 50 days by December-end. But it does not looks like". So, PAC decided to call the top officials involved in the decision making process this month, he said, adding that the demonetisation has impacted the country's economy. "The PM is misleading the country to satisfy his ego. He is trying to justify his wrong decisions. He has done in a callous manner by introducing Rs 2,000 notes," he said. "In a country where there is a call drop problem and telecom facilities are not smooth, how can PM expect e-transactions would take place on mobiles. Do we have sufficient infrastructure?" he questioned. Asked what kind of questionnaire been sent to the RBI chief and top finance ministry officials, Thomas said that the PAC has raised questions on all aspects of demonetisation. Among key questions sought are: Who were involved in the decision-making, how much money has come back into banks after demonetisation, is there a law that can restrict people's access their money, how much money has been pumped back into the system, if black money issue has been addressed and the impact on the economy and poor. The PAC, which scrutinises the reports of the Comptroller and Auditor General (CAG), takes suo motu note of the important matters. (PTI)

Demonetisation: Parliamentary committee may summon Indian PM Narendra Modi

Dismissing concerns of slowdown due to demonetisation, Finance Minister Arun Jaitley said both direct and indirect tax collections have shown robust increase during the April-December period, indicating an&nbsp;uptick in economic activity including manufacturing.

He said direct tax collection was up 12.01 per cent at Rs 5.53 lakh crore in April-December 2016 as compared to revenue in the year-ago period, while indirect tax receipts soared 25 per cent to Rs 6.30 lakh crore. Giving the break-up, he said excise collection was up 43 per cent at Rs 2.79 lakh crore, while service tax rose 23.9 per cent to Rs 1.83 lakh crore in the first nine months of the current fiscal.

&quot;Customs duty receipts were up 4.1 per cent at Rs 1.67 lakh crore. Indirect tax collection in December was up 14.2 per cent year-on-year,&quot;&nbsp;he said.

During the month, which witnessed the demonetisation process, the excise collection was up 31.6 per cent, Jaitley said, adding that this category is directly linked to manufacturing. Service tax receipts in December were also up 12.4 per cent. Customs revenue dipped 6.3 per cent as gold imports came down.

&quot;Tax collection data is real and not an estimation,&quot; Jaitley said, while dismissing apprehensions of a&nbsp;slowdown in following currency squeeze post demonetisation. When compared with tax collections in November, indirect tax receipts in December 2016 were up 12.8 per cent, he said.

&quot;Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant,&quot; Jaitley said. VAT collections in most states too have shown an increase and they also received taxes in the old currency in November. &quot;In my opinion, all well administered states have seen rise in VAT collection even in November,&quot; he said. 
 
(WION with inputs from agencies)

Arun Jaitley releases tax collection figures asserting an increase of 25% in April-December period.

Dismissing concerns of slowdown due to demonetisation, Finance Minister Arun Jaitley said both direct and indirect tax collections have shown robust increase during the April-December period, indicating an uptick in economic activity including manufacturing. He said direct tax collection was up 12.01 per cent at Rs 5.53 lakh crore in April-December 2016 as compared to revenue in the year-ago period, while indirect tax receipts soared 25 per cent to Rs 6.30 lakh crore. Giving the break-up, he said excise collection was up 43 per cent at Rs 2.79 lakh crore, while service tax rose 23.9 per cent to Rs 1.83 lakh crore in the first nine months of the current fiscal. "Customs duty receipts were up 4.1 per cent at Rs 1.67 lakh crore. Indirect tax collection in December was up 14.2 per cent year-on-year," he said. During the month, which witnessed the demonetisation process, the excise collection was up 31.6 per cent, Jaitley said, adding that this category is directly linked to manufacturing. Service tax receipts in December were also up 12.4 per cent. Customs revenue dipped 6.3 per cent as gold imports came down. "Tax collection data is real and not an estimation," Jaitley said, while dismissing apprehensions of a slowdown in following currency squeeze post demonetisation. When compared with tax collections in November, indirect tax receipts in December 2016 were up 12.8 per cent, he said. "Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant," Jaitley said. VAT collections in most states too have shown an increase and they also received taxes in the old currency in November. "In my opinion, all well administered states have seen rise in VAT collection even in November," he said. (WION with inputs from agencies)

Robust growth in tax collection, says India's finance minister Arun Jaitley

India&#39;s Prime Minister Narendra Modi today emphasised the role of the Indian diaspora in the development of the country and thanked them for supporting the Indian government in its steps against corruption and black money.

PM Modi, who was speaking at the Pravasi Bharatiya Divas, lauded&nbsp;overseas Indians for their role in the country&#39;s development. He&nbsp;said they had made an &quot;invaluable contribution&quot; to the Indian economy by investing over 69 billion US dollars by way of remittances.

&quot;We welcome all your efforts that seek to strengthen India&#39;s partnership with the overseas Indian community,&quot; he said.

&quot;For me, FDI has two definitions &mdash; one is &#39;Foreign Direct Investment&#39; and the other is &#39;First Develop India&#39;,&quot; the prime minister added. &quot;I can say with full confidence that 21st century belongs to India.&quot;

Modi also said engagement with overseas Indian community was a key area of priority for the government. &quot;We want to change brain drain to brain gain,&quot; the PM said. He said the government will soon launch a skill development programme, &quot;Pravasi Kaushal Vikas Yojna,&quot; for the Indian youth seeking employment abroad.

The prime minister also welcomed efforts of the Indian diaspora to strengthen the country&#39;s partnership with the overseas Indian community.&quot;We don&#39;t see the colour of the passports, but the relations written by blood which matter the most.&quot;&nbsp;

Modi said the Indian diaspora represented the best of Indian culture, ethos and values.

&quot;The true identity of this event is you, the overseas Indians. It is a matter of pride for us that you all are here to attend this. There are over 30 million overseas Indians living abroad. They are not just respected for their numbers, but for the contributions they make,&quot; he said.

&quot;They are role models for immigrants from other backgrounds and countries. They take our values and culture wherever they go. The Indian diaspora have contributed their best towards progress in that country,&quot; he added.

PM Modi said those terming the government&#39;s demonetisation move as anti-people&#39; were the &quot;political worshippers&quot; of graft and black money which were making the economy, polity and society hollow.

&quot;Friends you know we have undertaken a big responsibilty in fighting black money and corruption... Black money and corruption have gradually made our polity, economy, society and the country hollow.

&quot;It is unfortunate that there are some &quot;political worshippers&quot;&nbsp;(rajnaitik pujari) of black money who term our actions against it as anti-people,&quot; Modi said at the 14th Pravasi Bharatiya Divas, an annual event to mark the contribution of the overseas Indians.

&quot;It is very saddening to see some black money supporters maligning the moves against corruption,&quot; he added.

The Pravasi Bharatiya Divas provides a platform to overseas Indians to engage with the government on issues of concern to the diaspora and to explore opportunities for investment in India. The event also provides an opportunity to overseas Indians to network with other overseas Indians residing in various parts of the world.

Modi also encouraged Persons of Indian Origin (PIO) to convert their PIO Cards into OCI (Overseas Citizen of India) cards.&quot;We have extended the deadline for PIO card conversions to OCI from 31 December 2016, until June 30, 2017 without any penalty,&quot; PM Modi said.&nbsp;

He also said that, starting with Mauritius, the government was working to put in place procedures so that descendants of various Indian communities could become eligible for OCI cards, by addressing the difficulties of PIOs in Fiji, Reunion Islands, Suriname, Guyana and other Caribbean States.

Noting that the Indian diaspora represented the best of Indian culture, ethos and values and was respected for its contributions, Modi said the welfare and safety of all Indians abroad was his government&#39;s &quot;top priority&quot;.

&quot;The security of Indian nationals abroad is of utmost importance to us...Security of all Indians abroad is top priority,&quot; he said.

More than 6,000 delegates from across the world registered for the event at India&#39;s IT capital.&nbsp;

The convention is being held biennially for the first time instead of earlier annual versions.&nbsp;

President Pranab Mukherjee will confer Pravasi Bharatiya Samman awards on January 9, the concluding day.

Vice-President of Suriname Michael Ashwin Satyandre Adhin was the special guest at the Youth PBD yesterday, in which he highlighted India&#39;s potential to be a &quot;Vishwa Guru&quot; (world leader) once again. 
 
(WION with inputs from agencies) 
&nbsp;

Modi, who was speaking at the Pravasi Bharatiya Divas, said overseas Indians remitted $69 bn annually to the Indian economy

India's Prime Minister Narendra Modi today emphasised the role of the Indian diaspora in the development of the country and thanked them for supporting the Indian government in its steps against corruption and black money. PM Modi, who was speaking at the Pravasi Bharatiya Divas, lauded overseas Indians for their role in the country's development. He said they had made an "invaluable contribution" to the Indian economy by investing over 69 billion US dollars by way of remittances. "We welcome all your efforts that seek to strengthen India's partnership with the overseas Indian community," he said. "For me, FDI has two definitions — one is 'Foreign Direct Investment' and the other is 'First Develop India'," the prime minister added. "I can say with full confidence that 21st century belongs to India." Modi also said engagement with overseas Indian community was a key area of priority for the government. "We want to change brain drain to brain gain," the PM said. He said the government will soon launch a skill development programme, "Pravasi Kaushal Vikas Yojna," for the Indian youth seeking employment abroad. The prime minister also welcomed efforts of the Indian diaspora to strengthen the country's partnership with the overseas Indian community."We don't see the colour of the passports, but the relations written by blood which matter the most." Modi said the Indian diaspora represented the best of Indian culture, ethos and values. "The true identity of this event is you, the overseas Indians. It is a matter of pride for us that you all are here to attend this. There are over 30 million overseas Indians living abroad. They are not just respected for their numbers, but for the contributions they make," he said. "They are role models for immigrants from other backgrounds and countries. They take our values and culture wherever they go. The Indian diaspora have contributed their best towards progress in that country," he added. PM Modi said those terming the government's demonetisation move as anti-people' were the "political worshippers" of graft and black money which were making the economy, polity and society hollow. "Friends you know we have undertaken a big responsibilty in fighting black money and corruption... Black money and corruption have gradually made our polity, economy, society and the country hollow. "It is unfortunate that there are some "political worshippers" (rajnaitik pujari) of black money who term our actions against it as anti-people," Modi said at the 14th Pravasi Bharatiya Divas, an annual event to mark the contribution of the overseas Indians. "It is very saddening to see some black money supporters maligning the moves against corruption," he added. The Pravasi Bharatiya Divas provides a platform to overseas Indians to engage with the government on issues of concern to the diaspora and to explore opportunities for investment in India. The event also provides an opportunity to overseas Indians to network with other overseas Indians residing in various parts of the world. Modi also encouraged Persons of Indian Origin (PIO) to convert their PIO Cards into OCI (Overseas Citizen of India) cards."We have extended the deadline for PIO card conversions to OCI from 31 December 2016, until June 30, 2017 without any penalty," PM Modi said. He also said that, starting with Mauritius, the government was working to put in place procedures so that descendants of various Indian communities could become eligible for OCI cards, by addressing the difficulties of PIOs in Fiji, Reunion Islands, Suriname, Guyana and other Caribbean States. Noting that the Indian diaspora represented the best of Indian culture, ethos and values and was respected for its contributions, Modi said the welfare and safety of all Indians abroad was his government's "top priority". "The security of Indian nationals abroad is of utmost importance to us...Security of all Indians abroad is top priority," he said. More than 6,000 delegates from across the world registered for the event at India's IT capital. The convention is being held biennially for the first time instead of earlier annual versions. President Pranab Mukherjee will confer Pravasi Bharatiya Samman awards on January 9, the concluding day. Vice-President of Suriname Michael Ashwin Satyandre Adhin was the special guest at the Youth PBD yesterday, in which he highlighted India's potential to be a "Vishwa Guru" (world leader) once again. (WION with inputs from agencies)

Overseas Indians respected for contributions they make: PM Modi to Indian diaspora

Seeking to analyse the banking transactions in months before the demonetisation, Income Tax department has asked banks to report cash deposits in savings accounts between April 1 to November 9, 2016.

Bank&#39;s have also been directed to ask&nbsp;account holders, who did not furnish&nbsp;PAN (Permanent Account Number) or Form 60 (for those without PAN) at the time of opening bank account, to do so by February 28 this year.

As per a notification, the banks, cooperative banks and post offices will have to report to the tax department all cash deposits between April 1 to November 9, 2016 -- the day when the demonetisation was effected by junking old Rs 500 and Rs 1000 notes.

Further bank officials will have to document PAN or declaration of Form 60 received from account holders and maintain all records for transactions under Rule 114B of I-T Act. Rule 114B lists various transactions for which quoting PAN is mandatory.

Following the demonetisation move, the tax department had earlier asked banks and post offices to report to it all deposits above Rs 2.5 lakh in savings accounts and more than Rs 12.50 lakh in current accounts made between November 10-December 30, 2016.

Also, cash deposits exceeding Rs 50,000 in a single day had to be reported.

With an estimated about Rs 15 lakh crore in junked currency notes coming back into the banking system post demonetisation, the tax department has started analysing the bank deposit trends.

(PTI)

Banks have been directed to ask account holders who did not provide a permanent account number of Form 16 to do so by February 28 this year

Seeking to analyse the banking transactions in months before the demonetisation, Income Tax department has asked banks to report cash deposits in savings accounts between April 1 to November 9, 2016. Bank's have also been directed to ask account holders, who did not furnish PAN (Permanent Account Number) or Form 60 (for those without PAN) at the time of opening bank account, to do so by February 28 this year. As per a notification, the banks, cooperative banks and post offices will have to report to the tax department all cash deposits between April 1 to November 9, 2016 -- the day when the demonetisation was effected by junking old Rs 500 and Rs 1000 notes. Further bank officials will have to document PAN or declaration of Form 60 received from account holders and maintain all records for transactions under Rule 114B of I-T Act. Rule 114B lists various transactions for which quoting PAN is mandatory. Following the demonetisation move, the tax department had earlier asked banks and post offices to report to it all deposits above Rs 2.5 lakh in savings accounts and more than Rs 12.50 lakh in current accounts made between November 10-December 30, 2016. Also, cash deposits exceeding Rs 50,000 in a single day had to be reported. With an estimated about Rs 15 lakh crore in junked currency notes coming back into the banking system post demonetisation, the tax department has started analysing the bank deposit trends. (PTI)

Income Tax department asks banks to report cash deposits before demonetisation

A parliamentary committee has asked the governor of India&#39;s central bank to appear before it and explain how the decision of demonetisation was taken and for details on how it has impacted the economy, Reuters reported.

The Public Accounts Committee (PAC), which is probing the government&#39;s decision to scrap high-value Rs 500 and Rs 1000 bank notes (($7.34-$14.69) has asked Reserve Bank of India (RBI) governor, Urjit Patel, to appear before it on January 20, the commmitte&#39;s chairman, KV Thomas, also a senior member of the opposition Congress party, told Reuters.

The PAC has asked Patel to provide details on the value of currency that has been returned to the bank, the quantity of 
&quot;black money&quot; it has received and the amount of new currency released so far, Thomas said.

The committee has sent the RBI governor a list of questions on the demonetisation process. It has also asked other finance ministry officials, including the revenue secretary and finance secretary to appear before it, Thomas said.

In an unexpected move, PM Modi announced the demonetisation of Rs 500 and Rs 1000 notes on November 8 to curb the influence of black money circulating in the economy.

The opposition parties have criticised the government and the central bank over shortages of new currency notes and restrictions on depositing old notes that have caused long queues at banks and ATMs.

Thomas added that the governor has also been asked about the country&#39;s preparedness to handle cashless transactions.

&quot;We had decided to call the RBI governor sometime in December but because the prime minister had asked for 50 days, we 
decided to postpone it to sometime January,&quot; Thomas told Reuters. &quot;We did not want to give it a political colour.&quot;

Urijit Patel is already set to testify before another parliamentary committee on the demonetisation issue.

Last month, the RBI unexpectedly kept its key policy rate unchanged at 6.25 per cent, despite calls for action in the face of an intense cash shortage. The bank was widely expected to cut the rate by at least 25 bps. 
 
(WION with inputs from Reuters) 
&nbsp;

RBI governor Urjit Patel has been asked to explain how the decision of demonetisation was taken

A parliamentary committee has asked the governor of India's central bank to appear before it and explain how the decision of demonetisation was taken and for details on how it has impacted the economy, Reuters reported. The Public Accounts Committee (PAC), which is probing the government's decision to scrap high-value Rs 500 and Rs 1000 bank notes (($7.34-$14.69) has asked Reserve Bank of India (RBI) governor, Urjit Patel, to appear before it on January 20, the commmitte's chairman, KV Thomas, also a senior member of the opposition Congress party, told Reuters. The PAC has asked Patel to provide details on the value of currency that has been returned to the bank, the quantity of "black money" it has received and the amount of new currency released so far, Thomas said. The committee has sent the RBI governor a list of questions on the demonetisation process. It has also asked other finance ministry officials, including the revenue secretary and finance secretary to appear before it, Thomas said. In an unexpected move, PM Modi announced the demonetisation of Rs 500 and Rs 1000 notes on November 8 to curb the influence of black money circulating in the economy. The opposition parties have criticised the government and the central bank over shortages of new currency notes and restrictions on depositing old notes that have caused long queues at banks and ATMs. Thomas added that the governor has also been asked about the country's preparedness to handle cashless transactions. "We had decided to call the RBI governor sometime in December but because the prime minister had asked for 50 days, we decided to postpone it to sometime January," Thomas told Reuters. "We did not want to give it a political colour." Urijit Patel is already set to testify before another parliamentary committee on the demonetisation issue. Last month, the RBI unexpectedly kept its key policy rate unchanged at 6.25 per cent, despite calls for action in the face of an intense cash shortage. The bank was widely expected to cut the rate by at least 25 bps. (WION with inputs from Reuters)

Parliamentary committee to question governor of India's central bank over demonetisation

14.97 trillion rupees out of a total of 15.4 trillion in old notes have been deposited in banks, a Bloomberg report said

Nearly 97 per cent of the 500- and 1,000-rupee notes demonetised by the government on November 8 have been deposited in banks, Bloomberg reported. The last date for depositing the old notes was December 30. Banks have received 14.97 trillion rupees ($220 billion), sources "with knowledge of the matter" told Bloomberg. The Indian government had estimated around 5 trillion rupees out of a total of 15.4 trillion rupees, outlawed by Prime Minister Narendra Modi’s surprise demonetisation move, would not make its way back to the banks and remain undeclared for fear of coming under the tax scanner. A near-full validation of the old notes, the Bloomberg report added, would deal a blow to Mr Modi's plans of getting at the country's "black money", the local term for undeclared or untaxed money. Mr Modi's surprise demonetisation has made things difficult for millions of people. It has forced them into long queues, people have found it difficult -- without cash -- to get hold of food and medicines, and farmers -- again without cash to buy seed and fertiliser -- have been unable to sow their winter crop. And the demonetisation might also have hurt the economy. According to Bloomberg, private indicators published over the past week signal that the $2 trillion economy will be hurt by the clampdown on cash. The Nikkei India Services Purchasing Managers' Index shrank in December, the second straight month of contraction, Bloomberg said citing a report. The Bloomberg report added that since the demonetisation, banks have doled out 8 trillion rupees in new currency notes. The figures of bank notes deposited are provisional and may change, it also added. (WION)

Demonetisation: Nearly 97% of old notes back in banks, says report

Over 50 days after announcing demonetisation, with the situation yet to return to normalcy, Prime Minister Narendra Modi will discuss the impact of the note-ban with senior ministers on Tuesday, the Hindustan Times reported.

At the meeting, the Prime Minister will discuss the steps taken by the government so far. &nbsp;

&ldquo;The focus will be more on the slew of measures announced by the PM on the eve of the new year,&rdquo; a minister told the daily.

The report added that Modi will start a five day-long series of meetings with the secretaries of 10 ministries.

Addressing the nation on the eve of the new year, the Prime Minister had announced a slew of sops and praised the efforts of bankers post demonetistion.&nbsp;

&quot;My effort is to take the banking system to normalcy as fast as possible in the new year. I have asked all concerned officers in government to focus their attention to this task,&quot; he had said.

He also asked banks to work proactively, especially in rural and remote areas, to ease people&#39;s difficulties.

Meanwhile, a day ago, Maharashtra Navnirman Sena chief Raj Thackeray slammed Prime Minister Narendra Modi over demonetisation.&nbsp;

&quot;On the day of announcement of demonetization, Modi was saying with great confidence and telling people to see what happens on December 30, but nothing has happened,&quot; he told reporters.

(This report first appeared in DNA)

Modi will reportedly also start a five day-long series of meetings with the secretaries of 10 ministries

Over 50 days after announcing demonetisation, with the situation yet to return to normalcy, Prime Minister Narendra Modi will discuss the impact of the note-ban with senior ministers on Tuesday, the Hindustan Times reported. At the meeting, the Prime Minister will discuss the steps taken by the government so far. “The focus will be more on the slew of measures announced by the PM on the eve of the new year,” a minister told the daily. The report added that Modi will start a five day-long series of meetings with the secretaries of 10 ministries. Addressing the nation on the eve of the new year, the Prime Minister had announced a slew of sops and praised the efforts of bankers post demonetistion. "My effort is to take the banking system to normalcy as fast as possible in the new year. I have asked all concerned officers in government to focus their attention to this task," he had said. He also asked banks to work proactively, especially in rural and remote areas, to ease people's difficulties. Meanwhile, a day ago, Maharashtra Navnirman Sena chief Raj Thackeray slammed Prime Minister Narendra Modi over demonetisation. "On the day of announcement of demonetization, Modi was saying with great confidence and telling people to see what happens on December 30, but nothing has happened," he told reporters. (This report first appeared in DNA)

Demonetisation: To review impact, PM Modi calls meeting of senior ministers

To mitigate hardships of poor and marginal farmers due to cash deficit following demonetisation, the Reserve Bank of India (RBI) today directed banks to distribute at least 40 per cent of currency notes in rural areas.

The 50-day exercise ended on December 30, but the cash supply situation is yet to ease in certain pockets. As a result, the government has not lifted the withdrawal ceiling of Rs 24,000 per week.

On observing that bank notes being supplied to rural areas is not commensurate with the local requirements, some steps have already been initiated, RBI said in a notification.

With a view to ensuring at least 40 per cent bank notes are supplied to rural areas and mitigating the issue in a more enduring manner, the banks maintaining currency chests are advised various steps, including liberal issuance of the existing stock of other denomination notes below Rs 100.

&quot;Banks should advise their currency chests to step up issuance of fresh notes to rural branches of regional rural banks (RRBs), district central cooperative banks (DCCBs) and commercial banks, white label ATMs and post offices in rural areas on a priority basis which are considered as main rural channels of distribution,&quot; it said.

The directive came just a couple of days after Prime Minister Narendra Modi in his address to the nation on the eve of new year exhorted banks to make efforts to restore normalcy as fast as possible and should focus on rural areas.

&quot;I have asked all officers concerned in the government to focus their attention on this task. They have especially been told to proactively resolve the problems in rural and remote areas,&quot; Modi had said.

According to the statement, banks should follow need-based approach for supply of currency as rural requirements could vary from district to district, depending on variations in the rural and urban mix of each district.

Each district has different proportion of current account and&nbsp;savings account in their banks.

RBI has already mapped each district of every state and also made estimates of the requirement.

Accordingly, all chests operating in a district must issue bank notes to distribution channels in the indicated proportion, it said.

&quot;The indicated proportion may be maintained on a weekly average basis at each chest level as it may be difficult to stick to the proportion on daily basis,&quot; it added.&nbsp;

Chests should issue bank notes in denominations of Rs 500 and below, the RBI notification said.

Particular ATMs, including those run by white label ATM operators, may be issued Rs 500 and Rs 100 notes and in the ATM category, off-site ones should be allocated a higher proportion of cash as against on-site as they are more important in last-mile currency connectivity, it added.

About reporting, it said currency chests must furnish daily issuance to their Link Offices (LOs) along with chest slips with a weekly summary at the close of business every Friday.

&quot;Banks should indent for coins, obtain supply from Issue Department of RBI, if required, and ensure supply to public on priority basis,&quot; it said.&nbsp;

(PTI)

The Reserve Bank of India also asked banks to issue more currency denomination notes below Rs 100

To mitigate hardships of poor and marginal farmers due to cash deficit following demonetisation, the Reserve Bank of India (RBI) today directed banks to distribute at least 40 per cent of currency notes in rural areas. The 50-day exercise ended on December 30, but the cash supply situation is yet to ease in certain pockets. As a result, the government has not lifted the withdrawal ceiling of Rs 24,000 per week. On observing that bank notes being supplied to rural areas is not commensurate with the local requirements, some steps have already been initiated, RBI said in a notification. With a view to ensuring at least 40 per cent bank notes are supplied to rural areas and mitigating the issue in a more enduring manner, the banks maintaining currency chests are advised various steps, including liberal issuance of the existing stock of other denomination notes below Rs 100. "Banks should advise their currency chests to step up issuance of fresh notes to rural branches of regional rural banks (RRBs), district central cooperative banks (DCCBs) and commercial banks, white label ATMs and post offices in rural areas on a priority basis which are considered as main rural channels of distribution," it said. The directive came just a couple of days after Prime Minister Narendra Modi in his address to the nation on the eve of new year exhorted banks to make efforts to restore normalcy as fast as possible and should focus on rural areas. "I have asked all officers concerned in the government to focus their attention on this task. They have especially been told to proactively resolve the problems in rural and remote areas," Modi had said. According to the statement, banks should follow need-based approach for supply of currency as rural requirements could vary from district to district, depending on variations in the rural and urban mix of each district. Each district has different proportion of current account and savings account in their banks. RBI has already mapped each district of every state and also made estimates of the requirement. Accordingly, all chests operating in a district must issue bank notes to distribution channels in the indicated proportion, it said. "The indicated proportion may be maintained on a weekly average basis at each chest level as it may be difficult to stick to the proportion on daily basis," it added. Chests should issue bank notes in denominations of Rs 500 and below, the RBI notification said. Particular ATMs, including those run by white label ATM operators, may be issued Rs 500 and Rs 100 notes and in the ATM category, off-site ones should be allocated a higher proportion of cash as against on-site as they are more important in last-mile currency connectivity, it added. About reporting, it said currency chests must furnish daily issuance to their Link Offices (LOs) along with chest slips with a weekly summary at the close of business every Friday. "Banks should indent for coins, obtain supply from Issue Department of RBI, if required, and ensure supply to public on priority basis," it said. (PTI)

Demonetisation: India's central bank directs banks to supply at least 40% of notes to rural areas

Hit hard by the demonetisation move, the manufacturing sector plunged into contraction in December -- the first shrinkage in a year -- as the cash crunch took its toll on new business orders and factory output, a monthly survey showed today.

The Nikkei Markit India Manufacturing Purchasing Managers&#39; Index (PMI) -- which measures manufacturing sector activity -- fell to 49.6, down from 52.3 in November.

The index slipped below the crucial 50 threshold -- which separates contraction from expansion -- for the first time since December 2015. This also marked the biggest month-on-month decline in the index in over eight years or since November 2008 when the global economy had slipped into a severe downturn after the Lehman bank collapse.

&quot;Having held its ground in November, following the unexpected withdrawal of Rs 500 and 1,000 bank notes from circulation, India&#39;s manufacturing industry slid into contraction at the end of 2016,&quot; said Pollyanna De Lima, Economist at IHS Markit and author of the report.

Lima added that &quot;cash flow issues among firms also led to reductions in purchasing activity and employment&quot;.

Survey participants widely blamed the withdrawal of high-value rupee notes for the downturn as cash shortage in the economy reportedly resulted in fewer levels of new orders.

Businesses also highlighted challenging conditions in external markets, with a fall in new businesses from abroad ending a six-month long growth.

Though December saw a mild decline in manufacturing output, the average reading for October-December remained in the &quot;growth terrain&quot;, suggesting a positive contribution from the sector to overall GDP in the third quarter of 2016-17, the survey said.

Several researchers and economists have lowered their near-term GDP growth forecasts in the wake of the demonetisation move, though there is a broader view that the decision would help the economy grow faster in the longer run.

&quot;With the window for exchanging notes having closed at the end of December, January data will be key in showing whether the sector will see a quick rebound,&quot; Lima added.

The report said the higher prices paid for a range of raw materials made average cost burden increase for the 15th straight month in December, with the rate of inflation picking up since November.

(PTI) 
&nbsp;

This also marked the biggest month-on-month decline in the index since November 2008, when the global economy collapsed

Hit hard by the demonetisation move, the manufacturing sector plunged into contraction in December -- the first shrinkage in a year -- as the cash crunch took its toll on new business orders and factory output, a monthly survey showed today. The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- which measures manufacturing sector activity -- fell to 49.6, down from 52.3 in November. The index slipped below the crucial 50 threshold -- which separates contraction from expansion -- for the first time since December 2015. This also marked the biggest month-on-month decline in the index in over eight years or since November 2008 when the global economy had slipped into a severe downturn after the Lehman bank collapse. "Having held its ground in November, following the unexpected withdrawal of Rs 500 and 1,000 bank notes from circulation, India's manufacturing industry slid into contraction at the end of 2016," said Pollyanna De Lima, Economist at IHS Markit and author of the report. Lima added that "cash flow issues among firms also led to reductions in purchasing activity and employment". Survey participants widely blamed the withdrawal of high-value rupee notes for the downturn as cash shortage in the economy reportedly resulted in fewer levels of new orders. Businesses also highlighted challenging conditions in external markets, with a fall in new businesses from abroad ending a six-month long growth. Though December saw a mild decline in manufacturing output, the average reading for October-December remained in the "growth terrain", suggesting a positive contribution from the sector to overall GDP in the third quarter of 2016-17, the survey said. Several researchers and economists have lowered their near-term GDP growth forecasts in the wake of the demonetisation move, though there is a broader view that the decision would help the economy grow faster in the longer run. "With the window for exchanging notes having closed at the end of December, January data will be key in showing whether the sector will see a quick rebound," Lima added. The report said the higher prices paid for a range of raw materials made average cost burden increase for the 15th straight month in December, with the rate of inflation picking up since November. (PTI)

Demonetisation: India's manufacturing sector contracts for first time in a year

By&nbsp;Manju AB

Equated monthly installments (EMIs) on home, car, and education loans will fall by at least half a per cent with banks across the board reducing their lending rates.

On Sunday, India&#39;s largest lender, State Bank of India (SBI), fired the first salvo by reducing its marginal cost-based lending rate (MCLR) by a whopping 0.9 per cent. With this, the bank has cut its benchmark rate by nearly 200 basis points from January 2015. Each basis point is equivalent to one-hundredth of a percentage.

As the deluge of deposits post demonetisation brought down funding costs for the bank and the government wanted to spread some New Year cheer (again post demonetisation), the cost of loans across the board have been made cheaper. The one-year MCLR of SBI, to which most of its loans are linked, is down to 8 per cent from an earlier 8.9 per cent. The reduction of 0.9 per cent is across all maturities.

The SBI action was followed within hours by peers. Punjab National Bank (PNB) has cut its one-year MCLR rate by 0.7 per cent to 8.45 per cent from 9.15 per cent, effective January 1. Similarly, Union Bank of India has reduced its one-year MCLR by 0.65 per cent to 8.65 per cent, effective January 2.

Rajnish Kumar, Managing Director in charge of retail loans, SBI, told DNA: &quot;The reduction will result in all loan rates to come down. For home loans, the reduction will be up to 0.75 per cent, depending on the tenure and the maturity. The quantum of reduction for car loans is being decided. There also we will give a good relief for customers. For a Rs 30 lakh loan for 30 years, the monthly EMI will come down by Rs 1,200.&quot;

The overnight MCLR is down to 7.75 per cent from 8.65 per cen, the one-month MCLR is down to 7.85 per cent from 8.75 per cent, the three-moth MCLR is down to 7.90 per cent from 8.80 per cent, the six-month MCLR is down to 7.95 per cent from 8.85 per cent, and the 2-year MCLR is down to 8.10 per cent from 9 per cent.

The banks cutting their lending rates supplements the sops Prime Minister Narendra Modi promised the housing sector, small and medium enterprises and farmers.

Banking sources say it is only a matter of time before the private sector banks -- ICICI and HDFC -- match the cuts.

Loan rates have no option but to fall, irrespective of what action the Reserve Bank of India (RBI) takes. If you take the latest bank credit and deposit growth rates put out by the central bank, it shows that while bank credit growth is steadily shrinking to 4 per cent, deposit growth, especially savings accounts, have swelled by 15.9 per cent. The wide gap shows the banking system is flush with cash and that lending costs would correspondingly fall.

Last week, the largest private sector lender, ICICI Bank, prepared itself for a lending rate cut by cutting its deposit rates to 7.5 per cent for a 390-day fixed deposit and 7 per cent for senior citizens, reducing rates by 0.10 per cent to 0.25 per cent on various maturities.

RBI introduced the MCLR system in April this year with the objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates. The rates are revised every month.

(This report first appeared in DNA)

&nbsp;

With banks cutting their lending rates, It is hoped the reductions will kick-start a stuttering economy

By Manju AB Equated monthly installments (EMIs) on home, car, and education loans will fall by at least half a per cent with banks across the board reducing their lending rates. On Sunday, India's largest lender, State Bank of India (SBI), fired the first salvo by reducing its marginal cost-based lending rate (MCLR) by a whopping 0.9 per cent. With this, the bank has cut its benchmark rate by nearly 200 basis points from January 2015. Each basis point is equivalent to one-hundredth of a percentage. As the deluge of deposits post demonetisation brought down funding costs for the bank and the government wanted to spread some New Year cheer (again post demonetisation), the cost of loans across the board have been made cheaper. The one-year MCLR of SBI, to which most of its loans are linked, is down to 8 per cent from an earlier 8.9 per cent. The reduction of 0.9 per cent is across all maturities. The SBI action was followed within hours by peers. Punjab National Bank (PNB) has cut its one-year MCLR rate by 0.7 per cent to 8.45 per cent from 9.15 per cent, effective January 1. Similarly, Union Bank of India has reduced its one-year MCLR by 0.65 per cent to 8.65 per cent, effective January 2. Rajnish Kumar, Managing Director in charge of retail loans, SBI, told DNA: "The reduction will result in all loan rates to come down. For home loans, the reduction will be up to 0.75 per cent, depending on the tenure and the maturity. The quantum of reduction for car loans is being decided. There also we will give a good relief for customers. For a Rs 30 lakh loan for 30 years, the monthly EMI will come down by Rs 1,200." The overnight MCLR is down to 7.75 per cent from 8.65 per cen, the one-month MCLR is down to 7.85 per cent from 8.75 per cent, the three-moth MCLR is down to 7.90 per cent from 8.80 per cent, the six-month MCLR is down to 7.95 per cent from 8.85 per cent, and the 2-year MCLR is down to 8.10 per cent from 9 per cent. The banks cutting their lending rates supplements the sops Prime Minister Narendra Modi promised the housing sector, small and medium enterprises and farmers. Banking sources say it is only a matter of time before the private sector banks -- ICICI and HDFC -- match the cuts. Loan rates have no option but to fall, irrespective of what action the Reserve Bank of India (RBI) takes. If you take the latest bank credit and deposit growth rates put out by the central bank, it shows that while bank credit growth is steadily shrinking to 4 per cent, deposit growth, especially savings accounts, have swelled by 15.9 per cent. The wide gap shows the banking system is flush with cash and that lending costs would correspondingly fall. Last week, the largest private sector lender, ICICI Bank, prepared itself for a lending rate cut by cutting its deposit rates to 7.5 per cent for a 390-day fixed deposit and 7 per cent for senior citizens, reducing rates by 0.10 per cent to 0.25 per cent on various maturities. RBI introduced the MCLR system in April this year with the objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates. The rates are revised every month. (This report first appeared in DNA)

EMIs on home, car, education loans to fall by at least half a per cent

India&#39;s central bank refused to&nbsp;divulge whether the views of the chief economic advisor and finance minister were taken into account before the sudden announcement of demonetisation of high-value currency notes by prime minister Narendra Modi on November 8.

The Reserve Bank of India (RBI), which was responding to a query under the Right to Information Act (RTI), said it could not answer the question since it did not come under the definition of &quot;information&quot; under the transparency law.

The applicant wanted to know whether the &quot;views of Chief Economic Advisor Arvind Subramaniam and Finance Minister Arun Jaitley were taken before announcement was made&quot;.

&quot;Query is in the nature of seeking opinion from Central Public Information Officers (CPIO) which is not defined as information as per Section 2(f) of the RTI Act,&quot; the RBI said in response to an RTI query.

Asked whether the information sought fell under &quot;seeking opinion&quot; from the CPIO, former Chief Information Commissioner A N Tiwari said, &quot;No. It does not. It is a fact sought by an RTI applicant. The CPIO cannot say an opinion has been sought from him.&quot;

&quot;How can it be called seeking an opinion? Whether someone was consulted or not is a matter of record. Had the question been that should views be taken then it would mean taking opinion,&quot; former Information Commissioner Shailesh Gandhi said, expressing surprise at the response of RBI Central Public Information Officer.

The definition of information covers &quot;any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force&quot;.

The query was also sent to the Prime Minister&#39;s Office and the Finance Ministry but it remained unanswered even after 30 days of filing of the RTI application.

The applicant had also sought to know the designation and the names of officials who were consulted before scraping of old Rs 500 and Rs 1000 currency notes.

&quot;The information sought relates to sensitive matters pertaining to discontinuation/withdrawal of bank notes. The information is exempt from disclosure under Section 8(1)(a) and (g) of RTI Act,&quot; the RBI said.

The monetary policy regulator also did not disclose if the decision to demonetise currency notes worth Rs 20 lakh crore was opposed by any official or minister, saying the information sought is &quot;hypothetical&quot; in nature.

It also cited Section 8(1)(a) of the RTI Act to deny minutes of deliberations related to demonetisation.

Section 8(1)(a) of the RTI Act exempts from disclosure the information which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign state or lead to incitement of an offence.

Information sought under Section 8(1)(g) would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes.

The RBI has been denying information related to crucial aspects related to demonetisation citing exemption clauses. It recently refused to give reasons behind the demonetisation move.

Earlier, it had denied to Mumbai-based RTI Activist Anil Galgali information about distribution of currency to banks between November 9 and November 19 citing Section 8(1)(g) of the RTI Act.

The central bank did not give any reason as to how this section would apply in the case of information sought by Galgali.

RTI Activist Venkatesh Nayak, who was also denied deliberations on demonetisation by the RBI, said: &quot;While confidentiality prior to announcing the demonetisation decision is understandable, continued secrecy after its implementation is difficult to understand when people are facing problems due to shortage of cash.&quot;

He said the refusal to disclose the minutes of the board meeting where the decision was taken is &quot;perplexing&quot;. 
 
(PTI)

&nbsp;

&nbsp;

India's central bank said it could not answer the question, since it did not come under the definition of 'information'

India's central bank refused to divulge whether the views of the chief economic advisor and finance minister were taken into account before the sudden announcement of demonetisation of high-value currency notes by prime minister Narendra Modi on November 8. The Reserve Bank of India (RBI), which was responding to a query under the Right to Information Act (RTI), said it could not answer the question since it did not come under the definition of "information" under the transparency law. The applicant wanted to know whether the "views of Chief Economic Advisor Arvind Subramaniam and Finance Minister Arun Jaitley were taken before announcement was made". "Query is in the nature of seeking opinion from Central Public Information Officers (CPIO) which is not defined as information as per Section 2(f) of the RTI Act," the RBI said in response to an RTI query. Asked whether the information sought fell under "seeking opinion" from the CPIO, former Chief Information Commissioner A N Tiwari said, "No. It does not. It is a fact sought by an RTI applicant. The CPIO cannot say an opinion has been sought from him." "How can it be called seeking an opinion? Whether someone was consulted or not is a matter of record. Had the question been that should views be taken then it would mean taking opinion," former Information Commissioner Shailesh Gandhi said, expressing surprise at the response of RBI Central Public Information Officer. The definition of information covers "any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force". The query was also sent to the Prime Minister's Office and the Finance Ministry but it remained unanswered even after 30 days of filing of the RTI application. The applicant had also sought to know the designation and the names of officials who were consulted before scraping of old Rs 500 and Rs 1000 currency notes. "The information sought relates to sensitive matters pertaining to discontinuation/withdrawal of bank notes. The information is exempt from disclosure under Section 8(1)(a) and (g) of RTI Act," the RBI said. The monetary policy regulator also did not disclose if the decision to demonetise currency notes worth Rs 20 lakh crore was opposed by any official or minister, saying the information sought is "hypothetical" in nature. It also cited Section 8(1)(a) of the RTI Act to deny minutes of deliberations related to demonetisation. Section 8(1)(a) of the RTI Act exempts from disclosure the information which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign state or lead to incitement of an offence. Information sought under Section 8(1)(g) would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes. The RBI has been denying information related to crucial aspects related to demonetisation citing exemption clauses. It recently refused to give reasons behind the demonetisation move. Earlier, it had denied to Mumbai-based RTI Activist Anil Galgali information about distribution of currency to banks between November 9 and November 19 citing Section 8(1)(g) of the RTI Act. The central bank did not give any reason as to how this section would apply in the case of information sought by Galgali. RTI Activist Venkatesh Nayak, who was also denied deliberations on demonetisation by the RBI, said: "While confidentiality prior to announcing the demonetisation decision is understandable, continued secrecy after its implementation is difficult to understand when people are facing problems due to shortage of cash." He said the refusal to disclose the minutes of the board meeting where the decision was taken is "perplexing". (PTI)

RBI refuses to say if finance minister was consulted before demonetisation

India&#39;s largest lender State Bank of India slashed its benchmark lending rates by 90 basis points or 0.9% across various maturities effective January 1, 2017, reported PTI.

The decision comes on the back of the Indian Prime Minister&#39;s announcement on the New Year&#39;s eve to offer sops to the home buyer&#39;s under the PM Awas Yojana.&nbsp;

After demonetisation, the banks are flush with funds which has contributed towards lowering the cost of funds.&nbsp;

The bank has reduced marginal cost of funds based lending rate (MCLR) from 8.90 per cent to 8 per cent for 1-year tenure, SBI said in a statement.

The MCLR on overnight borrowings has been reduced to 7.75 per cent from 8.65 per cent, while the lending rate for three-year tenure has been cut from 9.05 per cent to 8.15 per cent.

Similarly, the bank reduced the lending rate by similar percentage point for tenures including one month, three months, six months and two years.

&quot;With this, the bank has reduced its benchmark rate by 2 per cent from January, 2015,&quot; it said.

Banks have moved to MCLR as their new benchmark lending rate from June, replacing the base rate system for new borrowers.

It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks.

Last week SBI&#39;s subsidiary State Bank of Travancore also cut rates by upto 0.3 per cent, while IDBI Bank cut its lending rate by upto 0.6 per cent across various loan tenors.

(WION with inputs from PTI)

After demonetisation, the banks are flush with funds which has contributed towards lowering the cost of funds

India's largest lender State Bank of India slashed its benchmark lending rates by 90 basis points or 0.9% across various maturities effective January 1, 2017, reported PTI. The decision comes on the back of the Indian Prime Minister's announcement on the New Year's eve to offer sops to the home buyer's under the PM Awas Yojana. After demonetisation, the banks are flush with funds which has contributed towards lowering the cost of funds. The bank has reduced marginal cost of funds based lending rate (MCLR) from 8.90 per cent to 8 per cent for 1-year tenure, SBI said in a statement. The MCLR on overnight borrowings has been reduced to 7.75 per cent from 8.65 per cent, while the lending rate for three-year tenure has been cut from 9.05 per cent to 8.15 per cent. Similarly, the bank reduced the lending rate by similar percentage point for tenures including one month, three months, six months and two years. "With this, the bank has reduced its benchmark rate by 2 per cent from January, 2015," it said. Banks have moved to MCLR as their new benchmark lending rate from June, replacing the base rate system for new borrowers. It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks. Last week SBI's subsidiary State Bank of Travancore also cut rates by upto 0.3 per cent, while IDBI Bank cut its lending rate by upto 0.6 per cent across various loan tenors. (WION with inputs from PTI)

Demonetisation: India's largest lender State Bank of India cuts lending rate by 0.9%

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