Mumbai, Feb 6 () Following are the highlights of RBI's sixth bi-monthly monetary policy statement, 2019-20: * Policy rate kept unchanged at 5.15 pc * GDP growth for 2020-21 fiscal pegged at 6 pc * Upward bias expected in overall food prices on account of vegetables, pulses * Accommodative stance to revive growth maintained; inflation to remain elevated in short-run * Retail inflation projection revised upwards to 6.5 pc for January-March quarter * Breakout of Coronavirus may impact tourist arrivals, global trade * Rationalisation of personal income tax rates in the 2020-21 Budget to support domestic demand * Need for adjustment in interest rates on small saving schemes outlined * Pricing of loans by banks for the medium enterprises to be linked to an external benchmark effective April 1 * Time for restructuring of GST-registered MSME loans extended till December 2020, from March 2020 at present * Revised regulations for housing finance companies to be issued * RBI to periodically publish a composite 'Digital Payments Index' (DPI) from July 2020 to capture the extent of digitisation of payments * Framework for a Self-Regulatory Organisation (SRO) for digital payments to be issued * Pan India Cheque Truncation System (CTS) to be made operational by September * Extension of date of commencement of commercial operations of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by one year, allowed * Crude prices likely to remain volatile * Foreign exchange reserves stood at USD 471.4 billion on February 4, 2020 * Net FDI rose to USD 24.4 billion in April-November 2019, against USD 21.2 billion a year ago * Net foreign portfolio investment (FPI) stood at USD 8.6 billion in 2010-20 (till February 4) as against net outflows of USD 14.2 billion in the year ago period * All six members of Monetary Policy Committee vote in favour of maintaining status quo on interest rate * Next meeting of the MPC scheduled during March 31, April 1 and 3, 2020. JD ANSANS

Highlights of RBI's sixth bi-monthly monetary policy statement for 2019-20

New Delhi, Feb 3 () The government will protect the interest of policyholders of LIC, which is likely to go public in the next financial year, Minister of State for Finance Anurag Thakur has said.
Listing of LIC will help bring in greater transparency, public participation and also deepen the equity market, he said.
"Government came out with the idea (LIC listing). The details will follow and it will be in the interest of LIC and its policyholders. Interest of LIC and policyholders will be safeguarded," he told in an interview.
Asked about quantum of stake sale, he said, once the amendment to the LIC Act is finalised you will get all the details.
"LIC have an independent set-up to decide where they want to invest even today and what will continue in the next format that would come into light as well in the future," he said.
Finance Minister Nirmala Sitharaman while presenting the Budget 2020-21 on Saturday proposed to sell a part of government stake in LIC through an initial public offer next fiscal.
The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank in the next fiscal out of total disinvestment target of Rs 2.10 lakh crore.
The government currently owns 100 per cent in LIC, while it holds around 46.5 per cent stake in IDBI Bank.
Assuring that the numbers presented in the Budget as realistic, Thakur said several measures announced in the Budget will help boost economy and meet nominal GDP growth target of 10 per cent set in the Budget.
"Just three four months back the government announced corporate tax rate cut. It takes some time to implement that at the grassroot level. So, you will see impact of that in some time. That is why we have not said 7.5 per cent, we have said 6.5 per cent (growth). And that is a real and genuine numbers we are looking at," he said.
Besides, he said, the revenue and expenditure target for the next fiscal are very much achievable.
The Budget has pegged total receipts at Rs 22.46 lakh crore and expenditure at Rs 30.42 lakh crore 2020-21 keeping in mind government's commitment towards various schemes and need for improvement in quality of life of the people.
Terming this year's Budget as 'Jan Jan Ka Budget', Thakur said, every strata of the society has been taken well into consideration and major reforms have been undertaken benefiting youth, women, farmers, investors and middle class.
The government has provided Rs 2.83 lakh crore for agriculture, farmer welfare and rural development.
"Doubling farmers' income is an agenda for the next two years. We have already fulfilled the commitment of one and a half times of cost of production of farmers which government had promised," he said.
With the announcement of 'Kisan Rail' and 'Krishi Udaan' to be launched by Indian Railways and Ministry of Civil Aviation, respectively, for a seamless national cold supply chain for perishables, this too will serve beneficial as it will aid farmers in facilitating smooth and fast transport of perishable goods, he said.
In addition, the government has increased agriculture credit target to Rs 15 lakh crore for the next fiscal.
Thakur said, "from the startups to education, internship to apprenticeship many announcements have been done...So, I think more young entrepreneurs, more startups we are going to see...We see India moving to top three startup countries in the world in the next couple of years".
With regard to helping the MSME sector, he said, the government has asked the RBI to consider extending debt restructuring window by another year till March 31, 2021.
More than five lakh MSMEs have benefitted from restructuring of debt permitted by the Reserve Bank of India in the last year, he said. DP BAL

Interest of LIC policyholders will be protected, says Anurag Thakur

<ul><li>At its 32nd meeting, the <keyword id="6354679" type="DEFINITION" weightage="20" keywordseo="gst">GST</keyword> Council decided to double the minimum revenue threshold for compliance with the tax to ₹4 million for producers of goods. </li><li>It also raised the limit for the composition scheme, which allows businesses to pay <keyword id="6368033" type="UNKNOWN" weightage="20" keywordseo="taxes">taxes</keyword> at a fixed rate of turnover (usually 1% for traders and manufacturers), to ₹150 million from ₹100 million. </li><li>Government officials said that annual tax revenues would decline by ₹52.3 billion as a result of all the changes, after assuming that the scheme would lose over half its registrants. </li><li>Given that the ultimate decision with respect to thresholds lies with state governments, they will likely opt for the status quo rather than relinquishing an important source of revenue. </li></ul>At its 32nd meeting recently, the GST Council, a committee comprising Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> along with a number of state finance ministers, unveiled <a href="http://www.pib.nic.in/PressReleseDetail.aspx?PRID=1559414">a series of changes</a> in the Goods and Services Tax (GST) regime. The council decided to double the minimum revenue threshold for compliance with the tax to ₹4 million for producers of goods while retaining the ₹2 million threshold for service providers. It also raised the limit for the composition scheme, which allows businesses to pay taxes at a fixed rate of turnover (usually 1% for traders and manufacturers), to ₹150 million from ₹100 million. Registrants of the scheme will now be required to only file one annual return and make a tax payment every quarter as opposed to a normal taxpayer, which makes payments on a monthly basis. In a move that contradicts the idea of “one nation, one tax”, the thresholds have been left to the discretion of state governments, which will have to decide in a week’s time. For example, the existing revenue threshold of ₹2 million will probably continue to apply for states in Northeast India where businesses are smaller and earn less than their counterparts in larger states. Finally, service providers and producers of goods with a turnover of ₹5 million or less will be allowed to opt for the composition scheme. However, instead of 1% they will have to pay fixed rate of 6%. The changes, which will be effective from 1 April, are largely directed at reducing the tax and compliance burden on small businesses, and hence, can be seen as a continuation of the government’s plan to revive the prospects of the micro, small and medium-enterprise (MSME) sector. This, in turn, will keep the economy chugging along as the government heads towards national elections. Last week, the Reserve Bank of India (RBI) gave in to pressure from the central government and announced<a href="https://www.businessinsider.in/indias-central-bank-just-gave-the-countrys-small-businesses-a-one-time-breather-from-some-of-their-bad-loans-but-with-a-few-conditions/articleshow/67346902.cms"> a restructuring scheme for the stressed accounts</a> of small businesses. This followed the introduction of <a href="https://www.businessinsider.in/indias-central-bank-chooses-to-keep-interest-rates-on-hold-unveils-a-new-pricing-policy-for-retail-and-small-business-loans/articleshow/66968094.cms">a revised pricing policy for small business loans</a> in December wherein loans with floating rates would be aligned with an external benchmark for the sake of transparency. The government measures will keep small business owners happy - an important ploy in an election year. However, the recent revisions to the GST will prove to be a drain on the Centre and state governments, which rely heavily on tax revenue. With the hike in the minimum revision threshold to ₹4 million, an estimated figure of over two million small businesses will no longer have to pay taxes. Government officials told the Indian Express that annual tax revenues would decline by <a href="https://indianexpress.com/article/business/economy/breather-for-small-businesses-gst-exemption-cap-up-to-rs-40-lakh-5532881/">₹52.3 billion </a>as a result of all the changes, after assuming that the scheme would lose over half its registrants. Since the ultimate decision lies with state governments, they will likely opt for the status quo rather than relinquishing an important source of revenue. Given that their polls don’t coincide with national elections, state governments aren’t subject to the same electoral pressures as that of the central government. Besides, most of them are already dealing with a <a href="https://indianexpress.com/article/business/economy/gst-revenue-states-deficit-drops-to-10-in-apr-nov-from-20-in-previous-eight-months-5516384/">shortfall in GST revenues</a>. The state of Puducherry has already opted to retain the revenue threshold at ₹2 million, along with Kerala and Chhattisgarh. More states are likely to follow suit next week. SEE ALSO: <a href="https://www.businessinsider.in/indias-central-bank-just-gave-the-countrys-small-businesses-a-one-time-breather-from-some-of-their-bad-loans-but-with-a-few-conditions/articleshow/67346902.cms">India’s central bank just gave the country’s small businesses a one-time breather from some of their bad loans — but with a few conditions</a> <a href="https://www.businessinsider.in/indias-central-bank-chooses-to-keep-interest-rates-on-hold-unveils-a-new-pricing-policy-for-retail-and-small-business-loans/articleshow/66968094.cms">India’s central bank chooses to keep interest rates on hold, unveils a new pricing policy for retail and small business loans</a>

The Modi administration continues its courtship of small businesses with a GST breather — but it seems unlikely that state governments will opt in

(Image source- Reuters) <ul><li>At its bi-monthly meeting yesterday, the central bank’s <keyword id="6375120" type="COMPANY" weightage="20" keywordseo="monetary-policy-committee">Monetary Policy Committee</keyword> decided to keep interest rates unchanged at 6.5% for the second time in a row. </li><li>The move, which was widely in line with market expectations, was largely due to a strong growth outlook in the ensuing quarters amid a moderation in <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword> and oil prices and a halt in the rupee’s decline. </li><li>The <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> also moved to make the pricing of <keyword id="6362287" type="UNKNOWN" weightage="20" keywordseo="loans">loans</keyword> with floating rates to retail customers and micro, small and medium-sized enterprises (MSME) more transparent by aligning them with an external benchmark.</li></ul>In the first meeting of the central bank’s Monetary Policy Committee since the very public rift between the Reserve Bank of India (RBI) and the Modi government, the committee decided to keep interest rates <a href="https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=45656">unchanged </a>at 6.5% for the second time in a row. The move, which was widely in line with market expectations, was largely due to a strong growth outlook in the ensuing quarters amid a moderation in inflation <a href="https://www.businessinsider.in/oil-prices-are-falling-and-thats-great-news-for-the-indian-rupee/articleshow/66768210.cms">and oil prices</a> and a halt in the rupee’s decline. In fact, the RBI cut its inflation forecast for the second half of 2018-19 to 2.7%-3.2% from 3.9%-4.5%. It also pegged inflation in the first half of 2019-2020 at 3.8-4.2% from an earlier range of 3.8-4.5%. The six-member committee also opted to maintain the stance at “calibrated tightening”, indicating the possibility of inflationary pressures in the near future given the obvious volatility in crude oil and foreign currency markets. However, if this doesn’t pan out and inflation continues to moderate, the RBI could very well cut rates or move to a “neutral” stance. It has so far raised rates twice, by 0.25 percentage points each, in the financial year so far. This is a remarkable turnaround from the last meeting in October, when the RBI changed its stance from “neutral” to “calibrated tightening”. However, this was at the height of the rupee’s freefall and a surge in capital outflows and oil prices, which was trading more than $20 higher at $85/barrel. The decision indicates the lower probability of rate hikes in the near term, which is bound to boost investor sentiments and provide a fillip to growth amid a possible liquidity crisis in the non-banking financial sector. As domestic inflation falls short of forecasts, the government will do what it can to prevent a continued reduction in food prices as this will hurt farmer incomes. That could invariably lead to more announcements of minimum support prices for certain agricultural commodities. Transparent pricing of loans The RBI also made a number of important additional announcements. It has moved to make the pricing of loans with floating rates to retail customers and micro, small and medium-sized enterprises (MSME) more transparent by aligning them with an external benchmark, in this case - the repo rate or rate of interest on treasury bills. The move, which is effective from 1 April 2019, will limit the deviation over the benchmark rate. Banks currently have a freer hand when it comes to setting rates on these loans, but will not be able to now have to maintain the same spread over the benchmark throughout the life of the loan unless a borrower’s credit rating changes significantly. All banks will also be required to maintain the same external benchmark for a specific loan category. The move is largely a response to banks’ aversion to passing on rate cuts from the central bank to their customers. Separately, the RBI also decided to appoint a committee of experts to oversee and devise solutions for the stress in the MSME sector. The lack of access to working capital loans for small businesses was a huge sticking point between the central government and the RBI, which eventually decided to formulate <a href="https://www.businessinsider.in/after-weeks-of-tension-the-reserve-bank-of-india-gives-in-to-some-of-the-central-governments-demands-while-retaining-its-independence/articleshow/66705908.cms">a restructuring scheme</a> for SME bad loans and allow shadow banks to <a href="https://www.businessinsider.in/the-reserve-bank-of-india-just-made-it-a-lot-easier-for-the-countrys-shadow-banks-to-sell-off-their-loans/articleshow/66879016.cms">sell their loans off</a> with greater ease. The composition of members for the expert committee are expected to be finalised by the end of 2018 with a final report due by June 2019. SEE ALSO: <a href="https://www.businessinsider.in/oil-prices-are-falling-and-thats-great-news-for-the-indian-rupee/articleshow/66768210.cms">Oil prices are falling and that’s great news for the Indian Rupee</a> <a href="https://www.businessinsider.in/the-reserve-bank-of-india-just-made-it-a-lot-easier-for-the-countrys-shadow-banks-to-sell-off-their-loans/articleshow/66879016.cms">The Reserve Bank of India just made it a lot easier for the country’s shadow banks to sell off their loans</a> <a href="https://www.businessinsider.in/after-weeks-of-tension-the-reserve-bank-of-india-gives-in-to-some-of-the-central-governments-demands-while-retaining-its-independence/articleshow/66705908.cms">After weeks of tension, the Reserve Bank of India gives in to some of the central government's demands while retaining its independence</a>

India’s central bank chooses to keep interest rates on hold, unveils a new pricing policy for retail and small business loans

Here’s how the advertising and marketing industry reacted to Union Budget 2021

<ul><li>New income tax slabs: 10% tax on income between ₹7.5 lakh without exemption compared to 20% right now.</li><li>15% tax on income between ₹7.5 lakh and ₹10 lakh without exemption compared to 20% right now.</li><li>20% tax on income between ₹10 lakh and ₹12.5 lakh without exemption compared to 30% right now.</li><li>25% tax on income between ₹12.5 lakh and ₹15 lakh without exemption compared to 30% right now.</li><li>Cost to the exchequer ₹40,000 crore; Removed 70 tax exemptions and deductions. These new rates are available to those who forego exemptions, deductions, and rebates.</li><li>Dividend distribution tax will be abolished, it will be taxable in the hands of the recipient. Cost to exchequer: ₹25,000 crore</li><li>SEE ALSO: <a href="https://www.businessinsider.in/budget/news/union-budget-2020-live-updates-news-and-highlights/liveblog/73824572.cms" data-type="tilCustomLink" target="_blank">Business Insider India live blog</a> on Budget 2020.</li></ul>Finance Nirmala Sitharaman presented her second annual budget speech. The top highlights from the budget 2020 proposals include the government's plan to sell stake in state-iowned insurance giant Life Insurance Corporation of India, sweeping changes in the income tax slabs, as well as the abolition of the dividend distribution tax at the end of the corporates. Aside from theses, startups with revenue up to ₹25 crore can avail 100% tax deduction in any three years over a period of 7 years, according to the latest Finance Bill presented by Sitharaman. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Following are the key highlights of the budget speech: <ol><li>Only through higher growth, we can have our youth gainfully and meaningfully employed.</li><li>Fundamentals of the economy are strong, inflation has been contained, banks have been cleaning up the accumulated loans of the past decade. </li><li>An average household now saves about 4% of its monthly spends due to lower incidence of tax under the GST regime.</li><li>Welfare schemes with direct benefit transfer embedded in them, preventive healthcare via programmes like sanitation, healthcare via central schemes, housing scheme via Prime Minister Awas Yojana (PMAY) etc changed the established order of a few individuals cornering most of the benefits. </li><li>During 2014-19, Indian economy grew at an average of 7.4% with low inflation. India's foreign direct investment was $284 billion between 2014 an 2019 compared to $190 billion in the preceding five-year period.</li><li>India's government debt fell to 48.7% of GDP as of March 2019 compared to 52.3% as of March 2014.</li><li>Three themes of Budget 2020: 'Aspiring India', 'economic development', and 'to build a caring society'. </li><li>We shall aim for seamless delivery of services by leveraging technology. </li><li>6.11 crore farmers insured under Prime Minister Fasal Bima Yojana - a centrally-sponsored insurance scheme. Farm markets need to be liberalised.</li><li>16 action points: 1: Encourage state governments that will implement the following model laws that have already enacted by the centre. 2: Propose comprehensive measures for 100 water-stressed districts. 3: Expand outlay for solar pumps to 20 lakh farmers, another 15 lakh farmers to pumpsets to solar grid. Farmers if they have barren lands, they can set up solar power plants and sell it to the grid. 4: Balanced use of orgnaic and inorganic fertilisers. 5: Provide viability gap funding for setting up warehouses. Food Corporation of India can set up warehousing on their land too. 6: Push to reduce storage costs for farmers. 7: Promotion of women self-help groups. 8: To launch refrigerated trains to transport food items from the farm to other parts of the country. 9: Horticulture exceeds the production of foodgrains. 'One product for one district' to promote focussed development of horticulture. 10: Integrated farming system in rain-fed areas. Multiple crops, bee-keeping solar pumps in rain deficient area. 11: Financing on negotiable warehousing receipts will be linked to e-NAM. 12: The NABARD refinance scheme will expanded. The agriculture credit target for FY21 will be expanded to ₹15 lakh crore from ₹12 lakh crore. 13. To eliminate foot and mouth disease by 2025. To double milk production to 108 million metric tonnes by 2025. 14. Blue economy - development management of marine resources. Target ₹1 lakh crore in fish exports by 2025. 15. By FY23, propose raising fish production to 200 lakh tonnes, will also promote algae, seaweed.</li><li>16. Under Deendayal Antyodaya Yojana, self help groups will be expanded beyond the current 58 lakh.</li><li>Allocation for agriculture: ₹2.83 lakh crore, this includes ₹</li><li>Mission Indradhanush has been expanded to include 12 new diseases and 5 new vaccines. A very focussed water and sanitation programme to reduce the burden of diseases on the poor. There are 20,000 hospitals empanelled under the PMJAY, this has to rise. Propose to set up hospitals under the private-public partnership, the 112 districts identified as 'aspirational' will get priority in the setting up of new hospitals. </li><li>Proceeds from taxes on medical devices will be used to support the programme to build the infrastructure.</li><li>Reiterate India's commitment to eradicate tuberculosis by 2025. </li><li>Allocation for health: ₹69,000 crore including ₹6,400 crore for PMJAY.</li><li>By 2030, India is set to have the world's largest working-age population. They need education, skills, and employment opportunities. Our education system needs more money to attract better teachers and to set up better labs. Open the education sector to external commercial borrowing. </li><li>In order to provide quality education to the under privileged, a full-fledged online courses will be launched from the top 100 institutions in India.</li><li>Under 'Study In India' programme, a new INSAT exam to be launched for foreign students to enroll into Indian universities. </li><li>Every medical college will be linked to a nearby hospitals under the public-private partnership mode.</li><li>Total outlay for education sector: ₹99,300 crore and another ₹3,000 crore for skill development.</li><li>150 top education institutes to start offering apprenticeship programmes.</li><li>Propose to set up an investment clearance cell for end-to-end services including information on land bank and facilitating the approval process etc. </li><li>It is proposed to develop 5 new smart cities in collaboration with state governments in PPP mode. </li><li>Electronics manufacturing industry is cost competitive and India has shown its potential. To attract large investments in electronic manufacturing -- including electronic equipment, smartphones -- a new policy will be announced soon.</li><li>A National Textile Mission to work for next four fiscal years with an estimated outlay of ₹1,480 crore.</li><li>A new scheme Nirvik, for higher insurance cover, reduction in premium for small exporters, and simplified claim process, including digital refund process to help exporters.</li><li>Every district must become a hub for exports.</li><li>Unified procurement scheme: Propose ₹27,300 crore for development of industry and commerce in FY21.</li><li>National Infrastructure Pipeline will bring in generic and sectoral reforms in construction and maintenance of the infrastructure. Propose a project preparation facility that will employ economist, management graduates to execute projects.</li><li>A National Logistics Policy will soon be released to clarify the roles of Central government, state governments, and the regulators.</li><li>The Delhi-Mumbai Expressway and two other projects will be completed by FY23. The Chennai-Bengaluru expressway project will also started by then.</li><li>Government will monetise 12 NHAI highway projects.</li><li>Setting up a large solar power capacity alongside the rail tracks on the land owned by the railways, is a proposal under consideration.</li><li>150 trains under the PPP mode. More Tejas type trains will connect iconic tourist destinations. </li><li>Central government will give 20% of the funds needed for a suburaban rail transport system in Bengaluru.</li><li>100 more airports will be set up in the next five years.</li><li>₹1.7 lakh crore allocated for transport infrastructure.</li><li>Propose to replace traditional meters with digital meters in the next three years. This will allow consumers to port out of a service provider (selling power) just like they port out of mobile service provider.</li><li>Fibre to home connections through Bharat Net will connect 1 lakh villages this year itself. Propose to provide ₹6,000 crore for Bharat Net programme.</li><li>Quantum technology: An outlay of ₹8,000 crore over the next five years.</li><li>₹22,000 crore allocated for the power sector including renewble energy sector.</li><li>No manual cleaning of sewers will be allowed, new technology will be roped. Centre in conversation with civic bodies.</li><li>Provision of ₹85,000 crore for scheduled castes and other backward classes.</li><li>Provision of ₹53,700 crore for scheduled tribes in the country.</li><li>5 archaeological sites would be developed as iconic sites with on-site museum -- Rakhigarhi (Haryana), Hastinapur (UP), Dholavera (Gujarat), Shivsagar (Assam), and Aditya Nallur (Tamil Nadu).</li><li>Propose ₹35,500 crore for nutrition-related schemes.</li><li>Allocation for Ministry of Culture: ₹3,500 crore. </li><li>Propose ₹2,500 crore to promote tourism.</li><li>Propose ₹9,500 crore for senior citizens and specially abled.</li><li>Proposed total allocation for women-centric programmes ₹28,600 crore.</li><li>Propose ₹4,400 crore allocation for clean air. </li><li>Companies Act will be amended to abolish 'criminal liability' for 'civil offences'.</li><li>A National Recruitment Agency will be set up. It will conduct a common entrance test for non-gazetted positions in the government and public-sector enterprises. </li><li>Propose a new national policy on national statistics will push for use of AI to collect data real time.</li><li>India will host G20 Presidency in 2022; the government proposes to allocate ₹100 crore to start the preparations.</li><li>Governance reforms proposed for PSU banks: Robust mechanism is in place to monitor the health of all banks and the money of depositors are safe. Insurance of bank deposits raised to ₹5 lakh from ₹eposit insurance and credit guarantee scheme.</li><li>Government will sell its remaining stake in IDBI Bank to private investors. Stock jumps over 13%</li><li>MSME entrepreneurs can avail 'subordinate debt' from banks and the loan will be fully guaranteed by a Trust. This will be treated as quasi-equity stake.</li><li>Government has asked RBI to extend deadline for MSME debt restructuring by one more year. </li><li>FY20 fiscal deficit seen at 3.8% of GDP and at 3.5% in FY21.</li><li>Non-resident Indians will be allowed to invest in certain categories of government bonds.</li><li>Currently, foreign portfolio investors are allowed to buy a maximum of 9% of the outstanding corporate bonds. Finance Minister proposes to increase the threshold significantly to 15%.</li><li>An international bullion exchange will be set up in GIFT City in Gandhinagar, Gujarat.</li><li>Government to sell stake in LIC. </li><li>Receipts for FY21 estimated at ₹22.46 lakh crore, estimate expenditure: ₹</li><li>Borrowing plan for FY21: ₹5.36 lakh crore, capital expenditure will rise over 22%.</li><li>Dividend distribution tax will be abolished, it will be taxable in the hands of the recipient. Cost to exchequer: ₹25,000 crore</li><li>Dividend and capital gains made by foreign funds on investment in infrastructure space will tax free.</li><li>Startups with revenue up to ₹25 crore can avail 100% tax deduction in any three years over a period of 7 years.</li><li>Small retailers with revenue up to ₹5 crore need not get their books audited by accountants.</li><li>New scheme to end tax disputes: If someone agrees to pay the disputed tax amount by March 2020, there will be no interest and penalty. There are 4,83,000 tax disputes pending at various forums.</li><li>FY21 disinvestment target ₹2.1 lakh crore, doubled from the ₹1.05 lakh crore target in FY20.</li><li>Propose a cash incentive for customers demanding invoice, to boost compliance with GST</li><li>Imported footwear, furniture, and medical equipments will get more expensive as customs duty will be increased.</li></ol> SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/new-income-tax-slab-tax-savings-for-salaried-people/articleshow/73835816.cms">You'll save ₹78,000 more under new income tax slabs if you earn less than ₹15 lakh</a> <a href="https://www.businessinsider.in/budget/news/indian-government-infuses-22000-crore-in-power-and-renewable-proposes-freedom-to-choose-supplier/articleshow/73835587.cms">Indian government infuses ₹22000 crore in power and renewable, proposes freedom to choose supplier</a> <a href="https://www.businessinsider.in/budget/income-tax/news/check-out-new-income-tax-slab-of-2021/articleshow/73830824.cms">New income tax slabs 2020</a> <a href="https://www.businessinsider.in/budget/news/there-will-be-no-manual-cleaning-of-sewers-anymore-announces-nirmala-sitharaman/articleshow/73835265.cms">“There will be no manual cleaning of sewers anymore,” announces Nirmala Sitharaman</a> <a href="https://www.businessinsider.in/budget/news/union-budget-2020-live-updates-news-and-highlights/liveblog/73824572.cms">Union Budget 2020 Live Updates</a> <a href="https://www.businessinsider.in/budget/news/indian-taxpayers-expectation-from-the-budget-2020/articleshow/73804969.cms" data-type="tilCustomLink" target="_blank"></a><a href="https://www.businessinsider.in/defense/news/indias-budget-allocation-for-defence-has-remained-fairly-static-for-the-past-five-years/articleshow/73153930.cms" data-type="tilCustomLink" target="_blank"></a>

Income tax cuts, stake sale in LIC and other highlights from Finance Minister Nirmala Sitharaman's budget speech

<ul><li>Following a nine-hour meeting, the board of the RBI and officials from the central <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword> were able to reach a compromise on a number of issues. </li><li>The central bank agreed to implement measures to improve the flow of credit to the micro-small-and-medium enterprise (MSME) sector and to work towards easing restrictions on state-owned banks. </li><li>The RBI also decided to institute a panel that will decide upon the transfer of its surplus funds to government coffers and review the reserve <keyword id="36749" type="ORGANIZATION" weightage="20" keywordseo="capital">capital</keyword> requirements imposed on Indian banks. </li></ul>As <a href="https://www.businessinsider.in/a-compromise-between-the-rbi-and-the-central-government-could-be-in-the-offing-as-the-board-to-central-bank-prepares-to-meet-next-week/articleshow/66619722.cms">predicted</a>, the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) and the central government were finally able to reach a truce following <a href="https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=45523">a marathon meeting</a> of the 18-member board of the central bank on Tuesday. Among the many concessions the RBI agreed upon, the main ones were to implement measures to improve the flow of credit to the micro-small-and-medium enterprise (MSME) sector and to work towards easing restrictions on state-owned banks. While the two parties will continue to differ over a number of issues, the central bank is expected to retain its autonomy when it comes to decision-making. Terms of the truce Given the ongoing liquidity crisis in the non-banking financial sector, the central government had been vocal about the slowdown in credit to small businesses around the country. The RBI had opposed the ask saying that easing credit could result in a further pile-up of bad loans. Over the course of the November 19 meeting, the board of the RBI decided to formulate a scheme to restructure the bad loans of SMEs to the tune of ₹250 million or less in lieu of access to additional financing. Secondly, the RBI agreed to review the restrictions imposed on banks under its Prompt Corrective Action (PCA) framework. Most of the banks on the PCA watchlist are state-run banks given their disproportionately large share of non-performing loans in the Indian banking sector and recent history of losses. Following the review, the RBI’s Board of Financial Supervision is expected to release some banks from the programme - something that the government has insisted upon. Speaking to media outlets on Monday, the principal economic advisor to the government, Sanjeev Sanyal, said that it was imperative for there to be <a href="https://www.livemint.com/Companies/Lv7U81nwl85rgaz1HjZiEL/Cant-have-Hotel-California-approach-towards-RBI-PCA-banks.html">an exit plan </a>in place for banks under the PCA framework. Thirdly, the board of the central bank decided to institute a panel primarily tasked with deciding upon the transfer of surplus funds to government coffers and review the reserve capital requirements imposed on Indian banks. The Indian government has recently raised demands that it should receive a larger share of RBI’s surplus funds as it struggles to meet its fiscal deficit target. The ask was strongly opposed by RBI, which said it needed stronger cash reserves in the event of a financial downturn. While the RBI decided to retain the capital adequacy ratio for banks at 9% of risk-weighted assets, which is one percentage point more than what is prescribed under <keyword id="142572" type="PERSON" weightage="20" keywordseo="Basel-III">Basel III</keyword> norms, it has given them an additional year to implement Basel III requirements by March 2020. The compromise came as a relief to market speculators as fears about the resignation of RBI governor <keyword id="6375119" type="PERSON" weightage="20" keywordseo="urjit-patel">Urjit Patel</keyword> were put to rest. Both the R<a href="https://www.livemint.com/Money/tKGf3TKkN0XeExXVhNO1TL/Rupee-bond-prices-gain-as-RBI-government-hint-truce.html">upee</a> and <a href="https://www.google.co.in/search?q=sensex&amp;rlz=1C1GCEU_enIN820IN820&amp;oq=sensex&amp;aqs=chrome..69i57j69i60j69i57j69i59j69i60j69i61.881j0j7&amp;sourceid=chrome&amp;ie=UTF-8">Sensex</a> index were up Monday, while prices on 10-year government bonds also increased. The truce, by no means, indicates an end to disagreements between the government and the central bank, which isn’t a bad thing. Given the difference in their goals and the timeline of their mandates, the two parties may butt heads again over a number of issues. However, the outcome of the board meeting of the RBI shows that when needed, a compromise can be reached and long-term stability can be reconciled with short-term boosts to the economy. SEE ALSO: <a href="https://www.businessinsider.in/a-compromise-between-the-rbi-and-the-central-government-could-be-in-the-offing-as-the-board-to-central-bank-prepares-to-meet-next-week/articleshow/66619722.cms">An end to the spat between the RBI and the government could be in sight as the board of the central bank prepares to meet next week</a> <a href="https://www.businessinsider.in/the-spat-between-indias-central-bank-and-the-government-gets-more-heated-as-the-finance-minister-blames-it-for-not-doing-enough-to-prevent-the-countrys-bad-loan-problem/articleshow/66442846.cms">The spat between India’s central bank and the government gets more heated as the finance minister blames the RBI for not doing enough to prevent the country’s bad loan problem</a> <a href="https://www.businessinsider.in/indias-government-wants-to-dilute-an-important-corrective-programme-for-the-nations-struggling-lenders-and-the-central-bank-is-having-none-of-it/articleshow/66411552.cms">India’s government wants to dilute an important corrective programme for the nation’s struggling lenders — and the central bank is having none of it</a>

You Searched For "MSME restructuring scheme" and got 7 results

Highlights of RBI's sixth bi-monthly monetary policy statement for 2019-20

PTI

Interest of LIC policyholders will be protected, says Anurag Thakur

PTI

The Modi administration continues its courtship of small businesses with a GST breather — but it seems unlikely that state governments will opt in

Dilsher Dhillon

India’s central bank chooses to keep interest rates on hold, unveils a new pricing policy for retail and small business loans

Dilsher Dhillon

Here’s how the advertising and marketing industry reacted to Union Budget 2021

BI India Partner

Income tax cuts, stake sale in LIC and other highlights from Finance Minister Nirmala Sitharaman's budget speech

Sriram Iyer

After weeks of tension, the Reserve Bank of India gives in to some of the central government's demands while retaining its independence

Dilsher Dhillon