Category: Finance

Nagaland Assembly passes state budget for 2018-19

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Nagaland Assembly on Monday passed the state’s Rs 18,315.76-crore budget for fiscal 2018-19.

The Nagaland Appropriation Bill (No. 2), 2018 budget was passed by voice vote following discussions on cut motions raised by the Opposition NPF MLAs.

The budget was presented by Nagaland Chief Minister Neiphiu Rio on March 23 last with a fiscal deficit of Rs 1,630.67 crore.

This is the first budget of the newly-formed Nationalist Democratic Progressive Party (NDPP)-led People’s Democratic Alliance of Nagaland (PDA).

The Assembly also passed two other bills — the Nagaland Road Safety Authority Act, 2013 (First Amendment) Bill, 2018 which was presented by Minister for Transport P Paiwang Konyak on the third day of the House, and the Nagaland Appropriation Bill (No.1) 2018 presented by Rio.

The first appropriation bill passed a supplementary demand for the year 2017-18 authorising payment of Rs 2,074.48 crore out of the consolidated fund of the state to the services of the fiscal ending 31st of this month with regard to various government departments.

Subsequently, Speaker Vikho-o Yhosh adjourned the Assembly sine die.

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Bank frauds continue: ED attaches assets worth Rs 55.65 crore of Kolkata firm

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Enforcement Directorate (ED) today attached assets worth Rs 55.65 crore of a Kolkata-based computer manufacturing firm in connection with its money laundering probe in an alleged bank fraud of over Rs 515 crore, officials said.

The agency’s zonal office in the West Bengal capital issued a provisional order under the Prevention of Money Laundering Act (PMLA) attaching lands, plots and residential flats in Ahmedabad, Kochi, West Bengal, Bengaluru and Mumbai as part of the action against the firm R P Info Systems and its directors.

A total of 66 vehicles and bank deposits to the tune of Rs 2 lakh have also been attached, they said.

The total value of the attachment is Rs 55.65 crore, they said.

The ED had lodged a PMLA case in the matter based on a CBI FIR.

The CBI in February had booked the firm and its directors Shivaji Panja, Kaustuv Ray and Vinay Bafna for allegedly cheating a consortium of banks to the tune of Rs 515.15 crore.

It is not the first time that the company has had a brush with the law as the CBI had booked it in 2015 for cheating IDBI Bank, once a leader of the consortium before relinquishing the position in 2013, to the tune of Rs 180 crore.

The other members of the bank consortium were State Bank of India, State Bank of Bikaner and Jaipur and State Bank of Patiala (both now part of the SBI), Union Bank of India, Allahabad Bank, Oriental Bank of Commerce, Central Bank of India, Punjab National Bank and Federal Bank.

It is alleged that loans were taken on the basis of false and fabricated documents.

The bank in its complaint on February 26, now part of the CBI and the ED FIRs, has alleged that the company which manufactured computers with brand name Chirag had taken funds from the consortium from time to time from 2012 onwards.

These loans have become NPA, it said,

The banks alleged that company manipulated financial statements and did not route sale proceeds through the loan account.

The agency had booked the company and its directors in 2015 in connection with the case related to IDBI Bank. But in the FIR, the agency had only focused on the exposure to IDBI Bank which was over Rs 180 crore.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Govt to borrow Rs 2.88 lakh crore in April-September, issue inflation indexed bonds

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government will borrow Rs 2.88 lakh crore in the April-September period of 2018-19, lower than Rs 3.72 lakh crore it had borrowed in the first half of the current fiscal, and introduce bonds linked to CPI or retail inflation.

Economic Affairs Secretary Subhash Chandra Garg said that, in consultation with the Reserve Bank, it has also decided to issue Government Securities (G-Sec) with 1-4 year maturity as demanded by primary dealers.

At a meeting with finance ministry officials last week, the dealers had suggested that the government out with shorter duration bonds as the likely change in interest rate by the RBI could have a bearing on long duration bonds.

The borrowing calendar for the first half of the 2018-19 fiscal was finalised at a meeting between finance ministry and RBI officials on Saturday.

Briefing reporters about the programme, Garg said Rs 2.88 lakh crore gross borrowing in the April-September period of next fiscal, is 47.56% of the budgeted amount.

The government in the Budget has raised the gross borrowing to Rs 6.06 lakh crore, from Rs 5.99 lakh crore in current fiscal ending March 31.

“We are absolutely confident that we will be able to meet all expenditure without going into overdraft,” he said.

The 47.56% of budgeted gross market borrowing in the first half of next fiscal is lower than the average of 60-65% in last five years.

The government borrows funds from money market to bridge the fiscal deficit. The deficit has been pegged at 3.3% of GDP in 2018-19, lower than 3.5% in current fiscal.

In the next fiscal, the G-Sec buyback would be reduced by Rs 25,000 crore. In addition to this, the government will withdraw up to Rs 1 lakh crore from the National Small Savings Fund (NSSF) — Rs 25,000 crore more than in the current financial year — to fund the fiscal deficit.

This could reduce the overall market borrowing programme of the government for the entire fiscal, Garg said.

To a question on whether the gross borrowing in next fiscal would be lower by Rs 50,000 crore, he said: “You can conclude that.”

Garg said the government plans to issue more Floating Rate Bonds (FRBs).

This, along with Consumer Price Index (CPI)-linked Inflation Indexed Bonds, would account for 10% of the total issuances during the year.

He also said that the government and the RBI are in the final stage of discussions for increasing FPI limits from April 1, 2018.

He said more issuance will be planned in short and long-term maturity bucket, reducing the issuance in medium term segments of 10-14 years to around 29%, as against more than 50% issuances in previous years.

Besides, the gross borrowing per week under T-Bills will be Rs 15,000 crore.

Asked as to when will RBI transfer additional dividend to the government, Garg said “Now there is 2-3 days left. So this would be coming.”

In August, RBI had paid a dividend of Rs 30,659 crore for the fiscal ended June 2017. It was less than half the Rs 65,876 crore it had paid in 2015-16.

Since November last year the finance ministry has been in discussions with the central bank to transfer the surplus to the exchequer.

To a query on why RBI and the government are on a different page with regard to dividend payment, Garg said: “We are on one page”. However, he did not give an indication on the quantum of additional dividend the government is expecting from the Reserve Bank.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India, China trade talks to be held today at Delhi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India and China will conduct  trade talks today to discuss about ways to boost two-way commerce and reduce trade deficit. Trade ministers and senior officials from both countries will be part of the Joint Economic Group (JEG) meeting that will be held in Delhi.

The meeting comes days after it was reported  that both countries signed 101 trade agreements valued at about $2.37 billion during the visit of a trade group to India organized by China’s Ministry of Commerce.

The meeting also gains significance as it comes on the backdrop of rising tensions between the two countries, and prospect of a looming trade war between China and the US.

As per agency reports, an official has said that Commerce and Industry Minister Suresh Prabhu and his Chinese counterpart Zhong Shanwill will discuss how to balance the trade gap during the India-China Joint Economic Group meeting. Besides, matters related to  investment,  market access matters and other non-trade barriers too may come up during the meet.

Trade deficit in trade with China is a big issue that has concerned Delhi over the years. Though there has been slight decrease in the trade deficit from $75.45 billion in 2011-12 to 51 billion in 2016-17 it is still a big concern. This deficit, that stand currently at $36.73 billion for this April-October fiscal is attributed mainly to  the heavy volume of Chinese exports, particularly manufactured goods targeting telecom and power sectors.

Formed back in 1988, Joint Economic Group (JEG) is a platform where both countries make discussions and decisions regarding bilateral trade.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow