JOIN USFM fast-tracks GST clearance
Finance Minister P Chidambaram on Monday sounded confident of resolving long-pending issues concerning the Goods and Services Tax (GST) and its passage in Parliament soon.
He said that the government’s disinvestment plans were on course and that the much-awaited initial public offering of steel major Rashtriya Ispat Nigam Limited will kick start in October itself. Chidambaram said the government was also confident of garnering the budgeted Rs 30,000 crore through disinvestment proceeds this fiscal year ending March 31.
The government is expected to offload 10 per cent of its stake in the wholly-owned public sector firm. An Empowered Group of Ministers (EGoM) is likely to meet on Tuesday to decide on the date and pricing of the IPO. Along with RINL, four other public sector undertakings namely, NMDC, NTPC, Power Grid Corporation and Engineers India, have been identified for divestment of government’s minority stake in them.
GST, which will empower the Centre and states to simultaneously tax supply of goods and services, was to be introduced from April 2010 and has missed several deadlines.
In GST, the impending issues are setting up a GST network to map taxpayers’ data better and a demand from the states to compensate central sales tax (CST), which is levied on inter-state trade of goods.
As a precursor to the introduction of the GST, it was decided to phase out CST over a three-year period (2006-07, 2007-08, and 2008-09) on the assumption that GST would be introduced from April 1, 2010. But, since the GST could not take off during this time, the Centre compensated the states on account of CST losses till 2011. Now, they are asking for a CST compensation for the delay in implementation of GST.
Chidambaram said, he was confident of resolving this and other issues after a few meetings with the Empowered Committee of State Finance Ministers.
“I will meet with Sushil Modi, the Chairman of the Empowered Committee of State Finance Ministers on October 22. Thereafter, I have asked a meeting with the entire Empowered Committee, and I am confident that with these two meetings and perhaps, one more meeting if necessary, we will be able to resolve all the issues concerning GST,” Chidambaram told a conference of economic editors.
“And once the state Finance Ministers are on board and all of us have agreed on what needs to be done, then passage of the GST Bill in Parliament should be easy,” Chidambaram said. The Finance Minister was also confident of the government garnering Rs 40,000 from the sale of spectrum this fiscal.
Insurance sector needs $5-6 billion
New Delhi, PTI: Making a strong case for raising FDI cap in insurance sector, Finance Minister P Chidambaram on Monday said the industry requires $5-6 billion capital in the immediate run.
“Every company already has 26 per cent FDI. So if you raise the cap from 26 per cent to 49 per cent, then there is headroom for them to bring in more capital. The estimated capital requirement in the insurance sector is about $5-6 billion in the immediate future,” Chidambaram told reporters.
The penetration ratio in life insurance sector is 4.4 per cent and 0.76 per cent in the non-life segment, meaning a vast majority of the population does not have insurance at all.
While the Cabinet last week approved an amendment to the Insurance Laws (Amendment) Bill, 2008, to raise the FDI in the sector from 26 per cent to 49 per cent, the proposal needs to be cleared by Parliament.
Chidambaram said the government intends to meet BJP and other parties ahead of the Winter Session to seek their support to raise the FDI cap to 49 per cent from the present 26 per cent as the sector require huge amount of capital.
He said “by and large” the provisions of the insurance bill are along the lines recommended by the Standing Committee for Finance and he does not expect any opposition to the entire bill or the most of its clauses.
“The disagreement is only to one clause (related with FDI ceiling).
“On that clause, I expect a vigorous debate and I hope I will be able to convince the opposition parties. Even before the Parliament session, I intend to meet with the Principal Opposition party and other parties and ask for their support,” the Finance Minister said. The Standing Committee headed by senior BJP leader Yashwant Sinha had recommended to maintain the FDI ceiling at 26 per cent in the sector.