- The government cleared a package to resolve the persistent rise in non-performing assets that are plaguing public sector banks and denting credit growth.
- The package, which includes an ordinance to amend the Banking Regulation Act of 1949 to empower the Reserve Bank of India to take more actions to check bad loans, is learnt to have been cleared by the government.
- The Cabinet has recommended an ordinance which has to first go to the President to secure his assent.
Issue with bad loans
- Bad loans in the Indian banking system have gone up sharply in the last one year.
- According to Reserve Bank of India data, gross NPA, as a percentage of gross advances went up to 9.1% in September 2016 from 5.1% in September 2015.
- The stressed assets moved up from 11.3% to 12.3%.
- Stressed assets in some of the public sector banks have approached or exceeded 20%.
- Economic survey of 2016-17 has pointed out the twin balance sheet problem that is, stressed companies on one hand and NPA-laden banks on the other.
Source : The Hindu
GS III : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Government think-tank NITI Aayog has suggested that agriculture income be brought under the purview of personal Income Tax in a bid to curb tax evasion.
- At the Governing Council meeting, the Aayog reasoned that non-agricultural entities sometimes use the blanket relief to evade taxes.
- All agricultural income is currently exempted from Income Tax regardless of its size.
- While the provision is meant to protect farmers, non-agricultural entities sometimes use it to evade taxes by declaring agriculture as the source of their income.
- This would widen the tax base and more funds could be made available for the social sector schemes.
In assessment year 2014-15, only 3.65 crore individuals filed returns. Of this group, only 1.91 crore individuals or around 1.5% of the population paid any Income Tax at all. So we should endeavour to bring a large number of citizens into the direct tax net even if their tax liabilities are minimal.There were about 225 million households in India of which roughly 2/3rd were in rural India. Rural India, he said, was effectively out of the purview of all personal income taxation.
Source : The Hindu
GS II : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
The third meeting of NITI Aayog’s Governing Council, which deliberate on the 15-year Vision Document to accelerate the country’s economic development.
Outcome of the meeting
- NITI Aayog set out the new approach which envisages a 15 year long term vision, accompanied by a 7 year strategy and a 3 year action agenda.
- In 3 year agenda inputs from the states as well as central ministries and subject experts were incorporated in the agenda.
- The three-year agenda has been divided into seven parts, with each part having a number of specific action points and over 300 specific action points have been identified covering the whole sectors.
- Besides the 3 YEAR agenda seven-year strategy and a 15-year long-term vision that will replace the erstwhile Five-Year Plans for the nation’s planning framework.
- The 15-year vision document aims to pegs the Indian economy’s growth from Rs 137 lakh crore in 2015-16 to Rs 469 lakh crore by 2031-32 at 2015-16 prices.
- Projection is based on growth estimate of 8 per cent per annum
- The vision of ‘New India’ could only be realised if all States work together and speed up capital expenditure and infrastructure creation.
- National Institution for Transforming India is a Government of India policy think-tank established by the Narendra Modi government to replace the Planning Commission which followed the top-down model.
- The stated aim for NITI Aayog’s creation is to foster involvement and participation in the economic policy-making process by the State Governments of India.
- The emphasis is on bottom-up approach and make the country to move towards cooperative federalism .
- The Prime Minister as the Ex-officio chairman and governing council consists of all state Chief Ministers,Lieutenant Governors of union territories,and vice chairman nominated by the Prime Minister.
- In addition to full members, there are two part-time members and four ex-officio members and a chief executive officer.
- The temporary members are selected from the leading universities and research institutions.
Source : The Hindu
GS III : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment