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Jaitley hints at not raising tax rates in coming budget

India's finance minister Arun Jaitley hinted at not raising tax rates and providing incentives to manufacturing in the coming Budget while asserting that “structural changes“ will have to be made to get the economy to grow at 8-9%. Hard-selling India to global investors at the World Economic Forum in Davos, he also promised a stable tax regime that will not come up with unreasonable demand and change taxes retrospectively. “In terms of incentivizing manufacturing, it is very much on our agenda. Even though we had few days, during the last Budget we did give to ministry of micro small and medium enterprises (MSME), national investment and manufacturing zone (NIMZ) and so on because we wanted the sector to pick up and that priority is

Ministries including heavy industry, shipping and information technology have prepared proposals to give a fillip to Prime Minister Narendra Modi’s Make in India campaign. Official sources said that while the department of heavy industry (DHI) has made a case for providing subsidies to manufacturers of battery-operated solar cars, infrastructure creation and R&D, the shipping ministry has proposed tax benefits to domestic - Asian Voice 31st January 2015

fairly high on our agenda,” he said speaking at a session on `India's Next Decade'. While referring to various revenue sources for the government, including divestment, dividend and spectrum sale, the finance minister said as economic activity picks up, the government's capacity to raise revenue will also increase. “I am not in favour of raising the rates of taxation

as that could become counter-productive,” he told reporters. Jaitley expressed confidence that India was close to the point when investment will pick up as there are a large number of investors who are waiting to come in. “They only want to be doubly sure about the credibility of the decision making process and the stability of the policies,” he said. Commits to strict fiscal plan: India will not stray from a plan to slash its fiscal deficit to 3% of the gross domestic product within two years, Jaitley said, despite top aides' advice to revive the economy with more infrastructure spending. Jaitley, who will present his first fullyear Budget on February 28 for the 2015-16 financial year, said the current level of deficit was unacceptable. “We have a

roadmap to bring it (fiscal deficit) down a little below 3% over the next couple of years and then we intend to maintain it,” Jaitley said. The government is scrambling to contain the fiscal deficit at 4.1% of the GDP in the fiscal year ending March, after a sharp shortfall in revenue that forced it to rein in spending. India's fiscal deficit touched Rs 5,250 billion ($85.09 billion), or 99% of the full year's deficit target, in November. In his Budget, Jaitley is expected to announce subsidy cuts while allocating more for infrastructure, reflecting a rightward shift in thinking since Prime Minister Narendra Modi was elected in May. Falling oil prices have reduced the fuel subsidy bill and the government has roughly halved expenditure growth this fiscal year.

players for shipyard building. “The DHI is focusing on linking its electric mobility initiative and the efforts on national renewable energy generation. This can be achieved by incentivising manufacturers and this can be done by creating a fund for providing subsidies,” the official said. The national mission for electric mobility (NMEM) scheme, launched by the UPA in 2013, estimates, by 2020,

there will be a demand for around 6-7 million units. Further, the shipping ministry, the official said, has prepared a plan to boost domestic shipping industry by giving “tax breaks” for shipyard building. “The ministry also wants to make it compulsory to import LNG on ships bearing Indian flags. This will create service opportunities for Indian players,” the official said. The business model will shift from cost-insurance-

freight (CIF) to free on board (FOB) and Indian ships and insurers will be able to reap the benefits hitherto enjoyed by foreign vessel owners. “Announcements for some sops for these industries may also be made in the Budget 2015-16,” the official said. The information technology department wants “duty restructuring” for electronic sector, especially semi-conductors, another official said.

Arun Jaitley

Proposals to boost ‘Make in India’ plan ready

QX hosts UKIBC trade delegation

QX Limited hosted a trade delegation from the UKIndia Business Council (UKIBC), a premier business-led organisation promoting bilateral trade and investment between UK and India. The UKIBC delegates were led by its Chief Operating Officer, Kevin McCole; Head of Policy and Communication in India, Divya Dwivedi; and UK Head of Policy and Research, Adrianna Vega. In Gujarat to attend the 7th Vibrant Gujarat Summit, the group travelled to QX Limited’s offices in Ahmedabad to hear about the QX growth story and UK–India trade experience. Kevin McCole and his team were joined by other members of UKIBC which comprise of some of UK’s most vibrant and innovative businesses from the education, consulting, technology and packaging sectors. This included Vikrant Patil, National Programme Manager for Molecular Products UK; Subhash Ghosh, Executive Director of Lemon Advisors UK Ltd; Shailja O’Leary, International coordinator of Bournemouth and Poole College; Ramnik

Chris Robinson speaking to UKIBC trade delegates. From right to left: Adrianna Vega, Ramnik Modi, Kevin McCole, Divya Dwivedi, Anil Bhambhani, Martin Perry, Shailja O’Leary, Sanjeev Ohri, Kuldeep Upadhyay, and Rajiv Bhatia

Modi, Chairman of MTL Packaging; and Martin Perry, Director of Zada Technology Ltd. As part of their visit, guests were given a comprehensive tour of QX’s processing centres by its leadership team, who explained the facilities, expertise and capabilities of some of the key areas of the business including the recruitment, accounting and corporate advisors divisions. This was followed by QX Chairman, Chris Robinson sharing his experience of setting up business in Ahmedabad, Gujarat, which began with him researching locations, finding the right premises, identifying a local partner

and employing his first 15 staff way back in 2003. The delegates also appreciated the opportunity to hear Chris talk about how QX assisted a UK architectural firm to set up their operations in Ahmedabad. Kevin McCole said, “We’re grateful to QX for inviting us to their offices. It was a very enjoyable experience as we could discuss what they are doing and how their plans have developed over the last 10 years. Like UKBIC, QX has the passion for facilitating an increase in trade and investment between the UK and India, and it was an honour to have been part of the discussions.”

Commenting on the visit Chris Robinson said, “It was a pleasure to host the UKBIC trade delegates on site. Our aim for the visit was to showcase QX Corporate Advisors (QX CA) which provides vital insight and guidance for businesses looking to establish themselves in India and the UK. The guests got an opportunity to see first-hand the important role QX CA plays within both markets.” He continued, “We are keen to increase our activity locally, particularly across India, so this was a fantastic opportunity to build on our existing relationship with UKBIC and its members.

Symposium on ageing in emerging markets

Ian Scott - Executive Director of the EMS, HE Shaukat Aziz - former Prime Minister of Pakistan, Mrs Choudhrie, Bhanu Choudhrie Director C&C Alpha, Michael Earl - former Pro Vice Chancellor University of Oxford, Cherian Thomas - COO C&C Alpha

Fifty leading international policy experts and practitioners gathered in Oxford last weekend for the symposium on ageing in emerging markets, sponsored by C&C Alpha Group and attended by executive director Bhanu Choudhrie. They came from more than 20 emerging market and high income countries and included specialists in gerontology, economics, finance, sociology, anthropology, medicine, health policy and social policy and senior figures from the worlds of politics, business and civil society. The symposium agreed that the belief that old age begins at 65 is unfit for purpose and ripe for replacement; that definitions of retirement age must be drastically modified; that social and economic policies must be grounded in realistic assumptions about life expectancy; and that the equation of old age and disability must be discarded given that (for example) 83% of China’s elderly population reported no health problem in the 2010 census. The United Nations anticipates that, by 2050, the proportion of populations aged over 65 will rise from 7% in 2010 to 20% in Brazil; from 8% to 24% in China; from 13% to 26% in Russia; and from 5% to 12% in India. These changes - driven by declining fertility and rising longevity – will continue extensions of healthy life that have already been achieved in high income countries - and will offer dramatic possibilities for economic growth and productivity. The symposium concluded that the advantages of healthy longevity will not, however, be realized if emerging markets

fail to match the challenges and opportunities with their distinctive political, cultural, social and institutional environments. While emerging markets can and should learn from each other and from higher income countries they should not expect to find common solutions to shared problems and should not copy models designed for other times and places. The symposium also concluded that the economic, social and cultural benefits of healthy longevity will be elusive if emerging markets fail to take advantage of new technologies, promote healthier lifestyles, create physical and social environments adapted to physical and mental frailties, develop holistic lifetime health and education strategies, adopt realistic approaches to financial security in the final stages of life and coordinate age related policies and plans across jurisdictional boundaries within governments. Emerging economies have made very limited progress in planning for the phenomenon of longevity. Many rely on outdated or imported policies. Few have acknowledged that demographic transformation, like urbanization and the epidemiological transition from communicable to non-communicable diseases, is incomparably faster in emerging markets than in higher income countries. The scale and speed of ageing in emerging markets means they have less time to adjust and that existing social and economic inequalities and the incidence of oldage poverty could be seriously exacerbated in the absence of countervailing actions.

Britain’s largest stateowned bank Royal Bank of Scotland (RBS) is to cut some 160 jobs in the UK and offshore around 60 of them to India. RBS has been cutting back its retail operations and the latest job cuts are also part of wider cost-cutting measures. According to Unite the Union, which represents the bank’s

staff, around 60 backoffice roles are to be moved to India. “We will do everything we can to support staff, including seeking redeployment opportunities wherever possible and ensuring that compulsory redundancies are kept to a minimum,” the Edinburgh-headquartered bank said in a statement.

UK bank RBS to move 60 jobs to India

AV 31st January 2015  

Asian Voice weekly news paper (Issue 37)

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