News Round up- Economy (18th Feb 2008)
Insurance sector seeks 49% FDI
MUMBAI: The insurance sector has demanded a hike in foreign direct investment (FDI) limit from the present 26 per cent to 49 per cent and exemption of service tax for health insurances.
"For the growth of the insurance sector, the FDI cap of 26 per cent should be increased to 49 per cent. This will help to further deepen the Indian insurance market," Unison Insurance Broking Services' Managing Director, B K Sinha, said on the sidelines of an insurance seminar on Sunday.(Full Story)
HSBC hints at more investment in India
MUMBAI: Hoping to benefit hugely from the India-growth story, global banking major HSBC, hinted at more investments in the country once the regulatory environment permitted it.
The bank is understood to be open to adopting the inorganic route to grow in the Indian market as and when the regulatory environment become conducive for it.
"We are waiting for the right market opportunities in India and will increase our investment here, as and when the regulator allows us," HSBC's Head of Personal Financial Services, Asia-Pacific, Nicholas G Winsor, said. (Full Story)
New UK rules for money transfer to India
LONDON: The British government has introduced new rules for money transfer companies to ensure that the money, which is transferred from Britain overseas including India, are delivered safely and to the right person.
Annually, about 2.3 billion pounds are transferred from Britain overseas, most of it to 50 developing countries.
A large chunk of it, about 300 million pounds, is transferred to India every year, followed by Pakistan (200 million pounds).
However, individuals who transfer the money to India and other places face worries about the amount reaching the destination, and reaching the right person. (Full Story)
SEBI warns investors against 'Art Funds'
MUMBAI: The Securities and Exchange Board of India has sought to caution investors with regard to investing in Art Funds, funds/schemes launched by companies formed for the purpose.
The market regulator Wednesday said at present, no entity was registered with it under the SEBI (Collective Investment Schemes) Regulations.
At the same time, SEBI has threatened actions, civil and criminal, against such funds / companies and warned against launching of "Art Funds" or schemes without registration. (Full Story)
Tax collection needs to be balanced: Supreme Court
NEW DELHI: The Supreme Court has rejected the Kerala government's plea, seeking disallowance of tax exemption benefits to an assesee saying a balance should be struck between revenue collection and business-friendly approach.
"Tax administration is a complex subject. It consists of several aspects. The government needs to strike a balance in the imposition of tax between collection of revenue on one hand and business-friendly approach on the other," a bench comprising Justices SH Kapadia and BS Reddy said. (Full Story
Small investors expect populist budget
The UPA's Finance Minster is expected to deliver a populist budget and so the demands are running high. The small investors are hopeful of a tax cut. At present, income up to Rs 1,10,000 for men and Rs 1,45,000 for women attracts no tax. Experts feel that this threshold can be increased by another Rs 40,000. Since incomes have also risen significantly, the highest tax rate of 30 per cent should be applicable to salaries above Rs five lakh against the current Rs 2,50,00. This could translate into a cool saving of Rs 40,000.
Another way to save on tax is to invest up to Rs one lakh into tax saving instruments. Investors want their limit to be hiked but they are also demanding that the government should extend tax saving sops to a wide variety of options. Investors are also demanding that interest on fixed deposit savings should become tax free and MFs across the board should get a tax saving waiver instead of restricting this option only to ELSS schemes.
"Even if you increase tax slab, it will definitely help. Secondly, mutual fund as a method of saving is becoming more popular. It is an opportunity to create wealth and not just an avenue for savings or short-term speculation. Having burnt their fingers in the recent market correction, small investors would be looking for a silver lining in this year's budget. A cut in income tax rates is what everyone is expecting but at the same time, more money in the hands of investors, whether invested or spent, will also help spur growth
Rupee appreciates 15 paise
Mumbai: Overcoming the weakening trend of the past few days, the Indian rupee on Thursday appreciated by 15 paise against the U.S. currency at 39.61/62 in sync with the surge in domestic as well as Asian stock markets amid increased availability of dollar. The rupee moved between 39.60 and 39.73 at the interbank foreign exchange market. It had closed at 39.76/77 on Feb 13, its lowest level since November 28 last year.
The rupee premiums on forward dollar also recovered sharply on fresh paying pressure from banks and corporates. Foreign exchange dealers said anticipation of fresh capital inflows, the key driver for the Indian unit, in view of the rise in equity markets and expectations of foreign institutional investors turning active once again boosted rupee sentiment. A record FII inflows had pushed the rupee up by about 12 per cent against the dollar last year.
Other Stories
FM may cut duty to spur growth
Industry bodies like the Consumer Electronics & Appliances Manufacturers Association have sought a cut in excise duty from 16 per cent to 8 per cent. The general consensus, however, is that a moderate duty cut to 12 per cent could be in the offing.
Petro price hike just a drop in ocean for PSUs
IOC chairman said the increase in prices of diesel and petrol will substantially reduce the bonds in the next financial year.
India, China are not immune to crisis: IMF
The IMF MD also admits that the Fund had previously underestimated implications of the crisis in the US.
It is now clear that the IT and BPO sector will be hit by the US recession only in the future
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