The terms for the goods and service tax (GST) could get diluted. On Wednesday, finance minister Pranab Mukherjee proposed a new structure for the tax that includes major concessions for the states. The concessions include imposing different tax slabs that don’t include petroleum products, alcohol, electricity, and real estate. Under Mukherjee’s proposal, starting next fiscal, there’ll be a 20% tax on goods, a 12% tax for so-called mass items, and a 16% tax on services. Those rates will then start merging until they reach a uniform 16% in three years. The GST aims to replace several indirect taxes and create a common market across the country. It’s scheduled to be rolled out on 1 April 2011.
And while the Centre may have made many concessions to states on GST, it’s looking to take control of key aspects of the tax. The draft constitutional amendment proposes to give the Centre veto powers over rates. On the flipside, the Centre will not be able to change GST rates by itself.
Another major government’s proposal this week could make acquisitions more expensive for Indian companies. On Monday, markets regulator Sebi suggested an overhaul of takeover regulations that will make life easier for incumbents and harder for corporate raiders. As per the proposed changes, the threshold for open offers will go from 15% to 25%. But once a company crosses that mark it will also have to make an open offer to buy 100% of the company’s shares. Under existing rules, buyers only need to make open offers for 20% after acquiring a 15% stake.
Some of India’s most important banks announced their quarterly numbers during the week. HDFC Bank met analysts expectations with its net profit shooting up almost 33.9% to Rs812 crore in the quarter ending June. Net interest income rose 29.4% to Rs2,401 crore.
On Wednesday, Yes Bank announced a 56% increase in net profit to Rs156 crore. Its net interest income climbed 67% to reach Rs262 crore. Its numbers were driven by strong credit growth that came largely from 3G auction payments.
A new study said the proposed aforestation programme could help suck up more greenhouse gases than previously thought. The report from the Indian Institute of Science says the scheme could offset 10.5% of projected emissions. That’s compared to an environment ministry estimate of 6.4%. The proposed Green India Mission plans to restore and add ten million hectares of forests over the next ten years.
A train accident in West Bengal on Monday morning left over 60 passengers dead. The deadly mishap occurred when an express train rammed into the rear of a waiting train at the Sainthia station. Over 150 other passengers were wounded.
The Andhra Pradesh high court has granted bail to five of the accused in the Satyam accounting fraud case. Those out of prison include the company’s former MD, B. Rama Raju. Not given bail is his brother and Satyam founder B. Ramalinga Raju.
On Friday, the prime minister’s chief economic advisor, C. Rangarajan said inflation was currently the biggest threat to India’s economic growth. Rangarajan also said monetary policy had to be tightened.
Ratan Tata is all set to lead a new joint venture to assemble helicopters in India. The head of the Tata group will take over as chairman of Indian Rotorcraft. Tata Sons owns 74% stake of the company and AgustaWestland the remaining 26%.