Budget 2018: India eyes doubling of foreign tourists to 20 mn by 2020: Alphons

India is doing very well internationally and is 13th in terms of foreign tourists arrival and 7th in the Asia Pacific, the minister said

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India, which saw a record number of Foreign Tourist Arrivals (FTA) of 10 million in 2017, is targeting to double this number in next three years, Minister of State Tourism K J Alphons on Thursday said.

“We crossed 10 million FTAs in 2017 and if we include non-resident Indians visiting the country then the number went up to over 17 million. In dollar terms our earnings have gone up by 20.2 per cent, which is a very good growth compared to the world tourism that grew by less than five per cent,” the minister said on the sidelines of OTM 2018.

These are very encouraging numbers and the government is working towards doubling both the FTAs and foreign exchange earnings in the next three years, he added.

“To make this possible we are working with the state governments and with the industry, as they have a big role to play. So we are all working together and make this possible,” he said.

India is doing very well internationally and is 13th in terms of foreign tourists arrival and 7th in Asia Pacific, the minister said.

“We are getting good spenders who are contributing 6.88 per cent to the GDP and we are also contributing 12.6 per cent to the employment,” he added.

On the upcoming Tourism Policy, Alphons said, it should be out in two or three months, as “we are incorporating new ideas”.

When asked about expectation in Budget 2018, he said “We are hoping to get more than last year…I hope they will be generous in the budget allocation.”

Maharashtra Tourism Minister Jaykumar Rawal, who was also present at the event, said Mumbai has one of the best airports in the world and is also building a world-class cruise port.

“We are building an international cruise port with an investment of Rs 5,000 crore, which funded by the government at Mazagon Dock. It will be operational by 2020,” Rawal added.

In the 3-day OTM 2018, which is organised by Fairfest Media, over 45 countries, over 21 states and Union Territories and over 1,100 exhibitors are participating.

 

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Budget 2018: As jobs remain big headache, govt looks at tax tweaks for fix

One way the government could give job creation a boost is by tweaking taxation laws to provide companies an incentive for hiring

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Job creation is one of Modi government’s biggest challenges, with the Opposition using what it calls the government’s poor performance in this regard as a stick to beat the prime minister’s economic policies with. With Budget 2018 less than a month away, and with employment generation reportedly being a key theme this year, one way the government could give job creation a boost is by tweaking taxation laws to provide companies an incentive for hiring.

India already provides tax benefits to incentivise job creation by companies. However, according to a Times of India report, certain lacunae in the rules have kept many companies, particularly from the services sector, from reaping the benefits of such incentives. In view of this, according to the national daily, the government could tweak Section 80JJAA — which sets out conditions under which a company can avail of deductions in respect of employment of new employees — of the Income Tax (I-T) Act or introduce some new provision.

Under the Section, 30 per cent of the additional employee cost is available to the concerned company as a deduction for three years, including the year of hiring the new employee(s). Only companies having a turnover of Rs 10 million or more are eligible to claim benefits for any new employment created by them. The devil, however, is in the details. Among the Section’s various conditions under which a new worker is not considered an additional employee, two in particular seem to have negatively impacted job creation, according to the national daily. Firstly, if a person is employed for less than 240 days in the first year of his employment with the concerned company, then he or she is not considered an additional or new employee. Only the textile sector enjoys a lower threshold of 150 days in this regard. Secondly, an employee whose total emoluments are more than Rs 25,000 per month is also not considered an additional employee — the salary of such an employee is excluded when computing additional employee cost, against which the benefit is available.

What are the possible remedies?

Experts have pointed out the difficulties such conditions pose. Speaking to the national daily, EY India partner & national tax leader Sudhir Kapadia explains that employees hired from August onwards are subject of “significant uncertainty” for the company as they cannot complete the stipulated 240 days in the first year of their employment.

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Budget 2018: Modi govt targets disinvestment receipts of Rs 900 billion

The ONGC-HPCL deal is likely to fetch the government Rs 300 billion, the report said quoting sources

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Eyeing Rs 1 trillion Budget 2018 target through disinvestment for next fiscal, the Modi government may end FY18 with Rs 900 billion selloff, almost twice the record figure of Rs 460 billion achieved last year, on the back of its stake sale in Hindustan Petroleum Corporation (HPCL) to Oil and Natural Gas Corporation (ONGC), according to The Time of India report.

The deal is likely to fetch the government Rs 300 billion, the report said quoting sources.

The sale of the government’s stake in HPCL to ONGC is stuck on valuation. According to persons close to the development, the effort was to close the deal before the end of this month but the government was looking at getting a higher value for its 51.1 per cent stake in HPCL.

Based on the current market capitalisation, a 51 per cent in HPCL is valued at Rs 323 billion, about Rs 23 billion higher than in last July when the Union Cabinet had cleared the sell-off. However, reports suggest that after evaluating the marketing network, physical assets and brand value of HPCL, the valuation could be around Rs 450 billion.

The Cabinet Committee on Economic Affairs had given in-principle approval for the strategic sale on July 19 last year.

The government’s non-tax revenue is hugely dependent on the deal. As on January 2, total disinvestment proceeds for 2017-18 stood at Rs 538 billion against the target of RS 725 billion set by Finance Minister Arun Jaitley. If the ONGC-HPCL deal works out, this will be first time since 2009 that the government would be surpassing the disinvestment target.

Budget 2018: Private investors seek pass-through of losses at fund level

As per existing regulations, if there are losses in a fund at the end of its life, the same cannot be passed onto its investors

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At a time when Finance Minister Arun Jaitley and his team would be getting set for Union Budget 2018-19, the private equity industry is seeking a pass-through of losses at the fund level for Category 1 and Category 2 alternative investment funds (AIFs).

According to the existing regulations, if there are losses in a fund at the end of its life, the same cannot be passed onto its investors. ‘‘This is a big issue with VC or infra funds. Over a fund life of eight-to-nine years, a fund may end up with one or two loss-making firms,” says Gopal Srinivasan, president, Indian Private Equity & Venture Capital Association.

The regulations say that profits can be passed onto investors, but losses have to be kept at the fund level. Interestingly, Sebi’s original venture capital regulations of 1996 allowed this. These were replaced by Sebi’s AIF regulations in 2012. ‘‘If the pass-through is allowed, investors will take more risks. They won’t mind taking losses in one or two companies if they know they will get the full benefit,” says Srinivasan.

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Budget 2018: Will Modi govt fulfil housing expectations of millions?

To provide relief to home buyers as well as encourage investment in under-construction properties

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The “Housing for All by 2022” mission has set the stage for a robust recovery in the residential property market. In the past two years, we have seen an unprecedented focus on reforms channelised through the Benami Transactions (Prohibition) Amendment Act 2016, demonetisation, Real Estate Regulatory Act (RERA) and the Goods and Services Tax (GST) regime. So, this time, the Budget for FY2018-19 will be much more critical than ever. The provisions, if moved in positive directions, will have the power to continue the momentum and cement home buyers’ confidence.

While so many tough decisions have already been taken, it will be worthwhile to rationalise further the direct tax structures impacting home buyers. I believe that there is room for improvement in some of the prime income tax (IT) provisions meant to incentivise the home buyers.

Deduction on home loan interest: The IT Act has provisions under which a home buyer can claim a deduction on home loan interest paid towards an under-construction property, in five equal instalments for five financial years. But this deduction is included in the overall deduction amount of Rs 2 lakh that one can claim in a financial year.

Also, the condition of equal deduction during five years leaves limited room for home buyers to claim benefit of the current year’s interest paid. Buyers can claim the benefit only after receiving possession of the property and thus there is no benefit during the construction period. Given so many properties are delayed in possession, the interest component paid during construction can also become very high.

Sample this: A home buyer pays Rs 7.5 lakh over five years of construction period as interest towards home loan. In this case, he can claim Rs 1.5 lakh every year, but then this amount is included in the overall limit of Rs 2 lakh, thus making no significant impact on his taxable income.

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Budget 2018: India cuts extra market borrowing needs by 60% to $3.1 billion

The news sent benchmark 10-year bond yields down over 15 basis points

1502738041-5345India has cut its additional market borrowing requirement by more than half for the financial year ending in March to Rs 200 billion ($3.13 billion), Economics Affairs Secretary S C Garg said on Twitter.

The news sent benchmark 10-year bond yields down over 15 basis points.

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Last month, the finance ministry had said that the government is likely to borrow additional Rs 500 billion ($7.79 billion) in 2017/18 fiscal year that ends in March.

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Budget 2018: Council may cut GST rates for 70 items; 40 on revision list

Aiming to boost the struggling agriculture and rural economy, and encourage clean energy, the Council is expected to rationalise rates

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A fortnight ahead of the Union Budget 2018, the Goods and Services Tax (GST) Council is likely to take up rationalisation of rates of about 70 items, of which at least 40 are services. Amendment in rules may also be taken up to simplify filing and plug some of the loopholes. A fitment committee of officers has made these recommendations to the Council, which will meet on Thursday.

With the aim to boost struggling agriculture and rural economy, and encourage clean energy, the Council is expected to rationalise rates of agriculture implements and unconventional fuel buses. It is the last Council meeting before Finance Minister Arun Jaitley presents his last full Budget on 1 February, before general elections in 2019.

“Around 40 to 50 services will be taken up for a rate revision in the Council meeting. These are services that were earlier exempt but were taxed under the GST regime. They are facing issues,” said a government official.

Agriculture implements that are currently taxed up to 18 per cent may come under the 12 per cent or the 5 per cent bracket.

Agriculture sector growth is projected to fall to 2.1 per cent in FY18 because of an expected drop in the rabi harvest, an almost 3 per cent fall in kharif production, according to Advance Estimates by the Central Statistics Office. In the earlier meetings, the Council had lowered the rate on tractor parts from 28 per cent to 18 per cent.

In the last full Budget of the National Democratic Alliance government, measures to give a push to the rural, and small enterprise sectors are likely.

Among others, bio-diesel buses, which attract 28 per cent GST, may see a downward revision. Karnataka is one of the states to have given a big push to bio-diesel buses that are environment friendly. Karnataka State Road Transport Corporation (KSRTC) has inducted a slew of buses that run on bio-diesel. Click Here