There are two aspects to the news- knowing the headline and understanding the intricacies of it. We at The Connectere focus on both. While The First Forum edition gives a brief about the headlines, The Weekly Analysis Edition is meant to educate the reader on what do various news mean and what are their intricacies. This initiative is meant to educate the reader on how to understand the important news. In the Forty Seventh Edition we are covering the following news:
- Govt inviting suggestions on the Blue Economy Policy
- CBDT to keep double tax avoidance, international practices in view on NRI tax residency
- SEBI eases norms for IPO of large entities
- India begins probe to continue anti-dumping duty on some steel imports from China
The ‘Blue Economy’ is an emerging concept that encourages better stewardship of our ocean or ‘blue’ resources. The Ministry of Earth Sciences (MoES) has rolled out the draft blue economy policy in the public domain, inviting suggestions and inputs from various stakeholders, including industry, NGOs, academia and citizens. It is in line with the Government of India’s Vision of New India by 2030. The draft, prepared by the economic advisory council to the Prime Minister outlines the vision and strategy that can be adopted by the government to utilise the plethora of oceanic resources available in the country. It aims to enhance the contribution of the blue economy to India’s GDP by around 4%, improve the lives of coastal communities, preserve marine biodiversity, and maintain the national security of marine areas and resources. Let’s see the essence of this policy.
The blue economy occupies a vital potential position in India’s economic growth.
It could well be the next multiplier of GDP and well-being, provided sustainability and socio-economic welfare are kept centre-stage. It emphasizes policies across several key sectors to achieve holistic growth of India’s economy. It aids the production of goods and services that have clear linkages with economic growth, environmental sustainability, and national security. It is understood as a subset of the national economy comprising an entire ocean resources system and human-made economic infrastructure in marine, maritime, and onshore coastal zones within the country’s legal jurisdiction.
Therefore, India’s draft blue economy policy is envisaged as a crucial framework towards unlocking the country’s potential for economic growth and welfare. Most importantly, it is the 17 sustainable development goal (SDG), also known as the Global Goal adopted by the United Nations member states including India. SDG 14 seeks to conserve and sustainably use the oceans, seas and marine resources for sustainable development. Several countries have undertaken initiatives to harness their blue economy. For instance, Australia, Brazil, the United Kingdom, United States, Russia, and Norway have developed dedicated national ocean policies with measurable outcomes and budgetary provisions. Canada and Australia have enacted legislation and established hierarchical institutions at federal and state levels to ensure progress and monitoring of their blue economy targets. With a draft blue economy policy framework of its own, India is now all set to harness the vast potential of its ocean resources.
The Central Board of Direct Taxes (CBDT) is evaluating a number of facets together with double taxation avoidance, greatest practices by different nations, and tax treaties, earlier than arriving at a view on figuring out tax residency for non-resident Indians or NRIs having overstayed in India in FY 21. They want to make sure that it should not be the case that NRIs income becomes tax-free in India as well as their home country being a loss for both at the same time.
Measures or instructions taken by nations such because the US, UK, and others would even have to be thought-about such that the view India takes is in line with international friends. Several nations in Europe and the UK have initiated second or third waves of lockdowns due to resurgence in Covid 19 circumstances at the same time as vaccination drives have begun. CBDT also has to look at tax treaties before formalizing a view. However, the most important problem the Board is going through is an assortment of knowledge of the variety of folks having bought impacted by overstay and lack of readability of guidelines. The officials added that whereas international journey for many a part of FY 21 was barred and opened up later on in a restricted method, the precise quantity of people that could have stayed greater than 182 days could be robust to confirm. Data could be important for figuring out the size of reduction that the Board wants to present, and therefore formulate its response to the Supreme Court. The SC has given CBDT three weeks to determine on reduction to be granted to NRIs on the fee of revenue tax for the continued monetary year. It is listening to a petition filed by an NRI who had stayed more than 182 days in India due to the lockdown and subsequently could have to pay tax in India on his world revenue. The Board had issued a clarification in May final year for FY20, on the facet of residency beneath Section 6 of the I-T Act whereby numerous relaxations have been offered to NRIs who couldn’t journey again to their nation of labor or residence due to the lockdown. CBDT has not issued any round for fee of revenue tax by NRIs staying past 182 days in India due to the pandemic in FY 21.
A thorough study should ensure that these people don’t escape a tax liability from both nations thus adding some part to both countries depending on various facts of residence and the various treaties but even if a small proportion added, the government revenue will increase and at the same time justice served.
The most unexpected announcement at Budget was the proposed disinvestment of Life Insurance Corporation of India (LIC) as the government proposed to sell a part of its holding in LIC by way of an IPO. They are hoping that the listing would bring discipline while allowing retail investors to participate in wealth creation. But the plan to sell the stake has been marked by complications given the sheer size of the state-run company.
To put things in perspective, just a 10 per cent share sale to the public is pegged to be at least Rs 1 lakh crore, which will be tough for the market to absorb. India’s largest financial institution with assets of over Rs 32 lakh crore facing hurdles before the IPO. To deal with it, market regulator SEBI has relaxed the norms to make the listing process easier and smooth for large entities like LIC, making it easier for the government to sell a part of its stake through IPO.
As per the new norms now, for any company with a post-issue market capital of above Rs 1 lakh crore, the IPO size will have to be Rs 10,000 crore plus 5 percent of the incremental market capitalisation amount. It means large companies can now divest a minimum of 5 per cent in the IPO, instead of 10 per cent. Further, they will get five years, instead of three, to raise the public float to 25 per cent. The Central government will hold at least 75% in LIC for the first five years post the IPO, and subsequently, hold at least 51% in the insurer at all times after five years of the proposed IPO. This move eases the minimum offer and public holding norms will allow the government more time to abide by rules and pave the way for the much-awaited mega float of Life Insurance Corporation (LIC). This would also encourage large firms to opt for listing.
The government is betting on diluting its stake in state-run LIC via an IPO in the coming fiscal in an attempt to garner enough non-tax revenues to narrow the country’s fiscal deficit. LIC, which is preparing for its IPO and is currently undergoing an evaluation process by actuarial firms, will be the biggest beneficiary of this relaxation by Sebi.
India has begun an investigation on the need to continue an anti-dumping duty on the imports of certain seamless tubes, pipes, hollow profiles of iron and steel from China based on complaints filed by ISMT Limited and Jindal Saw Limited. The applicants have alleged that dumping of these products from China has continued even after the imposition of anti-dumping duty, and there has been a significant increase in the volume of imports. The duty on the product was first imposed in February 2017 and is set to expire on May 16 this year. As per the notification issued by the Directorate General of Trade Remedies (DGTR), there is a likelihood that such activities would continue if such duties were to expire or removed thus bringing us back to square one in our problem. The period of investigation is April 1, 2019, to September 30, 2020.
Based on the duly substantiated application of the applicants and having satisfied itself, on the basis of the prima facie evidence submitted by the domestic industry, substantiating the likelihood of continuation or recurrence of dumping and injury, DGTR had declared that it initiates a sunset review investigation.
The DGTR, the quasi-judicial investigation arm of the commerce and industry ministry, has also begun a separate sunset review anti-dumping investigation in imports of Viscose Staple Fibre from China and Indonesia based on a complaint filed by the Association of Man-Made Fibre Industry of India on behalf of Grasim Industries Limited. The duty was first imposed on July 26, 2010, and then extended. The existing duties will expire on August 7, 2021. The period of investigation for the present investigation is September 1, 2019, to October 31, 2020.
While the other country might not be very happy from such duties being charged but there seems to be no option left for us as we could either keep an outside nation happy or let our markets prosper or rather survive. As unethical as it could ever get in dumping, it is only fair for India to continue with such duties to protect its own interests first. It is hoped that the new investigation shall ensure that the duties continue if not to be increased.