AIR SURCHARGE OF RS 4.00 FOR AGARTALA, RS 6.00 FOR PORT BLAIR & SILCHAR AND RS 5.00 FOR GUWAHATI & IMPHAL KOLKATA l TUESDAY l DECEMBER 27 l 2016 VOL XXVI NO 49 I 18 PAGES I Rs 4.00 READ TO LEAD Raju: It will take at least 8 to 9 years for Navi Mumbai airport to be built Civil aviation minister’s statement differs with CIDCO’s timeline of end-2019 Page 6 Farmers get 60-day grace period for loan repayment FARMERS who are facing constraints in repaying the crop loan dues get an additional grace period of 60 days, reports fe Bureau in Mumbai. The RBI on Monday said the government has allowed an additional grace period of 60 days for prompt repayment incentive of 3% to those whose crop loan repayments are due between November 1 to December 31, if such farmers repay the same within 60 days from that period. MoEF’s realty EC under NGT scanner THE environment ministry’s recent notification exempting real estate projects from obtaining prior environmental clearance has come under the scanner of the National Green Tribunal, reports PTI. The green body has sought the Centre’s reply on the issue. A plea alleges that the MoEF notification tries to “circumvent” the provisions of the EIA Notification, 2006, in the name of “ease of doing business”. HDFC Ergo, Liberty Videocon fined FinancialExpress.com Personal, corporate taxes to come down next year ■ Revenue gain from note recall gives room for moderate tax rates Around the world fe Bureau New Delhi, Dec 26 (corporation tax rate in %) A S the Budget 2017-18 is drawing closer, a significant moderation in the direct tax incidence on a vast majority of taxpayers is increasingly looking certain. On the personaltaxation(PIT)side,taxpayers at the bottom of the pyramid — those with annual tax outgo of less than R2 lakh and forming over 80% of thePITbase--couldgetthe highest benefit as both the exemptionthresholdandthe slabsarebeingrestructured. Corporate tax rate could also see a steep reduction, of even 3 percentage points, to 27%, in line with the 2015-16 budget announcement to bring it down to 25% in four years. Last year, the finance minister had virtually gave thetaxreductionplanapass, as he reduced the rate to 29% for firms with turnover up to R5 crore and left the rate for othersunchangedat30%. The PIT recast, despite thegainstothesmalltaxpayers, won’t need a big revenue INSURANCE regulator Irdai has imposed a total fine of R30 lakh on HDFC Ergo and Liberty Videocon General Insurance for violating norms, including on outsourcing and file and use, reports PTI. Both the insurers have been penalised with a fine of R15 lakh each. FE Specials Edit PAGE 8 MERGER SCHEMES: CHANGE OF LAW, AND GUARD The new law is in alignment with international practices, particularly on contractual and overseas mergers VaibhavGupta& SamudraAcharyya 15-39* USA 23-33 33.33 Germany France SO WHAT DID THE PM SAY? SEE EDIT: PAGE 8 sacrifice while it could give a significant boost to consumption: Just over a quarter of the the government’s PIT income comes from those with annual tax outgo of less than R2 lakh. At the RANSACTIONS on the Unified Payments Interface (UPI) platform have crossed the one million-mark in December, reports Shritama Bose in Mumbai. Moreover, in just over a month of its launch, SBI Pay— State Bank of India’s UPI app —has seen 5,00,000 downloads. Data from Reserve Bank of India (RBI) show total UPI transactions between December 1 and December 22 at 1.2 million valued at R457.07 crore. This is up from 0.3 million transactions in November valued at R90.5 crore. The average ticket size has risen to R3,808 in December from R3,016 in November. While digital payments have increased post the withdrawal of high currency notes on November 8, the jump in UPI-based transactions can be partly attributed to the fact that two large lenders— SBI and HDFC Bank — joined the platform on November 23. With this, 33 banks have joined the platform and 27 banks have their own UPI apps. HDFC Bank does not have a separate UPI app. Punjab National Bank, IDFC Bank, Union Bank, Allahabad, Canara Bank and Bank of Maharashtra all have separate UPI apps. ■ Continued on Page 2 Size of transactions made through UPI November Up to Dec 22 ATTACKS IN BERLIN Killings at a Christmas market test Germany’s nerve 457.07 90.5 Value (R cr) UK 25 China 35# Japan 30** India * at the federal level, extra income/capital-based levies in many states; ^ to decrease to 19% from April 1, 2017; # 24% plus “local income taxes:”; **plus surcharge and cesses Source: Ernst &Young It’s a million hits on UPI T Exclusive PAGE 16 20^ 1.2 0.3 Volume (million) Source: RBI same time, the post-demonetisation crackdown on tax evaders would help expand the tax net, besides enhancing, on a permanent basis, the tax liability of a large number of assessees, sources explained. Government officials had earlier talked about a R2 lakh crore targetunderthenewincome disclosure scheme PMGKY, withataxrateof 50%. DIPP asked by PMO to pick low-hanging fruit for Budget Banikinkar Pattanayak New Delhi, Dec 26: The departments of commerce as well as industrial policy and promotion are focussing on measures that are important and yet have “limited budget implications” so that they can be considered for inclusion in the upcoming Budget papers, senior government officials told FE. The process started after a directive from the Prime Minister’s Office (PMO) to identify all those steps that are crucial in terms of their potential impact on the economy and job creation and yet cost less to the exchequer, in addition to the usual “large measures”, said one of the officials. “The aim is to go for particularly low-hanging fruit with limited budget implications,” said another official. The panel involved in this exercise is headed by commerce secretary Rita Teaotia and comprises senior officials of both the commerce and industry ministries. ■ Continued on Page 2 QUICKPICKS Sebi puts in place REIT disclosure norms Weak demand puts gold prices at 11-month low Essar Oil posts record R2,162-cr profit in FY16 PUTTING in place disclosure norms for real estate investment trusts (REITs), Sebi on Monday said the offer document will contain financial information, related-party transactions and past performances, reports PTI. The move comes after Sebi earlier this month had issued detailed norms for public issuance of REITs. In a circular issued on Monday, Sebi said the offer document would contain financial information of last three financial years. ■ P11 GOLD prices slumped by R250 to hit an over 11-month low of R27,550 per 10 gram at the bullion market on Monday due to weak demand from jewellers and lower advices from futures trade, reports PTI. Silver also fell by R210 to R38,600 per kg on reduced offtake by industrial units and coin makers. Traders said persistent fall in demand from jewellers and retailers in view of prevailing cash crunch largely weighed on gold prices. ■ P14 ESSAR Oil on Monday said it earned a record net profit of R2,162 crore in the 2015-16 fiscal on back of robust refining margins, reports PTI. It informed that it earned a highest-ever $10.81 on turning every barrel of crude oil into fuel during the fiscal as compared to a current price gross refining margin of $8.37 a barrel in the previous year. Essar Oil got delisted from stock exchanges last year and is, therefore, not obliged by regulations to report quarterly numbers. ■ P5 International, Page 16 International, Page 16 P U B L I S H E D F R O M : A H M E DA B A D, B E N G A LU R U, C H A N D I G A R H , C H E N N A I , H Y D E R A B A D, KO C H I , KO L K ATA , LU C K N OW, M U M B A I , N E W D E L H I , P U N E In the news SAUDI ARABIA TO LEVY EXPAT FEE ON WORKERS LAST CHRISTMAS FOR GEORGE MICHAEL; PASSES AWAY AT 53 “A lower level of taxation that is globally compatible is necessary if the country has to have a broader base of economy” ARUN JAITLEY, Finance Minister A 3 percentage points cut in corporate tax rate could, however,bemoreonerouson the exchequer, but the government reckons that with the stricter implementation of steps to curb tax evasion and frustrate aggressive tax planning — and with the phasing out of exemptions —, the revenue drain could beminimised. ■ Continued on Page 2 twitter.com/FinancialXpress facebook.com/TheFinancialExpress FinancialExpress/Apps Markets spooked by PM’s tax talk, Sensex at 5-week low Bloomberg Mumbai, Dec 26 SENSEX D 26,000 OMESTIC stocks fell to the lowest level in more than a month after Prime Minister Narendra Modi hinted at raising taxes on income from share trading. Tax payment from individuals profiting from stock-market investments is low and there’s a need to find ways to ensure levies are raised in a fair, efficient and transparent way Modi said , over the weekend. The benchmark Sensex dropped 0.9 % at the close in Mumbai. The gauge, now down 1.2% for 2016, has fallen for nine of the past 11 days amid concern a cash crunch caused by the government’s move to invalidate high-value bank notes will crimp economic growth. Overseas investors have Intra-day, Dec 26 Prev. close: 26,040.70 25,992.41 25,925 25,807.1 25,850 25,775 25,700 Open Close R/$ Intra-day, Dec 26 67.70 67.75 (Inverted scale) 67.74 67.81 67.80 67.85 67.90 Open Close sold almost $500 million of local stocks this month, after a $2.6 billion net outflow in November, as uncertainty over economic growth and corporate profits persisted after India’s decision on November 8 to ban high-denomination banknotes. State Bank of India retreated 2% while Axis Bank lost 1.4 % in a seventh day of declines, the longest losing run since January 2014. , Twenty five of the 30 members on the benchmark S&P BSE Sensex fell. Cipla slipped 4.7% and Lupin declined 3%. Monday’s trading volume on the NSE Nifty 50 Index was 40% lower than the 30-day mean. “Fears of excessive taxation by the government and the cash crunch is leading the market fall,” Chakri Lokapriya, the Mumbaibased managing director at TCG Advisory Services, which manages about $3 billion, said by phone. ■ Continued on Page 2