Rising fiscal deficit and Expenditure Need during Pandemic

Synopsis: The pandemic time demands enhanced government expenditure to support the vulnerable masses and ensuring their survival. Considering this, the government should enhance the spending on physical and human capital formation without worrying about a rising fiscal deficit. Background: The International Monetary Fund in its World Economic Outlook report had raised the growth forecast for… Continue reading Rising fiscal deficit and Expenditure Need during Pandemic

India needs to be cautious before joining Global Minimum Tax rate

Synopsis: A Global minimum tax rate is beneficial for the US. But India need to rethink before joining such international tax proposals Introduction: The US Treasury’s call for a global minimum tax rate is gaining a global endorsement. But the goal of a global minimum tax is not only to end the race to the corporate… Continue reading India needs to be cautious before joining Global Minimum Tax rate

Strengthening the National small savings schemes

Synopsis:  The government need to implement the recommendation of high-level committees in determining the interest rate of small savings schemes Background Recently, the government notified on reducing the interest rates on National small savings schemes. However, the decision to reduce the interest rates on small savings schemes was reversed within 12 hours of notification. Reducing… Continue reading Strengthening the National small savings schemes

What is “global minimum corporate income tax”?

What is the News? The US Treasury Secretary has urged the world’s 20 advanced nations to move in the direction of adopting a Global minimum corporate income tax. What is the Global minimum corporate income tax? It is a type of corporate tax. Under this, If a company moves some of its operations to another… Continue reading What is “global minimum corporate income tax”?

“HSN code” Made Mandatory for Certain Category of GST Taxpayers

What is the News? The Government makes the 6 digit HSN (Harmonized System of Nomenclature) code mandatory for a GST taxpayer having a turnover of more than Rs 5 crore in a financial year. This rule comes into effect from April 1,2021. About HSN Code: The HSN Code is a six-digit identification code. The World… Continue reading “HSN code” Made Mandatory for Certain Category of GST Taxpayers

The New EPF Tax Rules Should be Re-examined

Synopsis: A new EPF Tax Rules under EPF(Employees Provident Fund) contributions is under the proposal. The intended objective is to prevent abuse of process by HNIs (High net individuals), however, there are some concerns that demand re-examination. Background Before the budget announcement, the EPF contributions were taxable beyond the permissible tax-free limit (1.5 lakh per… Continue reading The New EPF Tax Rules Should be Re-examined

Discrimination in taxing provident fund (PF)

Synopsis: The Finance Minister has enhanced the Provident Fund(PF) limit up to 5 lakhs from the previously proposed 2.5 lakh. This is a discriminatory proposal for taxing PF and should be reconsidered. Background: The finance bill 2021 was passed with 127 amendments. This included a proposal to tax income on PF contributions over Rs. 2.5… Continue reading Discrimination in taxing provident fund (PF)

Similarities between Disinvestment and fiscal deficit

Synopsis: Selling of Public assets (Disinvestment) has similar macroeconomic results to fiscal deficit. Both increase wealth inequalities in the society and hence should be avoided. Background The government has set a target of 1.75 lakh crore rupees from the disinvestment of PSUs in the current financial year. The only rationale shown by the government behind… Continue reading Similarities between Disinvestment and fiscal deficit

What is FDI or Foreign Direct Investment?

What is the News? The Rajya Sabha has passed the Insurance (Amendment) Bill, 2021. The Bill seeks to raise the FDI in the insurance sector to 74% from the current 49%. Click Here to Read about Insurance in Amendment Bill,2021 About Foreign Direct Investment(FDI): Foreign Direct Investment(FDI) is the medium for acquiring ownership of assets… Continue reading What is FDI or Foreign Direct Investment?

Why Taxes on Fuel may increase in the future?

Synopsis:  Due to economic pressure, the center and states may increase taxation on fuel. The disparity between the taxation powers of the centre and states A taxation is an economic tool used by the government to raise revenues. The Supreme Court of India described taxation as a “sovereign” power. Taxation powers of a state cannot… Continue reading Why Taxes on Fuel may increase in the future?