Sunday, September 23, 2012

Recent Economic Reforms

Includes -
1. Raise in price of diesel by INR 5.
2. capping of subsidized domestic LPG cylinder to 6 per annum.
3. 51% FDI in multi brand retail.
4. ____ in single brand retail
5. ____ in civil aviation

Aftermath -

  • TMC with 19 MPs pulled out of the govt.
  • Bharat Bandh
  • Delhi state govt. will provide additional 3 subsidized cylinders for domestic purposes.
  • Excise and custom duty cut on domestic non-subsidized LPG cylinders.
  • FM P. Chidambaram has approved the operational features of Rajiv Gandhi Equity Savings Scheme (RGESS) to attract first time investors to stock market through a tax savings scheme. This will also act as an alternative to investment in gold.
  • FM also approved foreign borrowings through loan and long term infrastructure bonds. So, no case-by-case approval is reqd.
Salient Features of RGESS :
-- It will provide tax deduction of 50% for investments up to 50000 for investors whose annual taxable income in below 10 lakhs.

http://www.thehindu.com/todays-paper/tp-business/article3924675.ece
http://www.thehindu.com/todays-paper/tp-opinion/old-arguments-warmed-up/article3930494.ece

Insurance Sector (09/30/2012) :
FM Chidambaram announced a revival package for the life insurance sector.
Package includes -
1. Banks can act as insurance broker as they can sell products from multiple insurance companies. At present, they can sell only one company's under Bancassurance policy.
2. 49% FDI in insurance sector was approved by cabinet on 22nd Aug.

Next Wave of Reforms (10/05/2012) : http://www.thehindu.com/todays-paper/upaii-gambles-with-another-round-of-big-bang-reforms/article3966789.ece
Cabinet approved
   -  49% FDI in Insurance sector & Insurance Laws (Amendments) Bill, 2008 (http://www.thehindu.com/todays-paper/tp-business/fdi-in-insurance-hiked-to-49/article3966757.ece)
(http://www.thehindu.com/todays-paper/tp-business/playing-brinksmanship-to-promote-infrastructure/article3976022.ece)
   - Opening of Pension sector to Foreign Investment
   - Clearing Companies Bill, 2011
   - Amendments to the Competition Act, 2002
   - Foreign Contracts (Regulation) Amendment Bill, 2012


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