News This Week

Massive Spike In Share Of External Financing In Q1 FY21: Report

The share of external financing has jumped to 4.5 per cent in Q1 FY21 from 1.6 per cent in the same quarter last fiscal. In terms of the quantum, it has skyrocketed by 325 per cent Y-o-Y, says a report analysing the fiscal numbers of the government.

The government has run 83 per cent of its borrowing target as of June, according to official numbers released on July 31, due to the impact of the pandemic that crippled the economy.

The massive spike in the share of external sources of funding the fiscal deficit comes even as it has been continuing financing primarily through domestic sources, as much as 96 per cent, according to an analysis by CARE Ratings.

"The share of external financing in the current financial year has jumped from 1.6 per cent as of Q1 of FY20 to 4.5 per cent in Q1 of the current fiscal. In terms of the quantum of external financing, this is a massive 325 per cent higher year-on-year during the first quarter," says the report without quantifying the actual numbers.

IRDAI Allows Life Insurers To Issue Policies Electronically Amid Pandemic

Amid rising cases of coronavirus and disruption in normal business activities, regulator IRDAI on Tuesday allowed life insurers to issue life insurance policies electronically.

The Insurance Regulatory and Development Authority of India (IRDAI) issued a circular exempting the life insurance companies from the requirement of issuing policy documents and copy of proposal form in physical form, subject to certain conditions.

This exemption will be valid for all policies issued during 2020-21, it said.

Exchange's Subsidiary To Administer, Supervise Registered IAs, Says Sebi 

Amid a growing number of registered investment advisers, markets regulator Sebi on Thursday said a wholly-owned subsidiary of a stock exchange can administer and supervise such advisers.

Besides, the regulator put in place the criteria for grant of recognition to a stock exchange's subsidiary and its responsibilities.

"Considering the growing number of registered Investment Advisers (IAs), it is decided to recognize a wholly-owned subsidiary of the stock exchange (stock exchange subsidiary) to administer and supervise IAs registered with Sebi," the regulator said in a circular.

Taxpayers Deserve Better Services, Says Sitharaman

Finance Minister Nirmala Sitharaman on Friday said taxpayers are nation-builders and the government would come out with a charter of rights for them. 

The minister also informed that the government has taken several measures towards simplification, improving transparency and moderation in rates as part of efforts to bring in ease for honest taxpayers. 

"I am happy that we are part of a government being led by a Prime Minister who honestly believes that the Indian taxpayer needs to be served better. And one of the announcements, which of course I made and I shall not elaborate on it now, is to give the Indian taxpayer a charter of its rights," she said. 

Sitharaman emphasised that Prime Minister Narendra Modi addresses taxpayers as 'nation-builders' and an honest taxpayer helps build this country. He has made it clear that this country has to make tax structure simple and easy for taxpayers, she added. 

To fulfil this objective, the government has introduced faceless assessment, reduction in scrutiny, and pre-filled tax form, among others. 

RBI Eases Norms For Banks’ Debt MF

With a view to expanding the bond market, the RBI on Thursday permitted banks to invest in debt instruments through mutual funds or exchange-traded funds without allocating additional charges. 

As per RBI's extant Basel III guidelines, if a bank holds a debt instrument directly, it would have to allocate lower capital as compared to holding the same debt instrument through a Mutual Fund (MF)/Exchange Traded Fund (ETF). 

"It has been decided to harmonise the differential treatment existing currently. This will result in substantial capital savings for banks and is expected to give a boost to the corporate bond market," RBI Governor Shaktikanta Das said while unveiling the bi-monthly monetary policy review. 

Hence, it has been decided that the general market risk charge of 9 per cent will apply on both direct holdings, as well as through mutual funds/ETFs. 

Compiled from Press Trust of India