Naqvi defends PM Modi after archbishop calls for prayer campaign ahead of 2019 polls

Jan 6: India’s Finance Ministry has delivered a challenge to its revenue collectors: meet tax targets despite $20 billion of corporate tax cuts.

Through a video conference on Dec. 16, officials were exhorted to meet the direct tax mop-up target of 13.4 trillion rupees ($187 billion), a government official told reporters. Collection in the eight months to November grew at 5% from a year earlier, against the desired 17%.

The missive shows Prime Minister Narendra Modi’s urgent need to buoy public finances in a slowing economy where April-November tax collections were half the amount budgeted. Authorities withheld some payments to states and have capped ministries’ expenditure as the fiscal deficit ballooned beyond the target.

The government’s efforts to maintain its deficit goal goes against advice from some quarters, including central bank Governor Shaktikanta Das, who urged more spending to spur economic growth.

It’s uncertain though how much room Modi’s administration has to boost expenditure, given that it may already be borrowing as much as 540 billion rupees through state-run companies, a figure that isn’t reflected on the federal balance sheet. Uncertainty about public finances pushed up sovereign yields in November and December, compelling Das to announce unconventional policies to keep costs in check.

“This is not a time to conceal the fiscal deficit by off-budget borrowing or deferring payments,” said Indira Rajaraman, an economist and a former member of the Reserve Bank of India’s board. “If they were to stick to the target, that would be catastrophic because there is so much pump-priming that is needed right now.”

GDP grew 4.5% in the quarter ended September, the slowest pace in more than six years as both consumption and investments cooled in Asia’s third-largest economy. Only government spending supported the expansion, piling pressure on Modi to keep stimulating.

S&P Global Ratings warned in December it may downgrade India’s sovereign ratings if economic growth doesn’t recover. Government support seems to be waning now, with ministries asked to cap spending in the final quarter of the financial year at 25% of the amount budgeted rather than 33% allowed earlier. This new rule will hamstring sectors including agriculture, aviation and coal, where not even half of annual targets have been disbursed.

As the federal government runs short of money, it’s been delaying payouts to state administrations.

Private hospitals have threatened to suspend cash-less services to government employees over non-payment of dues, while a builder informed the stock exchange about delayed rental payments from no less than the tax office itself.

India is considering a litigation-settlement plan that will allow companies to exit lingering tax disputes by paying a portion of the money demanded by the government, the Economic Times newspaper reported Saturday.

The move will help improve the ease of doing business besides unlocking a part of the almost 8 trillion rupees ($111 billion) caught up in these disputes. The step, which is being considered as part of the annual budget, could also bridge India’s fiscal gap.

Finance Minister Nirmala Sitharaman has refused to comment on the deficit goal before the official budget presentation due Feb. 1.

A deviation from target, if any, “will need to be balanced with a credible consolidation plan further-out,” said Radhika Rao, an economist at DBS Group Holdings Ltd. in Singapore.

Mumbai, Jan 29: Unfazed by his suspension from flying on Tuesday, stand-up comedian Kunal Kamra on Wednesday claimed that he once again approached television journalist Arnab Goswami, who he said was his co-passenger on a flight from Lucknow, for an "honest discussion" but was turned away.

Kamra tweeted in the morning that "Arnab Goswami was again travelling in his flight while returning from Lucknow". "I again asked him politely if he wants to have a honest discussion he with his verbal arrogant hand jester he asked me to move away & I did that (sic)," he tweeted.

The comedian was suspended from flying by IndiGo and Air India on Tuesday after he allegedly heckled Goswami aboard a Mumbai-Lucknow plane and posted a video clip on his Twitter handle.

FYI - Arnab Goswami was in my
flight again this morning while returning from lucknow... I again asked him politely if he wants to have a honest discussion he with his verbal arrogant hand jester he asked me to move away & I did that...

— Kunal Kamra (@kunalkamra88) January 29, 2020

While IndiGo suspended Kamra from flying with it for a period of six months, Air India banned him until further notice.

In a statement released on Twitter after he posted the video, Kamra said he did "exactly what Republic TV journalists do to people in their private/public spaces". Kamra stated he had not done anything criminal by allegedly heckling Goswami.

New Delhi, Jan 27: The government on Monday issued the preliminary information memorandum for 100 per cent stake sale in national carrier Air India. As part of the strategic disinvestment, Air India would also sell 100 per cent stake in low cost airline Air India Express and 50 per cent shareholding in joint venture AISATS, as per the bid document issued on Monday.

Management control of the airline would also be transferred to the successful bidder.

The government has set March 17 as the deadline for submitting the Expression of Interest (EoI).

EY is the transaction adviser for Air India disinvestment process.