The Modi government on Wednesday cleared a slew of measures aimed at propping growth up even as it promised to push for the crucial Goods and Services Tax Bill in Parliament, which finance minister Arun Jaitley said was stuck due to "unwarranted obstructionism" by the Congress.
Here's what the Cabinet said yes to:
1. The Cabinet cleared a 6% hike in dearness allowance for central government employees, which will be effective from July 1. The new DA will go up by 119 per cent from 113 per cent and will benefit over 1 crore central government employees and pensioners. The hike is in accordance with the accepted formula based on the recommendations of the 6th Pay Commission.
2. The Cabinet cleared gold Monetisation scheme to reduce the metal's demand in physical form and fish out idle gold lying with households and other entities.
The mobilized gold will also supplement RBI's gold reserves and will help in reducing the government's borrowing cost.
Here's what it means for you
a) A Gold Savings Account will be opened by customers at any time, with KYC norms, as applicable. This account would be denominated in grams of gold.
b) Collection and purity testing centres will send the gold to the refiners. The refiners will keep the gold in their ware-houses, unless banks prefer to hold it themselves. For the services provided by the refiners, they will be paid a fee by the banks, as decided by them, mutually. The customer will not be charged.
c) The deposits under the scheme can be made for a short-term period of 1-3 years (with a roll out in multiples of one year); a medium-term period of 5-7 years and a long-term period, of 12-15 years (as decided from time to time). Like a fixed deposit, breaking of lock-in period will be allowed in either of the options and there would be a penalty on premature redemption (including part withdrawal).
d) The amount of interest rate payable for deposits made for the short-term period would be decided by banks on basis of prevailing international lease rates, other costs, market conditions etc. and will be denominated in grams of gold. For the medium and long-term deposits, the rate of interest (and fees to be paid to the bank for their services) will be decided by the government, in consultation with the RBI from time to time. The interest rate for the medium and long-term deposits will be denominated and payable in rupees, based on the value of gold deposited.
e) For short-term deposits, the customer will have the option of redemption, for the principal deposit and interest earned, either in cash (in equivalent rupees of the weight of deposited gold at the prices prevailing at the time of redemption) or in gold (of the same weight of gold as deposited), which will have to be exercised at the time of making the deposit. In case the customer will like to change the option, it will be allowed at the bank's discretion.
f) A Gold Metal Loan Account, denominated in grams of gold, will be opened by the bank for jewelers. The gold mobilized under the short-term option will be provided to jewelers on loan, on the basis of the terms set-out by banks.
3. The Cabinet cleared sovereign gold bond scheme to cut demand for physical gold and help maintain India's CAD within sustainable limits. The salient features of the scheme are:
a) Sovereign Gold Bonds will be issued on payment of rupees and denominated in grams of gold. b) Bonds will be issued on behalf of Centre of India by the RBI. c) Cap on bonds that may be bought by an entity would be at a suitable level, not more than 500 grams per person per year. d) Rate of interest will take into account domestic and international market conditions and may vary from one tranche to another. e) Bonds will be available both in demat and paper form. f) Bonds can be used as collateral for loans.
4. Game-changer Spectrum trading guidelines gets nod. The Cabinet approved spectrum trading in all bands, which will increase efficient use of radiowaves by enabling telecom operators, who have a low subscriber base or unutilised spectrum lying with them, to trade in radiowaves. The salient features of the norms are:
a) Spectrum trading will be allowed only between two access service providers only outright transfer of right to use the spectrum from the seller to the buyer shall be permitted.
b) Trading will not alter the original validity period of spectrum assignment as applicable to the traded block of spectrum.
c) The seller shall clear all his dues prior to entering into any agreement for spectrum trading. Thereafter, any dues recoverable up to the effective date of transfer shall be the liability of the buyer.
d) A licensee shall not be allowed to trade in spectrum if it has been established that the licensee had breached the terms and conditions of the licence and the Licensor has ordered for revocation/termination of its licence.
e) Trading shall be permitted only on a pan-LSA (Licensed Service Area) basis.
f) Only that spectrum in the specified bands is permissible to be traded which has either been assigned through an auction in the year 2010 or afterwards, or on which the Telecom Service Provider (TSP) has already paid the prescribed market value (as decided by the Government from time to time) to the Government.
g) A telecom service provider will be allowed to sell the spectrum through trading only after two years from the date of its acquisition through auction or spectrum trading or administratively assigned spectrum converted to tradable spectrum.
h) Frequency swapping/reconfiguration from within the assignments made to the licensees will not be treated as trading of spectrum.
i) Both the licensees trading the spectrum shall jointly give a prior intimation for trading the right to use the spectrum at least 45 days before the proposed effective date of the trading.
5. Policy to put up offshore wind farms cleared. With this approval, Centre will bolster offshore wind energy plans and also carry out allocation of offshore wind energy blocks, coordination and allied functions with related ministries and agencies. The approval paves way for offshore wind energy development including, setting up of offshore wind power projects and research and development activities, in waters, in or adjacent to the country, up to the seaward distance of 200 Nautical Miles (EEZ of the country) from the base line.
6. The Cabinet okayed FDI, of up to 100 per cent, under the automatic route, in the activity of White Label ATM (WLA) Operations. This decision will ease and expedite foreign investment inflows in the activity and thus give a fillip to Centre's effort to promote financial inclusion in the country, including the Pradhan Mantri Jan Dhan Yojana.
7. Cabinet dropped plans to reconvene a session of Parliament to secure approval of a common goods and services tax (GST) because of political obstruction. The Cabinet recommended to President Pranab Mukherjee that he prorogue the monsoon session that had been kept alive since last month to allow for a consensus on the vital tax reform measure.
Here's what the Cabinet said yes to:
1. The Cabinet cleared a 6% hike in dearness allowance for central government employees, which will be effective from July 1. The new DA will go up by 119 per cent from 113 per cent and will benefit over 1 crore central government employees and pensioners. The hike is in accordance with the accepted formula based on the recommendations of the 6th Pay Commission.
2. The Cabinet cleared gold Monetisation scheme to reduce the metal's demand in physical form and fish out idle gold lying with households and other entities.
The mobilized gold will also supplement RBI's gold reserves and will help in reducing the government's borrowing cost.
Here's what it means for you
a) A Gold Savings Account will be opened by customers at any time, with KYC norms, as applicable. This account would be denominated in grams of gold.
b) Collection and purity testing centres will send the gold to the refiners. The refiners will keep the gold in their ware-houses, unless banks prefer to hold it themselves. For the services provided by the refiners, they will be paid a fee by the banks, as decided by them, mutually. The customer will not be charged.
c) The deposits under the scheme can be made for a short-term period of 1-3 years (with a roll out in multiples of one year); a medium-term period of 5-7 years and a long-term period, of 12-15 years (as decided from time to time). Like a fixed deposit, breaking of lock-in period will be allowed in either of the options and there would be a penalty on premature redemption (including part withdrawal).
d) The amount of interest rate payable for deposits made for the short-term period would be decided by banks on basis of prevailing international lease rates, other costs, market conditions etc. and will be denominated in grams of gold. For the medium and long-term deposits, the rate of interest (and fees to be paid to the bank for their services) will be decided by the government, in consultation with the RBI from time to time. The interest rate for the medium and long-term deposits will be denominated and payable in rupees, based on the value of gold deposited.
e) For short-term deposits, the customer will have the option of redemption, for the principal deposit and interest earned, either in cash (in equivalent rupees of the weight of deposited gold at the prices prevailing at the time of redemption) or in gold (of the same weight of gold as deposited), which will have to be exercised at the time of making the deposit. In case the customer will like to change the option, it will be allowed at the bank's discretion.
f) A Gold Metal Loan Account, denominated in grams of gold, will be opened by the bank for jewelers. The gold mobilized under the short-term option will be provided to jewelers on loan, on the basis of the terms set-out by banks.
3. The Cabinet cleared sovereign gold bond scheme to cut demand for physical gold and help maintain India's CAD within sustainable limits. The salient features of the scheme are:
a) Sovereign Gold Bonds will be issued on payment of rupees and denominated in grams of gold. b) Bonds will be issued on behalf of Centre of India by the RBI. c) Cap on bonds that may be bought by an entity would be at a suitable level, not more than 500 grams per person per year. d) Rate of interest will take into account domestic and international market conditions and may vary from one tranche to another. e) Bonds will be available both in demat and paper form. f) Bonds can be used as collateral for loans.
4. Game-changer Spectrum trading guidelines gets nod. The Cabinet approved spectrum trading in all bands, which will increase efficient use of radiowaves by enabling telecom operators, who have a low subscriber base or unutilised spectrum lying with them, to trade in radiowaves. The salient features of the norms are:
a) Spectrum trading will be allowed only between two access service providers only outright transfer of right to use the spectrum from the seller to the buyer shall be permitted.
b) Trading will not alter the original validity period of spectrum assignment as applicable to the traded block of spectrum.
c) The seller shall clear all his dues prior to entering into any agreement for spectrum trading. Thereafter, any dues recoverable up to the effective date of transfer shall be the liability of the buyer.
d) A licensee shall not be allowed to trade in spectrum if it has been established that the licensee had breached the terms and conditions of the licence and the Licensor has ordered for revocation/termination of its licence.
e) Trading shall be permitted only on a pan-LSA (Licensed Service Area) basis.
f) Only that spectrum in the specified bands is permissible to be traded which has either been assigned through an auction in the year 2010 or afterwards, or on which the Telecom Service Provider (TSP) has already paid the prescribed market value (as decided by the Government from time to time) to the Government.
g) A telecom service provider will be allowed to sell the spectrum through trading only after two years from the date of its acquisition through auction or spectrum trading or administratively assigned spectrum converted to tradable spectrum.
h) Frequency swapping/reconfiguration from within the assignments made to the licensees will not be treated as trading of spectrum.
i) Both the licensees trading the spectrum shall jointly give a prior intimation for trading the right to use the spectrum at least 45 days before the proposed effective date of the trading.
5. Policy to put up offshore wind farms cleared. With this approval, Centre will bolster offshore wind energy plans and also carry out allocation of offshore wind energy blocks, coordination and allied functions with related ministries and agencies. The approval paves way for offshore wind energy development including, setting up of offshore wind power projects and research and development activities, in waters, in or adjacent to the country, up to the seaward distance of 200 Nautical Miles (EEZ of the country) from the base line.
6. The Cabinet okayed FDI, of up to 100 per cent, under the automatic route, in the activity of White Label ATM (WLA) Operations. This decision will ease and expedite foreign investment inflows in the activity and thus give a fillip to Centre's effort to promote financial inclusion in the country, including the Pradhan Mantri Jan Dhan Yojana.
7. Cabinet dropped plans to reconvene a session of Parliament to secure approval of a common goods and services tax (GST) because of political obstruction. The Cabinet recommended to President Pranab Mukherjee that he prorogue the monsoon session that had been kept alive since last month to allow for a consensus on the vital tax reform measure.
Source:-The Economic Times
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