31 Dec, 2015
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Deepak Mohanty Committee on Financial Inclusion
The RBI committee on pushing Financial Inclusion submitted its report on 28 December 2015. The committee recommended a slew of measures, including a special deposit scheme for the girl child, government-to-person social cash transfer, and opening interest-free windows (Islamic banking) by banks. Who headed this committee? – Deepak Mohanty (Executive Director, RBI)
The committee (titled ‘Medium-Term path on Financial Inclusion’) was constituted in July 2015 with the objective of working out a medium-term (five-year) measurable action plan for financial inclusion. It was chaired by Deepak Mohanty, RBI executive director.
Important Recommendations of the Deepak Mohanty Committee:
- Banks have to step up account opening for women
- Union Govt. should consider a welfare scheme (Sukanya Shiksha) for promoting financial inclusion of women that can be jointly funded by the Central and State governments
- Need for better use of the mobile banking facility for Government-to-Person (G2P) payments, and this would push government in its financial inclusion drive
- A unique biometric identifier such as Aadhaar be linked to each individual credit account and the information should be shared with credit information companies
- Commercial banks in India must be enabled to open specialised interest-free windows (primarily for Islamic banking) with simple products
- The committee pressed for digitisation of land records to increase formal credit to all agrarian segments
Usha Thorat Committee on Small Banks
The Reserve Bank of India on 3 February 2015 constituted a committee to evaluate applications received for the proposed small finance banks. Who headed this committee? – Usha Thorat, former Deputy Governor of RBI
Nachiket Mor on Payments Banks
The Reserve Bank of India on 3 February 2015 constituted a committee to evaluate applications received for payments banks. Who headed this committee? – Dr. Nachiket Mor, Director, Central Board, RBI
Gandhi Committee on UCBs
The Reserve Bank of India (RBI) on 30 January 2015 constituted a 7-member committee on urban cooperative banks (UCBs). The committee will primarily re-examine and recommend appropriate set of businesses, size, conversion and licensing terms for the UCBs. Who is heading this committee? – R. Gandhi (Deputy Governor, RBI)
Vijay Kelkar Committee on PPP
The committee, which was reviewing the public-private partnership model (PPP model) of infrastructure development, has recommended improving the financing of such projects. Who was heading this committee on PPP Model, which submitted its report on 19 November 2015? – Vijay Kelkar
- The Vijay Kelkar Committee to review the PPP model of infrastructure development submitted its report to Finance Minister Arun Jaitley on 19 November 2015. The committee was headed by Vijay Kelkar, former Chairman of the Finance Commission.
- The committee analysed the risks involved and the existing framework of risk-sharing between the project developer and the government in the PPP model and gave its recommendations. The report of the Committee has recommended reviving the PPP model and redesigning it by introducing best international practices and by improving capacity building.
Arvind Arvind Subramanian Committee on GST
The govt. committee on the proposed goods and services tax (GST) suggested how much standard rate of GST as disclosed on 4 December 2015? – 16.9-19.9%
- The government-constituted committee on GST headed by Arvind Subramanian, the Chief Economic Advisor (CEA), submitted its report to Union Finance Minister Arun Jaitley on 4 December 2015.
- The committee recommended that the standard GST rate be in the range of 16.9-17.9%. The standard rate would apply to most goods and services under the new indirect tax regime.
- The committee also recommended that 1% tax proposed to be levied on the inter-state trade of goods to help the manufacturing states be done away with. This is one of the major demands of the Congress. The committee recommended other rates, with the lowest rate for goods at 12% and the highest rate at 40%. The highest rate is for demerit goods such as alcohol.
Sumit Bose Committee on Financial Products
A committee set up by the government to rationalise distribution incentives for financial products and curb their mis-selling, has in its report recommended flexible exits for financial products and that profits from exit charges not accrue to product providers. Who headed this committee? – Sumit Bose, former Finance Secretary
- The report of the Sumit Bose Committee recommended that the choice of withdrawal of all financial products, except those pertaining to pensions, should remain with the investor. It clearly said that financial products should have flexible exit options and the cost of exit must be limited. Currently, products such as unit-linked insurance plans (ULIPs) have a lock-in period of at least five years. It was increased from three years following a spate of customer complaints prior to September 2010, when market volatility led to poor returns for policyholders, who exited early.
A.P. Shah Committee on MAT
The government-constituted committee on Minimum Alternate Tax (MAT) for foreign institutional investors (FIIs) led by Justice A.P. Shah submitted its report to Union Finance Minister Arun Jaitley during 21 August 2015. The committee recommended that FIIs be granted relief on Minimum Alternate Tax (MAT) for the period before 1 April 2015. This comes as a major relief for the FIIs. It is worth mentioning that in 2012, the Advance Authority Ruling (AAR), Delhi, directed Castleton to pay MAT in India on its book profits, when the company transferred shares from a Mauritius entity to one in Singapore. Pertaining to this, the income tax department had sent notices to 68 FIIs, demanding Rs. 602 crore as MAT dues for earlier years. To resolve the issue, the government had constituted a commission headed by Law Commission Chairman A P Shah. The crux of the issue was whether the government would waive MAT prior to April 2015. From the current financial year, MAT is anyway not applicable to foreign portfolio investors. It is expected the government will accept the committee’s suggestions and stop demanding MAT from FPIs for the period before 1 April.