| Need of centralised infra for bill payments: RBI panel |
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Mumbai, 7 May A Reserve Bank of India (RBI) committee today recommended setting up of the Indian Bill Payment System (IBPS) in the country. In a report released today, the committee chaired by executive director GPadmanabhan said IBPS would be the centralised infrastructure connecting the billers through the aggregators and the customers through the customer service points, for management of all bill payments in the country. The committee said there is a need for developing an electronic bill payment system based on a GIRO model for payment of dues of essential services, insurance premium, utility payments, taxes, etc. |
| Proposal to limit state tax |
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New Delhi, 7 May Mobile phones and tablets could become cheaper if states accept the telecom department's proposal to define these as goods of special importance, under the Central Sales Tax ( CST) Act. The Empowered Committee (EC) of State Finance Ministers would consider bringing mobile phones and tablets under the declared goods category at its next meeting, in Mussoorie on May 10- 11. Industry associations and representatives from the Department of Telecom would make a presentation to the EC on May 11. If the proposal goes through, states will not be able to tax these electronic items at a rate higher than five per cent. Reduction in the tax rate from 12.5 per cent to five per cent would give a saving of ₹ 750 on a mobile phone costing ₹ 10,000. Currently, the tax rate varies from state to state. Maharashtra, West Bengal, Gujarat, Tamil Nadu and Madhya Pradesh levy tax on mobile phones at the highest rate of 12.5 per cent and also impose a surcharge. The situation is more complex in the case of a tablet, as the classification of the product is not clear. Some states consider it amobile phone, others classify it as information technology product, acategory that is taxed at five per cent. A lower duty on mobile phones is a long standing demand of the industry. Recently, Communications Minister Kapil Sibal wrote to the committee on the proposal. Industry associations have met EC Chairman and Bihar's Deputy Chief Minister Sushil Modi and said he sounded positive. But some states are still opposed to the proposal. At the Mussoorie meet, the effort will be to convince these states that such goods are important for the country's development — just like goods of special importance such as cereals, cotton, crude oil, sugar, textiles, jute, iron and steel, tobacco products, oil seeds, pulses and liquefied petroleum gas. Indian Cellular Association President Pankaj Mohindroo said if the proposal goes through, it would help put a check on grey market sales, as many Chinese handsets sold there don't pay value added tax. He said poor states are in favour of a lower tax as it would take mobile telephony to every nook and corner. The National Policy on Electronics had marked mobile phones and electronic products used for data communication as goods of special importance under the CST Act. CST is a tax on inter- state movement of goods imposed by the Centre but collected by states. Bringing more goods under the declared category would deprive states of higher revenues. In the last EC meeting, in Bhubaneswar, Modi had asked the Centre to abolish the provision from the law. Mohindroo, however, said the National Policy on Electronics was made after wide consultation and " because of the spirit of federalism, there is no wish to impose anything on the states". Article 286( 3)( a) of the Constitution authorises the Centre to declare some goods as of special importance and impose restrictions on the power of states to levy tax on these. INDIA MOBILE HANDSETS MARKET 2011 2012 Growth Form factor Shipments ( in mn) ( y- o- y%) Mobile handsets 183.4 20.8 221.6 Featurephones 172.2 19.9 206.4 Smartphones 11.2 35.7 15.2 Figures in million Source: CyberMedia Research |
| Pension scheme an accounting mess, says valuer |
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The Employees Pension Scheme, 1995, continues to not only suffer from a substantial excess of liabilities over assets but the gap has continued to rise, finds the latest report of the independent valuer. Worse, the valuation report (which, incidentally, only covers the year up to March 2008) says the data on which the findings are based are of poor quality. " Given the quality and too low a proportion of valid data made available for valuation, the results have limitations... and could be ( no more than) a broad indication of the financial position as obtaining on the date of valuation, says the report from V Balasubramaniam, the valuer appointed by the the Employees Provident Fund Organisation. His report says the cumulative shortfall is ₹ 54,203 crore. The combined 9th and 10th valuation reports, stating the position as of March 2006, had revealed a valuation deficit of ₹ 22,659 crore. In the 11th valuation report, this had risen by ₹ 18,460 crore. In the latest, 12th valuation report, covering the period till March 2008, it has risen another ₹ 13,084 crore, making a cumulative figure of ₹ 54,203 crore. As noted earlier, the valuer says the data was insufficient and poor in quality. And, recommended that a firmer conclusion on the extent of deficit would be possible if complete and accurate data of a greater proportion of members and the class of pensioners and beneficiary pensions covered by the scheme were provided. Explaining the findings from the available data, the report attributes the rise in deficit partly to the continuing effect of the increase in the monthly salary limit eligible for benefits from the scheme, in the year 2001, from ₹ 5,000 to ₹ 6,500. It was, it says, made effective for all members without infusion of additional funds to meet the higher liabilities. Also, there was " inadequacy of contribution rate owing to the changed economic scenario and membership behaviour, especially related to exit from the scheme, resulting in funding deficit''. It also points to inconsistencies in the data provided for valuation as compared to the one given for the earlier study. ACCOUNT MISMATCH (₹ cr) Assets Liabilities Source: EPFO Valuer report 95,920 163,992 22,980 38,145 27,276 54,203 104,400 Scheme assets Deficit 1,125 Reserves for inaccuracy Death benefit Pension benefits Total 254,523 Total 254,523 Value of future contributions 1,005 Administrative cost Current pensioners Withdrawal benefit |
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Company Secretary, Chennai
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