Finance Ministry Current Affairs

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Government lowers interest rates on Small saving schemes by 0.1%

The Union Finance Ministry has lowered interest rates on all nine small saving schemes by 0.1% for the April-June quarter as compared to January-March quarter.

These schemes includes Public provident fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra, Sukanya Samriddhi Account, Senior Citizens Savings Scheme. It does not include Post Office Savings Account.

Key Facts
  • Investments in the PPF scheme will fetch lower annual rate of 7.9% from previous rate of 8%.
  • 5-year National Savings Certificate will also fetch lower annual rate of 7.9% from previous rate of 8.
  • Kisan Vikas Patra (KVP) investments will yield 7.6%
  • Sukanya Samriddhi Account Scheme, will offer 8.4% annually, from 8.5% at present.
  • Senior Citizens Savings Scheme will offer 8.4% for the 5-year. The interest rate is paid quarterly.
  • Term deposits of 1-5 years will fetch a lower 6.9-7.7 % that will be paid quarterly.
  • The 5-year recurring deposit has been pegged lower at 7.2%.
  • However, interest on savings deposits has been retained at 4% annually.

The Ministry also has notified that rates of small saving schemes will be linked to government bond yields. The move is expected to prompt banks to lower their deposit rate in line with the small savings rate as offered by government. Since April 2016, interest rates of all small saving schemes are recalibrated on a quarterly on the basis market-linked interest rates system

What are small saving schemes?

Small Savings Schemes are more of social welfare schemes .They are government run schemes that provide higher interest rate. These schemes are meant for small investors backed by a sovereign guarantee and tax benefits.

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3rd G20 Framework Working Group meeting held in Varanasi

The third edition of G20 Framework Working Group (FWG) meeting was held in Varanasi, Uttar Pradesh.

The two-day meeting took place under the G20 German presidency, and was co-hosted by the Union Finance Ministry and the Reserve Bank of India (RBI).

It was inaugurated by Shaktikanta Das, Economic Affairs Secretary and Dinesh Sharma, special secretary in the Finance ministry was head the programme.

Key Facts 
  • The two day meeting held discussions on the current global economic conjecture as well as deliberations on the policy options that countries can pursue to counter the challenges.
  • It also deliberated on the inclusive growth agenda of G20 and formulated a framework that will enable countries to help frame country specific inclusive growth policies.
  • The high-profile meeting was attended by around 100 financial and economic policy mandarins from around 19 countries of G20.
  • Officials from the International Monetary Fund (IMF), World Bank, OECD, ILO, UNCTAD, European Central Bank, European Commission, Financial Stability Board and Asian Development Bank also participated in it.
Background

The first two FWG meetings under the German presidency of G20 were held at Berlin in December 2016 and at Riyadh in February 2017. The fourth and the last G20 FWG meeting under the G-20 German presidency is likely to be held in Argentina before the G20 leaders’ summit in July 2017 in Hamburg, Germany.

Note: This was the fourth occasion that India, hosted the FWG meeting since its inception in 2009.Previously, India had hosted the G20 FWG meeting in Neemrana (2012 under Mexican presidency), Goa (2014 under Australian presidency) and in Kerala (2015 under Turkish presidency).

About G20
  • The Group of Twenty (G20) is the premier forum for its members’ international economic cooperation and decision-making. It is deliberating on global economic issues and other important development challenges.
  • It comprises total 19 countries plus the European Union (EU), representing 85% of global GDP, 80% of international trade, 65% of world’s population.
  • It was started in 1999 as a meeting of Finance Ministers and Central Bank Governors in the aftermath of the Southeast Asian (Tiger economies) financial crisis.
  • In 2008, the first G20 Leaders’ Summit was held in Washington DC, US. The group had played a key role in responding to the global financial crisis.
  • Its members include India, Australia, Argentina, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, South Korea, Mexico, Saudi Arabia, Russia, Turkey, South Africa, UK, US and EU.

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Government approves re-organisation of field formations of CEBC to implement GST

The Union Finance Minister has approved re-organisation of field formations of the Central Board of Excise & Customs (CBEC) for the implementation of Goods & Services Tax (GST).

Under it, CBEC will be renamed as the Central Board of Indirect Taxes and Customs (CBIC) after getting required legislative approval.

Key Facts
  • The existing formations of Central Excise & Service Tax under the CBEC will be re-organised to implement and enforce the provisions of the proposed GST Laws.
  • The proposed CBIC will supervise the work of all its field formations and Directorates and assist the Government in policy making in relation to GST, continuing Central Excise levy & Customs functions.
  • The CBIC will have 21 Zones, 101 GST Tax payer Services Commissionerates comprising 15 sub-Commissionerates, 768 Divisions, 3969 Ranges, 49 Audit and 50 Appeals Commissionerates.
  • It will ensure rendering of taxpayer services to all the taxpayers through an indirect tax administration structure by having pan-India presence.
  • For a robust IT Network, the Directorate General of Systems under CBEC will be expanded for greater out- reach for facilitating smooth transition for the taxpayers to the GST environment.
  • The existing training establishment will be renamed as National Academy of Customs, Indirect Taxes and Narcotics (NACITN) and shall have an all India presence.
  • It will enable capacity building to the employees of the indirect tax administration of the Centre as well as of the State Governments and also of Trade and Industry.
  • The renamed Directorate General of Goods & Service Tax Intelligence will be also strengthened and expanded to become an important wing of the Government in its fight against Tax Evasion and Black Money.

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