Arun Jaitley Current Affairs - 2019
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The 16th meeting of the Financial Stability and Development Council (FSDC) was held in New Delhi. It was chaired by Union Finance Minister Arun Jaitley.
It was attended by heads of all financial sector regulators as its members. It reviewed the major issues and challenges facing the economy.
Key Highlights of the meeting
- Indian Economy: India appears to be much better placed because of improvement in its macroeconomic fundamental despite fragile world economy. It reviewed the major issues and challenges facing the economy.
- Banking: The status of NPAs of public sector banks and measures taken by the government and the RBI for tackling the stressed assets were reviewed. It also discussed about further action to be taken in this regard.
- Financial inclusion/ financial literacy: Discussed about the various initiatives taken by the government and regulators for promoting financial inclusion/ literacy. It also discussed further measures for promoting the same.
- Technology: Discussed issues pertaining to Fintech, digital innovations and cyber security. It also discussed on further steps to be taken.
- Demonetisation: It will help in eliminating the shadow economy and tax evasion. It will have a positive impact on GDP and fiscal consolidation in the long run.
Besides, a brief report on the activities undertaken by the FSDC sub-committee chaired by RBI Governor Urjit Patel was placed before the FSDC meeting.
About Financial Stability and Development Council
- The Central Government had established Financial Stability and Development Council (FSDC) in December 2010 with the Finance Minister as it Chairman.
- The idea to create it was first mooted by the Raghuram Rajan Committee on Financial Sector Reforms in 2008.
- It is a super regulatory body for regulating financial sector which is a vital for bringing healthy and efficient financial system in the economy.
- The FSDC envisages to strengthen and institutionalise mechanism of (i) maintaining financial stability, (ii) Financial sector development, (iii) inter-regulatory coordination along with monitoring macro-prudential regulation of economy.
Composition of FSDC
- Chairman: Union Finance Minister.
- Members: Heads of the financial sector regulatory authorities (i.e, RBI, SEBI, IRDA, PFRDA), Finance Secretary and/or Secretary, Department of Economic Affairs (Union Finance Ministry), Secretary, Department of Financial Services, and Chief Economic Adviser.
- FSDC can invite experts to its meeting if required.
Two Core functions
- Act as an apex level forum to strengthen and institutionalize the mechanism for maintaining financial stability.
- Enhance inter-regulatory coordination and promoting financial sector development in the country.
- Focus on financial literacy and financial inclusion.
- Monitor macro-prudential supervision of the economy.
- Assess the functioning of the large financial conglomerates.
The Goods and Services Tax (GST) Council has approved the draft Central GST (CGST) and State GST (SGST) laws along with Compensation Bill to bring the GST into implementation, country’s biggest indirect tax reform.
The CGST and SGST laws contains total of 197 provisions and five schedules. They were approved at the seventh GST Council meeting presided by Union Finance Minister Arun Jaitley in New Delhi.
GST Council agreed upon
The draft CGST and SGST laws do not include division of administrative turf between states and the centre. The Compensation Bill will have 2015-16 as base year and compensation to States for the loss of revenue from the GST rollout will be paid every two months. It provides legal backing to the centre’s promise to compensate states if their revenue growth rate were to fall below 14% in the first five years of GST. However few issues were left to be settled, such as source of compensation fund.
The next meeting of the Council scheduled early January 2017 will try to resolve the issue of dividing the administrative powers between the Centre and states. It will also take up the Integrated GST (IGST) Bill. It will also discuss the most contentious issue of ‘dual control’ or ‘cross empowerment’.
About GST Council
- As per Article 279A of the Constitution, GST Council is joint forum of the Centre and the States.
- Composition: Union Finance Minister (Chairperson), Union Minister of State (MoS) in-charge of Revenue of finance (Member) and Minister In-charge of taxation or finance or any other Minister nominated by each State Government (Members).
- Functions: They are mention in Article 279A (4) of the Constitution. It will make recommendations on important issues related to GST, like (i) Goods and services that may be subjected or exempted from GST. (ii) Model GST Laws. (iii) Principles that govern Place of Supply, threshold limits, GST rates. (iv) GST rates will including the floor rates with bands and (v) Special rates for raising additional resources during natural disasters/ calamities, special provisions for certain States, etc.