Finance Minister Current Affairs - 2019

Category Wise PDF Compilations available at This Link

Panel to revive GST Collections

The GST collection in September 2019, dropped sharply to a 19-month low. This reflects the widening slowdown of the economy. The tax collections were Rs 91,916 crore in September. This was 2.67% less as compared to September 2018.

GST Collection

The Gross GST collection in September 2019 comprises of Rs 16,630 crore collection of CGST – Central GST, Rs. 45,069 of IGST – Integrated GST and Rs 22,598 crore of SGST – State GST.

The GST that was amalgamated from July 1, 217, includes different central and state tax, service tax, VAT, excise duty and decline in collection indicate a downturn. Hence, GST Council has set up a panel to suggest measures that will revive GST collection.

Panel

On October 10, 2019, the GST Council set up a 12-member panel. The panel will not propose tax rate increases or decreases. Rather, it will find ways to widen tax base, prevent evasion, improve voluntary compliance. The main objective of the panel is to augment the revenue other than tax rate increase.

The GST Council has already resisted pressure from industries and automobiles for rate cuts and raised rates on caffeinated drinks that were imposed in September, 2019.

The Government will also face pressure on central government’s fiscal position for reducing corporate tax rate for businesses announced in September 2019.

Panel to review regulations of cooperative banks

The Union Finance Minister on 10th October, 2019 announced that a high level committee will be formed to look into the regulations that govern multi state cooperative banks. RBI imposed banking restrictions on PMC bank in September. This has left 1000s of investors and account holders worried. The amended framework is to be submitted in the winter session of the parliament.

Cooperative Banking in India

  • The rural cooperative credit system in India ensures flow of credit to the agriculture sector. The short-term cooperative structures operate under a three-tire system namely
    • Primary Agricultural credit societies (PACS). They operate at village levels
    • Central Cooperative Banks (CCB) – they operate at district level.
    • State Cooperative Banks (SCB) – they operate at state level
  • The PACS are outside the purview of Banking Regulation act, 1949 and hence is not regulated by RBI
  • The inspection of CCB And SCB are conducted by NABARD – National Bank for Agricultural and Rural Development. This is being done according to Section 35 of the Banking Regulation act, 1949. RBI can conduct inspection once a year if in need.
  • The needs of customers in urban and semi – urban areas are catered by Primary Cooperative bank (PCB) and Urban Cooperative Bank (UCB) respectively.

Multi – State Cooperative Banks

  • RBI constitutes state level task forces for cooperative urban banks (TAFCUB). This is done to bring all the decision makers on one table under the central TASFCUB.
  • The viable and non – viable UCBs in the state are identified by the TAFCUB. It suggests a revival path as well.
  • The exit of non – viable banks are done
    • Through mergers
    • Amalgamation with stronger banks
    • Conversion of these banks into societies
    • Liquidation, which is the last option.
  • Section 22 and Section 23 of Banking Regulation act, 1949 regulates the banking functions of UCB, SCB and DCCB.