Centre to let foreign firms pick up minority stake in insurance sector
The Centre has finally veered around to granting a minority stake to foreign insurance companies that seek to operate in the country. Among the alternative equity stakes that the Union finance ministry is dabbling with are 10, 25, 26 and 49 per cent, but a final decision on the extent of foreign holding will hinge on its political acceptability within the BJP and on the floor of parliament.
Power-distribution segment rid from Centre's shackles
The Union power ministry has accepted the SJ Coelho Committee report on reforming the power-distribution sector. The ministry has also agreed to one of the key recommendations of the committee, which is to stay away from regulating the distribution sector from the capital.
TDS on bank term deposits may be scrapped
The Union finance ministry is planning to revamp the tax deduction at source (TDS) provisions on term deposits of banks in the forthcoming budget. The TDS scheme, which was meant to tap taxes on individual earnings from fixed deposits, has not served the purpose because of several loopholes in its implementation.
Analysts see M3 growth target in 16-17% band
Economists expect the Reserve Bank of India (RBI) to peg the broad money supply (M3) growth target at 16-17 per cent in the current fiscal. This is imperative to fuel a higher GDP growth, they say.The deposit and credit growth targets, however, may remain unchanged at 18-20 per cent.
Drop in inflation gives central bank the elbow-room
The most important feature of the backdrop to the credit and monetary policy for the first half of 1998-99 is the benign inflation rate. After having recorded an inflation rate of around 10% for five years between 1990-91 and 1994-95, the rate of inflation fell to 7.7% in 1995-96, 6.3% in 1996-97, and is ruling below 5% now. This low rate gives considerable leeway to the central bank in framing its monetary policy.
Ministry to set up panels to overhaul power tariffs
Central and state electricity regulatory commissions to formulate rational tariff structures will be set up in three months, Union power minister PR Kumaramangalam has said. A bill to this effect is to be introduced in the budget session. The government has already issued an ordinance to set up the independent regulatory commissions.
