SUBMITTED BY:MANIKANT

MBA 2A

3rd WEEKLY NEWSfor the week ending 10th Sept.,

2010

RBI wants banks to reduce cost of low-value transactions

RBI asked banks to bring down sharply the cost of low-value transactions to increase penetration.

Direction given in context of banks who failed to use technology to increase penetration of banking services and improving their productivity and efficiency.

The net interest margin of banks has not reduced much; especially when the structure of business has not changed.

The deposit and advances per account has shown a rising trend which signifies that the rise in business is not due to acquisition of customers on the lower end of the pyramid.

The intermediation costs of banks in India still tend to be higher than those in developed banking markets.

Unless low-value transactions not done cost-effectively , not going to impact efficiency drastically.

Unhappy with DTC, commerce dept mulls new rules for SEZs

Unhappy with the new direct taxes code (DTC) bill, the commerce department will propose a fresh set of rules for taxing special economic zones, a move that will cheer investors worried over a sharp drop in tax benefits in the new regime.

The bill tabled in Parliament proposes to replace current benefits that exempt profits from tax (profit-linked exemptions) with rebate for investments made in SEZs (investment-linked exemptions) for both developers of these zones and businesses located in them

The code is government’s attempt to streamline and rationalise the direct tax structure and widen the tax-base by lowering tax rates but minimizing exemptions and linking them to investments to encourage production activity.

The proposed tax changes for SEZs have, however, been opposed by a large number of developers and units, especially from low capital investment sectors such as IT, bio-tech and pharmaceuticals, who have more to lose once tax benefits are linked to investments instead of profits earned.

India seeks Canadian investment in food processing

The Indian food processing sector was growing by more than 14 percent and many Canadian companies have evinced keen interest to come to India.

India allows 100 percent FDI in food processing industries and offers a whole lot of tax concessions.

While Indian FDI in Canada is only about $3 billion, Canadian FDI in India is just $600 million.

The thrust of the government is to create cold-storage and warehouse facilities across the country.

The steps taken helped reduced wastage by Rs 10,000 crore ($2200).

Current ministry aims to cut this wastage massively and process 20 percent of the total food produce by 2015. But there is a need of massive investments.

India seeks to invest in diverse sectors of Peruvian economy

India is keen to invest in Peru's hydrocarbon, mineral, pharmaceutical and agriculture sectors through joint ventures.

Given the complementarities in the growing economies of Peru and India, there is considerable scope for improving trade and investment between the two countries.

Zinc, cooper, silver, fishmeal, beans and sheep skins are Peru's most demanded products in India.

Amid China trouble, India, Japan to firm up economic pact

Amid dissonance in relations with China, India is looking to expand strategic and economic ties with Japan as the two sides hold the final round of negotiations next week to finalize a key economic pact ahead of Prime Minister Manmohan Singh's visit to Tokyo in October.

The pact, called Economic Partnership Agreement (EPA) in Japan, is expected to slash tariff duties on around 9,000 products, ranging from steel and apparel to drugs and machinery, and give a big boost to bilateral trade which was estimated to be around $11 billion in 2008-09.