1. Weekly news update
Submitted by
Ankush Gupta

2. Budget to look into CENVAT credit
claims
• Union budget for next fiscal would look into the
various problems being faced by the companies
under the central value added tax credit claims.
• CENVAT rate is currently fixed at 10% and
companies get credit for tax paid on inputs under
the scheme. Many of the current problems would
disappear when goods and services tax (GST) gets
operationalised as it was accrual based instead of
cash based .

3. Food inflation falls to 3-month low of
10.15%
– Food inflation fell for the sixth straight week to a
three month low of 10.15%, but there was no
respite for consumers as prices continued to rise
during the week.
– Index for food article rose 0.7% during the week
ended November 13, indicating that the decline in
inflation is largely because of the base effect.
– The arrival of winter vegetables has not done
much to moderate vegetable prices which rose
4.48% during the week.

4. Tax evaders in trouble
– The issue of foreign bank accounts had figured in
the discussions at an internal conference of IT
department. Specific data on bank accounts will
help the tax department seek information from
other countries about Indian assets.
– Under OECD model of tax treaties, a country can
source data on foreign assets and bank accounts
of its nationals from countries with it has “Double
Taxation Avoidance Agreement” but only in cases
where it has specific information.

5. FDI down 26% during January-
September
– Foreign direct investment in India stood as just
$15.97 billion during the January-September, 2010
down by 26% from the value of FDI in the same
period for last year
– In January-September, 2009 the country attracted
foreign direct investment worth $21.44 billion.
The countries that pumped the maximum foreign
capital into the Indian economy were Mauritius,
Singapore, US, Netherlands, Cyprus, Japan,
Germany and France.

6. Government banks on long-term
bonds to cut borrowings
– The government will increase the share of longer
tenure government bonds to reduce the
borrowing that is just for redemption of maturing
securities by reducing the level of debt it needs to
raise every year.
– The average maturity of center & apposes debt has
inched up marginally in the current year to 9.81 years
after dropping in the aftermath of the financial crisis
to 9.67 years due to preference for shorter maturity
securities.

7. SEBI asks MFs to simplify N.F.O
– Mutual funds schemes are becoming too complex
for average investors. SEBI has asked several asset
management companies to rework on some of
their proposed new schemes.
– Regulator is going slow on approving structured
mutual fund schemes where instead of investing
in equities and debt market in pre-determined
ratio, the fund manager is given the flexibility to
adopt complex strategies.

8. Thanks