Tag: # banking entity

Taxation System and Reform of Taxation Policy

Source: thenews.com.pk

Attribution of compulsory taxes by government is main characteristic of financial system. Taxes are levies in every country to generate revenue. Rudimentarily to raise revenue for government expenditure, and for other purposes as well. Without taxes, government would be unable to meet demands of the societal needs. Taxes are crucial because government collect the revenue and use it to finance social projects.

Tax system based on equality module that rich in the society will pay more than the poor. According to Adam Smith’s four principle in his famous book ‘Wealth of Nations’. Adam Smith stated that taxes should be proportional to income, that is everybody should pay the same rate or percentage of his income as tax.

Another important principle of a accurate tax system as per Adam Smith laid a good deal of stress in his cannon theory of certainty. The tax which each individual is bound to pay ought to be certain and not arbitrary. The time of payment, method of payment, the quantity to be paid ought all to be clear and plain to the contributor and to every other person.

 A successful function of an economy requires that the people, especially business class, must be certain about the sum of tax that they have to pay on their income from work or investment. The sum, the time payments of tax should not be certain but the time and manner of it’s payment should also be convenient to the contributor.

The Government has to spend money on collecting taxes levied by it’s collection costs of taxes and nothing to the national product, they should be minimised as  far as possible. If the collection costs of a tax are more than the total revenue yielded by it, it is not worth while to levy tax.

 Productivity of taxes when levied to generate sufficient revenue from the government. If few taxes imposed yield a sufficient funds for the state, they should be preferred over a large number of small taxes which are expensive in collection. Fair elasticity at any the government need of more funds, it should increase it’s financial resources without incurring any additional cost of collection.

Simplicity of tax system must be simple, plain and intelligible to tax payer. System of taxation should include a large number of taxes that is economical. The government should collect revenue from it’s subjects by levying direct and indirect taxes.

 Reforms in Taxation Policy

Source: canarahbsc.life

Tax Policy in India has evolved as an important component of fiscal Policy which had to play core role in the planned development strategy. Taxation Policy cannot be same always it keep on changing with changes in economic scope of the country. To structure and strengthen in taxation Policy various reforms we’re implemented and many are in stream like recent change was good and services tax was country’s biggest reform.

The taxation enquiry commission 1953 was the first comprehensive attempt to review the tax system, it design to structure. Holist tax system for the country; covered central and state also local taxes. In 1985, Government of India introduced long term fiscal policy; this policy led to Modified System of Value Added Tax (MODVAT) in 1986.

Economic crisis of 1991, tax reforms we’re initiated as a part of structural reform process. Tax reform committee recommend major reforms to stabilize economic turbulence in the country. Changes are Reflection of custom duty, Rationalize the capital gain tax and wealth tax, Reduce excise duty, bring the service sector in the VAT tax system, Improving quality of tax Administration, reduction of corporate taxes and reduce the cost of imported inputs.

Reform of Direct Taxes

The government brought consolidated direct taxes. The income tax act was passed in 1961. Direct Taxes Enquiry Committee was constituted to look into affair of direct taxes, tax reform committee (1991) has recommended various point to consolidated direct taxes and task force on tax Policy and administration gave explained path to reform direct taxes in country. National Securities Depository Limited (NSDL) established tax information network to moderate the collection, and monitoring accounting.

Reform of Indirect Tax

The indirect tax Enquiry report in 1977 recommended valuable reform in indirect tax regime. Initiated modified value added tax (MODVAT) for commodities in 1986 to replay the central excise duty, extend to all commodities through Central Value Added Tax (CENVAT). State replace sale tax and have Value added tax.

9 best vegan Omega-3 Supplements (2021) per Dietitians.

If you don’t have fish on your meal menu doesn’t mean you can’t get all the benefits of omega-3.

Omega-3 is also found in many plant foods, like chia and hemp seeds, in algal oil too. But mostly it is found in fish oil in significant levels.

For your vegan friends, there are plenty of options who wants to intake omega-3 and all of EPA, ALA L AND DHA.

New Banking entity will create jobs in India

On April 1, 2014, the Election Commission (EC) gave approval to the Reserve Bank of India (RBI) to proceed with licensing a third set of private banks. The last time that RBI licensed new banks was between 2003 and 2004 when it decided to let Kotak Mahindra Bank and Yes Bank into the market. It is hoped that the current licensing will help India’s central bank to expand the reach of the Rs 84 trillion banking industry. Last week, the RBI granted bank licenses to Bandhan Financial Services and Infrastructure Development Finance Company (IDFC). There are over 20 companies in the race for new banking licenses and it is said that 1,500 to 5,000 jobs are likely to be created in the next two years for each new banking license awarded by the RBI.  

Some of the areas where extensive hiring is likely to take place are retail banking, credit, technology, operations, branch banking, risk and treasury. And since India is focusing on financial inclusion, jobs are expected to open up in smaller centers. There will be a huge demand for people who have worked in tier 2 and 3 cities and rural areas as they will be able to understand the issues pertinent to financial inclusion. Currently, less than 30 percent of the Indian population has access to bank accounts. So, there is a lot to be done in the banking and financial sectors in India. The rural markets are untapped and by expanding and venturing into these markets, the banking and financial sectors will be able to witness growth and profitability.  

At IDFC alone, there have been key appointments, including that of the group head of new initiatives and the COO – Ajay Mahajan, former banker and financial services entrepreneur has been appointed the group head of new initiatives and Avtar Monga, veteran banker, has been named the COO. These new licenses will give rise to a number of backend jobs too, including those in processing and outsourcing. Every time a new entity is formed, jobs will be created not only in the entity but in other organizations linked to this entity. And this is exactly what is happening with the licensing of new banks.   

It is hoped that with the establishment of new banking entities, the unemployment rate in India will reduce. Reports claim that in the next two years, a number of people working in banks will be retiring and this will increase the demand for employees at various levels. India will witness a sharp increase in employment in the coming years and the growth and profitability of the banking and financial sectors are imminent. In any developing country, there is a huge scope for the growth of various industries. And this is what the RBI is planning to achieve by providing licenses to new banks. With an influx of new banks comes competition and this leads to greater productivity. So, by providing licenses to new banks, India will not only see a rise in the employment rate but it will also see a stark increase in the service quality.  

Anywhere between 1,500 and 5,000 jobs are likely to be created over 1-2 years for each new banking licence awarded by the Reserve Bank of India (RBI), estimates by leading head hunters, including Korn/Ferry International, Egon Zehnder, Heidrick & Struggles, EMA Partners, Russell Reynolds Associates and Randstad India, suggest. The RBI granted bank licences to micro lender Bandhan Financial Services and Infrastructure Development Finance Company (IDFC).

Based on a set of 1,938 companies spread across all sectors, the study said the value of sales in FY19 was Rs 69 lakh crore thus covering the entire corporate sector. It includes all listed public sector entities but the SME segment may find less representation in this sample.

As per the study, the aggregate headcount or employment increased at a CAGR of 3.3% over a four-year period from 2014-15 to 2018-19 compared with a CAGR of 7.5% in gross domestic product (GDP) during this period. In terms of growth in employment on an annual basis, it was 2.5% in 2015-16 and 4.1% in 2016-17. “Therefore, there is a case that supports the argument that employment growth has not been commensurate with GDP growth with a difference of 4.2% in CAGR during this period,” the study showed.

It showed that around half the companies had witnessed a decline in growth in employment over this time period while 35% of them had witnessed growth of 11.5% on the aggregate each with an above average CAGR of 3.3%.

Core worries


The ratings agency highlighted that core industries have witnessed “virtually negative growth in headcount”, with crude oil just about maintaining the employment level. These industries have been impacted by the slowdown in GDP growth as well as the challenges on the NPA side for banks.

A similar picture is witnessed for the heavy investment industries where growth has tended to be negative for power and capital goods and just 0.4% for infra. Among manufacturing industries, healthcare and automobiles registered a healthy growth of 4.8% in employment whereas the financial sector’s performance was the impressive with banks, NBFCs and insurance witnessing impressive growth

In the non-financial sector segment, the IT and retail industries registered near or above average growth while telecom, hospitality and realty witnessed negative growth. The telecom industry has been through upheavals which have led to several mergers that have impacted headcount. In case of realty, the decline in growth in business impacted job prospects, it said.

“The CAGR in employment and growth in physical production for industries in the manufacturing sector are not well related,” CARE Ratings concluded, adding that growth in employment has trailed growth in GDP indicating that the two have not moved in commensurate terms, and that service sector has performed better than manufacturing with financial sector industries doing better in terms of higher recruitment.