Corporate tax

Make in India,” said Dinesh Kanabar, CEO, Dhruva Advisors, referring to the Narendra Modi government’s ambitious campaign to boost local manufacturing that was launched in 2014.

The finance minister also announced that the higher surcharge on capital gains announced in the budget, and then rolled back for Foreign Portfolio Investors for equity would also not apply to “capital gains on sale of any security including derivatives”.

The mandatory 2% of average net profits made in the preceding three years that companies have to plough into Corporate Social Responsibility activities can be channelled to “incubators funded by state or central governments…, public-funded universities, the Indian Instit u t e s o f Te c h n o l o g y , a n d National Laboratories”.

“We need more research. Companies need to see it (the measure) in positive light and make sure that they take it up,” said Sanjay Kumar, senior director of Deloitte India.

To be sure, the measures announced could see the fiscal deficit swell to 4% from the estimated 3 . 3 % i f nothing e l s e changes, although there could be some revenue boost or spending cut. However, experts say the need of the hour was a boost to sentiment, and point out that with growth slowing, India would have anyway missed its fiscal deficit target for the year.

“India’s surprise corporate tax rate cuts are likely to boost sentiment and support t he broader economy at a time when momentum is flagging. These effects may marginally offset the direct negative impact to the government’s fiscal position,” S&P Global Ratings said in a note.

The measures “indicate that the government is adopting a tax stimulus route rather than using increasing government spending to help the recovery process of the economy,” said Vikram Kirloskar, president, Confederation of Indian Industry. “Coming just ahead of the festive season, there could not have been better news as the entire country gets ready to celebrate.” most vulnerable are the pedestrians. The loss of lives due to accidents is just unacceptable so we need political support for this,” said Anumita Roychowdhury, executive director, Centre for Science and Environment.

Almost a dozen states have opted to enforce lower penalties, or delay their introduction. following a public outcry.

“States have misconception on the law; they have the right to decide the fines for compoundable offences, not the rest. The law went through multiple stages of consultation where all states supported it. After that, it got Cabinet approval and was then introduced in the Lok Sabha,” said minister for road transport and highways, Nitin Gadkari.

On Thursday, transporters in some parts of India, including Delhi, staged a strike against the provisions which drew little response.

“Why do people not see the prime reason behind passage of the law is to save lives,” Gadkari said, adding that 55% of the road fatalities belonged to the 18-35 year age group. “Do we not have a responsibility to their families? There is no fear of law in India, that is why we are in such a state.”

The Bharatiya Janata Party (Bjp)-ruled Gujarat, which was the first state to decide not to go with Gadkari’s pet project, even held a meeting with all state transport ministers or their representatives to discuss this as part of its road safety meeting in September 2017.

“In Vadodara, I went with Gadkariji and they were all there and they were all in agreement,’’ said Younus Khan, who was transport minister in the then BJP government of Rajasthan and head of the Transport Development Committee. “That was where we decided that we can’t have cheap fines. The Gujarat transport minister was there and it was assented {to} by all.”

Gujarat transport minister RC Faldu, when contacted by Hindustan Times, said the state government “never opposed the changes made in the MV Act”.

Explaining the reason for not implementing the prescribed penalties, Faldu said that “following widespread complaints from people about inconvenience in getting PUC [pollution under control certificate] , licence and helmet, it has been postponed”.

In various states like Delhi, there have been queues that last hours just to get PUC certific a t e s a nd many f e l t i t was because the back-end operation wasn’t put into place before implementation.

On revising penalties under compoundable offences (fines for traffic violations that can be paid on the spot), he said flexibility has been provided in the central law. The minutes of the meeting that was held observed that all members were committed “to look into issues of Road Safety” and no dissent notes were given.

Karnataka is now under a BJP government, which has opposed higher penalties, but the then Congress government in the state had endorsed higher penalties in a meeting in Bengaluru in 2016. The minutes of the meeting notes that on “enhancement of penalties... we propose enhancement of penalties for violation of traffic regulations so that they act as a deterrent.”

Signatories included t he transport ministers of Chattisgarh, Himachal Pradesh, Haryana, Karnataka and also transport c ommissioner Kamal Dayani of Gujarat. Maharashtra, which has also opposed the amended penalties, also sent its transport commissioner Shyam Wardhane.

Khan is a bit surprised by the complete U-turn made by states now. “Whoever had a problem, we met them personally and sorted it out. The Maharashtra transport minister came for our Dharamshala meeting and again it was discussed there,” he said. “They should have been explaining the logic of higher fines to people and how it saves lives instead of doing their political agenda.’’

Maharashtra transport minister Diwakar Raote said, “I had attended two meetings as the member o f t he c o mmittee formed to discuss the draft earlier and also expressed whatever I had to say then. However, why can’t I react and request the centre to consider reducing the hefty fines following the public outcry?”

Gadkari and his ministry have been trying to convince the states to come on board with heavier penalties, but in the end, i t i s up t o t he s t ates t o enforce the fines.

“It is the only bill that was passed with a huge consensus after adding all suggestions from states in the select and standing committees. It will be sad if it still doesn’t get implemented,’’ Khan said. tioned that there was a “loss to government” of ~62 lakh.

ED, which launched a simultaneous probe, claimed in its charge sheet, filed on July 2018 that the scheme also involved money laundering of ~23.92 crore and attached properties worth ~11.88 crore, including fixed deposits and bank guarantees of ZHL in State Bank of Patiala and Dhanalaxmi Bank. The chairman of PMLA appellate tribunal, justice Manmohan Singh, hearing pleas of State Bank of India and Dhanlaxmi Bank as well as ZHL, seeking that the FDS and bank guarantees be released so that banks could recover dues from the company, said in his judgment on September 12: “The attachment (by ED) is not sustainable, (is) without application of mind and very harsh. There is no material on record that the banks have any nexus and link with other appellants (referring to ZHL and its directors)”.

It also added that ZHL is liable to pay only ~62 lakh while “rest of the attachment stands released”.

“In the present case, ED has failed to establish any foundational fact… CBI has stated that the loss to government is only ~62,74,858 (~62.7 lakh) which is nowhere close to the imaginary and concocted figure of ~23,92,34,724 (~23.9 crore) as alleged by ED. Therefore whole case of ED falls to the ground as the whole case proceeded on the figure of ~23.92 crore approximately, which in reality as on today is nothing but an imaginary figure, without any basis.”

Asserting that ED failed to even establish that there was any money laundering, Singh said: “The ED has failed to give any findings as to whether the property in question is ‘ascribable’ to money laundering or not. The ED appellate authority (which confirms an attachment) is required to show that was substantially probable cause to form opinion that the property under attachment is ‘proceeds of crime’. The ED has failed to establish that the decision is well thought, well reasoned and has been issued on the basis of the material gathered during the course of investigation carried out under the provisions of PMLA.”

It said that the banks here are victims and they cannot be asked to wait for their dues till the trial is over. “Where such

ED’S CHARGE SHEET FILED ON JULY 2018 SAID THAT THE SCHEME ALSO INVOLVED MONEY LAUNDERING OF ~23.92

loan is given out by innocent parties, being banks in this case, then it would be absurd that the securities of banks are not available to them to recover their losses. Any order which goes against the banks would create chaos in banking and be against the interest of the nation as whole and would be against the public money,” Singh observed.

The tribunal also came down heavily on ED’S attitude, saying the agency didn’t comply with its orders, didn’t provide it with t he prosecution complaint (charge sheet) even after a year of filing it and that the agency’s investigating officer (IO) wasn’t present in the court despite repeated reminders.

An Enforcement Directorate spokesperson could not be reached for comment. An officer i n t he a g e ncy a l s o d i d not respond to a text message seeking comment.

State Congress spokesperson Archana Sharma said the “baseless” lies have fallen flat on the ground. “This has unveiled their [Bharatiya Janata Party’s] vindictive propaganda that they dub as their truth. BJP’S claims on unfounded evidences have been snubbed by the court,” she said