Policy

    Finance Ministry in talks to work out formal mechanism for global arbitration

    The finance ministry is collaborating with other ministries to improve handling of international arbitrations under bilateral investment treaties. They plan to form a response team and revise the BIT template. The new template will allow 2-3 years to exhaust local remedies before pursuing global arbitration. This aims to balance investor-friendly provisions with sovereign policy-making space.

    How Trump and Modi economies are mimicking each other

    India and the US are witnessing high consumption driven by their top 10% earners. In India, affluent consumers fuel economic growth, focusing on high-end products amidst inflation. In the US, the wealthy's spending sustains economic activity. Reports indicate rising income disparities, with the well-off increasing their expenditures significantly more than the general population.

    CBDT introduces new rules for business trusts and investment funds, tightening compliance and updating tax forms

    The Central Board of Direct Taxes has implemented new rules requiring business trusts to file income distribution statements by June 15. Updated forms necessitate separate disclosures of dividend income and capital gains for business and investment funds, impacting REITs, InvITs, AIFs, and ARC trusts.

    Finance Ministry defers review meeting with heads of public sector banks to March 5

    The finance ministry has moved its performance review meeting with PSB heads to March 5. The meeting will assess financial performance and progress on financial inclusion schemes. Following the Union Budget presentation, PSBs reported a record net profit of Rs 1.29 lakh crore for April-December 2025, citing improved asset quality and capital buffers.

    RBI lowers risk weight on bank finance to NBFC, microfinance loans

    The Reserve Bank of India partially reverses tighter rules for small borrower and non-bank lender loans, reducing risk weights for consumer microfinance loans. This adjustment follows a deferral of new capital and liquidity proposals by the central bank, coinciding with a change in leadership as Sanjay Malhotra assumes the role of governor.

    India considers bankruptcy law revamp as cases drag on

    The Indian government plans to revamp bankruptcy laws to expedite court processes amid prolonged insolvency proceedings and low recovery rates. Proposed changes include joint hearings for interconnected businesses and measures for quicker creditor dispute resolutions. Interim financing will also be encouraged to safeguard asset values.

    Voluntary pension scheme for all on cards: Won’t be tied to employment, will be open for all

    India is exploring a Universal Pension Scheme that is voluntary and contributory, aimed at offering social security to all individuals. The scheme will incorporate existing central pension programs to streamline processes, extend benefits to unorganized workers, and include traders and self-employed individuals for comprehensive coverage.

    Decision on recommending revenue deficit grants for states yet to be made: Finance Commission chief

    A decision on revenue deficit grants to states hasn't been made yet, says Finance Commission Chairman Arvind Panagariya. The commission will finalize this after visiting all states. Some states have proposed changes to the funds' vertical and horizontal devolution criteria, including Mizoram. Key suggestions include revising weightage on income distance, population, and introducing new criteria.

    Parliament panel examining Income Tax Bill holds first meeting

    The Finance Ministry briefed the members of a Select Committee on the new Income Tax Bill, which aims to simplify the six-decade-old Act and make it user-friendly. The Bill, introduced by Finance Minister Nirmala Sitharaman, will replace terms like "assessment year" with "tax year". The 31-member committee, led by BJP MP Jay Panda, will report by the Monsoon session.

    RBI Monetary Policy Committee's Kumar reveals a key reason behind February rate cut

    RBI Rate Cut: A significant slowdown in India's manufacturing sector has been a key factor behind the monetary policy committee's decision to cut the key repo rate. The decline in urban consumption and private investments, along with global trade tensions, has impacted job creation and economic growth in India.

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    A flexible MPC wary of accommodative turn, but may back measured rate cuts

    A flexible MPC wary of accommodative turn, but may back measured rate cuts

    The Reserve Bank is likely to maintain its neutral monetary stance while delivering measured interest rate cuts and raising liquidity amidst global trade uncertainties. MPC members believe keeping the stance neutral provides flexibility to respond to evolving global financial conditions and prioritize growth.

    Digital currency wallets to be used for study loan subsidies

    Digital currency wallets to be used for study loan subsidies

    The government is collaborating with banks to implement a system for routing and settling interest subsidies on education loans through digital currency wallets. This initiative aims to integrate with the Unified Portal for Education Loan, enhance the efficiency of subsidy claims, and reduce fraud by using Central Bank Digital Currency (CBDC).

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    Union budget aims to build healthy economy with long-term vision: Mansukh Mandaviya

    Union budget aims to build healthy economy with long-term vision: Mansukh Mandaviya

    Union Minister Dr Mansukh Mandaviya praised the Union budget, emphasizing that it sets a long-term vision for a developed India by 2047. He highlighted the budget's focus on creating a healthy economy, with significant attention to infrastructure development and expanding coverage in the health sector under the Ayushmann Yojana.

    More interest rate cuts on way, signal MPC minutes

    More interest rate cuts on way, signal MPC minutes

    The Reserve Bank of India is expected to implement more interest rate cuts in the coming months to boost economic growth. The Monetary Policy Committee (MPC) has shifted its immediate focus from controlling inflation to fostering growth. The recent 25 basis points cut in the repo rate to 6.25% reflects this change, with further cuts likely.

    Financial firms must flag risks in leveraged products: RBI deputy governor Rajeshwar Rao

    Financial firms must flag risks in leveraged products: RBI deputy governor Rajeshwar Rao

    "It is said that the presence of too much light can also lead to blindness, we must be aware of the risk of reckless financialisation. Of late we have seen some concerns of excessive borrowing in the unsecured segment and from derivative euphoria in the capital markets. The temptation of short-term gains can easily overshadow the long-term financial security of individuals," Rao said.

    RBI proposes to do away with pre-payment levy on business loans taken by individuals/MSEs

    RBI proposes to do away with pre-payment levy on business loans taken by individuals/MSEs

    The RBI has proposed eliminating foreclosure charges or pre-payment penalties on all floating rate loans for individuals and MSEs, including for business purposes. The draft circular stipulates no charges or penalties for foreclosing/prepaying these loans, aiming to enhance responsible lending practices.

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