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Banned Indian notes in Nepal’s financial system will be exchanged soon: Arun Jaitley

In his two-day visit to participate in the Nepal Investment Summit, Jaitley said that the scrapped Indian notes in Nepal's system will soon be exchanged

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Finance Minister of India, Arun Jaitley, wikimedia

Kathmandu, March 2, 2017:  India’s Finance Minister Arun Jaitley on Friday said the currency notes scrapped by his country on November 8 last year but still in Nepal’s financial system will be exchanged soon.

Interacting with journalists here, Jaitley said he has not yet received a study report prepared by a two-member team of the Reserve Bank of India that visited Nepal to take stock of the situation in this regard.

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“It is our central bank’s autonomous decision,” he said.

Jaitley is in Kathmandu on a two-day visit to participate in the Nepal Investment Summit-2017.

Nepal has been repeatedly urging India to make arrangements to tackle the circulation of Rs 500 and Rs 1,000 notes demonetised by India. The RBI team visited Bhutan too for the purpose.

The Minister said the Nepal Rastra Bank (NRB) and the RBI are already in talks on the issue.

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“The banned currency will be exchanged but precaution should be taken to ensure that genuine transactions take place. I’m sure they will come out with a scheme (to provide exchange facility),” Jaitley said.

India’s Prime Minister Narendra Modi announced on November 8 that his government was withdrawing from that midnight the high-value currency notes from circulation to crack down on, what he said were, rampant corruption, counterfeit currency and terror funding.

Following the demonetisation decision, the NRB too banned the circulation of old Rs 500 and Rs 1,000 notes in Nepal from the very next day.

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Referring to the investment summit, the Minister said it will attract foreign investments in Nepal as well as boost commercial cooperation in South Asia as planned.

Jaitley paid courtesy calls on President Bidhya Devi Bhandari, Prime Minister Pushpa Kamal Dahal ‘Prachanda’, and Finance Minister Krishana Bahadur Mahara, among others, and reiterated India’s commitment to Nepal’s developmental endeavours. (IANS)

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Food processing will be a main industry in future: Jaitley

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Food processing will be a main industry in future: Jaitley

New Delhi: The entire Indian agriculture value chain is set to change drastically and food processing is going to be one of the main industries of the country in the future, Finance Minister Arun Jaitley said on Friday.

“The farm to kitchen chain is going to change in India, like elsewhere, with increased agricultural production, better storage facilities, more food processing and changing consumer food preference,” Jaitley said at the inaugural session of the World Food India 2017 here.

 “Food processing is going to be one of the principal industries of India in future, and an entrepreneur in 2017 should think of the industry from the perspective of where it will be in 2040, 2050,” he said.

In terms of market size, the Indian food market was worth $193 billion in 2016 and is expected to cross $540 billion in 2020, officials said here. The sector has been growing at the rate of 12 per cent annually.

“There is a silent revolution ongoing in India. There is an expanding middle class and below that there is a growing aspirational class, which is building up reasonable purchasing power,” the Finance Minister said, noting that this provided an enormous potential market for food products in the country.

About the potential, Food Processing Minister Harsimrat Kaur Badal said that only about 10 per cent of agricultural produce is processed in the country, leading to a lot of wastage.

The industry enjoys many fiscal incentives, including preferential credit under priority sector lending, she said.

“There is 100 per cent FDI (foreign direct investment) allowed into the sector through the automatic route and we have seen inflows increase 40 per cent over the last year,” she said.

“The proposal for a Food Processing Bank is also under active consideration.”

In the presence of delegates from many countries, the event was inaugurated earlier by Prime Minister Narendra Modi, who pointed out that India is the biggest producer of milk in the world and the second in rice, wheat, fish and vegetable output.(IANS)

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Decoding the Indian Agrarian Crisis and Fake Farmers Facade

Gaurav Tyagi believes half baked measures like loan waivers just make people lazy parasites.

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An increasing number of farmers in India are committing suicide due to debt pressure. To tackle the issue, the government has come up with farm loan waivers. (VOA)

– By Gaurav Tyagi


New Delhi, September 18, 2017 : 
Indian and International media is full of articles regarding large number of farmers in India committing suicide due to debt pressure.

Instead of going to the root of the problem and analyzing the reasons for this phenomenon, Indian politicians have come up with an absurd idea of farm loan waivers.

Majority of Indian farmers under debt trap own very little land. Farming on such small piece of land is not economically feasible. This sector is highly unorganized. Most of the time, no planning is involved in cultivation, irrigation and harvesting.

Middlemen exploit farmers by buying their produce at a very low price and then selling it at a premium to the end consumers.

The irony is that a large number of Indian politicians claim huge incomes from agriculture while farmers starve.

In the province of Madhya Pradesh 24 farmers committed suicide this year over crop loss and failure to repay loans but 18 of the 20 cabinet ministers of the state have shown ‘agriculture’ as their main source of huge incomes.

How come politicians are earning in Billions through farming while the real farmers are struggling to make both ends meet?

Let’s examine the issue in-depth.

The income earned from agricultural land is exempt from income tax under section 10 (1) of the Income Tax Act 1961. Politicians, bureaucrats and businessmen in India launder their money misusing the above income tax clause.

Normally, one cannot own agricultural land in India unless their forefathers have been agriculturists. Rich and influential people in the country obtain agriculturist certificates by ‘greasing the palms’ of the local land officials.

Farmers are not required to maintain detailed records in India. This provides an excellent loophole to pass off unaccounted and undeclared cash as agricultural income. It is done by showing fake sales cash receipts of agricultural produce, which like other certificates can be purchased in India through bribes.

Approximately 800,000 tax declarants in India state exorbitant amounts as agricultural incomes while filing their annual income tax returns.

This income, a whopping INR. 874 Lakh Crores was eight times more than the cumulative GDP of India for the financial years 2011 and 2012.

The average annual income declared by these assesses comes out to be anywhere between Rs. 30-80 Crores, on which they don’t pay any taxes.

It’s obvious that the aforesaid is not agricultural earning instead it’s declared as agricultural income by these assesses just to avoid paying taxes.

According to National Bank of Agriculture and Rural Development (NABARD) Delhi, with hardly any farming land has more farmers indulging in agriculture than Madhya Pradesh, Uttar Pradesh, Karnataka and West Bengal provinces.

Delhi’s so called ‘farmers’ received Rs. 22,077 Crores in agricultural loans during 2009. In reality, these ‘self proclaimed farmers’ are the owners of big farm houses on the outskirts of the capital.

The authorities are well aware of this malpractice. The Tax Administration Reform Committee in its report in November 2014 said, “Agricultural income of non-agriculturists is being increasingly used as a conduit to avoid tax and for laundering funds, resulting in leakage to the tune of Crores in revenue annually”

The Finance Minister of India, Arun Jaitley on 26th April said that the government of India does not plan to tax the farm income.

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Finance Minister of India, Arun Jaitley, wikimedia

It reveals that Indian politicians cutting across party lines indulge in this malpractice, 27% of the winning Lok Sabha M.P’s in 2014 elections have declared wealth of over Rs. 1 Crore, majority of which has been mentioned as agricultural income.

Indian opposition politicians blackmail the political party in power by indulging in spurious farmer agitations.

If there is a bumper crop then the opposition parties start shouting that prices have crashed due to over-supply in the market. When farming cultivation fails due to the vagaries of nature, then they start throwing statistics about farmers suicide.

A group of ‘self proclaimed’ farmers from Tamil Nadu province camped at Jantar Mantar in Delhi, the Indian capital city during March this year and indulged in cheap theatrics to draw attention to their protests.

The leader of this group, P. Ayyakannu is demanding that all farmers should be given loan waivers from banks and quoted highly inflated figures of farmers suicides in Tamil Nadu.

The Tamil Nadu government on 28th April, 2017 conveyed to the Supreme Court of India that no famers committed suicide in the state and clarified that a few, who took this extreme measure did it due to personal reasons.

Many farmers died due to old age and other medical issues. Ayyakannu clubbed all of them together to gather national as well as international attention.

ALSO READ Farmers welfare: What Indian agricultural sector needs to learn from Denmark?

Ayyakannu called off this whole play in Delhi on 23rd April after 40 days, when the Chief Minister of Tamil Nadu came to meet these protestors.
He said that their group is giving a one month’s time-frame to the government in order to fulfill their demands otherwise, they would resume their protests in the national capital from May 25 on a bigger scale.

This impostor farmer leader Ayyakannu again came back to Delhi again on 16th July with his gang of ruffians to continue their drama.

Ayakannu as per media reports is not even a farmer, but a lawyer, who makes huge amounts of money through out of court settlements and personally owns hundreds of acres of land.

He and his bunch of hooligans all look quite healthy and well-fed. They don’t appear like destitute farmers as claimed by them.

Fake farmers like the aforementioned Ayyakannu are just the front faces of this façade in the name of farmers.

The remote controls of such characters remain in the hands of politicians, who use them for their narrow, selfish, corrupt agendas depending on the political situation at the state and national level.

The governments of Punjab, Maharashtra, Karnataka, Rajasthan & U.P. provinces have waived off agricultural loans worth Billions. This has set up a very bad precedent for the rest of the country.

ALSO READ Exclusive: Angry Farmers and Distressed Leaders

There are no ‘free lunches’ in this world. These half baked measures like loan waivers just make people lazy parasites.

The following steps would go a long way in helping the real distressed farmers;

  • Scientific soil and climate testing should be done across all farming regions in India. Farmers can then be educated about which crops to grow profitably, in how many cycles; depending on the soil conditions and climate of the region.
  • Implement agricultural reforms like farming co-operatives, where farmers having small agricultural land holdings can be encouraged to come together and pool their land plus resources together.
  • Crop storage infrastructure should be built and maintained in every village so, that farmer can store their surplus produce rather than sell it desperately at a low price.
  • Crop insurance must be compulsorily introduced all over the country wherein, farmers by paying a nominal amount need not bother about their crops getting destroyed through excessive rain or drought.
  • Organic farming needs to be encouraged instead of over-reliance on chemical fertilizers. The food waste produced by an entire village can be easily turned into biodegradable compost, through innovative schemes like Vermicomposting.
  • Vermicast can replace fertilizers in the agriculture fields. This would save money for the farmer and provide high quality chemical free crops.
  • The APMC’s (Agriculture Produce Marketing Committees) have created a coterie of middlemen, who along with the complicity of these committees, form a virtual barrier between the farmer and the consumer, paying the former a pittance for his produce and charging the latter exorbitant amounts for fruits and vegetables.
    Vegetables are purchased at Rs. 2 or 3 a kg from farmers and then sold at 30 to 40 rupees per kg to urban consumers.
    This setup has been going on for decades in every town and city of India. Millions of urban Indians pay artificially higher prices and majority of farmers are underpaid due to this flawed system.
    The profits are made by middlemen, who do not pay taxes on these huge earnings. It is a common practice for them to store money in cash and not in banks.

These APMC’s must therefore be abolished immediately. Farmers should get direct access to the end consumer through the elimination of middlemen. This would ensure a better monetary return for farmers.

  • Private moneylenders in and around the villages charge a very high rate of interest from farmers. This unscrupulous sector should be bought under government regulation by bringing down the rate of interest to a rational level.
  • Government schools in villages are in shambles. They need to be upgraded so, that quality education at an affordable price is available to every child in the village.
    This would uplift farmers children through educational empowerment. It will enable them to make a transition to non-agricultural professions in future and enhance their family earnings considerably.

The aforementioned steps would cost the government far less than what it is losing in the absurd loan waiver schemes, which anyways don’t help the poor marginal farmer at all.
As regard dealing with the fake farmers of India.

The solution entails; no farm loan waivers and bringing the agricultural income above a certain threshold under the tax bracket.

The aforesaid measures would prevent the fake farmers façade spreading rapidly all over the country, while resolving the agrarian crisis of India by assisting needy farmers of the country.

The author is a Master Degree holder in International Tourism & Leisure Studies from Netherlands and is based in China. 


 

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New Rs 200 notes: It may take ATMs three months to dispense Rs 200

Will all the 2.25 lakh ATM machines across India would be recalibrated?

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Wait for 3 more months as ATM recalibration is not yet done
Wait for 3 more months as ATM recalibration is not yet done. Wikimeida
  • Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up
  • The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent
  • The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon
New Delhi, September 4, 2017: While the RBI launched the new Rs 200 notes a week ago, it may take up to three months for ATMs to start dispensing the new denomination currency “new Rs 200 note” as it will involve a huge exercise of recalibration.

What are ATM companies saying about when will the new Rs 200 notes come into the market?

Some banks have even asked the ATM companies to begin testing the new Rs 200 notes for recalibration of the machines, though they have not got supplies of the new Rs 200 notes/ currency. Only last year, the banks were involved in the recalibration of ATM machines after the demonetization of high-value currency notes in November.
ATM manufacturing companies said that they have not received any directive from the RBI regarding the recalibration of ATMs for the new Rs 200 note. They disclosed that some banks have at an informal level have asked them to start testing of the new note since it is of a different size.

 

When will the supply of the new Rs 200 notes see an increase?

Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up but has not given any time-frame by which it will be available in adequate numbers.

 It is yet to be seen whether all the 2.25 lakh ATM machines across India would be recalibrated for dispensing the new Rs 200 notes.

 

 avi B Goyal, Chairman, and Managing Director, AGS Transact Technologies Limited, which claims to have an installed base of 60,000 ATMs, told IANS, “The process of recalibration will begin once we receive the directive from the RBI. The size of the new Rs 200 notes are different from the existing ones and so, once we receive the new Rs 200 notes, we will have to understand its dimensions and accordingly reconfigure the ATM cassettes. Next, we will have to check if the supply of new Rs 200 notes is good enough to run the cassettes at full capacity.”

 “The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent. In fact, the ATMs will continue to be fully operational during recalibration and will continue to supply Rs 100, Rs 500 and Rs 2,000 denominations,” he said.

 

Among the other companies operating in the sector are NCR Corporation, which has over 1,08,000 machines, and BTI Payments, which has 4,500 cash dispensers. NCR Corporation said that while some banks have reached out to them to start testing of the new Rs 200 notes, they were yet to receive the supply to begin the process.

 “Banks have started getting in touch with us for testing the same “new Rs 200 notes”. They will let us know which machines they wish to configure for new rs 200 notes, which will require physical visits to ATMs. However, the new Rs 200 notes are still to be provided to us by the respective banks so that the testing can begin,” Anand Garollu, General Manager (Services), NCR Corporation said.

K. Srinivas, Managing Director, and CEO of BTI Payments, a RBI-licensed firm that operates cash dispensers not owned and managed by banks, said, “Recalibration will begin as and when we receive adequate quantity of new Rs 200 notes. We are looking to roll this out as quickly as possible.”

 He said that the industry was expecting new Rs 200 notes to be available over a period of time across various geographies.

 “The recalibration can be done progressively as and when the new denomination note starts to become available. Unlike the last time around (during demonetization), when we had to recalibrate all machines in one go,” Srinivas added.

 The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon. However, emails to RBI in this regard did not elicit any reply, they said.

 “The production of these “new Rs 200 notes” is being ramped up by the currency printing presses and over time, as more notes are printed, it will be distributed across the country through the banking channels and will be available for the public in adequate quantity,” the RBI had said in a statement.

 Currently, new Rs 200 notes are available only through select RBI offices and some banks.

While State Bank of India and Punjab National Bank are reported to have received the new Rs 200 notes, Eknath Baliga, Manager, KYC-Antimoney Laundering Cell, Corporation Bank, Mangalore, told IANS that none of its branches across the country had received the new Rs 200 notes so far.

The new Rs 200 notes are currently being printed only by RBI presses. Security Printing and Minting Corporation of India (SPMCIL) sources told IANS that the company has not received any indent so far for the printing of new Rs 200 notes. India’s two currency presses are owned by RBI and two by SPMCIL, which is a government-owned company.

 How ATM recalibration happens:

Usually, an ATM holds four cassettes — three of which can continue to be used for Rs 100, Rs 500, Rs 2,000, and the fourth cassette can be used for the new Rs 200 notes. On an average, each cassette has a capacity to hold 2,000-2,500 notes depending upon the quality of cash issued by banks. However, there are many ATMs that only have either two or three cassettes.

The number of slots in the ATM can be configured as per the bank’s preference. The banks decide which denomination needs to be configured in a machine on the basis of the customer profile in the area where the ATM is located and the number of transactions on that machine.

The banks need to make requisite changes at their ATM switch before the rollout of the physical recalibration at the ATMs in the field.

The recalibration of a new denomination takes 30-45 minutes per ATM. The process of recalibration is not very difficult but is time-consuming given an engineer has to visit every ATM and configure it to dispense the requisite denomination.

The introduction of the Rs 200 note has been welcomed as it would ease the currency circulation in the market as people prefer lower denomination cash withdrawals from ATMs. Rs 200 would also be more convenient for rural consumers. (IANS)