Tax exemptions on small savings likely to go
Mumbai -  The Reserve Bank of India has suggested a gradual elimination of tax exemptions on small savings and alignment of interest rates on small-savings instruments with those on similar instruments offered by banks and financial institutions to tackle the problem of growing interest burden in the budget.

The RBI has recommended harmonisation of tax exemptions for all savings instruments, repayment of interest and principal on the special deposit schemes, issuance of callable bonds, floating rate bonds and inflation-indexed bonds.

On repayment of interest and principal on the special deposit schemes, the RBI has said that a gradual phasing out will be the preferred approach.

The plan to remove the tax benefit from small savings is significant since banks have been demanding a similar benefit to bank deposits to create a level-playing field.

In the recent past, the government slashed returns on small savings to restructure the overall interest rate matrix.
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No separate licences for Internet, telephony-based services; Convergence Bill 2001
New Delhi - The government has done away with separate licensing for Internet-enabled services like e-mail and telephony-based services in the final draft of the Convergence Bill 2001, cleared by the Cabinet yesterday.
The bill has also recognised the role of the government in providing right of way to service providers. The service providers require a right of way for digging and laying cables or erecting poles or towers for offering services.

The earlier draft of the bill had left it to the individual license holders to obtain the right of way.

In another change, the final draft of the bill has done away with the provisions, which permitted the centre to detain press messages and articles of the non-accredited journalists.

However, the bill has not incorporated one of the major demands of the industry of a composite licence for all communications services, which has disappointed the industry considerably. Industry specialists say that they do not see how the bill will change the regulatory environment if everything else remains the same.

Government officials had earlier said that the demand for a single licence was unacceptable as it is not feasible and it would make the obligations of the licence holders unrealistic.
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