CII wants dividends from overseas subsidiaries declared tax-free
New Delhi: A CII-Crisil report has said that dividends from overseas subsidiaries should be declared tax-free instead of imposing on them the full corporate tax rate.

The report has also called for the creation of an apex agency, perhaps under the aegis of the Exim Bank, to help Indian banks assess the viability of international ventures of Indian firms and fund them.

The report has also highlighted the need to create another agency — on the lines of the UK Department of Trade and Investment — to provide country specific as well as sector-specific information to Indian firms. The logic cited is the need for specific information on the legal framework and political risks.

The report adds that efforts are needed to establish internationally acceptable investment norms under which Indian firms can invest abroad.
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FM issues austerity guidelines for ministries
New Delhi: The finance ministry has issued additional guidelines for various ministries and departments to undertake austerity measures in order to meet the fiscal responsibility and budget management (FRBM) target and release funds for social sector schemes under the NCMP of the UPA government.

According to the recently issued guidelines, every ministry and department would make 5 per cent cut on non-plan expenditure for the current financial year.

However, interest payment, repayment of debt, defence capital, salaries, pension and the finance commission grants to the states do not come under this head.

The guidelines further said no appropriation of funds to augment the non-plan heads of expenditure would be allowed during the current financial year.

The implementation of this cut would be reviewed on quarterly basis.

As a part of the drive, foreign travel of officers has been brought under the scanner with restriction being imposed on foreign trips in a year.

No officer should undertake more than four official visits abroad in a year, the guidelines said.

Besides, various government offices under central government shall make every effort to avoid unnecessary expenditure. Day-to-day functioning of the government offices would be managed with utmost economy in operating expenses such as maintenance of building offices equipment, furniture and hospitality.

The guidelines also asked the ministries and departments to use ICT as part of cost saving measures.

The centre's revenue deficit during April-august, 2006 crossed 93 per cent of the target for the whole fiscal. The centre has targeted revenue deficit to be 2.1 per cent of GDP this fiscal.
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