The oil ministry's proposal has been pending with the finance ministry for a while now. After the Inter-Ministerial Group (IMG) on inflation met here on Monday, oil minister Jaipal Reddy renewed his demand and said that he has asked the government to raise taxes on such vehicles.
A senior official of Central Board of Excise and Customs said a proposal was pending but no decision was taken yet. He, however, indicated that the government was now inclined to consider the proposal given the huge gap between the retail prices of the two motor fuels.
Before this year's budget, Reddy had demanded an additional excise duty of Rs 80,000 on diesel vehicles. The proposal was, however, opposed by the automotive industry and the department of heavy industries.
The idea of an additional excise levy has been tossed around in the oil ministry since 2008-09 as a way of raising funds to at least partially meet the Centre's burden on subsidizing diesel. But the idea never made it to the formal discussion table since it was felt that the funds garnered would not be significant in view of the massive size of the fuel subsidy burden.
The recent hike in petrol prices by Rs 7.50 has created a big gap between retail prices of petrol and diesel. While diesel is selling for Rs 41 a litre in Delhi, petrol is above Rs 73 a litre. The current subsidy on diesel is more than Rs 15 a litre that the government partly subsidizes to oil marketing companies.
The gap has also affected fuel consumption patterns and diesel demand has outstripped petrol for the first time in 15 years.
Meanwhile, the finance minister is likely to write to all chief ministers to consider cutting value added tax on petrol. On its part, the Centre may lower its duties to give some relief to the common man in view of the steep hike in petrol price. Already, Delhi, Uttarakhand and Kerala have announced cut in VAT on petrol.
In the budget for 2012-13, the finance minister had hiked the excise duty for both petrol and diesel cars with engines under 1,200 cc (petrol) and 1500 cc for diesel cars with length exceeding four metres to 24% from 22% and a fixed duty of Rs 15,000. Cars with engines exceeding the above capacity were charged an ad valorem duty of 27%.
The finance minister had, however, avoided raising additional duty separately on diesel cars.
Forex: USD/JPY retraces, held at 79.33 - FXStreet.com
Forex Income Map Goes Live - Get the Latest Details + Bonus - SBWire
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Bailout fears spark Bankia shares dive - The Independent
Finance Ministry to hold roadshows in five Gulf countries to attract QFIs - Economic Times
"We will organise roadshows from June 10-15 in five Gulf countries -- Bahrain, Oman, Kuwait, the UAE and Saudi Arabia, to attract Qualified Foreign Investors (QFI) in the securities market," a senior Finance Ministry official said.
A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs do not include FIIs/sub-accounts.
"We are discussing many things to encourage more capital flows. We are looking at various things as to how to implement budget announcements for QFIs, FIIs," the official added.
The official further said that the ministry is working on measures for attracting foreign investment into corporate bonds. Also the FII limits set for investment into these instruments were almost exhausted in the last fiscal.
The Foreign Institutional Investors (FIIs) can invest up to $20 billion in corporate bonds and $15 billion in government securities (G-secs).
It is expected that over the next two years QFIs would invest $50-75 billion in the country's equity and bond markets.
In Budget 2012-13, Finance Minister Pranab Mukherjee had announced opening up of corporate bond market for QFIs.
Earlier on January 1, 2012, the government had allowed QFIs to directly invest in the Indian equity market.
Allowing QFIs to directly invest in the Indian equity and bond markets would widen the non-resident investor base in stock markets and expand the set of non-resident portfolio investors, experts said.
The move comes against the backdrop of significant foreign capital outflows from the domestic equity market and lack of investors interest in corporate bond market.
In August last year, the government had allowed foreign investors to directly invest up to $13 billion in equity and debt schemes of mutual funds.
Personal finance apps, ranked by Mobilewalla - Fort Worth Star-Telegram
Cash management can be a tricky business, unless you consistently stay on top of all of your incoming and outgoing transactions. Apps can help you track your spending, set goals and keep all of your accounts in one place.
Apple appsMint.com Personal Finance (Free)* -- One of the most popular money-management apps. You can create a razor-sharp view of your accounts, track your budgets and better manage your expenses. (Mobilewalla score: 99/100)CheckPlease Lite Tip Calculator (Free)* -- Adjust the tip rate on your checks, split the bill among your friends or round up your tip. Take the guesswork out of it. Includes a tutorial to show you options. (Score: 93/100)My Eyes Only -- Secure Password Manager (Free) -- Having trouble keeping track of all the passwords to your accounts? Keep them in one place and recover them easily. You'll never be locked out again. (Score: 89/100)SplashMoney -- Personal Finance Manager ($4.99) -- You can connect to your bank accounts and sync to your PC or Mac to track all of your different accounts, from credit cards to money markets. Includes charts to help the budgeting process. (Score: 82/100)Adaptu Wallet: Personal Finance and Money Management (Free)* -- Manage your cash flow, stay apprised of your monthly budget and enter photos of all your cards to free up your wallet. (Score: 69/100)Android appsPayPal (Free)* -- Millions of individuals and small businesses trust PayPal with their daily transactions and credit-card processing. Easily manage your transactions, or simply send your friends money via this simple and secure platform. (Mobilewalla score: 89/100)Google Finance (Free) -- Keep track of your entire stock portfolio with real-time alerts from Google Finance. A must-have for day traders and stock junkies. (Score: 87/100)EasyMoney -- Expense Manager (Free) Manage and track all of your personal or work expenses with ease. Quickly assess your monthly spending levels with graphic displays or instant reporting for that demanding boss. (Score: 86/100)E*TRADE Mobile Pro (Free)* -- Manage your E*TRADE account securely and effectively from this feature-rich platform. Get quotes, make trades or chat directly with E*TRADE representatives. (Score: 84/100)mooLa! Platinum Edition ($4.99) -- Track and manage all of your "moola" in one simple-to-use interface. Pay bills, manage investments, even balance your checkbook. (Score: 69/100)Apps with an asterisk* denote availability on Apple and Android.Mobilewalla is a search and discovery engine using breakthrough technology to score every app to help consumers navigate the mobile application marketplace. Apps are scored using an algorithm that weighs several characteristics, including user ratings, position within category and staff recommendations. For more app intel, go to www.mobilewalla.com.EU finance ministers haggle over bank rules - Yahoo Finance
BRUSSELS (AP) -- European Union finance ministers are to meet in in Brussels Tuesday to hammer out an agreement over how high banks should build their defenses against future financial shocks, with the U.K. running the risk of being isolated over who should set the height.
The EU's 27 members agree on the need to increase capital reserves of banks, following an international agreement called Basel III, which was negotiated by the world's largest economies to avoid another financial meltdown such as the one brought on by the collapse of U.S. investment bank Lehman Brothers in 2008.
But the U.K. wants national regulators to be able to set requirements significantly higher than those of the EU — a position opposed by almost all other EU members, who fear investors might then prefer UK banks and flee from those in other countries.
On his way into the meeting Tuesday morning, George Osborne, the British chancellor of the exchequer, was non-committal about the possibility of reaching an agreement.
"This is a time of considerable uncertainty in the eurozone economies," he said, referring to the 17 countries — the U.K. not among them — that use the euro currency. "And that uncertainty is undermining the entire European recovery. And I think we're reaching a point where we've got to make a decision to see the eurozone stand behind their currency. A very important part of that, of course, is strengthening the entire European banking system. And that is what we intend to do today."
Once enacted, Basel III would require lenders to increase their highest-quality capital — such as equity and cash reserves — gradually from 2 percent of the risky assets they hold to 7 percent by 2019. An additional 2.5 percent would have to be built up during good times. All members of the G-20 have agreed to implement Basel III; if the European Union succeeds, it would become the first entity to institute the new requirements.
The U.K. is arguing that, because national taxpayers have to bail out banks when they fail, national authorities should be able to set more stringent requirements to guard against such failures. A compromise proposal offered by the Danes, who hold the rotating presidency of the European Union, would allow national authorities some leeway to increase requirements beyond those called for in the Basel III agreement. That proposal has broad support — except, so far, from the U.K.
The finance ministers can approve the compromise proposal without British support, through what is known as qualified majority voting, in which member countries have different numbers of votes according to their populations. However, there is a tradition in the EU that changes that would affect an industry in a particular country — such as the banking sector in the U.K. — are not forced into effect over the objections of that country, and consensus is sought.
"I think there should be a unanimous decision on such an important issue," Swedish Finance Minister Anders Borg said on his way into the meeting.
Finance sector prepares for Greek exit - just in case - New Statesman
No matter how unlikely the financial sector thinks Greece exiting the euro will be, it is taking every precaution possibile to make sure it doesn't get hurt by the process.
Lloyd's of London is preparing for a collapse of the single currency, and has reduced its exposure to the continent "as much as possible", according to a report in the Sunday Telegraph. Despite that, Europe still accounts for 18 per cent of Lloyd's £23.5bn of gross written premiums, with much of that concentrated in Spain and Italy, as well as the safer markets of France and Germany.
Richard Ward, the chief executive of Lloyd's, said:
I'm quite worried about Europe. With all the concerns around the eurozone at the moment, we've got to be careful doing business in Europe and there are a lot of question marks over writing business in the future in euros. I don't think that if Greece exited the euro it would lead to the collapse of the eurozone, but what we need to do is prepare for that eventuality. . .
We've got multi-currency functionality and we would switch to multi-currency settlement if the Greeks abandoned the euro and started using the drachma again.
Other institutions are putting their own houses in order. Two weeks ago, ITV's Laura Kuenssberg tweeted from a trading floor where the drachma had already been installed into the systems, and Reuters reported that a number of banks were quietly preparing for the exit, in which case those problems would be the least of their worries:
Some banks never erased the drachma from their systems after Greece adopted the euro more than a decade ago and would be ready at the flick of a switch if its debt problems forced it to bring back national banknotes and coins. . .
A Greek departure from the euro would create legal and practical problems for the banks which would dwarf the relatively straightforward technical job of dealing in a new currency.
But how unlikely does everyone think exit actually is? Are they covering for an extreme black swan event, or is it something which they are all expecting? Joe Weisenthal at Business Insider provides this chart, from Credit Suisse:
For those of you without the maths skills, that's a roughly 15 per cent total chance of a Greek exit, and another 20 per cent chance of a third round of elections (which, of course, takes us right back where we are already). Not definitely going to happen, but worth preparing for in case. No one wants to shout "fire" and spark a run, but no one wants to be the last one in the burning room either.
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