Union Finance Minister Smt. Nirmala Sitharaman led the Indian delegation to the Annual Meetings Plenary session of the International Monetary Fund (IMF) and the World Bank Group held in Washington DC yesterday . She also attended the Working Lunch Session of the Development Committee (DC), the ministerial-level committee of the IMF and the World Bank. In the DC Lunch, the members discussed about the global economic outlook. In her intervention, the Finance Minister mentioned that trade wars and protectionism have generated uncertainties that will ultimately impact flow of capital, goods and services. She called for ‘concerted action’ to mitigate the disruption on account of synchronous slowdown and to invoke the spirit of multilateralism for global growth. She further said that the increased trade integration, geopolitical uncertainties, and high accumulated debt levels necessitate strong global coordination and that we need not wait for the slowdown to become a crisis.

The 40^th meetings of the International Monetary and Financial Committee (IMFC) of the IMF are being held at this year’s Annual Meetings. During the day, three sessions of the IMFC took place. The IMFC Introductory Session was focused on Global Developments and Prospects and the discussions centred on the World Economic Outlook released on October 15, 2019. The Early Warning Exercise discussed upcoming risks to global economy and stability. A special session on IMF resources and governance was also held early in the day, in the context of the 15^th Round of the quota discussions concluding this year. Secretary, Department of Economic Affairs, Shri Atanu Chakraborty, led the Indian delegation at this session.

Earlier in the day , Finance Minister Smt. Nirmala Sitharaman also led the Indian delegation to the G20 Finance Ministers and Central Bank Governors meeting in which the deliberations centred on international taxation and Stablecoins. The Ministers and Governors also took updates from the G20 Deputies on Quality Infrastructure Investment, Debt Sustainability, Financing for Universal Health Care and Building Effective Country Platforms, and from the Africa Advisory Group on the Compact with Africa (CwA) initiative. On the discussions at the session regarding the work underway on developing a consensus solution on tax challenges arising from digitalization, the Finance Minister stated that a unified approach to the nexus and profit allocation challenges is a promising one that merits serious attention. A solution that is simple to implement, simple to administer and simple to comply with is needed.

On the side-line of the above meetings, the Finance Minister held several bilateral meetings, including with the First Deputy Prime Minister and Finance Minister of Russia, Mr. Anton Siluanov; Finance Minister of the Kyrgyz Republic, Ms. Baktygul Jeenbaeva; Finance Minister of Switzerland, Mr. Ulei Maurer; the Australian Treasurer, Mr. Josh Frydenberg; and the Finance Minister of Maldives, Mr. Ibrahim Ameer. In these meetings, the two sides discussed issues of common interest.

Secretary , Economic Affairs , Shri. Atanu Chakraborty also held a few one-on-one meetings on the side-lines. He met the Director General of the French Treasury, Ms. Renaud Basso; and the Chief Financial Officer of the World Bank, Ms. Anshula Kant. He also addressed investors in a session organized by JP Morgan.

The Finance Minister is currently on an official tour to Washington DC to attend the Annual Meetings of the IMF and the World Bank and other associated meetings. She is accompanied by Secretary, Department of Economic Affairs, and other officials from the Department.

 

 

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman attends the Annual Meetings Plenary session during the ongoing International Monetary Fund-World Bank's Annual Meetings 2019 in Washington DC on 18th October 2019.

RM/KMN
(Release ID: 1588504)

 

Ministry of Finance

Finance Minister led the Indian delegation at G20 Finance Ministers and Central Bank Governors as well as the BRICS Finance Ministers and Central Bank Governors meetings on the side-lines of the IMF/World Bank Annual Meetings

FM re-emphasized the need for G20 to ensure collective action so as to enable global growth to regain pace

Finance Minister leading Indian delegation to the IMF/WB Annual Meetings being held in Washington D.C this week

Dated: 18 OCT 2019

Union Minister for Finance & Corporate Affairs , Smt. Nirmala Sitharaman, led the Indian delegation at G20 Finance Ministers and Central Bank Governors as well as the BRICS Finance Ministers and Central Bank Governors meetings held in Washington D.C yesterday. Finance Minister is leading the Indian delegation to the IMF/WB Annual Meetings being held in Washington D.C this week.

The focus of discussions in the G20 Finance Ministers and Central Bank Governors Meeting was on the current challenges to the global economy and possible responses to mitigate them. Smt Sitharaman emphasized that the G20 has the responsibility to navigate the global policy co-ordination in effective fashion by identifying and taking strong measures for building buffers and catalysing a second wave of reforms. She gave a clarion call for concerted action in the face of global slowdown. She also highlighted that the emerging market economies, in particular, face the challenge of achieving economic growth and inclusive development while pursuing sustainable financing. In this context, Finance Minister emphasized on the  importance of countries pursuing structural reform measures to counter the growth slowdown.  The structural reform measures undertaken by India was highlighted by the Finance Minister particularly, the recent measures such as reduction of Corporate tax. Smt. Sitharaman indicated that India has reduced the Corporate tax from 30% to 22% thereby making India one of the lowest corporate tax imposing countries in the world today. This will spur investment. Alongside the Corporate tax reform, Government of India’s measures pertaining to Aaadhar based Direct Benefit Transfer as well as Universal Health Care policy received special mention from the Finance Minister. In conclusion, FM re-emphasized the need for G20 to ensure collective action so as to enable global growth to regain pace.

The main issues discussed during the BRICS FMCBG meeting included those pertaining to New Development Bank (such as membership expansion and enhancing the effectiveness of the utilization of the NDB’s Project Preparation Facility); developing the way forward on IMF resources as well as formulating a consensus co-operation on Authorized Economic Operators Programme.

On NDB issues, the Finance Minister in her interventions, emphasized India’s strong support for NDB’s membership expansion and encouraged NDB Management to continue the good progress achieved on this issue till date. As far as improving the effectiveness of the Project Preparation Facility is concerned, the Finance Minister indicated that sustainable recovery mechanisms need to be inbuilt into the PPF guidelines so that the assistance extended is recovered once the project loan is sanctioned. Regarding the IMF resources issue, Smt. Sitharaman indicated India’s deep regret on the lack of progress of the 15th General Review of Quotas (15th GRQ). With reference to the alternative proposal emerging at the current juncture with reference to strengthening borrowed resources of IMF, Finance Minister expressed a word of caution and indicated that borrowed resources cannot provide full confidence in extreme crisis situations as creditor nations themselves may be in stress.

Prior to the G20 FMCBG, the G20 Finance and Central Bank Deputies also met to discuss the way forward on priority G20 agenda items such as Quality Infrastructure Investment, building effective country platforms, attaining debt sustainability as well as strengthening universal health care financing.  Secretary, Economic Affairs Shri Atanu Chakraborty as India’s G20 Finance Deputy led the Ministry of Finance delegation for this meeting.

On Quality Infrastructure Investment, Shri Chakraborty urged the G20 to explore innovative sources of financing for boosting infrastructure development ensuring that quality considerations are in-built into these financing sources. As far as debt sustainability is concerned, Secretary , Economic Affairs while agreeing the importance of the agenda, struck a word of caution that the agenda of debt sustainability and transparency in LICs should not undermine the internationally agreed commitment on official development assistance. He also expressed India’s keen interest in the work IMF is pursuing on collateralized debt and looked forward to the research from IMF on the area. On strengthening UHC financing, he emphasised that the discussions on UHC financing must adopt a holistic approach encompassing preventive, curative and palliative care as well as plurality of pathways for achieving UHC including through traditional and complementary systems of medicine. On building effective country platforms, Shri Chakraborty emphasized that the G20 should reflect further about who will build the platform, how the private sector will be engaged in the process and the contours and scope of the platform as to whether it will involve project preparation, knowledge sharing, technical assistance etc.

In other engagements, Union Finance Minister attended an Industry Roundtable organized by USIBC and CII as well as an Economist Roundtable organized by CII. She also held bilateral meetings with Chancellor of Exchequer United Kingdom, Mr. Sajid Javed; Secretary of State for Development of the United Kingdom, Rt. Hon. Alok Sharma; Finance Minister and Deputy Prime Minister of South Korea, Mr. Hong Nam Ki; President of the World Bank, Mr. David Malpass; Special Advisor to Japanese Finance Minister and Candidate for ADB, Mr. Masatsugu Asakawa; Governor of JBIC, Mr. Tadashi Maeda; and Global CEO of Standard Chartered, Mr. Bill Winters.

RM/KMN
(Release ID: 1588430)

 

Ministry of Finance

Income Tax Department conducts Search on a “wellness group” in Chennai

Dated: 18^th OCT 2019

On 16.10.2019, the Income Tax Department conducted search action under the Income-tax Act, 1961 in the case of a conglomerate of trusts and companies that run year-round “wellness courses” and training programmes in philosophy, spirituality, etc at various sprawling residential campuses in Varadaiahpalem in Andhra Pradesh (AP), and also in Chennai and Bengaluru.

The group which was founded by a spiritual guru in the 1980s with “oneness” philosophy has also diversified into several sectors including real estate, construction, sports, etc in India and abroad. The group is presently managed and controlled by the spiritual leader who laid the foundation of the group, and his son. The courses attract residential customers from abroad and the group earns substantial receipts in foreign exchange. There was intelligence that the group has been suppressing its receipts which are ploughed into investment in huge tracts of landed property in AP and Tamil Nadu (TN) and also in investments abroad. The search action which is still in progress has covered about 40 premises located in Chennai, Hyderabad, Bengaluru and Varadaiahpalem.

During the search proceedings, evidence has been found that the group has been regularly suppressing its receipts at its various centres or ashrams. Evidence has been found with key employees who maintained record of cash collections that were kept outside the accounts for use in making investments elsewhere and also for paying for properties over and above documented values. It is learnt that the group also earned unaccounted income in receiving cash from property sales over and above documented values. A preliminary estimate of such unaccounted cash receipts is Rs 409 crore from FY 2014-15 onwards. Such unaccounted cash receipts are also evidenced by huge quantities of cash and other valuables found at the residences of the founder and his son, and at one of the campuses. A total sum of cash of Rs 43.9 crore has been found and seized by the Department at these premises.

Apart from the above, substantial sums of foreign currencies have also been found and seized. The total of such foreign exchange found at these premises is about $2.5 million which amounts to approximately Rs 18 crore. Foreign exchange in other currencies has also been found and seized. Substantial quantities of undisclosed gold in the form of jewellery, about 88 kg approximately valued at over Rs 26 crore, has also been found and seized. Undisclosed diamonds amounting to 1,271 carats valued approximately at about Rs 5 crore were also found and seized. Total value of seizure so far is approximately Rs 93 crore. The undisclosed income of the group detected so far is estimated at more than Rs 500 crore. The search proceedings are still in progress.

An important finding of the search is that the group has been investing in a number of companies in India and abroad, including in tax havens. Some of these companies based in China, USA, Singapore, UAE, etc are found to be receiving payments from foreign clients who attend the various residential “wellness” courses offered in India. The Department is investigating into diversion of income taxable in India to offshore entities by the group in this process. Further, it is found that one of the group trusts may be providing accommodation entries for other parties by receiving donations from them and then returning the money back under the garb of expenses and receiving a small percentage as fee. Instances have also been found where the group is not accounting for money received from foreign clients in cash in foreign currency and then exchanging the same in the grey market. All these leads are being pursued and investigation is in progress.

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RM/KMN

(Release ID: 1588457)

 

 

Ministry of Finance

Income Tax Department conducts searches on business group in Goa

Dated: 12 OCT 2019

The Income Tax Department carried out search operation on 10th October 2019 covering six premises of two groups involved in the sale-purchase of hotel resort at Goa.

One of the groups covered currently owns a large property at Goa on which a 5 star resort project is being built. The group is engaged primarily in hotels & hospitality, real estate and construction. The buyer, a Delhi Based group of companies is into catering, restaurant and hotel business.

Search operations have been concluded. The search resulted in  seizure of undisclosed  assets of Rs 4.39 crore comprising undisclosed cash of Rs 2.55 crore and jewellery/valuables worth Rs 1.84 crore.The group made a disclosure of a total amount of Rs 124.41 crore representing undisclosed income and also committed to pay taxes immediately.

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RM/KMN

(Release ID: 1587948)

 

Ministry of Finance

Income Tax Department conducts searches on coaching institutes in Namakkal, Tamil Nadu

Dated: 12 OCT 2019

The Income Tax Department, conducted a search action on 11th October, 2019 in the case of a business group based in Namakkal, Tamil Nadu. The group is mainly into running of educational institutions, and coaching institutes for competitive exams like NEET, etc. The group comprises several partnership firms and a trust controlled by a closely knit group of individuals. The search action covered 17 premises including residential premises of the group's promoters. The premises are located in Namakkal, Perundurai, Karur and Chennai in Tamil Nadu.

The search was undertaken on the basis of intelligence that the group was indulging in substantial tax evasion by suppression of fee receipts received from students. The modus operandi was to receive part of the fees in cash and such cash receipts were invariably not entered in the regular books of accounts. Instead, such receipts were maintained in separate set of accounts. Incriminating evidence of such suppression of receipts has been found during the search in the form of accounts maintained in diaries, in electronic storage devices and also in the form of huge sums of unaccounted cash. It was found that cash was kept in lockers in banks in the names of employees who acted as benami or name lenders.

Significant amount of cash was found in a safe inside an auditorium in the main school premises. Unaccounted cash of about Rs 30 crore has been found and seized. The unaccounted receipts are deployed for acquiring immovable properties as personal investments which are then leased for long term to the trust for expanding to other towns. It was also found that highly priced faculty are hired and employed in the coaching institutes and they are paid outside the books. Based on preliminary findings, the undisclosed income of the group is estimated at more than Rs 150 crore. The search is still in progress.

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RM/KMN

(Release ID: 1587925)