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Budget 205-26: FDI limit for insurance sector raised to 100 per cent

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New Delhi, Feb 1: Finance Minister Nirmala Sitharaman on Saturday announced an increase in the FDI limit for the insurance sector from 74 per cent to 100 per cent in the Budget for 2025-26 as part of far-reaching reforms in the financial sector.

This enhanced limit will be available for those companies which invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified, the Finance Minister said.

Budget 2025-26 aims to initiate transformative reforms across six domains which will augment our growth potential and global competitiveness during the next five years, she while presenting the Budget in Parliament.

One of these domains is the financial sector which encompasses sectors like insurance, pensions, bilateral investment treaties (BIT) and so forth, she said.

A forum for regulatory coordination and development of pension products will be set up, the Finance Minister stated.

Besides, to implement the earlier announcement on simplifying the KYC process, the revamped Central KYC Registry will be rolled out in 2025. A streamlined system for periodic updating will also be implemented, she added.

The Finance Minister also said that requirements and procedures for speedy approval of company mergers will be rationalised. The scope for fast-track mergers will also be widened and the process will be made simpler.

The FDI reforms assume significance as India has emerged as a hot investment destination with multinational giants such as Apple and Tesla looking for alternative supply chains after the US sanctions against China.

Prime Minister Narendra Modi recently said that the Indian automobile sector had attracted more than $36 billion in FDI over the last four years and this figure would go up several times in the coming years as he exhorted vehicle manufacturers to follow the mantra of ‘Make in India and Make for the World.’

Inaugurated the Bharat Mobility Global Expo 2025 at Bharat Mandapam in the national capital, the Prime Minister said that India presented a huge opportunity and is an ideal destination for investors. The government was paving the way for global investors to bring more FDI into the automobile sector which was technology and innovation-driven, he pointed out.

Sectors such as electronics have attracted major investments with the semiconductor units also coming up in the country for the first time.

Business

₹122-Crore New India Co-op Bank Scam: EOW Searches Ex-Chairman’s Home; Hitesh Mehta’s Lie Detector Test Set For March 11

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Mumbai: The Mumbai police’s economic offences wing (EOW) has searched the residence of New India Cooperative Bank’s former chairman Hiren Bhanu in connection with the embezzlement of Rs 122 crore at the lender, officials said on Wednesday.

EOW Recovers Several Documents

During the search, EOW recovered several documents, which police are examining, an official said.

The house search was conducted in the Malabar Hill area of south Mumbai, where Hiren Bhanu and his wife Gauri Bhanu stayed in a rented flat, an official said. Gauri previously held the position of vice chairman at the bank.

The couple also own a flat at Nepean Sea Road which they have rented out, an official said. Both are wanted accused in the Rs 122-crore embezzlement case.

The EOW team is identifying the couple’s properties and also ascertaining whether they were acquired with the proceeds of the crime, he said.

About The Lie Detector Test

Meanwhile, the agency will conduct a lie detector test on Hitesh Mehta, former general manager and head of the accounts of the bank, on March 11, the official said.

Mehta is not cooperating and is hiding some important facts concerning the case, due to which he has not given his consent for the test, he said. But the court has permitted the police to conduct the forensic psychological test on Mehta, the official said.

The EOW is probing what prompted the Reserve Bank of India’s inspection team to visit the bank in February 2025.

As per the balance sheets of the bank, as of March 31, 2019, it had Rs 33.71 crore in cash which rose to Rs 99 crore on March 31, 2020. It’s almost a three-fold jump, he said.

On March 31, 2021, the figure further increased to 194 crore and it was Rs 105 crore in 2022. At some point in the current financial year, the amount rose to even Rs 152 crore. Police are examining why the RBI team conducted an inspection last month and not in some of the previous years, the official said.

So far, police have arrested four persons in connection with the embezzlement, and four accused are still at large, he added.

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Business

Bombay HC To Decide GST Rate On Donuts And Cakes: 5% As Restaurant Service Or 18% As Bakery Product?

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Mumbai: The Bombay High Court is set to decide whether donuts and cakes should be classified under restaurant services, attracting 5% GST, or as bakery products, which could be taxed up to 18%.

A bench of Justices BP Colabawalla and Firdosh Pooniwalla was hearing a plea by Mad Over Donuts (Himesh Foods) against a show-cause notice (SCN) issued by the Directorate General of GST Intelligence (DGGI).

The Court recorded the DGGI’s assurance that no coercive recovery action would be taken against the petitioner while the case is pending. It also clarified that the petitioner could seek a stay if any recovery notice is issued.

The DGGI has demanded nearly Rs100 crore in tax dues from Mad Over Donuts and other bakery chains, arguing that donuts should be taxed as bakery products rather than under restaurant services.

The petitioner’s counsel, Abhishek Rastogi, contended that the supply of food, whether consumed on-site or taken away, qualifies as a composite supply of services under the CGST Act. He cited GST notifications that include restaurant, canteen, and takeaway services under the 5% tax bracket. He also referred to a government circular that supports classifying takeaway food under restaurant services.

Additionally, the petitioner raised procedural concerns regarding the DGGI’s issuance of a centralised SCN covering multiple GST registrations. He argued that separate notices should be issued for each jurisdiction to ensure clarity and fairness.

The DGGI’s counsel, Jitendra Mishra, clarified that no recovery notice had been issued so far, and the Court accepted this as an undertaking. The HC has directed the tax authorities to file their replies by March 17 and scheduled the matter for hearing on March 24.

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Hyundai has big plans for EV exports from India

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New Delhi, March 5: India will play a key role as a manufacturing hub in achieving Hyundai Motor Company’s aim of selling 20 lakh electric vehicles in the global market by 2030, according to the company’s president and CEO Jose Munoz.

Addressing Hyundai Motor India employees at a town hall meeting in the company’s headquarters in Gurugram on the outskirts of Delhi, he said the company’s new factory that is coming up at Talegaon in Maharashtra would not only help meet domestic demand but also position HMIL as a global manufacturing hub.

HMIL aims to reach a total annual production capacity of 1.1 million vehicles when its facility at Talegaon becomes fully operational. The company HMC will continue to support HMIL to expand its EV offering and invest in the necessary infrastructure to support this shift, he added.

To meet the growing demand for vehicles, HMIL’s upcoming manufacturing facility in Talegaon will play an important role in improving local manufacturing capabilities. HMIL is dedicated to making EVs more accessible and suited to Indian consumers’ needs, aligning with the country’s push for green and eco-friendly vehicles. mobility solutions.

Munoz said, “India is the third-largest market in Hyundai’s global operations. HMIL’s IPO has helped HMC to invest and expand in new products and additional production capacity in India. HMIL has emerged as a world-class automotive manufacturing and regional export hub and is integral to Hyundai’s global vision.”

In a statement, HMIL said, “Muñoz’s visit reinforced HMC’s commitment to HMIL while highlighting the overarching strategic goals, exploring new opportunities and fostering a culture of collaboration, innovation, and excellence. He also emphasized the importance of Hyundai’s customer-centric philosophy and achieving the highest standards of quality and customer care to ensure sustainable success amid the rapidly evolving business environment.

He reinforced HMC’s unwavering support to HMIL’s commitment towards India by continuing to contribute actively towards building a ‘Viksit Bharat’, the statement added.

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