Economy round-up: Reforms for services trade likely; SEBI to review rules for brokers

The government could soon usher in a slew of reforms to tackle the problem of a shrinking trade surplus in services.

The Economic Times reports that worried by the dwindling trade surplus in services, the commerce ministry is working on reforms to harness India’s relative advantage in medical tourism, technology and leisure travel.

A narrowing of trade surplus from $5.88 billion in July last year to $5.36 billion this year has got the commerce ministry to circulate a cabinet note on domestic reforms to improve earnings from services exports, the report says. The proposals include the setting up of a dedicated body for setting up standards in the services sector and mandating the Niti Aayog to identify steps to boost trade in services.

Meanwhile, the capital markets regulator Securities and Exchange Board of India (SEBI), in a first exercise of its kind, is carrying out a comprehensive review of rules for stock brokers while they handle clients’ money and stocks, The Economic Times says in another report. This move, the report says, comes after SEBI came across instances of siphoning off funds from investors’ accounts. The report adds that SEBI will put in place “red flag indicators” to indicate any misuse of clients’ funds.

Evan as the market regulator goes after fraudulent brokers, the banking regulator, the Reserve Bank of India, may change tack and opt for a conciliatory approach toward bankers on the issue of non-performing assets (NPAs). The Mint newspaper says in a report that the change in strategy will not be in terms of going soft on bankers, but afford more flexibility to them. This apparent change in approach comes as new RBI governor Urjit Patel wants to explore more options to tackle the issue of Rs. 6.3 trillion worth of bad assets Indian banks are sitting on, the report says.

The government on Monday issued draft procedural rules for the Goods and Services Tax (GST) regime, which it hopes will be implemented from 1 April. Indian businesses may be able to register online within a time period of three days and that applications for registration will be deemed to be approved if tax officials fail to act against them within a stipulated time period.

Separately, The Financial Express reports that the government is keener on the proposed 5% stake sale of state-run explorer ONGC Ltd, now that it is no longer saddled with an oil subsidy burden arising from under-recoveries. The disinvestment, which already has cabinet approval, could fetch the government Rs 11,000 crore at current prices, while bringing its stake in the company down to just over 63% from the 68% it currently owns. During 2016-17, the government has targeted raising Rs 56,500 crore via disinvestment in state-owned companies.

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