By Manoj Kumar and Aftab Ahmed

NEW DELHI, Oct 12 (Reuters)Spending to help India’s pandemic-hit economy is likely to face delays after the federal government and some states on Monday failed to agree who should borrow to cover revenue shortfalls.

India’s Goods and Services Tax Council, comprising federal and state finance ministers, last week extended a surcharge on luxury goods including cars and tobacco products beyond 2022 to help states repay loans raised to fill revenue gaps in the current fiscal year.

While 21 states, mainly ruled by Prime Minister Narendra Modi’s party and its allies have agreed to borrow from the market, around 10 which are run by opposition parties insist that the federal government should borrow and compensate them.

Under the 2017 national goods and services tax (GST), the federal government was mandated to compensate states until 2022 if their revenue growth fell below 14% a year.

But states now facing a tax shortfall of about 3 trillion rupees ($41 billion) in the financial year ending in March as a result of the coronavirus crisis, are only likely to get about 650 billion rupees from the federal government.

“There was no unanimity among the members of the GST council on borrowing,” Nirmala Sitharaman told a news briefing.

Some states said they will take the dispute to the Supreme Court, blaming the federal government for violating the accord.

Sitharaman said the government will proceed with the states who have agreed to borrow, but declined to comment on how the dispute with the others would be resolved.

Rajat Bose, a partner at Shardul Amarchand Mangaldas, a law firm specialising in tax matters, said the stalemate was likely to continue.

“The only certainty is that the levy of cess (surcharge) will continue beyond 2022 which means that eventually

NEW DELHI, Oct 12 (Reuters)India’s finance minister on Monday announced steps to stimulate consumer demand including advance payment of a part of the wages of federal government employees for spending during the festival season, part of efforts to bolster the pandemic-hit economy.

The government will also allow its employees to spend travel allowances that are an income-tax-exempt part of their salaries on goods and services, Nirmala Sitharaman told a news briefing.

“This is expected to create a consumer demand of about 280 billion rupees ($3.83 billion),” she said.

Prime Minister Narendra Modi’s government, which imposed a tough lockdown to stem the spread of the coronavirus in March, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season.

($1 = 73.1541 Indian rupees)

(Reporting by Aftab Ahmed and Manoj Kumar; Editing by Catherine Evans)

(([email protected]; +91 11 4954 8029; Reuters Messaging: [email protected]))

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Source Article

By Abhirup Roy and Saeed Azhar

MUMBAI/DUBAI (Reuters) – Indian entrepreneur BR Shetty has filed a complaint with federal investigative agencies in India seeking a probe into two former top executives of his companies and two Indian banks related to a multibillion dollar financial scandal engulfing his group.

Several companies linked to Shetty, including top United Arab Emirates hospital operator NMC Health PLC and payments firm Finablr PLC

, have come under severe financial strain this year after short-seller Muddy Waters questioned NMC’s financials.

At issue, Muddy Waters said, were questions about NMC’s asset purchase prices and capital expenditures, which it said were both inflated.

NMC and Finablr subsequently announced far higher debts than they had previously reported.

Shetty’s 55-page complaint, a copy of which was seen by Reuters, accuses the former chief executives of NMC and Finablr, along with their associates and bankers, of inflating the companies’ balance sheets, arranging “illegal” credit facilities and misappropriating funds since 2012.

It calls on India’s federal police, the Central Bureau of Investigation (CBI), and the Enforcement Directorate (ED) – India’s financial crime fighting agency – to investigate.

The complaint, with more than 100 pages of supporting documents, indicates it was also sent to India’s prime minister’s office, central bank and other investigative agencies.

A spokesman for the two former CEOs, brothers Prasanth and Promoth Manghat, rejected Shetty’s allegations, saying he had significant control over the running of NMC after stepping aside as CEO in 2017 and that he or his family remained on the boards of companies including Finablr.

“These unfounded allegations against Prasanth Manghat and Promoth Manghat are a clumsy attempt to distract attention away from the skills and real value added by them to the success of NMC, Finablr … and Shetty’s own role in what has taken place,” the

By Aftab Ahmed and Manoj Kumar

NEW DELHI (Reuters) – India on Monday announced steps to stimulate consumer demand, including advance payment of a part of the wages of federal government employees during the festival season and more capital spending as it tries to bolster the pandemic-hit economy.

The government will allow its employees to spend tax-exempt travel allowances on goods and services, Nirmala Sitharaman, India’s finance minister told a news briefing.

She said the government will also shore up investment by spending extra 250 billion rupees ($3.41 billion)on roads, ports and defence projects, and offering 120 billion rupees in interest-free 50-year loans to state governments for spending on infrastructure before March 31,2021.

“All these measures are likely to create an additional demand of 730 billion rupees ($9.96 billion),” Sitharaman said, adding the proposals would stimulate demand in a “fiscally prudent way.”

Prime Minister Narendra Modi’s government, which imposed a tough lockdown to stem the spread of the coronavirus in March, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season, which runs from October to March.

The latest package would not require any extra borrowing by the federal government, Tarun Bajaj, economic affairs secretary at the Ministry of Finance, told reporters.

India’s federal government said last month it would stick to revised borrowing target of 12 trillion rupees ($163.78 billion) in the current fiscal year ending March, against an earlier estimate of 7.8 trillion rupees.

India’s total coronavirus cases have crossed 7.12 million, second only to the United States, with deaths reaching 109,150.

The Reserve Bank of India left key policy rates unchanged on Friday, while retaining an accommodative monetary stance to support an economy that is projected to contract by almost 10% in the current fiscal year.

($1

By Abhirup Roy and Saeed Azhar

MUMBAI/DUBAI, Oct 12 (Reuters)Indian entrepreneur BR Shetty has filed a complaint with federal investigative agencies in India seeking a probe into two former top executives of his companies and two Indian banks related to a multibillion dollar financial scandal engulfing his group.

Several companies linked to Shetty, including top United Arab Emirates hospital operator NMC Health PLC and payments firm Finablr PLC FINF.L, have come under severe financial strain this year after short-seller Muddy Waters questioned NMC’s financials.

At issue, Muddy Waters said, were questions about NMC’s asset purchase prices and capital expenditures, which it said were both inflated.

NMC and Finablr subsequently announced far higher debts than they had previously reported.

Shetty’s 55-page complaint, a copy of which was seen by Reuters, accuses the former chief executives of NMC and Finablr, along with their associates and bankers, of inflating the companies’ balance sheets, arranging “illegal” credit facilities and misappropriating funds since 2012.

It calls on India’s federal police, the Central Bureau of Investigation (CBI), and the Enforcement Directorate (ED) – India’s financial crime fighting agency – to investigate.

The complaint, with more than 100 pages of supporting documents, indicates it was also sent to India’s prime minister’s office, central bank and other investigative agencies.

A spokesman for the two former CEOs, brothers Prasanth and Promoth Manghat, rejected Shetty’s allegations, saying he had significant control over the running of NMC after stepping aside as CEO in 2017 and that he or his family remained on the boards of companies including Finablr.

“These unfounded allegations against Prasanth Manghat and Promoth Manghat are a clumsy attempt to distract attention away from the skills and real value added by them to the success of NMC, Finablr … and Shetty’s own role in what