IBRD report shows recovery in capital inflows
Mumbai: The World Bank in its advance release of the report on Global Development Finance 2001 has forecast a recovery in capital flows to developing countries based on preliminary data for 2000. The bank has said that continuing strength in portfolio equity flows and a surge in bond market financing will boost private investment flows in 2000, despite temporary slowdown in foreign direct investment (FDI).

Capital flows to developing countries had declined in 1999, on diverging trends in debt and non-debt flows. The report said, overall, private capital flows were depressed and not commensurate with surge in economic activity in developing countries. At $126 billion, long-term private flows in 1999 were well below pre-1997 levels. Besides, private flows were narrowly concentrated in a few emerging market economies, with five countries receiving more than half (56 per cent) of private flows.

This marked a change from the 1994-97 period, when concentration levels trended down on improved prospects for developing countries and increased access to global capital markets by wider range of countries. FDI is the single largest source of foreign capital inflows. Its level and share in developing countries increased each year in the 1990s, as developing countries benefited from a shift to global production processes and structures by multinational corporations.
Back to News Review index page  

Two percent surcharge on income tax and corporate tax
New Delhi: The union cabinet has decided to introduce an ordinance imposing two percent surcharge on personal income tax and corporate tax in a bid to mop up additional funds to finance the relief and reconstruction expenses in quake-hit Gujarat. The new ordinance will come into force from the assessment year 2001-02 and is expected to net an additional Rs.1300 crore.

The surcharge will be applicable for all taxable income above Rs.60,000 per year. The effective rate of income tax for 60,000 to Rs.1.5 lakh will work out to 22.4 % and for income above Rs.1.5 lakh, the effective rate of tax will be 35.1 per cent. The effective rate for corporate tax will be 39.55 per cent.

The new surcharges have effectively brought the income tax and corporate tax rates closer to those prevailing in 1996-97. The effective rates at the highest slabs were 43 percent for corporate tax and 40 percent for income tax in 1996-97.
Back to News Review index page  

Export growth touches 20.42%
New Delhi: India’s export growth during this fiscal has touched the 20.42 per cent mark, though growth for the month of December has actually come down to 17.33 per cent. The growth continues to be higher than the export growth target set for the fiscal at 18 per cent.

Monthly trade data released by the ministry of commerce shows that the growth rate of exports in December was lower than the growth rate of 20.31 per cent in November. The total value of exports from April to December is calculated at $32.26 billion, while for the month of December, exports are estimated at $3.59 billion. The growth in exports has helped to squeeze the trade deficit to $5.88 billion, which is lower than last years’ level of $8.22 billion.

There is however, a steep fall in the non-oil imports, which are 8.31 per cent lower than the corresponding period of last year. In absolute terms, it is $25.7 billion against $28.03 billion in the same period of last fiscal.
Back to News Review index page