INDIA BUSINESS WORLD - FEBRUARY 16th - FEBRUARY 29th - 2008
INDIA SIGNS AGREEMENT WITH LUXEMBOURG
India gave approval to a double taxation avoidance agreement with Luxembourg aimed at stimulating the flow of capital, technology and man power between the two countries. A government release issued after the union cabinet approved the proposal said that the agreement on ‘avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and on capital’ will provide tax stability and reduce any obstacles in mutual co-operation.
India has so far signed and notified such bilateral treaties with 71 other countries. In more than 20 deals, the scope of the agreement includes capital taxes. The union cabinet also approved Rs 1,000 crore for setting up two funds of Rs 500 crore each to provide low-cost credit to weaker sections under its financial inclusion programme. The proposals for setting up a Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF) were announced by Finance Minster P Chidambaram during Budget 2007-08, the statement said. The funds would have an initial corpus of Rs 25 crore each.
The government and the Reserve Bank would contribute 40% each to the funds, while the National Bank for Agriculture and Rural Development (NABARD) would finance 20%. FIF would be used for training business facilitators and correspondents, who would ensure institutional credit as representatives of banks, particularly among weaker sections and low income groups.
The FITF would be used for providing “user-friendly” technology to ensure affordable financial services to the disadvantaged sections, the statement added.
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