Advocacy Success in Financial Inclusion:
Critical Review of Financial Inclusion in G 20 Countries with Focus on India
COVA had undertaken a Study titled “Critical Review of Financial Inclusion in G 20 Countries with Focus on India that was published in October 2013 with Dr. Mazher Hussain, Executive Director of COVA and Director of State Bank of Hyderabad as the Research and Advocacy Lead and with support from VANI and Heinrich Boll Stiftung.
The Study can be accessed at: http://www.vaniindia.org/publicationpdf/pub2jan15.pdf
Thereafter, COVA in partnership with civil society organisations made sustained representations for financial inclusion and the Twelve Recommendations from the Study to Union Ministers, Members of Parliament and bureaucrats and finally the Ministry of Finance forwarded the Representation of COVA containing the twelve recommendations based on the Study to the RBI and Indian Banks Association (IBA) the apex body of all banks in India.
Consequently, eight of the twelve administrative and policy recommendations by COVA that have been considered and are being incorporated by the Government of India in different policy formulations are:
- Single Page Application Forms for small loans
- Issue of receipt by banks for loan applications- Single Page Form with Receipt can also be downloaded from the website of the Department of Financial Services (DFS) at the following link: http://financialservices.gov.in/PMMY%20Form.pdf
- Revision of loan limit for petty business under DRI from 15,000 – now the loan limit is up to Rs 50,000 under the Shishu Scheme of MUDRA
- Revision of Income Limit of Rs 18,000 for Rural and Rs. 24,000 for urban areas to qualify for petty loans- GoI has now removed the income criteria for availing loans under MUDRA
- Over Draft facility of Rs. 5000 to the poor to meet emergencies- OD facility of Rs. 5000 announced under the Jan Dhan Scheme
- Assigning and mandating individual bank branches to attain targets
- Using Post Offices as Banking Correspondent to enable people to deposit and withdraw funds from their bank accounts
- Waiving of condition to procure No Dues Certificates from 8 to 10 neighbouring banks. This could enable financial inclusion and help petty and small businesses to access credit from banks and approximately 9 crores (90 million) hawkers, petty traders and micro enterprises across India can benefit provided these provisions are implemented
Social Justice and Tax Politics
CBGA- COVA Campaign in Indian Parliament on Finance Bill 2012-13- Sealing of Tax Avoidance Loopholes to Mop Extra Resources for Social Sector
CBGA and COVA initiated a Campaign in support of the Retrospective Amendment proposed by the Union Government in the Finance Bill 2012-13, relating to capital gains taxation on indirect transfer of a capital asset based in India.
As part of the Campaign, representatives of CBGA and COVA, interacted with over 26 leading politicians of the country including Union Ministers, Parliamentarians and leaders of different political parties to brief them about the need to support the proposed Retrospective Amendment and submitted a Note prepared on the matter. Another Note detailing responses to the Finance Bill 2012-13 on the issues of regressive tax system in India, unreasonable tax exemptions to the corporate sector, loopholes enabling gigantic tax avoidance, negligible amount of wealth tax collection etc. was also shared with some Parliamentarians. Copies of the Notes attached.
This proposal on Retrospective Amendment has important implications for many high profile transactions such as the recent Vodafone dispute involving over $2 billion in tax payment. Industry and business houses and even political figures (such as the UK Chancellor of the Exchequer) have been vocal in their protest against these amendments.
As organisations interested in governance accountability to ensure social justice, we welcome the retrospective amendment proposed in the Union Budget, and recognize that the honourable Members of Parliament can play a very crucial role in ensuring that this progressive taxation proposal is enacted in the current session of Parliament. With Rs 35,000 crore to Rs. 40,000 crore at stake from deals similar to the Vodafone deal, the proposal of the Union Finance Minister needs to be endorsed by as many of the stakeholders in governance as possible and efforts should be undertaken by everyone to ensure that the Parliamentarians pass this proposed amendment without dilution in the current Session.
There are several instances where the government has cited resource constraint as the major obstacle to increasing budgetary spending on crucial sectors and disadvantaged sections of population in the country. It is against this backdrop that the move to clarify that corporations were always meant to pay taxes on such transactions is important; it sends strong signals to the common people (including the poorest of the poor who pay indirect taxes on everything they consume) and those that rely on the systems supported by the tax revenue, that those in power are serious about tackling tax avoidance by some business sectors and corporates that drain the country of much-needed resources.