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Borrowing linked to reforms by the States, new public finance model: PM Modi

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Prime Minister Narendra Modi said on Tuesday that the new public finance model, in which states were only allowed to exceed their annual borrowing limits in 2020-2021 if they undertook certain pre-defined reforms, is a classic example of the new model of “reforms by conviction and incentives.”

In a blog posted on LinkedIn, Modi said India has seen a model of “stealth and coercion reform”. This is a new model of “reform by conviction and incentive”.

“It was a boost, prompting states to adopt progressive policies to obtain additional funds. The results of this exercise are not only encouraging, but also go against the idea that there are few takers for sound economic policies, ”Modi wrote in the blog.

Citing the example of four reforms, which state governments had to undertake to become eligible for the additional 1% loan, Modi said that each of the reforms was related to improving the comfort of life for the public, mainly the poor, the vulnerable and the middle class. It also promoted fiscal sustainability.

“Raising sufficient resources for public welfare while ensuring sustainability is proving to be one of the greatest challenges,” said the Prime Minister.

He added that states were able to raise an additional 1.06 trillion rupees in 2020-2021 through a central “Bhagidari” state approach.

“Officials who have worked on these reforms suggest that without the incentive for additional funds, enacting these policies would have taken years,” Modi said.

Elaborating on the first report, which is the One Nation One Ration card, Modi said the main benefit of this is that migrant workers can get their food ration from anywhere in the country.

“Seventeen states have completed this reform and obtained additional loans amounting to Rs 37,600 crore,” the prime minister said.

Regarding the second reform related to additional borrowing, which aims to improve the ease of doing business, Modi said that this reform (covering 19 laws) is particularly useful for micro, small and medium enterprises (MSMEs). This is because these companies suffer the most from the burden of the “inspector raj”.

It also promotes a better investment climate, larger investments and faster growth.

Twenty states have completed this reform and have been authorized to borrow an additional Rs 39,521 crore.

The third reform required States to notify the floor rates of property tax and water and sanitation charges. This was in line with indicative stamp duty values ​​for real estate transactions and current costs in urban areas.

“Eleven states have completed these reforms and obtained additional borrowing of 15,957 crore rupees in 2020-2021,” Modi said.

The fourth reform was the introduction of direct benefit transfer (DBT) instead of the free supply of electricity to farmers.

Additional borrowing of 0.15 percent of the government’s gross domestic product (GDP) was tied to it. A component has also been planned for the reduction of technical and commercial losses and another for the reduction of the gap between income and costs (0.05% of the GSDP for each).

Thirteen States have implemented at least one component while six States have implemented the LVD component. As a result, 13,201 crore rupees of additional borrowing was authorized.

Overall, 23 states have benefited from additional borrowing of Rs 1.06 trillion out of a potential of Rs 2.14 trillion.

“As a result, the total borrowing authority granted to states for 2020-2021 (conditional and unconditional) was 4.5% of the initially estimated GSDP,” Modi wrote.

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Private debt fund: the CSSF clarifies the concept of lending to the “public” – Finance and Banking

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Luxembourg: Private debt fund: the CSSF clarifies the concept of “public” lending

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The CSSF clarified its interpretation of the concept of “public” lending, which is relevant information for the non-bank lending sector and, in particular, for private debt funds carrying out a loan origination activity.


In general, the granting of loans to the public on a professional basis is a regulated activity which is subject to the authorization of the CSSF by virtue of article 28-4 of the law of April 5, 1993 on the financial sector. However, the law does not provide a legal definition of the term “public” for this purpose.

Legally, unregulated private debt funds cannot benefit from an exception to the authorization requirement. At the same time, direct lending strategies will generally not amount to lending to the “public”. This is an assessment that had to be made on a case-by-case basis, as the regulator has so far published only limited formal guidance on this particular context.

What has been clarified

The update of the Q&A provides greater regulatory certainty on situations where the CSSF considers that a lending activity is not oriented towards the public. This is true where:

  • loans are granted to a restricted circle of pre-determined persons; Where
  • the face value of each loan is at least 3,000,000 EUR (or the equivalent amount in another currency) and loans are granted exclusively to professionals.

To this end, a “professional” is defined as any natural person or any legal person, whether private or public, who acts, including through any other person acting in his name or on his behalf, at for purposes relating to its commercial or industrial, craft or professional activity.

The update further clarifies Luxembourg’s legal framework for non-bank lending and confirms the country’s position as an attractive domicile for private debt funds.

The update brings welcome clarity to Luxembourg’s legal framework for non-bank lending and reaffirms the country’s position as an attractive domicile for private debt funds.

To see the updated version of the CSSF Q&A, click here_

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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A tax commission to tackle the long-term strategy of public finances

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The government’s new Commission on Taxation is due to start its work today after Finance Minister Paschal Donohoe announced yesterday the composition of the 14-member panel.

he commission, which will provide high-level policy advice to government, is exploring new ways to generate sustainable revenues to fund government commitments over the next 20 years.

Two key areas to address are long-term demographic pressures on taxes and spending, as well as the implications of international corporate tax reform.

The independent body, chaired by Professor Niamh Moloney of the London School of Economics, is called upon to examine how best tax and social systems can support economic activity and promote increased employment and prosperity , while ensuring that sufficient resources are available to meet the rising costs of public services.

The commission is expected to report to the minister in July 2022 after a series of public consultations on how best to manage public finances to meet the economic challenges of the future.

This is only the fourth time in the history of the state that a Commission on Taxation and Social Protection has been convened.

The most recent commission in 2009 was tasked with making recommendations to institute local property taxes, carbon taxes and water charges – all highly controversial revenue measures.

The members of the committee are: Marie Bradley, Managing Director, Bradley Tax Consulting; Philip Brennan, former Assistant Secretary, Revenue Commissioners; Sandra Clarke, President of the Irish Tax Institute, Partner at BCC Accountants; Rowena Dwyer, Policy, Planning and Government Relations Manager at Enterprise Ireland; William Hynes, Senior Advisor to the Secretary-General of the OECD; Philip Kermode, former director, European Commission; Aoife Ní Lochlainn, Irish Environmental Network; Rena Maycock, CEO and Founder of Cilter Technologies; John-Mark McCafferty, CEO, Threshold; Tom McDonnell, Nevin Economic Research Institute and ICTU candidate; Fergal O’Brien, Director, IBEC; Barra Roantree, Institute for Economic and Social Research; and Anne Vaughan, former Assistant Secretary, Department of Social Welfare.

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Here’s how the Digital Vibes contract violated SA’s public financial management law

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Through Zintle Mahlati May 26, 2021

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Johannesburg – An internal investigation found that the Health Ministry’s payment of Rand 150 million to Digital Vibes was irregular and contrary to the Public Financial Management Act (PFMA).

Health Minister Dr Zweli Mkhize briefed media on Wednesday morning following his calls to withdraw from a Rand 150 million contract awarded to his associates.

The Daily Maverick had reported that associates including Tahera Mather, Mkhize’s former assistant, and her former spokesperson, Naadhira Mitha, were involved in a company called Digital Vibes.

Digital Vibes won a Rand 150 million contract for communications work. The deal initially focused on the NHI, but was extended last year to include Covid-19 communications work for the Department of Health.

Digital Vibes is accused of inflating prices and doing work the department could do in-house.

Mkhize said he was not surprised by the outrage that followed media reports on the deal. He said the ministry was concerned about the contract and opened an internal investigation in January. The investigation, carried out by an external tax firm, has been concluded.

A summary of its findings stated that “the invitation to tender and the tendering process it followed was a violation of the PFM law.”

He also found that Digital Vibes’ nomination process was flawed due to inconsistencies within the nominating committee and lack of disclosure of conflicts of interest.

“Investigators have found that approximately R37 million paid to Digital Vibes is an unnecessary and unnecessary expense,” Mkhize said.

Regarding the work of Covid-19, investigators found that Digital Vibes received work instructions from the department before the contract was extended to include Covid-19 communication.

Investigators also found that any money paid to Digital Vibes for work done before the contract was extended to include Covid-19 was an unnecessary expense and against Treasury regulations.

“The appointment of Digital Vibes was irregular and the total of Rand 150 million paid to Digital Vibes during the period of January 2020 and January 2021 was an irregular expenditure,” Mkhize said.

He said the “consequence management” process was underway as well as disciplinary action against anyone involved in awarding the contract.

Mkhize said legal proceedings are underway to recover the funds that have been illegally paid. He said it was yet to be determined whether there had been any corruption in the payment of funds, as an investigation into the flow of money was underway.

The Special Investigations Unit is also reviewing the same contract.

Mkhize confirmed that he submitted the report to President Cyril Ramaphosa on Tuesday.

He said that since he is cooperating with the SIU and there has been no interference, he sees no need to step aside.

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Kuwait committee warns of serious imbalances in public finances

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KUWAIT CITY – The Economic Affairs Committee of the Council of Ministers has warned of serious structural imbalances in public finances and a worsening of the liquidity crisis with the depletion of the General Reserve Fund, reports the Al-Rai daily citing sources.

Sources said the committee estimated the budget deficit over the next five years to be between KD45 and KD 55 billion. Sources revealed that the relevant team was finalizing the national economic and financial sustainability program, in cooperation with the Ministry of Finance, for submission to the committee.

Public sector employment policy is unsustainable and there are significant imbalances in the labor market, considering that more than four in five Kuwaitis work in government offices.

The program aims to control spending and increase non-oil revenues; and in the medium and long term, support economic diversification, improve the business environment, stimulate private sector growth and develop the labor market.

The program is being developed and revised based on changing data, emphasizing the development of the labor market by attracting foreign investment and supporting entrepreneurs and the industrial sector.

© 2021 Arab Times Kuwait English Daily. All rights reserved. Provided by SyndiGate Media Inc. (

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Why it’s time to investigate the Wisconsin Public Finance Authority

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For a while, I criticized this Wisconsin regional public finance authority for taking on the role of a willing issuer of bonds all over the United States. I don’t know what his motivation was to take on such an important role in the municipal bond market, but professionalism and expertise are certainly not what comes to mind. They do not have a dedicated professional staff and the experience of the members of its board of directors does not show any particular competence in the evaluation of the obligations which they approve. In fact, if what they are examining is nothing more than what the MSRB receives and publishes to the EMMA system, then they would have little or nothing of substance to evaluate.

I don’t know how many of those out-of-state bond issues they’ve approved, but I do know that so far some 23 issues totaling $ 1.9 billion are in default or are in trouble, 19 of which are in 2020- 2021. No other transmitter, no matter the state, even comes close to this number. In fact, during that time, I recorded 130 distresses / defaults on $ 9 billion in debt. Thus, this single small regional authority represents 14.6% of the number of issues in difficulty or in default (or 20.5% of the amount in dollars) over the last 13 months.

Most of these defaults are in the area of ​​retirement and health care, a type of bond that has historically had the worst history of defaults. All the more reason for further examination. A common feature of Wisconsin Bonds is that there is little or no information in terms of audited financial statements or official statements. We know that audited financial disclosure has not been a requirement of the authority. Its website advertises its services and does not claim to provide anything other than a rubber stamp.

I understand that they have taken this licensing authority nationwide at the request of a financial institution. Only four counties and one city that decided they had a calling. Aside from the abuses we see here, there is a huge violation of the rights of each state to control the issuance of bond debt for a project within its borders. There are also caps on the volume of tax-exempt emissions which represent a quota that a state has the right to allocate.

There is also a responsibility to bond buyers who show great confidence in the municipal market despite the fraud and abuse we have seen over the years. It is for these and other reasons that the MSRB, SEC, Congress, and state securities regulators should be addressing this issue, starting with the state of Wisconsin.

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Veteran public finance bankers Katie Koster and Tom Innis join DA Davidson to continue expansion

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Company strategy focused on growth and deepening the practice of public finance

DA Davidson & Co. announced today that the company has strengthened its public finance team in California with the arrival of Katie Koster and Tom Innis, two public finance bankers with extensive experience in helping clients access to capital markets through the development, structuring and marketing of public finances. transactions.

Koster joins the company to improve its banking platform throughout the Southwestern United States, while Innis focuses on working with utilities and local governments in California and across the country.

“The addition of Katie and Tom is a big step forward for our vision of strategic growth in public finance investment banking,” said Marc Dispense, president of DA Davidson, Fixed Income Capital Markets. “We could not be happier to continue to grow our team with extraordinary professionals who will leverage our existing expertise and fit seamlessly into our entrepreneurial and client-focused culture.”

Koster previously spent over 12 years at Piper Sandler, where she served as a Principal Banker or Co-Lead on more than 250 deals valued at over $ 5 billion at par. In particular, his work has focused on financing planned communities of all sizes through the use of special district bond finance. His experience includes a wide variety of financings mainly for municipal clients.

Innis also comes to DA Davidson from Piper Sandler, with over 20 years of experience in the public finance industry. With a focus on funding public services, he has managed more than $ 15 billion in municipal bond transactions. It has developed innovative financing structures and is known to have access to multiple sources of financing in order to provide solutions tailored to the unique needs of its clients.

“With the firm’s solid reputation as a leader in fixed income financing providing industry specific knowledge and personalized services, joining the DA Davidson team was an extremely compelling opportunity,” said Koster. “It is a pleasure to join a firm that is so determined to maintain its focus on what is best for clients as well as to amplify its footprint across the country.

DA Davidson has hired 13 public finance bankers over the past two years in locations across the United States. The company has broadly strengthened its Fixed Income Capital Markets team during the same period with the addition of 50 professionals.

DA Davidson & Co.’s Fixed Income Capital Markets group is a national leader in raising capital through fixed income banking, distribution and deposit strategy. With 31 sites in 19 states, the group is regularly ranked among the best companies in the country. The Fixed Income team serves new clients in the area of ​​public finance and taxable debt issuance, and maintains a diverse sales and trading group interacting with taxable and tax-exempt investors, including banks, credit unions, insurance companies, bond funds, fund managers and trust companies.

About DA Davidson Companies

DA Davidson Companies is an employee-owned financial services company providing a range of financial services and advice to individuals, businesses, institutions and municipalities nationwide. Founded in 1935 and based in Montana, with offices in Denver, Los Angeles, Portland and Seattle, the company has approximately 1,400 employees and offices in 27 states.

Subsidiaries include: DA Davidson & Co., the largest full-service investment firm based in the Northwest, providing wealth management, investment banking, equity and markets services and advice fixed income capital; Davidson Investment Advisors, a professional asset management company; DA Davidson Trust Company, a trust and wealth management company; and Davidson Fixed Income Management, a registered investment adviser providing fixed income portfolio and advisory services.

For more information, visit

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