Letter from Wall Street: Dear PM Modi, your politics can wait, but the economy cannot

For developing countries like India, higher economic growth is a priority. A higher economic growth requires finances. With the private sector being shy of making huge expenditure, the responsibility of drawing financial resources rests on the government.

A dividend is a sum of money given by a company to its shareholders out of the profits earned. Dividend distribution tax is the tax levied on the dividend paid by a company to its shareholders. The provisions of DDT were introduced by the Finance Act 1997. Only a domestic company is liable and has to pay the tax even if it is not liable to pay any tax on its income.

In the current fiscal, the government has decided to stay with the borrowing programme as announced in the Budget 2019. This has cheered the markets and kept yields in check. In the Budget speech, the finance minister also announced borrowing from overseas market but later on dropped the plan owing to currency risks.

Bank recapitalisation, means infusing more capital in state-run banks so that they meet the capital adequacy norms. The government, using different instruments, infuses capital into banks facing shortage of capital.

It looks highly unlikely that the disinvestment target will be met in the current fiscal. The next Budget for 2020-21, to be presented on February 1, will have another target for disinvestment. So, what exactly is a strategic sale and how is it different from disinvestment.