No plans to boost cryptocurrency sector in India, FinMin tells Lok Sabha

Union Finance Minister Nirmala Sitharaman
The finance ministry on Monday told Parliament that the government had no plans for boosting the cryptocurrency sector in India and the proposed Central Bank Digital Currency (CBDC) will not have volatility, which is normally associated with the private virtual currencies. 

However, there are associated risks with CBDC which need to be carefully evaluated, the Lok Sabha was informed. 

“As CBDC is backed by the central bank of a country, apart from other benefits, it will not have volatility which is normally associated with the private cryptocurrencies," the minister of state for finance told the Lok Sabha in a written reply. 

He said the government had received a proposal from the Reserve Bank of India (RBI) in October 2021 for amendment to the Reserve Bank of India Act, 1934 to enhance the scope of the definition of ‘bank note’ to include currency in digital form. The RBI has been examining use cases and working out a phased implementation strategy for introduction of CBDC with little or no disruption, the minister said. 

He said the introduction of CBDC has the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, and reduced settlement risk. 

In reply to another question, he said cryptocurrencies are unregulated in India at present. 

A Bill on Cryptocurrency and Regulation of Official Digital Currency has been included for introduction in the Lok Sabha. 

Rs 52,759 cr raised through IPOs this fiscal 

A total of Rs 52,759 crore has been raised by 61 companies through initial public offers till October this fiscal year, higher than the funds mopped up through this route in the last financial year, Finance Minister Nirmala Sitharaman informed the Lok Sabha. “IPOs are being brought by the companies regularly this year, and the amount raised in the current financial year till the month of October 2021, has surpassed the amount raised in the last financial year,” she said.

In the last fiscal, 56 companies garnered Rs 31,060 crore from IPOs and out of them, 27 were SMEs, as per the Sebi data cited by the minister.

Air India 

The government departments and autonomous bodies have dues of more than Rs 244 crore to Air India, of which a little over Rs 30 crore has been recovered, the Lok Sabha was informed. 

“Government departments/autonomous bodies owe Air India Rs 244.78 crore as on September 30, 2021. Of this, Rs 30.38 crore has been recovered as on November 30, 2021," minister of state for finance Bhagwat Karad said in a written reply. Karad said there was a huge accumulated debt on Air India, following which the government took an enterprise value (EV) bidding approach for strategic divestment of Air India and its identified subsidiaries and joint ventures. 

GST on health insurance premium 

Karad informed the lower house that there is no recommendation under consideration of the GST Council to reduce GST on health insurance premium. 

Forex reserves 

India has the fourth largest foreign exchange reserves in the world, minister of state for finance Pankaj Chaudhary told the Lok Sabha. As on November 19, 2021, he said the forex reserve stood at $640.4 billion.

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