Titbits: Offshore Financial Services - Time for a New Strategy?; Whatever happened to the Central Bank’s independence?; Mexa clamours for a Ministry of Planning; Overvaluation of the rupee.

Offshore Financial Services - Time for a New Strategy?(Published in L'Express)

Last week's tax proposals in India's 2012 Budget appear to be a definite game changer for the development of our offshore financial services. While investors from Mauritius will continue to be entitled to the benefits afforded by the provisions of the India-Mauritius Double Taxation Avoidance Agreement, especially to avoid taxation on capital gains incurred in India, the practical availability of such benefits will henceforth be subject to a host of bureaucratic impediments that go with the introduction of comprehensive General Anti Avoidance Rules (GAAR) in Indian Income tax legislation as from April 2013.

Titbits:Theatre of the Absurd: The Planning dialogue; Growth-oriented push; Public Enterprise Reform;The Quality of Tertiary Education

Theatre of the Absurd: The Planning dialogue

Trying to catch up on Development Planning after wasting some five years chasing short-term goals, the Ministry of Finance and Economic Development (MOFED) has embarked on an ambitious planning dialogue for a “Ten Year Economic and Social Transformation Plan” on a wrong note. The planning dialogue looks like a theatre of the absurd.

The strong rupee- refocusing the debate

The recent public debate on the strong rupee missed three essential points.

1. Large capital inflows: Firstly, the falling Euro only partly explains our appreciating exchange rate. As from 2007, the large capital inflows have more than offset the widening trade and current account deficits resulting in Balance Of Payments (BOP) surpluses. There has been a continuing build-up in foreign reserves and upward pressure on our Nominal and  Real Effective Exchange Rate (REER).