Are half-baked anti-profiteering rules a nightmare in the making?
MMNN:21 Jun 2017
Businesses are worried whether anti-profiteering rules under GST would lead to witch-hunting by taxmen
In the current format, the government's anti-profiteering rules on the goods and services tax (GST) raise more questions than answers. While the intent is to curtail inflation post-GST implementation, the notification suffers from a lamentable lack of clarity on many aspects, increasing uncertainty for businesses.
To begin with, the law would be applicable to all businesses irrespective of their nature or revenue. Since businesses are already struggling to brace for the 1 July deadline, tax experts say it would have been better if these provisions were restricted to those having oligopolistic markets or ones where a significant inflationary spiral is expected due to GST.
"The concern at this point in time is whether the sweeping provisions provided in the law can be effectively enforced without affecting business confidence. Also, every reduction in tax rates or increase in input tax credit may not lead to a corresponding reduction in prices as there could be simultaneous upward movement of costs of raw material or forex swings," said MS Mani, senior director (indirect tax) at advisory firm Deloitte India.
Retro tax on Cairn: I-T dept orders recovery of Rs 10K cr, to seize shares in Indian firm
MMNN:19 Jun 2017
The Income Tax Department has ordered coercive action against Cairn Energy Plc to recover Rs 10,247 crore of retrospective tax after the British oil firm lost a challenge to the move before an international arbitration panel.
The department ordered taking away $104 million dividend due to it from its remaining stake in the erstwhile subsidiary Cairn India (now called Vedanta Ltd) and another Rs 1,500 crore of tax refund due to it, a top source said.
This follows an international arbitration panel last week deciding not to entertain a plea by Cairn Energy seeking injunction against the coercive action to recover the tax.
The source said the tax department will now move to take over the 9.8% shareholding Cairn Energy had in Cairn India.
In an emailed statement, Cairn Energy confirmed the tax department's move.
"On June 16, 2017 the Indian Income Tax Department (IITD) issued an order to Vedanta India Ltd (VIL) directing it to pay over any sums due to Cairn. Sums due to Cairn from VIL now total USD 104 million, including historical dividends of $ 53 million and a further dividend of $ 51 million after the merger of CIL and VIL," it said.
The company said however that it will continue with the international arbitration proceedings against the retrospective tax demand.
"Cairn is seeking full restitution for (UK-India Bilateral Investment Treaty) Treaty breaches resulting from the expropriation of its investments in India in 2014, the attempts to enforce retrospective tax measures and the failure to treat the Company and its investments fairly and equitably," it said.
The company said it has a high level of confidence in its case under the Treaty and, in addition to resolution of the retrospective tax dispute, its claim seeks damages equal to the value of the Group's residual shareholding in Cairn India at the time it was attached (approximately $1 billion).
US Fed raises key interest rate to 1.0-1.25%, unveils cuts to bond holdings
MMNN:15 Jun 2017
The decision lifted the Federal Reserve's benchmark lending rate by a quarter percentage point to a target range of 1.00% to 1.25%
The Federal Reserve raised interest rates on Wednesday for the second time in three months, citing continued US economic growth and job market strength, and announced it would begin cutting its holdings of bonds and other securities this year.
The decision lifted the US central bank's benchmark lending rate by a quarter percentage point to a target range of 1.00% to 1.25% as it proceeds with its first tightening cycle in more than a decade.
In its statement following a two-day meeting, the Fed's policy-setting committee indicated the economy had been expanding moderately, the labour market continued to strengthen and a recent softening in inflation was seen as transitory.
The Fed also gave a first clear outline on its plan to reduce its $4.2 trillion (3.28 trillion pounds) portfolio of Treasury bonds and mortgage-backed securities, most of which were purchased in the wake of the 2007-2009 financial crisis and recession.
"The committee currently expects to begin implementing a balance sheet normalisation programme this year, provided that the economy evolves broadly as anticipated," the Fed said in its statement.
The central bank said it would gradually ramp up the pace of its balance sheet reduction and anticipates the plan would feature halting reinvestments of ever-larger amounts of maturing securities.
The Fed said the initial cap for Treasuries would be set at $6 billion per month initially and increase by $6 billion increments every three months over a 12-month period until it reached $30 billion per month in reductions to its holdings.
For agency debt and mortgage-backed securities, the cap will be $4 billion per month initially, increasing by $4 billion at quarterly intervals over a year until it reached $20 billion per month.
US stocks rose after the Fed announcement, while the dollar reversed some of its earlier losses.
"The Fed announcing an update to their reinvestment principles leaves September open. The start of balance sheet runoff and the fact that they haven't slowed their projected path of rate hikes suggest they can do both balance sheet and rate hikes at the same time," said Gennady Goldberg, interest rate strategist at TD Securities.
Fed Chair Janet Yellen was holding a press conference at 2:30pm EDT (1830 GMT).
Eyes on inflation
The Fed has now raised rates four times as part of a normalization of monetary policy that began in December 2015. The central bank had pushed rates to near zero in response to the financial crisis.
Policymakers also released their latest set of quarterly economic forecasts which showed temporary concern about inflation and continued confidence about economic growth in the coming years.
They forecast US economic growth of 2.2% in 2017, an increase from the previous projection in March. Inflation was expected to be at 1.7% by the end of this year, down from the 1.9% previously forecast.
A retreat in inflation over the past two months has caused jitters among some Fed officials who fear that the shortfall, if sustained, could alter the pace of future rate hikes. Earlier on Wednesday, the Labor Department reported consumer prices unexpectedly fell in May, the second drop in three months.
The Fed's preferred measure of underlying inflation has retreated to 1.5%, from 1.8% earlier this year, and has run below the central bank's 2% target for more than five years.
Expectations of any fiscal stimulus in the near term from the Trump administration have also waned with campaign promises on tax cuts, regulation rollbacks and infrastructure spending either still on the drawing board or facing hurdles in Congress.
Interest rates are seen rising one more time by the end of this year, according to the median projection of the forecasts released with the Fed's policy statement, in keeping with the previous forecast.
Estimates for the unemployment rate by the end of this year moved down to 4.3%, the current level, and to 4.2% in 2018, indicating the Fed believes the labour market will continue to tighten.
The median estimate of the long-run neutral rate, which is seen as the level of monetary policy that neither boosts nor slows the economy, was unchanged at 3.0%.
Minneapolis Fed president Neel Kashkari dissented in Wednesday's decision.
WPI inflation in May cools to 5-month low of 2.17%
MMNN:14 Jun 2017
Inflation based on the wholesale price index fell to a five-month low of 2.17% in May, mainly because of a sharp drop in prices of vegetables.
In December, the reading was 2.10%.
WPI inflation was 3.85% in April and (-)0.9% in May 2016.
Pulses and cereals saw a slower growth in prices.
The wholesale price index (WPI) for the month is based on the new base year 2011-12, which was revised last month from 2004-05, with an aim to reflect the macroeconomic picture more accurately.
The slowdown in wholesale inflation comes against the backdrop of retail inflation easing to a multi-year low of 2.18% in May.
Government data showed that prices of food articles shrank by 2.27% in May on an yearly basis.
The inflation print for vegetables read (-)18.51 %. While potato saw a deflation of 44.36 %, for onion, it came in at 12.86 %.
The rate of price increase was 4.15 % in cereals, down from 6.67 % in May last year. Protein-rich pulses turned cheaper in May as prices fell by 19.73 %.
Eggs, meat and fish saw a price decline of 1.02 % annually.
The index basket of the new series has a total of 697 items, including 117 for primary articles, 16 for fuel and power and 564 for manufactured products.
There was acceleration in prices of fuel and power (11.69 %) and manufactured products (2.55 %).
However, the price rise in sugar, which falls under the category of manufactured items, slowed to 12.83 % in May, from 23.12 % a year earlier.
Google's Gboard to now recognise hand-drawn emojis, suggest phrases as you type
MMNN:13 Jun 2017
Google rolled out the Gboard for more than 200 languages, besides expanding support for languages like Hawaiian, Maori and Belgian French.
Thanks to the latest update of Google's Android keyboard, you will now be able to draw the emoji you wish to send across. The update makes the Google keyboard, called Gboard, more user-oriented on Android devices.
To start with, you can draw emojis which you are struggling to find on the emoji keyboard.
"In the emoji search box, you can now tap the emoji handwriting icon to draw emoji directly onto the screen. Your drawing will automatically be recognised and show results for your favourite emoji," Google said in a blogpost on Tuesday.
In the latest update, Gboard has taken predictive typing to next level. It now suggests phrases that could follow, instead of words, as you type.
Google gave an example: Try typing "looking forward" and Gboard suggests "to seeing" or "to it" as you type. This is supported in English today and will be rolling out to more languages soon.
The Google Search on Android phones will now show multiple, more interactive result cards.
Google rolled out the Gboard for more than 200 languages, besides expanding support for languages like Hawaiian, Maori and Belgian French
India's plan to develop Iran's Chabahar port yet to see light as US weighs sanction
MMNN:10 Jun 2017
Western manufacturers are shying away from supplying equipment for an Iranian port that India is developing for fear the United States may reimpose sanctions on Tehran, Indian officials say, dealing a blow to New Delhi's strategic ambitions in the region.
Lying on the Gulf of Oman along the approaches to the Straits of Hormuz, the port of Chabahar is central to India's hopes to crack open a transport corridor to Central Asia and Afghanistan that bypasses arch-rival Pakistan.
India committed $500 million to speed development of the port after sanctions on Iran were lifted following a deal struck between major powers and Tehran to curb its nuclear program in 2015.
But the state-owned Indian firm that is developing Chabahar is yet to award a single tender for supplying equipment such as cranes and forklifts, according to two government sources tracking India's biggest overseas infrastructure push.
US President Donald Trump denounced the nuclear agreement on the campaign trail, and since taking office in January has accused Iran of being a threat to countries across the Middle East.
Swiss engineering group Liebherr and Finland's Konecranes and Cargotec have told India Ports Global Pvt Ltd, which is developing the deep water port, they were unable to take part in the bids as their banks were not ready to facilitate transactions involving Iran due to the uncertainty over US policy, the two officials said in separate conversations with Reuters.
These firms dominate the market for customised equipment to develop jetties and container terminals. One official said the first tender was floated in September, but attracted few bidders because of the fear of renewed sanctions. That fear has intensified since January.
"Now the situation is that we are running after suppliers," one official said, speaking on condition of anonymity because of the sensitivity of matter.
A Konecranes spokeswoman declined to comment beyond confirming the company was not involved in the project.
Cargotec and Liebherr did not respond to requests for comment.
Some tenders have been floated three times since September because they failed to attract bidders. A Chinese firm, ZPMC, has since come forward to supply some equipment, the same Indian official said.
Banks can now lend more, cheaper home loans likely
MMNN:8 Jun 2017
The reduction in the amount banks have to set aside (also called a provision) also mean lower home loan rates.
The Reserve Bank of India (RBI) on Wednesday made it possible for banks to lend more to home-buyers, and at lower rates, in a move that should benefit customers as well as real estate developers.
The central bank did this by reducing the amount of money banks have to set aside (as security) on home loans. Previously, they had to set aside 0.4% or Rs 400 per lakh. This has now been reduced to 0.25%, or Rs 250 per lakh.
Combined with the cut in the statutory liquidity ratio (the portion of deposits which banks have to invest in government securities) by 50 basis points, or 0.5 percentage point, this means banks now have that much more capital to lend.
The reduction in the amount banks have to set aside (also called a provision) also mean lower home loan rates.
The central bank also reduced the so-called risk weightage on home loans of between Rs 30 lakh and Rs 75 lakh to 35% from 50%, and over Rs 75 lakh to 50% from 75%.
Risk weights are used to calculate the minimum amount of capital that must be held by banks to reduce the risk of insolvency.
This could make bigger home loans less expensive (typically loans above Rs 75 lakh were up to 0.5 percentage points more expensive, in terms of interest than other loans).
"When risk weightage drops it means the banks have that much more money to lend. If it has dropped by one third it means the cost of doing business comes down which makes it possible for banks to then cut interest rate and pass it on to the borrowers," said Rajeev Ahuja, chief operating officer, RBL Bank Ltd.
The reduction in rates will be higher for bigger ticket size loans which are already more expensive when compared to loans of lower value.
Currently, the interest rate on home loans above Rs 75 lakh is higher. For instance, SBI offer an interest rate of 8.35% for loan amount below Rs 30 lakh while for loan above Rs 75 lakh the interest rate is at 8.65%.
RBI's decision was prompted by an understanding of the multiplier effect of home loans, according to N.S. Vishwanathan, deputy governor of RBI. His reference is to the fact that an increase in home loans means more home sales, which will benefit real estate developers, and companies in the construction, cement and steel businesses at one end, and companies in the furniture and appliance businesses at another.
"Delinquencies (are) generally among the lowest in home loan segment....It has been decided to reduce risk weight on certain categories on home loans and also the standard asset provisioning," Vishwanathan added.
According to Vishwanathan, reduction of statutory liquidity ratio (SLR) by 50 basis points will help banks in achieving 100% liquidity coverage ratio by January 2019. These two factors together will bring buoyancy to the home loan segment.
Credit to the housing segment has increased by 13.4% year-on-year at the end of April.
Banks are focusing on affordable housing as demand from other sectors of the economy has dried up and to take advantage of incentives offered by the government to home buyers. Many banks have reduced their home loan rates. The government on 31 December announced the Credit Linked Subsidy Scheme for Middle Income Groups, where interest subsidy of 4% was granted on housing loans of up to Rs 9 lakh and 3% on housing loans of up to Rs 12 lakh.
According to a report by CLSA India Pvt., housing sales could rise from Rs7 trillion in financial year 2017 to Rs17 trillion by fiscal 2024 on the back of market growth and impetus to affordable housing.
"The decision to reduce the risk weights for home loans over Rs. 30 lakh category will release capital for the banking industry and is a positive move," said Arundhati Bhattacharya, chairman of State bank of India (SBI).
Banks have already been aggressively cutting rates in the home loan segment. SBI, the country's largest lender, for instance, has already cut its one-year marginal cost of funds based lending rate (MCLR)--the rate linked to its home loans--to 8% currently from 9.20% in April 2016, when MCLR first came into effect.
15th meeting of GST Council in Delhi tomorrow
MMNN:2 Jun 2017
Union Minister for Finance, Defence and Corporate Affairs, Arun Jaitley, will chair the 15th meeting of the GST Council here tomorrow.
The meeting, to be held at Vigyan Bhavan, is important because it is likely to finalise the rates of tax and cess to be levied on the commodities remaining after the fitment exercise in the 14th GST Council Meeting, Ministry of Finance said in a statement today.
Besides, approval of amendments to the draft GST Rules and related Forms are also on the agenda of the one- day meeting. The meeting is likely to be attended by the Finance Ministers of different states/UTs besides senior officers.
Cabinet may decide on FIPB abolition today
MMNN:24 May 2017
The Union cabinet is expected to clear a proposal on Wednesday to allow direct approval to foreign investment proposals by ministries as part of the government's efforts to expand the ease of doing business.
In the latest push for ease of doing business, the Union cabinet is expected to allow direct approval to foreign investment proposals by ministries.
The likely clearance of the proposal on Wednesday can also speed up the much-needed investment process amid the Narendra Modi government's desperate push for job generation.
During this year's Union budget presentation, finance minister Arun Jaitley had announced that the decades-old Foreign Investment Promotion Board (FIPB), which clears proposals up to Rs 5000 crore, would be scrapped.
India has opened up most of the sectors to enable foreign companies to set up shop in the country. This in turn has reduced the utility of the FIPB.
"The Cabinet is likely to take up the proposal of abolishing FIPB at its meeting on Wednesday," official sources said.
The Department of Industrial Policy and Promotion, DIPP, will act as the nodal body for all foreign investment proposals, a source added.
The FIPB was initially constituted under the Prime Minister's Office in the wake of economic liberalisation in the early 1990s. It vets sectors such as defence and retail trading.
After the abolition of the FIPB, sources said, ministries concerned will clear FDI proposals.FDI inflows touched a record $60.1 billion in 2016-17, as the Narendra Modi government eased rules to lure global conglomerates to enter India.
In the last three years, the government has eased 87 FDI rules across 21 sectors to accelerate economic growth and boost jobs.
Tata Motors cuts up to 1,500 managerial jobs
MMNN:24 May 2017
Tata Motors says blue collar or worker jobs have not been impacted as part of the exercise.
Tata Motors said on Tuesday it has reduced its managerial workforce by up to 1,500 people domestically as part of an organisational restructuring exercise.
"The reference (total managers) on which we started (the exercise) was in the vicinity of 13,000...we do see as far as the white collar population is concerned, an overall reduction in the vicinity of 10-12% (up to 1,500)," managing director and chief executive Guenter Butschek told reporters here.
He was speaking after announcing the company's earnings for the fiscal 2016-17.
The company joins a growing number of organisations adopting such strategies for a variety of reasons, ranging from cutting the flab to automation. These job cuts, which have led to concerns on 'jobless economic growth' in various quarters, have been across multiple sectors, including capital goods, banking & finance, and information technology.
Engineering, procurement and construction major Larsen and Toubro had announced shedding of 14,000 jobs in the first half of FY17, HDFC Bank has also reduced its workforce by over 10,000 in the second half of FY17 alone.
In the IT segment, the country's largest private sector employer, some estimates have pegged the job losses at over 50,000.
The Tata Motors management, however, said blue collar or worker jobs have not been impacted as part of the exercise.
With the aim to reduce the number of managerial levels to 5 from the earlier 14, the top automaker undertook a review during the last financial year and identified the possibilities for restructuring.
"We underwent a very detailed exercise in terms of the roles, the requirements and the fitment of the roles etc. It was a very comprehensive exercise which we rolled out over a 6-9 month period which also factored in performance and leadership qualities," the company's group chief financial officer, C Ramakrishnan, told PTI.
Terming it as a "holistic fundamental review", he said the programme has been completed now and the company will be coming out with a new structure soon.
Officials said the exercise was carried out with a view to get ownership and accountability within the organisation and not to cut costs.
While some of the affected employees were given voluntary retirement option, some were transfered to a services arm -- Global Delivery Centre, the officials said.
However, they did not quantify the number of people moved to the services arm which is based out of Pune.
Enough is enough: SC orders sale of Sahara's Rs 34,000 crore Aamby Valley
MMNN:17 April 2017
The Supreme Court today asked Bombay High Court's official liquidator to sell the Rs 34,000 crore worth of properties of the Aamby Valley owned by the Sahara Group and directed its chief Subrata Roy to personally appear before it on April 28.
"Enough is enough. You cannot say something today and resile tomorrow," a bench, comprising Justices Dipak Misra, Ranjan Gogoi and A K Sikri, said, taking strong note of non- submission of over Rs 5,000 crore by the Sahara group.
The bench also cautioned Roy from playing with the court's order and said non-compliance of its order would invite the wrath of the law and ultimately he will be at his own peril.
The bench asked the official liquidator, attached with the Bombay High Court, to auction the Aamby Valley properties, estimated to be worth Rs 34,000 crore, and directly report to it.
The bench also directed Roy and his group as well as SEBI to provide all necessary details relating to the properties to the official liquidator within 48 hours.
Meanwhile, the top court restrained one Prakash Swamy, who has filed an affidavit with regard to the sale of Sahara hotels in the USA, from leaving India and asked him to deposit Rs 10 crore as fine with the market regulator SEBI.
Swamy will also have to appear in person in the apex court on April 28.
The Supreme Court had on April 6 warned the Sahara Group that if it failed to deposit Rs 5092.6 crore in SEBI-Sahara refund account by April 17 in pursuance of its order, it will be "compelled" to auction its property at the Aamby Valley in Pune.
The top court had told the group that no extension of time would be granted for depositing the amount.
The observation had come when the lawyer mentioned an interim plea seeking extension of time for depositing the money in the SEBI-Sahara refund account.
The court had also observed that it had clearly told the group that a "substantial amount" must come in the refund account.
"Whatever you do, we had told you that a substantial amount must come. Otherwise we will be compelled to put up Aamby Valley for auction," the bench had said, noting "What matters is the money coming in the kitty." The apex court had on February 28 said "in case, the substantial amount is deposited, this court may think of extending the time, otherwise appropriate direction shall be issued".
The court had last month ordered an international real estate firm, which had shown willingness to buy Sahara's stake in New York-based Plaza Hotel for USD 550 million, to deposit Rs 750 crore in the SEBI-Sahara refund account, instead of the apex court registry to show its bonafide.
The top court had earlier directed attachment of Sahara Group's prime property for realisation of money to be paid to its investors.
It had also asked the group to provide it within two weeks the list of "unencumbered properties" which can be put up for public auction to realise the remaining over Rs 14,000 crore of the principal amount of around Rs 24,000 crore that has to be deposited in the SEBI-Sahara account for refunding the investors.
The court had on November 28 last year asked Subrata Roy to deposit Rs 600 crore more by February 6 in the refund account to remain out of jail and warned that failure to do so would result in his return to prison.
It had on May 6, 2016 granted a four-week parole to Roy to attend the funeral of his mother. His parole has been extended by the court ever since. Roy was sent to Tihar jail on March 4, 2014.
Besides Roy, two other directors -- Ravi Shankar Dubey and Ashok Roy Choudhary -- were arrested for failure of the group's two companies -- Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL) -- to comply with the court's August 31, 2012 order to return Rs 24,000 crore to their investors.
However, director Vandana Bhargava was not taken into custody.
WPI inflation falls to 5.7% in March due to easing fuel prices
MMNN:17 April 2017
Inflation based on the wholesale price index slipped to 5.70 per cent in March due to easing fuel prices and cost decline of manufactured goods even as food prices hardened.
The WPI inflation, reflecting the annual rate of price rise, in February was 6.55 per cent. In March 2016, the print came in at (-)0.45 per cent.
According to official data released on Monday, food prices saw a sharp rise of 3.12 per cent in March compared to 2.69 per cent in the previous month.
This is primarily because of a steep price jump in vegetables where inflation stood at 5.70 per cent. As for fruits, the figure was also high at 7.62 per cent, while for egg, meat and fish, it was 3.12 per cent.
Fuel inflation declined to 18.16 per cent, from 21.02 per cent in February.
The manufactured items witnessed some softening in price rise, with inflation at 2.99 per cent in March, as against 3.66 per cent in the previous month.
The government also revised upwards January inflation to 5.53 per cent from the provisional estimate of 5.25 per cent.
Earlier this month, the Reserve Bank had left key policy rate unchanged at 6.25 per cent for the third review in a row citing upside risks to inflation. It had, however, increased the reverse repo rate -- which it pays to banks for parking funds with it -- by 0.25 per cent to 6 per cent, narrowing the policy rate corridor.
For 2017-18, it projected retail inflation to average 4.5 per cent in the first half and 5 per cent in the second half.
Data released last week showed that retail inflation touched a five-month high of 3.81 per cent in March on costlier food items and non-food products like fuel and light. RBI frames its monetary policy stance on the basis of retail inflation.
Flipkart raising $1.4 bn from Microsoft, Tencent, eBay shows Indian e-commerce is going strong
MMNN:10 April 2017
India's first and largest home-grown e-commerce player has moved to the centrestage with a funding of $1.4 billion from Tencent, eBay and Microsoft.
The transaction values Flipkart at $11.6 billion. This comes at a time when investors, concerned over the profitability and rising competition, are marking down the company's valuation. In February, Morgan Stanley mutual fund had marked down the valuation of the company for the fifth time to around $5.37 billion. Compare this with the $15 billion value the company commanded in 2015.
The latest round of funding has been viewed with much positivity by the trade primarily because many expect this to help the company get wings to soar and take on deep-pocketed Amazon.
The funding only shows that the ecommerce story in India is going strong and that there is market growth in the sector, said Paula Mariwala, partner, Seedfund and co-founder, Stanford Angels. "What did not work was the economics of acquiring customers and customer services. This development shows that the fundamentals of the growth story is intact and ecommerce continues to be a solution for products, consumers and marketers who want to reach out to consumers," said Mariwala. The funding only goes on to prove that the promise held out by the sector still holds true, she added.
The sector is ripe for correction and funding of this kind will buoy the sagging sector which is seeing many players bleeding on account of intense competition and the discounts game to attract customers. "The sector is right for course correction be it in furniture, food delivery or digital wallets. There are too many players across segments in the e-commerce space and it is time for the stronger players to consolidate their position with mergers and then becoming a stronger contender," says Arvind Singhal, chairman and managing director of Technopak Advisors, a retail industry consulting firm.
When one player dominates the market and the others are struggling to survive, it does not bode well for the industry per se and also the consumers, says an analyst.
The government has given a fillip to digital payments post-demonetisation which has further helped the ecommerce sector. People are adopting the digital medium faster than ever. The India story has got stronger with a large number of people using the Unified Payments Interface (UPI) platform developed by the National Payments Corporation of India. All this will only help ecommerce players to penetrate deeper into the market.
Under these circumstances, when a home-grown player like Flipkart gets a helping hand, it is a win-win situation for the company and its investors. "I don't think Flipkart qualifies to be called a home-grown player any more," said an analyst, pointing out to the fact that not just Flipkart but most ecommerce players are no longer run by the promoters but the investors who are keen on growth and not in a hurry to exit the market.
By the end of this year, more consolidations in the e-commerce sector is expected. "Consolidation is one solution to growth. It is happening all across the country," said Anil Talreja ,Partner, Deloitte Haskins & Sells. He said, in the ecommerce sector, there is always an issue with regard to startups and sustainability. If you are not in a position to sustain yourself and get a helping hand and subsume into that, it is a way to growth, he said.
According to another analyst, the biggest asset in the space is connect with customers. In this case, Flipkart is a company with this asset already. "The funders are willing to pump in money so as to enlarge the customer base and get loyal ones on board," the analyst said.
However, Singhal points out the development proves the sector has enough space for more than large players. "People have been speculating on the demise of Flipkart or its merger with partners not of its liking. This funding only goes to show that there is space for more players in the market," said Singhal.
What is curious about the Flipkart deal is its buying out eBay's India operation while the latter makes an investment in Flipkart. eBay, a first mover in the category, had lost much of its sheen and was not in the race at all for some years now. "It has had a face-saver with its buy-out by Flipkart and also by making an investment in Flipkart," said Mariwala.
With demands not yet met, petrol pumps threatens to take off every Sunday
MMNN:10 April 2017
With the government yet to decide on their demand for higher commission, the petrol pump owners have threatened to take off every Sunday. As per the report 'The Times of India' the petrol pump owners have also threatened to observe May 10 as 'No Purchase Day'.
In January, amid tussle between banks and petrol pumps, the central government had declared that the pump dealers and customers would not have to pay transaction cost after owners of petrol pump owners threatened to stop taking cards. A day before, the associations had threatened of not accepting debit or credit cards, even though there was no such notifications from the Reserve Bank of India on the matter.
Speaking to reporters, one of the petrol pump owners had said that for each payment on credit cards, the banks charged 1 percent. Speaking to reporters, Delhi Petrol Dealers Association president Anurag Narain had said that banks had levied a fee of 1 percent, due to which petrol pumps have an option but to stop EDC machines from operating.
The pump owners, who were not willing to pay such a huge amount, had voiced their concern in public and had promised to retaliate in kind against these banks. Some banks like ICICI Bank had however late on Sunday announced they had not issued any such orders and were not imposing any such charge.
Coming in their support, the Tamil Nadu Petroleum Dealers Association had also said it received a notice from banks saying that a Merchant Discount Rate of one percent will be taxed on all transactions done at the retail fuel outlets.
In a response to this, the associations had announced to stop digital payment for fuel on the day. Later in the night, the announcement was taken back, following intervention by authorities.
Fake rent receipt won't help you lower tax burden anymore
MMNN:5 April 2017
For as long as anyone can remember, producing fake property rent receipt, often from parents and relatives, has been an easy way to lower tax burden.
Such cavalier disregard for tax rule was overlooked by most employers as well as taxman, who possibly felt it was a minor transgression. Perhaps, not anymore.
The income tax department now has good reason to insist on proof from the tax payer showing that he is indeed a genuine tenant, staying in the property in question.
A salaried employee receiving 'house rent allowance' from the employer could escape paying tax on at least 60% of this amount by generating sham rent receipt.
However, according to a recent tribunal ruling, the assessing officer can now demand proof - such as leave and licence agreement, letter to the housing co-operative society informing about the tenancy, electricity bill, water bill etc. - in allowing a lower taxable income as computed by a salaried employee.
"The ITAT (Income Tax Appellate Tribunal) ruling has now laid down the criteria for the assessing officer to consider the claim of a salaried employee and if necessary question its justification. This will put the onus on the salaried class to follow the rules in availing the tax rebate," said Dilip Lakhani, senior tax advisor, Deloitte Haskins & Sells LLP.
Understandably, none of the required documents are available with salaried employees submitting fake rent receipts. There may not be any actual rent outflow from the person as he may be staying in his family home and collecting a receipt signed by his father. Even if a person is a genuine tenant, the amount mentioned in the receipt may be more than what's paid. This will not pose a problem if the person receiving the rent is outside the tax net. There are several instances where a person may be staying separately but claiming to pay rent to a relative owning another property in the same city; or, one of member of the family claiming a loan repayment deduction while another submitting a false rent receipt to evade tax.
Given the widespread practice of paying tax on only a small slice of HRA, it's unclear how far tax officials would go in questioning such claims and pinning down salaried employees.
However, ITAT Mumbai's decision to strike down the HRA exemption claim of a salaried individual for rent paid to her mother could set a precedent.
"Technology and stricter reporting system may make it easier for the (income tax) department. For instance, there was a time when many never bothered to pay tax on interest earned from bank fixed deposits. Today, it's almost impossible. In case of HRA exemption, the assessing officer may crosscheck whether the address mentioned in the ITR form is the same as the property on which rent is paid," said a tax officer.
The Tribunal ruling comes a few months after the government's decision to cap the loss on property bought with borrowed money. Till now, a person paying an interest of, say, Rs 3 lakh on a loan (he took to buy the property) and earning Rs 1.2 lakh as rent could show the difference of Rs 1.8 lakh as 'loss' and set it off against salary income to pay lower tax.
In the last Union budget it was laid down that such losses for an individual tax payer cannot exceed Rs 2 lakh.
SBI hikes transaction charges; customers decide to boycott bank on April 6
MUMBAI: MMNN:5 April 2017
After five years, the country's largest lender State Bank of India has decided to raise charges on various transactions through ATMs.
Some SBI customers have taken to social media to protest the hikes and called for a "no transaction day" on April 6.
They are also sharing the a text message calling for the boycott on April 6 and subsequent protests on April 24- April 26, if the bank does not remove the charges.
SBI has implemented a new list of rules for millions of its customers across India. Right from the introduction of an increased minimum balance to various new transaction charges. The new changes have been implemented from April 1.
Even customers of the six new banks that merged with SBI will have to follow this new list of rules. With the central bank introducing these new charges, there is a high probablity that other private sector banks will follow the suit and increase their banking charges.
The move came after private banks like ICICI, HDFC and Axis bank announced similar changes.
Banks including HDFC Bank, ICICI Bank and Axis Bank began charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.
The charges would apply to savings as well as salary accounts effective from last month.
Not in talks with Paytm, Flipkart for sale: Snapdeal
MMNN:22 March 2017
E-commerce marketplace Snapdeal on Wednesday firmly denied that it was in talks to sell the firm, after Mint newspaper reported the company was in talks with domestic rivals for a potential sale.
Mint had reported Snapdeal was in talks with Paytm and Flipkart for a potential sale, quoting sources.
"Snapdeal categorically denies having had any such discussion. The information is incorrect and without basis. We are making decisive progress in our journey towards profitability and all our efforts are aligned in this direction," a spokeswoman said in a written statement.
China, India led slowdown in coal power development, says report
MUMBAI: MMNN:22 March 2017
China's clampdown on new coal projects and a reluctance by backers to provide further funds in India are mainly responsible for last year's drop in the amount of coal-powered generation capacity under development, environmental groups said in a report.
Greenpeace, the Sierra Club, and CoalSwarm found global pre-construction planning fell 48% and new construction starts dropped 62% last year compared with 2015, according to the report, titled "Boom and Bust 2017: Tracking The Global Coal Plant Pipeline."
China last year imposed restrictions on further expansion of coal-power capacity amid increasingly low utilization rates at existing plants, according to the report. In India, the ministry of power said in June that the country had enough coal-fired plants to meet demand through 2019, while a draft National Energy Plan, released in December, said no further coal power capacity beyond that currently under construction will be needed until at least 2027.
In China and India, 68 gigawatts of construction is frozen at more than 100 project sites, according to the report. The research also found that coal plant retirements are taking place at an unprecedented pace, with 64 gigawatts of retirements in the past two years, mainly in the European Union and the US.
Meanwhile, the report identified 10 "hot spot" countries including Turkey, Indonesia, Vietnam and Japan, that have failed to develop their renewable-energy sectors in step with their peers while continuing to build and plan new coal plants.
SBI Justifies Penalty For Not Keeping Minimum Balance
MMNN:8 March 2017
Facing a backlash for levying penalty on non-maintenance of minimum balance in accounts, State Bank of India, the country's largest lender, on Wednesday justified its move saying the bank needs to impose some charges to balance the "burden" of managing a large number of no-frills Jan Dhan accounts.
The bank also said it has not received any "formal communication" from the government for re-considering the penalty and it will take a call "if something comes". It also clarified the penalty would not apply to Jan Dhan accounts.
Last week, the country's largest bank decided to reintroduce penalty on non-maintenance of minimum balance in accounts and also revised charges on other banking services.
The new charges would be applicable from April 1. The move by the state-run banking major has faced a lot of criticism, including from the opposition parties.
"Today, we have lot of burden such as we have 11 crore financial inclusion or Jan Dhan accounts. To manage such a large number of Jan Dhan accounts, we need some charges. We have considered many factors and after analysing carefully, we have taken this step," State Bank of India chairperson Arundhati Bhattacharya told reporters here on the sidelines of a national convention of women entrepreneurs.
As per the list of revised charges of SBI, failure to maintain monthly average balance (MAB) in accounts will attract a penalty of up to Rs. 100 plus service tax.
In metropolitan areas, there will be a charge of Rs. 100 plus service tax, if the balance falls below 75 per cent of the monthly average balance of Rs. 5,000. If the shortfall is 50 per cent or less of the MAB, then the bank will charge Rs. 50 plus service tax.
The charges and monthly average balance varies according to the location of bank. It is minimum in case of rural branches.
Ms Bhattacharya said that all the banks have minimum balance requirement for account holders and SBI as such has the lowest minimum balance requirement.
She said the penalty was there earlier also and State Bank of India was the only bank to withdraw it in 2012.
"Our analysis have shown that most of the account holders maintain more than Rs. 5,000 on a monthly basis and so they do not have to worry about any penalty," Ms Bhattacharya said.
She clarified that the penalty on non-maintenance of minimum balance will not be applicable on Jan Dhan accounts.
Asked about the government's direction to the bank to reconsider the decision, SBI managing director (national banking) Rajnish Kumar said the bank has not received any communication on this issue.
"There is no formal communication. We will see if something comes," Mr Kumar said.
Under the revised charges, withdrawal of cash from ATMs will attract a charge of up to Rs. 20 if the number of transactions exceeds three from other bank's ATMs in a month and Rs. 10 for more than five withdrawals from State Bank of India ATMs.
However, SBI will not levy any charge on withdrawals from its own ATMs if the balance exceeds Rs. 25,000. In case of withdrawal by its customers from ATMs of other banks, there will be no charge if the balance exceeds Rs. 1 lakh.
"We are charging as people go to ATMs, withdraw cash and give it to somebody who in turns deposit it into the bank. This type of transaction involves a cost which is not known to public as bankers do not levy any charge on the customers."
"There is some cost involved in printing cash, in transportation, counting and providing security to cash. The cost is borne by the tax payers. There is a cost in installing an ATM and so we feel the charges are very reasonable," Ms Bhattacharya said.
She said the customers must use alternate channels like mobile, internet to do their transactions.
"We do not see there is a requirement for an household person to withdraw cash through ATMs for more than four times. Daily cash requirement is more for people doing businesses and we want them to use mobile and internet banking to do transactions," she said.
While addressing the convention, Ms Bhattacharya said the bank so far has given loan worth to Rs. 1,60,000 crore to the MSME sector.
"This year alone we have done more than Rs. 10,000 crore. We wish to do around Rs. 16,000 crore of Mudra loans by the end of this financial year," she said.
At present, nearly 55 per cent of the bank's balance sheet comprises retail segment and balance is to large segment.
"I have no problem at all if I am able to tilt that more in favour of retail. I would love to do that. Of course large segment needs support because of that you would have the airports ... the roads you have today, for defence you are going to set up an SME and for that you need steel, cement.
"So, the large sector also needs support from the bank. But that does not mean that we (banks) are not there for you (retail segment)," she said.
Flipkart Now Said to Be Looking to Raise Up to $1 Billion
MUMBAI: MMNN:8 March 2017
India's top e-commerce company Flipkart is holding talks with investors to raise up to $1 billion (roughly Rs. 6,671 crores) in one of its biggest funding rounds so far, a source familiar with developments said on Wednesday.
The source declined to name the potential investors and the exact valuation Flipkart was looking for, but said it hoped the valuation would be in the "double digits", referring to a valuation of $10 billion or more.
Earlier on Wednesday, Financial Express newspaper, citing unidentified sources, said the expected fundraising could value Flipkart at up to $8 billion, far lower than the roughly $15 billion in its last funding round.
A Flipkart spokesman said the company would not comment on market speculation.
Flipkart's latest fundraising comes amid intensifying competition in the e-commerce space from the likes of US Internet giant Amazon.com Inc and domestic rival Snapdeal, which is backed by Japan's Softbank Group.
The ensuing heavy losses have hit valuations among India's e-commerce players. Some funds that have invested in Flipkart have recently slashed the value of their holdings, media reports have said, citing securities filings.
Launched by two former Amazon employees in 2007, Flipkart's biggest investor is US hedge fund Tiger Global. Others include Accel Partners, DST Global and Baillie Gifford.
The company has so far raised more than $3 billion in funding, mostly from international investors.
Geet & Devashish Bag First Prize For CII Young Indians Dream Start Up Challenge Competition
MMNN:27 Feb. 2017
Geet Soni and Devashish Saxena bagged the first prize worth Rs.2 lakh in the prestigious Dream Start Up Challenge 2017 competition for their healthcare start up Medicloud365. The second prize of Rs.1 lakh was given away to Rahul Dixit of Pooja Path Solutions- a start up providing religious services for all the occasions whereas Pramod Maithali won consolation prize for his primary school learning kit Tinkering Lab.
This national level competition that received 213 entries from across India, was organised by CII Young Indians in association with AISECT University and Netlink Limited. The finale of the competition held here on Saturday in which 8 finalists presented their business ideas before the jury. These shortlisted finalists were mentored for last six months by CII Young Indians Enterpreneurship & Innovation vertical head Siddharth Chaturvedi and co chair Nikhil Kaushik.
The jury included Dr Sandeep Kadwe, Managing Director & CEO, Madhya Pradesh Venture Finance Limited; Mr Anurag Shrivastava, Chairman, Netlink Private Limited, Mr Abhishek Sanghvi, Co-Founder, Swan Angel Network; and Mr. Sandro Stephen, Head Of Operations, North & South India, Indian Angel Network.
Jury member Anurag Shrivastava in his address gave useful tips on how to take their businesses forward.
In his welcome address CII Young Indians, Bhopal chairman Mr. Rakesh Sukhramani said the objective of the competition was to bring together young entrepreneurs, angel investors, mentors and government and private bodies working in the field of start ups.
Dr. Sandeep Kadve, managing director, Madhya Pradesh Venture Finance Limited said the State government has allocate aed Rs.100 crore worth fund for upcoming entrepreneurs. He said start ups seeking investment may approach him for the necessary support.
Paytm E-Commerce Launches Online Marketplace App - Paytm Mall
MUMBAI: MMNN:27 Feb. 2017
Paytm E-commerce today announced the launch of its new Paytm Mall application on Android.
Paytm Mall aims to offer a combination of the Mall and Bazaar concepts to Indian consumers.
"Only trusted sellers passing strict quality guidelines and qualification criteria will be allowed on the 'Mall'," Paytm said in a statement here.
All products listed on the mall will also go through Paytm certified warehouse and shipping channels ensuring guaranteed consumer trust, it said.
"We have defined quality criteria for sellers and are building strict controls over warehousing and shipping for products sold on Paytm Mall. Consumers would continue to get the largest assortment of domestic and international products through Paytm Bazaar, which will also be featured on the new app," said Saurabh Vashishtha, Vice President - Paytm.
The Bazaar is an unstructured shopping channel on Paytm that will also be featured on a new application, it added.
Paytm Mall has over 17 fulfilment centres across the country to offer consumers an efficient online shopping experience.
The platform would also offer sellers the widest reach through its vast network of over 40 courier partners, it said.
The Paytm Mall would also launch an ungraded version of the Paytm Seller app, available in 7 regional languages allowing anyone with a smartphone to set up an online shop on Paytm Mall.
Paytm Mall is available on Android, and lists over 68 million products sold by 1.4 lakh sellers spread over 1000 cities and towns across the country. The iOS app is expected soon.
RBI exempts KYC-compliant accounts from interrogation, single-deposit rule
NEW DELHI: MMNN:21 Dec. 2016
Rattled after huge protests against banks interrogating people who deposited more than Rs 5,000 rupees in demonetised currency notes, the Reserve Bank of India (RBI) amended its December 19 notification today and exempted fully KYC-compliant accounts.
Now people will be asked no questions on deposit of more than Rs 5,000 in scrapped currency in KYC-compliant accounts. Also, now more than one deposit, even if above Rs 5,000, can be made in KYC-compliant accounts till December 30.
Its RBI's 60th notification since November 8-and one of many U-turns on deposit and withdrawal norms.
KYC (know your customer) is a process through which banks obtain information about the identity and address of the customers while opening accounts and periodically update the customers' KYC details.
Two days ago, the RBI had notified that deposit of demonetised notes in excess of Rs 5,000 into a bank account would be received for credit only once during the remaining period till December 30, 2016. The credit in such cases, it said, would be allowed only after questioning the depositor, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation was to be kept on record to facilitate an audit trail at a later stage.
The notification had also said that deposit of demonetised notes up to Rs 5,000 in value received across the counter would be allowed to be credited to bank accounts in the normal course until December 30, but when several deposits smaller than Rs 5,000 taken together exceeded Rs 5,000 they might be subject to the procedure to be followed in case of deposit of above Rs 5,000.
Both these parts of the December 19 notification will not apply to the KYC-compliant accounts after today's modification in norms.
On December 19, after the RBI notification, Finance Minister Arun Jaitley had contradicted it, saying no questions would be asked if any amount of demonetised currency was deposited at one go but repeated deposits might raise queries. Even after Jaitley's assurance, some banks questioned those who wanted to deposit more than Rs 5,000, and made them fill in a form. This created a huge uproar, with many terming the process as an unnecessary interrogation of small customers while a lot of big fish escaped scrutiny.
Cash crunch should be over by February, but RBI may not replace all notes
MUMBAI: MMNN:17 Dec. 2016
India's crippling cash shortage should start easing by mid-January and be completely resolved by March assuming the Reserve Bank of India wants to replace all the notes withdrawn from circulation.
Discussions with bankers and former RBI officials reveal that just over 50% of the withdrawn notes would have come back into circulation by mid-January thanks to presses working round the clock. The smaller size of notes mean that 40 pieces can be printed per sheet instead of 36 earlier. The fact that presses are working seven days a week across three shifts could result in a nearly 50% increase in capacity, they added.
"As per this calculation, the issue should be largely addressed by January and be taken care of by February," said a retired central bank official, who did not want to come on record.
RBI officials did not reply to an official query on the issue. The RBI Annual Report for 2015-16 showed that there were around 15.7 billion Rs 500 denomination notes and 6.3 billion of Rs 1,000 currency notes in circulation.
If RBI wanted to reintroduce the entire amount back into the system, the printing requirement would be 22 billion pieces. But only half of the 6.3 billion Rs 1,000 notes need to be printed since the denomination has been increased to Rs 2,000. This brings down the total printing requirement to about 18 billion pieces.
RBI usually prints around 20-23 billion pieces per year, and a 50% increase in capacity could mean that all the four presses have a capacity to print 30-35 billion pieces. The central bank started printing these new notes in October.
So more than six billion pieces would have been printed so far assuming a monthly run of about 2.5-3 billion.
Total replacement of all the withdrawn notes would happen by March but the cash shortage could start easing by January as nearly 10 billion pieces would have come back into the system. But RBI officials have been signalling that they don't intend to replace all the withdrawn notes. Bankers who have been discussing the issue with the central bank report that there is a very high chance of all the notes not coming back into the system as cash.
Bankers say that RBI is focused on reducing the cash-to-GDP ratio now at 12% of GDP to somewhere between 8-10% of GDP. They say that the public should be prepared for reduced circulation of cash in the economy. In such a situation, one may not have to wait till March for the situation to stabilise, bankers say. It should come back to normalcy by January or end-February though it will be a new normal and not at all comparable to the situation prevailing before November 8.
Wholesale inflation dips to 3.15% in November as food prices cool
New Delhi: MMNN:14 Dec. 2016
Wholesale inflation eased for the third straight month as it fell to 3.15 per cent in November after subdued demand due to demonetisation led to softening of prices of vegetables and other kitchen staples.
The wholesale price index-based inflation, reflecting the annual rate of price rise, in October stood at 3.39 per cent. In November 2015, the print was (-)2.04 per cent.
WPI inflation in vegetables, at (-)24.10 per cent in November, saw deflationary pressure for the third consecutive month. This was helped by a substantial price fall in onions, which stood at (-)51.51 per cent.
Pulse inflation continued to rule high at 21.73 per cent in November, according to commerce ministry data.
Potato recorded maximum inflationary pressure at 36.97 per cent. Inflation in fruits rose to 2.45 per cent during the month.
Overall, the food inflation basket showed moderation with inflation at 1.54 per cent in November as against 4.34 per cent in October.
The reading for manufactured articles was 3.20 per cent compared with 2.67 per cent in the previous month. The corresponding figure for sugar came in at 31.76 per cent and that of petrol 5.54 per cent.
The WPI inflation for September has been revised upwards at 3.8 per cent against the provisional estimate of 3.57 per cent.
The decline in wholesale inflation coincides with a fall in retail inflation, which hit a two-year low of 3.63 per cent in November.
The monetary policy committee headed by RBI Governor Urjit Patel had earlier this month held interest rates steady and said demonetisation of high value currency notes could lower prices of perishables and reduce CPI inflation by 10-15 basis points by December.
Even as RBI maintained 5 per cent inflation target for March 2017, it trimmed GDP growth forecast to 7.1 per cent, from 7.6 per cent, for the current fiscal.
No bank officials will be spared if found involved in wrongdoings: FinMin
New Delhi: MMNN:10 Dec. 2016
The Finance Ministry has sent a strong message to banks, saying that no official will be spared if found involved in wrongdoing.
Sources said, the ministry is seriously looking into the matter.
In a major crackdown on bank employees involved in irregularities post the demonetisation move, as many as 27 senior officials of various public sector banks were suspended on December 2 and six others were transferred to check corrupt practices.
The Axis Bank earlier on Tuesday suspended its 19 officials allegedly involved in illegal activity post demonetisation.
The employees of state-run and private sector banks have come under the scanner of the Finance Ministry over alleged irregularities in converting old currency into new notes post the demonetisation drive.
The move comes after the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) cracked down on bank officials since note ban to curb black money conversions into new notes.
Last week, the ED had arrested two managers of Axis Bank's Kashmiri Gate branch in New Delhi and recovered gold bars weighing more than three kg.
Both were sent to ED custody till December 12.
3 reasons why RBI went against the wind and kept repo rate unchanged
New Delhi: MMNN:7 Dec. 2016
The Reserve Bank of India (RBI) on Wednesday surprised financial markets by keeping the policy rate unchanged at 6.25 per cent at its fifth bimonthly policy review. This was against a consensus forecast of a 25 basis points rate cut.
Analysts on Dalal Street attributed RBI's decision to maintain status quo on money policy to three major reasons:
Inflation: The central bank noted that prices of wheat, gram and sugar have been firming up and showed concerns over the recent decision by the Opec bloc to cut crude oil output from January. RBI said due to base effect, inflation rate may reverse and turn unfavourable in December and February.
"If the usual winter moderation in food prices does not materialise due to the disruptions, food inflation pressures could re-emerge. Furthermore, CPI inflation excluding food and fuel has been resistant to downward impulses and could set a floor to headline inflation. With the Opec agreement to cut production, crude prices may firm up in the coming months," it said.
Keki Mistry, VC & CEO, HDFC, said any central bank would consider rate cut either if it believes the move is going to push consumption forward because people will borrow more money and then use that for consumption, or if it believes a rate cut will facilitate investment.
"The way I see it, capacity utilisation in India still has not gone to the levels one would like to see before you see a big thrust on investments. In that sense, cutting rates now may not have helped," Mistry said
Wait and watch: RBI said it was on a wait and watch mode as impact of the cash ban was still playing out. The central bank expects short-run disruptions in economic activity in cash-intensive sectors such as retail trade, hotels & restaurants and transportation.
However, it was confident of a progressive increase in the circulation of new currency notes and believes the usage of non-cash-based payment instruments would surge.
"It is appropriate to look through the transitory but unclear effects of the withdrawal of SBNs while setting the monetary policy stance. On balance, therefore, it is prudent to wait and watch how these factors play out and impinge upon the outlook," the central bank said.
CEA Arvind Subramanian said that the RBI decision was important in containing liquidity in the system.
Global uncertainty: RBI felt rising turbulence in financial markets globally and volatility in crude oil prices going forward could put the inflation target for Q4 of FY17 at risk.
World trade is beginning to emerge out of a trough that bottomed out in July-August and is showing signs of stabilising, RBI said.
"Inflation has ticked up in some advanced economies, though well below target, and is easing in several emerging market economies. Expectations of reflationary fiscal policies in the US, Japan and China, and the waning of downward pressures on emerging market economies in recession are tempered by still-prevalent political risks in the euro area and the UK, emerging geopolitical risks and the spectre of financial market volatility," the central bank said.
RBI, meanwhile, took heart from the fact that global growth picked up modestly in the second half of 2016, after weakening in the first half.
"The only plausible explanation seems to be global factors. Maybe RBI wants to look at the Fed rate behaviour. Post that, it may want to take a call. We will have to actually see and listen to what RBI has to say about this contradicting factors between lower growth, lower inflation through consumption destruction vis-a-vis higher inflation expectation," said Nilesh Shah, MD at Kotak AMC.
Murthy Nagarajan, Head of Fixed Income at Quantum Mutual Fund, said by February, RBI will have greater clarity on the global situation such as the Fed rate hike and Donald Trump's policies and on India's fiscal deficit for FY2017-18. "That will allow it to take a more balanced view," Nagarajan said.
RBI May Cut Interest Rate By 0.5% In Next Policy Meet: HDFC CEO
New Delhi: MMNN:3 Dec. 2016
At a time when the country is undergoing a demonetisation drive, the Reserve Bank of India (RBI), in its next policy meeting on December 7, may cut the main interest rate by 50 basis points, feels Keki Mistry, Vice Chairman and CEO of HDFC.
In an interview to BTVi, Mr Mistry said: "My sense is that in the RBI policy, I would expect to see an interest rate reduction. I would have said 25 basis points cut is normally what is warranted. However, to give a further impetus to growth and the economy and taking into account relatively low inflation that we are seeing, it could be possible that RBI could look at a 50 basis points cut."
"One point is that the US rates are rising. We are expecting that the US Fed will increase rates in December. So in a situation where US is increasing rates, we will be reducing rates and, therefore, the gap between the two interest rates (in the US and India) will fall.
The only issue, he said, for the RBI is to keep the Indian currency rate in check. "As the gap keeps falling, it will put some pressure on the currency. So that is something the RBI may want to watch out for, because if the currency weakens a lot then that puts inflationary pressure on the economy... particularly in the context of the fact that all prices have started going up," he added.
Talking about the demonestisation drive of Rs. 500 and Rs. 1,000 bank notes that started on November 8, he said it would be difficult to gauge how much currency would be deposited by the end of December.
"We don't know how much money is likely to come in. It is all conjecture at the moment. If people say some Rs. 11 lakh crore has come in, we have to see. The official figure, I understand, is Rs. 8.4 lakh crore," he said.
"What we have to understand is that when something like demonetisation is announced, everybody who had any amount of currency notes with them of Rs. 500 and Rs. 1,000, including people like you and me, would have gone to the bank and deposited the money," Mr Mistry said
"So, therefore, the collections that we would get in the first two-three weeks was obviously going to be abnormally high than what you will see in the latter part of the period. So my sense is let's wait till December 31, only then we will know how much money actually comes back into the system. There is no point making an assumption now," he added.
Withdrawal From Jan Dhan Accounts Capped At Rs. 10,000 Per Month
Mumbai:MMNN:30 Nov. 2016
To check the misuse of Jan Dhan accounts by black money hoarders, Reserve Bank has restricted the withdrawal from such accounts to Rs. 10,000 per month.
"With a view to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in such accounts funded through deposits of Specified Bank Notes after November 9, 2016," the RBI today said in a notification, terming it as temporary measures.
According to it, fully KYC-complaint Jan Dhan account holders will be allowed to withdraw Rs. 10,000 per month from their account, while limited or Non KYC compliant account holders can withdraw Rs. 5,000 per month.
It, however, said branch managers may allow further withdrawals beyond Rs. 10,000 a month within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank's record.
With regard to deposits, Jan Dhan account holders have a limit of Rs. 50,000.
In the wake of the Centre's demonetisation drive, Jan Dhan accounts have seen a massive rise in deposits, in many cases to the extent of Rs. 49,000. There have been reports that the bank accounts of people, mainly in rural areas, who had zero balance till the announcement of scrapping of high value currency notes, have been witnessing sudden surge in deposits.
The government suspects that black money hoarders are using the farmers and other people's Jan Dhan accounts to deposit their ill-gotten money so that they can safely convert that money into white.
Deposits in Jan Dhan accounts soared sharply by around Rs. 27,200 crore in just 14 days after the announcement of ban on old Rs. 500 and Rs. 1000 currency notes. Total deposits in 25.68 crore Jan Dhan accounts crossed Rs. 70,000 crore mark and were at Rs. 72,834.72 crore on November 23.
As of November 9, total deposits in these accounts were Rs. 45,636.61 crore.
After the surprise demonetisation of 500 and 1,000 rupee notes announced by Prime Minister Narendra Modi on November 8, deposits in Jan Dhan accounts have increased sharply to 27,198 crore.
However, 22.94 per cent of 25.68 crore accounts still have zero balance.
Government Asks NABARD To Disburse Rs. 21,000 Crore To Farmers
New Delhi:MMNN:23 Nov. 2016
Government has allowed NABARD to disburse Rs. 21,000 crore to cash-starved farmers, helping them sow winter crops like wheat ahead of the sowing season, Economic Affairs Secretary Shaktikanta Das said today.
The government's demonetisation move, which swept away 86 per cent of currency in circulation, has badly hit farmers leaving them without cash just ahead of the sowing season.
Mr Das said the National Bank for Agriculture and Rural Development (NABARD) will disburse the money to farm cooperatives for onward payments to farmers.
"NABARD, for the facility of agricultural operations in the current rabi season and especially for the benefit of farmers, has sanctioned a special limit of Rs. 21,000 crore to district central cooperative banks," he told reporters in New Delhi.
More than 40 per cent small and marginal farmers get crop loans from cooperative institutions, he said.
The move is aimed at easing liquidity crisis facing farmers who were left with very little cash to buy seeds and fertilizers for winter crops due to restrictions placed on bank withdrawals post demonetisation.
This has threatened crop production in a year that came after two successive years of drought.
Reserve Bank of India (RBI) had yesterday relaxed rules on loans to farmers, allowing NABARD to disburse up to Rs. 23,000 crore to district cooperative banks for crop loans.
Mr Das said that out of the total agriculture credit, institutional credit meets more than 40 per cent of the requirement of small and marginal farmers.
"So the sanction of Rs. 21,000 crore to the district central cooperative banks (DCCBs) will enable them to pass on or grant funds to the primary agriculture cooperatives. This will then help in meeting crop loan requirements of farmers in Rabi season," he said.
This, he said, will help in smooth flow of credit for farmers to enable them to undertake rabi requirements.
"Over and above this Rs. 21,000 limit, as and when the additional limits are required, they will also be sanctioned by NABARD," he said.
To ensure farmers get credit in cash, the government has advised NABARD, RBI and banks to make the required cash available.
Banks have been asked to ensure the district cooperative banks and regional rural banks, which provide loans to several farmers' cooperatives, get sufficient cash.
"DCCBs will get their cash from currency chests of banks and state cooperatives. NABARD has created list of DCCBs and their list of requirements have been given to banks," he said.
Exchange of old notes over bank counters only up to Rs 2,000, just once till December 30
New Delhi:MMNN:19 Nov. 2016
The noose is getting tighter on those who are trying all possible means available to convert black money into white. The Reserve Bank of India on Friday announced that it will limit exchange of old notes into new ones at bank counters only once till December 30. The norm comes into effect starting Friday, November 18.
"On a review it has been decided that the limit of exchange of SBNs(Specified Bank Notes) in cash, across the counter of the banks shall be 2000 with effect from November 18, 2016. This facility will be available only once per person", said the RBI in a note to the Chairman, Managing Director, Chief Executive Officer of all public, private banks, Regional Rural Banks, Urban and State Cooperative Banks.
However, there is no limit on making bank deposits.
In another development, Indian Bank Association said on Friday that banks will exchange the notes only for their own customers tomorrow( Saturday), i.e. people who have bank accounts with them. So, individuals will have to the banks where they have accounts to change the notes.
However, the banks will exempt senior citizens from this and exchange demonetised notes for them regardless of whether they have accounts with the banks or not.
Meanwhile, banks across the country will remain close on Sunday after they remained opened last weekend despite being holiday then.
The lending institutions will make use of Saturday to clear off the pending work.
Also, government has cautioned Jan Dhan account holders, housewives and artisans that they will be prosecuted under the I-T Act for allowing misuse of their bank accounts through deposit of black money in Rs 500/1,000 notes during the 50-day window till December 30.
The directive comes against the backdrop of reports that some are using other persons' bank accounts to convert their black money into new denomination notes. In some cases, even rewards are being given to account holders for allowing such misuse.
SBI reportedly writes off bad loans of Rs 7,016 cr; Cong rakes up issue in Parliament
New Delhi:MMNN:16 Nov. 2016
The State Bank of India has cleaned up non-performing assets worth Rs 7,016 crore from its books by writing off loans given to 63 wilful defaulters, Daily News & Analysis reported on Wednesday. Of the 63 accounts, 31 have been partially written off and six shown as NPAs.
The clean-up drive saw the bank forgoing almost Rs 1,201 crore in dues to Vijay Mallya's defunct Kingfisher Airlines, which is at the top of the list of wilful defaulters. In other words, loans given to Kinfsiher Airlines will no longer be shown in the bank's balance sheet, though the airline has outstanding dues of almost Rs 1,201 crore. Some of the other prominent defaulters who feature in the write-off list are KS Oil (Rs 596 crore), Surya Pharmaceuticals (Rs 526 crore), GET Power (Rs 400 crore) and SAI Info System (Rs 376 crore).
The Congress party immediately reacted to the article and linked it to the government's demonetisation drive. "As Modiji's blue-eyed boy Mallya gets a Rs 1,200-cr write-off, fighting black money is political hypocrisy at its worst," said Congress leader Randeep Singh Surjewala.
Even Congress leader Anand Sharma expressed apprehensions that the money received from people migth be used to recapitalise the banks and wipe out Rs 6 lakh crore of non-performing assets of big industrialists.
"The Non-Performing Assets (NPAs) are to the tune of Rs 6 lakh crore. Do they want to utilise the money deposited by people in banks to wipe out the NPAs (on account) of industrialists who have played fraud on the country?" party spokesman Kapil Sibal said at a briefing by the All-India Congress Committee.
He claimed that the Reserve Bank of India RBI would transfer the money to the government, which would recapitalise banks and clear their balance sheets, and the "whole thing has nothing to do with black money; it is a compromise on black money and with NPAs".
Even Delhi Chief Minister Arvind Kejriwal has called demonetisation the biggest scam.
"This is what we feared. The hard-earned money of people will be put into banks to write off the loans of crorepatis. They have already started doing it," he said on Twitter."
Banks say note exchange facility being misused
New Delhi:MMNN:12 Nov. 2016
Confusion over the facility for exchanging old high-denomination notes, subject to a limit of Rs 4,000, at banks and post offices by providing valid identity cards has led to some people misusing the system to legalise their unaccounted wealth.
At present, the exchange facility is a one-time window and the limit will be reviewed after November 24. Several bank officials told ET that the exchange of demonetised Rs 500 and Rs 1,000 notes over the counter for Rs 4,000 is being misused and banks are taking steps to address the issue.
A senior official with the State Bank of India said the Reserve Bank of India has sent an email to banks stating that the exchange facility for Rs 4,000 is a one-time window. "But we have no way to track whether an individual has already availed of this benefit at another bank," he said.
"The intention is to support people to meet exigencies. The ATMs are now functional and people can withdraw money as per the existing limits," said a senior official with Punjab National Bank, adding that some individuals are misusing this window by going to different branches of a bank or other banks.
People can also use multiple IDs at the same branch or post office as systems are not in place to verify transactions.
State-run Central Bank of India has developed software to keep track of the Aadhaar number and PAN card of beneficiaries, which is shared across all its branches, an official said.
"It is taking time to update, given the huge flow of people, but we are ensuring that the facility is made available only once and is not misused," he said.
A senior official with Corporation Bank said that individual branches are maintaining a similar database and no person can exchange currency for more than Rs 4,000 at the same branch.
"We are educating people on the guidelines - some of them don't know about it and are not coming with any mala fide intention," he added.
A finance ministry official said all such data will be collated and tracked. "If there is any unusual pattern of withdrawals from any Aadhaar number and PAN account, we will be investigating such cases," he said.
Specified bank notes of aggregate value of Rs 4,000 or below may be exchanged for any denomination of bank notes with a requisition slip in the format specified by the Reserve Bank and proof of identity, the RBI said in a circular dated November 8.
"The limit of Rs 4,000 for exchanging specified bank notes shall be reviewed after fifteen days from the date of commencement of this notification and appropriate orders may be issued, where necessary," the RBI said.
Cash withdrawal from a bank account over the counter is restricted to Rs 10,000 a day, subject to a limit of Rs 20,000 a week, until November 24.
Withdrawal from ATMs is restricted to Rs 2,000 per day per card up to November 18.
Rs. 500, Rs. 1000 notes no longer legal tender
New Delhi:MMNN:9 Nov. 2016
Currency of Rs. 500 and Rs.1,000 ceased to be legal tender from midnight on Tuesday. Prime Minister Narendra Modi announced this in a surprise address to the nation on Tuesday night. He said the decision was taken to root out the menace of black money and corruption.
Notes of Rs. 100, Rs. 50, Rs. 20, 10, Rs. 5, Rs. 2 and Re. 1 remain legal tender and will be unaffected by the decision, the Prime Minister said, adding that all banks and ATMs will be closed on Wednesday and ATMs in some places on Thursday as well.
Mr. Modi announced that the existing Rs. 500 or Rs. 1,000 notes can be deposited in an individual's bank or post office accounts between November 10 and December 30. Currency value of up to Rs. 4,000 can be exchanged from any bank or post office a day till November 24 by showing a government identity card.
However, for 72 hours, government hospitals, railway, air and government bus ticket booking counters will continue to accept the old notes. Old notes will also be accepted till November 11 at petrol, diesel and gas stations authorised by public sector oil companies, consumer co-operative stores authorised by State or Central government, milk booths authorised by States as well as crematoriums.
The Reserve Bank of India will issue new Rs. 500 and Rs. 2,000 notes starting from November 10. The new Rs. 500 note will feature the Red Fort and the new Rs. 2,000 note will feature Mangalyaan, Economic Affairs Secretary Shaktikanta Das said at a media briefing late on Tuesday night. These notes will become available from November 10.
Once the ATMs start functioning, there will be a withdrawal limit of Rs. 2,000 per debit card, which will be increased to Rs. 4,000 later, Mr. Modi said in the 40-minute televised address to the nation. There will, however, be an overall limit on withdrawal from banks of Rs. 10,000 a day and Rs. 20,000 a week, which will be increased in the coming days.
Mr. Modi said there will be no restriction of any kind on non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.
Without naming Pakistan, the Prime Minister made a pointed reference to cross-border terror that was being funded by forged currency notes. "In the country's history of development, there comes a moment where powerful and decisive decisions are needed," he said.
"Your money will be your money. You don't have to worry about this. We have made arrangements to ensure that citizens suffer the least possible difficulty," he said.
A government official said that the move was necessary to stop terrorists and drug cartels "in their tracks." "An element of surprise is essential, or else they would have made necessary arrangements." The official described the action as a "surgery since the tumour had to be removed to prevent recurrence."
He claimed that this will result in a reduction of inflation as conspicuous consumption will come down. According to him, the "tumour of corruption could not be fought through tried, tested and failed methods" and it was time to employ new methods to defeat the enemies of India. Till March 2016, Rs. 14 lakh crore out of Rs. 16 lakh crore worth currency issued by the RBI were in the denominations of Rs. 500 and Rs. 1,000, as per the central bank's official data.
Currency values circulated by Reserve Bank of India till March 2016
||in Rs. Billion
|Rs. 2 and 5
Punjab National Bank Q2 Net Profit Dips 11.5% To Rs. 549 Crore
New Delhi:MMNN:5 Nov. 2016
State-owned Punjab National Bank today reported a 11.5 per cent fall in net profit at Rs. 549.36 crore for the second quarter ended September 30 on rise in provisions for bad loans.
The bank had reported a net profit at Rs. 621.03 crore during the July-September quarter last fiscal.
"Total income increased to Rs. 14,218.27 crore for the quarter ended September 30, 2016 from Rs. 13,701.93 crore for the same quarter a year earlier," the bank said in a regulatory filing.
Total interest, however, earned by the bank in the three-month period fell by 4.16 per cent to Rs. 11,830.36 crore from Rs. 12,345.03 crore a year earlier.
During the quarter, provisions for bad loans increased 34.6 per cent to Rs. 2,533.76 crore from Rs. 1,882.08 crore in the year-ago period.
Gross NPAs as a proportion of total advances moved up 13.63 per cent during the second quarter as against 6.36 per cent in the corresponding period last fiscal. Net NPAs also rose 9.10 per cent as against 3.99 per cent in the quarter under review.
Shares of the bank closed at Rs. 131.60 apiece on the BSE on Friday.
SBI Cuts Home Loan Rate To Lowest In 6 Years In Bonanza For Buyers
New Delhi:MMNN:2 Nov. 2016
In cheer for home buyers, State Bank of India (SBI) has cut interest rate by 0.15 per cent to a six-year low. The revised rates for new borrowers are effective from November 1, 2016, for loans up to Rs. 75 lakh.
For woman borrowers, SBI has brought down the interest rate to 9.10 per cent per annum from 9.25 per cent while for others to 9.15 per cent from 9.30 per cent.
This means that on a home loan of Rs. 50 lakh of 30 years, a home buyer can save Rs. 542 per month on EMIs.
This limited period festival offer is valid from November 1, 2016 to December 31, 2016, SBI said.
The rate cut comes in the wake of the SBI lowering its deposit rates last month.
SBI in a statement said its home loans are the "cheapest in the market" and provides an opportunity for both, new home buyers as well as those who wish to switch over their home loan to SBI to save on EMIs.
Analysts say that the SBI's rate cut could increase the competitive pressure on other lenders to bring down their interest rates.
Under a new lending rate regime effective from April 1 this year, banks price their lending rates based on marginal cost of lending rate (MCLR), which is closely linked to the actual deposit rates. For new borrowers, the MCLR is revised every month. In SBI's case, a customer is locked into the MCLR for a year if he/she avails the loan.
SBI's managing director Rajnish Kumar told NDTV Profit that the move will benefit a lot of people who are looking for affordable homes. The bank is seeing a lot of demand for housing loan below Rs. 1 crore, he added.
As part of the festive season offer, SBI has also waived processing fee on its approved projects and balance transfer of home loans.
India Ranks 13th In Protection Of Minority Investors
New Delhi:MMNN:26 Oct. 2016
India's global ranking in terms of protection of minority investors has slipped three notches to 13th, but remains much higher than the country's overall 130th rank for ease of doing business.
The sub-ranking for protection of minority investors is topped jointly by New Zealand and Singapore.
Others that ranked higher than India are Hong Kong, Malaysia, Kazakhstan, the UK, Georgia, Canada, Norway, the UAE, Slovenia and Israel.
In the World Bank's latest 'Doing Business' report, India's place remained unchanged from last year's original ranking of 130 among the 190 economies that were assessed on various parameters. However, the last year's ranking has been now revised to 131 from which the country has improved its place by one spot.
The list of countries in the Doing Business 2017 is topped by New Zealand while Singapore is ranked second.
The report said protection of minority investors indicator measures the protection of shareholders against directors' misuse of corporate assets for personal gain and the rights and role of shareholders in corporate governance.
According to the report, India carried out an ambitious, multi-year overhaul of its Companies Act, bringing Indian firms in line with global standards, particularly in respect of accountability and corporate governance practices while ensuring businesses contribute more to shared prosperity through a quantified and legislated corporate social responsibility requirement.
Company regulation is an ongoing process. Since the enactment of the Companies Act, 2013, the corporate affairs ministry issued notifications on a regular basis to address ambiguities in the law. Most notably, two sets of amendments were released in August 2014 and May 2015, highlighting the government's ongoing commitment to reform.
Further, in June last year, it set up a committee tasked with identifying further amendments to the Act and centralising recommendations and concerns from private sector stakeholders and regulatory agencies.
"Despite this piecemeal introduction, it has paid off both in economic terms and in India's performance in Doing Business. India's score increased in 3 of 6 indices of the protecting minority investors indicator set," the report said.
To simplify administrative requirements, the minimum paid-in capital was abolished. To instil greater transparency, the Act increased disclosure requirements, particularly regarding related-party transactions.
To bring Indian firms in line with global standards, the Act added requirements to disclose managerial compensation and have one-third independent directors and at least one woman on the board. Besides, India became the first economy in the world with a quantified and legislated corporate social responsibility (CSR) requirement.
"The case of India serves as a reminder of the time it takes and the challenges inherent to a holistic legislative overhaul. Piecemeal fixes can be a time and cost-effective approach, but only a full-fledged legislative reform gives policymakers the opportunity to innovate and sends a strong signal to the business community," the report noted.
MP Global Investor Summit kicks off, 150 CEOs may participate
Indore:MMNN:22 Oct. 2016
A 2-day Global Investor Summit organised by the state government of Madhya Pradesh at its commercial capital Indore kick-started today. the state expects to host about 150 CEOs and over 3,000 delegates including the Union Finance Minister at the event.
While the state itself plans to invest Rs 75,000 crore over the next 4 years in infrastructure development, the Summit aims to garner as much investments from the business community across the world as possible in some key areas like food and food processing, and automobiles among others.
Some of the key speakers at the event, Baba Ramdev of Patanjali, Kumar Mangalam Birla, Chairman of Aditya Birla Group, Anil Ambani, Chairman of ADAG and Alok Sharma, UK's Minister for Asia among others listed out their investment plans in the state.
Located in the centre of the country, Madhya Pradesh will become a supply hub for companies transporting goods once the Goods and Services Tax (GST) is implemented making the country one big marketplace, Finance Minister Arun Jaitley said on Saturday.
Addressing the 5th Madhya Pradesh Investment Summit in Indore, Jaitley said the GST will hopefully be implemented by next year which will make the country one big marketplace.
"Once the GST rolls out, hopefully by next year, India will become one big market. Companies transporting goods from north to south and east to west will need a hub at the centre," Jaitley said on the first day of the two-day summit that aims to attract global investment.
"Madhya Pradesh is suitable located to become a supply hub," he added.
At the summit, the state government will present a report card on the status of investment commitments made at the four previous such investor gatherings.
In the 2007 summit, MP signed investment agreements worth $18.3 billion and the investment commitment doubled to $36 billion at the next summit in 2010 and further to $44 billion in 2012. The last meeting in 2014 saw signing of agreements worth $66.1 billion.
Madhya Pradesh has been one of the fastest growing states in India, recording an average annual growth of 9.5 per cent in its gross state domestic product (GSDP) from 2013 to 2015. The growth rate in 2015-16, was 10.5 per cent against the national growth of 7.3 per cent.
Over 3,000 delegates including 500 from five partner countries-the UK, Japan, South Korea, Singapore and United Arab Emirates-are attending this year's summit.
Rooftop solar power capacity crosses 1 GW mark
New Delhi:MMNN:19 Oct. 2016
India's rooftop solar energy capacity has crossed 1 gigawatt (GW) mark this year with 513 MW generation capacity added over the past 12 months, says Bridge to India report.
"As per the report, titled 'India Solar Rooftop Map', India's rooftop solar capacity has crossed 1 GW mark this year," said consultancy services provider Bridge to India.
India has added 513 MW of rooftop solar capacity over the past 12 months, growing at 113 per cent over previous 12 months, reaching total installed capacity of 1,020 MW, according to the report released today at Intersolar Mumbai.
Last year's capacity addition is more than the addition of all previous years put together. 22 per cent of capacity added through PPA (power purchase agreements) based projects.
CleanMax, Amplus Solar, Cleantech Solar, Azure Power, Rays Expert and Hero Future Energies are some of the leading companies offering PPAs.
The rooftop solar market growth is directly linked to improving economics of rooftop solar. Most commercial and industrial consumers can reduce their power bills by 20-30 per cent with rooftop solar power.
It said this growth is expected to continue in the years to come and the market is expected to reach a total capacity of 12.7 GW by 2021.
The report also highlights that commercial and industrial consumers dominate the market with 63 per cent of installed capacity. Grid parity for these consumers has now been achieved in 17 out of the 19 largest states in India.
In states such as Maharashtra and Haryana, tariff differential between grid power and rooftop solar power can be as high as 30 per cent, it said.
This has been much steeper than what most analysts had earlier predicted and has helped in achieving the existing growth rate, it added.
Bridge to India MD Vinay Rustagi said, "Rooftop solar has been a side-story in the Indian solar sector so far but that is beginning to change now. The sector is growing rapidly and beginning to realise its potential, thanks largely to increasing cost competitiveness of rooftop solar power vs grid power."
Rustagi further said,"We expect rooftop solar to outpace growth in the utility solar market in the coming years. The government has announced attractive policies such as net metering, subsidies for select customers and cheaper debt financing for the sector although there is huge scope for improvement on every front."
There is also substantial rooftop capacity being created in the government sector itself, he added.
Tamil Nadu, Maharashtra and Gujarat are leading in terms of total installed capacity. The government rooftop solar segment has grown to over 10 per cent in total installed capacity.
Watch out Ola, Uber's battle for market share in India is getting aggressive
MMNN:12 Oct. 2016
Ever since the taxi hailing application company Uber gave up on the Chinese market a few months back following intense competition from the local player Didi Chuxing, it became more or less clear that the focus for the US-based firm will now shift to the Indian market.
But here too, the world's largest startup company boasting a valuation of $69 billion, realises the growing competition from the domestic player Ola.
In China, Uber couldn't stand up to the growing onslaught from the deep-pocketed Didi, prompting the former to eventually merge its business in the Dragon nation.
With Uber exiting China, the company has got enough room now to focus on India.
As a recent Bloomberg report says, "India will be crucial in terms of both demonstrating success in large international markets and long-term growth potential".
Unlike Didi Chuxing, Ola, Uber's rival here, doesn't have deep pockets. Backed by venture capitalist, Ola has a war-chest of $1.2 billion, while Uber will divert a big portion of $10 billion it raised from Didi into the Indian market.
With the battle lines clearly drawn, Uber has been fast expanding in India and now has presence in 28 cities and handled 5.5 million rides per week in August, says the Bloomberg report.
While India's market is poised to grow at $10 billion, Uber has been making a strong pitch to enter other transport areas besides the traditional cab service via its mobile app.
According to a report in Mint, Uber plans to introduce buses and mini-vans for people through its ride-hailing app, and the service would be called Uber Everything.
"The next big innovation that the company plans to introduce is Uber Pool in buses and mini-vans," Mint report said.
The new initiative would be similar to its UberHop service, which functions more like a scheduled bus service, the report says.
Uber also looks to increase employee base at its Bengaluru engineering centre and also plans to recruit a million drivers over the next two years.
Last month, Uber also said it is betting big on its enterprise offering -- Uber for Business (U4B) -- to drive its growth in the country. In the nine months of operations, Uber for Business has seen a 50 percent month-on-month growth and the company is looking at scaling the offering further.
'Uber for Business' also allows corporates to automate uploading of employee lists and information that ensures only authorised employees have access to the company's U4B account.
"U4B was developed to provide an enhanced experience to companies, and employees, wanting to use Uber's global network for work travel. The U4B platform also includes a versatile and powerful travel dashboard that business administrators can use to manage budgets, enforce ride policies, and monitor usage and spends," Uber Asia Pacific Head (Uber for Business) Arjun Nohwar said.
Further, the US tech heavyweight is also making an aggressive drive into meal delivery backed by a wave of staff recruitment with plans to enter at least 22 new countries and take on local rivals.
India's forex reserves rise to $371.99 bn last week; overseas currency assets at $346.71 bn
Chennai: MMNN:8 Oct. 2016
India's foreign exchange reserves went up to $371.99 billion as on 30 September, the Reserve Bank of India (RBI) announced.
According to data released by the RBI on Friday, the reserves stood at around $371.99 billion as on 30 September as against $370.76 billion as on 23 September.
On 30 September, the foreign currency assets stood at $346.71 billion, gold at $21.40 billion, special drawing rights at $1.48 billion and the reserve position in the International Monetary Fund (IMF) at $2.38 billion.
The reserves as on 23 September comprised of foreign currency assets at $345.24 billion, gold at $21.64 billion, special drawing rights at $1.49 billion and the reserve position in IMF at $2.39 billion.
Automation threatens 69% jobs in India: World Bank
Washington: MMNN:5 Oct. 2016
Automation threatens 69% of the jobs in India, while 77% in China, according to a World Bank research which has said that technology could fundamentally disrupt the pattern of traditional economic path in developing countries.
"As we continue to encourage more investment in infrastructure to promote growth, we also have to think about the kinds of infrastructure that countries will need in the economy of the future. We all know that technology has and will continue to fundamentally reshape the world," World Bank president Jim Kim said.
"But the traditional economic path from increasing productivity of agriculture to light manufacturing and then to full-scale industrialisation may not be possible for all developing countries," Kim said in response to a question at the Brookings Institute during a discussion on extreme poverty on Tuesday. "In large parts of Africa, it is likely that technology could fundamentally disrupt this pattern.
Research based on World Bank data has predicted that the proportion of jobs threatened in India by automation is 69%, in China it is 77% and in Ethiopia, the percentage of jobs threatened by automation is 85%," he said.
"Now, if this is true, and if these countries are going to lose these many jobs, we then have to understand what paths to economic growth will be available for these countries and then adapt our approach to infrastructure accordingly," Kim said.
He said one child policy could have been reason of sharp decline in child stunting and malnutrition, which is now at 10%.
"The one child policy could have been part of it, but anyway the point is, that if you look at educational outcomes and things like child stunting, India is at 38.7% child stunting, they are literally walking into the future with 40% of their workforce probably being unable to compete in the global digital economy, whereas China over the years has brought it down very, very low," Kim said.
"In India, it is probably partly because of sanitation that children are often in a just constant diarrheal stage, because of open defecation. There is a lot of different pieces of it. But I have been saying to the leaders of these countries that have these high stunting rates, there is like an emergency for you, you have got to tackle it," Kim said.
Better Targeting Of Kerosene Subsidy Is Government's Next Agenda: Arun Jaitley
NEW DELHI: MMNN:1 Oct. 2016
After the initial experiment in food and fertiliser, better targeting of kerosene subsidy is next on government agenda to plug diversion and black marketing of the fuel, Finance Minister Arun Jaitley said.
"Kerosene in some parts of the country is used as fuel, and in many parts... is misused. There is a huge amount of diversion... So, states are making efforts to become kerosene free because of a lot of diversion taking place," he said at an event of the Observer Research Foundation in New Delhi today.
He specifically made a mention of Union Territory of Chandigarh and Haryana trying to become kerosene free.
"That's one of the next items which is on the agenda as far as rationalisation is concerned, but there is still a section of society which uses kerosene as a fuel and therefore, you have to find a mechanism (as to) how to deal with the kerosene problem," he said.
With an aim to take PDS kerosene to the targeted beneficiary, it has been decided to implement the direct benefit transfer in kerosene (DBTK) in 39 districts in 2016-17. The districts spread across nine states have been identified in consultation with local governments, including Punjab, Gujarat, Himachal Pradesh, Madhya Pradesh and Chhattisgarh.
Giving examples of on-boarding of various government schemes on DBT, he said the government is now experimenting in various areas.
"Somewhere fertiliser is being experimented, somewhere food... One of the the great advantages would be to plug leakages, eliminate corruption and duplicacy and better targeting of subsidy," Mr Jaitley added.
It helps the government reach the targeted section more effectively and save money in the process that can be used for social programmes or alternatively, other developmental activities, he said.
"We are in the initial stages of various areas of implementation and I think the apprehensions which existed a couple of years ago have been to a large extent adequately addressed. Direct payment through this whole process of identification is slowly going to become the rule and not resorting to it would be an exception," he said.
"The whole idea is that in reaching the weakest section, the leakages takes place and only a small fraction reaches the targeted entity, and I think we will be able to get over that curse."