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moneycontrol.com
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https://www.moneycontrol.com/news/business/tata-power-solar-systems-partners-with-bank-of-india-for-solar-ev-charging-station-financing-12779175.html
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Tata Power Solar Systems partners with Bank of India for solar, EV charging station financing
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Tata Power Solar Systems partners with Bank of India for solar, EV charging station financing.Related stories.
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Tata Power Solar Systems Ltd (TPSSL) on Friday said it has partnered with Bank of India (BOI) to facilitate easy financing for rooftop solar installations and establishment of electric vehicle (EV) charging stations. The partnership is a significant milestone with Tata Power Solar becoming the first solar company to collaborate with BOI for both solar and EV Charging Station financing and strengthening its leadership as a green energy solutions provider, a statement said. This collaboration supports the government's initiatives to promote rooftop solar installations, targeting a wide spectrum of customers, including residential users under the PM Surya Ghar Yojana, housing societies, and Micro, Small, and Medium Enterprises (MSMEs). Under the PM Surya Ghar Yojana, residential customers seeking to install solar systems up to 3 KW can avail loans up to Rs 2 lakh with only a 5 per cent margin money requirement. These loans are offered at an attractive interest rate of 7.10 per cent per annum, are collateral-free, and have a tenure of up to 10 years. For installations above 3 KW and up to 10 KW, loans can be availed up to Rs 6 lakh with a 5 per cent margin money requirement. The interest rates for these loans range from 8.3 per cent to 10.25 per cent per annum, and these are also collateral-free with a tenure of up to 10 years. Registered housing societies and residential welfare associations can benefit from loans up to Rs 1 crore with a 10 per cent margin money requirement. All UDYAM-registered MSME customers looking to set up rooftop solar systems or EV charging stations can avail a loan of up to Rs 30 crore. These loans will have low interest rates starting from 9.35 per cent per annum with a margin requirement of 15 per cent and offer collateral-free options. Borrowers can avail higher repayment tenure of up to 120 months. Benefits of MSE-GIFT (Green Investment & Financing for Transformation) interest subvention can also be obtained under the loan offering.
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2024-07-26 12:24
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/financial-services-perspective-of-indias-budget-and-the-path-to-viksit-bharat-12779082.html
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Financial services perspective of India’s Budget and the path to Viksit Bharat
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The Budget for FY24-25 is forward looking and does have its heart in the right place..Related stories.
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By Pratik Shah and Keyur Shah The FY24-25Union Budgetpresented by the Indian Finance Minister is a strategic blueprint aimed at catalyzing the nation's journey towards 'Viksit Bharat' or Developed India. The focus on creating large-scale employment opportunities, accelerating the growth of the rural economy, and fostering a consumption-driven economy through these means is noteworthy. With a clear impetus on MSME, employment growth, skilling and the middle class, a slew of incentives have been announced in this context. The introduction of a credit guarantee scheme for MSMEs and the establishment of a self-financing guarantee fund with a guarantee cover of up to Rs 100 crore per applicant is a significant step. This move will likely reduce the credit risk for lenders and encourage them to extend more loans to MSMEs. This should result in significant credit offtake in the financial sector as well as provide impetus to the micro lending and non-bank lending to the MSME sector. By mitigating the risk factor, banks and financial institutions may be more inclined to support small businesses, which are often considered the backbone of the Indian economy. Further, given the specific announcement regarding strengthening debt recovery tribunals and also setting up of more such tribunals should help foster a better credit environment. Secondly, the proposal to lower the turnover threshold for mandatory onboarding on the TReDS platform from Rs 500 crore to Rs 250 crore is a strategic move to enhance liquidity for MSMEs. By converting trade receivables into cash, MSMEs can unlock their working capital more efficiently. This initiative not only improves the cash flow for small businesses but also encourages Public Sector Banks (PSBs) to engage with digital platforms, aligning with the Viksit Bharat vision of digital empowerment and financial inclusion. From a direct tax perspective, the FM said that the government would revamp the income tax, 1961. Hence one can expect a leaner and easier direct tax legislation in the near future. Further, for the financial services industry, the removal of the angel tax and the rationalization of tax rates for foreign banks from 40 to 35 percent should be of benefit. The reduced limit for reopening of assessments from 10 years to 5 years should also go a long way in providing certainty to taxpayers. The rationalization of the capital gains tax regime is a big move. The budget proposes an increase of the long-term capital gains tax rate from 10 percent to 12.5 percent and short termcapital gains tax(on listed securities other than derivatives) from 15 percent to 20 percent. The change in the long term capital gains tax rate is a bit of a mixed bag. There were certain gains (like on the sale of unlisted securities, real estate etc.) which were taxed at 20 percent, these will not be taxed at 12.5 percent and hence this will result in a lower rate of tax for these transactions. However, in context, certain long term assets like real estate and unlisted shares etc, one did also get indexation benefit, which now is proposed to be removed. This could be of significant impact for the sellers. Some of the other changes like the abolition of the buyback tax and the resulting taxation of the same as dividends should also have some impact on buy back transactions. Similarly, the increase in the securities transaction tax rates may cool down the futures and option markets which were on fire. Last but not the least, thebudget's emphasison agricultural reforms is likely to have a far-reaching impact on the rural economy. With the rural demand expected to pick up, there will be a positive impact on consumption in the rural sector. The banking sector must also be prepared to support this growth through innovative financial products and services that cater to the evolving needs of both the rural and urban populations. All in all, one does feel that the Union Budget for FY24-25 is forward looking and does have its heart in the right place. It lays down a comprehensive framework for fostering economic growth, with a clear focus on inclusivity and sustainability. The initiatives announced are likely to stimulate the MSME sector, enhance rural development, and create a conducive environment for job creation and skill development. If implemented effectively, these measures can significantly contribute to the realization of the Viksit Bharat agenda, paving the way for India to emerge as a developed and self-reliant economy. Pratik Shah, National Leader - Financial Services, EY India. Keyur Shah, Financial Services Tax Leader, EY India. Views are personal and do not represent the stand of this publication.Â
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2024-07-26 12:23
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moneycontrol.com
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https://www.moneycontrol.com/news/business/budget/taxes-not-hiked-because-i-wants-more-money-says-fm-sitharaman-12779051.html
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FM Nirmala Sitharaman: Open to feedback on tax changes proposed in Budget 2024, but Finance Bill with Parliament now
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Union finance minister Nirmala Sitharaman.
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Union Finance Minister Nirmala Sitharaman on July 26 said the government is open to all views and feedback on the proposed tax changes in Budget 2024, but noted that the Finance Bill is now under ParliamentŌĆÖs consideration and she cannot comment on it outside. Sitharaman, during an event, was asked if the government will review the removal of indexation benefit on the sale of real estate assets after┬Āseveral taxpayers, investors and the Opposition raised concerns on the withdrawal. ŌĆ£I will hear all comments and suggestions with respect to tax changes but the Finance Bill now rests with Parliament. I canŌĆÖt comment on it outside." In this year'sBudget, the government has proposed to bring down the long-term capital gain tax (LTCG) rate on real estate assets to 12.5 percent from the earlier 20 percent and to┬Ā drop the indexation benefit to adjust for inflation. The new rates will be applicable starting from July 23, but properties bought before 2001 will be grandfathered and protected against the latest changes. Read more:┬Ā"Not in a hurry to shut that shop", FM backs the capex push till recovery is complete Further, Sitharaman said taxes have not been increased because the government wants more money but to ensure equal treatment across all asset classes. ŌĆ£For ease of doing business, for simplification and for rationalisation we have increased taxes and not for revenue consideration or because I want more money... The decision is based on the idea that every asset class has to be treated similarly,ŌĆØ Sitharaman said during an industrial interaction ŌĆśBudget Open HouseŌĆÖ, which was organised by the RP Sanjiv Goenka group in partnership with CNBC-TV18. The government faced a backlash following the presentation of the Budget as it announced an increase in short-term capital gain tax to 20 percent from 15 percent on equities and equity-linked mutual funds. The government has also proposed to hike LTCG tax rate to 12.5 percent from the earlier 10 percent. The effects of these changes on the stock markets were seen on the Budget day after BSE Sensex plunged 1.6 percent during the┬Ātrading┬Āhours before recovering to end flat. Describing the budget as ŌĆ£futuristic,ŌĆØ she said that all calculations were meticulously conducted, dismissing the notion that they were ŌĆ£back of the envelope calculations.ŌĆØ Sitharaman reaffirmed the governmentŌĆÖs commitment to sustained capital expenditure to ensure economic recovery is sustained. She also highlighted the budgetŌĆÖs focus on allocating resources for imparting skills to IndiaŌĆÖs youth.
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2024-07-26 12:21
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moneycontrol.com
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https://www.moneycontrol.com/news/business/mrpl-issues-expression-of-interest-to-sell-jet-fuel-term-supplies-12779153.html
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MRPL issues expression of interest to sell jet fuel term supplies
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MRPL issues expression of interest to sell jet fuel term supplies.
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India's Mangalore Refinery and Petrochemicals Ltd (MRPL) has issued an expression of interest to sell around 240,000 metric tons (1.89 million barrels) of jet fuel term supplies starting September, three sources said on Friday. The state-owned refiner is looking to sell at least one 40,000-60,000 ton cargo per month from September to February, the sources said, adding that the buyer would have to offload the cargo between the 1st and 28th of each month. Interested buyers would have to submit their proposals by July 31. The company did not immediately respond to Reuters' request for comment. This could be purely an exploratory move since it is not an official sale tender, there is no validity date and buyer obligations are limited, two of the sources said. Furthermore, the refiner does not typically offer term supplies, the third source said. MRPL typically can sell around 2 cargoes of around 60,000 tons of jet fuel on a monthly spot basis, but has not offered any term cargoes in the past two years, Reuters tenders records showed.
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2024-07-26 12:09
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/cutting-through-tax-complexity-in-budget-2024-12779071.html
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Cutting through tax complexity in Budget 2024
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The budget proposes to simplify these provisions..Related stories.
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By Ganesh Raj Finance Minister’s seventh budget is visionary and path breaking on many fronts. It maintains the fiscal consolidation path with 4.9% fiscal deficit for FY25, lower than 5.1% estimated in the interimbudget, and sets a target of 4.5% for FY26. It also keeps the promise of capex spend, with a provision of 3.4% of GDP for the purpose. The strong direct tax revenues have been a key factor that enabled this balance of capex with fiscal prudence. On direct tax side, thebudget stands out for focusing on tax simplification. Many simmering issues that the taxpayers were facing have now been addressed, sending a clear message that the government remains committed to providing tax certainty and reduce litigation. Rationalisation of withholding taxes has been an important ask from taxpayers. The budget lowers the Tax Deducted at Source (TDS) rates for many transactions, which should ease the cash flow for taxpayers while meeting the government’s objective of tracking transactions.  For instance, it is proposed to lower the TDS rates from 5% to 2% in case of payments related to insurance commission (person other than company), life insurance policy, commission or brokerage and rent paid by individual or HUF. E-commerce participant (ECP) had to earlier bear a TDS rate of 1% which was not only higher than that applicable for offline transactions but was a squeeze on the thin margins of many ECPs. Thebudget now brings parity in the TDS ratesat 0.1%, providing much relief to the ECPs on payment by E-Commerce operators.  Payments on account of repurchase of units by Mutual Fund or Unit Trust of India has been excluded from current TDS deduction liability of 20%. Another significant relief is that earlier Tax Collected at Source (TCS) paid by salaried employees was not considered while computing his TDS liability u/s 192 of Income Tax Act and the employee had to claim a refund for the TCS paid, which added to the compliance burden. The budget now allows credit of TCS paid while computing TDS liability on salary income. With more than 5 lakh litigation cases stuck at CIT (Appeals) level, the pendency of disputes has been a serious concern. The budget proposes to introduce a Direct Tax Vivad se Vishwas Scheme 2024 as a dispute settlement mechanism. The earlier VSV scheme had helped settle about 1.3 lakh cases, despite pandemic related constraints. It is hoped that the new Scheme will encourage settlement of many more cases. Simplification of capital gains taxation has been a long standing ask of taxpayers. Short term gains on listed financial assets will be taxed at 20%, with all other financial and non-financial assets taxed at the applicable tax rate. Long term gains on all financial and non-financial assets (except unlisted debentures and unlisted bonds, which will be taxed at applicable rates) will attract a 12.5% tax. While the rates rationalisation will mean higher tax burden for some, the lower and middle-income classes will have some respite due to increase in the limit of exemption of long term capital gains from Rs 1 lakh to Rs 1.25 lakh per year. The holding periods are now proposed to be only two.  For all listed securities, the holding period is proposed to be 12 months and for all other assets, it shall be 24 months.  In a positive move for REITs and InVITs, the units of listed business trust will now be treated at par with listed equity shares at 12 months instead of earlier 36 months. The holding period for bonds, debentures, gold will reduce from 36 months to 24 months. For unlisted shares and immovable property it shall remain at 24 months. Income from buy-back of shares by companies was getting taxed in the hands of the company at 20%. The sum paid by a domestic company for buy back of its own shares will now be taxed in the hands of recipient investor as dividend, with the cost of such shares to be treated as a capital loss to the investor which can be carried forward for set off against capital gains from sale of shares The current procedure for assessment or reassessment of income is governed by multiple sections which specify different procedural requirements for assessment or reassessment of income. The budget proposes to simplify these provisions. Going forward, reopening an assessment beyond three years from the end of the assessment year will be possible only if the escaped income is Rs 50 lakh or more, up to a maximum period of five years from the end of the assessment year. Even in search cases, a time limit of six years before the year of search, as against the existing time limit of ten years, is proposed. This will help reduce tax-uncertainty and disputes. To further nudge individual taxpayers towards the new, simplified income tax regime the budget proposes to increase the standard deduction to salaried individuals and pensioners from Rs 50,000 to Rs 75,000 under the new tax regime. The higher deduction, together with the rationalisation of the tax slabs, would put higher additional disposable income of Rs 17,500 in the hands of a taxpayer, which should also contribute to increasing consumption. There are other welcome announcements such as removal of 2% equalization levy on consideration received/ receivable by an e-commerce operator from e-commerce supply or services, lowering of the tax rate on foreign companies from 40% to 35% and abolishment of angel tax. All these should give a positive signal to the foreign investors about India’s intent to provide a benign tax regime. Finance Minister has assured a comprehensive review of the Income-tax Act, 1961 to make the law concise, simple and easy to understand. Continued focus on tax simplification is the right way forward and will further improve tax buoyancy. Ganesh Raj, Partner and National Leader, Business Tax Services, EY India. Views are personal and do not represent the stand of this publication.Â
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2024-07-26 11:59
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/capital-gains-tax-structure-changes-will-help-ifsc-12779069.html
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Capital gains tax structure changes will help IFSC
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The proposals seek to increase the capital gains tax rates on listed equity shares..Related stories.
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The union budget’s proposals on capital gains tax structure has potentially a significant impact on foreign portfolio investors and the attractiveness of India’s international financial services centre (IFSC). The likely fallout are as follows. FPIs The proposals seek to increase thecapital gains tax rateson listed equity shares from 10 percent to 12.5 percent and from 15 percent to 20 percent for long term capital gains and short term capital gains, respectively. The higher rates are applicable for all transfers of listed shares from today onwards. The increase in tax rates could potentially impact NAVs of offshore FPIs that provide for tax on accrued gains. IFSC IFSC is emerging as an important destination for Fund Managers to set up funds, especially to raise monies from offshore investors for investing in capital markets. Currently, there is a separate tax regime for Category III Alternative Investment Funds set up in IFSC which is broadly comparable to taxation regime for offshore Funds set up in jurisdictions such as Singapore and Mauritius. To provide further impetus to Funds in IFSC, it is proposed to extend the same regime to retail schemes and ETFs set up in IFSC (currently, there is no separate tax regime for such Funds in IFSC). With this announcement, Fund Managers may want to explore the setting up of retail schemes and ETFs in IFSC. The reduction in the long term capital gains tax rates from 20 percent to 12.5 percent and the period of holding to qualify as "long term" to twenty four months would help outbound Funds set up in IFSC which are raising monies from resident investors for investing outside India. Finance companies/global treasury centres set up in IFSC are eligible for a 10-year "tax holiday" (to be availed within 15 years from their date of registration with the IFSCA). There are "thin capitalisation" norms in the tax law that restrict the deduction of interest paid to 30 percent of EBIDTA. Domestic NBFCs were excluded from these norms. It is proposed to extend the benefit to finance companies (subject to conditions to be prescribed) set up in IFSC (relevant for non-"tax holiday" period). This will encourage setting up of finance companies in IFSC for cross-border funding.
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2024-07-26 11:15
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moneycontrol.com
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https://www.moneycontrol.com/news/business/usfda-approves-sun-pharmas-drug-to-treat-alopecia-areata-12779065.html
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USFDA approves Sun Pharma's drug to treat alopecia areata
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USFDA approves Sun Pharma's drug to treat alopecia areata.
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Sun Pharmaceutical IndustriesLtd on Friday said the US health regulatory has approved its LEQSELVI (deuruxolitinib) drug for the treatment of adults with severe alopecia areata. The approval by the US Food and Drug Administration (USFDA) is for LEQSELVI (deuruxolitinib) 8 mg tablets, Sun Pharma said in a regulatory filing. Alopecia areata is an autoimmune disorder that can lead to unpredictable hair loss. It occurs when the immune system mistakenly targets hair follicles on the scalp, face, and sometimes other parts of the body, due to a breakdown in immune privilege. "LEQSELVI offers a new and effective solution that will significantly enhance options for long-suffering patients battling severe alopecia areata and their physicians," Sun Pharma CEO, North America Business, Abhay Gandhi said. The approval is based on data from two multicenter, randomised, double-blind, placebo-controlled Phase 3 clinical trials which enrolled a total of 1,220 patients with alopecia areata who had at least 50 per cent scalp hair loss as measured by Severity of Alopecia Tool (SALT) for more than six months, the company said.
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2024-07-26 11:10
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/rbis-proposed-liquidity-norms-to-raise-demand-for-bonds-12779002.html
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RBI's proposed liquidity norms to raise demand for bonds
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RBI's proposed liquidity norms to raise demand for bonds.Related stories.
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The Reserve Bank of India's latest draft guidelines aimed at enhancing the liquidity resilience of lenders, amidst an increased use of digital infrastructure, are expected to boost demand for government bonds over the medium term, traders said. Late on Thursday, the central bank proposed that banks apply an additional 5% reduction in the stability of retail deposits that have internet and mobile banking access. If finalised, the norms would be applicable from April 1, 2025. "Given the significant penetration of internet and mobile banking, the proposed changes are likely to increase the outflows in the next 30 day bucket for banks, thereby posing higher requirements of high-quality liquid assets (HQLA)," Anil Gupta, senior vice president and co-group head financial sector ratings at ICRA said. Liquidity coverage ratio (LCR) is a certain proportion of HQLA that banks need to maintain at all times. It includes cash, reserves with central banks, and federal government bonds, which can easily be converted into cash. The new norms will pose requirements for higher liquid assets for the banks to shore up their LCRs. Banks are likely to add government bonds in the run up to the implementation of these guidelines, Gupta added. The norms also suggest that government bonds would be valued at an amount not greater than their current market value, adjusted for applicable haircuts in line with the margin requirements under the liquidity adjustment facility and marginal standing facility. "The additional haircut owing to internet enabled transaction facility has arisen from recent global experiences of run offs... These steps add to the withdrawal of accommodation stance as far as liquidity with banks is concerned," said Alok Singh, group head of treasury at CSB Bank. However, traders said that there may not be an immediate impact as far as government bond yields are concerned as the said circular will come into effect later. State-run banks are already holding assets more than what regulatory norms need, but traders said some private banks may have to shore up holdings which could push up demand for bonds at a later stage. "In such a case, demand for shorter duration bonds would pick-up further," said VRC Reddy, treasury head at Karur Vysya Bank.
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2024-07-26 10:24
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/judgement-that-will-alter-both-federal-and-mineral-tax-landscape-12778782.html
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Judgement that will alter both federal and mineral tax landscape
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States have the legislative power to tax mineral rights. (Representative image).Related stories.
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By Gopal Mundhra The nine-judge Constitution Bench of the Supreme Court of India, with a decisive 8:1 majority, has ruled on the contentious issue of mineral taxation, overturning previous judgments and clarifying the balance of power between the Union and the States. The majority verdict declared that royalty on minerals is not a tax but a contractual consideration, and consequently States have the legislative power to tax mineral rights and mineral-bearing lands over and above the collection of royalty under Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act). States get a say on mineral taxation Thejudgment significantly bolstersthe States' authority in mineral taxation. It affirms that States can use mineral yield or value as a measure to tax mineral rights and mineral-bearing lands, and that the MMDR Act does not impose limitations on the States' taxing powers. The only dissenting judge, Justice Nagarathna, held that royalty is indeed a tax and warned that allowing States to levy additional taxes on minerals could lead to a lack of uniformity and unhealthy competition. This judgment overrules the previous India Cements judgment of 1990 which had heldroyalty to be a tax. The Court also clarified that Entry 54 of Union List is a regulatory entry and does not vest the power of taxation with the Union. Till now the Central Government was undertaking a periodical exercise for the determination of the rates of royalty after taking into consideration the fiscal requirement of the States based on the assumption that the States have no right to levy tax on minerals over and above import of royalty. The Central Government may have to revisit the formulae for royalty rate determination for the future. Judgement can alter fiscal landscape This judgment is expected to have far-reaching implications for mineral resource management and revenue distribution in India, potentially altering the fiscal relationship between theUnion and mineral-rich States. After the judgment was pronounced, the advocates requested the bench to clarify if the judgement would apply only prospectively. On this aspect, the bench agreed to hear the parties next Wednesday. In case, the judgment is made operative prospectively, it would be a sigh of relief for the mining community. On the other hand, if the judgment is made operative retroactively, it is likely to have a significant financial impact on industry stakeholders in the mining sector as all the pending demands that were previously stayed will now get revived. Judgement impacts pending writs Furthermore, this judgment carries substantial weight for the pending writ petitions in various High Courts across India wherein the validity and legality of Service tax and GST levied on mineral royalties under the reverse charge mechanism, has been challenged, inter alia, on the ground that mineral royalty is a tax and there cannot be tax on tax. The judgment clarifying the nature of royalty as a contractual consideration, would have an adverse effect on these pending petitions and the only relief the mining community may hope is that the Government, considering the industry practice and the uniformly adopted tax position, issues an exemption notification under the recently introduced Section 11A of Central Goods and Service Tax Act, 2017. After the earlier decision of the Supreme Court in case of India Cements in the year 1990, the States were quite cautious while introducing any legislation to tax mineral rights. This judgement, which has come out as a blessing of the Apex Court for the States, will grant the latter a free hand to levy taxes on mineral rights over and above the charge of royalty imposed under MMDR Act. It is important to note that the right to levy tax on mineral rights under entry 50 of the State list is independent of Article 246A under which GST is being levied. Potential downside There's also a risk of tax competition between states, where some might introduce more favourable tax regimes to attract mining investments, while others might impose higher taxes to maximize revenue. This situation could lead to uneven development of the mining sector across different states and potentially influence companies' decisions on where to focus their operations. (The author is Partner, Economic Laws Practice.) Views are personal and do not represent the stand of this publication.Â
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2024-07-26 10:17
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moneycontrol.com
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https://www.moneycontrol.com/news/business/dlf-sales-bookings-jump-over-3-fold-to-rs-6404-crore-in-q1-on-high-demand-for-luxury-homes-12778884.html
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DLF sales bookings jump over 3-fold to Rs 6,404 crore in Q1 on high demand for luxury homes
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DLF sales bookings jump over 3-fold to Rs 6,404 crore in Q1 on high demand for luxury homes.Related stories.
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Realty majorDLF's sales bookings jumped over three-fold to Rs 6,404 crore during the first quarter of this fiscal on strong demand for its luxury housing properties. The company had sold properties worth Rs 2,040 crore in the year-ago period. DLF has given guidance to achieve Rs 17,000 crore worth of sales bookings for the entire 2024-25 financial year as against nearly Rs 15,000 crore in the preceding year. According to its latest investor presentation, the company's sales bookings in the April-June quarter were driven by its luxury project 'DLF Privana West' at Sector 76/77, Gurugram that saw sales of Rs 5,600 crore. In its super-luxury housing project 'The Camellias' at DLF 5, Gurugram, the company sold 4 units for Rs 251 crore. On Thursday, DLF reported a 23 per cent increase in its consolidated profit to Rs 645.61 crore in the first quarter of this fiscal. Its net profit stood at Rs 527 crore in the year-ago period. Total income rose to Rs 1,729.82 crore during the April-June period of this fiscal from Rs 1,521.71 crore in the corresponding period of the previous year. In a statement on Thursday, DLF said, "We believe that the residential segment is witnessing a structural upcycle and hence we continue to strengthen our new product pipeline." "We stay committed towards leveraging this positive momentum and have planned a strong launch pipeline of an additional 9 million square feet of new products during the fiscal, across various segments and geographies including Gurugram, Mumbai, Goa and Chandigarh Tri-city," the company added. The company said it continues to witness healthy sales momentum and strong growth in collections leading to further improvement in its net cash position."Our rental business continued its steady performance during the period," DLF said. DLF's rental arm DLF Cyber City Developers Ltd (DCCDL) revenue stood at Rs 1,553 crore, reflecting (year-on-year) y-o-y growth of 10 per cent while consolidated profit for the quarter stood at Rs 470 crore, registering a y-o-y growth of 20 per cent. "We continue to have a positive outlook on the rental business and are accelerating our capex commitments to further strengthen our rental portfolio and deliver healthy growth," the company said. DLF is India's leading real estate developer and has more than seven decades of track record. It has developed more than 178 real estate projects and developed an area in excess of 349 million square feet. DLF Group has 220 million square feet of development potential across residential and commercial segments. The group has an annuity portfolio (office and retail real estate spaces) of over 44 million square feet. DLF is primarily engaged in the business of developing and selling residential properties (Development Business) and developing and leasing commercial and retail properties (Annuity Business).
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2024-07-26 09:43
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/now-after-i-t-search-6-year-assessment-needs-to-wind-up-in-12-months-cbdt-chairman-12778678.html
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CBDT consolidates review process with single order covering six assessment years
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Time barring" refers to the deadline by which a tax authority must complete an assessment and issue a notice..Related stories.
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In a significant move to simplify and expedite tax assessment procedures, the Finance Bill has proposed an amendment to the Income Tax Act for consolidation of the assessment process in cases involving multiple years. This will ease the burden on taxpayers and streamline the workflow. In a major relief to assessees who are probed for evasion of income tax, after the searches are carried out, the assessment for six years will be clubbed which will be completed within time-bound 12 months, following which a single demand notice will be issued, Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal toldMoneycontrolin an interview. Till now, separate notices were issued at different times for every assessment year which stretched the proceedings to even up to 10 years."Initially, tax assessments in search cases could be opened for up to 10 years, leading to multiple notices being issued across different years. Each notice had a different time-barring date, which stretched the proceedings and created challenges for both taxpayers and tax officers," Agarwal said. Under the previous system, if a notice was issued in one year, it could potentially have implications extending into the next, with the final time-barring dates spreading over several years. "This resulted in a complex mesh of overlapping assessments, often leading to increased disputes and prolonged resolution times," he added. In direct tax terminology, "time barring" refers to the deadline by which a tax authority must complete an assessment and issue a notice to a taxpayer. If this deadline is not met, the assessment becomes "time-barred", meaning that the tax authority loses the legal right to assess additional taxes for that period. To address these issues, the CBDT has introduced a consolidated assessment approach. "Now, six years of tax assessments will be examined in one go, with a single notice and a single assessment order covering all relevant years. This will replace the previous practice of issuing separate notices for each year," the chairman said. This streamlined process is expected to significantly reduce the complexity and duration of tax assessments. "For the taxpayer, it is a problem when proceedings get stretched. The new procedure also includes a defined timeline for completing the assessments. "The assessment must be completed within 12 months of the last authorisation. This makes it easier for both the taxpayer and the department," the chairman said. The consolidation will also impact the appeals process. Previously, multiple appeals could arise depending on when individual assessments were passed. Now, there will be only one appeal for the consolidated assessment order, further simplifying the resolution process. "The searches conducted from September 1, 2024 onwards will follow this new amendment in the Income Tax Act," said the CBDT chairman.
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2024-07-26 07:55
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moneycontrol.com
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https://www.moneycontrol.com/news/business/companies/oil-india-inducts-css-technology-for-extraction-of-crude-from-jodhpur-sandstone-12778649.html
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Oil India inducts CSS technology for extraction of crude from Jodhpur sandstone
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Oil India Limited claims a milestone breakthrough for extraction of heavy crude from Jodhpur Sandstone, the oldest sedimentary rock of Rajasthan.Related stories.
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Oil India Limited (OIL) successfully commissioned the Cyclic Steam Stimulation (CSS) Technology for extraction of heavy crude oil from Jodhpur sandstone, the oldest sedimentary rock of Rajasthan, after almost 27 years of its discovery. The Cyclic Steam Stimulation(CSS) is used to extract high-viscosity oil. Union Minister of Petroleum and Natural Gas of India, Hardeep Singh Puri took to X and wrote,"With successful induction of Cyclic Steam Stimulation technology, @OilIndiaLimited claims a milestone breakthrough for extraction of heavy crude from Jodhpur Sandstone, the oldest sedimentary rock of Rajasthan, after almost 27 years of its discovery. Breakthrough contributions by our energy sector entities & innovative technologies are powering India's journey towards energy self-sufficiency under the leadership of PM @narendramodi Ji." Harvesting heavy oil in Thar desert using technology which is first of its kind. With successful induction of Cyclic Steam Stimulation technology,@OilIndiaLimitedclaims a milestone breakthrough for extraction of heavy crude from Jodhpur Sandstone, the oldest sedimentary rock…pic.twitter.com/KEa3xzTtvY — Hardeep Singh Puri (@HardeepSPuri)July 25, 2024Meanwhile, India's crude oil import dropped 16% in the fiscal year ended March 31 due to lower international rates, but the dependency on overseas suppliers rose to a new high, official data showed. India imported 232.5 million tonnes of crude oil, which is refined into fuels like petrol and diesel, in the FY 2023-24 (April 2023 to March 2024), almost the same as in the previous financial year. However, it paid $132.4 billion for the imports in FY24 as against $157.5 billion import bill in 2022-23, the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC) data showed.
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2024-07-25 22:27
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/formal-employment-picks-up-in-may-new-subscribers-to-epf-esic-rise-12778564.html
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Formal employment picks up in May; new subscribers to EPF, ESIC rise
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Formal employment improves.Related stories.
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Formal employment picked up in May after a disappointing start to the year as new enrollments in the government’s social security schemes rose, according to data released on July 25. New subscriptions to the Employees’ Provident Fund scheme rose 5.8 percent in April compared with the previous month to 984,681, while subscriptions to the Employees’ State Insurance Scheme, which caters to relatively lower-paid employees, jumped 40 percent to 1.7 million, as per the report released by the ministry of statistics and programme implementation. The rise in employment bodes well for the economy. Private survey data has been hinting at improving employment prospects in the first quarter, after a tepid growth in the previous year. The number of private employees joining the National Pension Scheme rose 108 percent to 21,299 from 10,250 during this period. The National Pension Scheme’s overall subscriptions, however, fell as state subscriptions to NPS declined 54 percent in May compared with the previous month. The total subscriptions to the scheme were 28.5 percent lower at 79,080. Further analysis shows that women employment grew slower than male employment during this period. In the case of EPF, the number of new subscriptions fell by 4.6 percent, while male subscriptions grew by 9.8 percent. For ESIC, women subscriber addition at 31.9 percent was lower than male subscribers at 43 percent.
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2024-07-25 20:42
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/black-money-act-amendment-to-remove-penalty-on-non-disclosure-of-foreign-assets-worth-rs-20-lakh-12778560.html
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Black Money Act amendment to remove penalty on non-disclosure of foreign assets worth Rs 20 lakh
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Black Money Act amendments in Section 42 and 43 will be a part of the Finance Bill..Related stories.
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An amendment in the Black Money Act will give taxpayers relief from penalty in case they fail to disclose overseas assets worth Rs 20 lakh, Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal said, adding that however the obligation to report the transanction is not done away with. The Black Money Act amendments in Section 42 and 43 will be a part of the Finance Bill. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 aims to curb black money, or undisclosed foreign assets and income and imposes tax and penalty on such income. Currently under the Act, even if the taxpayers fail to disclose a foreign asset worth Rs 5 lakh, they have to pay a Rs 10 lakh penalty on it. “At present if the taxpayer is holding any asset abroad, which is not declared in the income tax return then there is a penalty of Rs 10 lakh. An amendment in the Black Money Act is proposed that If the value of the overseas asset is up to Rs 20 lakh, and is not disclosed, there will be no penalty if it's a bonafide mistake on the part of the taxpayer,” Agarwal told Moneycontrol in an interview. However, it does not mean that the obligation to actually report a transaction has been done away with. It should not be interpreted that way. The penalty has been removed, does not mean that the obligation has also been removed, he added. “The amendment is proposed as the income tax department presumes there may not be a malafide intention to hide it. So in such bonafide mistakes the person should not be subjected to penalty,” the CBDT chairman said.
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2024-07-25 20:07
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moneycontrol.com
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https://www.moneycontrol.com/technology/in-space-invites-industry-to-build-and-manage-satellite-system-under-ppp-model-article-12778510.html
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IN-SPACe invites industry to build and manage satellite system under PPP model
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Space regulator IN-SPACe floated an expression of interest in this regard on July 25.Related stories.
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Space regulator the Indian National Space Promotion and Authorisation Centre (IN-SPACe) is looking towards Indian private entities to build and manage a space-based Earth Observation (EO) system under a Public-Private Partnership (PPP) model. The body on July 25 released an Expression of Interest (EOI) inviting proposals from Indian entities. The opening of doors for Indian entities to develop this project which involves the design, build, and launch of a constellation of satellites equipped with advanced imaging technologies is a major leap in boosting EO-based space economy in the country. The proposal encompasses non-governmental entities (NGE) (a term reserved in the space sector for private entities) to design, build, and establish constellation of satellites in Low Earth Orbit having a combination of sensors including panchromatic, multispectral, hyperspectral and microwave. It will also involve NGEs launching the satellites through Indian satellite launch vehicles, monitoring and controlling the spacecraft health, and payload data download by establishing and operating their own ground stations or through Ground Stations as a Service (GSaaS) providers. Finally, the private entity will also be required to process the payload data downloaded from the satellite constellation and generate Analysis Ready Data (ARD), creating a wealth of information for various applications. Dr Pawan Goenka, Chairman, IN-SPACe said, "This is an initiative by IN-SPACe & ISRO towards creating a self-reliant, robust, and sustainable Earth Observation System catering to the growing demand for EO data." "It is envisaged that the upstream infrastructure of the satellite constellation with advanced imaging technology will create significant downstream commercial potential, resulting in more competitive products," Goenka said. The EOI has been released on the IN-SPACe digital platform www.inspace.gov.in. Interested companies are encouraged to visit the website to learn more and register for the upcoming pre-EOI conference on August 8, 2024, IN-SPACe said in a press release.
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2024-07-25 19:34
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/labour-and-skill-ministries-spend-to-double-from-previous-decade-12778459.html
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Labour and skill ministries' spend to double from previous decade
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Govt to spend a lot more on jobs and skills.Related stories.
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The labour and skill development ministries of the government will spend nearly double of what they disbursed in the last decade over the next five years, according to a Moneycontrol analysis of Budget documents. While the ministries had spent Rs 1.03 lakh crore between FY16 and FY24, theBudgetlays down a roadmap of spending Rs 2 lakh crore over the next five years. A major boost is expected to go towards skill development, where spending over the next half a decade is expected to 5.2 times higher than what was spent between FY16 and FY24. On the other hand, labour ministry’s scheme spending will be 1.2 times higher. Of this Rs 2 lakh crore, the newly launched employment linked incentive schemes will account for over half of the Budget at Rs 1.07 lakh crore, while the internship programme and upgradation of industrial training institutes is set to account for Rs 93,000 crore worth of spending. The finance minister in her budget speech on July 23 announced the launch of three schemes under the employment linked initiative, with one targeting first-time entrants to job market, another supporting bulk hiring of first timers in manufacturing and the third focused on support to employers. “I am happy to announce the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 410 million youth over a five-year period with a central outlay of Rs 2 lakh crore,” FM Nirmala Sitharaman had noted. For FY25, the spending of the two ministries at Rs 25,850 crore (sans establishment expenditure) was already 1.8 times higher than the previous year. The FY25 allocations are over triple of what the government spent prior to the pandemic in FY20 and five times the spending from a decade ago. The pace of spending of labour ministry has been higher than skill development.
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2024-07-25 18:15
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moneycontrol.com
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https://www.moneycontrol.com/news/business/companies/prime-day-2024-is-the-biggest-ever-prime-day-event-in-india-says-amazon-here-are-the-highlights-12778404.html
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Prime Day 2024 is the biggest ever Prime Day event in India, says Amazon; here are the highlights
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Signaling a growing penetration of e-commerce firms, two out of three Prime members shopped from non-metro cities, while over 70 percent of the demand for smartphones came from tier 2 and 3 cities..Related stories.
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Small and medium businesses’ (SMBs’) sale during Amazon’s Prime Day 2024 jumped 30 percent year-on-year to hit all-time high, the e-commerce giant said in a statement on July 25. In addition, out of the total, over 65 percent of SMBs who received a sale during the shopping event were from tier 2-3 cities and beyond, with women entrepreneurs, weavers, and artisans selling over 1,600 units per minute during the event. For Amazon India, it was the biggest shopping event ever as the e-commerce giant broke records with record sales during the two-day event. The event also recorded 24 percent more prime members shopping during the 8th Prime Day compared to the 2023 event, achieving its highest-ever Prime member engagement. Akshay Sahi, head of Amazon Prime, delivery and returns experiences, India and Emerging Markets said, “We would like to thank our sellers, brands and bank partners for helping us deliver the biggest ever Prime Day in India. Prime members purchased more items than any previous Prime Day shopping event, and we recorded the highest number of same day deliveries. We love helping our customers save big, and Prime Day is the ultimate celebration of value, fast deliveries, great deals, new launches and blockbuster entertainment that the Prime membership provides.” Signaling a growing penetration of e-commerce firms, two out of three Prime members shopped from non-metro cities, while over 70 percent of the demand for smartphones came from tier 2 and 3 cities. In terms of electronics, Apple iPads saw 23 times more growth in sales and Samsung Galaxy Tabs saw a surge of 17 times in sales vs previous Prime Day, the company statement said. The sale of premium smartphones above Rs 30,000 continued to grow with more affordability options available for customers such as No Cost EMI & Amazon Pay Later. iPhone 13, Samsung Galaxy S23 Ultra 5G and OnePlus 12R were among the top 3 premium smartphones customers bought during this Prime Day 2024, statement added. Moreover, the overall consumer electronics and personal computing segment saw a growth of 13 percent in sales over last year’s Prime Day. During the two-day event, Intel Core Ultra powered Laptops saw an 18X growth in sales vs last Prime Day, according to the statement. Vineet Gehani, senior director, PC Category, HP India Sales Pvt Ltd, said, “We are extremely happy to have been associated with Amazon’s Prime Day this year. The success of the event was a testament to our growing partnership with Amazon.” Key highlights from Amazon Prime Day 2024 -In Amazon Fresh, muesli, eggs, seeds & dry fruits emerged as the top breakfast choices for India with a 1.6x growth YoY vs last Prime Day -Customers couldn’t get enough of beauty offers on Prime Day deals, with makeup and skincare brands spiking upto 3X YoY, led by brands like Sugar Cosmetics, Lakme and Maybelline -Amazon Fresh consumers also showed higher adoption of healthier choices resulting in a YoY growth of 3x and 1.5x respectively in mineral supplements and sports supplements (Protein powders) -Customers loved shopping from vast collection of smart watches and premium watches, witnessing up to 9X spike, especially from smartwatch brands like Titan Smart, Fastrack Smart & premium brands like Seiko, Boss, Michael Kors. -Prime members shopped from top brands such as LG, Samsung, IFB, Bosch, and Haier and upgraded to premium appliances through affordability options of NCEMI, Bank discounts and exchange offers -Prime members enjoyed big savings on Fire TV Stick making it the second-most purchased product across Amazon.in this Prime Day. -Premium sports shoes category featuring brands like New Balance, Saucony and Under Armour witnessed 3X spike vs last Prime Day.
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2024-07-25 17:39
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/a-push-towards-atmanirbhar-bharat-in-budget-2024-12776229.html
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A push towards тАШAtmanirbhar BharatтАЩ in Budget 2024
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Government has garnered tremendous success from its earlier reforms in the mobile phone manufacturing sector..Related stories.
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By Gautam Khattar┬а The Finance Minister tabling the firstbudgetof Modi 3.0 government has reaffirmed its commitment on enhancing self-sufficiency or тАШAtmanirbhar BharatтАЩ through key tax initiatives aimed at empowering the Indian local manufacturing. A slew of rate rationalization measures has been introduced to transform the economy into a global manufacturing powerhouse. Government has garnered tremendous success from its earlier reforms in the mobile phone manufacturing sector, which has resulted into a three-fold increase in domestic production over the last six years. Continuing its endeavour to promote Make in India, Government has now reduced the basic customs duty rate on mobile phone, printed circuit board assembly and mobile chargers to 15 percent. Further, in an effort to bolster the aviation and marine sector, the Government has increased the time limit for export of goods imported for repair under Maintenance, Repair and Operations (MRO) from 6 months to one year. Additionally, the time limit for re-importation of goods for repairs under warranty has been increased from three years to five years. To enhance the domestic value addition in precious metals, basic customs duty on gold and silver has been reduced. On similar lines, basic customs duty on X-ray tubes and flat panel detectors for use in medical X-ray machines have been reduced under phased manufacturing programme to align with domestic capacity addition and fostering innovation in the medical technology sector. On the other hand, 5 percent increase in the basic customs duty rate of printed circuit board assembly is endeavoured to boost local manufacturing of telecom network gear and make imports costlier. The rationalization in the customs duty rates will play a significant role in achieving governmentтАЩs vision of a self-reliant India and to further promote its initiatives such as Production-Linked Incentive Schemes. Overall, the budget provides a robust framework for growth and has the ability to attract foreign direct investment to build strategic and sustainable growth trajectory. The author is Principal тАУ Price Waterhouse & Co LLP.┬а Views are personal and do not represent the stand of this publication.┬а
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2024-07-25 16:59
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/as-many-as-4-6-crore-income-tax-returns-filed-so-far-in-ay2024-25-cbdt-chairman-12778352.html
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As many as 4.6 crore income tax returns filed so far in AY2024-25: CBDT Chairman
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Budget- Income tax- 2024.Related stories.
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As many as 4.6 crore Income Tax return have been filed so far and the income tax department is in discussion with the technological vendors to ensure capacity to handle large volumes as the last date of July 31 nears. “We are aware of the glitches on the income tax portal. We are talking to our vendors to ensure that the portal is able to handle the additional volumes of return filing,” Central Board of Direct Taxes Chairman Ravi Agarwal toldMoneycontrolin an interview. The portal was able to handle 2.2 lakh return filings in the peak hour on July 25, he said. In the 4.6 crore returns filed, two-thirds have been filed under the new tax regime. The government is hoping that its “nudge towards the new tax regime” by offering relief attracts more taxpayers to move to the regime, he said. The CBDT will also now begin an overhaul of the Income Tax Act, which will aim at simplifying the tax laws. The review will be done over the next six months, and the Bill may be introduced in the nextUnion Budgetin February, Agarwal said. Pendency of cases Currently, 5 lakh cases are pending under appeals or litigation, which the CBDT is targeting under Vivaad se Vishwas second edition. In the earlier Vivaad se Vishwas, Rs 75,000 crore revenue was received by the government and the resolution of about 1 lakh cases was seen. The cases under Angel tax will also be eligible under the scheme if they are under appeal or litigation, he said.
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2024-07-25 16:48
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moneycontrol.com
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https://www.moneycontrol.com/news/business/companies/indias-total-ma-deal-value-soars-200-yoy-to-6-9-bn-in-q2cy24-report-12778141.html
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India's total M&A deal value soars 200% YoY to $6.9 bn in Q2CY24: Report
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Domestic transactions increased by 37.6 percent, making 117 deals, up from 85 in Q2 2023 with overall value of domestic transactions rising 154.2 percent, reaching $5 billion, up from $2 billion in Q2 2023.Related stories.
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Mergers and acquisitions in India continued to grow in the second quarter of 2024, recording fourth straight three-month period of growth with 174 transactions and deals worth $6.9 billion, a new report said on July 25. “This represents a significant two-fold increase in overall deal value and a substantial 46.2 percent growth in deal volume compared to Q2 2023,” the report said Domestic segment accounted for 72.4 percent of the overall deal value, emerging as the largest category within the M&A landscape, as revealed in Forvis Mazars in India's latest M&A Deal Tracker Report, adding that it was the only category to experience growth in deal volume during this period. Akhil Puri, partner, Financial Advisory, Forvis Mazars in India, said, “M&A activity in Q2 2024 saw a remarkable surge, with deal value and volume both experiencing substantial increases, rising from $2.3 billion in Q2 2023 to $6.9 billion in Q2 2024, an impressive 200 percent growth. This robust performance highlights the resilience of the Indian market amidst global uncertainties.” Domestic transactions increased by 37.6 percent, making 117 deals, up from 85 in Q2 2023 with overall value of domestic transactions rising 154.2 percent, reaching $5 billion, up from $2 billion in Q2 2023. “Despite a reduction in cross-border transactions due to geopolitical challenges, domestic investments have shown remarkable strength, continuing to lead the M&A landscape and representing approximately 72 percent of the total deal value across various sectors. This resilience underscores the attractiveness of the Indian market and its potential for sustained growth,” said Puri. Key highlights: -Domestic category emerged as the largest within the M&A landscape. The overall value of domestic transactions saw a massive 154.2 percent increase, reaching $5 billion, up from $2. billion in Q2 2023 - The Inbound M&A category exhibited mixed results in Q2 2024. Inbound transactions slipped 15.4 percent to 11 deals, which was the lowest in the last four years. The overall deal value for the category increased by 185.6 percent, reaching &$313.8m, compared to $109.9 m in Q2 2023. -Overall transaction value expanded by 422.2 percent to touch $1.2 billion in the outbound M&A segment. The total number of outbound transactions decreased by 33.3 percent to 14 deals, down from 21 deals in Q2 2023 -All categories saw a significant increase in activity during Q2 2024 compared to Q2 2023. $0m to $5m category was the most active in terms of volume in the last four years, and the fastest growing, with a 244.4 percent increase compared to Q2 2023. -The $100 million to $1 billion and $25 million to $100 million categories saw 133.3 percent and 62.5 percent growth, respectively -In terms of deal value, the $100 million to $1 billion category grew by 243.2 percent ($2.8 billion), and the $0 million to $5 million and $25 million to $100 million categories saw substantial growth of 177.9 percent and 44.7 percent, respectively.
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2024-07-25 16:38
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/moneycontrol-pro-panorama-nasdaq-rout-a-wake-up-call-12778300.html
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Moneycontrol Pro Panorama | Nasdaq rout, a wake-up call?
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The Nasdaq Composite fell by a sharper 3.6 percent..Related stories.
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Dear Reader, The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of. On Wednesday, the $1 trillion rout in the tech-heavy Nasdaq 100 index marked the worst day recorded in the market in about 18 months. The blue-chip S&P 500 fell 2.3 percent and the Nasdaq Composite fell by a sharper 3.6 percent. Stocks of the Magnificent Seven -- Microsoft, Apple, Tesla, Amazon, Meta, Alphabet and Nvidia -- tanked and sky-high investor profits vanished in a jiffy, as questions were raised on the payback time for investments in technology, primarily artificial intelligence (AI). Thus far, the results announced by some of the mega tech companies were far from impressive. Telsa’s profits missed expectations and worse, brokerages warned that the company’s “timeframe and probability of success” of plans to roll out self-driving “robotaxis” is hazy. Likewise, Alphabet’s indications of sinking more resources to compete with rivals in AI did not go down well with investors. Shares of other tech stocks such as AI-chip maker and the darling of tech investors, Nvidia, along with Apple too closed lower. To be sure, it’s a wake-up call for investors who are realising that the payoffs for billions of dollars invested could take longer than envisaged. The big question: Is the AI frenzy cooling off? The Magnificent Seven had hogged the limelight with a large part of the market remaining unloved in the past few quarters. In fact, some analysts had expected a rotation in funds from the tech segment to mid and smaller cap stocks which displayed stability in earnings trajectory and traded at reasonable valuations. Also, softer-than-expected inflation data in the US has ignited hopes of an impending rate cut by the Federal Reserve in September. Some observers point out that the US yield curve is turning steeper, implying possibilities of a near-term rate cut. In this context, a recently published FT article (carried last week in MCPro) highlighting violent rotation said smaller companies tend to benefit more during rate cuts as some of them could have bigger debt burdens than large-cap ones. This perhaps exacerbated the fall in overheated tech stocks as investors took cognisance of a larger menu they could choose from. Investors in Indian equities saw the reverse trend in the past two years, when small-and-mid-cap stocks steadily outperformed the large-caps till recently. A reality check on the basis of fundamental earnings growth, more often than not, has punctured bubbles in equity markets. But the jury on the impact of AI is still out. It remains to be seen whether the profit booking in tech stocks is just a bout of nervousness or a warning of dangerously stretched valuations. Investing insights from our research team Axis Bank Q1 FY25 – slower earnings trajectory ahead, warrants caution Federal Bank Q1 FY25 – change of guard amid all-round strength Larsen and Toubro: Expect better recovery, aided by higher execution, order inflows KPIT: Strong quarterly show, but is valuation playing ball? Jindal Steel and Power Q1: Resilient show in a tough market environment Sona BLW Q1 FY25: Robust numbers, focused investment in EVs SRF: Banking on the ramp-up of recently commissioned assets Mahindra Finance: Profit jumps sharply amid unique challenges What else are we reading? Mild overweight on equities; bullish on Indian government bonds: the post-Budget view India Inc’s effective tax rate rises on the back of large companies, services sector SEBI's intraday trading report exposes market disparities Chart of the Day: FDI equity inflows to infrastructure step up India’s SMEs need a comprehensive policy beyond budgetary finance to go global How large IT companies stack up on growth rates after June quarter Inflation, stock prices, and french friesÂ(republished from the FT)Funding surge for blank cheque companies points to Spac bounceback(republished from the FT) Congress has been systematically targeting RSS with bans, a brief look at history All stakeholders not satisfied, but Budget has something for everyone Finally, getting down to the brass tacks in a budget Should the Budget have set a higher capex target? Budget nudges growth in the immediate term, opens pathways for new reforms For key infrastructure sectors, the Union Budget 2024 is par for the course Tech and Startups WazirX’s $230-mn hack will stall the crypto industry’s progress with regulators Technical Picks:ÂNTPC,ÂAshok Leyland,ÂHBL Power, andÂIndiamart IntermeshÂ(These are published every trading day before markets open and can be read on the app). Event alert: The most definitive startup summit of the year is back! The Moneycontrol Startup Conclave on August 9 in Bengaluru will feature a mix of keynote speeches, panel discussions, and inspiring talks from experts in the fields of policy, artificial intelligence, venture capital, and entrepreneurship. ClickÂhere to register. Vatsala KamatMoneycontrol ProÂÂ
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2024-07-25 16:11
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/govt-focused-on-becoming-a-more-privatised-economy-dipam-secretary-on-pse-policy-timeline-12778307.html
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Govt focused on becoming a more privatised economy: DIPAM Secretary on PSE policy timeline
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Focus on becoming a privatised economy: DIPAM secretary.Related stories.
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The timeline of the government’s PSE policy, which envisaged minimum government, has been moved up, saidTuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM), when asked about the possibility of CPSE mergers to improve efficiency. The government had announced a new public sector enterprise policy as part of its Atmanirbhar Bharat reforms to minimise presence in key strategic sectors and exit the non-strategic ones. Noting that the government was still focused on becoming a more privatised economy, Pandey, in an interview with Moneycontrol, noted that the focus is on value creation. “We didn't have actually a fixed timeline there. Privatisation efforts are contingent on availability of bidders and how conducive it is to carry out such initiatives. But the primary issue of value creation remains, irrespective of whether you privatise or not,” he said. DIPAM secretary also noted that the disinvestment process was continuing and the government had other options available. “You do have non-listed companies. So, you can start with listing. The transfer of the management control creates a new dimension, which is time taking, because the company is going out of the government control for good. There are a lot of issues with respect to transfer, but none of these things arise when you're going to the market,” he noted. The secretary also pointed out that green initiatives could also unlock value for the government. “All the companies are building up the green assets, some of them are doing it via subsidiaries. They're creating the capacity, and if there is a certain size, they will put it together in the form of a subsidiary for the possible IPO,” Pandey said. On the issue of whether PSEs will participate in efforts by the government to spur R&D and create jobs, Pandey noted that CPSEs will participate to the extent they can. “Employment intensity will be contingent upon technology, of course, and will vary from company to company. The PSUs are not typically very much into very labour-intensive manufacturing, because we are not into consumer goods anymore,” he pointed out. The secretary also noted that the focus, however, will remain on efficiency and profitability.
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2024-07-25 15:50
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/psu-mergers-overhyped-hr-issues-will-lead-to-problems-dipam-secretary-tuhin-kanta-pandey-12778241.html
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PSU mergers overhyped; HR issues will lead to problems: DIPAM Secretary Tuhin Kanta Pandey
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CPSEs will need to be assessed from HR concerns that can arise from mergers, Tuhin Kanta Pandey said.Related stories.
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Public sector undertakings will not follow a herd mentality on mergers, said Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM), when asked about the possibility of CPSE mergers to improve efficiency. “Mergers are in my opinion overhyped. The literature is still not very clear that the mergers have improved technical efficiencies,” he told Moneycontrol in an interview noting that public sector enterprises need to be assessed differently. The government had announced merger of 10 nationalised lenders into four large banks in 2019. ALSO READ:RBI vetting process for IDBI Bank stake sale in advanced stage, says Dipam Secy Pandey noted that while in the case of public sector banks, technology was primary consideration for mergers, CPSEs will need to be assessed from HR concerns that can arise from mergers. “Our systems are not so standardised. In many cases there will be insurmountable problems, there will be fitment issues,” he noted. The secretary noted that this did not mean that PSUs were not concentrated on value creation. DIPAM has become more focused on asset management and has a more market-oriented approach, he pointed out. On the issue of strategic divestment, the secretary noted that the department will go for disinvestment wherever cabinet clearances are available but will also focus on value. “We have to really see whether it is also worth doing going forward. Pawan Hans didn't succeed, even in its fourth iteration, owing to some legal issues. In many cases, like Scooters India Limited, we tried but we couldn’t find buyers and then had to go for closure,” Pandey added. The government junked the plan of Pawan Hans’ sale in 2023.
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2024-07-25 15:30
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moneycontrol.com
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https://www.moneycontrol.com/news/business/companies/mega-sale-of-advent-backed-bharat-serums-vaccines-mankind-pharma-emerges-as-likely-front-runner-12778062.html
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Mega sale of Advent-backed Bharat Serums: Mankind Pharma emerges as likely front-runner
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Mumbai-based Bharat Serums and Vaccines Limited was set up in 1971 and is engaged in the development, manufacturing and marketing of biological, biotech and pharmaceutical formulations..Related stories.
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Mankind Pharma is likely to have emerged as the leading contender to acquire Advent International-backed Bharat Serums & Vaccines following the submission of binding bids, people familiar with the development said. A consortium, led by Swedish private equity firm EQT and the Abu Dhabi Investment Authority (ADIA), is the other suitor in the fray for buying BSV in a deal that is estimated to value the pharma company between $1.5 billion and $2 billion. "Mankind Pharma is the likely front-runner now, though there is no clarity on whether an exclusivity pact has been signed as yet. Factors like bid value and taxation are likely to have played a key role along with deal approval timelines. Mankind Pharma being a domestic player will be in a position to acquire 100 per cent of the target at one go, as compared to a foreign suitor which requires government approval beyond 74 per cent stake," said one of the persons cited above. A second person confirmed the above and said an official signing on the proposed transaction was expected shortlyWhen contacted, Mankind Pharma and Advent Interational declined to comment on an email query from Moneycontrol. Moneycontrol was the first to report BSV's sale plans and the appointment of sell-side advisors on December 2 and December 20 respectively. Later, on July 3,Moneycontrol was also the first to reportthat the EQT-ADIA combine, and Mankind Pharma were the key contenders for the buyout. Mankind Pharma had bid previously for Apax Partners-promoted medical devices player Healthium Medtech, but KKR edged ahead to win the auction process. The drugmaker's share price has risen by 11.5 per cent in the last one year. A buyout of Bharat Serums & Vaccines would bolster Mankind Pharma’s domestic operations as its product portfolio consists of formulations across acute and therapeutic areas. A closer look at BSV Advent announced the buyout of a controlling stake in Bharat Serums in November 2019, providing a complete exit to the erstwhile investors, Orbimed Asia and Kotak PE. A partial exit was given to the founders, the Daftary family. Back then, the deal valued the firm at around $500 million. Mumbai-based Bharat Serums and Vaccines Limited was set up in 1971 and is engaged in the development, manufacturing and marketing of biological, biotech and pharmaceutical formulations. According to a note by ICRA Ratings dated September 11, 2023, its product profile comprises plasma derivatives, monoclonal, fertility hormones, antitoxins, antifungals, anaesthetics, cardiovascular drugs, diagnostic products and more. The firm has a key manufacturing facility at Ambernath and another smaller facility at Thane. It also has a horse farm in Hyderabad, an R&D unit at Navi Mumbai and four wholly-owned subsidiaries in the US, Germany, the Philippines and India.
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2024-07-25 14:36
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/indian-banks-selling-retail-loan-portfolios-as-deposits-lag-12778191.html
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Indian banks selling retail loan portfolios as deposits lag
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Indian banks selling retail loan portfolios as deposits lag.Related stories.
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India’s private banks are selling portfolios of retail loans as regulators pressure them to improve credit-deposit ratios. India’s largest lender, HDFC Bank Ltd., sold a 50 billion rupee ($597 million) loan portfolio to an undisclosed buyer in June, Chief Financial Officer Srinivasan Vaidyanathan said in a post-earnings media call last week. “We did see a good amount of interest in the market,” he said, noting the bank had last done such a transaction more than a decade ago. “It’s just a beginning,” and “at appropriate price points we will keep doing it,” he added. IDFC First Bank Ltd. sold a basket of unsecured retail loans to Citigroup Inc. in a securitization deal worth 6 billion to 7 billion rupees at the beginning of the year, according to people familiar with the plans who asked not to be named because the information is private. IDFC “will be happy to entertain more such transactions”, said Paritosh Mathur, its head of wholesale banking, without confirming the size or timing of the transaction. The deal won a AAA rating, Mathur said, due to the “high performance of our asset portfolio.” Sales of retail loan portfolios by private banks have been uncommon in India, but several of them are now exploring deals to improve their CD ratios given the success of HDFC’s transaction, according to the people familiar. Private lenders are discussing loan portfolio sales with foreign banks, state-backed lenders, debt mutual funds and insurance companies, said the people. Citi executed its first securitization financing with a digital lender, Navi Finserve, last year, according to a post on the LinkedIn page of K Balasubramanian, head of corporate banking for South Asia. A spokesperson for Citi declined to comment. The Reserve Bank of India is concerned about the increase in credit deposit ratios, a measure of how much of a bank’s deposits are being lent out. Bank deposits grew 11.1% annually through June 28, outpaced by loan growth of 17.4%, the latest RBI data show. The “gap between credit and deposit growth rates warrants a rethink by the boards of banks to re-strategize their business plans,” the Reserve Bank of India said in a monthly bulletin last month. “A prudent balance between assets and liabilities has to be maintained,” it said. The market is also applying pressure to some Indian banks on their loan books. Shares of Axis Bank Ltd fell Thursday following first-quarter earnings that missed estimates on worsening asset quality.
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2024-07-25 14:13
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/sugar-industry-body-proposes-bio-refinery-transition-plan-to-govt-12778180.html
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Sugar industry body proposes bio-refinery transition plan to govt
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Sugar industry body proposes bio-refinery transition plan to govt.Related stories.
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Sugar industry body ISMA on Thursday said it has presented a plan to the government to transform sugar mills into bio-refineries, aiming to boost production of sustainable aviation fuel and other green energy sources. The representatives of the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) met with Food Minister Pralhad Joshi to discuss a policy framework for the transition, which would expand beyond current ethanol, bioelectricity, and biogas production, a statement said. ISMA Director General Deepak Ballani said the initiative would help India meet international aviation blending targets set to take effect in 2027 under CORSIA mandates while supporting the country's net-zero and self-reliance goals. "We see a future where local resources drive national development," Ballani said in the statement adding that "This aligns with the government's vision for a self-reliant India." The plan aims to create alternative markets for India's estimated 55 million sugarcane farmers, building on the success of the current ethanol blending programme in increasing farmer incomes. The government launched 400 E-100 fuel pumps last year. Joshi stressed the need to promote E-100 use, particularly given India's leadership of the Global Biofuels Alliance. ISMA pledged to work closely with the government on the swift implementation of the bio-refinery plan, which is expected to set new benchmarks in the sector and strengthen India's energy security.
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2024-07-25 13:53
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/what-government-earns-and-where-does-it-spend-12776193.html
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What government earns and where does it spend?
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Budget on money.
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Tax revenues will contribute 63 percent to the government’s kitty in FY25 as against 60 percent last year, budget documents showed on July 23. The reliance on borrowings and other liabilities has also reduced, according to budget documents released by the government on July 23. Borrowing and other liabilities now finance 27 percent of receipts compared with 33 percent a year back. Moneycontroltakes a look at where the government earns the money from and what it ends up spending on.
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2024-07-25 13:48
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moneycontrol.com
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https://www.moneycontrol.com/news/business/jagsonpal-pharmaceuticals-to-sell-faridabad-facility-to-regalia-laminates-for-rs-41-crore-12778099.html
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Jagsonpal Pharmaceuticals to sell Faridabad facility to Regalia Laminates for Rs 41 crore
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Jagsonpal Pharmaceuticals to sell Faridabad facility to Regalia Laminates for Rs 41 crore.
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Jagsonpal Pharmaceuticals Ltd on Thursday said it will sell its Faridabad facility to Regalia Laminates LLP for a consideration of Rs 41 crore. The company had in November last year announced plans to divest the Faridabad unit. "We now wish to inform you that the company has entered into an agreement to divest the said facility," Jagsonpal Pharmaceuticals said in a regulatory filing. It is being sold to Regalia Laminates LLP and the sale is expected to be completed on or before October 31, 2024, the company said. The consideration proposed to be received from the sale is Rs 41 crore, the filing said. The facility was not operational and did not contribute any revenue in the last year, it added.
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2024-07-25 12:49
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/foreigners-sell-nearly-1-billion-in-indian-equities-in-two-days-since-budget-12778064.html
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Foreigners sell nearly $1 billion in Indian equities in two days since budget
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Foreigners sell nearly $1 billion in Indian equities in two days since budget.Related stories.
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Foreign investors sold nearly $1 billion worth of Indian equities in the two days since the government raised taxes on derivatives trades and on capital gains from equity investments in its annual budget. Foreign portfolio investors (FPIs) net sold shares worth 81.06 billion rupees ($968 million) on Tuesday and Wednesday, provisional data from the National Stock Exchange showed. These investors, anticipating thebudget, had bought equities worth a net amount of $2.20 billion in six sessions before the presentation on Tuesday. They have invested a net $5.1 billion so far this year. The increase in capital gains tax is clearly a negative even if the increase on long-term gains is moderate, said Ashish Gupta, chief investment officer at Axis Mutual Fund. Uncertainty over whether the long-term capital gains tax rate of 12.5% could go up further creates pressure for the market, he added. "Long term, we do not see much of an impact since the growth story remains intact and companies continue to grow." India's benchmark indexes Nifty 50 and Sensex gained about 2% during the pre-budget FPI buying spree. They had risen about 3% between July 11 and July 18, but a 1% drop due to a global cyber outage on July 19 trimmed the gains. Since the budget, the indexes have shed about 1%. Sectors in which FPIs have more holdings - financial services, banks and private banks - fell about 3% each. However, domestic institutional investors have remained buyers, investing a net $0.55 billion since the budget. The impact of the tax changes went beyond equities, as the rupee fell to record lows on both the budget day and Wednesday amid a souring sentiment. The tax changes are intended to discourage "excessive speculation" in the derivatives market and encourage long-term investment, a top finance ministry official told Reuters. "Moving activity from the derivative segment to the cash segment and moving it from short-term speculation to long-term investment are objectives which the government has in mind and some of our tax changes are done with those objectives in mind," T.V. Somanathan said. Separately, India's markets regulator on Wednesday said the number of intraday traders in the equity cash market jumped 300% between fiscal years 2019 and 2023, with seven out of ten traders making losses.
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2024-07-25 12:43
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moneycontrol.com
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https://www.moneycontrol.com/news/business/strongest-incentives-from-the-state-should-be-for-evs-bmw-12778025.html
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Strongest incentives from the state should be for EVs: BMW
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BMW i5 M60 xDrive.Related stories.
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German luxury carmaker BMW on Wednesday said incentives are necessary to support the growth of the electric vehicle segment. The company, which on Wednesday introduced the all-electric MINI Countryman and electric scooter CE04 in the country, said the market here is still evolving and efforts should continue to smoothen and accelerate this transition. In a press conference here, BMW Group Senior Vice President, Region Asia Pacific, Eastern Europe, Middle East and Africa Jean-Philippe Parain stated that the "strongest incentives from the state should be for EVs". Incentives allow to bring an electric model to a price point where transition can happen towards an electric vehicle, he noted. Parain noted that in some countries, where customers drive longer distances, plug-in hybrid vehicles (PHEVs) can be a bridge. "But if I were to speak for India, I would focus on the full transition to full electric vehicles", he added. In India the total tax incidence on hybrid vehicles in the country is 43 per cent, which is inclusive of GST, while battery electric vehicles attract a tax of about 5 per cent. Parain stated that there is potential for EVs in India and the company is looking to drive in more products into the country. He noted that besides battery electric vehicles, the automaker is also investing in internal combustion engine models, plug-in hybrids and also thinking about hydrogen vehicles. The company plans to remain flexible when it comes to technologies, Parain stated. Globally, he said that BMW is among the top sellers of EVs along with Tesla and BYD. He noted that the company's sales were impacted in China. "India is an exception and there is a need to sustain this growth going forward," Parain stated. BMW Group India President and Chief Executive Officer Vikram Pawah stated that EVs were suitable for India. Penetration of electric vehicles in India is encouraging and once products are available across all price points, the segment will grow very fast, he noted. Pahwa also noted that the automaker, besides introducing new models, is also investing in establishing charging infrastructure to aid the growth of the segment. BMW on Wednesday introduced the all-new 5 Series Long Wheelbase in the country with price starting at Rs 72.9 lakh. The company also introduced the new Mini Cooper S and the new all-electric MINI Countryman priced at Rs 44.9 lakh and Rs 54.9 lakh respectively. BMW Motorrad introduced premium electric scooter CE 04 at Rs 14.9 lakh.
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2024-07-25 12:06
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/rbi-may-prefer-mild-rupee-weakness-to-correct-overvaluation-bofa-says-12777992.html
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RBI may prefer mild rupee weakness to correct overvaluation, BofA says
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RBI may prefer mild rupee weakness to correct overvaluation, BofA says.
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The Reserve Bank of India may allow the rupee to weaken slightly to unwind the slightly elevated real effective exchange rate and keep the South Asian currency "competitive," BofA Securities said in a note on Thursday. "It supports the government's ambitions for attracting large-scale manufacturing investments," the Wall Street firm said, adding it expects the rupee to decline to 84 to the U.S. dollar by the end of the year. The rupee was quoting at 83.7075 as of 10:54 a.m. IST, holding near the all-time low of 83.72 hit on Wednesday. The currency's trading range has slightly weakened to 83.40-83.70 this month, from the 83.0-83.5 range it held for a large part of the first half of the year, BofA pointed out. The RBI has been holding the rupee in a narrow range via a two-sided intervention -- by absorbing inflows to boost forex reserves and, as it did this week, selling dollars to support the currency. "We see no sign of change in (the) RBI's pursuit of a higher reserves buffer, which would limit the appreciation potential for INR," BofA said. The RBI's dual-sided intervention has kept the rupee's volatility in check relative to historical levels. "Over the medium term, it would be prudent for the RBI to allow higher volatility in INR. Along with the policy of building a large reserves buffer, that could create more asymmetric risks for trend INR depreciation," BofA said.
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2024-07-25 11:44
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moneycontrol.com
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https://www.moneycontrol.com/news/economy-2/revenue-secretary-rules-out-a-rethink-on-ltcg-as-marginal-hike-in-levy-is-justified-12777611.html
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Revenue secretary rules out a rethink on LTCG as 'marginal' hike in levy is justified
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Revenue secretary Sanjay Malhotra rules out a rethink on LTCG as 'marginal' hike in levy is justified.Related stories.
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A marginal increase in long-term capital gains (LTCG) tax on listed equity, which is a “passive income”, is justified in view of the salary, business and rental income being taxed at a much higher rate, Revenue Secretary Sanjay Malhotra said. Defending the removal of indexation benefits from LTCG on real estate, he said other asset classes, including incomes from shares, interest and fixed deposits do not enjoy the same benefit, and the move should be seen as a simplification measure. “The income tax rates on salary income, business income or rental income are higher. On this passive income, the LTCG tax was only 10 percent, is it justifiable? This is a very marginal increase which will impact only people with a higher income as per our study,” Malhotra toldMoneycontrolin an interview. “There is no need to rethink the LTCG. It’s a minor increase which the capital markets have absorbed." TheUnion Budgetfor 2024-25 announced a 12.5 percent long-term capital gains tax (LTCG) on all financial and non-financial assets. The proposal raised the tax rate by 2.5 percent for listed equity from 10 percent and reduced the tax rate by 7.5 percent for real estate, but without indexation benefits. Indexation adjusts the purchase price of the asset for inflation, and, hence, reduces the taxable capital gains. As much as 61 percent of the long-term capital gains tax comes from people with an income of more than Rs 1 crore and 88 percent LTCG is received from people with more than Rs 15 lakh income. Similar is the trend seen for short-term capital gains tax, he said. “So, to the extent that there is an increase in the taxation rate there is also an increase in the exemption limit for lower income categories. It doesn’t impact the people in lower income groups below Rs 15 lakh much,” he said. The exemption under capital gains tax on listed equity and equity-oriented mutual funds has been increased to Rs 1.25 lakh from current Rs 1 lakh. These measures should be seen more towards simplification which people have been asking for years, he said. LTCG on real estate Defending the removal of indexation on real estate, Malhotra said the same benefit is not enjoyed for income from shares, interest or fixed deposits. “I would like to ask this question to those who are asking for indexation on LTCG in real estate, why don't they ask for indexation for shares, interest incomes and fixed deposits? What happens to other asset classes? We don’t ask for indexation there? In LTCG on real estate, any property sale to buy another house is exempted. If one is not investing in another house, why should it not be taxed at 12.5 percent?” The government had removed the indexation benefit for companies holding unlisted shares with the reduction of the corporate tax to 22 percent in 2019, which was welcomed, the revenue secretary said. This change was part of the broader corporate tax reform announced in September 2019, where the government reduced the base corporate tax rate to 22 percent for domestic companies that do not avail of any other exemptions or incentives. This simplified tax regime was aimed at promoting investment and economic growth by providing a lower tax rate but without certain benefits like indexation on capital gains. Higher returns in real estate The returns in real estate are actually in excess of 10-11 percent and vastly exceeds inflation which has been roughly at 4.6 percent over the last 10 years, Malhotra said. The reduction in LTCG without indexation for real estate will benefit in almost all cases and the real estate companies have nothing to lose, he said.“Nominal real estate returns are generally in the region of 12-16 percent. The indexation for inflation is in the region of 4-5 percent, depending on the period of holding. Therefore, substantial tax savings are expected to a vast majority of such taxpayers,” the finance ministry said on July 24. For property held for five years, the new regime is beneficial when the property has appreciated 1.7 times or more. For property held for 10 years, it is beneficial when the value has increased to 2.4 times or more. For property purchased in 2009-10, if the value has increased to 4.9 times or more, it is beneficial. Only where returns are low (less than about 9-11 percent per annum) that the earlier tax rate is beneficial but such low returns in real estate are unrealistic and rare (less than 10 percent of the cases), it said in an explanation. Revenue foregone Even with the higher LTCG, the total revenue foregone with all the tax proposals will be Rs 7,000 crore annually, he said. As a result of these proposals, revenue of about Rs 37,000 crore (Rs 29,000 crore in direct taxes and Rs 8,000 crore in indirect taxes) will be forgone while revenue of about Rs 30,000 crore will be mobilised additionally. Thus, the total revenue forgone is about Rs 7,000 crore annually, Finance Minister Nirmala Sitharaman had said in her Budget speech.
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2024-07-25 11:18
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/india-mulls-easier-norms-for-fpis-to-take-the-fdi-route-says-dea-secretary-12777667.html
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India mulls easier norms for FPIs to take the FDI route, says DEA Secretary
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Economic Affairs Secretary Ajay Seth.Related stories.
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India may consider changes to make it easier for foreign portfolio investors (FPIs) to take the Foreign Direct Investment (FDI) route after they reach the 10 percent cap on investment in shares. “At the moment foreign portfolio investment has to be less than 10 percent. Today, the moment an investor hits the 10 percent they would go back and offload into the market. But if someone wants to become a significant beneficial owner and cross that 10 percent and want to become FDI in a company, do we have a route? Of course, through the process of approvals. That is one of the things that can be facilitated,” Ajay Seth, Secretary, Department of Economic Affairs toldMoneycontrolin an interview. Seth clarifies this does not tantamount to a relaxation on the cap on FPI investment in equity shares, but is more a way to make it easier for an interested FPI to come on to the FDI regime. This means that the distinction between the two - FDI and FPI, may become less pronounced. Currently, Foreign Portfolio Investment refers to any investment made by a person resident outside India, in equity instruments where it is less than 10 percent of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company or less than 10 percent of the paid-up value of each series of equity instruments of a listed Indian company. On the other hand, FDI is the investment through equity instruments by a person resident outside India in an unlisted Indian company; or in 10 percent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company. The fullBudgetfor 2024-25 proposed to simplify the norms around foreign direct investment (FDI) in a bid to attract more foreign inflows. “The rules and regulations for foreign direct investment and overseas investments will be simplified to facilitate foreign direct investments, nudge prioritisation, and promote opportunities for using Indian Rupee as a currency for overseas investments,” Finance Minister Nirmala Sitharaman said in her Budget speech. Another area, where the government may consider easier norms pertains to making it smoother for Indian companies with larger overseas investments to invest back into the country. “Second area would be, say an Indian company might have made an overseas investment, the overseas company may have become a multinational company today, that company wants to invest back into India, do we have a smooth regime to come back? Is it an FDI? There are areas where we can improve rules and regulations,” Seth said. Some of these steps will require changes to the Foreign Exchange Management Act (FEMA), Seth added. Potential steps to attract more FDI flows into India come at a time when steeper interest rates in developed countries have led to investors preferring to invest abroad due to a higher opportunity cost. Net FDI inflows to India declined from $42.0 billion during FY23 to $26.5 billion in FY24. However, in gross terms the moderation was by only 0.6 per cent in the previous fiscal year.
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2024-07-25 10:14
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moneycontrol.com
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https://www.moneycontrol.com/news/business/australias-mayne-pharma-sues-indian-drugmaker-sun-pharma-over-patent-infringement-12777679.html
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Australia's Mayne Pharma sues Indian drugmaker Sun Pharma over patent infringement
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Australia's Mayne Pharma sues Indian drugmaker Sun Pharma over patent infringement.Related stories.
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Mayne Pharma has filed a lawsuit against India's Sun Pharma over infringements of patents related to a certain product used for menopause-related vaginal pain, the Australian drugmaker said on Thursday. In the lawsuit filed at the United States District Court for New Jersey, Mayne Pharma accused its rival of violating all 20 Orange Book-listed patents linked to IMVEXXY - a vaginal insert aimed at reducing pain during sexual intercourse after menopause. Orange Book-listed patents are those approved by the U.S. Food and Drug Administration (FDA) and deemed safe to use. The Australian drugmaker said it filed the lawsuit after a notification indicated Sun Pharma's submission of an Abbreviated New Drug Application (ANDA) to the FDA seeking approval to market a generic version of IMVEXXY. The ANDA is a request filed to the health regulator for approval of an already licensed drug to manufacture the medication in the United States. These application processes do not warrant the applicant to go through a clinical trial. Sun Pharma did not immediately respond to a Reuters' request for comment. Mayne Pharma's complaint also indicated that Sun Pharma filed a Paragraph IV certification, suggesting the latter challenged the patent's (IMVEXXY) listing in the Orange Book as invalid or inapplicable. This "formally initiates the litigation process under the Hatch-Waxman Act and triggers a 30-month stay of any potential FDA approval for Sun Pharma's ANDA," Mayne Pharma said in a statement.
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2024-07-25 09:00
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/india-says-it-plans-to-simplify-gst-rate-regime-in-coming-months-12777633.html
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India says it plans to simplify GST rate regime in coming months
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India says it plans to simplify GST rate regime in coming months.Related stories.
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India is working on simplifying the country’s sales tax regime by introducing three slabs instead of the existing four rates, a top tax official said. “Too many rates in goods and services tax are leading to classification disputes and that needs to be resolved,” Sanjay Agarwal, chairman of the Central Board of Indirect Taxes and Customs said in an interview Wednesday. Agarwal said GST compliance has improved since the tax was introduced in July 2017 and revenue growth has stabilized. That gives the government room to review the rates to simplify the system, he said. Revenue from GST has been steadily rising over the years and increased 11.7% in the fiscal year through March 2024. The collections rose to 1.74 trillion rupees in June. Agarwal said the government intends to simplify the GST structure by taking the existing slabs of 5%, 12%, 18% and 28% and combining it into three rates. The new rates would not impact the revenue collection adversely and the entire exercise “will be done in next few months.” On Tuesday, the government also announced a reduction in the import duty on gold to boost jobs and exports in gems and finished jewelery products. “High duty was leading to smuggling,” Agarwal said, adding that in 2023-24, the department had seized 4.8 tons of gold worth close to 2.9 billion rupees. The tax was imposed when the current account deficit was high, but since it’s manageable now, the government has reduced it to boost the sector, he said. In reference to the 28% GST levied on online gaming last year, Agarwal said the government has collected over 130 billion rupees from the companies since Oct. 2023.
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2024-07-25 07:39
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/discussion-paper-on-crypto-policy-likely-before-sept-says-dea-secretary-12777598.html
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Discussion paper on crypto policy likely before Sept, says DEA secretary
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Economic Affairs Secretary Ajay Seth..Related stories.
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India plans to come out with a discussion paper outlining its policy stance on cryptocurrencies before September, Economic Affairs Secretary Ajay Seth toldMoneycontrolin an interview. The rationale behind the discussion paper is to seek comments and views from relevant stakeholders on the ideas outlined in it. This paper will contain suggestions on the remit of regulations for cryptocurrencies in India as well, Seth added. “In India it (cryptocurrencies) is being regulated from the perspective of AML and EFT alone. Regulation starts and ends there, it cannot be beyond that, so should the remit be more? What should be the policy stance? All that will come out in the discussion paper.” Back in March 2023, India extended anti-money laundering (AML) and counter-terror financing (CTF) standards to crypto-assets and intermediaries. “At the moment, an inter-ministerial group, is looking into a wider policy for cryptocurrencies. We expect to come out with the discussion paper before September,” Seth said, adding that the Reserve Bank of India (RBI) as well as Securities and Exchange Board of India (Sebi) are also part of the group. “The policy stance is how does one consult relevant stakeholders, so it is to come out in the open and say here is a discussion paper these are the issues and then stakeholders will give their views,” he added. AReutersstory back in May said that Sebi has recommended that several regulators oversee trade in cryptocurrencies, indicating that at least some authorities in the country are open to allowing the use of private virtual assets. However, unlike Sebi, the RBI maintained that private digital currencies represent a macroeconomic risk, as per theReutersreport. The move to release a discussion paper on cryptocurrencies comes after G20 member countries during India’s presidency last year endorsed guidelines set forth by the International Monetary Fund (IMF) and the Financial Stability Board (FSB). The IMF-FSB synthesis paper has warned against a blanket ban on crypto activity citing that such a move would be difficult to enforce. “If you recall, the G20 came out with an agreed roadmap that gives a good framework of how each country should assess risks to its own economy and what it sees as a potential use case, at the moment that discussion is on,” Seth said, indicating that the architects of the proposed discussion paper may keep this framework in mind. The roadmap for regulating crypto assets, proposed by the FSB and the IMF, was adopted by the finance ministers and central bank governors (FMCBG) from G20 nations in October. Cryptocurrencies in India have been subject to much scrutiny with the central bank in April 2018 prohibiting lenders and other financial intermediaries from dealing with crypto users or exchanges. However, this ban was struck down by the Supreme Court in 2020. Though the government prepared a bill on cryptocurrencies back in 2021 that is said to have proposed a ban on private cryptocurrencies, it has not been introduced till date.
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2024-07-25 06:54
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/direct-tax-relief-for-middle-class-in-budget-2024-is-sufficient-revenue-secy-12777548.html
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Direct tax relief for middle class in Budget 2024 is ‘sufficient’: Revenue Secy
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Revenue Secretary Sanjay Malhotra.Related stories.
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The direct tax slabs rejig announced in the Union Budget amounting to savings of Rs 17,500 for the middle class along with an increase in the rebate limit to Rs 7 lakh in the new tax regime last year is ‘sufficient’ relief over a period of two years, Revenue Secretary Sanjay Malhotra said. There has been some criticism regarding the direct tax slab rejig in the 2024 Budget leading to savings of Rs 17,500. The tax relief, while a positive step, is seen as not significantly impactful for lower and middle-income taxpayers. Critics argue that the relief provided is insufficient given the rising cost of living and inflation pressures. “Budget has given relief of Rs 17,500 this year. In last year's Union Budget, we had reduced the number of tax slabs, and adjusted the rebate limit in the new tax regime to Rs 7 lakh, effectively giving relief of Rs 37,500 in comparison to the old tax regime.” “Over a period of two years, this relief in personal income tax, we believe is sufficient,” Malhotra told Moneycontrol in an interview. Budget 2024has enhanced the standard deduction from Rs 50,000 to Rs 75,000 in the new tax regime. Also, the tax structure in the low to middle slabs has been raised slightly upwards thus reducing the tax liability. As per the calculations of the Finance Ministry, owing to the above changes, a salaried employee under the new tax regime would save up to Rs 17,500 in income tax. Reiterating the government's focus on simplifying tax structures and rules, Finance Minister Nirmala Sitharaman has said that more than two-thirds of personal tax-payers have availed of the new tax regime in the financial year 2023-24. The Budget announced a comprehensive review of the Income Tax Act to ensure that it is easy to understand, which will reduce the scope for disputes and litigations. The process is expected to be completed in six months.
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2024-07-24 22:42
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/data-innovation-lab-announced-by-ministry-of-statistics-and-porgramme-implementation-to-improve-stats-quality-12777478.html
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Data Innovation Lab announced by ministry of statistics and programme implementation to improve stats quality
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Data innovation lab by MoSPI ot become operational.Related stories.
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Paving the way for more collaboration to enhance its statistical and technological capabilities, the Ministry of Statistics and program implementation on July 23 notified the guidelines for its data innovation lab. The ministry also announced the formation of a selection committee that shall gather proposals from researchers to develop methodologies that can help improve the quality of the national statistical system and the creation of beta statistics, which rely on innovative ideas to develop databases and find new ways for data collection. “Objective of Data Innovation Lab is to promote innovation, adoption of Information Technology in the field of official statistics, including survey-related methodology and address the challenges being faced by the National Statistical System (NSS),” the ministry noted. The governing council, which consists of the secretary of the ministry as chairperson will also decide on the framework for the innovation lab. “The functions related to the formation of DI Lab like the creation of sandboxing environment/availability of Hardware and software etc. may be facilitated through appropriate partners/outsourcing,” the guidelines highlighted. The finance minister in herBudgethad announced the need for improving data governance and use of technology. “For improving data governance, collection, processing, and management of data and statistics, different sectoral databases, including those established under the Digital India mission, will be utilised with active use of technology tools,” the finance minister had said in her speech on July 23. The Economic Survey also highlighted the importance of Ministry of Statistics and programme implementation. The survey had highlighted the need for revision of existing indicators like consumer inflation, production, and growth, besides pointing to new surveys for capturing items like capex activity.
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2024-07-24 20:18
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/gst-buoyancy-expected-to-decline-but-will-stay-above-one-says-cbic-chairman-12777434.html
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GST buoyancy expected to decline, but will stay above one, says CBIC Chairman
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GST buoyancy to decline but stay above 1.Related stories.
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Tax buoyancy from Goods and Services Tax is expected to come down in the coming years, but will stay above one, said Sanjay Kumar Agarwal, Chairman, Central Board of Indirect Taxes & Customs (CBIC), in a post-Budget interaction with Moneycontrol. “The compliance levels are going up, tax buoyancy cannot remain that high,” Agarwal noted. The ministry has set a target of increasing GST collections by 11 percent in FY25, against a GDP growth of 10.5 percent. Growth in GST collections had declined to a three-year low of 7.7 percent in June, compared to 10 percent in the previous month. “GST, after seven years, has fairly stabilised and that is reflected in the revenue that is coming from it,” Agarwal said. In FY24, GST collection had grown 12.7 percent as per provisional account released by the government, while nominal growth was muted at 9.6 percent. Commenting on duty reduction on gold, the CBIC chairman noted that the move is also expected to curb gold smuggling. “There was a huge difference in international and domestic prices, which had created a margin for smuggling. If that is reduced, then smuggling may not remain a profitable business,” he added. TheBudgethad announced a reduction in customs duty on gold and silver to 6 percent from 15 percent earlier. Finance Minister Nirmala Sitharaman in her Budget speech also changed the rate structure of certain products like critical minerals. The CBIC chairman noted that the changes were initiated to give impetus to domestic manufacturing, which, in turn, will boost employment generation. On the issue of duty inversion, Agarwal said that duty inversions need to be studied carefully and, on a case-by-case basis, as in some cases the value of inputs can be negligible. “At times, inputs, which are used for manufacturing of any finished goods may have an inverted duty structure, but its contribution in the total value may be very low,” he highlighted.
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2024-07-24 19:14
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/budget-nudges-growth-in-the-immediate-term-opens-pathways-for-new-reforms-12777357.html
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Budget nudges growth in the immediate term, opens pathways for new reforms  
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The macroeconomic impact of budgetary announcements is positive in the short term..Related stories.
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The first budget in the third term of the newly elected Narendra Modi government called for some reshaping of its policy path, as it looked forward to the next five fiscals and at the Viksit Bharat 2047 goals.¬†¬† The fact thatanother budget loomsseven months from now provides a chance for course correction, just in case.¬† So, the opportunity was to set the ball rolling on new policy pitches that take cognisance of new areas that may require support to ensure resilient, sustainable and more equitable growth.¬†¬† Put another way, there is time to prepare and test the waters.¬† Against this backdrop, let‚Äôs take stock of what thefull Union Budget for 2025does.¬† It maintains prudence in fiscal management, maintains attention on focus areas and initiates a dialogue for ushering in next-generation reforms.¬†¬† What continues: improved revenue augmentation (by enhancing revenue collection efficiency and newer taxes), the thrust on capex (having cemented its role in driving durable growth) and the pursuit of fiscal consolidation (at a faster pace). With growing geopolitical uncertainties and climate risks, maintaining a fiscal buffer for times of distress is critical.¬† What is new: a re-tilt towards revenue spending where necessary (support to weaker sections in rural areas where rains play truant and urban areas where the post-pandemic recovery is still incomplete), incentivising employment generation (by taking steps to work in collaboration with the private sector) and mitigating climate change adversities in the short term.¬† What is in the offing ‚Äď scope for dialogue to usher in new economic reforms (required to build resilience and leverage on newer growth opportunities), improve the ease of doing business (by rationalising taxes, tariffs and duties to make Indian manufacturing competitive), enhance factor efficiency (of land, labour, capital and technology) and foster innovation (in areas of energy transition and agriculture productivity enhancement).¬†¬† The macroeconomic impact ofbudgetary announcements is positive in the short term.¬†¬† The budget responsibly deploys the higher revenue (tax and non-tax revenue) on reducing the fiscal deficit, sustaining spending on investments and making way for higher spending to support segments that require support. Overall, the quality of spending remains intact despite the slight tilt towards revenue spending.¬† A lower fiscal deficit and the non-inflationary nature of spending are inflation-positive, while lower market borrowings will help temper yields. We expect the 10-year government bond yields to average 6.8% by March 2025, from 7% in March 2024, supported by lower market borrowings, a policy rate cut by the Reserve Bank of India (expected in October) and lower inflation.¬†¬† On the back of a normal monsoon and cooling food inflation, we expect headline consumer price inflation to soften to 4.5% on average this fiscal from 5.4% in the last. We maintain our gross domestic product growth forecast at 6.8% for this fiscal‚Äď a moderation from 8.2% in fiscal 2024, led by tighter lending conditions.¬† However, the government will need to unleash a new set of reforms to ensure a sustained pick-up in growth over the medium term.¬† For now, the budgetary measures acknowledge the pain points in the economy, take actions to alleviate stress in the short term and outline areas where policy action is needed to smoothen the growth process.¬† The next seven months, therefore, give the government a good time period to ponder and design policies that will kick in the next round of reforms.¬†
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2024-07-24 18:29
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/for-key-infrastructure-sectors-the-union-budget-2024-is-par-for-the-course-12777352.html
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For key infrastructure sectors, the Union Budget 2024 is par for the course
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The Centre wants to undertake infrastructure development with states in tow..Related stories.
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The full Union Budget for this fiscal was business as usual on the infrastructure front, sending a subtle message that the private sector should step up investments in the infrastructure buildout, while the government takes a pause. While this could be the intended outcome, there was no definite call-out in thebudget. Further, surprisingly, there was little to no mention onmonetisation of infrastructure assets, which has gained traction in recent years. The overall budget outlay was unchanged, at Rs 11.11 lakh crore, for fiscal 2025. The Centre wants to undertake infrastructure development with states in tow. It gave significant attention to cities to tackle the rapid urbanisation across the country. For the manufacturing sector, good-quality plug and playinfrastructure is a key requirementto set up facilities. The announcement to develop industrial parks in 100 cities, in partnership with states and the private sector, will promote regional manufacturing and job creation in the medium term. In addition, the Centre proposed to develop 12 industrial parks on its own. That said, it is imperative to develop these parks at scale and provide necessary external infrastructure such as good-quality roads and inland container depots in a timely manner. The budget also proposed to develop cities as growth hubs, introduce a transit-oriented development scheme, and carry out brownfield development of cities to help create jobs and develop all-round economic activity around these cities. For the roads and railways sectors, the budget maintained the status quo on capital expenditure. This turns the focus towards execution. With awards of new projects taking a pause for the roads sector in the first four months this fiscal, a flurry of activity is expected in the rest of the fiscal. Railways is expected to see a 7Â percent increase in revenue receipts, taking the budgetary estimate to Rs 2.78 lakh crore, which will help improve its operating ratio. In shipping, the focus has been on improving gross tonnage of Indian flag carriers. We account for only about 5Â percent of total overseas cargo carrying requirements of India. Hence, focused reforms for the sector were very much needed. Further, promotion of cruise tourism by introducing a simpler tax regime for foreign carriers and completely removing the customs duty on components and consumables for the manufacture of shipping vessels will support the Indian ship-building industry. The budget did not touch upon monetisation of brownfield assets and a road map for attracting private-sector investments. On the brighter side, the budget has brought down the time for classification of units as LTCG from 36 months to 12 months, this will give good fillip to this mode of monetisation of built assets. On the softer side, the focus on skilling programme and creation of 1,000 Industrial Training Institutes will aid the infrastructure sector, as skilled labourers will be available locally. To sum up, the budget is a continuum with respect to allocation to key infrastructure sectors, albeit with a lower allocation in percentage terms.
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2024-07-24 18:22
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/finally-getting-down-to-the-brass-tacks-in-a-budget-12777321.html
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Finally, getting down to the brass tacks in a budget
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budget.Related stories.
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The Economic Survey tabled in Parliament on the eve of the Budget presentation, offers an unexpected narrative of the Indian economy. It is a sobering document much in tune with the situation we find ourselves at this juncture. It needs to be read carefully, for its messaging is, I come with a critique and not to praise it. The Chief Economic Advisor deserves kudos for that. Naturally there are obligatory statements about India shining, even as the global economy remains subdued. And indeed at the macro level, we have done well with high real GDP growth and a macroeconomy that is approaching $4 trillion. On understanding complexities For a Survey of its breadth and depth, there are many things one can pick on, but none as quickly as the courageous statement that suggests that ‘few people outside government (living or dead) can understand the complexity of governance in India’ The complexities relate to economic, cultural, geographic, regional and others. Arguably, even within government the understanding of this complexity could be rare. For if such complexities were understood in their entirety, thegovernment would eschew the temptationof making palpably unattainable promises and policy makers would push back against such targets. I am speaking of doubling farmer’s income in five years, increasing employment by 20 million and achieving $2 trillion worth of exports to name just a few. These are obviously political statements and acumen would demand they be appreciated as such. To however, mask the weaknesses of the economy, whether these are structural or cyclical, internal or external, self-inflicted or circumstantial and attribute the challenger’s narrative to a lack of understanding is disingenuous at best and an attempt to divert at worst. It is also unkind to the intelligence of academics, sociologists and economists, historians and demographers among others who spend their time engaging in deep and meaningful research of India and its peoples. The Cambridge economist Joan Robinson who visited India for only a few days but worked on the Indian economy for several years had famously said that whatever you say about India at a point in time, the exact opposite is also true at the same point in time. Many people within and outside government have quoted Joan Robinson no doubt because they agree with that assessment. Economic Survey leads tobudget’s core theme Notwithstanding, I feel this year’s Economic Survey has played a crucial role in identifying the several difficulties thatconfront the Indian economy. Primary among these has been the slow employment creation especially in the formal sector even in the face of fast GDP growth. The corporate sector has not only done well, but is ‘swimming in profits’. A high growth economy in which 800 million people receive some sort of food subsidy is neither economically nor politically sustainable is the message that is loud and clear in the Survey and to my mind it was the focus of the Finance Minister Nirmala Sitharaman’s first budget in this election cycle. A thrust for employment creation is writ large in both the Survey and the budget. Development of industrial parks close to cities, reenergizing the smart cities program, bringing back the focus on transit oriented development (ToD), creation of urban rental housing and dormitories are examples of proposals that are aimed to encourage labour intensive manufacturing, possibly the only sensible way to address India’s employment challenge. While the Production Linked Incentive scheme is being reinforced by increasing allocations to sectors such as semiconductor and pharmaceuticals, the budget has buttressed this by an employment linked incentive scheme, or ELI. The government will provide monetary incentive while the corporate sector would have to train interns or the youth entering the labour market for the first time.  Corporate funding is recommended from their corporate social responsibility pool. This comes on the back of an earlier not so successful scheme to encourage labour intensive employment where the government paid part of the provident fund contribution to first time employees in certain sectors. Multiple channels of enabling job creation The current internship scheme that seeks to train 10 million youth in five years has the potential to unleash the energy of youth in the companies they are placed in. It could create multiplier effects but the proof will naturally lie in the quality of implementation and the keenness of the corporate sector. The job creation agenda is also visible in the proposals to develop religious tourism and tourism in general in the eastern part of the country. Tourism is a labour intensive activity. The enhanced allocations for MSMEs under the Mudra scheme, especially labour intensive manufacturing is another reflection of the focus of employment. The principal message in this budget is to double down on skill and job creation, including for women. The responsibility of this agenda has been placed squarely on the profitable shoulders of India’s private sector. It is interesting that the budget speech did not mention public sector employment, which has remained an aspiration, especially among rural youth. The employment goal will perhaps reverberate and resonate in policy circles for the next five years in this election cycle.  Getting rid of process clutter Simplifying processes in India is work in progress. This budget moves the needle on that. Simplifications have been proposed in tax administration as well as in the bankruptcy code. It is a common occurrence in India that resources, whether tax revenues meant for the government or debt recovery for creditors, these get stuck in endless litigation because of our complex procedures resulting in deadweight losses. Simplification is therefore a welcome step and will get a further boost as the government finalises the economic policy framework in the next six months. These next generation reforms seek to cover all factors of production, namely land, labour,capital and entrepreneurship, and use technology as an enabler for improving total factor productivity and bridging inequality. Effective implementation of several of these reforms requires collaboration between the Centre and the states and building consensus, since development of the country is inextricably linked with development of states. Federalism, cooperative and otherwise The competitive and cooperative federalism that was the hallmark of several budgets between 2014 and 2019 has remained on paper except for the implementation of GST, which according to Arvind Subramanian, former CEA, was a monumental achievement in cooperative federalism. The Survey too emphasises the need for harmonisation across levels of government and across different policies between and within sectors. Agriculture has been mentioned as a case in point in which subsidies to water electricity and fertilizers coexist with minimum support prices and export bans from time to time. These policies conflict and create rents, damaging the economic fabric. Inverted duty structures are also prevalent, creating policy conflicts that the FM has promised to address in the next six months. A budget to counter narratives The fiscal consolidation agenda remains on track with a windfall from the RBI and higher than expected tax revenues. The middle class have received a little respite in tax liabilities but those investing in stocks and other assets will have to pay long-term capital gains of 12.5%. Incentives for the poor, tax breaks for the middle class and additional taxes for the rich in the budget seek to moderate the narrative that the rich are getting richer while the poor are finding it difficult to catch up. The budget is however only a start. It is not taxing the rich more that will address the problem. As Joseph Schumpeter observed, the market's achievement does not consist in providing silk stockings for queens but in bringing them within reach of factory girls. And the only way that can happen is to create productive employment opportunities for India’s burgeoning youth, including women. The budget has made a start. Now, for the follow through.
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2024-07-24 17:51
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/govt-employee-count-rises-for-first-time-since-fy19-spending-per-head-also-on-the-up-12777219.html
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Govt employee count rises for first time since FY19, spending per head also on the up
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Employee strength rises for first time post 2019.Related stories.
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The Centre reversed a five-year downsizing trend in FY24, expanding its workforce to 3.56 million, aÂMoneycontrolÂanalysis of Budget documents shows. The number of employees working for the Union government fell to its lowest in nearly a decade at 3.17 million in FY23, capping a consistent drop since FY19, when staff strength was at 3.27 million. The employee numbers hit a peak of 3.33 million in FY14,Budgetdocuments show. A look at the numbers provided in Budget documents also shows that the senior-to-junior employee ratio may have also worsened during these years. The expansion comes with a twist. Average pay per employee is expected to decline in FY24, as the government inducts more young workers, but rise again in FY25. The government is expected to have spent Rs 8.12 lakh per employee on pay and allowances other than travel expenses in FY24, a 4.4 percent drop from Rs 8.49 lakh in the previous year. Employee costs jumped 8.3 percent in the FY23. The average employee salary increased at an annual pace of 6.5 percent between FY16 and FY23, even as the number of employees declined between the two periods. In FY16, the average employee compensation despite a 34 percent jump from the previous year was Rs 5.44 lakh. A comparison with inflation also indicates that jobs at the higher level would have been filled faster than the ones at the lower level. Budget numbers indicate that number of central government employees will decline again to 3.51 million by FY25, but the average pay will rise to Rs 9 lakh per annum.
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2024-07-24 17:12
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moneycontrol.com
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https://www.moneycontrol.com/news/business/moneycontrol-pro-panorama-no-country-for-indian-traders-12777236.html
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Moneycontrol Pro Panorama | No country for Indian traders
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While big and small traders are complaining about the tax hikes, the investor community and government authorities are welcoming the move..Related stories.
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Dear Reader, The day after theBudget, the primary topic of conversation is the increase in taxes on all aspects of trading and investing. While big and small traders are complaining about the tax hikes, the investor community and government authorities are welcoming the move. In her Budget, Finance Minister Nirmala Sitharaman raised long-term capital gains (LTCG) tax on financial and non-financial assets from 10 percent to 12.5 percent. Short-term capital gains (STCG) will now be taxed at 20 percent, up from the previous 15 percent. The finance minister increased the Securities Transaction Tax (STT) from 0.02 percent to 0.1 percent, a fivefold increase in F&O trades. Investors and government authorities believe the tax increases are modest, with potential for further hikes. The rise in LTCG from 10 percent to 12.5 percent is minimal and affects only a small portion of participants, as only one percent of traders in India pay LTCG. Most of those affected are in the HNI segment, meaning the impact on retail traders will be negligible. However, by this logic, participants with a holding period of less than one year will feel the brunt of the tax increase. Authorities have justified the increase in STCG by stating that widening the gap between LTCG and STCG will encourage participants to hold their investments for more than one year. This may sound good in theory, but how many traders and investors participate in the market primarily to take advantage of tax arbitrage. Similarly, the rationale behind increasing STT was to curb retail activity in the derivatives segment. While NSE CEOÂAshishkumar Chauhan appreciated the increase in STT, calling it smaller and lower than expected, most others did not support this hike. Government authorities and fund managers, who prefer traders to divert their money to them, welcomed the move. However, in their representation to the finance minister before the Budget, brokers had asked for the abolition of STT. Ironically, the NSE has introduced weekly index options for retail investors, which attract the highest trading volumes. Retail investors are feeling cheated by the government's multiple tax increases. The Securities Transaction Tax (STT) was introduced in 2004 to replace the LTCG tax. This arrangement continued until 2018 when Sitharaman reintroduced LTCG without removing STT. In this Budget, the FM increased both taxes, making trading and investing more costly. Due to these taxes and the high cost of trading, many high rollers are relocating to other countries, particularly Dubai, to benefit from lower taxes. These traders have the option to leave, which they are exercising. Unfortunately, retail traders do not have the same flexibility and will either continue to trade in the market or move their trading activities underground. The Indian trading and investing community suffer in all scenarios. What exacerbates the situation is the government's open-door, low-to-zero tax policy in GIFT City. The government wants foreign traders to come to India, make money, and leave without paying taxes. Unfortunately, the same courtesy is not extended to Indians. Meanwhile, Vijay Bhambwani writes onÂhow to capitalise by trading in a high-cost environment. Investing insights from our research team Hindustan Unilever: Resilient earnings numbers, working towards sustainable growth Bajaj Finance Q1 FY25 – Profit dragged down by higher provisions Tracker Pro Economic Tracker: Active workforce improves slightly, consumer sentiment and power consumption fall WhatÂelse are we reading? July Flash PMI signals strong growth, higher inflation Chart of the Day: A snapshot of budgetary trends in the last 10 years Will the government walk the talk on IBC reforms announcements? Investors will remain positive post Budget on Indian fixed income assets The Budget provides a blueprint for the future ICICI Prulife must work past its Ulip-driven growth for profitability Budget sticks to fiscal prudence -- and a jobs promise No major direct sops for auto sector in Budget 2024 Budget’s focus on solar power underscores commitment to energy transition goals With the Budget's removal of angel tax, will the pearly gates open for startup investment? Mohamed El-Erian: Why I am now optimistic that economies can break out of a rut (republished from the FT)Digital initiative, financial inclusion and MSME troika takes centre stage for Budget 2024 Budget 2024 outlines roadmap for 'Viksit Bharat', focus on poor, women, youth and farmers Union Budget 2024 charting course for 'Viksit Bharat' Markets Investors likely to shy away from buyback offers post budget proposal Personal Finance Do bond fund investors need to change their strategy after Budget? Technical Picks:ÂTVS Motor,ÂSun Pharma,ÂLarsen and Toubro andÂPersistent SystemsÂ(These are published every trading day before markets open and can be read on the app) We have a crack team of reporters writing on everything startups and tech. We are fans of their newsletter Tech3 that lands in our inboxes every weekday evening. You can catch up on the day's happening tech and startup stories, including news, scoops, and analyses. If you have not already subscribed to it,Âclick on this link to sign up.A new offer for you and your friends--The MC Pro Elite Club referral programme. Invite friends toÂsubscribe to Pro, and you could earn up to Rs 1000/- on eligible subscriptions. Plus, your friends get Rs 200 when they subscribe for the first time.ÂClick here to know more. Thank you for subscribing to Moneycontrol Pro. Check out our offers pageÂhere for exclusive discounts on select brands and giveaways. We would love to hear from you. For any feedback on the product and suggestions please clickÂhere. We promise to read your responses although we might not be able to reply to each one individually. Shishir AsthanaMoneycontrol Pro Â
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2024-07-24 16:21
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/budget-signals-shift-in-infra-strategy-as-govt-pushes-states-private-sector-to-pitch-in-12777120.html
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Budget signals shift in infra strategy as govt pushes states, private sector to pitch in
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India has earmarked Rs 11.1 lakh crore for capex in Budget 2024-25, representing 3.4 percent of GDP..Related stories.
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Finance Minister Nirmala Sitharaman announced that the capex budget for 2024-25 would be Rs 11.1 lakh crore, or 3.4 percent of GDP, maintaining it at the same levels as announced in the interim budget. Despite the seemingly substantial allocation, infrastructure expert Vinayak Chatterjee notes the government’s shift towards decentralizing infrastructure investment, emphasizing a bottom-up approach to spur economic growth. In herÂbudgetspeech on July 24, the FM identified infrastructure as a top priority, highlighting its strong multiplier effect on the economy. She emphasized on the Central Government’s significant investments in the past and committed to maintaining robust fiscal support for infrastructure over the next five years, balancing this with other priorities and fiscal consolidation. “This budget marks a strategic shift in mindset of how microeconomic policy is panning out. From 2014 till last year, the governing mantra was that large infrastructure and public works outlays were pump-priming the economy and GDP. To that extent, we saw a consistent government policy over the years of increasing the budget allocation significantly, increasing by 25 percent-30 percent in the last few years. Investment in infrastructure was touted to have the highest multiplier effect and was creating assets for the nation. Now we find a significant underplaying of the infrastructure sector where we have just got 11.1 percent increase,” Vinayak Chatterjee, Chairman, CII infrastructure council and founder and managing trustee The Infravision Foundation, told Moneycontrol in an interview. TheEconomic Survey 2023-24, which was tabled on July 22, was a precursor to this change in stance, he said. The survey called upon the private sector to create jobs and scale up investments and the need to minimise the role the government plays. No Big Bang Infra Announcements Continuing thetrend set by the interim budget on February 1, 2024, FM Sitharaman refrained from announcing major infrastructure projects. This was a shift from previous budgets, which were replete with bigbang initiatives for roads, power generation, renewables, airports, and more. Railways, traditionally a budget key point,received only a brief mention.“The FM, in her speech, was rather candid when she said that they have had to reduce aggression to accommodate fiscal consolidation and making resources available for other priority needs,” Chatterjee said. “The broad messaging that is coming through is that there is a conscious attempt to strategically downplay central government involvement in doing the heavy lifting in infrastructure and, instead, pushing it through states, private sector and even multilateral development banks,” he said. Keeping the coalition politics in mind, the finance minister made major commitments to states where its National Democratic Alliance (NDA) partners Telugu Desam Party (TDP and Janata Dal (United) are in power–Andhra Pradesh and Bihar, respectively. Financing Challenges Chatterjee believes that while the government had a top-down approach of taking the lead in infrastructure investments, it is now looking at states, private sector and multilateral agencies to pump in resources for building infrastructure. “Traditionally, the belief is that every one rupee spent on infrastructure results in three rupees of GDP. Construction has the highest multiple,” he said. The FM said that the government will encourage states to provide comparable infrastructure support and made provisions for Rs 1.5 lakh crore inlong-term interest-free loans. Private sector investment in infrastructure will be promoted through viability gap funding and enabling policies and regulations, with a market-based financing framework set to be introduced. “This bottom-up approach is going to take at least four or five years to fructify. It takes time for MSMEs and others to start delivering growth,” Chatterjee said. Reliance on multilateral agencies comes with its own challenges given the times they take in approving funding. “The sudden step back in infrastructure investments in terms of reducing the percentage of outlays leads to an apprehension that this may cost India substantial basis points in GDP growth in the near-, short- to medium term. There is apprehension that it will take time to play out. In the meantime, they have drastically reduced the pace of growth of infra outlays, so this will have a certain impact,” he said.
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2024-07-24 16:19
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/rupee-falls-1-paisa-to-revisit-all-time-low-of-83-70-against-us-dollar-12777238.html
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Rupee falls 1 paisa to revisit all-time low of 83.70 against US dollar
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Rupee falls 1 paisa to revisit all-time low of 83.70 against US dollar.Related stories.
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The rupee depreciated 1 paisa to revisit its all-time closing low of 83.70 (provisional) against the US dollar on Wednesday, weighed down by a strong dollar against major crosses overseas amid investors' weak appetite for riskier assets. Forex traders said the increase in capital gains tax and removal of indexation benefits announced in the FY25 Budget on Tuesday was the main reason for dollar buying as foreign investors sold stocks. At the interbank foreign exchange market, the local unit opened at 83.69 and touched an intra-day high of 83.68 and a low of 83.72 against the dollar during the session. It finally settled at an all-time low level of 83.70 (provisional) against the American currency, registering a fall of 1 paisa from its previous close. On Tuesday, the rupee declined 3 paise to 83.69 against the US dollar after the government raised tax rates on capital gains in the FY25 Budget. Forex traders said US dollar buying continued to be the theme after the increase in long-term capital gains tax (LTCG) and short-term capital gains tax (STCG) and then the removal of indexation benefits. The government on Tuesday proposed reducing the long-term capital gains tax on immovable properties to 12.5 per cent from 20 per cent but removed the indexation benefits to adjust for inflation, a move experts termed as "negative" for sellers. As per the memorandum to theUnion Budget, with rationalisation of rate to 12.5 per cent, indexation available under section 48 of the Income Tax Act is proposed to be removed for calculation of any long-term capital gains, which is presently available for property, gold and other unlisted assets. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.05 per cent at 104.50. Brent crude futures, the global oil benchmark, were trading higher by 0.79 per cent at USD 81.65 per barrel. In the domestic equity market, the 30-share BSE Sensex fell 280.16 points or 0.35 per cent to settle at 80,148.88 points, and Nifty dropped 65.55 points or 0.27 per cent to 24,413.50 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 2,975.31 crore, according to exchange data.
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2024-07-24 16:15
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/india-budget-extends-economic-momentum-to-social-equity-12777204.html
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India budget extends economic momentum to social equity
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This budget also scores high on fiscal consolidation trajectory..Related stories.
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By Sudipta Roy TheUnion Budgetannounced today lays down the ‘roadmap for pursuit of Viksit Bharat’ with measures spanning long term macro-economic framework, steps to unlock the potential of agriculture sector, emphasis on creating formal jobs and skill building while focusing on promoting innovation and also outlining the next generation policy framework for sustained and inclusive economic growth. Fast tracking thegrowth of rural economyhas been duly prioritised with policy steps towards both increasing public investment in rural infrastructure and extending policy attention to agricultural and allied activities like horticulture, improvement of supply chains, natural farming, among others. Some specific policy steps like mission to achieve self-sufficiency in pulses and oilseeds, promoting Farmer-Producer Organizations, cooperatives, advancing agricultural productivity through research and natural farming practices and promoting start-ups for vegetable supply chains will bring in quick gains for the overall resilience of the sector. At the same time, steps like policy for development of the cooperative sector or comprehensive review of the agriculture research setup will help address long term issue in the agricultural sector. Efforts to bring ininclusive growthtowards a sustainable long-term growth trajectory is commendable. The states lagging in development have been included in a separate development plan encompassing human resource development through skill development, boosting infrastructure, industrial development and generation of economic opportunities to make them drivers of growth in the nation’s growth story. This will not only catalyse industrial development of the eastern region or financial development of the north eastern states but also lay the basic building blocks for inclusive and sustained long term growth path for the economy. The budget has provided a structural boost to consumption by prioritising employment and skill development, especially among the economically weaker sections through a focus on agriculture and welfare sectors. Some of the policy steps in this direction including, Employment linked incentives, scheme for skilling in collaboration with state governments and Industry, upgrading industrial training institutes should help generate productive employment in the non-agricultural sector, particularly in the formal sector. As the outcome of some of these steps get visible on ground, it will prove to be a game changer for sustained demand boost for the economy. The budget also carries a futuristic tone, as it sets up the roadmap for long term vision of developed economy. It covers many critical elements like urban development, energy transition, research and development of small and modular nuclear reactors as future source of energy, partnership with the State governments and multilateral development banks to provide basic services, National Research Fund for basic research and prototype development etc. The holistic roadmap is further supported by some bold plans for next generation reforms, including digital public infrastructure in agriculture for coverage of farmers and their lands in 3 years, economic policy framework reforms for improving returns to various factors of production etc. While government’sgrowth focus agendathrough CAPEX investment continues, this budget also scores high on fiscal consolidation trajectory. With a market borrowing plan lower than FY24 and fiscal deficit target of 4.9%, govt’s strict adherence to the fiscal glide path continues. That augurs well for the interest rate trajectory and should help crowd in private investment spending. Sudipta Roy, Managing Director & CEO, L&T Finance Ltd. Views are personal and do not represent the stand of this publication.
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2024-07-24 16:06
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/india-may-cut-borrowing-if-small-saving-inflows-are-high-says-official-12777189.html
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India may cut borrowing if small saving inflows are high, says official
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India may cut borrowing if small saving inflows are high, says official.
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India could look at cutting gross borrowing later in the financial year if inflows into national small saving schemes (NSSF) are high, Economic Affairs Secretary Ajay Seth told Reuters on Wednesday. NSSF consists of public investments in schemes like postal deposits, savings certificates, public provident fund and senior citizens' savings scheme, among others. The federal government has increased its reliance on borrowing from NSSF over the last few years to meet its funding requirements. In the federalbudgetannouncement on Tuesday, the government reduced gross borrowing by Rs 12,000 crore to Rs 14.01 lakh crore for the fiscal year, and cut the fiscal deficit target by 20 basis points to 4.9%. Market participants were expecting the borrowing to be reduced by around Rs 50,000 crore, after a larger-than-expected surplus transfer from the Reserve Bank of India. However, the government decided to cut borrowing via shorter-dated treasury bills instead of government bonds. India is aiming at NSSF collections of Rs 4.2 lakh crore for the ongoing financial year, down from Rs 4.67 lakh crore in the interim budget.
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2024-07-24 15:44
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/what-did-india-search-for-on-the-budget-day-12777099.html
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What did India search for on the Budget Day?
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Gold dominates searches on Budget.Related stories.
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Tax rates, gold and employment were the most-searched categories among the many Budget announcements made by Finance Minister Nirmala Sitharaman on July 23, according to an analysis of Google Trends. The finance minister, in herBudgetspeech, cut the customs duty on gold by 6 percent while also announcing initiatives on employment, housing, and personal income tax. While the interest was focussed on employment and jobs as Sitharman started her speech, attention shifted to income tax, gold, and mobile phones as the finance minister’s speech unfolded, according to aMoneycontrolanalysis of search trends. The trends also showed regional variations. For instance, Northeastern states, Maharashtra and Chhattisgarh, were more concerned about employment than Goa, Karnataka and Delhi, which showed greater interest in capital gains tax. The government increased the long-term capital gains tax to 12.5 percent while removing indexation benefits for properties purchased after 2001. On the other hand, people in Jharkhand, Goa and Chandigarh were more interested in income tax on the Budget Day. The Google Trends data, which covers the past 24 hours, shows that the country’s IT hubs, Karnataka, Haryana, Goa, and Delhi, were more interested in the new tax regime. These states topped the trends in search for these and related topics. The new tax regime has been sweetened with more slab relaxations and an increase in the standard deduction to Rs 75,000 from Rs 50,000 earlier. Sitharaman noted that the changes will reduce each individual’s tax burden by Rs 17,500. Gold was the most searched term by people across the country in the 24 hours from 08:50am on July 23, with Andhra Pradesh, Tamil Nadu and Punjab topping the chart. People in the North East, Bihar and Uttar Pradesh were more interested in mobile phones, which saw a cut in customs duty.
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2024-07-24 15:00
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moneycontrol.com
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https://www.moneycontrol.com/news/business/adani-green-energy-operationalises-250-mw-wind-capacity-at-khavda-gujarat-12777018.html
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Adani Green Energy operationalises 250 MW wind capacity at Khavda, Gujarat
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Adani Green Energy operationalises 250 MW wind capacity at Khavda, Gujarat.
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Adani Green Energy on Wednesday said it has operationalised a 250MW wind power generation at the world's largest 30,000 MW renewable energy plant at Khavda, Gujarat. With this milestone, 2,250 MW of cumulative capacity has been made operational at the Khavda plant, Adani Green Energy Ltd (AGEL) said in a statement. The operationalisation of 250 MW wind capacity at Khavda further strengthens AGEL's leadership in India with the largest operational portfolio of 11,184 MW, the statement added. Khavda has one of the best wind resources in India, with speeds of 8 meters per second making it an ideal location to harness wind energy. The Khavda Renewable Energy plant is equipped with one of the world's largest and most powerful onshore wind turbine generators (WTG) of 5.2 MW capacity each. The WTGs with high rated capacity enable optimal land use to harness higher energy yield from the same location and bring down the levelized cost of energy (LCOE). The 5.2 MW WTGs installed at Khavda are built with superior German technology and manufactured at Adani New Industries Ltd's (ANIL) integrated manufacturing ecosystem strategically located near the Mundra port. AGEL has transformed the Khavda barren wasteland into a hub of clean and affordable energy. The energy from the Khavda RE plant can power 16.1 million homes each year.
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2024-07-24 13:43
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/india-needs-to-sell-assets-to-support-spending-jpmorgan-says-12777013.html
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India needs to sell assets to support spending, JPMorgan says
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India needs to sell assets to support spending, JPMorgan says.Related stories.
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India’s government needs to revive its asset monetization program to create revenue streams beyond taxes, which can help fund spending while keeping it on a fiscally prudent path, according to a top economist. “Over time it will be nice to see renewed focus on asset sales, monetization of infrastructure assets, and disinvestment as another source of revenue,” Sajjid Z. Chinoy, chief India economist at JPMorgan Chase & Co., told Bloomberg TV’s Menaka Doshi on Wednesday. “Over the next 10 years, India will have huge expenditure obligations.” Prime Minister Narendra Modi, who returned to power last month with a weaker mandate, is under pressure to spend more to shore up voter support and meet the demands of his coalition partners. The federalbudgetreleased Tuesday targeted a smaller fiscal deficit for this year on the back of a record dividend from the Reserve Bank of India and a surge in tax revenues. Next year, the government aims to bring down the budget gap even further, which is necessary for India to win a credit rating upgrade. India’s debt is currently rated at the lowest investment-grade level. Chinoy said raising revenue through selling government assets would be more beneficial than raising taxes, which could impinge on demand. “The beauty of asset sales is that its effective like an asset swap, you are selling one asset to build a road or invest in human capital,” he said. The government’s attempts at big-ticket sales of state-run companies have yielded little success, forcing it to scale back its program to small stake offerings through stock exchanges. In the last budget, the government had set a target to raise 500 billion rupees through stake sales by March.
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2024-07-24 13:37
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moneycontrol.com
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https://www.moneycontrol.com/news/business/private-sector-needs-to-step-up-match-govts-efforts-towards-job-creation-anand-mahindra-12776859.html
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Private sector needs to step up, match govt's efforts towards job creation: Anand Mahindra
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Private sector needs to step up, match govt's efforts towards job creation: Anand Mahindra.Related stories.
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India's private sector needs to step up and match the government's efforts towards job creation and making young people employable, as in the absence of a collective effort, the country's demographic dividend could become a demographic disaster, Mahindra Group Chairman Anand Mahindra said on Wednesday. In his reaction to theUnion Budgetfor 2024-25, he said it shows evidence that the government recognises the importance of growth accompanied by job-creation. "We are the envy of the world in terms of our growth in GDP. We are the preferred destination of the world for investment because of the belief in our future," Mahindra said in a post on social media platform X. He further said, "But the vital task ahead for us is to ensure that this growth is now accompanied by an explosion in job-creation." Mahindra noted that, "Hence for me, the most important element of yesterday's budget was strong evidence that the government recognises this to be its most important mission. And that skilling to make young people employable is as important as employment." Mahindra said the schemes announced by Finance Minister Nirmala Sitharaman are promising. "But they need to be tracked closely to ensure that the incentives are working and if any tweaks/modifications are required," he added. Asking the private sector to also play their part, Mahindra said it "needs to step up to the crease and do its part by investing in both employment & employability". He cautioned that, "If we don't all pull together for this task, the demographic dividend will go back to being a demographic disaster."
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2024-07-24 12:19
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/gold-import-surge-under-ftas-prompts-duty-cut-in-budget-cbic-chairman-12776728.html
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Gold import surge under FTAs prompts duty cut in Budget: CBIC chairman
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Gems and jewellery sector contributes to 8 percent of India’s total exports..Related stories.
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A surge in imports under free trade agreement, lower current account deficit and a spate in smuggling prompted the Union Budget to slash duty on gold from 15 percent to 6 percent, according to Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal. “During the period that the import duty on gold had gone up, we noticed that gold imports under certain free trade agreements (FTAs) had gone up. In addition to that, smuggling was on a rise. Due to all these factors, we decided to reduce the import duty on gold,” Agarwal toldMoneycontrolin an interview after the UnionBudget 2024-25 was tabled on July 23. There has been a sharp increase in gold imports largely because of duty concessions provided by India to the UAE under the Comprehensive Economic Partnership Agreement. India's imports of gold and silver from the UAE surged 210 percent to $10.7 billion in FY24, according to economic think tank Global Trade Research Initiative (GTRI). As far as smuggling is concerned, in 2022-23, the Indian authorities seized 3,800 kilograms of smuggled gold. India's customs department seized 2,000 kg in the first half of 2023-24, 43 percent more than the haul a year back. In July 2023, the basic customs duty on refined gold bars was increased to 12.5 percent along with maintaining the Agriculture and Infrastructure Cess (AIDC) at 2.5 percent​. The government had on January 22 increased the import duty on gold and silver findings, used in making jewellery, and on precious metal coins to 15 percent to bring them in line with duties on gold and silver bars. “The import duty was increased in July because of the geopolitical situation, international prices of petrol had reached a level that was impacting the current account deficit (CAD),” he said. The CAD is now seen as improved. For April-December 2023, it stood at 1.2 percent of the GDP, down from 2.6 percent in the same period of the previous year. “Gems and jewellery sector is important for exports, it contributes to 8 percent of India’s total exports. It was important to provide that environment to the sector,” Agarwal said.
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2024-07-24 11:14
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/indexation-benefit-of-ltcg-tax-in-real-estate-only-marginally-covered-inflation-costs-says-cbdt-chief-12776559.html
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Indexation benefit of LTCG tax in real estate only marginally covered inflation costs, says CBDT chief
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The new tax of 12.5 percent without indexation will be more beneficial for taxpayers..Related stories.
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The indexation benefit available on long-term capital gains (LTCG) in real estate deals only marginally took care of the inflation seen in property prices, which have jumped five times in the last 10 years, Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal said. The government's analysis shows the new 12.5 percent rate in LTCG tax will be more beneficial for the taxpayers, he added after Finance Minister Nirmala Sitharaman tabled theUnion Budgetfor 2024-25 on July 23. While the Budget reduced the LTCG tax on real estate deals from 20 percent to 12.5 percent, the removal of the indexation benefit against inflation sparked a concern that it will add to the burden on the middle class. “Though the indexation benefit on LTCG in real estate has been removed, the government’s analysis shows that in the last 10 years while the cost of property has increased 5 times, the indexation benefit was only marginally taking care of the inflation. As against that the capital gains tax was 20 percent,” Agarwal toldMoneycontrolin an interview. “On comparing the data of the last 10 years, if a person is holding a property and the property appreciation is 4-5 times, the new tax of 12.5 percent without indexation will be beneficial. Keeping in view the increase in property rates, the new tax announced in the Budget will be beneficial for taxpayers,” he said. The removal of indexation benefits will not be applicable to properties held before 2001, and they will continue to get indexation benefits. The Finance Minister, in a bid to rationalise the capital gains tax regime, changed the LTCG tax rate to 12.5 percent across all financial and non-financial assets.
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2024-07-24 11:13
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moneycontrol.com
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https://www.moneycontrol.com/news/business/reliance-gets-us-approval-to-resume-crude-imports-from-venezuela-12776715.html
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Reliance gets US approval to resume crude imports from Venezuela
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Reliance gets US approval to resume crude imports from Venezuela.Related stories.
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Reliance Industries Ltd. has secured US approval to resume importing oil from Venezuela despite White House sanctions on the country, according to people familiar with the development. India’s largest privately owned refiner plans to start purchasing Venezuelan crude soon, said the people, who asked not to be named as the information is not public. Reliance accounted for around 90% of India’s crude imports from Venezuela after the sanctions were lifted last year, according to data intelligence firm Kpler. The US Treasury declined to comment, and Reliance did not reply to email seeking comment. Washington temporarily removed restrictions on the South American nation’s gold and oil sectors last year, when President Nicolas Maduro and the opposition signed a deal to guarantee free and fair elections. The sanctions were then reinstated in April after Venezuela failed to honor the agreement, and oil companies have been applying for permits from the US Treasury Department to keep doing business there. Venezuela’s crude exports climbed to 654,000 barrels a day in June, the highest since April 2020, according to shipping reports and data from Kpler, after the US granted a specific license for companies to continue to drill in the country despite the sanctions being in place. Apart from Reliance, India’s state-owned Oil and Natural Gas Corp.’s overseas investment arm ONGC Videsh Ltd. has also applied for waivers to import crude from Venezuela. Disclosure:Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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2024-07-24 10:43
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/private-sector-activity-rises-to-three-month-high-of-61-4-in-july-pmi-data-12776567.html
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Private sector activity rises to three-month high of 61.4 in July: PMI data
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Flash PMI shows economy on strong footing.
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Private sector activity rose to a three-month high of 61.4 in July compared with 60.9 in the previous month, according to preliminary data released on July 24. The HSBC Flash India Composite Output Index remained above the 50-mark, which separates expansion from contraction for 36th consecutive month. Private sector activity had picked up in June from a five-month low of 60.5 in May, as both manufacturing and services had both witnessed a pickup in activity. Services PMI had risen to 60.5 in June from 60.2 in the previous month, while manufacturing PMI had risen to 58.3 compared with 57.5 in the previous month. The NCAER-NSE survey released last week showed that activity in the first quarter is likely to be better than in the previous quarter. The outlook for the future had also improved. The Indian economy is likely to perform better than earlier expected, with international agencies raising growth forecast closer to or above 7 percent. The PMIs had noted a pickup in employment in June. The government in its Budget on July 23 announced employment linked incentive schemes to spur job creation in the economy.
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2024-07-24 10:35
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/budget-2024-outlines-roadmap-for-viksit-bharat-focus-on-poor-women-youth-and-farmers-12776663.html
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Budget 2024 outlines roadmap for 'Viksit Bharat', focus on poor, women, youth and farmers
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The government has taken focussed steps on rural development, manufacturing, skilling..Related stories.
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By Rahul Kakkad The government has themed thisbudgeton four major pillars i.e. Poor, Women, Youth and Farmers with focus on employment, skilling, MSMEs and the middle class with a total central outlay of around Rs 2 lakh crores over a 5-year period. In line with the strategy laid down in the interim budget, this budget lays down a roadmap in pursuit of ‘Viksit Bharat’ with 9 priorities includingagriculture, employment and skilling,manufacturing, infrastructure and steps have been taken in that regard. It is also proposed to simplify the rules for FDI. While changes with respect to the same would be announced separately, liberalization to the FDI regime on multi brand retail would be closely looked at. From a personal tax front, changes made to the new tax regime for individuals is expected to benefit the salaried employee up to Rs 17,500 in income tax leading to more disposable income which is a welcome move. On the corporate front, a slew of measures have been announced includingabolishment of angel tax,withdrawal of equalization levy, reduction in tax rates for foreign company from 40% to 35%, simplification/ reduction of TDS rates and simplification of re-assessment proceedings which is in line with the government’s objective to simplify taxes, provide tax certainty and reduce litigation. On the flip side, there has been increase in tax rates for STCG from 15% to 20% and on the LTCG from 10% to 12.5% with an increase in STT on options to 0.1% from 0.0625% and on futures from 0.0125% to 0.02%. Further, buyback of shares has now been treated akin to distribution of dividend and taxed accordingly. While increase in STT rates was somewhat expected, substantial increase incapital gains taxwould surely dent the investor sentiments in the short term. Further, treating buyback of shares as akin to dividend has now reduced the scope of structuring the payments to shareholders in a tax effective manner. On the indirect tax front, reduction of BCD on mobile phone, PCBA and charger from 20% to 15% should certainly bring about a reduction in the cost of mobile phones making them more affordable to the customers. Further, BCD reduction from 10% to 5% for gold and silver bars, gold and silver dores, etc. would surely boost consumer spends owing to overall reduced costs. Additionally, providing a boost to the leather and textile industry, BCD rates have been rationalized. While there are no big bang announcements from a tax perspective, the government has taken focussed steps on rural development, manufacturing, skilling which would definitely provide an upliftment to the sector and pave the way for sustainable growth in the years to come. Rahul Kakkad, Tax Partner – Consumer Products and Retail, EY India. Views are personal and do not represent the stand of this publication.
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2024-07-24 10:26
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/cbic-chief-says-its-hard-to-correct-inverted-customs-duty-due-to-fta-exemptions-12776622.html
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CBIC chief says it's hard to correct inverted customs duty due to FTA exemptions
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Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal.Related stories.
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Though the Union Budget proposed to review the customs levies over the next six months for inverted duty correction, Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal said it will be a difficult task in many cases because of nil rate on some items under free trade agreements (FTAs). “We have received certain proposals, corrections for inverted duty in customs. But if the inversion is happening because the rate of duty is nil under free trade agreements (FTAs), then it is difficult to correct it,” Agarwal toldMoneycontrolin an interview. India has FTAs with countries like the United Arab Emirates (UAE) and Australia. These pacts aim to promote trade by reducing or eliminating customs duty on a range of goods. In the customs duty ambit, inverted duty structure is seen in items like leather, textiles and engineering goods. The duty structure is inverted when the import levy on a finished product is lower than that on raw materials and intermediate goods, which discourages domestic manufacturing. This is particularly true of manufacturers that are heavily dependent on imported raw materials. “However, the inverted rate of customs duty on items which are not manufactured in India, can easily be corrected,” Agarwal said. TheUnion Budgetannounced a fully exempt customs duty on 25 critical minerals such as lithium, cobalt, rare earths, which are crucial for nuclear energy, renewable energy, space, defence and telecommunications among other sectors. India is heavily dependent on imports for most of the critical minerals, with few exceptions like copper, gallium, graphite, cadmium, phosphorus, potash and titanium. Import duty on ferro-nickel, a key raw material in the production of stainless steel, was also removed. The basic customs duty on mobile phones and mobile chargers was reduced in the Budget to 15 percent from 20 percent. To increase value addition in the domestic electronics industry, the BCD was removed on oxygen-free copper for manufacture of resistors and certain parts to manufacture connectors. The handset and electronics makers had sought to rationalise the import duty structure and reduce the duties on components of mobile phone parts or sub-assemblies over time to attract global value chains to India and enable them to create manufacturing at scale. They said the move would help the company compete with China and Vietnam, which currently have much lower and simplified input duty structures.
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2024-07-24 09:59
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/digital-initiative-financial-inclusion-and-msme-troika-takes-centre-stage-for-budget-2024-12776605.html
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Digital initiative, financial inclusion and MSME troika takes centre stage for Budget 2024
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DFM takes centre stage in this year's Budget..Related stories.
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By Gurpreet Chhatwal TheUnion Budgetfor full fiscal 2025 strongly emphasises the critical role the financial sector needs to play in supporting economic growth through a series of welcome announcements. These will arm the lenders in increasing credit flow to the crucial sectors of the economy and optimise outcomes in 3 critical areas — credit expansion, financial inclusion and stressed assets resolution. And the tools used arereferred to as the DFM troika, i.e.,digitalor tech-enabled initiatives,financialinclusion, andMSME(micro, small and medium enterprise) support measures. Digital Initiatives First, technology initiatives in agriculture through successful implementation of the Digital Public Infrastructure (DPI) can expand lending to this segment, supported by strengthened underwriting and monitoring to control the traditionally high non-performing assets in the sector. Technology is also expected to contribute to strengthening the recovery ecosystem, with an integrated technology platform to improve implementation of the Insolvency and Bankruptcy Code. This, coupled with other proposed changes, such as strengthening of the tribunal and appellate tribunal, can improve its efficacy from the perspective of both enhancing recovery levels and speeding up the resolution process. Financial Inclusion Two, from an inclusion perspective, the government’s thrust on supporting affordable housing continues with a planned central assistance of Rs 2.2 lakh crore in the next five years. Together with the proposed interest subsidy, this will support growth for companies offering affordable-housing finance. These companies, on the back of a favourable regulatory dispensation and solid underlying demand, have been growing faster than traditional housing finance companies. Further, the proposed 3% interest subvention on education loans to youth currently not eligible for Government benefits should lead to robust growth in the segment. Several other steps focused on women and youth have also been announced. Boost to MSME Sector Third, and perhaps the most overarching thrust, has been on the MSME front — a number of measures have been proposed to support credit flow to this sector, such as introduction of a credit guarantee scheme for facilitating term loans to MSMEs for purchase of machinery and equipment without collateral or third-party guarantee, solidifying credit assessment criteria of MSMEs by public sector banks and providing guarantee from a government-promoted fund to ensure flow of credit to this sector even during stress periods. Further, the role of SIDBI has been enhanced from its hitherto primarily refinance focus to expanding direct lending to MSMEs in addition to raising the limit of MUDRA loans. Also, for facilitatingMSMEs to unlock their working capitalby converting their trade receivables into cash, the turnover threshold of buyers for mandatory onboarding on the TReDS platform has been reduced. To be sure, today the Indian financial sector is in sound health with strong profitability and comfortable capital buffers. The banking system’s provisioning cover and net non-performing assets are also at their all-time best levels. The measures announced in the Budget are expected to bolster the efforts of the financial sector in supporting overall economic growth by expanding the addressable credit base across various borrower segments, while at the same time supporting lenders’ asset quality. All said, the criticality of the financial sector in achieving the government’s objectives of growth and development is clearly reinforced by the plan for a financial sector vision and strategy document. While the final contours are awaited, this budget is expected to set the agenda for the next five years and provide a framework to guide the efforts of the government, regulators, financial institutions and market participants. Gurpreet Chhatwal is Managing Director, CRISIL Ratings Ltd. Views are personal and do not represent the stand of this publication.
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2024-07-24 09:57
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/budget-adopts-an-optimal-approach-in-tax-slab-rejig-says-cbdt-chairman-12776540.html
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Budget adopts an ŌĆśoptimal approachŌĆÖ in tax slab rejig, says CBDT chairman
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Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal.Related stories.
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With the Union Budget 2024-25 recasting the tax slabs that would result in savings of Rs 17,500 for the middle class, Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal said the government adopted an "optimal approach" which will benefit 65 percent of the taxpayers who have moved to the new regime. ŌĆ£Thisbudgethas increased the lower tax slabs to Rs 3-7 lakh and Rs 7-10 lakh. The old tax regime has higher rates. All in all, we feel an optimal approach has been adopted, which will benefit all the taxpayers,ŌĆØ Agarwal toldMoneycontrolin an interview. While the tax slabs were rejigged for the new tax regime, the old tax regime rates were left untouched in the Budget. ŌĆ£People are coming and adopting the new tax regime. As much as 65 percent taxpayers across have adopted the new tax regime, people are finding it beneficial,ŌĆØ he said. The standard deduction for salaried employees was also increased from Rs 50,000 to Rs 75,000. The government will have to forego revenue of Rs 29,000 crore in direct taxes. The Finance Minister Nirmala Sitharaman in the post-budget press conference said that the government has not decided if there will be a sunset date for phasing out the old tax regime. "I cannot comment on it right now," she said. She also promised measures to simplify tax regime for individual income tax-payers, in line with measures taken over the years, especially introduction of the new, simplified tax regime. Sitharaman said that the finance ministry will undertake a comprehensive review of the Income Tax Act to ensure that it is easy to understand, which will reduce the scope for disputes and litigations. The process is expected to be completed in six months.
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2024-07-24 07:59
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/fiscal-prudence-continues-budget-2024-in-10-charts-12776171.html
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Fiscal prudence continues: Budget 2024 in 10 charts
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Budget 2024 lowers the fiscal deficit target.Related stories.
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The government on July 23 struck a fine balance by capping the fiscal deficit, even as it expanded the size of its welfare schemes. The fiscal deficit was set at 4.9 percent, despite the Budget size expanding by 1 percent compared with the InterimBudgetand 7 percent from the previous year. A rise in tax revenues and better dividends have provided more fiscal space. Here are 10 charts explaining the fiscal prudence of the Narendra Modi-led government. Govt sticks to its fiscal path... ...buoyed by robust tax revenues... ...with a bit of push from RBI and PSU dividends... ...as the broader economy canters on a faster lane... ...driven by capex growth multipliers... ...even as asset sales stay sluggish... The subsidy bill has remained within bounds... ...even as the Budget size has vaulted... ...characterised by declining debt... ...with the primary and revenue deficits also trending down.
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2024-07-24 07:20
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/deficit-targets-ratings-change-12776494.html
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Deficit targets achievable; sustained fiscal consolidation must for upgrades: Rating agencies
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Hoping for a ratings upgrade.Related stories.
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Rating agencies noted that the fiscal deficit target of 4.9 percent set by the government in its July 23 Union Budget will be achievable, but a rating action would require a sustained consolidation, leading to a reduction in government debt. “Sustained fiscal consolidation, which supports a downward trajectory in the government debt ratio over the medium term would be supportive of India’s credit profile, particularly when combined with the current positive momentum on macroeconomic performance and external finances,” said Jeremy Zook, director and primary sovereign analyst for India at Fitch Ratings. Nirmala Sitharaman in her Budget speech reaffirmed the government’s commitment to bring down the fiscal deficit to below 4.5 percent by the next fiscal. The government lowered the fiscal deficit target to 4.9 percent from 5.1 percent earlier. “We will continue to assess the impact the gradual improvement in fiscal outlook will have on the medium-term debt trajectory as a key factor in our ongoing monitoring of India’s rating,” Zook added. Fitch Ratings, which recently revised India’s growth forecast to 7.2 percent, also noted that not only 4.9 percent, even the target of bringing down fiscal deficit to below 4.5 percent seemed achievable. “However, the budget did not provide any additional clarity on the medium-term fiscal management objectives and targets, which is something we thought may have been forthcoming at the onset of the new term,” it noted. Moody’s also emphasised on India’s ability to reach its FY26 target. However, both the agencies noted that India’s debt remained higher than its peers. “We project general government debt to stabilise above 80 percent of the GDP over the next three years, down from 89.3 percent in FY21. We also forecast general government interest payments to fall to around 24 percent of general government revenue over the next two years from over 28 percent in fiscal 2020-21, although this remains much higher than the median 8.7 percent recorded by Baa-rated peers,” said Gene Fang, associate managing director at Moody’s Ratings. Central government debt is expected to lower to 56.8 percent in FY25, according toBudget 2024. S&P Ratings was the only agency recently to revise India’s outlook to positive from stable earlier this year. Economists have been contending that the government adhering to fiscal path will lead to a ratings upgrade by one of the three global ratings concerned within the next 18-24 months. India is currently rated 'BBB-' by Fitch and S&P and 'Baa' by Moody’s.
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2024-07-24 06:50
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/economists-laud-budgets-fiscal-prudence-say-opens-path-to-ratings-upgrade-12776456.html
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Economists laud BudgetŌĆÖs fiscal prudence, say opens path to ratings upgrade
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The budget kept the capex allocation unchanged at Rs 11.11 lakh crore, 16.9 percent higher than the previous yearŌĆÖs spend..Related stories.
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The Union Budget has done well to keep to the fiscal consolidation roadmap while taking measures to boost consumption, economists said in their post-budget reaction, further noting that the steps are likely to help with fiscal consolidation. ŌĆ£Considering the Indian economy has been in a sweet spot lately, we believe pursuing counter-cyclical fiscal policy should help strengthen India's macroeconomic stability and create a foundation for strong medium-term growth,ŌĆØ said Tanvee Gupta Jain, UBS economist. Jain further noted that this raised the possibility of a rating upgrade by one of the three ratings agencies within the next 18-24 months. The finance minister lowered the fiscal deficit target to 4.9 percent for FY25 compared with 5.1 percent in the interimbudget. ŌĆ£From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as a percentage of GDP,ŌĆØ the FM further noted. The government plans to reduce the fiscal deficit below 4.5 percent of the GDP by FY26. Economists note that the easing stance is also expected to help monetary decisions. ŌĆ£The fiscal prudence will also help in appropriate monetary response with inflation seen easing. Thus, overall the budget to us appears to be a positive for the banking and financial sector,ŌĆØ said Achala Jethmalani, Economist, RBL Bank. They also pointed out that the continued focus on growth is also likely to help fill the vacuum left by China. ŌĆ£India is a frontrunner in filling the vacuum created by ChinaŌĆÖs economic slowdown. A key requirement for this is sustained capex in Infrastructure supported by the availability of cheap capital. After all, China in its heydays, used to invest 10-20% of GDP in building infrastructure,ŌĆØ said Debopam Chaudhuri, chief economist, Piramal Group. The budget kept the capex allocation unchanged at Rs 11.11 lakh crore, 16.9 percent higher than the previous yearŌĆÖs spend.
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2024-07-23 21:39
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moneycontrol.com
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https://www.moneycontrol.com/news/business/companies/spicejet-board-approves-raising-up-to-rs-3000-crore-stock-up-5-12775971.html
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SpiceJet board approves raising up to Rs 3,000 crore, stock up 5%
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The airline has been struggling to keep afloat for many quarters now and has reportedly not deposited the Employee Provident Fund Contributions to its 11,581 staff since January 2022.Related stories.
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No-frills carrier SpiceJet said on July 23 it plans to raise up to Rs 3,000 crore by selling securities, including shares, marking the troubled budget carrier's latest attempt to shore up funds to restore full operations.The company will issue shares to institutional investors, it said in an exchange filing, without disclosing the price at which they would be sold. In an exchange filing, SpiceJet said," This is to inform you that the Board of Directors of the Company at its meeting held on July 23, 2024 has, inter-alia, considered and approved raising of funds aggregating up to Rs.3,000,00,00,000 (Rupees Three Thousand Crore only) through issue of equity shares or any other eligible securities to qualified institutional buyers by way of qualified institutional placement under the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, and any other methods including by way of further issue, in accordance with the relevant provisions of applicable laws and subject to approval of the shareholders of the Company and other applicable regulatory and contractual approvals, as may be required." Shares of SpiceJet surged nearly 5 percent to Rs 57.51 at 2.00 pm on BSE. In January this year, SpiceJet received in-principle approval from the BSE for a fund infusion of Rs 2,242-crore and raised Rs 1,060 crore under preferential issue in two tranches. The Gurugram-based airline announced a multi-fold jump in standalone profit after tax (PAT) to Rs 119 crore for the January-March quarter of 2023-24, over Rs 16.85 crore PAT in the corresponding quarter of the previous year. For the full fiscal year 2023-24, the airline posted a loss of Rs 409.43 crore. It had reported a loss of Rs 1,503 crore in FY23. For the December quarter, SpiceJet reported a loss at Rs 301.45 crore. SpiceJet had posted a profit of Rs 106.82 crore in FY23.The airline has been struggling to keep afloat for many quarters now and has reportedly not deposited the Employee Provident Fund Contributions to its 11,581 staff since January 2022. As on July 19, as many as 33 aircraft -- 15 Boeing 737 and 18 regional jets Q400 -- were on ground, owing to multiple reasons, as per the aircraft fleet tracking website planespotter.net. SpiceJet has a total of 60 planes, which include 32 Boeing 737 and 24 Q400. Besides, it also has two Airbus 340 and two Airbus A320, which are on wet-lease. *With Agency Inputs
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2024-07-23 21:35
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/a-game-changer-budget-angel-tax-axed-msmes-empowered-12776364.html
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A Game-Changer Budget: Angel tax axed, MSMEs empowered
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budget.Related stories.
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Budget 2024 packs a wide range of proposals that address many issues that the industry and the government have been discussing for a while. It is heartening to note that the Finance Minister has chosen to take up these for resolution in the first budget of the Modi 3.0 government. At the top of the list is the abolition of Angel Tax, which has been a major source of confusion for young start-ups relying on external capital. For a start-up to have to pay tax on the money the capital it raises from external investors was an anomaly. With the Angel tax now gone, it removes the uncertainty and will help start-ups and investors move ahead without this overhang. Another ask over the years has been for the reduction of LTCG on unlisted equities, which has been met with the tax rate moving down from 20% to 12.5%, albeit with the removal of indexation. Will be interesting to see whether this is a net positive or not for theinvestors in the startup ecosystem. The government has reiterated its commitment to the digital economy by reducing the TDS that an e-commerce operator needs to deduct from the gross value of sales on the platform. This reduction from 1% to 0.1% aligns with the government's objective of following the money flow and also frees up the working capital of online sellers to invest in growth. Another encouraging news for the online economy is the government’s proposal for the public sector banks to use the digital footprint of MSMEs to assess their creditworthiness, moving away from external valuations. This is an insightful move to leverage the digital trail that online businesses provide and use that to benefit honest, tax-compliant online sellers. India’s sterling achievements in the space tech sector and its potential are anchored by the Rs 1000 Cr venture capital fund allocation for space tech development. The liberalisation of Indian space sector rules in June 2022 to allow private space companies to own and operate space assets has ignited a lot of growth in the sector. With support from government agencies,Indian space tech startupshave demonstrated and validated their technologies successfully. The next phase is about commercialisation, including selling to global customers. Cliched as it will sound, the sky is indeed the limit here. MSMEs are the lifeblood of India and thebudgethas a host of measures to support their growth. Collateral-free loans, new guarantee scheme for MSMEs in the manufacturing segment, SIDBI branches in MSMEs clusters are a boost for this vital sector. Anything that strengthens their standing has a multiplier effect on employment, tax collections and in supporting other businesses and individuals that support this sector. While our economic boom in recent decades has been led by the services sector, in the last many years, the government has spent a lot of effort and financial resources in strengthening India’s manufacturing sector with the aim of boosting the quantum of available jobs. PLI focused on vital sectors like pharma, semiconductors, telecom equipment, solar panels, and more, and an outreach to invite foreign capital and large corporations to choose India is bearing fruit. Global supply Chain diversification, friendshoring, relatively low labor costs, tax cuts and infrastructure spending have helped India’s manufacturing grow faster. All this emphasis is reflected in the strong performance of the manufacturing sector, which reported a 9.9% growth last year, as per the Economic Survey 2024 released earlier this week. Efforts to boost employment in the sector through incentives on EPF enrolment, focusing on the supply of dormitory-type comfortable and safe housing for industrial workers, are meaningful steps. Focus on increasing women’s participation in the workforce can certainly propel broader growth. A lot of the budget discussion was focused on augmenting the skill levels of India’s workforce and for good reason. With 1.44 Bn people, 2/3rd of whom are between 15-64 years and with a median age of 28.2 years, India has a massive current and emerging workforce, which is also one of the youngest in the world. Our workforce has decades of gainful contribution to make towards India’s growth and all efforts to improve the effectiveness of this segment will be hugely beneficial for India. What stood out to me was the government’s mission mode to enable internship opportunities with India’s top 500 corporates. A 100-Mn target over five years and the use of CSR funds to support this could be a game changer connecting promising candidates with deserving opportunities. Skilling and student loans, upgrading training institutes, aligning skill training with contemporary needs of the economy are super important initiatives that move our demographic dividend in the right direction. The budget continues the recent years of building up India’s physical and digital infrastructure, the benefits of which we are all enjoying. Nurturing an economy as large and a society as diverse as India is a mammoth task. Budget 2024 points the economy in the right direction and offers many specific initiatives to propel us towards our collective destiny of a Viksit Bharat.
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2024-07-23 21:25
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/fm-builds-on-economic-surveys-data-approach-in-budget-12776395.html
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FM builds on Economic Surveys data approach in Budget
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Budget bats for data integration.Related stories.
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Finance Minister Nirmala Sitharaman, in her Budget speech, built on the ground laid by the Economic Survey on integrating more datasets for decision-making. “For improving data governance, collection, processing, and management of data and statistics, different sectoral databases, including those established under the Digital India mission, will be utilised with active use of technology tools,” the finance minister said in the government’s maidenbudget. In another instance, the government in its big job push also talked about integrating the e-shram portal with other portals to provide a wide array of services. “Open architecture databases for the rapidly changing labour 19 market, skill requirements and available job roles, and a mechanism to connect job aspirants with potential employers and skill providers will be covered in these services,” she noted. The push is also evident in allocation to the Ministry of statistics and programme implementation, which witnessed over 20 percent increase in its budget for capacity development to Rs 531 crore from Rs 439 crore in the previous year. The economic survey released on Budget Eve highlighted the need for an updation of the base year of important indicators like the GDP, CPI, and IIP, which are used to estimate growth, inflation, and production, but also argued for the integration of other databases to help in decision-making. It had emphasised the need to build more indicators to track different indicators like private capex. “Survey data to help understand private sector capital formation at regular intervals will also help policy formulation,” it had said.
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2024-07-23 20:32
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/amid-push-for-employment-linked-incentive-schemes-pli-allocations-double-in-fy25-12776396.html
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Amid push for Employment Linked Incentive schemes, PLI allocations double in FY25
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Auto PLI gets a boost.
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Allocations to production-linked incentive (PLI) schemes rose to nearly Rs 12,500 crore in FY25 from just under Rs 7,000 crore spent in the previous fiscal, according to Budget 2024. The increase is led by the auto scheme, where the allocation jumped seven times to Rs 3,500 crore. Further analysis indicates a push for white goods PLI as well, with an outlay of Rs 298 crore from Rs 65 crore in the previous year. ACC battery’s allocation has increased to Rs 250 crore from Rs 12 crore spent in FY24 revised estimates. While allocations across the schemes remained unchanged from the interim Budget, textiles witnessed a push with the government budgeting Rs 45 crore, instead of the Rs 5 crore given in the interimBudget. Earlier this month, the government had reopened applications for the white goods scheme. The scheme has witnessed Rs 6,962 crore commitments from manufacturers since inception. The finance minister in her budget also announced an employment-linked incentive scheme to push for job creation. “These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers,” the FM had said. The Economic Survey released on the eve of the Budget talked about supplementing PLI efforts in job creation and talked about the need to create 7.9 million jobs annually until 2036.
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2024-07-23 20:15
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moneycontrol.com
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https://www.moneycontrol.com/news/business/stocks/budgets-duty-reduction-on-leather-imports-to-boost-demand-12776388.html
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Budget's duty reduction on leather imports to boost demand
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The cost reduction in leather is likely to be passed on to end-s as footwear companies..
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The government has reduced the customs duty on wet white, crust, and finished leather used in the manufacture of leather/synthetic footwear from 10 percent to zero. Leather is a key raw material for footwear manufacturers such asBata IndiaandMetro Brands, which have significant leather-based offerings (formal and office wear shoes). Leather as a raw material is mostly imported and the duty reduction is likely to reduce input costs for these companies. We expect about 5 percent reduction in leather footwear prices, considering that raw material forms about half of the overall costs. The cost reduction is likely to be passed on to end-consumers as footwear companies are facing subdued SSSG (same store sales growth). Bata posted flattish sales in FY24, while Metro Brands sales growth has moderated to 10 percent YoY in the same period. Price reductions will boost demand and would be positive for these companies.
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2024-07-23 20:05
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/where-is-indias-capex-going-12776375.html
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Where is India’s capex going?
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Defence corners significant proportion of capex push.Related stories.
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Although the finance minister kept the capital expenditure target unchanged from the interim Budget at Rs 11.11 lakh crore, it still marks a 16.9 percent increase from the previous year. This year’s allocation is Rs 1.6 lakh crore higher than last year's spend of Rs 9.5 lakh crore. A Moneycontrol analysis of 102 departments in theBudgetshows that five departments cornered most of it. From Rs 1.6 lakh crore, Rs 60,000 crore will go to the department of economic affairs as outlay for other general services, which will be assigned to respective ministries later, and another Rs 47,000 crore will be allocated to states. Of the over Rs 50,000-crore increase, defence, communications, railways, roads and police will account for over 90 percent of the spend. The defence budget is up 9.4 percent from the previous year, while telecom capex is 20.5 percent higher. Police services also got a capex push with a 32.8 percent increase in capital allocation. In absolute terms, defence and telecom capex is up by Rs 14,000 crore each, while Railways is up Rs 12,000 crore. Police capex is likely to be higher by Rs 3,300 crore in FY25. The biggest losers are law and justice, atomic energy and civil aviation, where capex is down Rs 2,400 crore, Rs 1,142 crore and Rs 672 crore from the previous budget.
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2024-07-23 19:39
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/budget-2024-privatisation-of-psus-will-happen-but-best-time-to-be-decided-says-fm-12776342.html
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Budget 2024: Privatisation of PSUs will happen but best time to be decided, says FM
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FM on banks.Related stories.
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The privatisation of public sector undertakings (PSUs) is very much on the table and the government is committed to carry it out as these are the decisions of the Union Cabinet, though the timing for it will have to be decided, Finance Minister Nirmala Sitharaman said on July 23. “Privatisation of PSUs, a cabinet decision, has to be honored. But timing has to be chosen by the government depending on what's the best time” Sitharaman said at a press briefing post the presentation of theUnion Budgetin the Parliament. Sitharaman said that the PSUs have been giving high dividends on account of good growth. The combined market cap of 81 listed PSUs, including banks and insurance companies, has grown by 225% in the last three years, on the back of higher government capex and better capital management, Sitharaman had said on May 8. Four public sector banks, including Canara Bank and Indian Bank, on July 10 gave dividends worth Rs 6,481 crore for financial year 2023-24. The Union Budget has not given a specific disinvestment target. It has estimated Rs 50,000 crore combined for asset monetisation and disinvestment. “PSU dividends have gone up. Non tax revenue mobilisation is happening,” Sitharaman said. “There is a holistic strategy to create value in PSUs,” Department of Investment and Public Asset Management secretary Tuhin Kanta Pandey said at the post-budget press conference. The 2021 Budget had announced privatisation of two public sector banks and an insurance company. Some of the PSU strategic sales, including Shipping Corporation of India and NMDC Steel, are at an advanced stage. The bids for privatisation of IDBI Bank are currently with the Reserve Bank of India for scrutiny. The bidders who have shown interest through EoI have to get two sets of clearances -- one from the home ministry for security clearance and the other from the Reserve Bank of India (RBI) for meeting the 'fit and proper' criteria. The government, along with LIC, is selling nearly 61 per cent stake in IDBI Bank and had in October 2022, invited bids from buyers. In January 2023, DIPAM said it had received multiple Expressions of Interest (EoI) for buying a stake in IDBI Bank.
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2024-07-23 19:25
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moneycontrol.com
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https://www.moneycontrol.com/news/business/stocks/this-pharma-stock-gets-a-budget-tonic-12776339.html
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This pharma stock gets the Budget tonic
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Budget has scrapped the basic customs duty on cancer drugs Trastuzumab Deruxtecan, Osimertinib, and Durvalumab.Related stories.
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In a key announcement, the Union Budget has scrapped the basic customs duty on cancer drugs Trastuzumab Deruxtecan, Osimertinib, and Durvalumab. The extant duty was 10 percent. One interesting beneficiary of this announcement isAstrazeneca Pharma India Ltd,which is owned by MNC AstraZeneca plc. These drugs are manufactured by Astrazeneca in the US/UK and are imported to India. The company launched Trastuzumab Deruxtecan in India in January this year for the treatment of breast cancer. As recently as March, the company received an approval from the Central Drugs Standard Control Organisation (CDSCO) to import for the sale and distribution of Trastuzumab Deruxtecan for two new indications. In its annual report, the company mentions that in the last financial year Durvalumab (Imfinzi) was adopted as a standard care for indicated patients with advanced Biliary Tract Cancer (BTC). The rapid adoption and growth of Imfinzi in BTC was the key driver for the overall growth of the brand in the FY24. While these are recent developments, Osimertinib (Tagrisso) is the company’s key offering for the treatment of lung cancer. Tagrisso is one of the Top Ten oncology brands in India as per IPSOS MAT Jun ’23 and continues to be the largest oncology brand by sales for AstraZeneca India. Reduced custom duties for the key drugs would help in better affordability for patients in India and should aid the company’s sales. It is notable that the company gets 62 percent of sales from oncology. However, the EBITDA margin at 14 percent is not impressive. Further, the stock is trading at an elevated trailing valuation multiple of 78x EV/EBITDA.
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2024-07-23 19:25
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/budget-2024-modi-has-heard-voters-nda-3-0-is-on-the-job-12776319.html
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Budget 2024 message - Modi has heard voters, NDA 3.0 is on the ‘job’
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Jobs, or the lack thereof, was singled out by many as one of the reasons why the BJP lost ground to the Opposition on June 4..Related stories.
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After the BJP found itself chastised by the voters in the recently concluded Lok Sabha election there was only one question that was left to be asked: Will Prime Minister Modi hear the voter’s message? The question has been significantly answered in the affirmative by Finance Minister Nirmala Sitharaman while presenting her 7th consecutive budget – a new record surpassing the 6 consecutivebudgets presented by Morarji Desai. Jobs, or the lack thereof,was singled out by many as one of the reasons why the BJP lost ground to the Opposition on June 4. Today, the BJP led NDA has taken a major step in focusing on the employment challenge by rolling out an Employment Linked Incentive (ELI) scheme. Under this scheme, the government has allocated Rs 2 Lakh crore for the ELI scheme to create jobs over the next five years. The scheme includes a direct benefit transfer of one month’s salary in three installments, up to Rs 15,000, to first-time employees registered in the Employees Provident Fund Organsiation (EPFO). Importantly, the scheme will incentivize additional employment in the manufacturing sector linked to the employment of the first-time employees. The incentive will be paid out up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee. Not just offering employment, but this will also give a reason to employers to formalize jobs which is much needed. In addition to the ELI scheme the government has announced an apprenticeship program along with an allowance to every apprentice. In other words, the government is virtually guaranteeing a first job. To ensure employability that government has allocated Rs 1.48 lakh crore to create job opportunities. This will bespent to develop infrastructure: 3 crore houses for urban poor, Amritsar-Gaya industrial corridor, several highways. The important point is that the funds for these employment generating schemes are being drawn from the surplus corpus provided by the RBI. In other words, they will not put pressure on the FM to miss targeted obligations towards ensuring fiscal prudency next year. Talking of which, the fiscal deficit stands at an appreciably conservative 4.9% for FY25. Many will of course be tempted to dismiss these initiatives as a short-cut. But this would be true if the government had not signaled its commitment to job creation by attempting to create the conditions for a consumption-led virtuous cycle elsewhere in the budget. After dithering for a while, the government has finally put some money in the hands of the middle class through a much-needed tax break under thenew tax regime. The FM stated that there would be a gain of Rs 25,000 as standard deduction and Rs 17,500 per annum on tax saved. This is a big plus as it will increase income and hence give people the option to consume. Higher consumption will boost profitability incentivising private expenditure in capital formation. Then there is also the move to abolish angel tax, and the tax rate being lowered for foreign companies topped by several rationalisations in customs duty. This again should boost demand for goods as they become more affordable. All in all, the budget signals that the Modi government has become more receptive to voter grievances and therefore that bit more accountable. This is can only be a win-win for voters and democracy.
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2024-07-23 19:14
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/no-pandering-smart-adjustments-and-boosting-urban-redevelopment-are-budgets-highlights-12776318.html
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No pandering, smart adjustments and boosting urban redevelopment are budget’s highlights
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Budget 2024 bears the firm imprint of the Prime Minister’s steadfast resolve to not let ‘political expediency result in bad economics.’.Related stories.
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The first budget of Modi 3.0, so eloquently presented by Finance Minister Nirmala Sitharaman, bears the firm imprint of the Prime Minister’s steadfast resolve to not let ‘political expediency result in bad economics.’ Consequently, all commentators expecting handouts for better electoral outcomes for the ruling party, in the coming three state elections have been again disappointed. There is not even one announcement in the budget that could be singled out as pandering to the voters’ whims and wishes. Yes, there has been the expectedfiscal attentiongiven to Andhra Pradesh and Bihar, but this also has been done with a degree of finesse so as not to derail the continued focus on fiscal consolidation. The majority of allocations to these two states will be arranged as additional resource mobilization with the help of multilateral development banks, presumably as soft interest loans underwritten by the central government. Smart move. Fiscal consolidation will boost private capex revival The fiscal deficit is targeted to be brought down to 4.9% from the earlier estimate of 5.1 percent. Clearly, the government decided not to splurge windfall receipts from the RBI which handed over a dividend income, double the amount assumed in the interimbudget. With lower fiscal deficit, and the expected larger supplies of foreign portfolio capital inflows, as India’s weight in international bond indices improves further, we may see a softening of bond yields. This will give the RBI needed confidence to reduce interest rates, which in turn will likely drive greater capital investment by corporates and also by households in real estate. The private investment cycle, already on the upswing, finally, will be reinforced. Four highlights Apart from resisting the ‘rewari’Âtemptation and, standing firm on fiscal consolidation, there are, among several others, four features that would stand out for positive acclaim for this budget. First, is the government’s admission that employment generation is a top priority and announcing direct measures to try andgenerate more jobs. The three schemes announced in the budget will incentivize the employers to take on a larger number of workers on their rolls as regular and not contract workers. It is to the credit of the finance minister and her team in North Block that they did not ignore a good suggestion even if the opposition may claim its parentage. Good economics should remain party agnostic. The second positive feature is the emphasis on raising productivity in the agriculture sector and announcing a comprehensive review of the agriculture research establishment. This should yield high returns because at present ICAR’s contribution to making our agriculture globally competitive is rather modest. But for me an even more important feature of the budget is the announcement for targeting an expansion of natural farming package to one crore farmers over the next two years. This will indeed be a game changer. A paradigm shift is in the making in the Indian agriculture sector, which will surely become an exemplar for other countries. Bravo. The third commendable feature of the budget is its focus on ‘creative redevelopment of cities.’ The budget recognizes that it will be cities, with their dynamism and talent pools, which will drive employment generation and economic growth. The targeting of 14 cities with populations larger than 30 lakh for transit-oriented development; urging the states to reduce stamp duties specially for women house owners; building one crore houses for the urban poor under the PMÂAwas Yojna; taking the PPP route to build dormitory style housing for industrial workers are all solid initiatives to give the cities their due in driving employment and growth. Finally, the measures announced for ensuring energy security while accelerating thetransition to ‘green energy’ are commendable. I am particularly enthused by the allocation for R&D for small modular nuclear reactors as they may be the best substitute for the base load currently provided by coal based power plants. However, I hope that the government will continue to look for an expeditious introduction of SMNRs through transfer of technology by global private companies, which may have already made substantial advances in this field. Promotion of pump storage for utilizing the seasonally variable power from solar and wind sources is a long awaited move. The encouragement for roof top solar energy with the provision of 300 units of free energy will also help the country minimize its carbon footprint as it increases its energy production by 2-3x in the coming decades. That large increase is required to bring the Indian consumer at par with the global average energy consumption. Features that could have been there Some features that I would have liked to see in the budget include, i) an ambitious target for privatization of public sector enterprises especially now that their market valuations are at sky high; ii) a target for asset monetization which will convert poorly and inefficiently utilized government assets to more productive use. At the same time, revenues from privatization and asset monetization will help reduce the public debt to GDP ratio and reduce the interest pay out, which today swallows as much as 40 percent of tax revenues. iii) a time-bound plan for reducing and eliminating the dysfunctional regulatory and compliance burden specially affecting the small and medium enterprises who don’t have the wherewithal to establish large government relations departments. And iv) the finalization of the labour codes that has been going on for the last several years. Hopefully, a time bound plan for this and for minimizing the ‘regulatory cholesterol’ will form a central part of the ‘Economic Policy Framework’ that is expected to be finalized in the next six months. Overall, a well-crafted budget with an eye on the longer term, during which India has to successfully address the substantial twin challenges of accelerating employment generation and reducing its carbon footprint while sustaining a 7-8% rate of economic growth.
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2024-07-23 18:49
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moneycontrol.com
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https://www.moneycontrol.com/news/economy/agriculture/nirmala-sitharaman-announces-implementation-of-dpi-for-agriculture-over-next-3-years-in-budget-2024-12775604.html
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Nirmala Sitharaman announces implementation of DPI for agriculture over next 3 years in Budget 2024
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Experts said that lending to the agriculture sector always needs a cautious approach as it has higher chances of turning non-performing assets (NPAs)..Related stories.
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Government has set out an ambitious plan to facilitate implementation of Digital Public Infrastructure (DPI) in agriculture over 3 years, bringing over 6 crore farmers under the formal land registry system, Finance Minister Nirmala Sitharaman said while presenting the Union Budget 2024 on July 23. "Buoyed by the success of the pilot project, our government, in partnership with the states, will facilitate the implementation of the DPI in agriculture for coverage of farmers and their lands in 3 years," Sitharaman said. As part of the project--namely Agri Stack--the government also plans to conduct digital crop survey for Kharif in 400 districts this year. "The details of 6 crore farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states," the finance minister said. The government had announced for development of DPI for agriculture as an open source, open standard and inter-operable public good for better targeting of reforms and subsidies for farmers. A critical part of the project was--Agri Stack--the central data base for farmers’ information, including their digital identity, holdings and crops under cultivation. The project has been in the pilot phase for the past few years among states. Once implemented, it would provide the relevant and verified data to identify genuine farmers (Farmer ID), pinpoint the farm location (Farm ID) through geotagging and track what crop they are growing (Crop Survey). The latestEconomic Surveyreleased on July 22 noted that the centralised database has now been fairly well developed in the major states and can provide the right tool through which the fertiliser subsidy may be better targeted. Agri Stack comes under the ambitious “Digital Agriculture Mission 2021-2025” of the Ministry of Agriculture. The launch of the mission was initially planned in 2021 but was delayed due to pandemic.
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2024-07-23 18:35
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/implications-of-budget-2024-announcements-on-indirect-taxes-12776287.html
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Implications of Budget 2024 announcements on indirect taxes
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Announcements on indirect taxes will help in ease of trade, removal of duty inversion and reduction in disputes..Related stories.
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The vision of ‘Viksit Bharat’ by 2047 has been the driving force for Finance Minister, Nirmala Sitharaman as she presented the budget 2024-25 which revolves around the theme to facilitate employment generation, skill development with prime focus on MSMEs. In line with the said vision, the budget kept its focus on 9 priority sectors which included manufacturing, services, energy security and infrastructure development. Thebudgetcontinues to promote ‘Make in India’ policy by supporting domestic manufacturing, deepening local value addition, promoting export competitiveness, and simplifying taxation. With this agenda, conditional exemptions/ concessional rates provided under Customs have been rationalized. The same will help in ease of trade, removal of duty inversion and reduction in disputes. Further, there have been certain sectoral specific exemptions and duty reductions in the field of medicine and medical equipment, mobile phones and parts, and critical minerals. To provide ease of doing business, the government has provided relief to the long standing ask of the industry in terms of rules of origin which have been relaxed by enabling acceptance of different types of proof of origin provided in trade agreements in order to align it with new trade agreements which provide for self-certification. Other such measures include increase in time-period from 3 years to 5 years, of duty free re-import of goods exported out under warranty from India as well as increase in duration from 6 months to 1 years for export in the case of aircraft and vessels imported for maintenance, repair and overhauling. The FM has emphasised in her speech that GST reforms continue to be a priority and has reinforced the government’s intention to further simplify and rationalize the tax structure and its endeavor to expand it to the remaining sectors. After the last GST council held in June 24, the current budget has implemented the recommendations that were announced therein by bringing in the changes in the finance act. Overall, the Budget is focussed on boosting the manufacturing sector in India and improve the ease of business as well. While the budget has set its agenda right to move towards the path of developed economy by 2047, there needs to be an alignment of incentives to create the necessary ecosystem to further boost manufacturing in India. (Inputs bySwati Saraf, Senior Tax Manager, EY.) Views are personal and do not represent the stand of this publication.
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2024-07-23 18:30
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/budgets-tax-cut-benefit-overshadowed-by-indexation-losses-12776278.html
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Budget's tax cut benefit overshadowed by indexation losses
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Mixed data for real estate investors.
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The Union Budget 2024 has introduced significant changes in the taxation of property, reflecting the government's efforts to diversify the investment landscape. One of the notable adjustments is the reduction of the Long-Term Capital Gains (LTCG) tax rates. While this reduction may be aiming to attract more investment into property and bring in tax rationalisation compared to equity asset class, removal of the indexation benefit is a dampener. Before thebudget, property sales were subject to a 20 percent LTCG tax rate with the indexation benefit. The new tax rate of 12.5 percent comes without the indexation benefit, which is a significant change. The removal of the indexation benefit is disappointing for long-term investors who have relied on it to mitigate the impact of inflation on their gains. Real estate investments, particularly which are long-dated, are expected to have higher effective capital gains tax on account of the new provision. The immediate impact of these changes is visible in the real estate sector. The stocks of major real estate companies such asDLF Ltd,Godrej Properties,Oberoi Realty, andBrigade Enterpriseshave dropped by 3-5 percent by the end of the day. While the reduced tax rate aims to attract investment, the elimination of the indexation benefit could pose challenges for long-term holders, potentially leading to higher tax liabilities and affecting investment decisions in the real estate sector.
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2024-07-23 18:25
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/why-this-infrastructure-stock-is-a-big-beneficiary-of-the-union-budget-2024-12776236.html
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Why this infrastructure stock is a big beneficiary of Union Budget 2024
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Huge allocation to Andhra and Bihar will be beneficial for NCC.
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The government has enhanced infrastructure allocations for the development of the eastern region with a focus on Andhra Pradesh and Bihar. The Central Government will provide funds under the budgetary allocation as well as facilitate financial support through multilateral development agencies. This will mean huge order inflows for the Andhra-based construction playerNCC. With project execution capabilities and experience in diverse projects, NCC will be a big gainer of the Union Budget’s focus on the eastern region. The Central Government will support the infrastructure development of Andhra’s proposed capital  Amaravati, the dream city of Chandrababu Naidu who is a key ally of the ruling NDA (National Democratic Alliance) regime. The government will provide Rs 15,000 crore in the current financial year for the development of the capital city with additional allocations expected in the future. Apart from the capital city, the government will focus on other infrastructure projects in Andhra Pradesh such as the Polavaram Irrigation project, and water, rail and road projects in other regions of Andhra Pradesh such as Kopparathy and Orvakal industrial nodes. Moreover, the government will provide for the development of the backward regions of Rayalaseema, Prakasam, and North Coastal Andhra. In Bihar, the government will support the development of road connectivity projects worth Rs 26,000 crore as well as a power project worth Rs 21,400 crore. New airports, medical colleges, and sports infrastructure will also be built in Bihar. Moreover, the overall development of infrastructure in other eastern states such as Odisha, Jharkhand, and West Bengal will provide order opportunity for NCC. NCC has a strong understanding of the eastern market (several projects are under execution) and will benefit from these developments.
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2024-07-23 18:09
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/startups-and-vcs-cheer-the-reform-and-rationalize-budget-12776284.html
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Startups and VCs cheer the 'Reform and Rationalize' Budget
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A long-standing ask of Indian startups has been to plug the capital gains differential between listed and unlisted securities..Related stories.
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The first budget of the new NDA government has set the tone for the current financial year. Budget 2024 has bestowed upon startups many of the key asks they had of the government. The changes proposed by the honorable finance minister will have a tangible impact on Startup India as well as investors in such assets. Removal of Angel Tax The biggest reform announced for startups was theremoval of “Angel Tax”. Introduced in 2012 as a means of preventing the circulation and generation of unaccounted funds, Section 56(20(viib) was dubbed “Angel Tax” as it primarily applied to angel and seed round investments by Indian residents. Non-residents were outside its purview. Angel tax sought to tax the difference between the price at which securities were issued by a startup to investors vs the fair market value of the securities. What was meant as an anti-abuse measure slowly became a tax-harvesting section as many startups began to get tax notices for their raises. The taxman’s penchant for comparing the actual performance of the company against the projections and taxing the difference was patently absurd. Even the government provides revised estimates everybudget, making this practice of the taxman repressive. Not adhering to projections is a commercial risk, not a taxable event. Theextension of Angel Tax to non-resident investments in 2023 saw startup funding plunge67% YoY to a 6-year low. Rather than the previous tinkering with angel tax seen in 2019 and 2023, the wholesale surgical strike against angel tax without any exceptions is a massive win. Though it only applies to funding rounds post April 1, 2024, the industry holds out hope for 2 more announcements: 1) Dropping ongoing Angel Tax cases against startups 2) No notices to startups who raised capital prior to April 1, 2024 But after 12 long years, Angel Tax is finally dead. Parity in Capital Gains A long-standing ask of Indian startups has been to plug the capital gains differential between listed and unlisted securities. Investments in unlisted securities are mainly primary capital infusions, which goes into new asset creation, hiring and sales. The stock market is the transfer of capital from one investor to another. Despite this, the tax rate on unlisted securities was twice the rate of listed securities. The tax rate for foreign investors was also twice the rate of domestic investors. Due to this, funding in startups has primarily been from foreign sources. Hence when the stock market was booming, starting funding entered a prolonged funding winter. The parity between listed and unlisted as well as resident and non-resident investors will boost startup funding. Even with the Cost Inflation Index removal, startup investors are far better off than the old regime. The Cost Inflation Index table as released by CBDT gives an average indexation benefit of 5.76% to resident Investors from 2001-02 to 2023-24. But The 37.5% reduction of LTCG on unlisted shares, from 20% to 12.5% is still a major boost to post-tax returns as compared to the erstwhile regime of indexation. Indexation benefits were not large enough to compensate for the unlisted tax rate which was twice the rate of listed securities. This Budget has cemented Prime Minister Modi as the “Startup PM of India” and these changes will fuel startup fundraising and expansion. The Government has been imploring the private sector to increase investments. These changes will ensure that startups lead the charge.
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2024-07-23 18:00
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/on-the-way-to-fiscal-consolidation-will-rating-upgrade-follow-12776249.html
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On the way to fiscal consolidation. Will rating upgrade follow?
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Nilesh Shah is the Managing Director of Kotak Mahindra AMC.Related stories.
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By Nilesh Shah, Managing Director of Kotak Mahindra AMC Budget 2024signals a strong commitment to India's macroeconomic story. It sets the fiscal deficit target for FY25 at 4.9 percent of GDP, lower than market expectations. In absolute terms, this amounts to Rs 16.15 lakh crore. For FY26, it aims to bring the deficit below 4.5 percent. These targets look credible. The budget keeps the nominal GDP growth rate at 10.5 percent, same as was projected in February 2024. This is a realistic assumption, despite an 8 percent real growth in the second half of FY24 and RBI's FY25 growth projections at 7.2 percent. Extra revenues from RBI have been prudently used by increasing total expenditure only by ~ Rs 50,000 crore, while keeping capital expenditure constant and the balance being utilised in reducing the fiscal deficit. As the bulk of the increase in expenditure outlay is in the form of asset creation (houses/ roads etc), the budget is non-inflationary and would provide comfort to RBI on the inflation front. We believe the actual fiscal deficit for FY25 could be lower due to higher tax collection on account of tax buoyancy. For FY26, the government needs to curtail its fiscal deficit by about Rs 30,000 crore -40,000 crore to ensure it's below 4.5 percent. This is achievable through better tax compliance or increased non-tax revenue and disinvestments. Also read:ÂFM Sitharaman stands firm on fiscal discipline; RBI dividends help in juggling post-poll necessities The budget's priorities are clear. It focuses on economic growth drivers. Special attention is given to empowering women, youth, employment, and skill development. A sum of Rs 1.48 lakh crore is allocated for these. There are new ideas too, like internships with top 500 companies. This shows a push for self-reliance over handouts. After a long time, we see some tax changes. Standard deduction for salaried people is up. Import duty on gold and silver is down. LTCG (Long-Term Capital Gains), STCG (Short-Term Capital Gains) tax rates for equities have increased. Revenue estimates are conservative. Given higher returns on its dollar investment, the RBI is likely to give a higher dividend next year too. Even accounting for additional spending, the government may have a Rs 20,000 crore-30,000 crore surplus left to reduce the FY26 deficit. If the actual fiscal deficit for FY25 is lower than 4.9 percent, then achieving 4.5 percent or even lower in FY26 would be simpler. Also read:ÂWhat Budget 2024 means for India Inc. The Finance Minister's approach is like an all-rounder in cricket. It steers the economy towards a possible sovereign rating upgrade, much like winning a championship. The budget's fiscal consolidation path looks achievable. It balances growth needs with fiscal prudence. The conservative estimates and focus on asset creation provide a solid foundation. If executed well, India could see improved fiscal health and a high chance of a sovereign rating upgrade in future.
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2024-07-23 17:46
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/jewellery-stocks-jump-14-after-govt-cuts-basic-custom-duty-on-gold-silver-12776273.html
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Jewellery stocks jump 14% after govt cuts basic custom duty on gold, silver
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Jewellery stocks jump 14% after govt cuts basic custom duty on gold, silver.Related stories.
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Shares of gold and jewellery retailers jumped 14 per cent on Tuesday after Finance Minister Nirmala Sitharaman said the government will reduce the basic customs duty on the yellow metal and silver to 6 per cent. The scrip of Tribhovandas Bhimji Zaveri surged 13.86 per cent to close at Rs 155.30 apiece, Titan Company zoomed 6.63 per cent to Rs 3,468.15, Rajesh Exports rallied 6.32 per cent to finish at Rs 316.35 on the BSE. PC Jeweller's shares jumped 5 per cent to settle at Rs 74.16 — also its upper circuit limit, Senco Gold climbed 4.75 per cent to Rs 987.55 and Kalyan Jewellers India rose 4.53 per cent to end at Rs 552.85 on the exchange. The 30-share BSE Sensex benchmark slipped 73.04 points or 0.09 per cent to close at 80,429.04. On Tuesday, the government slashed customs duties on a range of products, including gold, silver, and critical minerals, to cut input costs, increase value addition, promote export competitiveness and boost domestic manufacturing. The basic customs duty on coins of precious metals, gold/silver findings, and gold and silver bars was reduced to 6 per cent from 15 per cent. It was cut to 5.35 per cent from 14.35 per cent for gold and silver dore. On platinum, palladium, osmium, ruthenium, and Iridium, the levy was cut to 6.4 per cent from 15.4 per cent. The gems and jewellery exporters have been demanding to cut duties on precious metals to boost exports and manufacturing for the last several years. "My proposals for customs duties intend to support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation while keeping the interest of the general public and consumers surmount," Finance Minister Nirmala Sitahraman said. "To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent," she added. The minister also proposed to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction in disputes. "Customs duty on gold and silver has been reduced to 6 per cent that may lead to a decline in domestic prices and perhaps lift demand. "The existing duty on gold and silver is 15 per cent which comprises 10 per cent of basic customs duty and 5 per cent as Agricultural Infrastructure Development cess," Hareesh V, Head of Commodities at Geojit Financial Services, said.
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2024-07-23 17:42
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moneycontrol.com
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https://www.moneycontrol.com/news/business/markets/tata-consumer-announces-rights-issue-to-raise-up-to-rs-3000-at-rs-818-per-share-here-are-the-key-dates-12776244.html
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Tata Consumer announces rights issue to raise up to Rs 3,000 cr at Rs 818 per share: Here are the key dates
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The record date has been fixed on July 27, 2024, while the rights issue period will be between August 5 and August 19 of this year, the company statement said..
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Tata Consumer's board on July 23 announced a rights issue worth Rs 3,000 crore at Rs 818 per share, the company announced in an exchange filing. A total of 3,66,47,492 shares, aggregating up to Rs 2,997.77 crore, will be issued at a discount of 34.97 percent, the filing said. On July 23, the stock of the company closed 4.42 percent higher at Rs 1,258 on NSE. The record date has been fixed on July 27, 2024, while the rights issue period will begin on August 5 and end on August 19 of this year, the company statement said. The owner of Tetley tea and Ching's Secret noodles brands had reported a net profit of Rs 217 crore in the March quarter, declining 19 percent from Rs 269 crore in the year-ago period. Revenue jumped 8.5 percent to Rs 3,927 crore in the three-months period ended March 31, the firm had said in an exchange filing on April 23.
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2024-07-23 17:41
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/budgeting-for-the-future-while-maintaining-fiscal-prudence-12775950.html
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Budgeting for the future, while maintaining fiscal prudence
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Nirmala Sitharaman with budget documents as she arrives to present the federal budget in the Parliament in New Delhi, India, Tuesday, July 23, 2024. (AP Photo).Related stories.
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The Union Budget announcements revealed significant positives for the Indian financial sector, with relatively larger share of benefits for the marginalized segment of the population. The budget proposals had focused on the growth of the informal sector of the economy by announcing various measures of skill enhancement of youth, credit flow to micro, small and medium enterprises (MSMEs) and the income enhancement measures for the rural sector. Thebudgetary proposals shall augment the per capita income and further increase the financial inclusion. The proposals to incentivise domestic higher education though interest subvention and the incentives foraddition of jobs in the formal sectorcould also enhance the growth of formal sectors of the economy. All these announcements are expected to improve the bankability of the population and improve the credit flow through the formal channels in the economy over the medium term. Boost to MSME Sector Given the significant employment generated by the MSME sector and with a focus on alleviating the stress in the MSME sector, a slew of announcements was made to increase the credit flow to MSME sector. The key ones included the Government of India (GoI) guaranteed credit support to overdue MSME borrowers, enhanced limits for MUDRA loans and reduction in turnover limit of the goods buyers from MSMEs for the mandatory onboarding on receivable discounting platform. Further, new credit guarantee scheme for MSMEs in themanufacturing sectorfor machine purchases and adoption of revamped loan underwriting models by public sector banks for lending to MSMEs are other key announcements which shall improve the credit flow while providing resilience the asset quality of the lenders. To match the increased requirements of skilled labor for the industry, the announcements for youth skilling programme in collaboration with industry coupled with various financial incentives to provide formal employment to the youths are also positive, as they improve the formal jobs in the economy. The housing sector has a multiplier impact on the economy and the continued thrust on PM Awas Yojna (PMAY) with sharp increase in allocations reinforces the housing push by the government. The announcements related to encourage states to reduce stamp duty for purchase of house shall also reduce the cost of ownership of the house. In addition, the announcements for land-related reforms in both rural and urban areas including the digitalization of rural land records and urban bylaws will support mortgage underwriting for the lenders. The reintroduction of the CLSS scheme after a hiatus of one year, which will improve affordability for end-borrowers, augurs well for affordable housing finance companies, as they are likely to see further improvement in demand. Revision of Tax slabs Buoyed by the increasing adoption of the newindividual tax regime, the tax slabs have been revised, which will provide incremental relief provided to the income taxpayers. Supported by additional receipts, the overall gross and net borrowings for FY2025 have been further cut to Rs. 14.01 trillion and 11.63 trillion respectively. While the reduction is lower than our expectations, the announcements also augur well for the overall interest rates in the economy and not crowding-out the private sector fund raisings. The fiscal deficit, in line with our expectations, has been pared to 4.9% of GDP for FY2025 and reiterated at below 4.5% of GDP for FY2026. However, the new medium term fiscal consolidation path linked to reduction in debt/GDP ratio instead of a clear reduction in fiscal deficit/GDP ratio will remain monitorable. PSU Banks Ignored Given the strong performance of public sector banks as well as other government-owned financial institutions, there were no announcements related to capital infusion into these entities, which was entirely in line with our expectations. However, the three public sector general insurance companies getting overlooked once again for capital infusion came as a surprise, as these companies remain severely under-capitalized. With ambitious targets for insurance penetration over the medium term, a significant improvement in the financial health of these companies is the need of the hour. To further strengthen the lenders, the announcements related to appropriate changes to be brought in insolvency and bankruptcy code 2016 and steps to be taken for reforms and strengthening of tribunals, debt recovery tribunals, and appellate tribunals along with establishment of more tribunals shall provide impetus to recoveries and is positive for the asset quality and profitability of the lenders. With the heightened concerns on excess activity in derivatives trading, the increase in the securities transaction tax on future and options is not a surprise. Coupled with the increase in the capital gains tax rates with immediate effect, we can expect some moderation in the overall capital market activity levels.
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2024-07-23 17:32
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/ratio-of-defence-capex-spending-climbs-a-decadal-high-in-fy25-shows-budget-data-12776059.html
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Ratio of defence capex spending climbs a decadal high in FY25, shows Budget data
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Defence capex gets a push.Related stories.
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Defence capex spending scaled its highest level of Rs 1.72 lakh crore in FY25, shooting up 9.4 percent from the previous fiscal, according to Budget 2024 data. As a proportion of defence spending, capex was at the highest level of 27.7 percent in FY25, compared with 25.2 percent a year back. The finance minister, in her firstÂBudgetof the third straight Narendra Modi government, kept the defence capex unchanged at Rs 1.72 lakh crore. It had jumped 10 percent in FY24 to Rs 1.57 lakh crore. The government has set an ambitious target to more than treble the defence production to Rs 3 lakh crore by FY29 and raise exports to Rs 50,000 crore. Defence production had declined by a third to around Rs 75,000 crore in the previous fiscal compared with Rs 1.09 lakh crore in the previous year. Defence exports had garnered Rs 21,000 crore in FY24. Overall defence allocation at Rs 6.22 lakh crore was 0.3 percent down from Rs 6.24 lakh crore spent in the previous year. As a share of the GDP, India’s defence spending declined to 1.9 percent to its lowest level in a decade. The country was the fourth largest military spender in 2023, according to Stockholm International Peace Research Institute database, but its spending was less than a tenth of that of the US and just over a fourth of China’s. Pensions and revenue expenditure, which primarily pertains to salaries across the forces still accounts for two-thirds of spending, but the share has declined from 70.6 percent from in the previous fiscal. Pension also witnessed a dip in FY25, following the trend in FY24. In FY23, pension had jumped 31 percent to Rs 1.53 lakh crore on account of implementation of one rank one pension.
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2024-07-23 16:34
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/budget-2024-changes-will-boost-gift-city-ifscs-growth-trajectory-12775904.html
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Budget 2024 changes will boost GIFT City IFSC’s growth trajectory
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Taxation of Retail Schemes and ETFs set up in GIFT City IFSC is likely to attract more fund managers..Related stories.
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By Jaiman Patel Continuing from previousbudgets, a number of announcements has been made with respect to GIFT City IFSC. Retail Schemes and ETFs in IFSC have not yet taken-off due to the lack of a specific tax regime. Now, taxation of Retail Schemes and ETFs set up in GIFT City IFSC has been prescribed on same lines as Category IIII IFSC AIFs (Specified Funds). This will attract global fund managers to setup retail schemes and ETFs in IFSC, which would potentially lead to a more vibrant fund management ecosystem in IFSC. Further, in sync withapplicable tax rates, clarification has been made that no surcharge will apply on advance tax of IFSC based Specified Funds. Now, interest expense is disallowed beyond 30% of specified earnings where the borrowings are from a non-resident related party. Similar to Indian financial institutions, now IFSC Finance companies are exempted from such thin capitalisation (interest disallowance) related provisions. This will promote set up of Finance Companies in GIFT IFSC especially captive treasury units. Currently, where source of credits/funds is not explained, the same is subject to income-tax. Further, it is prescribed that source of such creditor/lender/shareholder is also required to be explained. This requirement (verifying source of source) was exempted for SEBI registered VCFs. Similar exemption has been granted to VCFs registered with IFSCA. Further, announcement has been made that necessary changes will be provided for an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a ‘variable company structure’. While, these are positive changes and will boost the IFSC ecosystem, a number of expected changes have not come through. These include tax framework for ODIs issued by non-banking units, tax framework for relocation of holding companies to IFSC, clarity on taxation of insurance proceeds received IFSC insurance company, etc. Jaiman Patel, Partner, GIFT City, EY India. Views are personal and do not represent the stand of this publication.Â
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2024-07-23 16:16
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moneycontrol.com
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https://www.moneycontrol.com/news/opinion/near-term-consumption-kicker-in-budget-2024-12775895.html
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Near-term consumption kicker in Budget 2024
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What will lead to a consumption boost this financial year?.Related stories.
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There’s very likely to be a bump up in consumption this year on account of the budget. This impact should show up in the next 12 months, which is distinct from the long-term impact of other budget proposals. The immediate impact on consumption will come through two channels. Fiscal support for jobs Annexures to Finance Minister Nirmala Sitharaman’sbudgetspeech showed the union government expects to spend Rs 1.07 trillion as fiscal incentives toenable creation of jobsfor new entrants into the market, and also additional jobs. In all 29 million jobs are expected to be created on account of these incentives. Job creation may not happen immediately, but if the incentives are released soon they will begin to create jobs this year and the experience will improve the employability of beneficiaries. These schemes, which span a direct transfer of Rs 15,000 as wage to subsidies to provide formal jobs, will create grounds for a sustained consumption boost. Jobs are the best way to push consumption. Income tax benefits The second channel to provide a consumption boost is likely to come from people who are already earning an income, but will now find themselves with a higherpost-tax disposable income. More than 66 percent of income tax payers are a part of the new tax regime. This regime has received benefits in the form of a higher standard deduction and a change in slabs which can put up to Rs 17,500 as extra post-tax income in the hands of tax payers. Another change in the budget is that the deduction on family pension has increased from Rs 15,000 to Rs 25,000. The tax and pension change together can leave extra income in the hands of about 40 million people. The cumulative impact of fiscal benefits for job creation and tax changes will lead to a consumption boost this financial year.
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2024-07-23 16:01
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moneycontrol.com
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https://www.moneycontrol.com/technology/meity-receives-52-boost-in-2024-25-budget-outlay-at-rs-21936-crore-article-12775845.html
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MeitY receives 52% boost in 2024-25 Budget outlay at Rs 21,936 crore
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MeitY received a more than 50 per cent increase in its estimate in this year's budget.Related stories.
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The Ministry of Electronics and Information Technology (MeitY), which is responsible for key schemes in the electronics manufacturing and semiconductor ecosystem, has received a 52 percent hike in its estimate for 2024-25, with the Union Budget allocating Rs 21,936.90 crore for this. The revised estimate for MeitY in 2023-24 stood at Rs 14,421.25 crore. The increase in allocation is in line with the gradual increase in MeitY's budget over the years. The majority of the increased allocation for MeitY is reflected in the expanded production-linked incentive (PLI) schemes for both semiconductors and large-scale electronics manufacturing and IT hardware. The estimate for the 'modified scheme for setting up of compound semiconductors/silicon photonics/sensors fab/discrete semiconductors fab and semiconductor assembly, testing, marking and packaging (ATMP)/outsourced semiconductor assembly and test (OSAT)facilities in India' was increased from Rs 1,428.84 crore in the revised estimate for 2023 - 2024, to Rs 4,203 crore in theUnion Budgetfor 2024-25. The central government increased the estimate for the 'Modified Scheme for Setting up of Semiconductor Fabs in India' from Rs 12.51 crore in revised estimate for 2023-24 to Rs 1,500 crore this year. Notably, the government has also estimated Rs 500 crore for the Rs 10,738-crore IndiaAI program, which aims to amp up the country's artificial intelligence infrastructure, in this year's budget. The ministry, apart from the semiconductor and hardware PLI scheme, is also responsible for public sector undertakings such as National Informatics Centre, Centre for Development of Advanced Computing, Indian Computer Emergency Response Team and so on. The budget estimate from C-DAC has remain unchanged at Rs 270 crore; Unique Identification Authority of India (UIDAI) was decreased from Rs 800 crore in revised estimate of FY23-24 to Rs 600 crore; and semiconductor laboratory's estimate has been increased from Rs 493 crore to Rs 540 crore.
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2024-07-23 15:22
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moneycontrol.com
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https://www.moneycontrol.com/news/business/earnings/mm-finance-q1-results-net-profit-jumps-45-to-rs-513-crore-12775993.html
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M&M Finance Q1 results: Net profit jumps 45% to Rs 513 crore
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The stock of the company gyrated after the announcement of the Budget by Union finance minister Nirmala Sitharaman on July 23. At 14:41 pm, the shares were trading at Rs 294.2, up 0.62 percent on NSE..Related stories.
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Mahindra & Mahindra Financial Serviceson July 23 posted 45.45 percent jump in net profit at Rs 512.96 crore in the first quarter of FY25 as compared to Rs 352.66 crore in the same period a year ago. In the March quarter, the company posted net profit of Rs 618.99 crore. The firm's revenue from operations jumped 19 percent to Rs 3,612.18 crore against Rs 3,034.89 crore, it said in a stock exchange filing. In the March quarter, the revenue stood at Rs 3,547.11 crore. At 14:41 pm on July 23, the company's shares were trading at Rs 294.2 apiece, up 0.62 percent on NSE. The company also appointed Bijoy Thaplial as chief businessofficer for leasing, partnerships and payments, formingpart of senior management personnel of the firm, according to the statement. His appointment will be effective from August 1. Meanwhile, the non-banking financial company posted assets under management (AUM) worth Rs 1.06 lakh crore against Rs 86,732 crore, growing 23 percent year-on-year. The net interest margin came in at 6.6 percent compared to 6.8 percent in the year-ago period. The firm's total income was at Rs 3,760 crore compared to Rs 3,125 crore, posting a YoY growth of 20 percent.
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2024-07-23 15:18
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/customs-duty-relief-for-mobile-phone-chargers-check-out-other-measures-12775781.html
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Customs duty relief for mobile phone, chargers: Check out other measures
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Union Budget 2024.
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Finance Minister has announced customs duty relief on mobile phone, mobile chargers, gold and silver, as well as shrimp feed in the Union Budget on July 23. Finance Minister mentioned that the last six years have seen a three-fold increase in production of mobile phones in India, and almost a 100-fold rise in exports of mobile handsets. With the aim to simply taxation for the common public, FM Sitharaman announced the following proposals on customs duty: Medicine & medical equipment: Three more medicines exempt from customs duty. Precious Metals: Customs duty on platinum reduced to 6.4% and on gold and silver down to 6%. Solar: There will be no extension of customs duty on solar energy-related parts. Shrimp Export: The Basic Customs Duty (BCD) on shrimp feed will be cut to 5%. Similar reduction and exemption in Customs Duty for leather raw materials were announced to enhance make exports of leather and textile more competitive. Rare Earth Minerals: Lithium, copper, and cobalt will be exempted from customs duty, along with 25 critical minerals. Mobile Phone: Customs duty on mobile phones and chargers will be reduced to 15%. There has also been a reduction in customs duty on mobile phone components (PCBA) and chargers. Metals: Basic Customs Duty on steel, copper on some products reduced. The Customs Duty structure will be put to comprehensive review over next six months to rationalise it and remove duty inversion, FM said in the Budget speech.
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2024-07-23 14:50
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/no-increase-for-pm-kisan-in-budget-2024-12769287.html
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No increase for PM-Kisan in Budget 2024
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Union budget PM Kisan.
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Contrary to expectations, the Finance minister Nirmala Sitharaman in Modi 3.0's maiden budget on July 23 kept the per farmer payout under PM-KISAN scheme by unchanged at Rs 6,000. Overall outlay under the Pradhan Mantri Kisan Samman Nidhi programme was kept at Rs 60,000 crore allocation under the interimbudgetand just over Rs 58,000 crore in FY24. One of the first decisions of the prime minister after assuming office was to release the 17th installment of PM-KISAN worth Rs 20,000 crore. A key demand by industry associations and farmers organisations in the pre-budget meetings with the finance minister was to increase per farmer benefit under the programme. Agriculture growth was tepid at 1.4 percent in FY24 compared with 4.7 percent in the previous year, despite the economy expanding 8.2 percent in FY24. Consumption growth has also been muted at 4 percent. The government has been hoping for a better monsoon this year to provide a boost to rural economy. But economists contend the higher food inflation can play spoilsport. Food inflation galloped to 9.4 percent in June compared with 8.7 percent, according to data released on July 12.
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2024-07-23 14:40
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moneycontrol.com
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https://www.moneycontrol.com/news/business/allocation-under-pmay-will-boost-affordable-housing-sundaram-home-finance-12776008.html
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Allocation under PMAY will boost affordable housing: Sundaram Home Finance
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Allocation under PMAY will boost affordable housing: Sundaram Home Finance.
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The huge allocation in both rural and urban locations under the Pradhan Mantri Awas Yojana credit-linked subsidy scheme is a big boost for the affordable housing segment, D Lakshminarayanan, MD, Sundaram Home Finance said on Tuesday. Lower stamp duty for women purchasing property is likely to drive the growth of more first-time home buyers, he said, reacting to theUnion Budgetpresented by Union Finance Minister Nirmala Sitharaman in the Lok Sabha. "Digitisation of land records will improve transparency, boost revenue compliance, and improve overall credit flow," he said. In a statement here he said, "the huge allocation in both rural and urban locations under the PM Awas Yojna credit-linked subsidy scheme is a big boost for the affordable housing segment."
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2024-07-23 14:27
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moneycontrol.com
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https://www.moneycontrol.com/technology/rs-1000-crore-vc-fund-for-space-economy-will-give-boost-to-entrepreneurs-pvt-players-in-space-chairman-pawan-goenka-article-12775977.html
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Rs 1,000-crore VC fund for space economy will give boost to entrepreneurs, pvt players: IN-SPACe chairman Pawan Goenka
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Pawan K Goenka- IN-SPACe.Related stories.
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Space regulator Indian Space Promotion and Authorisation Centre (IN-SPACe) Chairman Pawan K Goenka said that the government's plan of setting up a Rs 1,000-crore venture capital (VC) fund for the space economy would give a major boost to entrepreneurs and other private players in the ecosystem. "The announcement of a focused venture fund of 1000 crores will give a major boost to new entrepreneurs and NGEs in the space sector. At IN-SPACe, we look forward to supporting the growth of the space economy and nurturing an enabling ecosystem for NGEs," Goenka said in a statement. "The fund along with the existing policies for the space sector will fuel technological innovation and create a fertile ground for NGE's to thrive," Goenka added. Earlier in the day, while giving herBudgetspeech, Sitharaman said, "With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up." Space tech startups such as Pixxel and Agnikul Cosmos have also lauded the move. "At Pixxel, we are excited about the opportunities this fund will create to advance space technology and drive economic growth. While we recognise that even larger funds will be needed as the sector grows, this is an excellent start and a vital stepping stone. This initiative marks a significant step forward for India in the global space industry," Awais Ahmed, CEO of Pixxel Space said. Srinath Ravichandran, CEO of Agnikul Cosmos said, "Wonderful news for all of us in the sector. This will help larger players emerge out of India’s space startup ecosystem. This also shows that the Government is continuing to strongly back its vision of making India have a larger chunk of the global space economy."
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2024-07-23 14:26
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/mgnrega-gets-rs-86000-crore-for-fy25-12769284.html
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MGNREGA gets Rs 86,000 crore for FY25
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MGNREGA gets a substantial share.Related stories.
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Finance Minister Nirmala Sitharaman on July 23 kept the allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme unchanged at Rs 86,000 crore. The allocation stands 4 percent percent lower than the Rs 90,000-crore-plus that the government had spent on the job scheme last year. The MGNREGA allocation had crossed Rs 1 lakh crore during the pandemic year of FY21 and has since declined. In FY21, the spending was 80.8 percent higher than the initialbudgetallocation. AMoneycontrolanalysis had found that the government has outspent on the MGNREGA by 30 percent on average each year for the last decade. Between FY22 and FY24, the actual expenditure on the scheme exceeded the budgeted outlay by 34.2 percent on average, compared with 16 percent excess spending between FY16 and FY20. This is despite the fact that the share of spending on centrally sponsored schemes, which have a state funding component like the MGNREGA, have witnessed a decline over the last decade. The share of the central government’s spending on central sector schemes, which are 100 percent funded by the Union government and include subsidies and direct benefit transfer programmes like Pradhan Mantri Kisan Samman Nidhi Yojana, has risen over the last decade.
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2024-07-23 14:04
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/mgnrega-gets-a-higher-outlay-of-rs-86000-crore-in-budget-2024-25-12775946.html
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MGNREGA gets a higher outlay of Rs 86,000 crore in Budget 2024-25
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Budget 2024.
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Betting big on Bharat, the first full Budget of the third Narendra Modi government raised the allocation for the Mahatma Gandhi National Rural Employment Guarantee scheme for 2024-25 to match the revised estimate of RTs 86,000 crore for FY24. Initiated by the erstwhile Congress-led UPA government, MGNREGA has continued to be a significant part of India’s social security system. The scheme was allocated Rs 60,000 crore for FY24 and the revised estimate came in at Rs 86,000 crore. The scheme provides a legal guarantee for at least 100 days of wage employment to every rural household whose members do unskilled manual work.
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2024-07-23 13:53
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moneycontrol.com
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https://www.moneycontrol.com/news/economy/agriculture/budget-keeps-allocations-for-pm-kisan-fasal-bima-schemes-unchanged-despite-focus-on-farm-growth-12775901.html
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Budget keeps allocations for PM Kisan, Fasal Bima schemes unchanged despite focus on farm growth
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Union budget PM Kisan.
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Although the Union Budget for 2024-25 focused on the farm sector, Finance Minister Nirmala Sitharaman skipped raising the allocations for the PM Kisan and Fasal Bima schemes. PM Kisan is a flagship scheme of the Narendra Modi government with quarterly cash transfers of Rs 6,000 a year. The budgetary allocation for PM Kisan had remained unchanged in the InterimBudgettoo, although estimates suggested that the allocation of Rs 60,000 crore would fall short for 11.8 crore beneficiaries. Another flagship scheme of the Modi government, Pradhan Mantri Fasal Bima Yojana, had an allocation of Rs 14,600 crore in the Interim Budget. It too remained unchanged in the full budget on July 23. Experts have said that the allocation is conservative to meet the demand. The Modi government had promised to double farm incomes at the start of his tenure. The Indian agriculture is defined by small land holdings, unequal growth across crops, heavy monsoon dependence, and low infrastructure investment. The share allocated to the Department of Agriculture and Farmers Welfare as a proportion of the total budgeted expenditure has gone down over the last four years - from 4.4 percent in 2020-21 to 2.56 percent in 2023-24.
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2024-07-23 13:34
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/from-credit-support-to-more-mudra-loans-budget-2024-bats-for-msmes-12775850.html
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From credit support to more Mudra loans, Budget 2024 bats for MSMEs
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Finance Minister Nirmala Sitharaman.Related stories.
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Budget 2024 turned its attention to Micro, Small and Medium Enterprises (MSMEs) in a big way, as Finance Minister Nirmala Sitharaman announced a slew of measures ranging from a credit guarantee scheme to higher limit for MUDRA loans for the sector. "ThisBudgetprovides special attention to MSMEs and manufacturing,particularly labour-intensive manufacturing. We have formulated a package covering financing, regulatory changes and technology support for MSMEs to help them grow and also compete globally," Sitharaman said. Here is what the Budget has to offer to MSMEs : Credit guarantee scheme for MSMEs in manufacturing sector To facilitate term loans to MSMEs for purchase of machinery and equipment without collateral or third-party guarantee, the government plans to launch a credit guarantee scheme for MSMEs in the manufacturing sector. "The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to Rs 100 crore, while the loan amount may be larger. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reducing loan balance," Sitharaman said in her Budget speech. Follow our live blog for the latest on Budget 2024 New assessment model for MSME credit A new credit assessment model will be formulated by state-owned banks to assess MSMEs instead of relying on external assessment. They will also take a lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. It is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria and will also cover MSMEs without a formal accounting system, the minister, presenting her record seventh Budget, said. Credit Support to MSMEs during stress period The Budget announced a new mechanism to facilitate continuation of bank credit to MSMEs during their stress period, which pertains to circumstances beyond their reasons. "MSMEs need credit to continue their business and to avoid getting into the NPA stage. Credit availability will be supported through a guarantee from a government promoted fund," Sitharaman added. Mudra Loans The limit of Mudra loans will be enhanced to Rs 20 lakh from Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category. Enhanced scope for mandatory onboarding in TReDS To help MSMEs unlock their working capital by converting their trade receivables into cash, Sitharaman has proposed to reduce the turnover threshold of buyers for mandatory onboarding on the TReDS platform from Rs 500 crore to Rs 250 crore. The minister said the step will bring 22 more CPSEs and 7,000 more companies onto the platform and medium enterprises will also be included in the scope of the suppliers. SIDBI branches in MSME clusters SIDBI will open new branches to serve all major MSME clusters within three years and provide direct credit to them. As many as 24 such branches will be opened this year, enabling the service coverage to expand to 168 out of 242 major clusters. MSME Units for Food Irradiation, Quality & Safety Testing The Budget announced financial support to set up 50 multi-product food irradiation units in the MSME sector. "Setting up of 100 food quality and safety testing labs with NABL accreditation will be facilitated," Sitharaman said. E-commerce export hubs To enable MSMEs and traditional artisans to sell their products in international markets, e-commerce export hubs will be set up in public private-partnership (PPP) mode. This move is expected to making doing business easy for MSMEs by facilitating trade and export related services under one roof.
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2024-07-23 13:31
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moneycontrol.com
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https://www.moneycontrol.com/news/business/economy/fm-announces-increase-in-monetary-limit-for-filing-tax-litigation-in-tribunals-courts-12775823.html
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FM announces increase in monetary limit for filing tax litigation in tribunals, courts
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Sitharaman proposed to increase monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court to Rs 60 lakh, Rs 2 crore and Rs 5 crore, respectively..Related stories.
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Finance Minister Nirmala Sitharaman announced an increase in the monetary limit for departments to file tax litigations in tribunal, high courts and the Supreme Court. As a result of the increase, the government cannot pursue tax litigation if the amount in dispute is below the monetary limit, Sitharaman said in herBudgetspeech on July 23. She said "I propose to increase monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court to Rs 60 lakh, Rs 2 crore and Rs 5 crore, respectively." As a consequence of this, if the amount in dispute is less than that mentioned above, the department cannot file an appeal. This is a stark increase from the government's earlier policy with respect to direct tax litigation. Under the 2019 policy for direct tax litigation, appeals before the Income Tax Appellate Tribunal (ITAT) could not be filed if the disputed amount was less than Rs 50 lakh, and for appeals before high courts, it was enhanced to Rs 1 crore, while for special leave petitions (SLPs)/appeals before the Supreme Court, the limit was Rs 2 crore. Similarly, for central excise and service tax, the government can file an appeal in the Customs Excise Service Tax Appellate Tribunal (CESTAT) if the amount in dispute is a minimum of Rs 50 lakh, in HCs if it is Rs 1 crore and in the SC if its Rs 2 crore. For customs, the limit is Rs 5 lakh before CESTAT, Rs 10 lakh before HC, and Rs 25 lakh before the SC. FM Sitaraman further said: "With a view to reduce litigation and provide certainty in international taxation, we will expand the scope of safe harbour rules and make them more attractive. We will also streamline the transfer pricing assessment procedure." Vivad Se Vishawas 2024 announced: The finance minister in her budget speech announced the Vivad Se Vishwas Scheme, 2024 with a view to bring resolution to certain income tax dispute. This is the third Vivad Se Vishwas scheme overall and the second such scheme to bring down income tax disputes. In the 2023 budget, the government announced Vivad Se Vishwas 2.0 to settle contractual disputes between the government and private parties. In 2020, the government announced the first version of Vivad se Vishwas to reduce legal disputes related to income tax. As per the statistics available, more than 148,000 cases were solved with the recovery of about 54 percent of the amount under litigation. The scheme started on March 17, 2020, and closed on March 31, 2021. FM on direct tax litigation: Speaking of the government's efforts to reduce direct tax litigation, FM Sitaraman said: "While our concerted efforts to reduce pendency of appeals at various appellate fora are beginning to show good results, it will continue to engage our highest attention." The FM also announced deployment of more officers from the income tax department to hear appeals filed by assesses.
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2024-07-23 13:26
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moneycontrol.com
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https://www.moneycontrol.com/news/business/jsw-steel-ceo-jayant-acharya-says-mills-in-talks-with-govt-on-trade-measures-against-imports-12775766.html
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JSW Steel CEO Jayant Acharya says mills in talks with govt on trade measures against imports
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JSW Steel CEO Jayant Acharya says mills in talks with govt on trade measures against imports.Related stories.
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The Indian steel industry is in talks with the federal government for trade measures to combat rising imports particularly from China and Vietnam, JSW Steel Chief Executive Jayant Acharya told Reuters on Tuesday. India turned net steel importer in the fiscal year that ended in March and the trend continues with its finished steel imports scaling a five-year high in April and May, according to provisional government data. "Indian steel industry is in discussion with the government. I think there are measures which we would be requesting the government to take up," Acharya said, without elaborating on the possible measures being discussed. India's steel and trade ministries have been in talks over rising imports, Reuters had reported last month. EXPORTS, COKING COAL This year, JSW Steel expects its exports to be 10-15% of total sales, Acharya said, adding that international markets were "muted" as of now, while demand in India was "extremely strong". Separately, Acharya denied the company was in talks with Australian miner Whitehaven Coal for a stake in its Blackwater metallurgical coal mine. Whitehaven in January said it was exploring a potential sell-down of about 20% of Blackwater to global steel producers as strategic joint venture partners. However, JSW Steel continues to look for coking coal assets overseas, including Australia, and Canada, Acharya said. Acharya also said the company was open to importing coking coal from Mongolia but as of now there was "nothing on the radar". He also opposed a proposal from the trade remedies body against capping imports of low ash metallurgical coke, a steelmaking fuel. "Putting any kind of duties on materials which we don't internally have, doesn't make strategic sense," Acharya said. Last month, Reuters reported that India's steel ministry also did not favour limits on imports of met coke, citing risks to domestic output.
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2024-07-23 12:12
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moneycontrol.com
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https://www.moneycontrol.com/technology/nirmala-sitharaman-announces-rs-1000-crore-vc-fund-in-a-boost-for-space-economy-article-12775616.html
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Nirmala Sitharaman announces Rs 1,000-crore VC fund in a boost for space economy
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Indian Space Research Organisation's Chandrayaan 3 lander Vikram on the lunar surface.Related stories.
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Finance Minister Nirmala Sitharaman on July 23 announced that the government will set up a venture capital fund of Rs 1,000-crore for the space sector. "With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up," Sitharaman said while presenting the Budget for the financial year 2024-25. This announcement gains significance in the light of the Indian Space Research Organisation (ISRO's) recent achievements, including successfully landing Chandrayaan-3 near the Moon's South Pole, and space tech startup Agnikul Cosmos' successful launching of its maiden rocket. Other space tech startups such as Pixxel, Digantara and Piersight Space have also attracted VC investments, signalling a growing demand for homegrown space tech solutions. Industry body Indian Space Association (IsPA) which represents over 40 space tech startups, apart from bigger players such as Airtel, One Web and so on lauded the move. "We previously advocated for increased financial incentives to support the burgeoning space startups in the country. The announcement of a ₹1000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain. Additionally, the proposal for establishment of 12 industrial parks across India we hope will include the space sector as this will provide a substantial boost to the space and satellite manufacturing industry, which has long called for the creation of space parks," Lt Gen (retd) AK Bhat, director general of IsPA said. In a statement, Awais Ahmed, CEO of Pixxel Space said, "The announcement of a 1000 crore VC fund in the UnionBudget 2024-25 for the space sector is a groundbreaking development. This fund will provide crucial financial support to innovative startups and companies, enabling them to scale their technologies and contribute to India's space ambitions. Such a significant investment underscores the government's commitment to fostering a robust and dynamic space ecosystem." "At Pixxel, we are excited about the opportunities this fund will create to advance space technology and drive economic growth. While we recognise that even larger funds will be needed as the sector grows, this is an excellent start and a vital stepping stone. This initiative marks a significant step forward for India in the global space industry," Ahmed said. Srinath Ravichandran, CEO of Agnikul Cosmos said, "Wonderful news for all of us in the sector. This will help larger players emerge out of India’s space startup ecosystem. This also shows that the Government is continuing to strongly back its vision of making India have a larger chunk of the global space economy." Chaitanya Dora, CFO of Dhruva Space said, "As per our understanding, the Centre has constantly supported both Technology and Business Development across the Space sector. This year, the Budget synergises macro-economic expansion with targeted micro-economic interventions, catalysing the growth of the Space-Technology ecosystem, with a pronounced emphasis on bolstering private stakeholders within India’s burgeoning space sector. This strategic thrust aims to fortify India's stature as a leading Space Nation, propelling innovation and fostering a conducive environment for private enterprise to thrive in the Space domain." On July 22, the Economic Survey hailed India's burgeoning space sector growth while acknowledging challenges such as gaps in indigenous technology development and uncertain long-term demand. The Economic Survey, mainly observed challenges in the sector, when it came to the adoption of space technology, lack of technology needed for indigenisation, lack of competitive marketplace and so on.
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2024-07-23 12:10
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moneycontrol.com
|
https://www.moneycontrol.com/news/business/economy/budget-natural-farming-digital-land-record-12775642.html
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Budget rolls out farm priorities - natural farming, push for digital land records
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Our priority is to enhance productivity and resilience in agriculture, FM said during the Budget speech.
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Over the next two years, one crore farmers will be ushered into natural farming, Finance Minister Sitharaman said on July 23, as part of Centre's priority to enhance agriculture. "We plan to release 109 varieties of 32 crops and support natural farmers with certification and branding", FM Sitharaman said while presenting the firstBudgetunder Modi 3.0 government, which was her seventh. To ensure self-sufficiency in pulses and oilseeds, the government will focus on storage and marketing eco-system, FM added. Government will also establish 10,000 need-based bio resource centres. FM said the plan is also to develop a digital public infrastructure for agriculture in partnership with States, which will integrate 6 crore farmers and their land into a digital registry, with an allocation of Rs 1.52 lakh crore for agriculture and allied sectors. This is being updated
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2024-07-23 12:02
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moneycontrol.com
|
https://www.moneycontrol.com/technology/fm-sitharaman-announces-e-commerce-export-hubs-in-budget-2024-article-12775619.html
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Nirmala Sitharaman announces e-commerce export hubs in Budget 2024
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A report by economic think tank GTRI said that India's e-commerce exports have the potential to reach $350 billion by 2030.Related stories.
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E-commerce export hubs will be set up in the country under a seamless regulatory and logistics framework, Finance Minister Nirmala Sitharaman announced in her Budget speech on July 23. The commerce ministry's arm, Directorate General of Foreign Trade (DGFT), has already been working with the Reserve Bank of India (RBI) and concerned ministries, including the finance ministry, on several steps to promote exports through e-commerce medium as huge export opportunities are there in the sector. According to industry experts, in such hubs, export clearances can be facilitated. Besides, it can also have warehousing facilities, customs clearance, returns processing, labelling, testing and repackaging. "It will be a kind of bonded zone which will facilitate exports and imports of e-commerce cargo and to a large extent address the problem of re-imports because in e-commerce, about 25 per cent of goods are re-imported. These hubs are also kind of export-oriented units and the private sector will have to come forward for developing these hubs," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai toldPTIearlier. Recently, DGFT Santosh Kumar Sarangi said that there is a huge potential to increase exports through e-commerce medium. Last year, the cross-border e-commerce trade was about $800 billion and is estimated to reach $2 trillion by 2030. "We need to reorient our policies to facilitate an e-commerce ecosystem and have a larger pie in the e-commerce exports," Sarangi said, adding that China's e-commerce exports are about $350 billion, whereas India's shipments through online medium is only $2 billion. A report by economic think tank Global Trade Research Initiative (GTRI) said India's e-commerce exports have the potential to reach $350 billion by 2030, but banking issues hinder growth and increase operational costs.
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2024-07-23 11:51
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