QBiz: RBI-Govt Tussle; Petrol Prices to Change Daily From 15 June
The Quint’s roundup of the nation’s top business news.
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1. Gloves off in Spat Between RBI, Narendra Modi Government
Tensions boiled over between India’s central bank and the government of Prime Minister Narendra Modi, as Asia’s third largest economy faces its weakest growth in two years and record low inflation. Six months after setting up an independent committee to oversee interest rates, the government is openly expressing frustration that the Reserve Bank of India (RBI) chose not to ease monetary policy on Wednesday.
Economic conditions warranted a substantial monetary easing, said chief economic adviser Arvind Subramanian just hours after the central bank kept its benchmark repurchase rate unchanged as expected at 6.25 percent.
Source: Livemint
2. Petrol/Diesel Prices to Change Daily From 15 June
Petrol and diesel prices will be revised daily from 15 June onwards by the three Indian oil marketing companies in sync with global crude oil prices, officials said here on Thursday. Daily revision of Retail Selling Prices (RSP) has already been implemented on a pilot basis in Udaipur, Jamshedpur, Visakhapatnam, Chandigarh, and Puducherry from 1 May.
After the success of the experiment, Indian Oil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Ltd, and Bharat Petroleum Corporation Ltd have now decided to implement it across the country from 15 June. Presently, the oil marketing companies review and revise retail fuel prices after every fortnight on the basis of global crude oil prices.
Source: IANS
2.'Implement GST in Select Sectors to Test It First'
The Goods and Services Tax (GST) system should first be implemented in select industries and service sectors to test it before rolling it out on a full scale across the nation, a top tax lawyer said on Thursday.
According to him, there should be an extensive trial run so that glitches could be sorted out. Datar said it is not known whether the GST server can take the load as a huge number of returns will be filed on a single day across the nation by various business entities. He said he has no issues with the GST if there is 'one nation, one tax rate' but adding up various rates and calling it GST is not actually GST.
Source: IANS
4. RBI Builds Credibility With Rain Check on Rate Cut
For all the dovishness of the monetary policy statement, the fine print of the Reserve Bank of India’s (RBI’s) communication shows that rate cuts will be hard to come by. Markets being markets have already pencilled in one in August as bond yields fell five basis points.
Yes, the central bank lowered its inflation forecast for fiscal year 2018 and even pruned its forecast for gross value-added growth a bit. Deputy governor Viral Acharya said that accommodation would be looked at if data is conducive, which means the central bank is keeping the option open.
Source: Livemint
5. Birla Points to Jio Free Offers for 'Unprecedented Disruption' in Telecom
Billionaire Kumar Mangalam Birla has blamed rival Reliance Jio for causing “unprecedented disruption” in the telecom industry by offering free voice and data but hoped the sector would return to growth in 2017-18. Without naming Jio, Birla, in a letter to shareholders of Idea Cellular Ltd, said the flourishing telecom industry witnessed a 2 percent decline in annual revenues in the 2016-17 fiscal.
His commentary in the latest annual report of Idea Cellular comes at a time when the telecom industry is facing a squeeze on revenue and profitability on account of competition intensified by the entry of Reliance Jio, which is owned by billionaire Mukesh Ambani.
Source: Livemint
6. Government Banks Need up to Rs 95,000 Crore Capital Infusion: Moody's
Moody’s Investor Service on Thursday said India’s large state-owned banks will need up to Rs 95,000 crore of equity capital, highlighting a key challenge facing the country’s banking system, 70 percent of which is accounted for by state-owned banks. Moody’s expects the stock of bad loans at these banks to rise in the next two years, squeezing profits further.
Alka Anbarasu, vice-president and senior analyst at Moody’s said:
Source: Livemint
7. Cadila Healthcare Overtakes Lupin as Second Most Valuable Pharma Company in India
Cadila Healthcare Ltd overtook Lupin Ltd to become India’s second most-valuable drugmaker on Wednesday as investors, cheered by US regulatory approval for a generic drug produced by the firm, drove its shares to a lifetime high. Shares of the Ahmedabad-based company closed up 9.6 percent at Rs 537.25, off the intraday high of Rs 542.40, on a day the benchmark Sensex ended 0.3 percent higher at 31,271.28.
With a market capitalisation of Rs 55,000.57 crore, Cadila is now behind only Sun Pharmaceutical Industries Ltd, which remains the most valuable Indian drug firm with a market capital of Rs 1.23 trillion. Lupin Ltd has slipped to the third spot with a market value of Rs 52,128.57 crore.
Source: Livemint
8. Merger of HDFC Standard Life Insurance and Max Life Fails to Get IRDA Approval
The Insurance Regulatory and Development Authority of India (IRDA) has denied permission to the proposed merger of Max Life Insurance Co Ltd and HDFC Standard Life Insurance Co. Ltd (HDFC Life), saying the structure of the deal violates Section 35 of the Insurance Act, 1938, which bars the merger of an insurance company with a non-insurance firm.
In separate statements on Thursday, both Max and HDFC Life said IRDA has reaffirmed its earlier position on the deal in its current structure, following which both companies are exploring other options.
Source: Livemint
9. GST to Have Positive Impact on Gold Industry: World Gold Council
Even as consumers will face a slightly higher tax rate in gold, after the Goods and Services Tax (GST) is rolled out this July, the overall impact on the gold industry will be positive, World Gold Council said on Thursday.
"On 1 July, India's labyrinth of taxes will be replaced with a simple, nationwide GST. This is the biggest fiscal reform since India's liberalisation in the early 1990’s," WGC said in a report.
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