1. Impact of Modi Govt's Campaign Against Cash on Informal Economy
It is now abundantly clear that, among businesses, it is the informal sector that has been the worst affected by demonetisation.
Firms in the informal sector operate in a cash economy — they buy their raw materials, pay their workers and sell their products in cash. It’s no wonder that when access to cash is a problem these businesses will suffer.
But the cash shortage will ease sooner or later. Does that mean it’s just a matter of short-term pain before it’s business as usual? Not really, not if the government is serious about pushing through its ‘less cash’ pro-digital payments agenda and ensuring that every transaction has an audit trail.
(Source: Livemint)
2. Railways Plans Highest Outlay of Rs 1.35 Lakh Crore for FY18
Indian Railways is likely to have its highest plan outlay of around Rs 1.35 lakh crore for the next financial year.
The national transporter plans to seek almost Rs 60,000 crore from the finance ministry as gross budgetary support and another Rs 25,000 crore from LIC as loan.
The remaining amount will be raised by the Indian Railways Finance Corporation (IRFC) bonds, internal resources and public-private partnerships (PPP).
(Source: The Economic Times)
3. Expect A Good Run For Non-Banking Financial Firms In 2017
With Indian equity markets trading at seven-month lows, non-banking financial companies have started to look attractive.
Five of the eight stocks in the S&P BSE 500 Index that could deliver returns of over 50 percent in next 12 months are NBFCs. These return potentials are calculated based on consensus price targets of analysts tracked by Bloomberg.
Manappuram Finance Ltd leads the pack, with analysts expecting the company’s shares to rise 99 percent. Bharat Financial Inclusion Ltd comes in second with a return potential of 78 percent. Dewan Housing Finance Corporation Ltd, Muthoot Finance Ltd, and Repco Home Finance Ltd are all expected to rally between 53 and 58 percent.
(Source: BloombergQuint)
4. Stock Markets Rattled by Demonetisation Impact, Tax Worries
Prime Minister Narendra Modi’s remarks over the weekend that people who profit from the stock market should pay more taxes punctured hopes of a post-Christmas relief rally, driving down key indices on Monday.
Traders and fund managers said a slowdown in consumer demand after the withdrawal of high-value bank notes and the expiry of derivative contracts on Thursday contributed to the downbeat investor sentiment.
BSE’s 30-share benchmark Sensex fell 233.6 points, or 0.9 percent, to close at 25,807.1 points. The broader 50-share Nifty index of the National Stock Exchange (NSE) closed down 77.50 points, or 0.97 percent, at 7,908.25 points, a seven-month low.
(Source: Livemint)
5. FPIs May Face up to 40 Percent Tax on Indian Investments
A government clarification on indirect transfer of shares seems to have unnerved foreign portfolio investors as they could end up paying up to 40% tax on their investments in the country’s capital markets.
As per the clarification issued last Wednesday, if the shares of an Indian company held by a fund constitute more than 50% of its total assets, and the value of the holding exceeds Rs 10 crore, indirect transfer of these shares abroad would be taxed in India.
Since then, many foreign portfolio investors (FPIs) and their custodians have been trying to gauge the exact impact of the government’s clarification on their returns even as government officials chose to shrug it off as unnecessary fears.
(Source: The Economic Times)
6. India Needs Lower Rates To Increase Tax Base: Arun Jaitley
Finance Minister Arun Jaitley on Monday said that a lower level of taxation that is competitive and compatible with global standards is necessary to broaden the tax base of the economy.
"...What you need is broader base of economy, for which you need lower level of taxation... You need to manufacture and provide services which are competitive in character, therefore your tax rates will have to be globally compatible," Jaitley said while addressing a gathering of a new batch of IRS officers.
Jaitley also said that payment of taxes is a legitimate duty of citizens and those who do not comply will have to face severe consequences.
(Source: BloombergQuint)
7. Airtel Gives Rs 816 Crore Network Update Order to Ericsson
Telecom operator Bharti Airtel has awarded an over $120-million (Rs 816 crore) network modernisation and expansion contract to Swedish gear maker Ericsson for Delhi, as the company looks to spruce up service and counter the threat from Reliance Jio Infocomm in the country’s most lucrative market.
The contract for 2G/3G/4G network follows Bharti Airtel’s recent acquisition of additional 10 MHz spectrum in the 2300 MHz band and 5 MHz spectrum in 2100 MHz band for Rs 1,430 crore and Rs 2,770 crore, respectively.
The new four-year contract, being initiated in this quarter, will bring these new airwaves into use for the telco to offer enhanced coverage and capacity, thereby improving the network performance in the national capital.
(Source: The Economic Times)
8. Tata vs Mistry Fallout: Opinion Divided on Whether Tata Group Needs Restructuring
As the battle between Tata Sons Ltd and its ousted chairman Cyrus Mistry moves from the boardroom to the courts, one question that has split stakeholders and external observers is whether the 148-year-old group needs to restructure itself to forge ahead.
Mistry, sacked as chairman of Tata Sons in October, has always insisted that governance reform is a must, and repeatedly pointed to his efforts to define roles played by each Tata entity — the trusts, the holding company and the operating firms— in the running of the group.
The Tatas, on the other hand, have maintained that the current structure adequately serves the interests of all stakeholders.
(Source: Livemint)
9. India, US Must Exchange Wish Lists to Iron out Issues: IACC
With Donald Trump set to take charge as the next US President, the Indo-American Chamber of Commerce on Monday suggested that India and the US should exchange wish lists to fast-track resolution of bilateral issues which are impeding accelerated investment flow.
Broad contours of the wish lists should include amicable settlement of IPR issues leading to earliest conclusion of a bilateral investment treaty (BIT), a totalisation agreement, a sound legal framework to expeditiously settle disputes, settlement of issues emanating from non-tariff measures and importantly, a fast solution to nagging visa problems.
(Source: PTI)
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