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QBiz: PM Modi to Meet 200 Start-Up Entrepreneurs; New Metro Policy

The Quint’s roundup of the top business stories of the day.

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1. Narendra Modi to Meet 200 Start-Up Entrepreneurs

More than 200 start-up entrepreneurs and chief executives who have set up successful businesses from scratch will interact with Prime Minister Narendra Modi, on Thursday, on a range of issues including job creation, income growth and innovation at a session organised by federal policy think tank NITI Aayog.

Modi’s interaction with these ‘champions of change’ is aimed at forging a partnership between the government and young entrepreneurs from across key sectors of the economy to drive growth, a NITI Aayog official said on condition of anonymity.

The prime minister is expected to spend two-and-a-half hours with the entrepreneurs and chief executives, listening to their ideas and suggestions on subjects such as digital economy, health and nutrition, travel and tourism, hospitality, financial sector reforms, sustainable growth, education and skill development.

Source: Livemint

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2. Cabinet Approves Three-Minister Panel To Speed Up Strategic Stake Sales

The Cabinet Committee on Economic Affairs has approved a proposal to set up a panel of three ministers as an alternative mechanism to speed up strategic disinvestment at public sector companies.

The Department of Investment and Public Asset Management under the finance ministry proposed to set up a panel comprising Finance Minister Arun Jaitley, Road Transport and Highways Minister Nitin Gadkari and minister of the administrative department under which the stake sale of a company is to take place. The group would decide the quantum of stake to be sold, tranches through which it will be offloaded and the process involved.

The move gives more teeth to the Core Group of Secretaries on Divestment to take policy decisions for procedural issues involved in the sale. “The approval will help in speedy completion of strategic disinvestment transactions,” a statement from the Press Information Bureau said.

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3. Big Push For Private Players As Government Unveils New Metro Policy

The government has made public-private partnership mandatory for states to avail central assistance for new metro rail lines as part of its new policy to execute these capital-intensive transport projects.

“Private participation either for complete provision of metro rail or for some unbundled components (like automatic fare collection, operation and maintenance of services) will form an essential requirement for all metro rail projects seeking central financial assistance,” according to the metro rail policy cleared by the Union Cabinet on Wednesday.

An economic rate of return of 14 percent will now be the new criteria for approval, a shift from the existing norm of internal rate of return of 8 percent. The policy empowers state governments to set up permanent authorities for timely revision of fares.

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4. RBI Governor Pushed 0.25% Rate Cut, Transmission by Banks: MPC Minutes

RBI Governor Urjit Patel had opted for a moderate rate cut of 25 basis points, arguing that low food prices were unusual and vulnerable to upward pressures, said minutes of the last Monetary Policy Committee (MPC) meet released on Wednesday.

Patel had also opined that effective transmission of policy rate was key to non-inflationary growth and banks have still space to cut lending rates. The RBI Governor-headed six-member MPC had met on 1 and 2 August to decide this fiscal’s third bi-monthly monetary policy.

Based on the majority view at the MPC meet, the central bank reduced the key policy rate (repo) by 25 basis points to 6 percent, although the industry and other stakeholders were expecting more than that.

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5. Centre Extends Tax Incentives For Industries In North East, Hilly States

Manufacturing units in the north-east and hilly states that used to get excise exemption before the Goods and Services Tax will continue to receive the benefit for another 10 years.

The relief will be in the form of refunds as there is no provision of exemption under GST, said Finance Ministry Arun Jaitley after a meeting of the Union Cabinet on Wednesday.

As many as 4,284 establishments in Jammu and Kashmir, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim will gain from the decision. This will cost the exchequer Rs 27,413 crore in 10 years to 31 March 2027, Jaitley said.

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6. SEBI Allows Banks To Buy Stakes In Distressed Firms Without Open Offer

Markets regulator SEBI has notified relaxed norms for stake purchase in distressed listed companies by lenders, exempting them from making open offers for shareholders.

The relaxation will be subject to certain conditions, including shareholders’ approval of the stake acquisition by way of special resolution.

The decision of the Securities and Exchange Board of India comes in the backdrop of the government and the Reserve Bank of India stepping up efforts to tackle the menace of bad loans, amounting to over Rs 8 lakh crore.

The regulator has eased the norms for restructuring in stressed companies that are listed on exchanges as well as resolution plans approved under the Insolvency and Bankruptcy Code, SEBI said in a notification dated 14 August.

Source: PTI

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7. Infosys To Consider Share Buyback Proposal On 19 August

Infosys Ltd will, this week, consider a proposal to buy back shares as it seeks to deliver on an earlier commitment to reward shareholders.

The Vishal Sikka-led software services outsourcer will mull the buyback proposal at its board meeting on 19 August, it said in a stock exchange filing. The company has also closed the trading window with immediate effect and will resume trade on 22 August.

Infosys had promised to return up to Rs 13,000 crore to shareholders in the financial year 2017-18 from its cash surplus – either as a buyback or a dividend or a combination of both – after its January-March quarter earnings. It had also revised its capital allocation policy, saying that it will distribute up to 70 percent of its free cash flow.

Four large Indian software services providers, including Tata Consultancy Services, Wipro and HCL Technologies have already completed their buybacks.

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8. GST Base Looks Set to Be at Least 25% Wider Than Earlier Tax Regime

Sticking to the 1 July deadline for rolling out the goods and service tax (GST) seems to have paid off as far as the number of registered indirect tax assessees, referred to as the tax base, and the potential for a revenue boost to the exchequer are concerned.

The number of indirect tax assessees who have applied for registration or registered to pay GST is set to cross the 10 million mark soon, a 25 percent expansion from the 8 million assessees registered under the earlier tax system for paying excise duty, service tax and state-level value-added tax (VAT), said a senior finance ministry official who asked not to be named.

A wider tax base may lead to increased tax buoyancy, the official said. Tax collection is said to be buoyant when growth in tax receipts surpasses the economic growth rate.

Source: Livemint

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9. Pin Code 700001 and Shell Companies

Last week, Securities and Exchange Board of India (Sebi) named 331 listed companies as suspected “shell companies” – companies that exist for the purpose of financial manoeuvring – and asked stock exchanges to initiate action against them. As many as 141 of these were registered in West Bengal, followed by 53 in Maharashtra and 35 in Delhi.

A more granular look into their registered addresses shows that of the 284 companies for which pin codes could be ascertained, 37 were formed in just one of the over-19,000 pin codes in India – 700001 in Central Kolkata.

This area has long been known to be a thriving hub of lawyers and chartered accountants who specialise in creating so-called “shell companies”.

Source: Livemint

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Topics:  Reserve Bank of India   PM Modi   SEBI 

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