1. GDP to Face GST hiccups: Economists
The Goods and Services tax (GST) might adversely affect economic growth in the initial part of 2017-18 before providing a boost from the fourth quarter onwards, economists said.
They added retail price inflation would largely remain unaffected but inflationary expectations would persist as prices would rise for services such as premium air travel and air-conditioned hotels as well as goods such as aerated drinks, hybrid cars and fertilisers. These items have negligible weights in the consumer price index (CPI).
Rigid inflationary expectations would not allow inflation to decline significantly, though taxes paid on inputs would be reimbursed, which would have a damping effect on inflation, some economists said.
Source: Business Standard
2. Beginning of a Brand New Journey For India: Finance Minister Arun Jaitley on GST
The Goods and Services Tax (GST) may be a destination tax, but for India it will begin an altogether new journey, union Finance Minister Arun Jaitley said as the country rolled out its most comprehensive indirect taxes reform since Independence.
Jaitley said the GST would lower prices, make tax avoidance difficult, boost GDP and bolster government resources, allowing greater spending on the welfare of the people.
“There will be a check on inflation, tax avoidance will be difficult, rates will be lower compared to earlier, the country’s GDP will benefit, and the extra resources the states and the Centre will get, that will be used to serve the poor,” Jaitley said in his speech at the special function in Parliament’s Central Hall to roll out the historic tax reform on Friday.
Source: The Economic Times
3. Fertilisers Prices to Come Down Marginally After GST: Minister
Fertiliser prices will come down marginally with GST rate being slashed to 5 percent from 12 percent proposed earlier, a decision taken in the interest of farmers, Union minister Ananth Kumar said on Friday.
The reduced GST rate will bring down burden on farmers by Rs 1,261 crore, Chemicals and Fertilisers Minister Ananth Kumar told reporters.
“Prices of urea, DAP, MoP, and mixed fertilisers will come down marginally with reduction in GST rate from 12 percent to 5 percent,” he said.
Kumar claimed that the reduced GST rate on fertilisers will help in bringing prosperity in rural areas.
Source: PTI
4. SpiceJet ‘Not Strong Enough’ To Buy Air India: Chairman Ajay Singh
SpiceJet Ltd is too small an airline to acquire Air India, Chairman and Managing Director Ajay Singh told BloombergQuint, a day after its rival IndiGo expressed unsolicited interest in the debt-laden national carrier.
“We are not strong enough, or large enough to take on a large company like Air India,” Singh said at the launch of SpiceStyle, the e-commerce venture of the low-cost airline. The state-owned airline is a great asset which needs to be restored to a “glorious position in aviation”, he added.
The government on Wednesday gave its in-principle nod to sell a stake in Air India, which is currently saddled with a debt of over Rs 50,000 crore.
Read the full story on The Quint.
5. Govt Imposes 10% Customs Duty On Imported Mobile Phones, Parts
The government has imposed 10 percent basic customs duty on mobile phones and parts like charger, headsets, battery and USB cable with immediate effect to boost domestic manufacturing.
The 10 percent customs duty, according to an official statement, will be levied on imported cellular mobile phones and accessories such as charger, battery, wire headset, microphone and receiver, key pad, USB cable and other specified electronic goods.
Read the full story on The Quint.
6. RBI Report Warns of More NPA Pain, Sees Bad Loans Topping 10% by March 2018
The Reserve Bank of India (RBI) has warned that risks to the banking industry’s stability have worsened, with asset quality and profitability deteriorating further.
The latest edition of the regulator’s Financial Stability Report (FSR), released on Friday, said a severe credit shock is likely to impact capital adequacy and profitability of a significant number of banks.
The report forecast that the banking system’s gross bad loan ratio will rise to 10.2 percent of the total loan book a year later if economic conditions stay the same. Bad loans made up 9.6 percent of total assets as of March 2017.
Source: Livemint
7. Core Sector Growth up 3.6% in May From 2.8% in April on Energy Push
Core sector output rose by 3.6 percent in May, up from the 2.8 percent rise the previous month of April.
The improving pace of growth, counted year on year, was primarily led by the electricity sector supported by refinery products and natural gas.
Data released by the Commerce and Industry Ministry on Friday also showed that the eight core industries – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – had cumulative growth of 3.2 percent in the first two months of the current financial year.
This is less than half the 6.9 percent growth that was seen in the corresponding period of previous year of 2016-17.
Contributing 40 percent to the total industrial production, core sector output had dipped in April mainly due to tepid growth across sectors apart from steel, electricity and fertilizers.
Source: Business Standard
8. Finance Ministry Cuts Small Savings Rates by 10 Basis Pts For 2nd Quarter
In a big blow to small investors, the Finance Ministry has further slashed the interest rates on small saving schemes such as the Public Provident Fund (PPF) and the Kisan Vikas Patra (KVP) by 10 basis points.
The new rates, notified by the Ministry on Friday, will be effective for the second quarter of the fiscal, between 1 July and 30 September.
Accordingly, the PPF will offer a return of 7.8 percent as against 7.9 percent in the first quarter of the fiscal.
The immensely popular PPF yielded a return as high as 8.7 percent till 2015-16.
Source: The Hindu BusinessLine
9. Bharti Airtel's Deals With Videocon, Aircel Approved: CCI
The The Competition Commission of India has approved Bharti Airtel's acquisition of Videocon Telecom and Aircel Ltd's airwaves, according to details on the antitrust watchdog’s website.
The approvals for Airtel’s spectrum trading pacts with Videocon Telecom and Aircel, which were announced in March and April 2016, respectively, were sought in May 2017. Bharti Airtel had acquired rights to use Aircel's 4G spectrum in the 2300 Mhz band in eight telecom circles – Tamil Nadu, Bihar, Jammu & Kashmir, West Bengal, Assam, North East, Odisha and Andhra Pradesh – in a Rs 3,500-crore deal.
Source: The Economic Times
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