1. Budget May Rejig Duties to Boost Local Manufacturing
The upcoming budget could see another rejig of basic customs duties on select products as the government attempts to push local manufacturing. The commerce and revenue departments are in discussions on the matter and will take a final call closer to the budget, which is likely to be presented on 1 February.
Metals including aluminium, copper and steel, select chemicals and plastics are some areas in focus, as are certain consumption goods.
“There have been discussions,” said a government official privy to deliberations on the matter.
(Source: Economic Times)
2. Ahead of Council Meet, Centre Releases ₹35,298 Cr GST Compensation
Ahead of the 38th GST Council Meeting on Wednesday, the Centre has released one more tranche of the compensation cess – amounting to ₹35,298 crore – to States and Union Territories.
Earlier this month, Opposition-ruled States had upped the ante, demanding immediate release of dues from the GST Compensation Fund, which they said topped ₹50,000 crore.
When the issue was raised in the just-concluded Parliament session, Finance Minister Nirmala Sitharaman said that during the current year (2019-20), cess collected till 31 October was ₹55,467 crore. However, cess released to the States amounted to ₹65,250 crore. This meant ₹9,783 crore was released in excess of what was collected.
In 2017-18, total cess collected was ₹62,596 crore, while ₹41,146 crore was released to the States.
(Source: Hindu BusinessLine)
3.Max Pain for Spicejet as Boeing Likely to Delay Deliveries
SpiceJet Ltd is likely to face added financial pressure next year amid increasing uncertainty over deliveries of Boeing 737 Max aircraft that India’s second-largest airline has ordered, analysts said.
On Monday, The Wall Street Journal reported that Boeing may consider suspending production of 737 Max planes or reducing the output until clearances from the US Federal Aviation Administration’s (FAA) are obtained. Boeing’s 737 Max planes have been grounded since March following two fatal crashes in Indonesia and Ethiopia that killed a total of 346 people.
SpiceJet ordered as many as 205 of these planes in 2017, of which 13 have been delivered. The planes are, however, grounded due to the ongoing FAA safety review.
(Source: Livemint)
4. Auto Industry Needs to Grow by 14% to Meet $5 Trillion Economy Target: Pawan Goenka
Auto manufacturing will have to grow by 14 per cent if India has to achieve the $5 trillion economy target, Mahindra and Mahindra Managing Director Pawan Goenka said on 16 December. India has set an ambitious target of $5 trillion in the next five years and 12 percent of it is expected to be contributed by the manufacturing sector.
"$5 trillion economy target by 2025-26 means a CAGR of 8.5 percent. Within that, the target of manufacturing is $1 trillion, which means 12 percent from manufacturing and within manufacturing, automotive plays a significant role. If manufacturing has to grow 12-13 percent auto must grow by 14 percent," Goenka said during a panel discussion at the India economic conclave 2019.
He further said currently the auto industry contributes 7 percent of GDP which is good but when compared with the other major auto producing countries, which are all in double digits, the Indian industry's share is still lower.
(Source: Moneycontrol)
5. Foresaw Slump, Hence Previous Rate Cuts: Das
RBI governor Shaktikanta Das said the Monetary Policy Committee (MPC) had acted in anticipation of the economic slowdown before keeping interest rates unchanged last week. He also said an RBI survey of manufacturing companies suggested some signs of a revival. “We’ve acted a little bit ahead of time in terms of reducing our policy rates,” Das said.
“As early as February this year, the RBI saw that there is a growth slowdown. We saw that a momentum for slowdown is building up, so we started cutting rates this year. That time the market thought that the RBI had surprised the markets by going for a rate cut. But I think it was a timely action,” he added.
(Source: Economic Times)
6. Share Trades Will Need Upfront Margin Deposit From January
Come January, retail investors will have to maintain deposit money with their stockbrokers to buy or sell shares. As in the derivatives segment, market regulator SEBI has now mandated brokers to collect an upfront cash margin even for buying and selling of shares.
Institutional investors, including foreign portfolio investors and mutual funds, who treat equity trades as business transactions have been exempted.
So far, clients did not have to pay brokers an initial amount to deal in the cash market segment as the entire amount was collected on a T+2 (today+2) basis during settlement. But that convenience of payment has now ended with SEBI’s recent directive, experts told BusinessLine.
(Source: Hindu BusinessLine)
7. Tata Motors in Alliance Talks With Chinese Firms
Tata Motors Ltd, India’s largest vehicle maker, is in initial talks with a couple of Chinese automobile companies for a tie-up for its passenger vehicles business, three people aware of the development said.
These companies may either invest directly in Tata Motors or form a joint venture, the people said, requesting anonymity. Mint could not independently verify the names of the two companies. The collaboration could include joint development of technologies related to electric mobility, sharing of manufacturing capacities, development of engines and platforms and other aspects of the business, they said.
“The Chinese have invested in German, Swedish and French automakers and wisely. I’m sure they will see value in Tata Motors,” said Avik Chattopadhyay, founder of Expereal, a brand consulting firm. “It also gives a strategic investor the opportunity to provide ground-up electric mobility technology at the entry level.”
(Source: Livemint)
8. Carmakers Increase Year-End Discounts, Lure Buyers With Never-Before Offers
As the year draws to a close, car companies and their dealers are making a last-ditch effort in getting rid of their stocks offering discounts that are higher than ever seen before.
Maruti Suzuki, Hyundai, Mahindra, Honda, Tata Motors and Fiat Chrysler have increased discounts by Rs 10,000-Rs 1.77 lakh in December from a month earlier under different promotional schemes.
Companies were offering discounts starting at Rs 40,000 going up to Rs 5 lakh depending on the model and variant. Manufacturers are pushing out Bharat Stage IV (BS-IV) stocks, before replacing them with next-gen BS-VI variants. Existing BS-IV models will carry an even lesser value in the new year as the consumer is already more keen in buying the BS-VI variant.
(Source: Moneycontrol)
9. Pricier Vegetables, Pulses Push up Nov Wholesale Inflation to 0.58%
Wholesale inflation rose to 0.58 percent in November from 0.16 percent in October, according to a statement from the Ministry of Commerce and Industry.
It was, however, down from 4.47 percent in November 2018.
For consumers, the blow was softened by cheaper LPG and crude petroleum prices, but they had to shell out more for onion, pulses, vegetables and cereals during November.
An official statement said that the Wholesale Price Index (WPI) for all commodities for November rose by 0.10 percent to 122.3 from 122.2 in October.
In the overall index, the highest increase was reported in onion prices. The index representing onion inflation rose to 172.30 in November compared to November 2018. During November 2018, the index had reported a decline of 47.60 percent compared to onion prices in November 2017.
(Source: Hindu BusinessLine)
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