QBiz: Clampdown on Diesel Vehicles; Govt to Dematerialise Shares
Read the top business news from across the country on QBiz.
1. Nitin Gadkari to Auto Firms: Govt to Go After Diesel Vehicles Heavily
Indian auto firms were warned by the government on 7 September to switch to production of vehicles that run on non-polluting alternative fuels or risk being overtaken by inevitable policy change.
Automakers have to move to vehicles that run on electricity, biodiesel, ethanol and compressed natural gas “whether they like it or not,” Transport Minister Nitin Gadkari said.
“And I am not going to ask you. I will bulldoze it (through),” Gadkari told auto industry executives at an annual convention organised by the Society of Indian Automobile Manufacturers (Siam). “The government has a crystal-clear policy to reduce imports (of crude) and curb pollution.”
2. Government Plans to Dematerialise Shares of Unlisted Companies to Crack Down on Black Money
The government is planning to make it mandatory for unlisted companies to dematerialise their shares as part of the broader crack down on black money.
“It’s a large exercise. Initially, the plan is to cover public limited companies,” said an official with knowledge of the development. “Today it is optional – if an unlisted company wants to dematerialise, they can do it.” The Ministry of Corporate Affairs (MCA) is in talks with the Securities and Exchange Board of India (Sebi) depositories on the matter.
“Ministry of Corporate Affairs has informally held discussions with depositories on this plan and will be having its first formal meeting next week to discuss the time frame and other issues,” said another person close to the development.
Source: Economic Times
3. McDonald’s to Enforce Closure of All 169 Outlets as NCLAT Refuses Interim Relief
The Indian unit of McDonald’s Corp said it will shut all its 169 outlets in northern and eastern India after estranged partner Vikram Bakshi failed to win interim relief on a petition challenging the fast-food chain’s termination of their franchise agreement.
McDonald’s India Pvt Ltd announced its intention immediately after the National Company Law Appellate Tribunal (NCLAT) said it would hear Bakshi’s interim plea along with the main appeal scheduled for hearing on 21 September.
On 21 August, McDonald’s India terminated its franchise agreement with Connaught Plaza Restaurants Pvt Ltd (CPRL) for all 169 McDonald’s outlets in northern and eastern India, citing non-payment of royalties as the primary reason. Bakshi, the managing director of CPRL (a joint venture between him and McDonald’s India), was supposed to shut the restaurants within 15 days of termination (by 6 September).
4. Window for Small Businesses: Composition Scheme Under GST May Return
The composition scheme, which is applicable to specific categories of small businesses whose turnover is Rs 75 lakh and below and had been closed on August 16, may return soon.
With just about a million taxpayers opting for the scheme, the goods and services tax (GST) Council will consider reopening the window in its meeting on 9 September in Hyderabad, giving another opportunity to small players to avail of it.
“Smaller players reportedly faced challenges with respect to registration. Some wanted more time to evaluate their business models to comply with the requirements of the composition scheme. So, we want to give them another chance,” said a senior government official.
Source: Business Standard
5. Dollar Tumbles as Yen, Euro Rally on Irma, ECB: Markets Wrap
The dollar tumbled and safe havens like the yen and gold rallied as investors braced for the economic damage that Hurricane Irma may inflict on Florida, while the euro stayed stronger after the European Central Bank stopped short of attempting to jawbone it lower.
Futures contracts pointed to a positive open for Asian equity markets. The S&P 500 Index, Nasdaq Composite Index and Dow Jones Industrial Average barely budged on Thursday. The euro strengthened to the highest in almost three years after ECB President Mario Draghi cautioned on the common currency’s strength though didn’t expand on any action to address it. The yen hit its strongest since November. Ten-year Treasury yields fell toward 2 percent.
Draghi said he’s watching the euro’s gains as policy makers edge toward settling the future of their bond-buying program. The euro’s surge – more than 14 percent against the dollar this year – was reflected in a downgrade to the ECB’s inflation outlook, though Draghi said economic growth remains solid.
6. BP, Reliance Close in on India Gas Field Near Missile Test Site
Billionaire Mukesh Ambani’s Reliance Industries Ltd and its partner BP Plc are reviving investment plans for a gas block close to a military missile launching facility in the Bay of Bengal.
Reliance and its British partner are preparing a new development plan for the gas-rich NEC-OSN-97/2 block, also called NEC-25, in the Mahanadi basin offshore eastern India, according to Atanu Chakraborty, head of India’s oil regulator Directorate General of Hydrocarbons. Work in the block was hindered partly by objections from the defense ministry for its proximity to the Chandipur missile test base.
“They are already in discussion with us on the technical aspects of their field development plan,” Chakraborty said in an interview in London. “Reservoirs are being assessed, so that they make the final decision.”
7. OYO Raises $250 Million From SoftBank Vision Fund, Others
Hotel aggregator OYO (Oravel Stays Pvt Ltd) has raised $250 million in a funding round led by SoftBank Vision Fund, in a much needed equity infusion that spells the Japanese investor’s continued interest in the space and a renewed confidence in the company it entered in 2015.
The series D investment gives OYO growth capital to scale up its network and invest in its recently launched effort to create premium, self-managed hotels under the Townhouse brand. It also gives OYO the muscle to fend off competition from large online travel agencies MakeMyTrip and Goibibo, which joined forces in October last year.
A part of the capital is also likely to be invested in expansion in South-East Asia. OYO entered Malaysia and Nepal in January and April this year, respectively.
8. Monsanto Exits Cotton Seeds Business in India
Monsanto is selling its branded cotton seeds business in India to Hyderabad-based Tierra Agrotech, although the US biotechnology major would remain invested in farming segments such as corn seeds, crop protection, vegetables and Bollgard II technologies.
Industry sources said the exit from India, where Monsanto pioneered the use of genetically modified (GM) technology, will help secure regulatory approval for Bayer’s acquisition of the US company. The global majors have earlier announced sales of businesses in other markets to address regulatory concerns over the merger.
Source: Economic Times
9. Post-Demonetisation Economy: Exorcising DeMo's Demons
From the GDP data now available, one can estimate that demonetisation reduced GDP growth by about 1.2 percent in the first half of 2017. This estimate accounts and adjusts for the decelerating trend in quarterly GDP growth since mid-2015-16. This GDP growth deceleration is due to many factors.
The negative effects of demonetisation on GDP are largely over. Because of fears of getting shortchanged on input credit from GST, there was an inventory drawdown in June, and a possible slowdown in production even before that. Both these will be offset in August and Q2 of 2017-18.
Source: Economic Times
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