1. Indian Oil Overtakes ONGC to Become India’s Most Profitable PSU
Indian Oil Corporation (IOC) has overtaken Oil and Natural Gas Corp (ONGC) to become India's most profitable state-owned company. IOC, which has for decades been India's biggest company by turnover, posted a 70 percent jump in net profit to Rs 19,106.40 crore in the financial year ended 31 March 2017.
Billionaire Mukesh Ambani-led Reliance Industries retained the crown of being India's most profitable company for the third year in a row, posting a net Rs 29,901 crore in financial year 2016-17.
ONGC was long India's most profitable company but lost the crown to private sector Reliance and TCS a couple of years back. It has now been unseated as the most profitable PSU by IOC. In the previous 2015-16 fiscal, IOC had a net profit of Rs 11,242.23 crore as compared to ONGC's Rs 16,140 crore.
Source: BloombergQuint
2. With FIPB Gone, Investments Will Hinge on Inter-Ministerial Coordination
The dismantling of the Foreign Investment Promotion Board (FIPB), which served as the gatekeeper for foreign direct investment (FDI) into the country for the past 25 years, is more symbolic than substantive as over 90 percent of inflow into the country in recent years has been through the automatic route.
As symbols go, it might be an important one as it attempts to declare to foreign investors that they need not see India as a country of red tape. But for that to happen, the alternative mechanism for clearance of proposals in the 11 sectors that still need government approval has to be without glitches.
Finance Minister Arun Jaitley, in a media briefing last week, said a notification would be issued soon giving details about the Ministries/Departments that would be responsible for FDI clearances in the 11 sectors which need approval.
Source: The Hindu Business Line
3. Govt to Announce Electoral Bonds Scheme Soon: Jaitley
Finance Minister Arun Jaitley said on Sunday that the Centre would shortly announce the nature of the electoral bonds scheme. Addressing BJP workers he said:
This year, before the budget was being prepared, the prime minister had told us to take some steps in the budget to cleanse the political parties, and out of that the electoral bonds scheme was born. We are in the process of shortly announcing the nature of the scheme
In the budget 2017-18, the government had proposed amendment to the RBI Act to enable issuance of electoral bonds. Lauding Prime Minister Narendra Modi for his decisiveness, Jaitley said unlike the previous prime minister (Manmohan Singh), Modi has been decisive in taking steps with regard to demonetisation, surgical strike against Pakistan and the Goods and Services Tax (GST).
On GST, he said from 1 July onwards India will become a uniform market, where goods and services will flow freely across the country and curb evasions.
Source: PTI
4. ICAI Steps in to Check If Bad Loans Are Being Misreported by Banks
The Institute of Chartered Accountants of India (ICAI) has written to the Reserve Bank of India (RBI), seeking information on the divergence in bad-loan estimates by some lenders and the central bank. ICAI’s financial reporting review board (FRRB) will also review the 2015-16 financial statements of Axis Bank Ltd and Yes Bank Ltd, the accounting body said. Separately, an ICAI official said on condition of anonymity that ICICI Bank Ltd’s financial statement would also be reviewed.
ICAI’s disciplinary directorate wrote to RBI on 24 May seeking “specific information/details such as details of inspection by RBI with relevant documents to be made available to ICAI and further requesting them to file a formal complaint, if they so desire”, a spokesperson for the auditors’ body said in a written reply to Mint’s queries.
Source: Live Mint
5. Sebi Examining NSE Directors' Role in Algo-Trading Investigation
India’s market regulator has questioned whether directors of the National Stock Exchange of India (NSE) had failed in their fiduciary responsibility of maintaining market sanctity by allowing unfair access to some brokers in its co-location platform. Separately, the Securities and Exchange Board of India (Sebi) is also investigating whether any NSE officials had colluded with brokers and made illegal gains, two people aware of the matter said.
In show-cause notices issued to NSE and some of its officials, both current and former, Sebi asked why action should not be initiated against them for allegedly violating Stock Exchange and Clearing Corporation regulations and Prevention of Fraud and Unfair Trade Practices.
These show-cause notices have been issued under Section 11 of the Sebi Act, said one of the two people cited earlier. Section 11 pertains to the competent authority giving directions, in this case a whole-time member of Sebi.
Source: Live Mint
6. How Will GST Impact State Revenues?
The goods and service tax (GST) will be implemented soon. This is a value-added tax (VAT) system that subsumes a number of central and state taxes. How would GST impact state governments? We look at the finances of 12 large states. In a VAT system, each person in the value chain gets input credit on the tax paid by the previous persons. This acts as an incentive to ensure that the previous person has paid tax.
When VAT was introduced for sales tax a decade ago, states saw an increase in the tax growth rate (though there could be other factors such as higher nominal gross domestic product growth). While excise, service tax and sales tax allow for tax credits within their silos, GST integrates these and enables tax credit across these taxes.
Source: Live Mint
7.India Not Keen to Put E-Commerce Under FTA With Russia-Led Group
Prime Minister Narendra Modi and Russia President Vladimir Putin are expected to discuss a proposed free trade agreement (FTA) between India and the Russia-led Eurasian Economic Union (EAEU) at a summit meeting on 1 June amid signs that India may oppose including e-commerce in the pact. A joint feasibility study (JFS) group that has recommended launching negotiations for the FTA advocated including e-commerce as a deliverable.
The EAEU, which also includes Armenia, Belarus, Kazakhstan and Kyrgyzstan has demanded the creation of a common legal framework with India on e-commerce under the proposed FTA. But India holds that it is not ready to include any market access elements in view of the evolving nature of e-commerce laws and regulations. The JFS group maintained that switching from paper documents would increase security and transparency in supply chains and generate higher revenue.
Source: Live Mint
8. Reliance Industries Eyes 10% Market Share in Fuel Retail
Reliance Industries Ltd (RIL) is targeting doubling its market share in fuel retail in the next two-three years as it expands the business, two people aware of the plan said. RIL currently has a 5% share of India’s fuel retail market.
One of the two officials cited above said:
RIL is working on various plans to improve its market share in the fuel retailing segment. It is looking at all the markets it is not currently represented in, and these are areas other than urban markets.
This person spoke on condition of anonymity as he is not authorized to speak to the media. An RIL spokesperson declined to comment on the plan. RIL, which had a 12% market share in fuel retailing in 2005, saw its share slip to less than 0.5% in 2014, by when it had shut most of its fuel retail outlets due to spiralling crude oil prices.
Source: Live Mint
9. The Simple Insurance Plan That Is Complex
Insurance Regulatory and Development Authority of India (Irdai) has taken many steps to increase the distribution footprint of insurance products in India. And in order to get more feet on the street, the regulator has allowed the industry to make use of point of sales persons (PoSPs).
PoSPs are at the bottom of the pecking order of insurance distributors. Their qualification criteria are low, which makes it easy to hire them. In the life insurance space, Irdai has allowed PoSPs to sell simple products such as: term policies, guaranteed endowment and money back plans and annuities.
But simple and easy to understand plans should not be limited to PoSPs alone. With the industry going for open architecture, where distributors can sell products of more than one insurer, it is important to have basic products.
Source: LiveMint
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