1. Jaitley Says GST Cap Cannot be Mentioned in Bill: BS
In signs of no thaw with Congress on Goods and Services Tax (GST), finance minister Arun Jaitley on Wednesday described as preposterous the opposition party’s demand for putting a cap on tax rate in the constitution amendment Bill saying nowhere in the world tariffs are mentioned in the statute.
Arun Jaitley, Finance MinisterThree new propositions are now raised (by Congress) including a preposterous one that tariff must be mentioned in Constitution of India. Now if they can tell me that anywhere else in the world this happens that tariffs are mentioned in Constitution… So every time there is a drought, flood and you need to increase the tax rate, you have to first go to all states in India to change the tax rate. This is something which is just not possible.
Read more here.
2. Bear Hug Tightens: ET
India’s benchmark indices are within kissing distance of ‘bear market’ territory. With a 1.7 percent fall on Wednesday, the indices are now down 19.8 percent from their peaks touched in March last year. A 20 percent fall in the prices generally signals the onset of a bear market. India, however, would be among the last major markets to enter the bear zone, being better placed than the likes of Brazil, China, Hong Kong, Taiwan, France and Germany.
It was another turbulent day for the benchmark indices on Wednesday, with the BSE Sensex slipping below the psychologically crucial level of 24,000 before recovering to 24,062, down 418 points.
Read The Economic Times article here.
Also read on The Quint: Markets in Bear Grip: Should India Panic About Further Downturn?
3. Wall Street Slides Again as Oil Prices Drop
Wall Street stocks tumbled on Wednesday as US oil prices sank to fresh 12-year lows, but an afternoon rally significantly cut the session’s losses.
The Dow Jones Industrial Average lost 249.28 points (1.56 percent) at 15,766.74. The broad-based S&P 500 fell 22 (1.17 percent) to 1,859.33, while the tech-rich Nasdaq Composite Index dipped 5.26 (0.12 percent) to 4,471.69.
Collapsing oil prices and fears of a slowdown in China, the world’s second largest economy and a key market for US companies, have led the S&P 500 to drop 9 percent this year. In the past six months, the energy sector has fallen 26 percent.
Kim Forrest, Senior Equity Research Analyst, Fort Pitt CapitalThe fear is, ‘Is tomorrow going to bring more selling?’ People are not even thinking about today, they’re thinking about tomorrow.”
Read more here.
Also read on The Quint: USA Need Not Fret Over Cheap Oil, It Will Help Its Economy
4. Pay 12 Percent Interest on Income Tax Refund Delay Says Panel: FE
Tax refunds made more than six months after the returns are filed will come with an annual interest of 12 percent and those with delay by over a year will be paid interest up to 18 percent, if the government accepts the recommendations of a high-level committee.
Currently, the interest on refunds can’t exceed 6 percent, a “low rate” which, according to the committee, doesn’t fully offset the opportunity cost of money to the taxpayer, while serving as a “perverse incentive” for the taxman to delay refunds.
Read more here.
5. New Technology Could Disrupt Govt’s Manufacturing Push Says Anand Mahindra: ET
Will the Chinese slowdown lead to the automatic rise of India as a manufacturing superpower? It’s not inevitable, according to Anand Mahindra, chairman, Mahindra & Mahindra, India’s leading SUV and tractor maker. Indian government officials and economists have been projecting that higher costs and wages in China and the excess capacity built up there would help make India an attractive base for manufacturing.
But Mahindra, one of the panellists in a debate on ‘Transformation of Tomorrow’ at the World Economic Forum in Davos, said it will not be easy. And the reason is not government policy but the rapid emergence of radical new technologies like 3D printing, smart robotics and artificial intelligence that are already upending business models around the world.
Anand Mahindra, Chairman, Mahindra & MahindraIndians should be most worried. Will there be demand for the stuff that we will produce?
Read more here.
5. New Power Tariff Policy Supports Low Rates, Smart Tech: BS
The Union Cabinet on Wednesday approved amendments to the power tariff policy that aims to tighten regulations for setting rates and promote clean energy.
The policy, which is governed by the Electricity Act, was under revision since 2011. It has nearly 30 major amendments and a few minor ones, aimed at ensuring uninterrupted supply to all consumers by 2021-22.
- Aims to ensure uninterrupted power supply to all by 2021-22
- New rules for setting rates and to promote clean energy
- Microgrids for remote villages and small power plants near coal washeries
- Mandatory minimum purchase for clean energy
- Allows cost pass-through for use of imported and e-auctioned coal
Read more here.
7. Sebi Panel Suggests Reforms for Alternative Funds Industry: Livemint
An advisory panel set up by the capital markets regulator has suggested a slew of tax reforms and changes in existing laws to facilitate capital-raising by alternative investment funds (AIFs) and boost entrepreneurship.
The committee formed by the Securities and Exchange Board of India (Sebi) and headed by Infosys founder NR Narayana Murthy put out a report on Wednesday.
It addressed how to unlock domestic sources of venture capital and private equity and other funds for AIFs; enable and encourage onshore fund management in India; and reform the AIF regulatory regime to facilitate and optimise investments by AIFs.
AIFs, or money collected from high networth investors to invest primarily in unlisted securities and startups to promote entrepreneurship, more than doubled during the past year—outpacing traditional investment vehicles such as mutual funds and market-linked insurance products.
Read more here.
8. KKR, UltraTech Submit Bids for Jaypee Group’s Cement Assets: Livemint
KKR and billionaire Kumar Mangalam Birla’s UltraTech Cement have submitted initial bids for all the cement assets of Jaiprakash Associates, people with knowledge of the matter said.
JSW Cement, a unit of industrial conglomerate JSW Group, also submitted an offer earlier this month for the cement operations of heavily-indebted Jaiprakash, the people said, asking not to be identified as the information is private. The bidders have started due diligence, which could be completed by the end of February, according to the people.
Potential buyers have been asked to take on as much as Rs 20,000 crore of the cement business’s debt as part of the deal, sources said.
Read more here.
9. SC Has Rejected HZL Petition Twice, So Why Is It Being Entertained Again: FE
Though the Supreme Court has, as yet, not ruled against the government selling its residual stake in Hindustan Zinc (HZL), the case is getting increasingly curious. If the case is that HZL was sold without getting Parliament’s approval – HZL was created by an Act of Parliament – the fact is that, when the company was privatised in 2002, there was no court judgment saying that Parliament’s approval was required; that came only in September 2003 in the judgment about privatizing HPCL and BPCL.
So, the HZL sale was certainly not illegal at the time it was done, and what is being sought to be sold now are the shares of a private company where Parliament has no role whatsoever. Indeed, given how HZL’s mining capacity has risen from 3.5 million tonnes then to 10.3 million tonnes today, sales from Rs 1,470 crore in FY02 to Rs 14,589 crore in FY15 and profits from Rs 68 crore to Rs 8,178 crore, there can be little doubt that the company and the government have benefitted enormously from the privatisation.
Read this full opinion piece here.
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