QBiz: $350-bn Forex Reserves, GST to Hit Renewable Energy & More

Latest business stories from across newspapers.

4 min read

1. Reports Indicate GST Likely to Impact Renewable Energy Sector:ET

While India’s increased focus on renewable energy is generating much global interest, the latest findings reveal that the new GST regime could increase the cost of setting up renewable energy systems in the country by up to 20 percent. According to an Economic Times report, the Ministry of New & Renewable Energy (MNRE) is learnt to have shared the findings of the report with the Department of Revenue, requesting for an exemption.

The renewable energy sector currently enjoys various fiscal incentives like 100% tax holiday on the earnings for 10 years, concessional excise and custom duties and so on. All these incentives will come to an end in the new GST regime.


2. Forex Reserves Remain Steady at $350 Billion: Livemint

India’s foreign exchange reserves are enough to cover nearly 10 months of imports, according to the latest report on the management of forex reserves released by the Reserve Bank of India (RBI), Livemint reports.

As on 30 September last year, the import cover provided by the forex reserves rose to 9.8 months from 8.9 months at the end of March 2015, said the report. The reserves at the end of September stood at $350.29 billion as compared to $341.64 billion at the end of March.

3. SEBI Tightens Debt Investing Norms for Mutual Funds: BS

The Securities and Exchange Board of India (SEBI) has announced tighter norms governing mutual fund investments in debt securities. The regulator has reduced single security exposure, sector exposure and group exposure for debt schemes.

Business Standard reports the move comes within months of a crisis at JPMorgan Asset Management Company due to a payment default on debentures by Amtek Auto.The maximum a debt scheme can invest in the securities of a company has been reduced from 15 percent to 10 percent of the corpus. Single sector exposure for a scheme has been reduced from 30 percent to 25 percent.


4. EPFO Locks in High-Yield Debt, PSU Banks Like SBI, Canara Get Growth Capital: ET

State Bank of India, Allahabad Bank and Canara Bank are among more than half-a-dozen banks which have raised about Rs 12,000 crore in bonds to boost their capital from the Employees’ Provident Fund Organisation and their cost of borrowing may have reflected their poor financial health, reports the Economic Times.

It is a win-win for both banks and EPFO. Banks have got growth capital as they enter busy loan season (between Jan and March), while EPFO will get some long term yield pick-up.

NS Venkatesh, Executive Director & Chief Financial Officer, IDBI Bank

5. Indian Oil to Spend Rs 4,000 Crore on Paradip Refinery Upgrade: Livemint

Indian Oil aims to invest Rs 4,000 crore in upgrading its newest refinery in the eastern part of the country after the Central government decided to bring forward by four years the introduction of road vehicle fuels which are compliant with Euro VI emission standards to April 2020, according to a Livemint report. The 300,000 barrels per day refinery, which was commissioned last year, was designed to produce Euro IV and Euro V-compliant fuels.


6. Renewable Energy Sector to Get Rs 1-Lakh-Crore Boost from State-Run Lenders Like PFC: ET

State-run lenders to Power Finance Corporation and Rural Electrification Corporation are set to provide a boost of over Rs 1 lakh crore to the renewable energy sector as the two companies are looking to offer cheaper finance to low-risk commissioned renewable energy firms to help them replace costlier loans, reports Economic Times.

The move is aimed at utilising the cash that the two financiers will receive in lieu of loans lent to state-run power distribution companies.


7. With Rs 60,000 Crore in Dues, FCI Gets Only Rs 10,000 Cr: FE

Facing mounting outstanding dues in excess of Rs 60,000 crore, the finance ministry has provided Rs 10,000 crore to the Food Corporation of India (FCI) for carrying out operations of procurement and distribution of foodgrains.

According to a Financial Express report, FCI had approached the finance minister to provide Rs 20,000 crore as supplementary grant or as part of revised estimate under the food subsidy budget to meet the expenses in the last quarter of the current fiscal. But North Block provided FCI with only Rs 10,000 crore as ways and means advance.


8. RBI Governor Wants Employees to Put Even Rich Defaulters Under the Cosh: ET

Reserve Bank of India governor Raghuram Rajan called on the regulator’s staff to be relentless in pursuit of wrongdoers even if it meant holding the powerful to account. The Economic Times reports, Rajan has highlighted these in a 2,500-word new year message that touched upon many issues, and said RBI must take the lead in ensuring compliance.

It has often been said that India is a weak state. Not only are we accused of not having the administrative capacity of ferreting out wrongdoing, we do not punish the wrongdoer, unless he is small and weak.

Raghuram Rajan, Governor, Reserve Bank of India

9. Govt to Relax Mining Lease Transfer Rules: Livemint

The government plans to enact a law that will allow companies that received mining licences without having gone through the auction process to transfer these leases—a move that will make mergers and acquisitions (M&As) easier in the steel cement, and metals sectors, reports Livemint.

This law would help close Birla Corp’s purchase of two cement units in Chhattisgarh and Jharkhand from LafargeHolcim and UltraTech Cement’s acquisition of two Jaypee Group cement units in Madhya Pradesh by lifting the bar on the transfer of mine leases.

The mines ministry will table the Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016, meant to enable the transfer of mining leases that were originally granted without an auction in the budget session of Parliament.

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