QBiz: Obama Backs India’s NSG Membership; Mamata to Support GST
All the leading business stories that you need to know.
1. US President Obama Signals Supports for India’s NSG Membership
India’s chances to enter the Nuclear Supplier Group (NSG) brightened after the US President Barack Obama indicated his support for India’s candidature. On Tuesday, during the visit of Prime Minister Narendra Modi, Obama backed India’s claim to join the 48-nation club that governs trade in commercial nuclear technology.
India’s entry into the NSG is being opposed by China, which has instead backed Pakistan’s membership to the group. Interestingly, the group was formed in 1974 in the response to the first nuclear test conducted by India.
Another key anti-proliferation grouping, the Missile Technology Control Regime (MTCR) agreed to accept India as a member.
Read full story on The Quint.
2. Mamata Banerjee to Support GST Bill: The Hindu
The stalled Goods and Services Tax (GST) Bill found a lifeline on Tuesday as West Bengal Chief Minister Mamta Banerjee lent her support. According to The Hindu Business Line, the TMC chief made it clear that she will stand by the Bill, in its current form.
The Chief Minister said the bill is a ‘positive tax proposal’. She directed the West Bengal Finance Minister Amit Mitra to ensure a quicker passage of the Bill. Banerjee has emphasised that her party will still continue to oppose the BJP politically.
Opposition to the Bill has come primarily from the Congress, which has sought a cap on the rate of the goods and services tax, removal of the proposed levy on inter-state trade, and the establishment of an independent dispute resolution mechanism. The Congress had first proposed the GST in 2006.
3. Telecom Commission Proposes 3 Percent Spectrum Usage Charge: The Hindu
The Telecom Commission on Tuesday has suggested a lower 3 percent spectrum usage charge (SUC) from the operator’s adjusted gross revenue (AGR) for all bands. According to The Hindu Business Line, the proposal, if approved, would be a major relief to telecom operators in the upcoming auctions.
The SUC will be calculated using a weighted average formula based on the total spectrum holding. However, the proposal will be limited only to the upcoming auction. The Centre will decide later on user charges for auctions to be held in future.
The proposal would bring down RJio’s SUC from 5 percent to 2.88 percent, Airtel’s from 4.90 percent to 3.74 percent and Aircel’s from 3.24 percent to 2.83 percent.
4. Wipro to Use Artificial Intelligence to Cut Out Work of 3,000 Engineers: Livemint
Wipro has decided to use its artificial intelligence platform Holmes in a bid to automate its fixed pricing projects. According to a Livemint report, the step will save up to $46.5 million for the company but relieve 3,000 engineers from software maintenance activities.
In fixed-price projects, a client and IT vendor agree on a price, with the outsourcing firm having the final word on the number of people to be deployed on a project. Wipro plans to generate $60-70 million in revenue by selling this platform to its new and existing clients in current financial year.
New chief executive officer Abidali Neemuchwala has set an ambitious target for Wipro of more than tripling its revenue growth to 12-14 percent for fiscal 2017. Wipro’s push to monetise Holmes and use it to save costs, and thereby arrest falling profitability, comes more than a year after it launched the platform.
5. DGCA to Rein in Flight Cancellation Charges: ET
India’s aviation regulatory body Directorate General of Civil Aviation (DGCA) on Tuesday, decided to rein in run-way flight cancellation charges. According to The Economic Times report, the DGCA has told the airliners that cancellation fee can’t exceed the basic fare.
DGCA held discussions with airlines on the new rules, which will be announced soon. Any booking site charges will also be included within the new limit.
Analysts believe that the airlines keep such charges high in order to boost their revenue as they can’t raise fares for fear of losing customers.
6. Amazon to Invest Additional $3 Billion in India, Says Jeff Bezos: ET
Amazon Chief Executive Jeff Bezos said on Tuesday the company would invest an additional $3 billion in India, boosting the company’s committed investment in the country to $5 billion, reports The Economic Times.
“I am pleased to announce today that Amazon will invest an additional $3 billion on top of the $2 billion investment we announced in 2014 to bring our total committed investment in India to over $5 billion,” Bezos told an event in Washington attended by Prime Minister Narendra Modi , who also met on Tuesday with President Barack Obama.
7. Uber Applies for Permit in Karnataka: BS
Uber on Tuesday applied for a license to operate in Karnataka. According to Business Standard, the app-based cab service provider has applied under the new rules governing app-based taxi aggregators, indicating that it will comply with policies on fare capping and surge-pricing.
Uber’s appeal against the new rules is pending in the Karnataka High Court. The company called the rules unconstitutional and without legislative backing.
An application for licence would mean that Uber has finally agreed to play by the local rules in India, a large market that it needs to capture. Uber has faced problems with the local governments around the world.
8. Every Company May Soon Have a Trade Union: BS
A trade union may become the necessity for management of every company. According to Business Standard report, if the proposed Industrial Relations Code is enacted, the companies will have to recognise a trade union that has the support of at least two-thirds of its workers.
A union with required support will be the representative body for workers and communicate with management in case of a dispute. In case no union has the required two-third support, the Bill allows the formation of a collective bargaining council where different unions can have their representatives.
The suggested Bill has been sent to Union Law Ministry for approval by the Labour Ministry.
9. Opinion: As RBI Pauses, Borrowers in for a Long Wait
On Tuesday, The Reserve Bank of India (RBI) chose to make no changes to its repo rate – the rate at which banks borrow short-term funds from RBI. Sharper-than-expected surge in inflationary pressures and uncertainty over achieving its 2016-17 inflation target of 5 percent, has led the RBI to pause this time around.
Radhika Merwin in her coloumn for The Hindu Business Line explains the impact of RBI’s decision on borrowers.
While any further rate cut by the RBI will pave way for banks to lower their deposit rates, much of the reduction in lending rates for now, will be leftovers of the pass through of the earlier (150 basis point) cuts in policy rate. With banks now pricing loans with reference to the new marginal cost of funds-based lending rate (MCLR), a further 10-15 basis points fall in MCLR cannot be ruled out, given that deposit rate decreases immediately reflect on the banks’ cost of funds. But any cuts in MCLR will not impact lending rates for existing borrowers immediately. This is because existing borrowers (for loans taken before 1 April) continue to be charged interest on loans based on the earlier base rate system.Radhika Merwin, The Hindu
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