QBiz: Shortlist to Replace Rajan; Retrospective Impact for GAAR
The Quint brings to you a collection of the most important business stories from the previous day.
1. GAAR Can Still Have a Retrospective Impact: Livemint
Any investments made before 1 April 2017 will not come under the scrutiny of the general anti-avoidance rules (GAAR) but arrangements that predate the deadline could come under the tax department’s scanner if a tax benefit is claimed from next year, reports Livemint.
This means that existing arrangements that are aggressively structured to escape taxes in India, be it royalty payments, depreciation, interest payments or fees for technical services, could come under the tax department’s scrutiny irrespective of the date of entering into such arrangements if tax benefits continue to be claimed from financial year 2017-18.
2. Govt Shortlist to Replace Raghuram Rajan at RBI Down to Four: Livemint
The government has narrowed down its list of candidates to become the next governor of the Reserve Bank of India to four, while a new Monetary Policy Committee will also be chosen soon, reports Livemint.
The moves seek to ensure policy continuity after RBI chief Raghuram Rajan shocked markets 10 days ago when he announced he would not seek reappointment in September.
3. India Among Asia’s Least Exposed to Brexit Says Morgan Stanley: Livemint
According to Morgan Stanley, India’s economy, given its relatively low exposure to trade, will be among the least impacted in Asia by the Brexit developments, reports Livemint.
The short term impact of Brexit will likely be felt through the financial channel, that is, volatility in exchange rate and capital-market flows, Morgan Stanley economists including Chetan Ahya in Hong Kong wrote in a report, adding they expect the Reserve Bank of India (RBI) to intervene to reduce currency swings and take steps to boost cash supply should outflows of foreign money cause liquidity to tighten.
4. Seventh Pay Commission May Be Implemented Soon: Livemint
According to a report published in Livemint, The Union government is likely to soon announce the implementation of the Seventh Pay Commission that would hike the salaries and allowances for over 1 crore government employees and pensioners by at least 23.5 per cent.
Based on the panel’s report, headed by Cabinet Secretary PK Sinha, the Finance Ministry is preparing a Cabinet note and the issue may come up for approval by the Cabinet as early as June 29.
5. Companies with Exposure to Europe Like TCS, HCL, Maruti Suzuki Face Downgrade Risk After Brexit: ET
Amid uncertainty over the impact of Brexit, analysts have started downgrading the revenue estimates for some of the export-oriented companies from various Indian sectors. These companies are likely to be hit the most by Britain’s decision to quit the partnership with EU, reports The Economic Times.
Valuations are still on the higher side and risks to earnings have increased post Brexit, thus, we expect earnings cuts in automobiles, IT and metals sectors due to Brexit, and the related weaker global economic growth.Sanjeev Prasad, Senior Executive Director & Co-Head (strategy), Kotak Institutional Equities
6. Tata Advanced Systems Tying up with Bell Helicopter to Compete for $2-Billion Defence Deal: ET
In a bid to strengthen its position as a leader in the Indian defence aviation industry, Tata Advanced Systems is partnering with Bell Helicopter of the US to compete against the Mahindra-Airbus for a $2-billion naval chopper manufacturing contract, reports The Economic Times.
The contract for 100 utility helicopters to be operated from Aircraft carriers will be a ‘Make in India’ project. Tata will form a joint venture with US-based Bell to bid for the contract under existing foreign direct investment norms.
7. Rainfall to Be Heavy in July: Study on El NiñO
A study on El Niño has backed the India Meteorological Department’s (IMD) assessment that monsoon will shrug off the initial weakness and delay to deliver much heavier rainfall in July.
2016 could be classified as mid-summer decay case considering the El Niño decay and the high possibility of developing a La Niña, and so, good rainfall is most likely expected from July onwards.C Gnanaseelan, Author of Study
The study showed that when an El Niño decays in June, rains in June are deficient but good between July and September, reports The Economic Times.
This will come as welcome news as India over the past few years has suffered from low rainfall which has created drought-like situations in many parts of the country.
8. All Efforts Being Made to Get Black Money says Modi: FE
Hailing the government’s black money law as very stringent, PM Narendra Modi has said that all steps are being taken to ensure that generation of unaccounted money is curbed, reports The Financial Express.
Our first cabinet decision was on Black Money. At the G20 forum also this issue was raised for the first time and consensus was formed on it.Narendra Modi, Prime Minister
Modi went on to add that Mauritius, which was infamous for serving as a route for black money, was also blocked under the NDA’s regime as the government strives towards making sure that black money is not generated and doesn’t move out of India.
9. Commercial Banks Deposits Double to Rs 89 Lakh Crore During 2010-2015
Deposits with commercial banks almost doubled during 2010-2015 to Rs 89.22 lakh crore while their credit rose two-fold to Rs 68.78 lakh crore during the same period, RBI data showed on Monday.
Deposit-wise, the western region witnessed the highest amount mobilised by banks at Rs 26.85 lakh crore witnessed in 2015 as against Rs 14.49 lakh crore in 2010.
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