1. Finance Ministry Hopeful of GST Roll Out on 1 April
The Finance Ministry raised its pitch over the implementation of the Goods and Services Tax (GST) from 1 April, 2017 even as the Centre and states are yet to reach an agreement over the prickly issue of administrative turf over assesses and only two days are left for the winter session of Parliament.
Barely a week before the next meeting of GST Council on 22 and 23 December, the ministry in tweets and later through a press statement said: “Members of GST Council are participating in meetings with a very positive attitude and are working towards roll-out of GST as per the deadline.”
It said the GST Council has already taken a number of important decisions, paving the path for the roll out of the GST with effect from 1 April, 2017.
(Source: Business Standard)
2. Demonetisation Keeps A Lid On Wholesale Prices
Wholesale inflation eased for the third consecutive month, led lower by prices of food articles and minerals.
The Wholesale Price Index rose 3.15 percent in November as against 3.39 percent in October, according to data from the Ministry of Commerce and Industry. Economists polled by Bloomberg had predicted an increase of 3.10 percent.
At current levels, wholesale and retail inflation are running at par, having closed a significant gap that existed between the two inflation measures last year. Retail inflation stood at 3.63 percent in November.
(Source: BloombergQuint)
3. Coal India Reports Lowest Quarterly Profit Since Listing
Coal India Ltd (CIL), the world’s biggest coal miner, reported its lowest-ever profit since listing on account of higher employee cost and lower realisation.
Net profit for the three months, ended 30 September, dropped 77.4 percent to Rs 600.4 crore from Rs 2,654.4 crore a year ago, the Kolkata-based miner said in a stock exchange filing. Revenue fell 7.7 percent to Rs 15,645 crore from Rs 16,957.6 crore last year.
Analysts, tracked by Bloomberg, estimated a net profit and revenue of Rs 2,263.5 crore and Rs 16,614.2 crore respectively. The company reported earnings based on the newly-introduced Indian Accounting Standards, which is in line with International Financial Reporting Standards.
(Source BloombergQuint)
4. Note Ban May Help Realtors Get Higher Valuations for Rental Arms
Demonetisation could help developers of commercial properties such as DLF, K Raheja Corp and Phoenix Mills get higher valuation for their rental subsidiaries. These companies are looking to sell stakes in their commercial rental arms to raise around $3 billion from investors.
With interest rates set to go down, yields are coming down. I believe valuations of commercial properties will go up.V Jayasankar, head of equity capital markets and origination at Kotak Mahindra Capital Company
Jayasankar said the stake sale plans of real estate developers would progress as planned.
Demonetisation would not impact commercial properties though residential rates may drop. Commercial properties have blue chip clients and long leases and they are unlikely to get impacted.V Jayasankar
(Source: Business Standard)
5. Sensex Ends Lower by 95 Points; Fed Decision Awaited
The Sensex and Nifty ended lower as world stocks nudged lower, bond yields fell and a hush settled on the dollar, with investors certain the Federal Reserve will lift interest rates for the first time in a year on Wednesday but less so about what it may do in 2017.
The 30-share BSE index Sensex ended lower by 94.98 points or 0.36 percent at 26,602.84 and the 50-share NSE index Nifty closed down by 39.35 points or 0.48 percent at 8,182.45.
Among BSE sectoral indices, metal index was down 1.7 percent, PSU 1.65 percent, capital goods 1.00 percent and FMCG 0.82 percent. On the other hand, IT index was up 0.63 percent, realty 0.5 percent and TECk 0.36 percent.
Buying activity was witnessed in select counters on positive economic data as WPI-based inflation for November 2016 came in at a five-month low of 3.15 percent against 3.39 percent in the previous month.
(Source: The Hindu Business Line)
6. Higher Crude Prices Could Cost Indian Government Over Rs 1,00,000 Crore
The Organisation of the Petroleum Exporting Countries’ (OPEC) decision to cut crude production may cost the Indian government a whole lot more than had been anticipated earlier. With crude prices headed towards the $60 a barrel mark, the government may have no choice but to either bear the full cost of the hike, or at least a part of it, says JM Financial Institutional Securities.
The government will have to cut excise duty by up to Rs 5.6 per litre on petrol and Rs 5.5 per litre on diesel if it decides to keep prices constant, once crude prices reach $60 per barrel.
The government is likely to incur a revenue loss of Rs 80,550 crore, assuming crude is at $60 a barrel.JM Financial Institutional Securities
In case crude prices rise further to $65 a barrel, the total cost could go up to Rs 1,10,760 crore, that accounts for 0.7 percent of budgeted GDP, as excise rates will have to be cut by Rs 7.6 per litre for both petrol and diesel.
(Source: BloombergQuint)
7. April 2017: Earliest India Will Get Its Cash Back
We are 17 days away from Prime Minister Narendra Modi’s 50-day deadline to end the worst effects of the scrapping of 86% – by value – of India’s currency. In the chest-thumping, hand-wringing and controversy that has ensued since the announcement on 8 November, there has been an absence of facts on the question of re-monetising India.
An extrapolation of 2016 Reserve Bank of India (RBI) data on the capacity of Indian printing presses and currency distribution indicates that, at current rates, the Prime Minister’s deadline will not be met. Getting adequate money to banks and Automated Teller Machines (ATMs) nationwide will depend on how many bank notes the government wants to put back into circulation.
If the government wants to introduce Rs 9 lakh crore ($135 billion) – or 35 percent less money than it pulled out – it will take up to May 2017, and if it wants to reintroduce the entire Rs 14 lakh crore ($210 billion) that it withdrew, that could take up to August 2017.
(Source: BloombergQuint)
8. Double-Whammy for Luxury Goods Sellers: No Buyers, No Funders
Aashana Taneja, a housewife from Delhi, had booked a Tory Burch clutch from luxury site Darveys just days before the unexpected announcement of demonetisation. She paid an advance of ₹15,000 in cash for the ₹30,000 clutch, which was to be shipped from a New Jersey-based store. But, after receiving the product, she did not have enough cash to pay the balance amount. Most luxury sites sell goods on CoD (cash-on-delivery) mode; Darveys suffered a loss from the transaction as it had to re-ship the product back to the seller.
Our software system was not prepared, and we had to incur a loss due to ‘return-to-origin’ of the product. Almost 80 percent of our orders are cash-on-delivery, and orders like the one made by Aashana Taneja had to be reshipped and the import duties had already been paid.Nakul Bajaj, founder and CEO, Darveys
Most luxury goods are bought with cash, and demonetisation has led to 25-40 percent drop in sales for luxury sites such as Darveys, Luxepolis, Envoged and Confidential Couture.
(Source: The Hindu Business Line)
9. Hyundai to Drive in More Affordable Cars
Hyundai Motor India Limited, which has been stepping up its play at the premium end of the automobile market in India, is looking to launch several models in the mass segment to increase its contribution to parent Hyundai Motor Company’s global sales to around 15 percent over the next few years.
With overall sales – domestic as well as exports – of 6,43,270 units, Hyundai Motor India overtook Europe to emerge as one of the top three overseas bases for the Korean carmaker in 2015. Last year, India contributed 13 percent to the parent company’s global sales of 49,64,837 units.
The company is now planning multiple interventions in the mass segment to boost volumes further and strengthen its presence here over the next two to three years.
(Source: The Economic Times)
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