QBiz: TRAI Defers Scrapping IUC Levy; Markets at Record Highs

Here are the top business stories of the day.

5 min read
Vodafone Idea and Bharti Airtel. Image used for representational purposes.

1.RBI to Steadily Tighten NBFC Regulations: Das

The Reserve Bank of India (RBI) is looking to steadily tighten regulation of non-banking financial companies (NBFCs) without causing any disruption to the current recovery of the sector, RBI governor Shaktikanta Das said.

“NBFC regulation is not as strong as (in) banks. We are now making changes to the sector. We have mandated that there should be a chief risk officer. We have also mandated that NBFCs should have liquidity coverage ratio (LCR) requirement to take care of asset-liability (ALM) mismatches.

There are a few other regulatory measures, which are under consideration and we will be bringing (them) in steadily. These new regulations have to be brought in a non-disruptive manner,” Das said in an exclusive interview to Mint on Tuesday.

(Source: Livemint)

2. Relief for Voda Idea, Airtel as TRAI Defers Scrapping IUC Levy

The telecom regulator on Tuesday deferred by a year a plan to scrap a levy charged by operators for handling incoming calls from rival networks, offering relief to older telcos that generate a part of their revenue from interconnect usage charges (IUC).

The Telecom Regulatory Authority of India (Trai) will now scrap IUC from 1 January 2021 instead of next month. As a result, operators will continue to earn 6 paise a minute for every mobile call they receive on their networks till 31 December 2020.

The regulator has changed its stance about two years after it decided to scrap the levy from 1 January 2020, a move that older telcos Vodafone Idea Ltd and Bharti Airtel Ltd claimed favoured newer entrant Reliance Jio Infocomm Ltd because its outgoing voice traffic was much higher than incoming. Scrapping IUC would benefit an operator with more outgoing traffic.

(Source: Livemint)

3. Lease Rates, Refund for Exporters on Agenda

A boost for the real estate sector, rationalisation of tax rates on lotteries, making refunds seamless for exporters – these topics are set to dominate Wednesday’s Goods and Services Tax (GST) Council meeting, according to people with knowledge of the matter and the agenda for the meeting.

The government is looking to balance revenue collections between states and the Centre besides ironing out problems faced by a few industries, the people said. The government is also contemplating a temporary cess of 2 percent on certain goods, especially those falling in the 5 percent and 18 percent slabs, to make up for the revenue shortfall.

The GST Council may clarify rates on long-term leases, exempting those of 30 years or more if provided by a state, or if the central government has a stake of at least 20 percent. If approved, this will benefit manufacturing, realty and hospitality companies, experts said. Several companies had taken the government to court over 18 percent GST on long-term lease transactions.

(Source: Economic Times)

4. Fin Min Sets Monthly Target of ₹1.1-Lakh Cr GST Mop-Up

With a high possibility of fiscal slippage, the Finance Ministry has drawn up a fresh strategy to boost tax collection during the remaining period of the current fiscal ending on 31 March 2020.

Data show that the net direct tax collection for the period from April to November was ₹5.56-lakh crore, as against ₹5.47-lakh crore during the last fiscal. The net GST collection (CGST+IGST+Compensation cess) was ₹3.98-lakh crore as against ₹5.82-lakh crore during last fiscal.

These figures are below expectations and there is a strong possibility that the fiscal deficit will widen by at least 50 basis points more than the Budget Estimate of 3.3 percent of GDP (Gross Domestic Product).

(Source: Hindu BusinessLine)

5. SEBI Imposes Fine of Rs 8 Crore on PC Jeweller Promoters for Insider Trading

The Securities and Exchange Board of India (SEBI) has fined Shivani Gupta, Sachin Gupta, Amit Garg and Quick Developers a total of Rs 8 crore for violating insider trading norms with relation to the PC Jeweller case.

According to a release, Sachin and Shivani Gupta are, respectively, the son and daughter-in-law of former chairman of PC Jeweller, Padam Chandra Gupta, while Amit Gupta is his nephew.

“A sum of Rs 6,17,60,184.13 shall be impounded jointly and severally, from Shivani Gupta, Sachin Gupta and Amit Garg, being the notional loss avoided on account of trades carried out in the trading accounts of Shivani Gupta, and a sum of Rs 2,13,23,161.64 shall be impounded jointly and severally, from Quick Developers Pvt. Limited and Amit Garg, being the notional loss avoided/gains made on account of trades carried out in the trading account of Quick Developers Pvt Limited," read the order.

(Source: Moneycontrol)

6. Wall Street Bulls Enter Dalal Street: Sensex, Nifty at Record Highs

The stock market soared to record closing levels on Tuesday, mimicking the optimism on Wall Street, which too hit all-time highs the previous night cheered by the preliminary trade deal between the US and China. Overseas investors net bought Indian shares worth almost ₹1,248 crore on Tuesday and the Volatility Index dipped 6.67 percent to a near five-month low, indicating traders’ anticipation of lower risks in the near term.

The BSE Sensex rose 413.45 points, or 1.01 percent, to end at 41,352.17 after hitting a record high of 41,401.65 intraday. NSE’s Nifty gained 111 points, or 0.92 percent, to close at 12,165. Intraday, it set a new record of 12,182.75, surpassing its previous high of 12,158.8 (hit on November 28). The VIX ended at 12.51– the lowest since July 26. Technical analysts expect the Nifty to touch 12,300-levels by end of 2019.

(Source: Economic Times)

7. Retail Loans Seen Doubling to ₹96-Lakh Crore in 5 Years

Betting big on private demand and improved data analytics, a joint report by ICICI Bank and Crisil estimates that retail loans in India could double over the next five years.

The report sees the retail loan book of lenders and non-banking finance companies (NBFCs) doubling to ₹96-lakh crore by March 2024 from ₹48-lakh crore as on 31 March 2019. This would translate into a CAGR of 14-15 percent.

The report, which was released on Tuesday, predicts that this growth will rest on five key pillars – increased demand for private consumption (of home, car, consumer durables, credit cards), increased availability of various consumer data, willingness of consumers to take loans, improved usage of data analytics, and regulatory initiatives for growth in low-cost home loans and MSME credit.

(Source: Hindu BusinessLine)

8. NBCC to Acquire Jaypee Infratech, Receives 97.36% Votes From Lenders

In what could bring relief to over 20,000 homebuyers stuck with incomplete homes, the government's construction arm, the NBCC, has emerged as the clear winner to acquire the embattled realty firm Jaypee Infratech with 97.36 percent vote share, sources told Moneycontrol.

NBCC's resolution plan has been approved by the Committee of Creditors (CoC) with a 97.36 percent majority, sources said.

This is the third round of bidding to find a buyer for Jaypee Infratech, which went into Corporate Insolvency Resolution Process (CIRP) in August 2017.

(Source: Moneycontrol)

9. India’s Gender Gap Widens, Slips Four Places in WEF Survey

India has slipped four places to rank 112th globally in terms of gender gap amid widening disparity in terms of women’s health and survival and economic participation – the two areas where the country is now ranked in the bottom-five, an annual survey showed on Tuesday.

While Iceland remains the world’s most gender-neutral country, India has moved down the ladder from its 108th position last year on the World Economic Forum’s Gender Gap Report to rank below countries such as China (106th), Sri Lanka (102nd), Nepal (101st), Brazil (92nd), Indonesia (85th) and Bangladesh (50th).

(Source: Hindu BusinessLine)

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