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QBiz: India’s CAD to Widen to 2.5% of GDP, Says Moody’s & More

Here are the top business stories of the day.

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1. India's CAD to Widen to 2.5% of GDP in FY19 on Higher Oil Prices: Moody's

India's current account deficit (CAD) will widen to 2.5 percent of the GDP in the current fiscal due to higher oil prices that has been accentuated by rupee depreciation, Moody's and other experts have said.

Rupee last week dropped to a record low of 70.32 to a US dollar as political turmoil in Turkey and concerns about China's economic health continued to support safe-haven assets and weighed on emerging market currencies.

Joy Rankothge, Vice President - Senior Analyst, Moody's Investors Service said while the weaker rupee will benefit exports at the margins, it is unlikely to reverse the trade deficit, which hit a five year high of $18.02 billion in July.

(Source: Business Standard)

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2. 10% Growth Estimate Under UPA Is Not Official Data: Govt

The Narendra Modi-led government on Sunday, 19 August, clarified that the back series GDP estimates made public recently, which appeared to show that economic growth exceeded 10 percent under the erstwhile UPA government, are ‘not official.’ It also said that these estimates are meant only to facilitate taking a decision for an appropriate approach in dealing with the economy.

The government’s clarification came after the Committee on Real Sector Statistics, one of the five committees constituted by the National Statistical Commission, estimated that on a factor cost basis, the Indian economy grew 10.08 percent in 2006-07 under the then Prime Minister Manmohan Singh, the highest since economic liberalisation in 1991.

(Source: The Hindu Business Line)

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3. BSE, NSE to Suspend Trading in Gitanjali Gems, Amtek Auto

The Bombay Stock Exchange Ltd (BSE) and National Stock will suspend trading in shares of as many as nine firms, including PNB fraud accused Mehul Choksi’s Gitanjali Gems, from 10 September for not complying with listing norms pertaining to submission of financial results.

However, if any company complies with the provisions of the Listing Obligations and Disclosure Requirements (LODR) regulations on or before the date prescribed by the exchanges, the trading in its security will not be suspended, according to separate communications dated 17 August from the exchanges. In case of the BSE, the date is 4 September, while for the NSE, it is 5 September.

(Source: Livemint)

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4. New Worry for Modi Government? Merchandise Exports from Job-Intensive Sectors Contract in Q1

Merchandise exports may have risen 14.5 percent in the first quarter of this fiscal, against 8.5 percent a year earlier, but the headline numbers mask a disturbing fact: Supplies from labour-intensive sectors dropped 1.6 percent between April and June to $31.4 billion. In fact, in the two years through FY18, growth in exports from employment-sensitive sectors – such as textiles & garments, gems & jewellery, leather, stone, cement, ceramic, farm, plantation, marine and other allied segments – continued to slow.

Consequently, the share of such sectors in merchandise exports came down to just over 38 percent in Q1FY19 from close to 44 percent in FY17, official data showed.

Discounting the farm and allied sector, where elevated local prices have rendered exports in certain segments unviable, supplies from other jobs-intensive segments witnessed even a sharper contraction – 3.5 percent in the three months through June.

(Source: Financial Express)

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5. CBDT Defers Till March 2019 GAAR, GST Reporting Under the New Tax Audit Form

The Central Board of Direct Taxes (CBDT) has put off till 31 March 2019, the proposed GST and GAAR reporting under the amended tax audit form. This dispensation would be available for tax audit reports to be furnished on or after 20 August but before 1 April 2019.

In a circular issued on Friday, the CBDT said representations had been received by the Board that the implementation of the reporting requirement under the proposed Clause 30C (pertaining to General Anti-Avoidance Rules or GAAR) and the proposed Clause 44 (pertaining to Goods and Services Tax compliance) of the tax audit Form No 3CD may be deferred.

(Source: The Hindu Business Line)

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6. EU, 11 Others Back US Complaint Against India's Export Subsidies at WTO

The European Union, Russia, China, Japan and eight other countries have backed the US complaint against India’s export promotion schemes at the World Trade Organisation (WTO).

These countries have joined the dispute as third parties. The US has challenged almost all of India’s export programmes at the WTO saying they will harm its workers, citing the Agreement on Subsidies and Countervailing Measures (ASCM). It pegged the subsidies at $7 billion.

“The number of third parties in the issue is a matter of concern and has serious implications. They are backing the complainant,” said a person aware of the development.

(Source: The Economic Times)

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7. As Cyberthreats Rise, SEBI to Expand Scope of Security Initiatives For MIIs

Regulator Sebi is planning to broaden the scope of cybersecurity initiatives for the market infrastructure institutions (MIIs) and look into the operational modalities of their implementation in order to deal with the cyber challenges.

Enhancement of cybersecurity has been one of the priorities of the Securities and Exchange Board of India (SEBI) during the financial year 2017-18.

"Taking cognizance of the threat posed by technological developments in the Indian capital markets and the rise of cyber threats in the financial domain across the globe, Sebi had laid down a detailed framework with regard to cyber security and cyber resilience that stock exchanges, clearing corporations and depositories are required to adopt," the regulator said in its annual report for 2017-18.

(Source: The Hindu Business Line)

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8. Global Cues, Rupee to Chart Course of Equity Indices

Fears over a rise in global protectionist measures, along with rupee movement and direction of foreign funds, are likely to chart the course of major domestic equity indices during the week starting on 20 August.

“Global risk will drive the market sentiments next week. The news on US-China talks to resolve trade disputes later in the year will boost the sentiment,” Devendra Nevgi, Delta Global Partners Founder and Principal Partner, told IANS.

“The news emanating from Jackson Hole Symposium, where the US Fed Chairman is expected to comment on the policy rates, will be watched next week,” Nevgi added.

Consequently, investors will remain cautious over the possibility of any impending hike in the US interest rates which can potentially drive away Foreign Portfolio Investors (FPIs) from emerging markets such as India.

(Source: Financial Express)

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9. Coal India Expects 367 mt Output from 115 Projects in 2018-19

State-run Coal India Ltd (CIL) expects 367 million tonne output by the end of the current financial year from its 115 ongoing projects. The public sector undertaking accounts for over 80 percent of India’s coal production. The coal production from the projects is “planned to reach 377 mt in 2019-20,” Coal India said in a report, adding that there are 65 projects in the pipeline with a “targeted capacity of 247.66 mt per year”. “Of these 65 future projects, 27 with ultimate capacity of 108.29 MT have been approved,” Coal India said.

According to the utility, efforts are on to augment investment in logistics and infrastructure for coal offtake adding that Operator Independent Truck Dispatch Systems are installed in 11 large opencast projects in 4 subsidiaries besides road and rail projects.

The PSU has lined up Rs 9,500 crore as capital expenditure for 2018-19.

(Source: Livemint)

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