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QBiz: Oil Below $0 in US; Govt Says No to GST Exemption on PPEs

Your daily lowdown of all the top business news for the day.

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India
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1. Oil Trades Below Zero Across US as Futures Market Craters

Oil is trading below $0 a barrel across the U.S. after the futures market suffered its worst price crash in history.

Barrels from the country’s biggest shale plays and offshore grades are pricing in negative territory, with buyers asking to be paid for taking crude away.

The meltdown follows the worst day of trading in U.S. history, in which New York oil futures plummeted more than 300% to close at an unprecedented negative $37.63 a barrel. The market was already under pressure as storage across the country fills and the coronavirus pandemic obliterates energy demand.

(Source: Livemint)

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2. Chinese Investors Likely to Face SEBI Heat After Change in FDI Rules

The Securities and Exchange Board of India (Sebi) is likely to make investment rules more stringent for China and other neighbouring nations.

This follows the recent modification in the Union government’s foreign direct investment (FDI) norms, with China at the centre of the tweak.

Besides stepping up scrutiny, SEBI could put a cap on the purchase limit, beyond which additional approvals would be required, said a person privy to the initial discussion. SEBI may also ask custodians not to settle any trade without proper identification of end-beneficiaries.

Last week, the government removed all neighbouring countries from the automatic FDI route. What was applicable only to Pakistan and Bangladesh — the two countries that were barred from automatic FDI — has now been extended to all neighbouring countries.

(Source: The Business Standard)

3. Government Rejects Calls for GST Exemption on Ventilators, PPEs

Despite mounting pressure, the government has rejected calls for giving goods and services tax (GST) exemption to ventilators and other medical equipment, which are key to the fight the coronavirus pandemic, saying such a move will not benefit consumers much but could bring hardship to domestic producers.

Exempting ventilators, masks, test kits and personal protection gear from GST will burden their domestic producers, who pay taxes on raw material with unusable tax credits, said a government official who asked not to be named. This will add to their cost of production, a burden that imported rival products will not have to bear.

The union government has come under political pressure from opposition parties, particularly the Congress, which has been demanding that equipment and commodities related to the treatment of COVID-19 should be free from GST.

(Source: Livemint)

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4. Government to Shell out Rs 4k Cr More on Recast Crop Insurance Scheme

he government will have to spend Rs 4,000 crore more on the revamped crop insurance scheme after making it voluntary from the upcoming Kharif season.

The annual premium is likely to increase by 2% from the existing 12.5% as a number of participating farmers is likely to fall 30%.

Over the last three crop seasons since launch, the average number of participating farmers had been 37.5 million with 58% of them having crop loans.

(Source: The Economic Times)

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5. Institutional Investments in Real Estate Down 58% in January-March

Institutional investments in real estate fell sharply by 58% year-on-year at $712 million (around Rs 5,400 crore) during January-March 2020 as the sector got battered on two fronts, a report by JLL India has said. Investors adopted a wait-and-watch policy following the crisis at DHFL and Yes Bank, which got further extended on account of the novel coronavirus outbreak, it said.

The real estate industry has been facing one of its toughest times and attracting funds from institutional investors is one of them. Total investments in FY19-20 have been the lowest in four years, declining by 13% y-o-y to $4.26 billion (around Rs 32,600 crore), the report said.

The change in investment climate also reflects in the asset allocation with investors parking more funds in office spaces. Investments in the office sector rose to $2.9 billion in FY19-20 from $1.8 billion in FY18-19.

(Source: Financial Express)

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6. Etailers Asked to Draw up Limited List of Essentials They Want to Supply

The Department for Promotion of Industry and Internal Trade (DPIIT) has asked e-commerce companies to draw up a limited list of products that they consider essential to deliver as many people work from home.

This will include staples and pharmaceuticals already included in the list.

Ecommerce companies are keen to deliver work-from-home essentials such as routers, chargers and even stationery, laptops and tablets as students across the country take online classes and need these to support their education.

“We have asked e-commerce companies to give us a limited list of products that they want to be allowed. Then we will examine and send it to the home affairs ministry,” said an official.

(Source: The Economic Times)

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7. Employers of a Million People Apply to Furlough Program

Struggling businesses that employ more than a million people rushed to sign up for the U.K. government’s program to support furloughed workers on the first day they could apply, according to Her Majesty’s Revenue & Customs, which is administering the program.

With as many as 11.7 million employees expected to lose their jobs or be furloughed during the nation’s lockdown, concerns had mounted that HMRC’s portal would be overwhelmed and crash. Users say the platform, which opened on Monday and can handle 450,000 applications per hour, is working well so far.

The system is “simple and fast," said Chris Adams, chief executive officer of The Dream Corporation Ltd., which owns a virtual reality bar and kitchen in East London.

His three-year-old company furloughed 27 of its 32 employees when the government ordered the closing of “non-essential" businesses on March 23. The whole application process this morning took 25 minutes and Adams was informed that his company would receive a grant to pay his employees in six working days.

(Source: Livemint)

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8. Airtel to Pay April Salaries of Nearly 25,000 Staff Employed by Distributors, Retail Franchisees

Bharti Airtel has decided to pay the basic income for April of nearly 25,000 employees of its distribution partners and franchisees.

Most of the Airtel retail stores have been closed because of the countrywide lockdown since March 25. The company said it is providing this one-time support to its partners to tide over this tough time. “This is an endeavour to ensure your Airtel Friends get their basic income. You are therefore requested to pass the basic monthly pay to all your staff for the month of April,” Airtel Delhi CEO said in a letter to distribution partners.

Sources said all the circle CEOs have written similar letters to distributors of their states.

(Source: Financial Express)

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9. New Development Bank Meet: FM Favours Hike in Emergency Financing to Tackle COVID-19 Crisis

Finance minister Nirmala Sitharaman on Monday called for enhancing the emergency financing facility of the New Development Bank (NDB), based on the requirements of member nations to fight the pandemic.

Addressing the fifth annual meeting of the board of governors of NDB via video conference, the minister said: “The bank has financial capacity to enhance the emergency facility up to $10 billion for price-related assistance. Therefore, based on the demand from member countries, this facility should be enhanced.”

She also encouraged the NDB to take appropriate steps to join the G-20 forum, along with the multilateral development banks and international financial institutions. She also hailed NDB’s efforts in fast-tracking financial aid to BRICS countries, including India, under the emergency assistance programme.

So far, NDB has approved 14 projects worth $4,183 million in India.

(Source: Financial Express)

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