Daily Financial News Analysis – 22nd Jan’20 – Free PDF Download

Bali Meeting

• India has got an invitation from Asean secretariat.
• RCEP meeting on February 3 and 4 in Bali.
• India’s concerns will be addressed
  1. extra safeguard mechanism to curb irrational spike in imports
  2. tougher rules on the origin of imported products
  3. India’s $105-billion trade deficit with RCEP members
  4. A more balanced deal on services.
  5. Agriculture and dairy sector out of the RCEP negotiations.

• The presence of China in the grouping had reinforced fears of domestic industry about potential dumping.
• S Jaishankar: India had not shut its doors on the RCEP.

Direct tax collections

• Direct tax collections till January 15 stood at Rs 7.3 lakh crore
  1. down 5.2% from the year-ago period
• Gross direct tax collections — after refunds but before devolution to states — for FY20 is budgeted to grow at 4% to Rs 13.35 lakh crore.
• Many analysts have pegged the total tax revenue shortfall (net) for the current fiscal at upwards of Rs 2.5 lakh crore.
• There are reports that the government might try to boost collections in March quarter by unveiling an amnesty dispute resolution scheme for direct taxes, similar to the one implemented for indirect taxes.
• Personal income tax collection grew 5% till January 15, as against 23.3% budgeted.
• Steep contraction in corporate tax collections

Zero MDR

• Banks have asked the government for funds to support the payments ecosystem.
• Indian Banks Association (IBA) has sought an acceptance development fund (ADF) to be managed by the central bank.
• The move to a zero MDR regime, would result in an annual loss of Rs 5,000 crore.
• Nandan Nilekani Committee on deepening of digital payments had recommended an ADF for improving the acquiring infrastructure in Tier IV, V and VI locations.
• Banks are hoping the ADF will come through in the next one month and expect some indication in the Union Budget.
• Banks might simply go easy on issuing RuPay cards.

Nirvik scheme

• Nirvik: Niryat Rin Vikas Yojana
• Aims to ease lending process and enhance loan availability to exporters.
• The commerce ministry proposes to subsidise the premium under the scheme that has to be paid by exporters of certain key sectors.
• Insurance cover guaranteed could cover up to 90% of the principal and interest.
• The insurance cover may include both pre- and post-shipment credit.
• The Export Credit Guarantee Corporation currently provides credit guarantee of up to 60 per cent loss.
• 14|Sep|2019: announced by Finance Minister Nirmala Sitharaman to boost exports

National Start-up Advisory Council

• Under commerce and industry minister Piyush Goyal.
• To recommend measures to build a strong ecosystem to promote budding entrepreneurs, ease access to capital, incentivise investments and keep control of start-ups with original promoters.
• To provide inputs on keeping control of start-ups with original promoters
• Many pointed out that foreign investors would shy away from investing in e-commerce start-ups if any such move was implemented.
• Ministry: the council will suggest steps to facilitate public organisations to foster innovation, promote creation, protection and commercialisation of intellectual property rights, make it easier to start, operate, grow and exit businesses by reducing regulatory compliances and costs.

Hyundai on BS 6

• It is not going to pass on the entire increased cost to consumers but will absorb a portion of it.
• It is India’s second-largest passenger vehicle manufacturer.
• Analysts are sure that if Hyundai follows this strategy, competitors are not going to be left behind and will follow suit.

Coal mining

• Government wants to remove all the impediments to investments in coal
• Recent Cabinet decision: removed end-use restrictions on miners
• Union coal ministry is thinking to do away with the requirement of prior experience for prospective bidders for coal blocks.

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