Daily Financial News Analysis – 2nd Dec’19

Table of Contents

Audit Company

Company Law Committee under corporate affairs secretary Injeti Srinivas.
Proposed: an entire audit firm need not be banned just because a few of its auditors are found to have been lax in their duty or colluded with the management of a company in perpetrating a fraud.
PwC India is in the midst of a legal tussle over a two-year ban slapped on it by SEBI.
Because of alleged role of some of its auditors in the Rs 7,800-crore Satyam scam.
Deloitte and BSR recently got interim relief from the Bombay High Court.
Existing framework: action of few auditors can attract serious troubles.
The ban, the committee feels, should be limited to only those auditors who are found to be guilty and the firms may ordinarily be let off with a hefty fine, if required.
However, strict action can be considered against the firms if it’s proved that they are obstructing the course of justice

GST

After two months of contraction, GST revenue grew 6% in November 2019.
3rd largest monthly mop-up of Rs 1.03 lakh crore since the tax’s launch in July 2017.
A pick-up in consumption during the festive season.
November collections on domestic transactions witnessed a 12% rise while those on imports declined 13%.
September GST collections: Rs 91,916 crore
1. 19-month low and 2.7% lower than the year-ago month
GST mop-up in October: Rs 95,380 crore
1. 5.29% lower than in the year-ago month

Land Title Act, 2019

The government is readying a draft model Land Title Act, 2019.
It will will pave the way for conclusive land titles
Conclusive land titles are guaranteed by the state for their correctness and entail provision for compensation by the state in case of any disputes.
In India, land ownership is determined through various records such as sale deeds, which are a record of the property transaction between the buyer and seller, besides property tax receipts and survey documents.
However, these documents are not a government guaranteed title but only a record of the transfer of property and hence can be challenged.
The government is of the view that massive progress in computerisation of land records will help in moving towards conclusive land titles.

Benefits

Facilitate easy access of credit to farmers
Reduce a large number of land-related litigations
Enable transparent real estate transactions
Ease land acquisition for infrastructure development
Land is a state subject.
All states will have to come on board to adopt the model legislation.
NITI Aayog has been holding meetings with all stakeholders on the draft legislation.
BS-VI emission norms: effective effect from 1-April-2020.
Its introduction will be create another round of price rise and this will affect the sales.
In the last one year, car prices have gone up significantly on account of the safety norms and other regulations, which has increased the acquisition cost for customers.
Manufacturers have invested a lot in upgrading the engines.
These updated engines will limit the release of NITROGEN OXIDE and CARBON MONOXIDE.
Maruti Suzuki chairman RC Bhargava: there was no need for cars to move to the new standards as pollution caused by them is less than 2% of the total pollution in the country.
The Energy and Resources Institute (TERI), he said pollution from cars even in New Delhi is just 4%, and even if BS-VI norms bring it down to 2.4% or lesser, no one will feel the difference in the air quality.
Initial estimates suggest while petrol car prices will go up by anywhere between Rs 20,000 and Rs 60,000 — depending on the engine capacity — diesel cars would be costlier in the range of Rs1 lakh-Rs2 lakh on account of the new emission norms.

EU-Google

European Union (EU) antitrust regulators are seeking details of Google’s data collection practices.
Possible: more regulatory woes for the world’s most popular internet search engine.
EU’s executive Commission on Alphabet unit Google
1. £6.9 billion fines in last 2 years
2. Ordered it to change its business practices
Last week, the EU competition enforcer sent out questionnaires to several companies, asking them about Google’s data practices and giving them a month to reply.
The focus is on data related to local search services, online advertising, online ad targeting services, login services, web browsers and others.
Regulators also wanted to know the kind of data sought by Google, how it uses it and how valuable the companies consider such data.
Another question asked whether Google and the companies were subjected to contractual terms that prohibit or limit the use of the data.
Regulators also wanted to know if Google had refused to provide data and how this affected the companies.
In an email to Reuters, Google said: “We use data to make our services more useful and to show relevant advertising, and we give people the controls to manage, delete or transfer their data. We will continue to engage with the Commission and others on this important discussion for our industry.”

Oil Cuts

OPEC and allied oil producers will consider deepening their existing oil output cuts by about 400,000 barrels per day (bpd) to 1.6 million bpd.
OPEC+ oil exporters have coordinated output for three years to balance the market and support prices.
Their current deal, which agreed to cut supply by 2 million bpd from January this year, expires at the end of March.

Russian Energy Minister Alexander Novak on Friday said he would prefer OPEC and its allies to wait until nearer April before making a decision on whether to extend the oil output deal.
Novak’s position is likely be opposed by most of OPEC’s members as they seek to clinch a new deal at the Dec. 5-6 meeting in Vienna.

China-US

Beijing is insisting S. tariffs must be rolled back as part of any phase one trade deal with Washington.
There is a continuous uncertainty on whether the 2 sides can strike a deal.

Q1 The Gulf of Bothnia is surrounded by which 2 nations?