Jobs, tourism, housing: Govt turns to start-ups for solution

Narendra Modi

NITI Aayog  — the country’s think-tank that finds solutions to problems ranging from economic issues to how Indian athletes can get more Olympic medals — is now looking towards the start-up community to find answers to India’s woes..

Prime Minister Narendra Modi and NITI Aayog will meet 212 entrepreneurs on Thursday to get their views on almost everything under the sun — jobs, ease of doing business, climate change, tourism, health care, skilling.

Prime Minister Narendra Modi and NITI Aayog will meet 212 entrepreneurs on Thursday to get their views on almost everything under the sun — jobs, ease of doing business, climate change, tourism, health care, skilling.Ahead of this meeting, Modi met the entrepreneurs for a private chat over dinner on Wednesday.

This is the second such event — after Prime Minister’s magnum opus event Startup India in January 2016 — where start-up bosses are being called by the PM en-masse. This would lead to a similar programme on August 21-22, where 180 young CEOs would deliberate on six subjects — New India 2022, Digital India, Emerging a Sustainable Tomorrow, Health and Nutrition, Education and Skill Development, and Soft Power.

 

Why rupee is unlikely to hit 60 levels against the US dollar 

Rupee

Though the rupee saw its sharpest fall in a day since July 3 of 24 paise to hit 64.08 against the US dollar(USD) on Thursday, the Indian unit is in no hurry to breach 60 levels in the near term, suggests the latest report by Tanvee Gupta Jain, an economist with UBS.

Going ahead, Jain expects the rupee (USD/INR) to remain range-bound between 62-66 levels over the next few months and average 64.3 in FY18 and 65.4 in FY19. UBS had earlier estimated it to hover around 65.4 and 67.6 levels, respectively.

The USD/INR pair has been among the better-performing currencies in emerging markets, appreciating 5.9% thus far in calendar year 2017 (CY17). On Thursday, however, the Indian unit lost ground on reports of escalating India’s geopolitical tension with China amid developments relating to North Korea and the US.

Rupee came under pressure against the US dollar and fell to the lowest level in a week after geopolitical tensions weighed on domestic as well as global equities. Asian currencies also weakened against the US dollar on weak global sentiment,” says Gaurang Somaiya, research analyst (currency) at Motilal Oswal.

“Weakness in domestic equities could continue in Friday’s session and that could further weigh on the rupee. On the domestic front, market participants will be keeping an eye on industrial production (IIP) data and slower-than-expected growth could keep the rupee under pressure.the USD/INR pair is expected to quote in the range of 64.00 and 64.45,” Somaiya adds.

Tata Motors net up 42% on one-time JLR gain

Guenter Butschek MD and CEO, Tata Motors

A one-time gain of Rs 3,609 crore (£437 million) embellished Tata Motors net profit for the April-June quarter. The company, which also owns luxury car brand Jaguar Land Rover (JLR), posted a 41.6 per cent growth in profit at Rs 3,200 crore, against Rs 2,260 crore it posted in the same quarter last financial year.

Without the one-time gain that came from changes in JLR’s pension plans, the company would have reported a loss on forex impact. The performance is, therefore, below analysts’ expectations of Rs 1,415-1,480 crore

Consolidated profit for the quarter was lower by Rs 793 crore due to translation impact from British pound to rupee,” the company said in its filing. Income for the quarter declined 9.59 per cent to Rs 59,972 crore, as its operating performance was hit by lower wholesale volume sales of Jaguar Land Rover, excluding sales from the group’s China joint venture, and a slowdown in its heavy vehicle business, among other factors.

The standalone business (which primarily includes the domestic commercial and passenger vehicle) remained in the red, like in last few quarters. The loss here was Rs 467 crore, against Rs 26 crore profit in the corresponding period of the previous financial year. Sales declined over 11 per cent to Rs 9,207 crore. Volumes sold (including exports) of commercial and passenger vehicles for the quarter stood at 111,860 units, down 11.8 per cent. The decline was mainly on account of 35 per cent drop in sales of medium and heavy commercial vehicles

Chocolate mithais to attract 5% GST, Centre clarifies

GST impact on sweets

Sandesh, with or without chocolate, will be taxed at 5 per cent, the government clarified on Thursday along with the goods and services tax (GST) rates for other items, including rakhis, idli-dosa batter and kulfi.

However, ambiguity persisted over whether the tax rate for plastic furniture would be 28 per cent as furniture or 18 per cent as plastic items. The sharp jump in tax on car leasing is also expected to be taken up in the GST Council meeting on Saturday.

The clarification comes amid reports that sweet shops have discontinued chocolate barfis and chocolate sandesh. The GST rate on chocolates is 28 per cent and Indian sweets are taxed at 5 per cent. Although milk is exempt in the GST, khoya, or concentrated milk, will attract 5 per cent GST.

“Sweet shops in Kolkata were in panic over different GST rates based on the types of sweets and ingredients. Now the government has clarified that the GST rate on all Indian sweets is 5 per cent,” said Archit Gupta, founder and chief executive officer of ClearTax.The GST was implemented on July 1 and subsumed most indirect taxes such as excise duty, service tax and value-added tax.

 

RBI group to study MCLR regime so that your bank reduces loan rate 

RBIVoicing displeasure over banks not doing enough to reduce lending rates, the Reserve Bank of India (RBI) said an internal group would review the working of the system to improve transmission.The central bank will also explore ways to link bank lending rates directly to market-determined benchmarks

Though the marginal cost of funds-based lending rate (MCLR) system is an improvement over the base rate system, monetary transmission by banks has not been “not entirely satisfactory”, the RBI said in statement on developmental and regulatory policies

“The decision to review the MCLR system with a view to improve monetary policy transmission is a welcome move as a large section of any bank’s portfolio is still anchored to the base rate. The MCLR in its present form is grossly misused by a few players to create an artificial pricing structure,” said R P Marathe, managing director and chief executive, Bank of Maharashtra.

The MCLR was introduced in April 2016 for improving the monetary transmission. The MCLR, the internal benchmark lending rates, have to be revised monthly. This move was in response to banks failing to transfer the benefit of rate cuts by the RBI to its customers. The MCLR rates, unlike base rates, have to take the change in repo rates into consideration and revise lending rates accordingly.

July factory activity contracts to 9-yr low on confusion over GST implementation

steel factory, steel

Factory activity plunged last month and had its deepest contraction in more than nine years after Prime Minister Narendra Modi’s new tax policy severely hurt output and demand, a survey showed on Tuesday.

The Nikkei/IHS Markit Manufacturing Purchasing Managers’ Index fell to 47.9 in July from June’s 50.9, its first reading below the 50 mark that separates growth from contraction since December and its lowest reading since February 2009.

A Reuters poll predicted a modest July dip to 50.8. But July brought the biggest month-on-month decline since November 2008, just after the collapse of Lehman Brothers triggered a financial crisis and brought on a global recession.

“New orders and output decreased for the first time since the demonetisation-related downturn.”

An output sub-index fell to 46.3, its lowest since early 2009, from 51.7 in June, while contractions were reported across all major sub-indexes in the survey, including new orders, purchasing activity and employment.”The introduction of the goods and services tax (GST) weighed heavily on the Indian manufacturing industry in July,” said Pollyanna De Lima, economist at Read More

Once ‘fragile’ India gets thumbs up from foreign investors 

world, economy, dollar, bonds, gold, FPI, foreign investors

When Fed taper fears jolted emerging markets in 2013,India was one of the worst hit and was forced to raise interest rates to underpin its tumbling markets. Fast forward to this year, and history has been turned on its head. Not only is the US central bank raising rates, but India is widely expected next week to be the first country in Asia to cut policy rates this year.

being concerned at India’s falling policy rate premium over the United States, foreign investors are giving the country’s markets the thumbs up.The rupee is rallying and the country’s bonds are in demand,offering some of the best inflation-adjusted returns in Asia. Inflation, long a thorn in the economy, is at its lowest in five years, economic growth is picking up and the current account deficit is a fraction of its old self.

Prime Minister Narendra Modi unveiled a national goods and services tax on July 1, India’s biggest tax reform since independence in 1947, raising confidence among investors that other measures to boost the economy would follow.

“The structural story for India remains pretty strong,” said David Cornell, chief investment officer of London-based Ocean Dial Asset Management, which argues India and other emerging markets will outperform over the next 12 months.