The finance ministry said on Tuesday that high energy and commodity prices due to the Russian invasion of Ukraine may provide an upside risk to inflation and continued vigil is required. "Going forward, elevated energy and commodity prices may act as an upside risk to the inflation outlook in the near-medium term. "Given the inherently unsustainable nature of high prices, international commodity prices are expected to level off early with an increase in supplies outside the crisis zone," the department of economic affairs said in its latest monthly economic report for February.
The Centre's ambitious Rs 6-trillion National Monetisation Pipeline (NMP) could fall short of yearly targets for the current fiscal year (FY22) and the next one as well (FY23), partly due to the long gestation period in monetising big-ticket railway infrastructure, Business Standard has learnt from sources in the finance and rail ministries. Officials say the major chunk of railway monetisation will happen from FY24 onwards because leasing some of the infrastructure, like stadiums and dedicated freight corridor, will not happen anytime soon. Rail infra is expected to be the second-biggest contributor to the NMP, with about Rs 1.52 trillion worth of assets to be monetised.
The $8.5 billion TVS Group received final approval for a family resettlement on February 4 from the National Company Law Tribunal (NCLT). It is an arrangement that is noteworthy because unlike many other corporate settlements this one was sorted out amicably and without any open conflicts.
Stocks of Indian companies with exposure to Europe fell on Tuesday amid concerns about the impact on their sales in case the Russia-Ukraine crisis worsens and the US and its allies impose economic sanctions on Russia. While top conglomerates, including Reliance Industries, the Tata group, and Aditya Birla Group, said they did not have any significant exposure to Russia, executives of some of the oil and gas, pharmaceutical, and tea companies said they were monitoring the situation closely as they earned substantial income from the region. Russian President Vladimir Putin on Monday ordered troops into two breakaway regions of eastern Ukraine after announcing that Russia would recognise their independence.
A proposal in the Union Budget 2022-23 to raise excise duty on dirtier, unblended retail petrol and diesel has met with some resistance from the petroleum ministry. However, finance ministry officials say no such communication arguing against the levy of extra duty on diesel has been received from the oil ministry. Until there are discussions between the two departments, the proposal will not be tweaked in the Finance Bill. The Rs 2 per litre additional excise duty proposed on unblended fuels in the Finance Bill will result in a uniform hike of diesel prices across the country from October 1.
As part of the exercise, each family will get complete ownership of the businesses it manages while scrapping the holding company.
At the customary post-Budget media interactions, Finance Minister Nirmala Sitharaman and her topmost bureaucrats touched upon a number of issues. The minister said the government taxing income from digital virtual assets did not give them legitimacy and that issue was being dealt separately in the planned cryptocurrency Bill. She also expressed confidence that the Budget targets were achievable.
Finance Minister Nirmala Sitharaman will present the much-awaited 2022-23 Union Budget on February 1. While there has been strong recovery in some sectors, touch services like hospitality, tourism and leisure continue to suffer after two Covid-19 waves. Household savings have been hit due to increased spending on health care. Consumption has still not reached pre-pandemic levels.
'We have all the technologies available, but it should be converted to something that can be commercially viable.'
The Centre is considering a gradual phasing out of certain direct tax exemptions meant for corporate and personal tax payers. This is among the tax proposals being discussed for the upcoming Union Budget 2022-23. A top policymaker said that according to the government's internal assessment, the percentage of corporates and individuals shifting to the new exemption-less tax regime has been very encouraging, and the Budget-makers expect many more to make the switch in the coming years. The person also said the finance ministry is exploring the option of rationalising the capital gains tax rates.
These could include strengthening the public-private partnership (PPP) dispute resolution mechanism, uniform PPP institutional framework, easier terms for infrastructure companies accessing bond markets, and tax sops, Business Standard has learnt. Investment in infrastructure projects with high multiplier effect has been the Centre's main plank to revive the economy, create employment and boost consumption.
The department of investment and public asset management is racing against time to launch the LIC IPO, which could become the largest-ever listing on the Indian bourses. This would lead to some delay in the strategic divestment of IDBI Bank.
Banks and companies in India are taking a cautious approach towards Sri Lanka, which, reeling from a financial crisis, has sought a $1-billion loan from the country to import essential commodities. A senior State Bank of India (SBI) executive said the bank was committed (to Sri Lanka) for the long term. "As far as exposures (are concerned), the bank will be cautious on its dollar exposure to Sri Lankan entities till the situation improves," he said.
After raising Rs 10 crore in seed funding last week from investors like Paytm founder Vijay Shekhar Sharma, Freshworks founder Girish Mathrabootham and Silicon Valley based venture capitalist firm Hourglass Venture, Chennai-based social media startup Pepul told Business Standard that it is looking to raise around Rs 200 crore by June this year for expansion. The social media platform, focused on online ethical practices, will be launched by 1,000 entrepreneurs across the country on January 26. Pepul, founded by G Suresh Kumar, will be using an Aadhaar-based user verification system to get rid of fake accounts on its platform. "We are planning to raise around Rs 200 crore by June this year.
According to highly placed sources, the finance ministry is likely to extend ECLGS and other loan guarantee schemes for micro, small and medium enterprises (MSMEs), hospitality and tourism sector, and the health infrastructure beyond March 31, Business Standard has learnt. This is likely to be announced by Finance Minister Nirmala Sitharaman as part of her Budget speech on February 1.
'We were exporting copper at that time. Now India is importing copper to the tune of around $1.2 billion. Moreover, there was a larger impact on the dependent MSMEs.'
Kerala-based Kitex Garments, the world's second-largest children's garments producer, has landed in trouble after sporadic violence at its workers' camp led to an attack on the local police, injuring at least five officers. The local police told Business Standard that at least 156 migrant workers were detained after the incident and around 50 have been arrested so far. A decision on any possible action against the company will be taken after the investigation.
Factionalism between OP Panneerselvam and Edappadi Palaniswami, the dominance of the BJP, the ruling DMK having a strong face in the form of CM Stalin, 'community and region-based politics', corruption charges against former ministers, and lack of a proper ideology are the major challenges the party is facing in the state.
While presenting her 2021-22 Union Budget, Finance Minister Nirmala Sitharaman had set a fiscal deficit target of 6.8 per cent of nominal gross domestic product (GDP) against the 2020-21 Revised Estimate of 9.5 per cent. The fiscal correction in the upcoming 2022-23 Union Budget is unlikely to be that steep. Even as discussions among top Budget-makers are ongoing, the fiscal deficit target for 2022-23 may likely be in the range of 6.5-6.8 per cent.
Backed by the China-plus-one policy, India's textile and apparel exports have seen a 53 per cent growth during the April-November period of the current fiscal year at around $26 billion. This compares to the figure of $17 billion during the same period in FY21. According to Wazir Textile Index, all major companies including Welspun, Vardhman, Trident, KPR Mills, Indo Count, RSWM, Filatex, Nahar Spg and Indorama have posted higher sales during the first half of the current fiscal year compared to the pre-pandemic year.
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