Taking advantage of a Russian offer to sell its crude oil cheap and bear the cost of insurance and transportation, India may import as much as 2 million tonnes (mt), or roughly 15 million barrels of crude, from the sanctioned nation in 2022, Business Standard has learnt. This comes after reports that Indian Oil Corporation (IOC) bought 3 million barrels of Russian Urals from trader Vitol for May delivery. This will be on cost, insurance and freight (CIF) model, where the seller incurs the costs and pays the freight, including insurance charges.
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.
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.
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.
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.
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.
India's traditional companies are now moving full scale into the renewable and alternative energy space that had been dominated by smaller players over the past decade. Companies such as government-owned NTPC and the Adani and the Tata groups restructured their businesses well in time to become major players in the green space. At the same time, other conventional companies, such as Larsen & Toubro and Reliance Industries Ltd (RIL), which have a presence both in the energy sector as well as myriad other activities - construction, technology and retailing - are tying up with new-age companies to hitch a ride to a greener path.
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.
Tata Group is in discussions with some major international companies, including those from Taiwan, for its foray into the semiconductor chip business. The Union government had earlier tried to bring in Taiwanese manufacturers Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) for chip manufacturing in India. A person close to the development said the Tatas have now opened a separate channel for a possible tie-up. Currently, India mostly imports chips, which are fabricated and assembled to put into various applications, including automobiles, renewable power, mobile phones, televisions, and other electronic items.
The Centre is looking to convene a meeting of the all-powerful Goods and Service Tax Council in early January. The meeting is likely to focus on rectifying the inverted duty structure for a few more items and will also serve as a platform for pre-Budget discussions between Union Finance Minister Nirmala Sitharaman and state finance ministers, Business Standard has learnt. "The current Winter Session of Parliament ends on December 23, followed by the Christmas-New Year period. "After that we would like to have a meeting of the GST Council, depending on whether there can be a quorum," a top government official said.
China on Tuesday announced a major policy change for its crisis-ridden power sector by allowing coal-fired power plants to charge their industrial and commercial customers market-driven prices. The National Development and Reform Commission (NDRC) of China said the electricity generated by coal-fired plants would discover price in market trading "in an orderly manner" from October 15. This is being done to pass on the high costs of coal and is being held up as the boldest reform in the Chinese power sector.
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The Union government's offer of settling the retrospective taxation case with Cairn Energy may hinge on Vedanta withdrawing the ongoing arbitration from the Singapore Tribunal on the same issue. The government has offered to refund Cairn Energy Rs 7,900 crore that it had collected under the retrospective tax demand on fulfilment of certain conditions, including withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc., would be filed. This condition is also part of the Taxation Laws (Amendment) Bill, 2021, passed by Parliament recently.
More than a year of Covid-19 has pushed most businesses into gloom but Reliance Industries Ltd (RIL) managed to reduce its gross debt 25 per cent, enabling it to turn towards its next phase of capital expenditure that has come in the form of a Rs 75,000-crore plan for green energy and power storage. The company managed to stay afloat during the pandemic because of its large presence in the consumer-centric businesses of retail and telecommunication (see chart: "A new Reliance"). These two businesses constituted 45 per cent of its EBITDA during FY21 from 36 per cent in FY20.
The change in leadership at the railway ministry comes at a time when the national transporter is grappling with low passenger earnings even as it is trying to increase freight loading and open up its doors to private investment. Union Minister Ashwini Vaishnaw took charge from Piyush Goyal who got the railway portfolio in 2017 after Prime Minister Narendra Modii dropped Suresh Prabhu from the Union Cabinet. Completing freight corridors, negotiating land for the bullet train, and speeding up monetisation plans would be some of the major focus areas for Vaishnaw.
It looks unlikely that a proper plan was in place or else the deaths could have been averted, reports Jyoti Mukul.
For deciding which vehicles are to be scrapped, the setting up of fitness centres and regulating them would be a humongous task.
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