Today Sector News – 12.03.2018
* AGRICULUTRE: At least five state governments are rolling out innovative schemes to help farmers realise remunerative returns, even as the centre has started working on a plan to ensure that farmers get minimum support prices for their produce, whether or not the items are procured by the designated agencies.
* AUTOMOBILE: Volvo Car India will raise prices of its vehicles by up to 5% because the company is unable to absorb costs after the government, in Union Budget 2018-19 (Apr-Mar), raised basic import duty on completely built-up and knocked-down vehicles. A month after India dropped the idea of an electric vehicle policy, the government's think-tank NITI Aayog has tasked at least seven ministries with framing guidelines to encourage the use of such vehicles.
* AVIATION: Minister of State for Civil Aviation Jayant Sinha has said the government is committed to its deadline to complete the disinvestment of national carrier Air India. The government will transfer part of Air India's $8.5 bln debt pile to a special purpose vehicle before selling a stake in the state-owned carrier, junior civil aviation minister said. Commerce Minister Suresh Prabhu has been given the additional charge of Ministry of Civil Aviation.
- Buoyed by the $12.5 bln deal with SPICEJET, French major Safran's chief executive officer Philippe Petitcolin has said it expects more such big deals and higher share in the Indian commercial aerospace market. Disinvestmentbound flag carrier Air India has taken delivery of its 23rd and the last Boeing 777 plane which can be used in ultra-long haul routes, and thus also completing its 68 aircraft orders placed with the US plane-maker more than a decade ago.
* BANKING: Wilful defaulters owed state-owned banks 1.1 trln rupees as on Dec 31, Minister of State for Finance Shiv Pratap Shukla said in a reply to a question raised in the Lok Sabha. The Reserve Bank of India imposed a penalty of 50 mln rupees on Airtel Payments Bank for breaching know-your-customer norms. The Reserve Bank of India has asked commercial lenders to provide details of all letters of undertaking - a form of credit guarantee at the centre of an alleged $2 bln fraud - issued by them in the past several years.
- The government will review the issue of the bar on liquidating the assets of those who have given personal guarantees against loans when it comes to companies undergoing insolvency resolution. The gross non-performing assets of all banks in India amounted to 8.4 trln rupees in December, led by industry loans, and services and agriculture sectors, the government said on Friday. The government has directed public sector banks to collect passport details of all borrowers for loans more than 500 mln rupees, Financial Services Secretary Rajiv Kumar said.
- The Indian Banks' Association has written to the RBI requesting relaxation in its revised framework for resolution of stressed assets, emphasising that the banking regulator's zero tolerance towards delay in loan repayment could jeopardise lending to the infrastructure sector. The International Monetary Fund has said the recapitalisation of public sector banks should be part of a broader package of financial reforms to speed up the esolution of nonperforming assets. The RBI has initiated special audit of state-owned lenders with focus on trade financing activities, especially relating to issuance of letters of undertakings by them.
* CORPORATE: A standing committee on finance said in a report that the Companies Act need not be amended to provide a specific definition of shell companies, but asked the ministry of corporate affairs to include a "fraudulent" intent clause in the Act to avoid legal ambiguity and help identify shell companies.
* ECONOMY: The Maharashtra government has projected revenue deficit of 153.75 bln rupees in 2018-19 (Apr-Mar), with revenue receipts at 2.86 trln rupees, and revenue expenditure at 3.01 trln rupees, state's Finance Minister Sudhir Mungantiwar said in his Budget speech. Pitching for the use of digitisation to improve supervision, NITI Aayog ViceChairman Rajiv Kumar sought prudential processes and said digitisation had improved risk evaluation capacity of financial organisations manifold. The government is examining a proposal to bring the foreign direct investment policy for the pension sector in line with that of the insurance sector.
* INFRASTRUCTURE: The central government has approved funding viability gap of 13 bln rupees for proposed Pune metro. The National Highway Authority of India plans to rope in foreign pension funds and other entities such as equity investors to fund mega highway projects for reducing overall costs.
* MINING: The central government has been asking the states since Aug 31 last year to submit their
action plans for auctioning leases of 348 non-captive mines, which are going to expire in 2020. However, even after repeated reminders, only two states--Andhra Pradesh and Rajasthan--have submitted their action plans.
* OIL AND GAS: Demerger scheme for Ratnagiri Gas and Power and Konkan LNG has been approved by the National Company Law Appellate Tribunal.
* RAILWAYS: Minister of State for Railways Manoj Sinha inaugurated Tori-Balumath section of 44.37 km-long ToriShivpur rail line in Jharkhand.
* REALTY: Homebuyers could be treated on a par with unsecured financial creditors at insolvency proceedings for real estate companies. The government has announced concessional goods and services tax rates for the sale of affordable homes, but developers are in a dilemma on charging lower rates, since there is no clear definition of such projects.
* REGULATORY: In a bid to end the dominance of the two central demat service providers, National Securities Depository and Central Depository Services, a SEBI appointed panel is likely to propose allowing corporate houses or private companies to get into the segment. Investors may soon have to tailor their bets in equity derivatives to their income. SEBI is planning to link the extent of investors' exposure to futures and options to what they earn.
* STEEL: The decision by the US to impose tariffs on steel and aluminium imports is a violation of the World Trade Organization's trade norms. ArcelorMittal USA has filed a case in a US court against Essar Steel, one of its directors Prashant Ruia, and three other Essar group entities seeking enforcement of $1.38 bln arbitration award from the company, court documents showed. Steel and alloy makers have asked the government to ensure supply of iron ore to sponge iron and pig iron units in Goa following a ban on mining operations in the state from Mar 16 threatening to disrupt supply of raw material.
- The commerce ministry is studying the impact of duty hike by the US on certain steel and aluminium products as India exports these goods worth about $2 bln per annum to America. Russia's Tyazpromexport, part of the Numetal consortium bidding for Essar Steel, would ramp up facilities at Gujarat's Hazira to its nameplate capacity of 10 mln tn within a year if they emerge as the winner
.
* TAXATION: The Parliamentary Standing Committee on Finance has recommended that the exemption limit for longterm capital gains tax be increased to 200,000 rupees from the proposed 100,000 rupees. Over 10.3 mln businesses have registered under the Goods and Services Tax regime and the implementation of the biggest indirect tax reform has been smooth so far, Parliament was informed.
- The GST Council has approved rolling out the e-way bill mechanism for inter-state movement of goods across the country from Apr 1, and the proposed system for intra-state movement of goods in a staggered manner starting Apr 15, Finance Minister Arun Jaitley said.
* TELECOMMUNICATION: The telecom regulator has stuck to its guns by reiterating to the government that telcos and tower companies should be mandated to share in-building solutions inside residential and commercial complexes, and large public places such as malls, hotels, and airports, to pre-empt any exclusive contracts, boost quality of indoor mobile coverage, and minimise call drops.
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* AUTOMOBILE: Volvo Car India will raise prices of its vehicles by up to 5% because the company is unable to absorb costs after the government, in Union Budget 2018-19 (Apr-Mar), raised basic import duty on completely built-up and knocked-down vehicles. A month after India dropped the idea of an electric vehicle policy, the government's think-tank NITI Aayog has tasked at least seven ministries with framing guidelines to encourage the use of such vehicles.
* AVIATION: Minister of State for Civil Aviation Jayant Sinha has said the government is committed to its deadline to complete the disinvestment of national carrier Air India. The government will transfer part of Air India's $8.5 bln debt pile to a special purpose vehicle before selling a stake in the state-owned carrier, junior civil aviation minister said. Commerce Minister Suresh Prabhu has been given the additional charge of Ministry of Civil Aviation.
- Buoyed by the $12.5 bln deal with SPICEJET, French major Safran's chief executive officer Philippe Petitcolin has said it expects more such big deals and higher share in the Indian commercial aerospace market. Disinvestmentbound flag carrier Air India has taken delivery of its 23rd and the last Boeing 777 plane which can be used in ultra-long haul routes, and thus also completing its 68 aircraft orders placed with the US plane-maker more than a decade ago.
* BANKING: Wilful defaulters owed state-owned banks 1.1 trln rupees as on Dec 31, Minister of State for Finance Shiv Pratap Shukla said in a reply to a question raised in the Lok Sabha. The Reserve Bank of India imposed a penalty of 50 mln rupees on Airtel Payments Bank for breaching know-your-customer norms. The Reserve Bank of India has asked commercial lenders to provide details of all letters of undertaking - a form of credit guarantee at the centre of an alleged $2 bln fraud - issued by them in the past several years.
- The government will review the issue of the bar on liquidating the assets of those who have given personal guarantees against loans when it comes to companies undergoing insolvency resolution. The gross non-performing assets of all banks in India amounted to 8.4 trln rupees in December, led by industry loans, and services and agriculture sectors, the government said on Friday. The government has directed public sector banks to collect passport details of all borrowers for loans more than 500 mln rupees, Financial Services Secretary Rajiv Kumar said.
- The Indian Banks' Association has written to the RBI requesting relaxation in its revised framework for resolution of stressed assets, emphasising that the banking regulator's zero tolerance towards delay in loan repayment could jeopardise lending to the infrastructure sector. The International Monetary Fund has said the recapitalisation of public sector banks should be part of a broader package of financial reforms to speed up the esolution of nonperforming assets. The RBI has initiated special audit of state-owned lenders with focus on trade financing activities, especially relating to issuance of letters of undertakings by them.
* CORPORATE: A standing committee on finance said in a report that the Companies Act need not be amended to provide a specific definition of shell companies, but asked the ministry of corporate affairs to include a "fraudulent" intent clause in the Act to avoid legal ambiguity and help identify shell companies.
* ECONOMY: The Maharashtra government has projected revenue deficit of 153.75 bln rupees in 2018-19 (Apr-Mar), with revenue receipts at 2.86 trln rupees, and revenue expenditure at 3.01 trln rupees, state's Finance Minister Sudhir Mungantiwar said in his Budget speech. Pitching for the use of digitisation to improve supervision, NITI Aayog ViceChairman Rajiv Kumar sought prudential processes and said digitisation had improved risk evaluation capacity of financial organisations manifold. The government is examining a proposal to bring the foreign direct investment policy for the pension sector in line with that of the insurance sector.
* INFRASTRUCTURE: The central government has approved funding viability gap of 13 bln rupees for proposed Pune metro. The National Highway Authority of India plans to rope in foreign pension funds and other entities such as equity investors to fund mega highway projects for reducing overall costs.
* MINING: The central government has been asking the states since Aug 31 last year to submit their
action plans for auctioning leases of 348 non-captive mines, which are going to expire in 2020. However, even after repeated reminders, only two states--Andhra Pradesh and Rajasthan--have submitted their action plans.
* OIL AND GAS: Demerger scheme for Ratnagiri Gas and Power and Konkan LNG has been approved by the National Company Law Appellate Tribunal.
* RAILWAYS: Minister of State for Railways Manoj Sinha inaugurated Tori-Balumath section of 44.37 km-long ToriShivpur rail line in Jharkhand.
* REALTY: Homebuyers could be treated on a par with unsecured financial creditors at insolvency proceedings for real estate companies. The government has announced concessional goods and services tax rates for the sale of affordable homes, but developers are in a dilemma on charging lower rates, since there is no clear definition of such projects.
* REGULATORY: In a bid to end the dominance of the two central demat service providers, National Securities Depository and Central Depository Services, a SEBI appointed panel is likely to propose allowing corporate houses or private companies to get into the segment. Investors may soon have to tailor their bets in equity derivatives to their income. SEBI is planning to link the extent of investors' exposure to futures and options to what they earn.
* STEEL: The decision by the US to impose tariffs on steel and aluminium imports is a violation of the World Trade Organization's trade norms. ArcelorMittal USA has filed a case in a US court against Essar Steel, one of its directors Prashant Ruia, and three other Essar group entities seeking enforcement of $1.38 bln arbitration award from the company, court documents showed. Steel and alloy makers have asked the government to ensure supply of iron ore to sponge iron and pig iron units in Goa following a ban on mining operations in the state from Mar 16 threatening to disrupt supply of raw material.
- The commerce ministry is studying the impact of duty hike by the US on certain steel and aluminium products as India exports these goods worth about $2 bln per annum to America. Russia's Tyazpromexport, part of the Numetal consortium bidding for Essar Steel, would ramp up facilities at Gujarat's Hazira to its nameplate capacity of 10 mln tn within a year if they emerge as the winner
.
* TAXATION: The Parliamentary Standing Committee on Finance has recommended that the exemption limit for longterm capital gains tax be increased to 200,000 rupees from the proposed 100,000 rupees. Over 10.3 mln businesses have registered under the Goods and Services Tax regime and the implementation of the biggest indirect tax reform has been smooth so far, Parliament was informed.
- The GST Council has approved rolling out the e-way bill mechanism for inter-state movement of goods across the country from Apr 1, and the proposed system for intra-state movement of goods in a staggered manner starting Apr 15, Finance Minister Arun Jaitley said.
* TELECOMMUNICATION: The telecom regulator has stuck to its guns by reiterating to the government that telcos and tower companies should be mandated to share in-building solutions inside residential and commercial complexes, and large public places such as malls, hotels, and airports, to pre-empt any exclusive contracts, boost quality of indoor mobile coverage, and minimise call drops.
