Tag: Business news

Consumption driving India’s economic revival: ASSOCHAM – Times of India

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MANGALURU: Consumption is certainly driving the revival of the Indian economy with states like Gujarat, Rajasthan, Tamil Nadu and West Bengal filling the ‘shopping cart’ at a fast clip, a review of GST data disaggregation by ASSOCHAM has noted.
In all, 23 states and UTs registered a positive GST revenue collection trend during February, reflecting an uptick in consumption.
Breaking down the February 2021 GST collection showed that Gujarat has achieved the enviable position of being amongst the largest consumption states and has grown its revenue at an impressive pace of 14 per cent year-on-year in February (from Rs 7215 crore to Rs 8221 crore).
Though Maharashtra is the largest consumption state, its annualised GST growth was on the lower side, partly because of a large base.
Along with Karnataka, Maharashtra showed a modest annual expansion of two per cent for the month. However, credit also goes to these states for maintaining consumer confidence despite being amongst the largest consumption states.
As the Goods and Services Tax (GST) is mainly the consumption tax, it gives a better picture of consumer confidence than a combination of taxes which have since been merged into GST. Being the largest consumption state, Maharashtra raked in GST revenue (Centre-State combined) of Rs 16,103 crore in February 2021, showing an increase of two per cent over the corresponding month of last year. A similar 2 per cent rise was seen in Karnataka, with GST revenue increasing to Rs 7581 crore for the month under review.
”The consumption story is catching up with the trend being led by manufacturing, FMCG, chemicals, fertiliser, real estate and construction with a major positive impact on industries such as steel and cement. Once the capacity utilisation reaches to the fullest, the investment wheel of the economy too would pick up momentum, giving further traction to the economy,” ASSOCHAM Secretary General Deepak Sood said. He said the chamber’s assessment about the V-shaped recovery in the FY’22 is being reflected in the high-frequency data, including the key figures of the GST collections.
The gross GST revenue collected February 2021 Rs 1.13 lakh crore, showing an increase of seven per cent over the same month last year.
The other states pointing towards speedy revival in consumption include Tamil Nadu, Himachal Pradesh, Punjab, Haryana, Sikkim, Arunachal Pradesh, Odisha, Jharkhand, Madhya Pradesh, Chhattisgarh and Jammu and Kashmir.
However, states like Goa which depend significantly on services like tourism, have shown a drop. With the vaccination drive picking up pace, the services sector too should return to growth in the next few quarters, the ASSOCHAM review noted.

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New-age desi tech companies use crypto for pay, perks – Times of India

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CHENNAI: New-age tech companies are satiating their young workforce’s growing desire for digital money by using a workaround to pay either part of their salary, bonus or other incentives in cryptocurrency. For employers, this is a quick and easy transaction, while for employees the lure is the possibility of the crypto appreciating in value.
There are two approaches taken by employers. One is to register their entities in crypto-friendly nations and pay their employees in cryptocurrency to avoid any legal or tax hurdles.
The second is to record the payment as a rupee transaction in their books, but to facilitate the conversion of the rupee into cryptocurrency.

An executive from a gateway company, which facilitates payments for cryptocurrency through banking channels, said, “Generally, we use a stable coin/cryptocurrency like Tether (USDt) to pay salaries. Employees can cash them out immediately or hold on to them.” Since Tether is pegged to the dollar, a systems engineer with a pay package of $60,000 per annum will get 60,000 USDt.
In India, cryptocurrency continues to be a grey area and both employees and employers are worried about the tax implications. “After encashment of altcoins via cryptocurrency exchanges, I file that amount as income from consultant fee for tax returns,” said Sujeet Kumar, a Patna-based consultant for use cases of blockchain and cryptocurrency.
Kumar gets paid in altcoin like Ethereum, Plaas Token and Audio Coin, which he encashes through Indian cryptocurrency exchanges. “I usually convert the coins according to my need. Most of my clients are in the cryptocurrency market, thus making the transactions easier and faster. I have taken my last year’s bonus via cryptocurrency too.”
The CEO of a cryptocurrency news website said, “We follow a method where we pay salaries in cryptocurrency and draw a salary slip in rupee. This spares employees from any concerns if their salary slips are in crypto.”
Opinder Preet Singh, who heads a crypto hedge fund called Chain Assets Capital, said, “With too many legal regulations and lack of clarification on recognising cryptocurrency in India, we have registered our company in a crypto-friendly jurisdiction abroad. This allows us to pay salary, bonuses and incentives or spend money in India and also around the globe, especially for freelancers hired overseas.”

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From peak of Rs 56,000 in August, gold plunges to near Rs 43,000 – Times of India

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MUMBAI: After a strong run that had lasted about nine months, gold in India is on a slide with its price during intraday trade on Friday nearing the Rs 43,000-per-10-gram level. From a high of Rs 56,310 recorded in August, the price is now down 21%. This means gold has technically entered the bear territory.
The slide in gold rates here came due to a sharp drop in its price in the international markets, which fell below the $1,700-per-ounce (Oz) mark on Thursday — a nearly nine-month low level. From its all-time peak at $2,010 last August, it has now lost 15%. Analysts feel that it could slide below the $1,500 level before it stabilises.

The drop in gold prices came on the back of a strong dollar, which was due to the rising bond yields in the world’s largest economy. With investors pouring money into US government bonds to earn higher yields, the attractiveness of the yellow metal as a safe haven diminished a bit, and hence the slide in its price, analysts said.
Apart from demand factor, the price of gold in India depends on the international pricing and the rupee dollar exchange rate since it is a globally traded commodity. Of late, dollar has been strengthening against most major currencies. The rupee-dollar rate has been hovering around the 73-to-adollar mark for the last few months. In the last couple of weeks, the rupee has broken below the 73-mark and on Friday closed at 73.03.
While some analysts see gold sliding to the $1,500 level, others feel there is going to be a tug-of-war between global central banks, which will try to rein in rising yields, and investors who would expect it to rise. This would eventually decide the price of gold, analysts said.
According to Hitesh Jain of Yes Securities, although gold prices have tumbled recently in the wake of the surge in sovereign yields, the latter would not rise sustainably since governments do not favour higher yields on their accumulated gigantic debt.
“There is a prevalent divide between markets and central banks, wherein markets are pricing higher inflation and growth, while central banks remain accommodative and dovish. We assume that central banks will eventually rein in yields with their asset purchases and also help their respective governments in keeping the borrowing costs low,” Jain wrote in a note. “On gold price trajectory, we still remain bullish considering the unprecedented government stimulus, bloated central bank balance sheets and burgeoning sovereign debt.”

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Government makes dual airbags mandatory for cars – Times of India

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NEW DELHI: The government on Friday announced its decision to make the passenger side airbag mandatory in new cars.
“It has been mandated that the vehicles manufactured on and after April 1, 2021, in the case of new models, and August 31, 2021, in the case of existing models, shall be fitted with airbag for the person occupying the front seat, other than the driver,” the ministry of road transport and highways stated.

In December last year, the government had sought public comment on a proposal to make airbags mandatory for the front passenger in all cars from this year
Priot to this, the Centre had made an airbag mandatory for the driver’s seat in all cars. This came into effect from July 1, 2019.



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India likely to start full operations at Iran’s Chabahar port by May end – Times of India

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NEW DELHI: India expects to start full-scale operations at Iran‘s Chabahar general cargo port it has built by the end of May, the country’s shipping minister said in a boost for regional trade.
India has been developing a part of the port on Iran’s south-eastern coast along the Gulf of Oman as a way to transport goods to Iran, but also Afghanistan and central Asian countries, and avoiding rival Pakistan.
But US sanctions on Iran slowed down the port’s development and Indian officials are now counting on a thaw in relations between Washington and Tehran under President Joe Biden to move forward with near $500 million of investments.
“I am expecting to visit Iran in April or May for the inauguration of full operations,” Mansukh Mandaviya, India’s ports and shipping minister, told Reuters.
India is developing two terminals at the port including the Shahid Beheshti complex and under an agreement signed with the Iran, it would run the terminal for 10 years.
Mandaviya said the port had already commenced operations in a limited way and the growth potential was evident.
Chabahar port had handled 123 vessels and 1.8 million tonnes of bulk and general cargoes from February 2019 to January 2021, he said.
“This is much higher than our expectations. Imagine the scale of operations and freight saving once it is fully operational,” he said.
Last year amid the pandemic, India used the Chabahar port to send 75,000 tonnes of wheat as humanitarian assistance to Afghanistan and 25 tonnes of the pesticide malathion to Iran to deal with a locust invasion.
The second batch of 25 tonnes has recently reached Chabahar.
As part of the agreement with Iran, India would provide six cranes and other equipment worth $85 million to equip and operationailse the Shahid Beheshti terminal.
So far, India has supplied two of these Mobile Harbour Cranes (MHC) and four others will be delivered over the next few weeks.
“Chabahar Port has emerged as the connecting point for the region to deliver humanitarian assistance during the Covid pandemic,” Mandaviya said.
India also plans to set up an around 600 km railway line from Chabahar port to Zahedan, the provincial capital of Sistan-Baluchestan in Iran close to the Afghan border, at a cost of $1.6 billion to facilitate the movement of goods to Afghanistan.
New Delhi has also proposed inclusion of Chabahar port in the International North-South Transport Corridor (INSTC)- connecting Mumbai with Moscow, the minister said, referring to discussions at a virtual summit on Chabahar port on Thursday.
The INSTC project, proposed by India, Russia and Iran in 2000, and later supported by 10 other central Asian countries, envisions a 7,200 km-long multi-mode network of ship, rail and road for freight transport, aiming to cut carriage costs by about 30% and transit time from 40 days to about 20 days.

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FDI inflows rise 40% to $53 billion in April-December – Times of India

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NEW DELHI: Foreign equity inflows shot up 40% to $52.9 billion with gross FDI rising over 22% to $67.5 billion during April-December 2020 on the back of deals in the digital space, such as those involving Reliance Jio.
Net inflows were estimated to be 30% higher at $48.5 billion as repatriation or disinvestment in Indian ventures also went up by a third to $19.1 billion, data accessed from the Reserve Bank of India (RBI) showed.
“India remained the bright spot in an otherwise shadowy year for FDI, as global inflows plunged by 42% year-on-year in 2020 ($859 billion), the lowest level since the 1990s, according to UNCTAD’s ‘Investment Trends Monitor’ released on January 24. India clocked a 13% ($57 billion) year-on-year rise, the highest growth among countries, boosted by flows into the digital sector,” the RBI said in a monthly publication released last week.

Although the government is yet to release the sector- and country-specific details, it attributed the increase to steps taken by it.
“Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country,” the commerce and industry ministry said in a statement.
“Net FDI flows remained strong in December 2020, following a surge through August-November 2020… A surge in FDI equity inflows in August-December 2020 was largely driven by a few mega deals in digital services,” the RBI said in its monthly publication last week.
During December, FDI inflows are estimated to have increased 22.7% to $9.2 billion.
With sectors such as insurance all set to see an increase in the sectoral limit to 74% and several companies looking to diversify their production bases to reduce their dependence on China, the government is hoping that flows will remain strong.
The RBI, however, warned of possible downside risks to the outlook for FDI flows in 2021, citing the “persistent uncertainty clouding the course of the virus”.
Unlike inward flows, FDI outflows via investment by Indian companies dropped by almost a quarter during April-December 2020 to a shade under $8 billion, the RBI data showed.

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EPFO liquidates equity outlay, retains 8.5% payout for FY21 – Times of India

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NEW DELHI: Amid falling interest rate, the Employees Provident Fund Organisation (EPFO) has managed to hold on to 8.5% rate for the current financial year, providing relief to its nearly five crore active subscribers. Many will be hit hard by the government’s move to tax returns if contributions top Rs 2.5 lakh annually.
The decision was taken at a meeting of the EPFO’s central board of trustees headed by labour minister Santosh Gangwar. It will need to be endorsed by the finance ministry, which is known to raise the red flag almost every year before holding itself back.

The retirement savings agency has relied on the stock market to offer higher returns. “For FY 2021 (2020-21), EPFO decided to liquidate investment and the interest rate recommended is a result of combined income from interest received from debt investment as well as income realised from equity investment. This has enabled EPFO to provide higher return to its subscribers and still allowing EPFO with healthy surplus to act as cushion for providing higher return in future also. There is no over-drawl on EPFO corpus due to this income distribution,” an official statement said, pointing to its equity investments over the years.
EPFO will be left with a surplus of around Rs 300 crore.
At the current level, someone in the 30% income tax slab will earn annual returns of over 11% given the tax-free status enjoyed by it currently.
In contrast, other investments, such as fixed deposits with banks don’t only offer such high rate but face tax if over Rs 1.5 lakh is parked even in maturity basket of over five years. Currently, SBI is offering 5.4% on fixed deposits with maturity of five to 10 years, and post-tax it will translate into an annual return of around 3.8% for someone in the 30% tax slab.
Similarly, public provident funds deposits currently fetch 7.1% but the investment is capped at Rs 1.5 lakh annually.
Apart from returns, provident fund also comes with the power of compounding, which means if you stay long enough, based on compound interest on the corpus, your returns actually grow significantly with your annual contribution adding to the benefit. Even the government did not fail to point it out.
“A high EPF interest rate, along with compounding, makes a significant difference to gains of subscribers. This is despite the fact that EPFO has consistently followed a conservative approach towards investment, putting highest emphasis on the safety and preservation of principal first approach. Risk appetite of EPFO is very low, since it involves investing poor man’s retirement savings also,” the labour ministry said in a statement.
The government on Thursday said that EPFO has extended its coverage to establishments in Jammu and Kashmir and Ladakh after the implementation of EPF & MP Act to the two Union Territories from the end of October 2019. During this period, the coverage has extended to 4,754 establishments compared to 3,458 at the end of October 2019, while the number of subscribers has shot up 63% to 2.1 lakh.

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Cyber Attacks on power grid: 10 power assets, Mumbai, Tamil Nadu ports came under RedEcho cyberattack | India Business News – Times of India

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NEW DELHI: Cyber attacks by RedEcho, the actor group with China links, on India’s power infrastructure have been more widespread than previously known and the intrusive infrastructure remains active even after military de-escalation in Ladakh’s Pangong area.
According to Christopher Ahlberg, CEO of Recorded Future, the Massachusetts-based enterprise security outfit that detected the intrusions, 10 Indian power sector assets and the Mumbai and Tamil Nadu’s VO Chidmabaranar ports came under attack.
The power assets that came under attack were Delhi state load despatch centre, DTL Tikri Kalan substation in Delhi; Mumbai Port Trust, western regional load despatch centre In Maharashtra, NTPC’s Kudgi power plant and southern regional load despatch centre in Karnataka, VO Chidambarnar port in Tamil Nadu, Telengana load despatch centre, eastern regional load despatch centre in West Bengal load despatch centre and northeastern regional load despatch centre in Assam.

“Recorded Future observed through its network intelligence significant, high-volume, network traffic from Indian power sector assets to servers used by China-linked group RedEcho… The adversary infrastructure is still active and activity continues (even after Pangong pull-back announcement),” Ahlberg said in a presentation on the group’s findings on Thursday.
Charity Wright of Insikt, Recorded Future’s threat research group, said the location of targeted infrastructure covered the length and breadth of India’s geography as well as the demography.
A New York Times report had last Sunday blown the lid off on these intrusions, citing findings by Recorded Future. It raised doubt Chinese hackers may have caused the October 12 power outage in Mumbai as a warning against strong Indian pushback to PLA’s border transgressions in Ladakh.
On the power ministry’s statement that no installation was affected as safeguards were already in place, Wright said it showed the government responded to alerts. On power minister RK Singh blaming the Mumbai blackout on human error, Ahlberg said there was insufficient data to prove cyberattack caused the Mumbai blackout.
Targeting the Indian energy sector offers limited economic espionage opportunities. But the group believed “gathering future operational activity, pre-positioning destructive malware, as a warning/show of force during heightened bilateral tensions; and potential information operation to disturb Indian population” could be the possible objectives.
Ahlberg said RedEcho “has overlapping modus-operandi with several Chinese groups, including APT41 and Tonto Team,” the known cyber threat groups that take directions from established nation-states to carry out cyberattacks.
Wright said her group detected the intrusions using large-scale automated analytics and analysis. These included a combination of proactively identifying adversary infrastructure through server fingerprinting; identifying established sessions between the victim and adversary infrastructure through network traffic analysis; and enriching traffic analysis with proprietary data sources for victim identification.
This was the same methodology used to detect power sector intrusions in the European transmission control system, ENTSO-E.

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Covid-19 prompts women to take ownership of money, invest more: Survey – Times of India

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NEW DELHI: A greater number of women in India are taking ownership of their money and investing more as compared to 2020, when the Covid-19 pandemic ravaged the economy and hit household budgets, according to a survey.
The percentage of women who actively invest has risen by 10 percentage points since last year, the survey conducted by Scripbox, a digital wealth management service firm, ahead of the International Women’s Day found.
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The survey involving 778 respondents from across the country was aimed at “examining aspects of financial preparedness, investment behaviours and challenges around money matters of women”.
“This annual survey records a clear progression in women investing more and taking greater control of their money over the last year as a result of the economic impact of the pandemic.
“The percentage of those who actively invest has risen by 10 per cent since the last year,” it said.
Women who would earlier leave the financial decisions to their husbands, or other male members of the family have, over the course of the past year, reclaimed control of their finances and by extension, their well-being.
“Sixty-seven per cent of women make joint decisions with their spouses and 21 per cent of women say that they handle them independently.
“The number of women who say that they have an equal say in money matters along with their spouses has doubled since last year, from 33 per cent to 67 per cent in 2021,” the survey said.
For non-metro women, financial decisions are largely left to the parents, it added.
For a large section of the respondents, getting involved in financial planning decisions lent them a sense of confidence that encouraged them to take risks.
Women continue to be avid savers, with over 50 per cent preferring to squirrel away their money in fixed deposits and 36 per cent choosing to invest in mutual funds.
Twenty-one per cent of women are investing in stocks.
“Nearly 60 per cent of women save more than 20 per cent of their income every month. Fifty-six per cent of women prefer fixed income products such as Fixed Deposits, Public Provident Funds, and other tax-saving schemes,” the survey said.
Sripbox founder Atul Singhal said embracing systematic long-term investing helped create a greater sense of well-being among women. It was promising to see more women taking the reins of their financial future.
“Women tend to prioritise long-term growth over immediate returns and look to achieve life goals. Their long-term view of wealth creation lends ideally to investing which requires and rewards that perspective,” he said.
The survey showed that saving for retirement is the foremost financial goal for women (58 per cent) in the country. Other goals include children’s education (52 per cent) and creating an emergency fund (50 per cent).
“Expectedly, among single women, their top financial goal was to save for travel (51 per cent). Saving up for a home was also among their top four financial goals,” the survey said.
While women have come a long way in terms of achieving financial independence, there is still a long way to go.
According to the survey, at least 50 per cent of women admitted to having low or no confidence in their financial decision-making and investment acumen.
“One out of two women say they don’t have enough knowledge and are confused about financial planning. One out of every five women in non-metros say that they do not have enough money to put towards their savings,” the survey said.

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Walmart’s Flipkart considers US listing with SPAC as option – Times of India

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NEW DELHI: Walmart Inc’s Flipkart is exploring going public in the US through a merger with a blank-check company as it seeks to quicken its listing process, according to people familiar with the matter.
The Bengaluru-based online retailer has been weighing a US initial public offering and it’s now also looking at other options, the people said. Flipkart’s advisers have approached several SPACs, said one of the people, who asked not to be identified as the information is not public. Flipkart could seek a valuation of at least $35 billion in a blank-check transaction, the people said.
Deliberations are at an early stage and Flipkart could still explore other options, the people said. A representative for Flipkart had no immediate comment.
The e-commerce firm is joining other Indian firms like online grocer Grofers in exploring a US listing through SPAC deals. ReNew Power last week agreed to merge with a US-listed special purpose acquisition company in a deal that will give India’s biggest renewable power producer an enterprise value of $8 billion.
Merging with SPACs, which are shell companies that raise money from public investors intending to acquire a business within two years, will allow Walmart to take its India unit to market at a faster pace than the usual IPO route. As many as 10 Indian companies could go public through SPAC deals before the end of the year, Utpal Oza, head of investment banking for India at Nomura Holdings Inc, said in an interview.
Flipkart, which is battling with e-commerce arch-rival Amazon.com Inc and Mukesh Ambani’s retail venture for market share in India, started operations in 2007 and now sells 80 million products on its platforms. Walmart acquired a majority stake in Flipkart in a $16 billion deal in 2018.

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