Morning Scan: All the big stories to get you started for the day

A round-up of top newspaper stories.

#1. India’s direct tax collections rise 11 percent to Rs 3.8 lakh crore till June 17

India’s net direct tax collections for the fiscal first quarter till June 17 stood at Rs 3.79 lakh crore, up 11.18 percent compared with the same period last year. The increase came on the back of robust advance tax revenues, official data said. The direct tax, net of refunds, includes corporate income tax
of Rs 1.56 lakh crore and personal income tax of Rs 2.22 lakh crore. Net collection stood at Rs 3.41 lakh crore in the same period of 2022-23.

Why it’s important: The robust collection indicates increased compliance amid strong economic growth. It would provide cheer to policymakers early in the financial year as it would sustain public spending without widening the fiscal deficit in an election year.

#2. Nodal agencies for manufacturing incentives under watch as government readies review

The central government is scrutinising agencies that are implementing the ambitious production- linked incentive scheme to ensure that powers given to them are not misused. The 14 manufacturing incentive schemes are being implemented through five project-monitoring agencies. These state-
owned entities are nodal agencies responsible for providing managerial and implementation support to the ministries rolling out the schemes. These also monitor key activities such as appraising applications, determining eligibility for incentives, monitoring performance and progress, and site
visits.

Why it’s important: The government’s think tank is reported to have misgivings about the powers given to the project monitoring agencies and it wants to ensure there is no scope for corruption.

#3. Lenders to Go First to launch forensic audit, Wadias to sue Pratt & Whitney

Banks could begin a forensic audit of Go Airlines India if a transaction audit to track undervalued or preferential transactions as part of the insolvency resolution process throws up adverse findings. Lenders met Go Airlines management to find out why it unilaterally sought insolvency although it has not defaulted on repayments. In a related development, the group plans to sue US engine maker Pratt & Whitney in multiple jurisdictions for its inability to deliver serviceable engines that led to it filing for bankruptcy.

Why it’s important: Forensic audits of companies facing insolvency is not unusual as creditors like to get the facts straight to maximise chances of recovery. The impending lawsuits against Pratt & Whitney were expected as engine trouble has been cited as the proximate reason for filing for
bankruptcy.

#4. iPhone exports from India touches record Rs 10,000 crore in May

Apple iPhone exports from India touched a record Rs 10,000 crore in May, boosting outward shipments of smartphones to Rs 12,000 crore, industry data show. In April and May, smartphone exports crossed Rs 20,000 crore ($2.4 billion), more than double the Rs 9,066 crore in the same period last year, according to India Cellular and Electronics Association. iPhones constitute 80 percent of the smartphone exports from India, and the remaining are phones of Samsung and some local brands.

Why it’s important: Apple’s increasing engagement with India could be an excellent leverage to convince other American companies to shift their supply chains in the country in a pivot from China.

#5. India prepares groundwork for carbon border tax to retaliate against European move

India is preparing the groundwork for a carbon border tax to strike back a similar move by the European Union. New Delhi is annoyed by the bloc’s move to link the environment with trade. The finance and commerce ministries are discussing the contours of such a mechanism, particularly about measuring the carbon content in products imported from Europe.

Why it’s important: India’s feels that the European Union’s carbon tax is just another way to impose customs duty. It’s tit for tat measure could further strain trade relations and result in a no-win situation.

#6. Latest government consumption survey to expand scope for better policymaking

The Household Consumption Expenditure Survey, a crucial input for policymaking revised for the first time after over a decade, will also feature information on the prices of tablets and mobile accessories like smartwatches. It would go beyond asking what you eat, what you wear and what you own. It also wants to know your OTT subscription spend, the time you spend online, how often you shop online, whether you order meals online and if you own an electric vehicle.

Why it’s important: The expanded scope of the survey will provide the government with a better handle on consumption trends in India even as e-commerce and online transaction gain traction in the country.

#7. Us tech companies raise concerns over 20 policy barriers to digital trade with India

The Washington-based Computer & Communications Industry Association, which counts Google, Uber, Meta, and Amazon as its members, has identified 20 policy barriers to US-India digital trade. These include the amendment to the IT Act, which imposes additional requirements under the
Intermediary Rules (2021), the Content Moderation Act, the equalisation levy, and the proposed telecom law.

Why it’s important: The trade body says India has a protectionist posture towards US digital services providers. Such lobbying pressure comes ahead of Prime Minister Narendra Modi’s state visit to the US.

#8. Stuttering monsoon pushes back summer sowing, may hit yields of key staples

The slow progress of the southwest monsoon has delayed sowing of key kharif crops such as rice, oilseeds, and pulses. The country is 37% deficient in rainfall at present. The additional specter of scanty rains due to the El Nino weather phenomenon may combine to shrink the production of staples and soybean.

Why it’s important: India needs a plentiful autumn harvest to sustain economic growth that is already slated to moderate in 2023-24. A deficient monsoon could play spoilsport.

#9. Corporate affairs ministry may relax moratorium rules in bankruptcy code
The moratorium clause of the insolvency and bankruptcy code could be eased for certain sectors, with the corporate affairs ministry considering exemption for aircraft leases. The moratorium on idle spectrum in the telecom sector can also be done away with by making a provision in the draft telecom law. Section 14 of the code declares a moratorium on proceedings, transfers, or disposals of any of the assets of the company from the date of start of insolvency.

Why it’s important: The relaxations could have an immediate bearing on the Go First bankruptcy proceedings that has stopped lessors from repossessing their aircraft from the distressed airline.

#10. Beauty brans flock to Indian market as youth numbers with disposable incomes expand

India is seeing an incoming floods of global beauty brands, probably the most in a year as per industry executives, as they target the country with the largest population of young people and increasing disposable income for their next phase of growth. Brands have started retail expansion and global funds are looking for opportunities to invest in beauty startups.

Why it’s important: Demand for beauty products is growing rapidly in India, driven by social media influencers, aspirational consumption in smaller cities and increasing e-commerce coverage. Global beauty brands want a share of the expanding pie.