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

A round-up of the biggest articles from newspapers

March 02, 2022 / 07:50 AM IST

GST collection over Rs 1.3 trillion for fifth month, signalling economic recovery

The government collected Rs 1.33 trillion in goods and services tax in February for transactions conducted in January. It was the second straight month when revenue from indirect taxes have topped Rs 1.3 trillion, according to official data. GST receipts had crossed Rs 1.39 trillion in April last year before the second pandemic wave disrupted the economy. It had since recovered to cross Rs 1 trillion in July and has remained high. In January, collections shot up to a record Rs 1.4 trillion.

Why it’s important: Buoyant revenue collections indicate that business activity is recovering from the Covid-19 pandemic. Indirect tax collections exceeding Rs 1.33 trillion despite a challenging situation in recent months indicate that receipts are on a stable trajectory through this financial year to March.


Reliance to buy Future Retail assets at agreed upon price

Reliance Industries will not decrease the purchase price of the Future Group’s retail assets from Rs 247.13 billion that was originally agreed upon when the deal was announced in August 2020, if the court allows it to acquire the business. It will, however, adjust over Rs 40 billion that the Future Group owes for the past 15 months as rent, purchase of inventory and toward working capital when the deal materializes. The deadline for closing the deal currently is September this year.

Why it’s important: Reliance has shut hundreds of Future stores over the weekend and removed signages to rebrand them as Reliance Retail outlets in the next few days after the Future Group defaulted on rent. The sale of retail assets by Future to Reliance is being opposed by Amazon in various courts and tribunals.


Cofounder Ashneer Grover exits BharatPe, may forfeit some stock options

Ashneer Grover, cofounder of BharatPe, has resigned as managing director and company’s board director. The fintech unicorn said Grover’s resignation letter was received within minutes after a board meeting was called to deliberate on an audit report by PwC, an accounting firm. The company’s board may claw back a portion of Grover’s stock options equal to around 1.4 percent of his shareholding.

Why it’s important: The embattled cofounder resigned just before the PwC report that looked in financial irregularities were scheduled to be discussed at the company’s boardroom. Grover and the board have been at loggerheads for long on issues of governance. He may lose part of his equity if PwC reports indicates any wrongdoing.


Ilker Ayci declines offer for Air India chief over unfavourable situation

Former Turkish Airlines chairman Ilker Ayci turned down the offer by Tata sons, the new owners of Air India, to be the carrier’s chief executive and managing director, citing an unfavorable narrative over his appointment. Air India had appointed him on February 14, saying he will join by April 1 following regulatory approvals.

Why it’s important: Air India has failed to clear its first hurdle after recent privatisation. The Swadeshi Jagaran Manch, an affiliate of the Rashtriya Swayamsevak Sangh, the ideological parent of the ruling Bharatiya Janata Party, had opposed the appointment on grounds of national security. This dimmed the prospects of getting security clearance. Tata Sons will have to begin headhunting again after the setback.


Semiconductor shortage may worsen due to war in Ukraine

The military aggression in Ukraine by Russia might aggravate the global shortage of semiconductor chips as the two nations are major suppliers of raw materials crucial to chip production, according to a report by Moody’s Analytics. Russia supplies the global semiconductor industry with rare metals and Ukraine supplies specialty gases required by the chipmaking industry.

Why it’s important: Ever since the coronavirus pandemic erupted across the world in 2020, the supply of semiconductor chips for motor vehicles and electronic goods, manufactured mostly in Taiwan, have been disrupted. This has particularly impacted carmakers, who were now hopeful of recovery as the pandemic recedes in key markets. That recovery might now take longer.


Local investors can trade in some American stocks from March 3

Investors in India will be able to trade in select US stocks through the NSE International Exchange, an arm of the National Stock Exchange, from March 3, through unsponsored depository receipts. The trading will be conducted over two calendar days beginning 8 pm on day one and up to 2.30pm the next day.

Why it’s important: Investors can now make use of the liberalized remittance scheme allowed by the Reserve Bank for up to $250,000 a year. Investing in global stocks has emerged as an attractive option in the past two years in the backdrop of buoyant US equities and a need to avoid the single-country risk.


High net exports exert pressure on India’s current account deficit

The country’s current account deficit is set to widen in the fiscal third quarter as the net exports ratio has touched the highest level in three years at 3.9 percent of gross domestic product in the October-December period, according to latest GDP data. The current account is likely to close at a deficit of 1.6 percent of GDP in the financial year to March compared with a surplus of 0.9 percent in 2020-21.

Why it’s important: Increasing geopolitical risks from the Russia-Ukraine conflict and sharply rising commodity prices could further widen the current account deficit in the near term. The immediate impact of the Ukraine war will be felt through higher inflation, an increase in the current account deficit and a fall in the value of the rupee against the dollar.


Global agency to release emergency stock to cushion oil price shock

As crude oil prices rise steeply on supply concerns, the 31 nations on the governing board of the International Energy Agency have agreed to release 60 million barrels of oil from their emergency reserves. The decision has been taken to send a strong message to global oil markets that there will be no shortfall in supplies because of Russia’s invasion of Ukraine.

Why it’s important: The development is a relief for countries heavily dependent on imports, which includes India. India depends on imports to meet 85 percent of oil needs. Oil marketers have held back hiking retail rates but that will change once the assembly elections are over. It would add fire to already high inflation.


Disney sells advertising inventory for 2022 cricket tournament

Disney Hotstar, the streaming channel of Disney Star, has sold most of its advertising inventory for the upcoming season of the Indian Premier League that starts on March 26. It will hike rates for the remaining slots by 20 percent after March 4, according to advertising sources.

Why it’s important: Cricket, particularly the premier league, is a huge money spinner. Disney is asking for a 10 percent increase in spot rates for 10-second slots on television. Peak asking rates are as high as Rs 1.8 million for some matches, which is an increase of over 25 percent compared with the previous editions of the tournaments.


Global tech giants worried about proposed data law in India

International technology companies have grouped together to express strong concern over the recommendations of a joint parliamentary committee on the proposed data protection law that is still in the works. The suggestions run counter to global standards for data protection and competition, the lobby groups that count Microsoft, Apple, Amazon, Google and Dell as members said in a letter to the electronics and IT minister.

Why it’s important: The parliamentary committee is recommended strict rules on data localisation and privacy. It has also suggested restrictions on international data transfers, and mandatory certifications of electronics hardware and AI software. These recommendations would raise compliance costs significantly for global tech firms.
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