India to focus on growth despite disruptions caused by Ukraine war
The war between Russia and Ukraine had disrupted supply chains around the world, including in India, finance minister Nirmala Sitharaman said in Parliament, but the government will continue to focus on growth and recovery with a predictable tax regime.
Why it’s important: The statement by the finance minister during the debate in the Rajya Sabha to approve the 2022-23 budget provides a clear indication that the government will not resort to further taxation despite geopolitical tensions that have derailed supply chains that might hurt growth.
Russian, Indian central banks to create framework for bilateral trade and banking
Russian central bank officials are expected to meet their counterparts from the Reserve Bank of India to create a regulatory framework that will help sustain bilateral trade and banking operations despite the global sanctions against Moscow. They are also likely to work on creating a dedicated payment mechanism to facilitate India's energy purchases from Russia.
Why it’s important: The Indian government has given an in-principle approval to rupee-rouble trade that needs a regulatory framework. This has become necessary to protect bilateral trade after the West took steps to commercially isolate Moscow in the aftermath of the Ukraine war.
Corporates request market regulator to reconsider related party rules
India’s top business groups have urged the markets regulator to reconsider implementing norms that mandate a group’s holding company to secure shareholders’ consent for deals above Rs 10 billion and auditors’ approval for all related-party transactions. The Confederation of Indian Industry has suggested that the Securities and Exchange Board of India change the norms and defer the amendments for at least six months.
Why it’s important: The bigger corporations are afraid that a low threshold will require them to go through several lengthy shareholder approval processes, delaying their ability to respond to market conditions and competition, and posing other operational challenges.
GST Council may hold merging tax slabs till crude oil prices cool
The Ukraine war and the sharp rise in crude oil prices could have stymied India’s plans to merge slab rates in the goods and services tax regime and make the system simpler with just three broad rates. The merger of the rates may be put on the backburner because of its implication on inflation.
Why it’s important: The next meeting of the GST Council in the second half of April may not consider rate restructuring to ease compliance. Several states are also not in favor of a merger that would raise GST rates for many products and services.
Only 2-3 firms to meet target for production-linked incentives for IT hardware
Just about two or three firms out of the 14 eligible companies are likely to meet their first-year targets for the production-linked incentive scheme for IT hardware for the financial year to March 31. The government had notified the hardware PLI scheme on March 3 last year with an incentive corpus of Rs 73.5 billion, under which the 14 companies were chosen.
Why it’s important: Some companies have said inadequate incentives under the scheme have hurt their manufacturing plans in India, while others have blamed the continuing disruptions to global supply chains and chip shortages for the missed targets.
Government to sell three Air India units and other assets in a year and a half
The central government will soon start the process to sell three erstwhile subsidiaries of Air India and real estate including the Air India building in Mumbai, two months after closing the sale of the national carrier to the Tata group. The process will be completed in the next year and a half, and the government is expecting about Rs 160 billion from the sale.
Why it’s important: Strong demand is likely for the profit-making Air India Air Transport Services. Any ground-handling company that succeeds in buying it will become the largest such firm in the country.
VC exits in local startups rise tenfold to $14 billion in 2021
Venture capital fund exits in Indian startups rose more than ten times to cross $14 billion in 2021 compared with the previous year, according to consultancy Bain and Co. Three big exits accounted for nearly 60 percent of the total value — BillDesk’s acquisition by PayU for $4.7 billion, Paytm’s $2.5 billion initial public offering, and Zomato’s public market debut of $1.3 billion.
Why it’s important: There is growing interest from global investors and private equity firms in growth-stage deals that drove of the buoyant secondary market. This is an indication that the startup ecosystem has become robust in India.
CBI to focus on unfair gains by brokerages in co-location case
The Central Bureau of Investigation is focusing on the financial gains made by some brokers when they had unfair access to the trading system of the National Stock Exchange as part of its investigation into the NSE co-location scam.
Why it’s important: The concerned brokers, likely to be some 30 in number, may have booked trading profits to the tune of Rs 25.82 billion during 2010-14, according to a report by the Indian School of Business.
Centre to sell 1.5% stake in ONGC for Rs 3,000 crore
The government will sell 1.5 percent stake in Oil and Natural Gas Corporation through an offer for sale to shore up the Centre’s divestment receipts by over Rs 3,000 crore. Retail investors can place their bids on Thursday, according to Tuhin Kanta Pandey, secretary at the department of investment and public asset management.
Why it’s important: The sale will be the government’s last attempt to boost divestment receipts in 2021-22. It will miss its pared down divestment target of Rs 78,000 crore as the LIC IPO has been postponed due to uncertainties arising from the war in eastern Europe.
Airtel buys Vodafone’s 4.7% stake in Indus Towers for Rs 2,388 crore
Bharti Airtel has bought Vodafone Group’s 4.7 percent stake in Indus Towers for around Rs 2,388 crore. The purchase has increased Airtel’s holding to 46.43 percent, while Vodafone’s stake has fallen to 21 percent.Why it’s important: Airtel has earlier said it will monetise its stake in Indus. It may further increase its stake in the tower company to provide stability before monetising its stake, the telecom operator had said.