Extending free food scheme, tax cuts could upset government’s fiscal math
The finance ministry’s department of expenditure has argued against extending the free food ration scheme beyond September or making any major tax cuts. The government has extended the Pradhan Mantri Garib Kalyan Anna Yojana for six months to September. The extension will swell the subsidy bill to about Rs 2.87 trillion and another six months could lift the bill to nearly Rs 3.7 trillion.
Why it’s important: It is important to rationalise revenue expenditure to protect capital expenditure that would boost growth.
Adani family pledges Rs 60,000 crore for charity on founder’s birthday
The Adani family has pledged Rs 60,000 crore to mark the 60th birthday of Gautam Adani, marking one of the biggest philanthropic commitments in India so far. The Adani Group founder and chairman turns 60 on Friday. The corpus will be administered by the Adani Foundation.
Why it’s important: Gautam Adani continues the trend of Indian billionaires pledging money to charity. He follows the likes of Azim Premji, Shiv Nadar, Mukesh Ambani, Kumar Mangalam Birla and Nandan Nilekani in setting aside substantial funds for charitable work.
Gold movement in India may require e-way bills to track shipments
The GST council is likely to consider imposing e-way bills for the movement of gold and precious stones within a state at its meeting next week. A group of ministers has proposed empowering states to decide on imposing the rule, rejecting the idea of introducing it for interstate movement. It has suggested setting a minimum threshold value of Rs 2 lakh for generating the e-way bills.
Why it’s important: The proposed move is aimed to help track the movement of gold and could aid in detecting tax evasion and smuggling amid rising prices. Gold is considered as a hedge against inflation and a safe haven during volatile times.
Corporate boardrooms get younger, add more women
Indian boardrooms are getting younger and adding more women, suggests data from the corporate affairs ministry. Nearly a third of new directors registered in 2021-22 were 30 years old or younger, while 44 percent were between 31 and 45, of which 32 percent were women. The percentage for male (70 percent) and female (30 percent) board members was similar across age groups.
Why it’s important: There has been a narrowing of the gender divide though a lot more needs to be done. The market regulator had earlier mandated at least one female director in the top 1,000 listed companies.
Bombay High Court allows Yes Bank to vote to oust Dish TV head
Jawahar Goel may not be able to continue as chairman of Dish TV India as the Bombay high court has dismissed a promoter entity’s petition seeking to block a crucial Friday vote by Yes Bank to oust Goel. A single-judge bench had already rejected World Crest’s petition earlier this week, after which it moved the division bench.
Why it’s important: The court rejected the argument that lenders or pledgees are not owners of shares and cannot exercise voting rights once the pledged shares are invoked. This could have wider ramifications.
Hindustan Unilever chairman flags headwinds to growth due to high inflation
Hindustan Unilever chairman Nitin Paranjpe has said that India is going through the most difficult economic situation and persistent inflationary pressures are beginning to weigh on demand. There’s a need for a balancing act to contain inflation without stalling growth, he said.
Why it’s important: High inflation has prompted consumers to cut back on purchases. Muted demand limits the scope for raising prices of products that puts pressure on margins in the face of rising input costs.
Fintech firms to seek six months’ time to comply with new credit line rules
Fintech companies have decided to seek an extension of at least six months from the Reserve Bank of India over its latest diktat that bars non-bank wallets and prepaid cards from offering credit lines on fintech platforms. The restriction on non-bank prepaid payments instruments comes into effective immediately.
Why it’s important: The buy now, pay later packages for digital customers have been one of the fastest growing business segments for fintech firms. The new rules threaten to upend that.
Vodafone Idea delays paying AGR dues by four years
Vodafone Idea has decided to defer the payment of additional adjusted gross revenue dues of Rs 8,837 crore by four years. In a filing, the telecom operator said its board has approved the four-year deferment for AGR payments after the government allowed a four-year moratorium for AGR dues up to 2018-19.
Why it’s important: The lifeline extended by the government could be a major relief to the beleaguered telco and place it in a better position to set aside funds for the upcoming auction for 5G spectrum.
Amazon faces uphill task in opposing Future Retail insolvency
Amazon’s efforts to oppose Bank of India’s move to initiate corporate insolvency resolution proceedings against debt-laden Future Retail will be an uphill task, legal experts have said. The National Company Law Tribunal has heard the intervention application by Amazon opposing the insolvency proceedings against the company, which owes around Rs 150 billion to creditors led by Bank of India.
Why it’s important: Amazon’s legal tussle with Future Retail looks like a lost cause. Once the corporate insolvency process is admitted before the tribunal, all proceedings in every court will have to be stayed.
Trend indicators point to deepening bearishness in Indian stock markets
Trend indicators are pointing to extreme bearishness in the stock market after the recent selloff. Out of the country’s 500 top stocks on the BSE, 86 percent are trading below their 200-day moving average, a measure used by market participants to determine the long-term trend in a stock or an index. When a stock trades below its 200-DMA, it is said to be in a bearish trend.Why it’s important: The trading trend indicates a high degree of pessimism in most blue chips. Market recoveries could be short, and volatility is expected to continue.