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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

June 28, 2022 / 08:02 AM IST

GST Council begins two-day meeting to increase compliance and revenue

The GST Council will consider several measures to prevent tax evasion and boost revenues at its two-day meeting. The steps include discussing the seven-point recommendations made by a group of ministers on system reforms, real-time validation of bank accounts by integrating the GST system with the National Payments Corporation and tougher measures using data analytics-led enforcement to boost compliance.

Why it’s important: The indirect tax regime enters into its sixth year amid challenges to improve tax compliance to boost revenues at a time high inflation makes raising taxes difficult. The central and state governments are facing increasing pressure to mobilize revenue to manage spiraling deficits.

 

Vedanta turns to LIC to raise Rs 4,800 crore as offshore borrowing costs rise

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At a time when higher US interest rates have made it expensive for Indian corporation to tap foreign bond markets, mining firm Vedanta is likely to have struck a direct transaction with Life Insurance Corporation of India to raise Rs 4,809 crore 10-year bonds.

Why it’s important: The rupee’s weakness, higher US interest rates, and high crude oil prices have made it costlier for firms to service foreign debt. More local firms would look to domestic fundraising options.

 

Captive private 5G network operators do not require to pay entry fee

India has set the ball rolling for building captive private 5G networks by issuing rules that said enterprises seeking spectrum directly from the telecom department would be given a renewable license for 10 years against a non-refundable application charge of Rs 50,000. The department will undertake demand studies and seek recommendations from the telecom regulator for direct assignment of spectrum to such firms.

Why it’s important: Allocating 5G spectrum for private networks is a contentious issue in India. Telecom operators have strongly opposed the move, saying it would impact their business but big tech in the country has pushed for it.

 

Electric vehicle makers availing subsidies to face increased scrutiny

Companies availing subsidies under the electric vehicle promotion scheme are facing increased scrutiny after it came to light that many manufacturers were providing misleading information. EV makers now must produce a certificate from an empaneled chartered accountant verifying the extent of imported components in their vehicles before their products can qualify for subsidies.

Why it’s important: India’s ambitious electric transition project must not be jeopardized by shady business practices. Consumer sentiment has already taken a hit because of batteries catching fire.

 

Yes Bank to approach regulator over Goel’s tenure on Dish TV board

Yes Bank has managed to convince the majority of Dish TV India shareholders to prevent Jawahar Goel’s continuance as managing director but was caught by surprise as the company’s articles of association makes it possible for Goel to continue as a non-executive director. The private lender now plans to approach the markets regulator over the issue.

Why it’s important: The development has riled investors and proxy advisory firms, who want to know why this information was shared only with the corporate ministry and not with shareholders.

 

More market manipulation revealed in investigations in NSE co-location scam

Investigations into the co-location swindle at the National Stock Exchange have unearthed new aspects of market manipulation by high-frequency traders, which involved firing a barrage of algorithmic orders, many more than allowed, to crowd out orders of rival brokerages.

Why it’s important: Unfair price dissemination and preferential treatment to some stockbrokers at the National Stock Exchange have shaken faith in the system and investigators must move swiftly to bring the culprits to book.

 

New legislation may allow government to fully exit from state-owned banks

The government may introduce a bill in the monsoon session of Parliament to make amendments to facilitate the privatization of state-run banks. One of the modifications being considered will allow the central government to completely exit from banks being privatized. Current law requires the government to hold at least 51 percent of public sector banks. The earlier thinking was that it should retain at least 26 percent during privatization and bring that down gradually.

Why it’s important: The proposed changes are based on discussions with potential investors during recent roadshows for the stake sale in IDBI Bank. They would make a radical shift in the government’s approach to privatize state-run lenders.

 

Airbus emerges as frontrunner for $5.5 billion order from Jet Airways

Airbus SE has emerged as the frontrunner to win an aircraft order worth as much as $5.5 billion from Jet Airways India. The talks are for A320neo jets and A220 planes. Boeing Co and Embraer SA are also in discussions and no final decision has been taken.

Why it’s important: If Airbus secures the massive contract, it will solidify the European aircraft maker’s presence in India, the world’s fastest-growing aviation market.

 

Imports under scanner as government seeks to contain current account deficit

The central government has begun close monitoring of imports amid concerns over the rising current account deficit that could undermine India’s macroeconomic balance. Revenue authorities are being vigilant after the trade deficit hit a record $24. 3 billion in May.

Why it’s important: The import of precious metals, especially gold, is under scrutiny. The government will have to move with care as any ill-considered move could impact the country’s fledgling economic recovery.

 

Niti Aayog suggests social security for platform workers

NITI Aayog has suggested that the government and companies put in place social security policies for gig workers, including paid sick leave, insurance, and pension. A report by the think tank estimates that in 2020-21, 7.7 million workers were engaged in the gig economy, 1.5 percent of India’s total workforce. This is expected to expand to 23.5 million workers and make up 4.1 percent of all workers in India by 2029-30.

Why it’s important: India requires a framework that balances the flexibility offered to gig workers while also ensuring their social security, given the inherent impermanence of the work.
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first published: Jun 28, 2022 08:02 am
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