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


GST hiked for several items, no decision on compensation to states

Several goods and services will cost more from July 18 with the GST Council approving an increase in rates to address inverted duty structures and withdrawing some exemptions. The wider reform of the GST slabs has been put off. The council could not decide on demands from about a dozen state ministers that their tax reform-related revenue losses should be compensated beyond June, when the current scheme expires.

Why it’s important: Any increase in GST rates is intended to make up for inefficiencies in the value chain, the finance minister said. The larger reforms have been pushed back till the time inflation cools a bit.

Succession planning starts at Reliance Industries, focus on next generation

Mukesh Ambani, 65, has initiated succession planning at Reliance Industries, India’s most valuable company. He has already made way for son Akash to take over as chairman of Reliance Jio Infocomm. Akash and daughter Isha are expected to be promoted to become chairpersons of the telecom and retail holding firms at the same time in the near future, although the exact timelines are still being worked out.

Why it’s important: Mukesh Ambani has started planning succession early to avoid the mistakes made by his father. His older twins are expected to be treated at par with the younger son waiting in the wings.

Rupee to weaken further despite interventions by Reserve Bank

The government is resigned to the fact that the rupee could weaken to 80 to the dollar over the next few weeks despite the central bank’s intervention to support the currency. The rupee settled just short of 79 against the dollar as a fall in domestic equities amid unceasing overseas investment outflows soured sentiment.

Why it’s important: The intervention of the central bank is more directed towards limiting the volatility rather than arresting the slide as the rupee faces fundamental headwinds due to high inflation and rate hikes in the US.

Market regulator allows foreign investments in commodity derivatives

The board of the Securities and Exchange Board of India has allowed foreign portfolio investors to trade in exchange-traded commodity derivatives. Overseas investors will be allowed to deal in non-agricultural commodity derivatives and cash-settled contracts. The three broad non-farm commodities where derivatives contracts are available on domestic exchanges are bullion, energy, and base metals.

Why it’s important: The move is aimed at improving liquidity and market depth. The more sensitive farm commodities have been kept out of bounds to avoid unnecessary volatility.

Byju’s lays off 500 employees, adding to the recent trend in edtech sector

Bengaluru-based Byju’s, valued at $ 22 billion, has laid off about 500 staffers at its group companies WhiteHat Jr and Toppr. The number of layoffs, cutting across various department functions, may increase.

Why it’s important: The company said the move is to drive cost efficiency. It continues the recent trend of letting staff go in other edtech companies as the sector seems to be battling a crisis.

TVS Motor to raise $ 300 million for electric vehicles business

Private equity companies TPG Capital and KKR & Co are in talks with TVS Motor to invest at least $ 300 million to fund the expansion of its electric vehicle (EV) business. TVS Motor may raise the money in the September quarter by selling 20-25 percent of TVS Electric Mobility.

Why it’s important: Private equity firms and venture capital funds are investing significant amounts in electric vehicle startups in India due to the attractive growth prospects and also to comply with their mandates to invest in clean technologies.

Tata group’s payment to settle dispute with Docomo faces tax scrutiny

The Tata group’s settlement of a dispute with NTT Docomo in 2017, which involved a payment of $ 1. 27 billion to the Japanese telecomfirm, has come under the scrutiny of the Directorate General of GST Intelligence. Tata Sons is challenging the claim that GST is liable on the payment.

Why it’s important: The Tata group says the payment was the outcome of arbitration in a London court and hence GST is not applicable. Tax authorities say this route could be taken by other firms to avoid paying GST levied on services, and setting a precedent is necessary.

Indian oil producers get marketing freedom, but exports not allowed

The Union cabinet of ministers have decided to give marketing freedom to domestic crude oil producers, allowing them to sell petroleum to any company in the local market. The move will benefit major crude oil producers, such as state-run Oil and Natural Gas Corporation and Oil India, and private sector firms like Vedanta’s Cairn Oil and Gas and Reliance Industries.

Why it’s important: The freedom to sell petroleum products in the domestic market is likely to boost the Indian hydrocarbon industry and bring more investments into the sector.

Crypto exchanges face pressure as prices decline, hurting business

Cryptocurrencies, which were in favor till last year, have seen a precipitous fall on every matrix for the exchanges, including trading volumes, value and profitability. The sudden shift in market sentiment from exuberance to fear has led to exchanges resorting to a combination of short- and long-term measures to manage working capital.

Why it’s important: A crypto winter is setting in after a drastic fall in prices of virtual digital assets. The exchanges have seen a drastic drop in both revenue and margins.

Farm credit societies to be digitized with outlay of Rs 25.16 billion

The cabinet committee on economic affairs has approved the computerization of primary agricultural credit societies with a budgetary outlay of Rs 25.16 billion to be spend over five years. The initiative proposes computerization of about 63,000 functional farm credit societies.

Why it’s important: Digitization is expected to increase the efficiency of the credit societies. It will also boost transparency and accountability in their operations.

Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.