GST collections exceed Rs 1.4 lakh crore for six months in a row
Collections of the Goods and Services Tax in August remained above Rs 1.4 lakh crore for the sixth consecutive month, increasing 28 percent compared with August last year to Rs 1.43 trillion. GST collection in August 2021 was Rs 1.12 trillion. However, revenue from indirect taxes saw a mild sequential fall from Rs 1.49 trillion in July.
Why it’s important: The robust indirect tax collections can be attributed to better overall compliance, a revival in consumption demand in the country, and high inflation. The consistently high collections indicate a buoyant economic trajectory.
India’s economic growth forecasts slashed after disappointing GDP data
A day after GDP expansion data came in below the Reserve Bank’s projection and market expectations, some financial institutions and banks pared their economic growth estimates for 2022-23, which State Bank of India, Goldman Sachs, Citigroup, and Moody’s. Citigroup cut its projection to 6.7 percent from 8 per cent earlier, while Goldman Sachs revised it to 7 percent from 7.2 per cent earlier. Moody’s, a ratings agency, cut its prediction to 7.7 percent from 8.8 per cent. SBI slashed it to 6.8 percent from 7.5 percent.
Why it’s important: There is a chance that India’s growth momentum will moderate in the coming quarters as Reserve Ban has signaled rising interest rates to tame high inflation. The uneven monsoon and slowing global growth are also likely to play a role.
Manufacturing activity remains robust in August as demand rises
The S&P Global India Manufacturing purchasing managers index came in at 56.2 points in August, slightly lower than the eight-month high of 56.4 points in July. It still signals the second-strongest improvement in operating conditions since last November and was the 14th consecutive month of growth. A reading above 50 shows expansion.
Why it’s important: A constant improvement in domestic demand has new orders in August, pushing manufacturing output growth to a nine-month high. Higher sales, new efforts to increase capacity, and product diversification are responsible for the good numbers.
Multiple favourable factors make this India’s century, says McKinsey CEO
India will soon be the world’s talent factory as it will have 20 percent of the earth’s working population by 2047, said Bob Sternfels, chief executive officer of McKinsey & Co. It will not only be India’s decade, but India’s century, with all key elements in place to achieve something special not just for the Indian economy, but potentially for the world, the firm’s 13th global leader said in an interview.
Why it’s important: There are many indicators that favor India, which include a large working population, multinationals reworking supply chains to include the country, and leadership in the digital domain.
Government to determine freebies given to doctors by pharma firms
The government is tightening rules to stop drugmakers from offering expensive gifts to doctors, from all-expense-paid trips to conferences to watches, to encourage them to prescribe certain drugs. The health ministry, department of pharmaceuticals and the National Medical Commission will define what is acceptable as a gift from pharma companies.
Why it’s important: There are already some rules of giving gifts to doctors, but these are often flouted. Stricter guidelines will work better if there is better compliance.
NTPC receives over 10 expressions of interest for minority stake in green arm
Canada Pension Plan Investment Board, Brookfield, ArcelorMittal and 10 others have shown interest in buying a minority stake in NPTC Green Energy, a unit of India’s largest power producer. The state-run company plans raise around Rs 2,000 crore through the sale. NTPC may divest 26 percent in the unit, but the exact quantum is not decided yet.
Why it’s important: If the stake sale is successful, there might be an IPO for NTPC Green. The operator of coal-fired power plants has started diversifying its energy portfolio to include renewable sources.
India may settle bond trades locally if g-secs are included in global indices
India is exploring ways to settle its sovereign bonds domestically if they are included in global bond indices and traded overseas. The government is yet to take a call on the tax status of transactions settled overseas.
Why it’s important: Local settlement will prevent the g-sec market from shifting overseas, which could stunt the Indian bond market. If settlements are local, there won’t be any need for changes in taxation.
State-owned firms now allowed to import renewables equipment from China
Making an exception for renewable energy projects by central public sector enterprises, the government has exempted them from a 2020 rule to restrict public procurement from China. These companies will now be able to import four categories of items, including solar photovoltaic cells and energy storage systems, freely from any country, including China, which dominates the renewables supply chain.
Why it’s important: Several firms run by the central government are now working on renewable energy projects to meet India’s ambitious targets in the sector. The exemption will ensure a level playing field with private firms that do not face any such restriction.
Dhanvarsha makes unsolicited offer of Rs 300 crore to buy Dhanlaxmi Bank
The Dhanvarsha group, a Delhi-based business house, has made an unsolicited offer to buy out the old-generation private sector lender Dhanlaxmi Bank. Dhanvarsha has offered Rs 11.85 per share, totaling Rs 300 crore, to acquire the entire equity stake in the private lender.
Why it’s important: Dhanlaxmi has improved its profitability and asset quality in recent times but needs further capital infusion. The buyout will need regulatory approval if its board approves the sale.
Unemployment in India rises to one-year high of 8.3 percent in August
India’s unemployment rate surged to a one-year high of 8.3 percent in August as employment fell sequentially by 2 million to 394.6 million, according to the Centre for Monitoring Indian Economy. In July, the unemployment rate was at 6.8 percent.
Why it’s important: Delayed sowing of the summer season crop due to erratic rainfall was the main reason for the rise in unemployment. It could be a temporary blip as farming activity picks up.
