General Affairs
Goa Government Hikes Value Added Tax On Petrol By 7 Per Cent
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PANAJI: Four years after virtually abolishing Value Added Tax (VAT) on petrol as part of a poll promise, the Goa government today announced a seven per cent hike in VAT on the popular fuel.
The step pushed taxation levels on petrol to pre-2012 level.
With Chief Minister Laxmikant Parsekar announcing in his budget speech that VAT on petrol will be 22 per cent as compared to 20 per cent in 2012, the Congress said the VAT hike was a classic case of the ruling Bharatiya Janata Party making a U-turn on its poll promise of abolishing the tax on the popular fuel.
"In order to cater to the enhanced spending on infrastructure projects, as well as, social welfare schemes; I propose to increase the VAT on motor spirit from 15 per cent to 22 per cent," Mr Parsekar said.
He said even with the seven per cent increase in VAT, petrol would not cost as much as it did in 2012, before then chief minister Manohar Parrikar virtually had abolished VAT on petrol bringing prices down by Rs 11. It had made petrol price in Goa the cheapest in the country.
Petrol is currently priced at Rs 51.05 in Goa, the proposed increase in VAT is expected to raise the price by around three rupees.
Justifying the hike in VAT, Mr Parsekar said in 2012, the petrol price, which had soared to Rs 72 per litre in Goa, was the reason why the VAT was nearly abolished in the first place.
"My government had reduced VAT on petrol, in the year 2012, to provide succour to the general public due to the increasing cost of this important fuel, used by daily commuters in the state. The price of petrol was Rs 72 per litre, which was brought down to Rs 61," Mr Parsekar said.
In his last budgetary exercise ahead of the 2017 state Assembly elections, Mr Parsekar had presented a revenue surplus budget of Rs 158.82 crore for 2016-17.
While the revenue receipt for the current fiscal are estimated at Rs 10641.96 crore, the revenue expenditure is estimated at Rs 10483.14 crore.
The Opposition party, Congress, described the VAT hike on petrol a predictable rollback of a poll promise. "This was avoidable. But this government has made a habit of taking U-turns on their decisions," Leader of Opposition Pratapsing Rane said.
PANAJI: Four years after virtually abolishing Value Added Tax (VAT) on petrol as part of a poll promise, the Goa government today announced a seven per cent hike in VAT on the popular fuel.The step pushed taxation levels on petrol to pre-2012 level.
With Chief Minister Laxmikant Parsekar announcing in his budget speech that VAT on petrol will be 22 per cent as compared to 20 per cent in 2012, the Congress said the VAT hike was a classic case of the ruling Bharatiya Janata Party making a U-turn on its poll promise of abolishing the tax on the popular fuel.
"In order to cater to the enhanced spending on infrastructure projects, as well as, social welfare schemes; I propose to increase the VAT on motor spirit from 15 per cent to 22 per cent," Mr Parsekar said.
He said even with the seven per cent increase in VAT, petrol would not cost as much as it did in 2012, before then chief minister Manohar Parrikar virtually had abolished VAT on petrol bringing prices down by Rs 11. It had made petrol price in Goa the cheapest in the country.
Petrol is currently priced at Rs 51.05 in Goa, the proposed increase in VAT is expected to raise the price by around three rupees.
Justifying the hike in VAT, Mr Parsekar said in 2012, the petrol price, which had soared to Rs 72 per litre in Goa, was the reason why the VAT was nearly abolished in the first place.
"My government had reduced VAT on petrol, in the year 2012, to provide succour to the general public due to the increasing cost of this important fuel, used by daily commuters in the state. The price of petrol was Rs 72 per litre, which was brought down to Rs 61," Mr Parsekar said.
In his last budgetary exercise ahead of the 2017 state Assembly elections, Mr Parsekar had presented a revenue surplus budget of Rs 158.82 crore for 2016-17.
While the revenue receipt for the current fiscal are estimated at Rs 10641.96 crore, the revenue expenditure is estimated at Rs 10483.14 crore.
The Opposition party, Congress, described the VAT hike on petrol a predictable rollback of a poll promise. "This was avoidable. But this government has made a habit of taking U-turns on their decisions," Leader of Opposition Pratapsing Rane said.
Bomb Scare On Air India Flight At Bangkok Airport, Passengers Evacuated
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BANGKOK: An Air India flight was ordered to park at an isolated area of Suvarnabhumi airport in Bangkok on Wednesday after a bomb threat, an airport official said.
Air India flight AI 332 from Delhi landed at Suvarnabhumi at 7.10 p.m. and air traffic controllers directed the pilots to taxi the plane to an area away from other jets for safety reasons, an airport official was quoted by Xinhua as saying.
Authorities activated an emergency plan and safely evacuated all 231 passengers and crew members to check for a bomb.
Airport officials said the checking result remains unknown.
Air India flight AI 332 from Delhi landed at Suvarnabhumi at 7.10 p.m. and air traffic controllers directed the pilots to taxi the plane to an area away from other jets for safety reasons, an airport official was quoted by Xinhua as saying.
Authorities activated an emergency plan and safely evacuated all 231 passengers and crew members to check for a bomb.
Airport officials said the checking result remains unknown.
BJP Demands Mamata Banerjee's Resignation After Sting Operation
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NEW DELHI: The BJP today stepped up its attack against the Trinamool Congress by demanding the resignation of West Bengal Chief Minister Mamata Banerjee in the wake of a sting operation showing her party leaders allegedly receiving money.
"All their MPs shown taking money should resign. Their leader (Mamata Banerjee) should also resign as earlier over similar case she had quit the NDA (Vajpayee government) once," Union Minister Prakash Javadekar told reporters, alluding to the Tehelka tapes revelation when Ms Banerjee had quit as the railway minister.
BJP lawmaker from Asansol in the state and Union Minister Babul Supriyo said the issue is about corruption and not mere politics.
"This is not a question of politics. It's an issue of corruption. People know it well while Didi (Mamata) moves around in chappals, her party colleagues are no less than crorepatis (rich). Most of us are not surprised by the allegations of corruption against Trinamool leaders," Mr Supriyo told news agency IANS.
He said the portal that did the sting operation against Trinamool leaders has done a "good service" to the people of the state and would help the electorate make up their mind for the elections.
"Didi (Mamata) herself says, people always give their verdict in the mandate in the ballot box. Let us see how they decide in upcoming elections," he added.
NEW DELHI: The BJP today stepped up its attack against the Trinamool Congress by demanding the resignation of West Bengal Chief Minister Mamata Banerjee in the wake of a sting operation showing her party leaders allegedly receiving money."All their MPs shown taking money should resign. Their leader (Mamata Banerjee) should also resign as earlier over similar case she had quit the NDA (Vajpayee government) once," Union Minister Prakash Javadekar told reporters, alluding to the Tehelka tapes revelation when Ms Banerjee had quit as the railway minister.
BJP lawmaker from Asansol in the state and Union Minister Babul Supriyo said the issue is about corruption and not mere politics.
"This is not a question of politics. It's an issue of corruption. People know it well while Didi (Mamata) moves around in chappals, her party colleagues are no less than crorepatis (rich). Most of us are not surprised by the allegations of corruption against Trinamool leaders," Mr Supriyo told news agency IANS.
He said the portal that did the sting operation against Trinamool leaders has done a "good service" to the people of the state and would help the electorate make up their mind for the elections.
"Didi (Mamata) herself says, people always give their verdict in the mandate in the ballot box. Let us see how they decide in upcoming elections," he added.
Drought-Hit Maharashtra Shuts Down Swimming Pools For 3 Months
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MUMBAI: On March 24, Maharashtra will celebrate a dry Holi, with the state government banning rain dance functions due to acute drought in the state. As a more serious measure, it has also ordered the shutting down of swimming pools for the next three months.
Speaking at a 'water awareness' event, Chief Minister Devendra Fadnavis appealed to people to celebrate Holi cautiously. "We can play dry Holi by using less water. I am not saying no to play Holi at all. But I appeal to everyone that celebrate the festival as a dry Holi," Mr Fadnavis said.
Water resources Minister Ganesh Mahajan confirmed that rain dance functions - that simulate a downpour and are very popular during Holi but consume lots of water - have been banned. Private tankers have also been barred from supplying water to such events.
In spite of the serious water crisis, both public and private swimming pools were still operating in the state. The government has now issued directives to all municipalities to stop supplying water to these.
"There is a water problem in Maharashtra. Letters have been given to municipal officers that swimming pools should be stopped," Mr Mahajan said.
Maharashtra is facing one if it's worst droughts with the monsoon failing in many parts for two years. Government data shows there is only 25 per cent water in the state's dams, whereas the situation has reached alarming proportions in the drought hit region of Marathwada where only 5 per cent water remains. And, summer is yet to begin.
Speaking at a 'water awareness' event, Chief Minister Devendra Fadnavis appealed to people to celebrate Holi cautiously. "We can play dry Holi by using less water. I am not saying no to play Holi at all. But I appeal to everyone that celebrate the festival as a dry Holi," Mr Fadnavis said.
Water resources Minister Ganesh Mahajan confirmed that rain dance functions - that simulate a downpour and are very popular during Holi but consume lots of water - have been banned. Private tankers have also been barred from supplying water to such events.
In spite of the serious water crisis, both public and private swimming pools were still operating in the state. The government has now issued directives to all municipalities to stop supplying water to these.
"There is a water problem in Maharashtra. Letters have been given to municipal officers that swimming pools should be stopped," Mr Mahajan said.
Maharashtra is facing one if it's worst droughts with the monsoon failing in many parts for two years. Government data shows there is only 25 per cent water in the state's dams, whereas the situation has reached alarming proportions in the drought hit region of Marathwada where only 5 per cent water remains. And, summer is yet to begin.
Were You In Touch With Pathankot Terrorists: Manohar Parrikar Asks Scindia
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Defence Minister Manohar Parrikar took a dig at Congress lawmaker Jyotiraditya Scindia today, asking if he was in touch with the terrorists who had launched the attack on the Pathankot air base in January.
The minister was responding to Mr Scindia's query during the debate on Pathankot in Lok Sabha today. The Congress had raised charges of mismanagement of the operation and had asked why the army didn't encircle the cantonment with jawans.
When the minister replied that the terrorists were in the cantonment by 3.11 am on January 2, Mr Scindia contested this.
"How do you know they were not inside? Were you in touch with terrorists?" Mr Parrikar shot back.
Though party chief Sonia Gandhi and vice president Rahul Gandhi were both present in Parliament, the Congress protested against the comment, but did not disrupt the proceedings. But Mr Gandhi later claimed that the Minister had been "unable to answer" the party's queries regarding the attack.
Mr Scindia had also questioned the lack of coordination between the ministers and the action on the ground.
"When the Pathankot attack was taking place, the Prime Minister was in Karnataka, attending a Yoga event and tweeting about it," he said. "The Home Minister tweeted saying we have killed the terrorists, while the Home Secretary said the operation was still on. And then the tweets had to be deleted. The Defence Minister was in Goa attending addressing a conclave of party workers."
Admitting the lack of coordination with Rajnath Singh over the tweet issue, Mr Parrikar said, "That was a small error in the tweet, which was corrected immediately, me and the Home Minister have good coordination."
Defence Minister Manohar Parrikar took a dig at Congress lawmaker Jyotiraditya Scindia today, asking if he was in touch with the terrorists who had launched the attack on the Pathankot air base in January.The minister was responding to Mr Scindia's query during the debate on Pathankot in Lok Sabha today. The Congress had raised charges of mismanagement of the operation and had asked why the army didn't encircle the cantonment with jawans.
When the minister replied that the terrorists were in the cantonment by 3.11 am on January 2, Mr Scindia contested this.
Though party chief Sonia Gandhi and vice president Rahul Gandhi were both present in Parliament, the Congress protested against the comment, but did not disrupt the proceedings. But Mr Gandhi later claimed that the Minister had been "unable to answer" the party's queries regarding the attack.
Mr Scindia had also questioned the lack of coordination between the ministers and the action on the ground.
"When the Pathankot attack was taking place, the Prime Minister was in Karnataka, attending a Yoga event and tweeting about it," he said. "The Home Minister tweeted saying we have killed the terrorists, while the Home Secretary said the operation was still on. And then the tweets had to be deleted. The Defence Minister was in Goa attending addressing a conclave of party workers."
Admitting the lack of coordination with Rajnath Singh over the tweet issue, Mr Parrikar said, "That was a small error in the tweet, which was corrected immediately, me and the Home Minister have good coordination."
Business Affairs
Sensex gains 131 points, Nifty at 7,498 ahead of US Federal outcome; ICICI Bank top gainer
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The S&P BSE Sensex wiped out all its losses to settle the day 131 points higher in trade on Wednesday, while broader CNX Nifty closed just a tad below its key 7,500-mark.
The headline indices gained as markets waited anxiously for the Federal Reserve to provide guidance on the risk of US rate hikes this year.
The 30-share index ended the day at 24,682, up 131.31 points, while broad-based 50-share index quoted 7,498, up 38.15 points at close.
Market breadth turned positive with 18 of the 30 Sensex components ending the day in green.
The late gains in the indices were led by ICICI Bank shares, which settled the day over 2 per cent higher.
Asian Paints was the worst performing stock on Sensex and lost over 2 per cent after global brokerage firm Nomura cut its target price to Rs 798 from Rs 870.
The Fed is expected to hold interest rates steady on Wednesday but investors will focus on how comfortable policymakers are in proceeding with the gradual rate hike path they embraced late last year.
Any negative reaction in global markets could impact foreign flows to India. Foreign investors have bought a net $1.67 billion of shares in March, but still remain net sellers of $1.2 billion this year.
Meanwhile, data on Tuesday showed exports dipped for the 15th month in a row, down by 5.66 per cent in February at $20.73 billion, due to contraction in shipments of petroleum and engineering goods.
Among Asian markets, China's Shanghai Composite ended with an uptick of 0.21 per cent. Hong Kong's Hang Seng index lost 0.15 per cent, while Japan's Nikkei shed 0.83 per cent.
A lowdown on markets today
11:50 am
Sensex at 24,386, down 164.42 points
Nifty at 7,415, down 45.20 points
09:22 am
Sensex at 24,524, down 26.27 points
Nifty at 7,458, down 2.55 points
The S&P BSE Sensex wiped out all its losses to settle the day 131 points higher in trade on Wednesday, while broader CNX Nifty closed just a tad below its key 7,500-mark.
The headline indices gained as markets waited anxiously for the Federal Reserve to provide guidance on the risk of US rate hikes this year.
The 30-share index ended the day at 24,682, up 131.31 points, while broad-based 50-share index quoted 7,498, up 38.15 points at close.
Market breadth turned positive with 18 of the 30 Sensex components ending the day in green.
The late gains in the indices were led by ICICI Bank shares, which settled the day over 2 per cent higher.
Asian Paints was the worst performing stock on Sensex and lost over 2 per cent after global brokerage firm Nomura cut its target price to Rs 798 from Rs 870.
The Fed is expected to hold interest rates steady on Wednesday but investors will focus on how comfortable policymakers are in proceeding with the gradual rate hike path they embraced late last year.
Any negative reaction in global markets could impact foreign flows to India. Foreign investors have bought a net $1.67 billion of shares in March, but still remain net sellers of $1.2 billion this year.
Meanwhile, data on Tuesday showed exports dipped for the 15th month in a row, down by 5.66 per cent in February at $20.73 billion, due to contraction in shipments of petroleum and engineering goods.
Among Asian markets, China's Shanghai Composite ended with an uptick of 0.21 per cent. Hong Kong's Hang Seng index lost 0.15 per cent, while Japan's Nikkei shed 0.83 per cent.
A lowdown on markets today
11:50 am
Sensex at 24,386, down 164.42 points
Nifty at 7,415, down 45.20 points
09:22 am
Sensex at 24,524, down 26.27 points
Nifty at 7,458, down 2.55 points
Excise duty strikes jewellery stocks; stay selective, advise analysts
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Jewellery stocks have gone into tailspin ever since the Finance Minister Arun Jaitley refused to budge under immense pressure from jewellery associations, asking for a rollback on his decision to levy one per cent excise duty on jewellery articles. If we go by what analysts say, all is not good with jewellery sector and one should remain highly selective while dealing in jewellery stocks.
Just a month ago, the government made it mandatory for gold buyers to furnish PAN card details on gold purchases above Rs two lakh, which has started pinching jewellery sales by prompting gold buyers to flock overseas, primarily in Dubai, Singapore and Malaysia to avoid furnishing such details.
Experts believe the earnings of jewellers may take a hit anywhere between 10-15 per cent on PAN card requirement, but will vary depending on their quantum of sales from retail buyers.
Aasif Hirani, Director, Tradebulls Securities too expects an approximately 10 to 15 per cent revenue hit on the new PAN card threshold.
As per him, the listed players, likely to be hit the most are PC Jewellers, Titan, TBZ, Gitanjali Gems, Rajesh Exports, Shree Ganesh Jewellers, Goldiam Int and Tara Jewels.
"The earnings of jewellers may get impacted between 10-15 per cent. Small jewellers across the country will be impacted most. The impact in case of large jewellers may be limited, but definitely there will be an adverse impact," said Sudip Bandhopadhyay, independent market analyst.
On excise duty hike, Vivek Gupta, CMT - Director Research, CapitalVia Global Research said: "investors should not be worried about the strike called by the jeweller's association and should rather use the correction in stocks to enter at lower levels in fundamentally strong counters having future growth potentials."
The expert recommended investors look at stocks such as PC Jeweller and Titan.
"The new duty comes at a time when the industry is facing a slowdown in purchases because of the surge in prices since the start of the year and after a poor monsoon cut harvests and incomes in rural India, a traditional source of demand," said Hirani, adding the planned excise tax will make purchases more expensive for buyers and lead to irregular business practices.
Impact on jewellery stocks
Jewellery stocks have shown mixed response to the strike called by jewellers' association. Gupta believes if one is looking for long term investment, one can hold the stocks as market has already discounted the news of excise duty hike by government, so it is not prudent to sell jewellery stocks at the moment.
Bandhopadhyay does not recommend to bet on any jewellery stocks in the short to medium term. He also said both the measures will impact the growth and smooth functioning of the industry in the long term as operational expenses and complications will increase resulting in lower earnings.
"Things are very fluid. Only when the above issues get conclusively settled, we can look at these stocks," said the expert.
Below are top two stock recommendations from Gupta from the jewellery pack:
PC Jewellers: One can initiate buying positions if the stock crosses the level of Rs 367 and sustains on closing basis, for the targets of around Rs 400 levels with a major stop loss of Rs 300 (by keeping a trailing Stop Loss).
Titan:One can initiate buying positions if the stock crosses and sustains on closing basis above the level of Rs 356 for the targets of around Rs 380-400 levels with a major stop loss of Rs 300 (by keeping a trailing Stop Loss).
What you need to know about excise duty
Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. By imposing excise duty on jewelery, government is trying to generate a source of revenue but the entire industry is against paying excise duty because it would increase cost of production for jewelers which will put further burden on already struggling industry.
Instead of excise duty, the industry has suggested either one per cent increase in import duty or Value Added Tax (VAT). IBJA (India Bullion And Jewellers Association) has made multiple representations to the Authorities to consider this request.
However, Finance Minister Arun Jaitley ruled out rollback of the order, saying the move is aimed to aligning gold with Goods and Services Tax (GST) which he hopes will happen soon.
"The day we get your (Congress) blessing and GST will be implemented. Then all goods will come under GST and so will be gold. This (one per cent excise duty proposal) is a preparation towards it," Jaitley said while replying to a debate on General Budget in Lok Sabha.
What you need to know about PAN card requirement
The central government has made it a must to quote the permanent account number (PAN) for all transactions above Rs 2 lakh in a bid to curb black money. The requirement has come into effect from January 2016.
Gupta said the mandatory PAN card requirement will curtail the gold demand as 70 per cent of rural buyers, including farmers, do not have PAN cards as they are not under tax net.
"This decision will have a negative impact on earnings in legitimate manner as mandatory PAN card for gold buyers will discourage the gold demand even the demand by those who are not under tax net," said Gupta.
However, Mr Shrey Jain, CEO, SAS Online holds a different view. Jain said the impact is likely to be limited because only a limited portion of the revenue of most players is derived from purchases of more than Rs 2 lakh.
To justify his reasoning, the expert cited Titan. In a notification filed to the BSE, the company said that less than 10 per cent of the revenue of its jewellery division comes from sales of above Rs 2 lakh.
Jewellery stocks have gone into tailspin ever since the Finance Minister Arun Jaitley refused to budge under immense pressure from jewellery associations, asking for a rollback on his decision to levy one per cent excise duty on jewellery articles. If we go by what analysts say, all is not good with jewellery sector and one should remain highly selective while dealing in jewellery stocks.Just a month ago, the government made it mandatory for gold buyers to furnish PAN card details on gold purchases above Rs two lakh, which has started pinching jewellery sales by prompting gold buyers to flock overseas, primarily in Dubai, Singapore and Malaysia to avoid furnishing such details.
Experts believe the earnings of jewellers may take a hit anywhere between 10-15 per cent on PAN card requirement, but will vary depending on their quantum of sales from retail buyers.
Aasif Hirani, Director, Tradebulls Securities too expects an approximately 10 to 15 per cent revenue hit on the new PAN card threshold.
As per him, the listed players, likely to be hit the most are PC Jewellers, Titan, TBZ, Gitanjali Gems, Rajesh Exports, Shree Ganesh Jewellers, Goldiam Int and Tara Jewels.
"The earnings of jewellers may get impacted between 10-15 per cent. Small jewellers across the country will be impacted most. The impact in case of large jewellers may be limited, but definitely there will be an adverse impact," said Sudip Bandhopadhyay, independent market analyst.
On excise duty hike, Vivek Gupta, CMT - Director Research, CapitalVia Global Research said: "investors should not be worried about the strike called by the jeweller's association and should rather use the correction in stocks to enter at lower levels in fundamentally strong counters having future growth potentials."
The expert recommended investors look at stocks such as PC Jeweller and Titan.
"The new duty comes at a time when the industry is facing a slowdown in purchases because of the surge in prices since the start of the year and after a poor monsoon cut harvests and incomes in rural India, a traditional source of demand," said Hirani, adding the planned excise tax will make purchases more expensive for buyers and lead to irregular business practices.
As per him, the listed players, likely to be hit the most are PC Jewellers, Titan, TBZ, Gitanjali Gems, Rajesh Exports, Shree Ganesh Jewellers, Goldiam Int and Tara Jewels.
"The earnings of jewellers may get impacted between 10-15 per cent. Small jewellers across the country will be impacted most. The impact in case of large jewellers may be limited, but definitely there will be an adverse impact," said Sudip Bandhopadhyay, independent market analyst.
On excise duty hike, Vivek Gupta, CMT - Director Research, CapitalVia Global Research said: "investors should not be worried about the strike called by the jeweller's association and should rather use the correction in stocks to enter at lower levels in fundamentally strong counters having future growth potentials."
The expert recommended investors look at stocks such as PC Jeweller and Titan.
"The new duty comes at a time when the industry is facing a slowdown in purchases because of the surge in prices since the start of the year and after a poor monsoon cut harvests and incomes in rural India, a traditional source of demand," said Hirani, adding the planned excise tax will make purchases more expensive for buyers and lead to irregular business practices.
Impact on jewellery stocks
Jewellery stocks have shown mixed response to the strike called by jewellers' association. Gupta believes if one is looking for long term investment, one can hold the stocks as market has already discounted the news of excise duty hike by government, so it is not prudent to sell jewellery stocks at the moment.
Bandhopadhyay does not recommend to bet on any jewellery stocks in the short to medium term. He also said both the measures will impact the growth and smooth functioning of the industry in the long term as operational expenses and complications will increase resulting in lower earnings.
"Things are very fluid. Only when the above issues get conclusively settled, we can look at these stocks," said the expert.
Below are top two stock recommendations from Gupta from the jewellery pack:
PC Jewellers: One can initiate buying positions if the stock crosses the level of Rs 367 and sustains on closing basis, for the targets of around Rs 400 levels with a major stop loss of Rs 300 (by keeping a trailing Stop Loss).
Titan:One can initiate buying positions if the stock crosses and sustains on closing basis above the level of Rs 356 for the targets of around Rs 380-400 levels with a major stop loss of Rs 300 (by keeping a trailing Stop Loss).
Jewellery stocks have shown mixed response to the strike called by jewellers' association. Gupta believes if one is looking for long term investment, one can hold the stocks as market has already discounted the news of excise duty hike by government, so it is not prudent to sell jewellery stocks at the moment.
Bandhopadhyay does not recommend to bet on any jewellery stocks in the short to medium term. He also said both the measures will impact the growth and smooth functioning of the industry in the long term as operational expenses and complications will increase resulting in lower earnings.
"Things are very fluid. Only when the above issues get conclusively settled, we can look at these stocks," said the expert.
Below are top two stock recommendations from Gupta from the jewellery pack:
PC Jewellers: One can initiate buying positions if the stock crosses the level of Rs 367 and sustains on closing basis, for the targets of around Rs 400 levels with a major stop loss of Rs 300 (by keeping a trailing Stop Loss).
Titan:One can initiate buying positions if the stock crosses and sustains on closing basis above the level of Rs 356 for the targets of around Rs 380-400 levels with a major stop loss of Rs 300 (by keeping a trailing Stop Loss).
What you need to know about excise duty
Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. By imposing excise duty on jewelery, government is trying to generate a source of revenue but the entire industry is against paying excise duty because it would increase cost of production for jewelers which will put further burden on already struggling industry.
Instead of excise duty, the industry has suggested either one per cent increase in import duty or Value Added Tax (VAT). IBJA (India Bullion And Jewellers Association) has made multiple representations to the Authorities to consider this request.
However, Finance Minister Arun Jaitley ruled out rollback of the order, saying the move is aimed to aligning gold with Goods and Services Tax (GST) which he hopes will happen soon.
"The day we get your (Congress) blessing and GST will be implemented. Then all goods will come under GST and so will be gold. This (one per cent excise duty proposal) is a preparation towards it," Jaitley said while replying to a debate on General Budget in Lok Sabha.
What you need to know about PAN card requirement
The central government has made it a must to quote the permanent account number (PAN) for all transactions above Rs 2 lakh in a bid to curb black money. The requirement has come into effect from January 2016.
Gupta said the mandatory PAN card requirement will curtail the gold demand as 70 per cent of rural buyers, including farmers, do not have PAN cards as they are not under tax net.
"This decision will have a negative impact on earnings in legitimate manner as mandatory PAN card for gold buyers will discourage the gold demand even the demand by those who are not under tax net," said Gupta.
However, Mr Shrey Jain, CEO, SAS Online holds a different view. Jain said the impact is likely to be limited because only a limited portion of the revenue of most players is derived from purchases of more than Rs 2 lakh.
To justify his reasoning, the expert cited Titan. In a notification filed to the BSE, the company said that less than 10 per cent of the revenue of its jewellery division comes from sales of above Rs 2 lakh.
Instead of excise duty, the industry has suggested either one per cent increase in import duty or Value Added Tax (VAT). IBJA (India Bullion And Jewellers Association) has made multiple representations to the Authorities to consider this request.
However, Finance Minister Arun Jaitley ruled out rollback of the order, saying the move is aimed to aligning gold with Goods and Services Tax (GST) which he hopes will happen soon.
"The day we get your (Congress) blessing and GST will be implemented. Then all goods will come under GST and so will be gold. This (one per cent excise duty proposal) is a preparation towards it," Jaitley said while replying to a debate on General Budget in Lok Sabha.
What you need to know about PAN card requirement
The central government has made it a must to quote the permanent account number (PAN) for all transactions above Rs 2 lakh in a bid to curb black money. The requirement has come into effect from January 2016.
Gupta said the mandatory PAN card requirement will curtail the gold demand as 70 per cent of rural buyers, including farmers, do not have PAN cards as they are not under tax net.
"This decision will have a negative impact on earnings in legitimate manner as mandatory PAN card for gold buyers will discourage the gold demand even the demand by those who are not under tax net," said Gupta.
However, Mr Shrey Jain, CEO, SAS Online holds a different view. Jain said the impact is likely to be limited because only a limited portion of the revenue of most players is derived from purchases of more than Rs 2 lakh.
To justify his reasoning, the expert cited Titan. In a notification filed to the BSE, the company said that less than 10 per cent of the revenue of its jewellery division comes from sales of above Rs 2 lakh.
The Flight to IFSC
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On February 29, when Finance Minister Arun Jaitley announced the tax bonanza for International Finance Service Centre (IFSC), it became certain that India's first IFSC in the Gujarat International Finance Tec (GIFT) City is a reality. The FM waived off securities transaction tax (STT), commodity transaction tax (CTT) and long-term capital gains (LTCG) on financial trades and transactions in IFSC. He also abolished the dividend distribution tax (DDT), while reducing the minimum alternate tax (MAT) to 9 per cent from 18.5 per cent, thus making IFSC an attractive proposition compared to its peers in the region.
However, the waiving off all taxes can pave the way for the downfall of the Indian domestic market. Foreign institutional investors (FIIs), the lifeline of the Indian equity market, are likely to migrate to IFSC because, besides the tax benefits, financial transactions there will happen in foreign currencies, eliminating their average loss of 5-6 per cent every year due to rupee depreciation.
India's equity market has four main participants - retail investors, proprietary traders, domestic institutions and FIIs. Opening up of IFSC would see FIIs and proprietary traders move to trade in IFSC. Today, almost 60 to 65 per cent of volumes are contributed by FIIs and proprietary traders, and if these two players move out of the market, it would drain out liquidity from the domestic equity market.
But there is a larger concern - stability of the Indian capital market. Domestic institutions - mutual funds and insurance companies - have been a big support for the market in the past couple of years. During the recent commodity crisis, domestic institutions supported the Indian markets when there was sustained selling across the globe by FIIs. Thanks to their buying, India largely remained unaffected.
The global financial crisis of 2008 has been the best example of the impact of rapidly opening up of financial markets and what it can do. While IFSC will have trades predominately between FIIs, its ramifications are huge. Today, Indian securities and indices are traded overseas including in the Singapore Exchange, but those are in derivatives only. In the absence of a spot market, the volatility is less, but IFSC will have a spot market as well as a derivative market. Therefore, with an underlying available to reflect price movement, it can cause huge volatility.
A few years ago, in a freewheeling chat, a top official of market regulator Sebi had mentioned that the government didn't want retail investors to participate in the equity market, as it feared investor rage in the event of a scam. Instead, the preferred route for retail investors is through mutual funds. Now, when things seem to be improving, with investors preferring the mutual fund route for equity investment, IFSC could act as a dampener even for the growth of retail participation in the equity market.
On February 29, when Finance Minister Arun Jaitley announced the tax bonanza for International Finance Service Centre (IFSC), it became certain that India's first IFSC in the Gujarat International Finance Tec (GIFT) City is a reality. The FM waived off securities transaction tax (STT), commodity transaction tax (CTT) and long-term capital gains (LTCG) on financial trades and transactions in IFSC. He also abolished the dividend distribution tax (DDT), while reducing the minimum alternate tax (MAT) to 9 per cent from 18.5 per cent, thus making IFSC an attractive proposition compared to its peers in the region.
However, the waiving off all taxes can pave the way for the downfall of the Indian domestic market. Foreign institutional investors (FIIs), the lifeline of the Indian equity market, are likely to migrate to IFSC because, besides the tax benefits, financial transactions there will happen in foreign currencies, eliminating their average loss of 5-6 per cent every year due to rupee depreciation.
India's equity market has four main participants - retail investors, proprietary traders, domestic institutions and FIIs. Opening up of IFSC would see FIIs and proprietary traders move to trade in IFSC. Today, almost 60 to 65 per cent of volumes are contributed by FIIs and proprietary traders, and if these two players move out of the market, it would drain out liquidity from the domestic equity market.
But there is a larger concern - stability of the Indian capital market. Domestic institutions - mutual funds and insurance companies - have been a big support for the market in the past couple of years. During the recent commodity crisis, domestic institutions supported the Indian markets when there was sustained selling across the globe by FIIs. Thanks to their buying, India largely remained unaffected.
The global financial crisis of 2008 has been the best example of the impact of rapidly opening up of financial markets and what it can do. While IFSC will have trades predominately between FIIs, its ramifications are huge. Today, Indian securities and indices are traded overseas including in the Singapore Exchange, but those are in derivatives only. In the absence of a spot market, the volatility is less, but IFSC will have a spot market as well as a derivative market. Therefore, with an underlying available to reflect price movement, it can cause huge volatility.
A few years ago, in a freewheeling chat, a top official of market regulator Sebi had mentioned that the government didn't want retail investors to participate in the equity market, as it feared investor rage in the event of a scam. Instead, the preferred route for retail investors is through mutual funds. Now, when things seem to be improving, with investors preferring the mutual fund route for equity investment, IFSC could act as a dampener even for the growth of retail participation in the equity market.
Indian tyre makers allege dumping from China, but are under scrutiny in the US for similar charges.
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Aslowing global economy and a glut in supply of major commodities have resulted in a staggering increase in protectionism, and more and more countries are being accused of working overtime to restrict trade instead of opening up their borders. The rising discomfort with excessive capacity and falling demand has also hit India in more ways than one. So much so, that while domestic tyre companies are protesting against a supposed invasion by cheap Chinese products, the US is adopting trade-restrictive measures to stop flooding of its markets with Indian tyres.
According to a report by London-based think tank, Centre for Economic Policy Research, 539 cases of protectionism were reported in the first 10 months of 2015 alone. Moreover, the top 10 nations resorting to such measures were all G20 members, with India at the second spot - behind the Russian Federation - with 55 instances.
The Indian tyre industry claims that imports of truck and bus radials from China have gone up by 68 per cent from 780,000 units in April-October 2014/15 to 1.31 million units in the corresponding period of the current fiscal. Allegations are also rife that radials from China have increased by a staggering 600 per cent in the past two years, largely due to a 67 per cent surplus capacity there.
But what weakens the script for the Indian industry is that it is under investigation in the US for possible dumping of off-the-road tyres. "In 2007, Titan won anti-dumping and countervailing duties on OTR tyres from China, but over the past few years there have been a number of companies putting wheels into the tyres to get around the duties," said Morry Taylor, Titan CEO and Chairman, the main complainant in the US. "This has become a large problem because some overseas operators have actually advertised on their websites how to beat duties. So, our petitions address Chinse tyres that enter mounted on a wheel or rim. We have also added India and Sri Lanka to this new action."
While the charges being levelled against Indian tyres in the US are similar to those being raised against Chinese tyres in India, domestic companies fear their recent and forthcoming investments may be jeopardised by the Chinese onslaught.
What is more worrisome is that China is taking away the lucrative replacement market where margins are higher. The imports in this segment have grown from under 20 per cent in 2013/14 to around 40 per cent this year. At the same time, China's share in imported truck and bus radials has also gone up from 40 per cent to 89 per cent.
"Many countries around the world, from South Africa and Brazil to Colombia and the US, have imposed anti-dumping duties on Chinese tyres. This has narrowed down the options for China to export their excess capacity, which is substantial. India is the only country to show growth and has emerged as a ready market," says Rajiv Budhraja, Secretary General at All India Tyre Manufacturers Association. "Unfortunately, this is happening at the most inappropriate time. The heavy truck and bus segment has just started growing after four years of decline but rising imports would mean the domestic industry will not enjoy the benefits."
Yet, the charges do not stand scrutiny. Prices of natural rubber have been benign - falling 62 per cent in five years - and the financial performance of all major tyre companies - MRF, JK tyre, Ceat and Apollo - has been good in the past one year. Barring Kesoram Industries, results have never been better, and there is little to suggest a dramatic squeeze in profitability. "Prices for key raw materials (natural rubber, steel and crude) for tyres are at historic lows and that has led to better margins. But revenue growth has slowed when it should have gone up," counters Budhraja, adding: "Compared to other sectors, the tyre industry looks healthier, but we don't want it to get into a comatose state before we start treating the malaise."
The largely unorganised transport sector however, feels domestic companies have not passed on the benefits of low rubber prices adequately and are inflating import numbers to avoid competition.
"The fact is truck and bus radial imports have dropped 48 per cent in November 2015, against peak imports in June. Imports were even lower for the calendar year with a dip in the monthly average by 60 per cent over peak levels," says S.P. Singh, Convenor, All India Tyre Dealers Federation. "On the other hand there is a massive cushion in prices of domestic tyres as companies have not passed on the full impact of decline in prices of natural rubber and crude oil. If they do so, prices would come down by 20-25 per cent, which will put pressure on overseas brands. Imports would come down automatically."
The tyre industry has long battled perceptions of operating as a cartel. An unfavourable verdict from the US at a time when it is crying for in-house protection will not do its image any good.
Aslowing global economy and a glut in supply of major commodities have resulted in a staggering increase in protectionism, and more and more countries are being accused of working overtime to restrict trade instead of opening up their borders. The rising discomfort with excessive capacity and falling demand has also hit India in more ways than one. So much so, that while domestic tyre companies are protesting against a supposed invasion by cheap Chinese products, the US is adopting trade-restrictive measures to stop flooding of its markets with Indian tyres.
According to a report by London-based think tank, Centre for Economic Policy Research, 539 cases of protectionism were reported in the first 10 months of 2015 alone. Moreover, the top 10 nations resorting to such measures were all G20 members, with India at the second spot - behind the Russian Federation - with 55 instances.
The Indian tyre industry claims that imports of truck and bus radials from China have gone up by 68 per cent from 780,000 units in April-October 2014/15 to 1.31 million units in the corresponding period of the current fiscal. Allegations are also rife that radials from China have increased by a staggering 600 per cent in the past two years, largely due to a 67 per cent surplus capacity there.
But what weakens the script for the Indian industry is that it is under investigation in the US for possible dumping of off-the-road tyres. "In 2007, Titan won anti-dumping and countervailing duties on OTR tyres from China, but over the past few years there have been a number of companies putting wheels into the tyres to get around the duties," said Morry Taylor, Titan CEO and Chairman, the main complainant in the US. "This has become a large problem because some overseas operators have actually advertised on their websites how to beat duties. So, our petitions address Chinse tyres that enter mounted on a wheel or rim. We have also added India and Sri Lanka to this new action."
While the charges being levelled against Indian tyres in the US are similar to those being raised against Chinese tyres in India, domestic companies fear their recent and forthcoming investments may be jeopardised by the Chinese onslaught.
What is more worrisome is that China is taking away the lucrative replacement market where margins are higher. The imports in this segment have grown from under 20 per cent in 2013/14 to around 40 per cent this year. At the same time, China's share in imported truck and bus radials has also gone up from 40 per cent to 89 per cent.
Yet, the charges do not stand scrutiny. Prices of natural rubber have been benign - falling 62 per cent in five years - and the financial performance of all major tyre companies - MRF, JK tyre, Ceat and Apollo - has been good in the past one year. Barring Kesoram Industries, results have never been better, and there is little to suggest a dramatic squeeze in profitability. "Prices for key raw materials (natural rubber, steel and crude) for tyres are at historic lows and that has led to better margins. But revenue growth has slowed when it should have gone up," counters Budhraja, adding: "Compared to other sectors, the tyre industry looks healthier, but we don't want it to get into a comatose state before we start treating the malaise."
The largely unorganised transport sector however, feels domestic companies have not passed on the benefits of low rubber prices adequately and are inflating import numbers to avoid competition.
"The fact is truck and bus radial imports have dropped 48 per cent in November 2015, against peak imports in June. Imports were even lower for the calendar year with a dip in the monthly average by 60 per cent over peak levels," says S.P. Singh, Convenor, All India Tyre Dealers Federation. "On the other hand there is a massive cushion in prices of domestic tyres as companies have not passed on the full impact of decline in prices of natural rubber and crude oil. If they do so, prices would come down by 20-25 per cent, which will put pressure on overseas brands. Imports would come down automatically."
The tyre industry has long battled perceptions of operating as a cartel. An unfavourable verdict from the US at a time when it is crying for in-house protection will not do its image any good.
US Federal seen holding interest rates for now, leaving door open for June hike
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US Federal Reserve policymakers are seen leaving short-term interest rates unchanged at a two-day policy meeting that began Tuesday, but also to signal that a rate hike is not too far off as long as the job market and inflation continue to improve.
The meeting began at 1 pm EDT (1700 GMT), a Fed spokesperson said in an email. The Fed is due to issue a statement at the conclusion of the meeting on Wednesday at 2 pm EDT (1800 GMT), and Fed Chair Janet Yellen will hold a news conference at 2:30 p.m.
The US central bank lifted borrowing costs in December for the first time in nearly a decade, but uncertainty over the impact on the US economy of slower growth in China and Europe since the beginning of the year has driven policymakers to hold off on any further rate hikes since then.
A recent string of stronger US data, including faster-than-expected job growth in February, has eased fears in the past few weeks that headwinds from abroad, and the tighter financial conditions they sparked at home, could derail the recovery.
"The most prominent risk in January - the tightening in financial conditions at the start of the year - has receded," wrote Goldman Sachs economists Zach Pandl and Jan Hatzius. "As a result, Chair Yellen will likely indicate that the committee remains on track to raise rates again next quarter."
Still, the path to a next rate hike is unlikely to be smooth. US retail sales were reported on Tuesday to have been weaker than thought in January, renewing worries over domestic growth prospects, even as the Bank of Japan offered a gloomier outlook for the world's third-biggest economy without immediately adding to stimulus.
Fresh forecasts from the Fed's 17 officials released after the meeting ends on Wednesday will likely signal three or possibly two rate hikes this year, a slower path of rate hikes than the four 2016 rate hikes envisioned in December, the last time forecasts were published.
The expected downgrade may largely reflect the Fed's decision in January to put policy on hold for the time being, rather than new worries over the US or global outlook.
Indeed, since the last Fed meeting US inflation has shown signs of stabilizing, with one measure published by the Dallas Fed rising to 1.9 per cent, its closest to the Fed's 2 per cent goal in 2-1/2 years. Meanwhile, the US unemployment rate held at 4.9 per cent in February, near the level many Fed officials believe represents full employment.
The European Central Bank's decision last week to ease policy further may help add to confidence that action has been taken to underpin growth in Europe, helping ensure a stalling of the global growth drag on the US
That could mean another US rate hike by mid-year and, depending on economic data, more to come after that.
"June seems certainly like a possibility" for the Fed's next rate hike, said former Minneapolis Fed President Narayana Kocherlakota last week. Kocherlakota's own preference is for the Fed to take out "insurance" against a recession by cutting rates back to near zero.
INFLATION DEBATE
Still, Kocherlakota's former colleagues will likely spend plenty of time discussing the inflation outlook.
More hawkish rate setters worry that if the Fed does not act to preempt inflation, it could end up behind the curve and lose credibility, while the more dovish members believe the economic recovery is still fragile and want to see firm evidence of inflationary pressures.
The Fed will also need to decide how to characterize the "balance of risks" to their baseline outlook, particularly if policymakers want to keep the door open to rate hikes in April or June.
"(L)ook for the committee to say that risks to the outlook for both economic activity and the labour market are 'nearly balanced,' wrote Barclays economists in a note Monday, adding that the language likely would signal a rate hike in June, though possibly earlier.
Traders of futures tied to the Fed's policy rate currently see about even odds of a rate hike in June, with some chance of another rate hike by the end of the year.
US Federal Reserve policymakers are seen leaving short-term interest rates unchanged at a two-day policy meeting that began Tuesday, but also to signal that a rate hike is not too far off as long as the job market and inflation continue to improve.
The meeting began at 1 pm EDT (1700 GMT), a Fed spokesperson said in an email. The Fed is due to issue a statement at the conclusion of the meeting on Wednesday at 2 pm EDT (1800 GMT), and Fed Chair Janet Yellen will hold a news conference at 2:30 p.m.
The US central bank lifted borrowing costs in December for the first time in nearly a decade, but uncertainty over the impact on the US economy of slower growth in China and Europe since the beginning of the year has driven policymakers to hold off on any further rate hikes since then.
A recent string of stronger US data, including faster-than-expected job growth in February, has eased fears in the past few weeks that headwinds from abroad, and the tighter financial conditions they sparked at home, could derail the recovery.
"The most prominent risk in January - the tightening in financial conditions at the start of the year - has receded," wrote Goldman Sachs economists Zach Pandl and Jan Hatzius. "As a result, Chair Yellen will likely indicate that the committee remains on track to raise rates again next quarter."
Still, the path to a next rate hike is unlikely to be smooth. US retail sales were reported on Tuesday to have been weaker than thought in January, renewing worries over domestic growth prospects, even as the Bank of Japan offered a gloomier outlook for the world's third-biggest economy without immediately adding to stimulus.
Fresh forecasts from the Fed's 17 officials released after the meeting ends on Wednesday will likely signal three or possibly two rate hikes this year, a slower path of rate hikes than the four 2016 rate hikes envisioned in December, the last time forecasts were published.
The expected downgrade may largely reflect the Fed's decision in January to put policy on hold for the time being, rather than new worries over the US or global outlook.
Indeed, since the last Fed meeting US inflation has shown signs of stabilizing, with one measure published by the Dallas Fed rising to 1.9 per cent, its closest to the Fed's 2 per cent goal in 2-1/2 years. Meanwhile, the US unemployment rate held at 4.9 per cent in February, near the level many Fed officials believe represents full employment.
The European Central Bank's decision last week to ease policy further may help add to confidence that action has been taken to underpin growth in Europe, helping ensure a stalling of the global growth drag on the US
That could mean another US rate hike by mid-year and, depending on economic data, more to come after that.
"June seems certainly like a possibility" for the Fed's next rate hike, said former Minneapolis Fed President Narayana Kocherlakota last week. Kocherlakota's own preference is for the Fed to take out "insurance" against a recession by cutting rates back to near zero.
INFLATION DEBATE
Still, Kocherlakota's former colleagues will likely spend plenty of time discussing the inflation outlook.
More hawkish rate setters worry that if the Fed does not act to preempt inflation, it could end up behind the curve and lose credibility, while the more dovish members believe the economic recovery is still fragile and want to see firm evidence of inflationary pressures.
The Fed will also need to decide how to characterize the "balance of risks" to their baseline outlook, particularly if policymakers want to keep the door open to rate hikes in April or June.
"(L)ook for the committee to say that risks to the outlook for both economic activity and the labour market are 'nearly balanced,' wrote Barclays economists in a note Monday, adding that the language likely would signal a rate hike in June, though possibly earlier.
Traders of futures tied to the Fed's policy rate currently see about even odds of a rate hike in June, with some chance of another rate hike by the end of the year.
General Awareness
Survey lists Reliance, Tata Industries under Sustainable Business Practices
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A survey of corporate India by the Confederation of Indian Industry(CII) says the metals and mining, automobile and construction materials sectors lead insustainable business practices. This survey lists leading Industries like Tata, Reliance, Mahindra and few others as Sustainable Business Practices.
Areas focused in the survey
The survey involves checking the environment, social and governance dimensions of business and measures the progress of Indian companies in adopting sustainable business practices
Companies listed in the survey
- Mahindra & Mahindra, Tata Motors, Hindustan Zinc, Vedanta, ACC and Reliance Industries
- These industries were given Platinum Rating
- Banking sector include theHDFC and Axis banks
- Tech Mahindra and Wiprorepresented the software and services sector
Companies under Sustainable gold plus
- Apart from the companies listed above, Seven other companies got a Sustainable Plus Gold classification
- These include Bajaj Auto, Ambuja Cements, Hindustan Unilever and Tata Steel
Flash light on the survey
- The Sustainable Plus survey looks at the 100 largestcompanies by market capitalization across 20 sectors in the country.
- 83 companies got Sustainable Plus bronze
- Social governance was the highest scoring point and environment occupied the least scoring category
A survey of corporate India by the Confederation of Indian Industry(CII) says the metals and mining, automobile and construction materials sectors lead insustainable business practices. This survey lists leading Industries like Tata, Reliance, Mahindra and few others as Sustainable Business Practices.Areas focused in the surveyThe survey involves checking the environment, social and governance dimensions of business and measures the progress of Indian companies in adopting sustainable business practicesCompanies listed in the survey- Mahindra & Mahindra, Tata Motors, Hindustan Zinc, Vedanta, ACC and Reliance Industries
- These industries were given Platinum Rating
- Banking sector include theHDFC and Axis banks
- Tech Mahindra and Wiprorepresented the software and services sector
Companies under Sustainable gold plus- Apart from the companies listed above, Seven other companies got a Sustainable Plus Gold classification
- These include Bajaj Auto, Ambuja Cements, Hindustan Unilever and Tata Steel
Flash light on the survey- The Sustainable Plus survey looks at the 100 largestcompanies by market capitalization across 20 sectors in the country.
- 83 companies got Sustainable Plus bronze
- Social governance was the highest scoring point and environment occupied the least scoring category
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