General Affairs
With China In Mind, PM Modi-Shinzo Abe To Delve On Boosting Defence Ties
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Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe are likely to deliberate extensively on bolstering defence and security ties during the annual summit talks being held in Gandhinagar tomorrow in the backdrop of China's growing assertiveness in the region.
There may be specific discussions on the long-pending Indian proposal to buy the US-2 amphibious aircraft from Japan and joint development of military equipment to further deepen the defence ties in sync with strategic partnership between the two countries, official sources said.
The annual Indo-Japan summit is taking place amid escalating tension in the region following the nuclear test by North Korea and China's combative posturing in the resource- rich South China Sea, and PM Modi and Mr Abe are expected to deliberate on them.
The two prime ministers may also explore ways to further deepen ties between the navies of the two countries to check China's heightened activities in the Indian Ocean.
Reflecting growing congruence in ties, Japan had thrown its weight behind India during the Doklam standoff.
Ahead of Mr Abe's visit here, the India-Japan annual defence ministerial dialogue had taken place in Tokyo during which co-production of military equipment, dual use technologies and New Delhi's proposal to buy the US-2 ShinMaywa aircraft were discussed.
Last year, China had reacted angrily to reports that Japan plans to sell weapons to India at cheaper prices, saying that such a move was disgraceful.
There are indications that the joint statement by the two countries after Modi-Abe talks will have certain components relating to defence cooperation.
At the defence dialogue, the two sides had also agreed to commence technical discussions for research collaboration in the areas of Unmanned Ground Vehicles and Robotics.
PM Modi and Mr Abe are expected to deliberate on cooperation in the nuclear energy sector as well.
A landmark civil nuclear deal between the two countries providing for collaboration between their industries in the field had come into force in July.
The nuclear cooperation agreement was signed last November during Prime Minister Narendra Modi's visit to Tokyo.
The deal allows Japan to export nuclear technology to India, making it the first non-NPT signatory to have such a deal with Tokyo
There was political resistance in Japan - the only country to suffer atomic bombings during the World War II - against a nuclear deal with India, particularly after the disaster at the Fukushima nuclear power plant in 2011.
Japan is a major player in the nuclear energy market and an atomic deal with it will make it easier for US-based nuclear plant makers Westinghouse Electric Corporation and GE Energy Inc to set up atomic plants in India as both these conglomerates have Japanese investments.
There may be specific discussions on the long-pending Indian proposal to buy the US-2 amphibious aircraft from Japan and joint development of military equipment to further deepen the defence ties in sync with strategic partnership between the two countries, official sources said.
The annual Indo-Japan summit is taking place amid escalating tension in the region following the nuclear test by North Korea and China's combative posturing in the resource- rich South China Sea, and PM Modi and Mr Abe are expected to deliberate on them.
Reflecting growing congruence in ties, Japan had thrown its weight behind India during the Doklam standoff.
Ahead of Mr Abe's visit here, the India-Japan annual defence ministerial dialogue had taken place in Tokyo during which co-production of military equipment, dual use technologies and New Delhi's proposal to buy the US-2 ShinMaywa aircraft were discussed.
Last year, China had reacted angrily to reports that Japan plans to sell weapons to India at cheaper prices, saying that such a move was disgraceful.
There are indications that the joint statement by the two countries after Modi-Abe talks will have certain components relating to defence cooperation.
PM Modi and Mr Abe are expected to deliberate on cooperation in the nuclear energy sector as well.
A landmark civil nuclear deal between the two countries providing for collaboration between their industries in the field had come into force in July.
The nuclear cooperation agreement was signed last November during Prime Minister Narendra Modi's visit to Tokyo.
The deal allows Japan to export nuclear technology to India, making it the first non-NPT signatory to have such a deal with Tokyo
There was political resistance in Japan - the only country to suffer atomic bombings during the World War II - against a nuclear deal with India, particularly after the disaster at the Fukushima nuclear power plant in 2011.
Japan is a major player in the nuclear energy market and an atomic deal with it will make it easier for US-based nuclear plant makers Westinghouse Electric Corporation and GE Energy Inc to set up atomic plants in India as both these conglomerates have Japanese investments.
Enforcement Directorate Files Supplementary Charge Sheet In VVIP Chopper Scam
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The Enforcement Directorate (ED) today charge-sheeted a woman director of two Dubai-based firms and the companies in the Rs. 3,600 crore VVIP choppers money laundering case.
In the supplementary charge sheet filed before Additional Sessions Judge Arvind Kumar, the ED named Shivani Saxena as an "active" director of Dubai-based M/S UHY Saxena and M/S Matrix Holdings.
Both the companies have also been charge-sheeted by the agency in the charge sheet under various sections of the Prevention of Money Laundering Act (PMLA).
On January 1, 2014, India scrapped the contract with Finmeccanica's British subsidiary AgustaWestland for supplying 12 AW-101 VVIP choppers to the Indian Air Force over alleged breach of contractual obligations and charges of kickbacks to the tune of Rs. 423 crore paid by the firm for securing the deal.
In the supplementary charge sheet filed before Additional Sessions Judge Arvind Kumar, the ED named Shivani Saxena as an "active" director of Dubai-based M/S UHY Saxena and M/S Matrix Holdings.
On January 1, 2014, India scrapped the contract with Finmeccanica's British subsidiary AgustaWestland for supplying 12 AW-101 VVIP choppers to the Indian Air Force over alleged breach of contractual obligations and charges of kickbacks to the tune of Rs. 423 crore paid by the firm for securing the deal.
Make Aadhaar Mandatory For NRI Marriages: Expert Panel Tells Centre
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Aadhaar should be made mandatory for the registration of NRI marriages in India to tackle desertion and other marital issues, an inter-ministerial committee has recommended to the Ministry of External Affairs.
The proposal by the special committee on Indian passport holders getting married in India is aimed at protecting the rights of women who are deserted by their NRI husbands or become victims of domestic violence and dowry harassment abroad.
"It has been proposed that Aadhaar be a must-have for registration of NRI marriages (in India)," said a source privy to the contents of the report submitted to the MEA on August 30.
The Unique Identification Authority of India is working on a policy for the Aadhaar enrolment of NRIs, Overseas Citizens of India and Persons of Indian Origin. At present, all residents including Indian nationals and foreigners with valid visas can enroll for an Aadhaar number.
The panel also recommended that India amend its extradition treaties with various countries to include domestic violence as a criterion for seeking the custody of an accused.
An official in the ministry of Women and Child Development (WCD) said tracking an offender in NRI marriages was often difficult. "The main issue is that serving of notice is difficult because you don't have the address," he said.
The report is only limited to NRIs and not anybody else of Indian origin living abroad, the source said.
"We are only dealing with those who hold an Indian passport," the source added.
The committee also suggested that the National Commission for Women (NCW) be made the nodal authority for looking into disputes arising out of such marriages.
According to an NCW report, about 1300 such cases were registered by its NRI cell between 2005 and 2012.
The panel mooted that special teams consisting of officials of the MEA, Home Affairs and WCD be deputed in "10-15 countries" from where such cases emanate.
Apart from the UK, US, Canada and Australia, teams should also be posted to African and west Asian nations, it said.
The expert panel on NRI marriages was constituted last year under the chairmanship of retired Justice Arvind Goel, former chairman of the NRI Commission of Punjab, and comprises officials of the ministries of WCD, Home Affairs, MEA and the department of Telecommunications.
The NCW report commissioned in 2011, titled Laws Relating to NRI Marriages and their Impact on Women, lists the problems faced by women in such marriages.
"It has been noticed that sometimes the particulars of employment, immigration status, surname, property, earning status, marital status and other material particulars are wrongly supplied purposely by the prospective groom to con a girl into marriage for ulterior motives," it said.
While hearing a batch of petitions challenging the Centre's move to make Aadhaar mandatory, the Supreme Court last month unanimously declared that the right to privacy was a fundamental one.
The judgement was limited to the issue of right to privacy and the question whether Aadhaar violates the right to privacy will be dealt with by a three-judge bench from November.
The proposal by the special committee on Indian passport holders getting married in India is aimed at protecting the rights of women who are deserted by their NRI husbands or become victims of domestic violence and dowry harassment abroad.
The Unique Identification Authority of India is working on a policy for the Aadhaar enrolment of NRIs, Overseas Citizens of India and Persons of Indian Origin. At present, all residents including Indian nationals and foreigners with valid visas can enroll for an Aadhaar number.
The panel also recommended that India amend its extradition treaties with various countries to include domestic violence as a criterion for seeking the custody of an accused.
An official in the ministry of Women and Child Development (WCD) said tracking an offender in NRI marriages was often difficult. "The main issue is that serving of notice is difficult because you don't have the address," he said.
The report is only limited to NRIs and not anybody else of Indian origin living abroad, the source said.
"We are only dealing with those who hold an Indian passport," the source added.
The committee also suggested that the National Commission for Women (NCW) be made the nodal authority for looking into disputes arising out of such marriages.
According to an NCW report, about 1300 such cases were registered by its NRI cell between 2005 and 2012.
The panel mooted that special teams consisting of officials of the MEA, Home Affairs and WCD be deputed in "10-15 countries" from where such cases emanate.
Apart from the UK, US, Canada and Australia, teams should also be posted to African and west Asian nations, it said.
The expert panel on NRI marriages was constituted last year under the chairmanship of retired Justice Arvind Goel, former chairman of the NRI Commission of Punjab, and comprises officials of the ministries of WCD, Home Affairs, MEA and the department of Telecommunications.
The NCW report commissioned in 2011, titled Laws Relating to NRI Marriages and their Impact on Women, lists the problems faced by women in such marriages.
"It has been noticed that sometimes the particulars of employment, immigration status, surname, property, earning status, marital status and other material particulars are wrongly supplied purposely by the prospective groom to con a girl into marriage for ulterior motives," it said.
While hearing a batch of petitions challenging the Centre's move to make Aadhaar mandatory, the Supreme Court last month unanimously declared that the right to privacy was a fundamental one.
The judgement was limited to the issue of right to privacy and the question whether Aadhaar violates the right to privacy will be dealt with by a three-judge bench from November.
PM Modi, Shinzo Abe Visit Iconic Mosque In Ahmedabad
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Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abetoday visited the Sidi Saiyyed Ki Jaali mosque in Ahmedabad, the last of the major Mughal era shrines in the Gujarat city.
After receiving Mr Abe at the airport and taking him on an open jeep roadshow to Mahatma Gandhi's Sabarmati ashram, PM Modi escorted him to the iconic mosque built in the 16th century.
According to clerics at the mosque, PM Modi explained the history and importance of the mosque to Mr Abe. The two Prime Ministers were also photographed against the picturesque monument against the fading sunlight. The famed lattice work of the mosque - the Tree of Life - has come to be the unofficial symbol of the city and has also inspired the logos of the National Institute of Design and the Indian Institute of Management-Ahmedabad (IIM).
The mosque was built by an Abyssinian, Sidi Saiyyed, who was from Yemen. It is said that about 45 craftsmen worked with him. Under the British, the monument mostly served the purpose of a government office.
In recent years, the 10-tone latticework windows have earned renown among historians and archeologists across the world. Officials see it as a symbol of the fusion of Hindu and Muslim cultures. Mr Modi, who was Chief Minister of Gujarat for 12 years before taking power at the centre, visited the mosque today for the first time, at a time India is facing international criticism over alleged intolerance and amid accusations by the ruling BJP's critics of divisive politics.
PM Modi has in the past visited the Sarkhej Roza mosque and tomb complex on the outskirts of Ahmedabad.
On a visit to Abu Dhabi two years ago, he visited the Grand Mosque, the largest in the UAE.
After receiving Mr Abe at the airport and taking him on an open jeep roadshow to Mahatma Gandhi's Sabarmati ashram, PM Modi escorted him to the iconic mosque built in the 16th century.
According to clerics at the mosque, PM Modi explained the history and importance of the mosque to Mr Abe. The two Prime Ministers were also photographed against the picturesque monument against the fading sunlight. The famed lattice work of the mosque - the Tree of Life - has come to be the unofficial symbol of the city and has also inspired the logos of the National Institute of Design and the Indian Institute of Management-Ahmedabad (IIM).
The mosque was built by an Abyssinian, Sidi Saiyyed, who was from Yemen. It is said that about 45 craftsmen worked with him. Under the British, the monument mostly served the purpose of a government office.
In recent years, the 10-tone latticework windows have earned renown among historians and archeologists across the world. Officials see it as a symbol of the fusion of Hindu and Muslim cultures. Mr Modi, who was Chief Minister of Gujarat for 12 years before taking power at the centre, visited the mosque today for the first time, at a time India is facing international criticism over alleged intolerance and amid accusations by the ruling BJP's critics of divisive politics.
PM Modi has in the past visited the Sarkhej Roza mosque and tomb complex on the outskirts of Ahmedabad.
On a visit to Abu Dhabi two years ago, he visited the Grand Mosque, the largest in the UAE.
'Calibrated Move To Tarnish India's Image On Rohingya Issue', Says Junior Home Minister Kiren Rijiju
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Union Minister Kiren Rijiju today slammed attempts to brand India as a "villain" on
the Rohingya refugee issue, saying it was a "calibrated design" to tarnish the country's image.
The Union Minister of State for Home's comments came two days after UN human Rights Chief Zeid Ra'ad al-Hussein flayed any attempts by India to deport Rohingyas to Myanmar.
Mr Rijiju said criticism of India on the Rohingyas, who have entered India illegally, undermines the country's security. "This chorus of branding India as villain on Rohingya issue is a calibrated design to tarnish India's image," he said in a tweet.
"It (such statements) undermines India's security," Mr Rijiju said.
The central government is planning to deport Rohingya Muslims, who have come to India due to alleged persecution in Myanmar, as it considers them as illegal immigrants.
Mr Rijiju had earlier said that the Rohingyas were illegal immigrants and stand to be deported. He had also said that India has absorbed the maximum number of refugees in the world.
The Minister had said no one should try to "demonise" India as a country hostile to refugees as it is not going to "throw" the Rohingyas into the "ocean" or "shoot" them but will follow due process of law before their identification and deportation.
The issue came to the fore after the Union Home Ministry in July had said illegal immigrants like the Rohingyas pose grave security challenges as they may be recruited by terror groups, and asked state governments to identify and deport them.
The ministry told all state governments that the infiltration of Rohingyas from Rakhine state of Myanmar into Indian territory, especially in recent years, besides being a burden on the limited resources of the country also aggravates security challenges posed to India.
The government told Parliament on August 9 that according to available data, more than 14,000 Rohingyas, registered with the United Nations High Commissioner for Refugees or UNHCR, are presently staying in India.However, some inputs indicate that around 40,000 Rohingyas are staying in India illegally and the Rohingyas are largely located in Jammu, Hyderabad, Haryana, Uttar Pradesh, Delhi-NCR and Rajasthan.
The Union Minister of State for Home's comments came two days after UN human Rights Chief Zeid Ra'ad al-Hussein flayed any attempts by India to deport Rohingyas to Myanmar.
"It (such statements) undermines India's security," Mr Rijiju said.
The central government is planning to deport Rohingya Muslims, who have come to India due to alleged persecution in Myanmar, as it considers them as illegal immigrants.
Mr Rijiju had earlier said that the Rohingyas were illegal immigrants and stand to be deported. He had also said that India has absorbed the maximum number of refugees in the world.
The issue came to the fore after the Union Home Ministry in July had said illegal immigrants like the Rohingyas pose grave security challenges as they may be recruited by terror groups, and asked state governments to identify and deport them.
The ministry told all state governments that the infiltration of Rohingyas from Rakhine state of Myanmar into Indian territory, especially in recent years, besides being a burden on the limited resources of the country also aggravates security challenges posed to India.
The government told Parliament on August 9 that according to available data, more than 14,000 Rohingyas, registered with the United Nations High Commissioner for Refugees or UNHCR, are presently staying in India.However, some inputs indicate that around 40,000 Rohingyas are staying in India illegally and the Rohingyas are largely located in Jammu, Hyderabad, Haryana, Uttar Pradesh, Delhi-NCR and Rajasthan.
Business Affairs
Higher CPI, but banks still have scope to reduce interest rates
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The gradual rise in the consumer price index (CPI) or retail inflation to 3.36 per cent in the month of July-August is seen as the end of the interest rate easing cycle. There are some experts who are now saying that the Reserve Bank of India (RBI) that tracks the CPI for adjusting its repo rate is likely to press the 'pause' button. But bankers say there is still scope for reducing interest rates marginally, if not substantially. Let's look at how and where:
1. Banks are reducing savings rate
The current and savings account (CASA), which are low cost deposits, plays a big role in the cost of funds, whereas the repo rate borrowings generally bridges the short term mismatches. In a post demonetization period, the banks are flush with fund but not enough avenues for deployment. The interest rate in retail products especially mortgages is also not very high. As a result, the banks now reducing the interest rate so that the servicing cost would go down. Many large well established banks have reduced the savings rate from 4 per cent to 3.5 per cent, which will offer scope for cutting interest rates in future.
2. Fierce competition in retail products
Retail banking especially home loan, car loan, credit cards and personal loans are the only segments that are growing whereas the corporate banking is not showing any growth. In a fierce competition in the segment, the banks are reducing rates to make their product look attractive. In fact, banks like Standard Chartered are making a aggressive pitch to grow retail banking. Similarly, new players like IDFC Bank, Bandhan Bank etc are also entering the retail space where the competition could drive down the interest rates.
3. Refinancing of loans by private sector
The public sector banks are in a deep trouble because of lower profitability, higher NPA provisioning and limited capital. In fact, they are not in a position to pass on the lower interest rates to their existing corporate clients (so as to protect their margins). The private sector banks are already pouncing on the opportunity to make an attractive offer with lower interest rates. The existing good quality corporate will surely see their interest burden going down if they go for refinancing with private banks.
4. The commercial paper and bond market route
With inflows into mutual funds, insurance companies and other investment vehicle are growing in a post demonetization period, the commercial paper and bond market is also seeing lot of activity. In fact, many good rated corporate are using this window to raise money at an attractive rate, which is much below the bank rate.
5. Full transmission of repo rate cut
The RBI has said time and gain that the full transmission of 200 basis points interest rate cut hasn't taken place. In fact, there is still scope for interest rate cuts. The RBI is already reworking the marginal cost of funding rate because the banks are not transmitting the full rate cut benefit to borrowers. This could also help in rates going down.
The gradual rise in the consumer price index (CPI) or retail inflation to 3.36 per cent in the month of July-August is seen as the end of the interest rate easing cycle. There are some experts who are now saying that the Reserve Bank of India (RBI) that tracks the CPI for adjusting its repo rate is likely to press the 'pause' button. But bankers say there is still scope for reducing interest rates marginally, if not substantially. Let's look at how and where:
1. Banks are reducing savings rate
The current and savings account (CASA), which are low cost deposits, plays a big role in the cost of funds, whereas the repo rate borrowings generally bridges the short term mismatches. In a post demonetization period, the banks are flush with fund but not enough avenues for deployment. The interest rate in retail products especially mortgages is also not very high. As a result, the banks now reducing the interest rate so that the servicing cost would go down. Many large well established banks have reduced the savings rate from 4 per cent to 3.5 per cent, which will offer scope for cutting interest rates in future.
2. Fierce competition in retail products
Retail banking especially home loan, car loan, credit cards and personal loans are the only segments that are growing whereas the corporate banking is not showing any growth. In a fierce competition in the segment, the banks are reducing rates to make their product look attractive. In fact, banks like Standard Chartered are making a aggressive pitch to grow retail banking. Similarly, new players like IDFC Bank, Bandhan Bank etc are also entering the retail space where the competition could drive down the interest rates.
3. Refinancing of loans by private sector
The public sector banks are in a deep trouble because of lower profitability, higher NPA provisioning and limited capital. In fact, they are not in a position to pass on the lower interest rates to their existing corporate clients (so as to protect their margins). The private sector banks are already pouncing on the opportunity to make an attractive offer with lower interest rates. The existing good quality corporate will surely see their interest burden going down if they go for refinancing with private banks.
4. The commercial paper and bond market route
With inflows into mutual funds, insurance companies and other investment vehicle are growing in a post demonetization period, the commercial paper and bond market is also seeing lot of activity. In fact, many good rated corporate are using this window to raise money at an attractive rate, which is much below the bank rate.
5. Full transmission of repo rate cut
The RBI has said time and gain that the full transmission of 200 basis points interest rate cut hasn't taken place. In fact, there is still scope for interest rate cuts. The RBI is already reworking the marginal cost of funding rate because the banks are not transmitting the full rate cut benefit to borrowers. This could also help in rates going down.
Jet Airways likely to bid for second round of UDAN scheme
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Naresh Goyal-owned Jet Airways may participate in the second phase of bidding for regional flights under the central governments UDAN scheme, but the final decision will depend on the "economics" of operations.
The second round of the bidding for RCS routes had commenced from August 24 last month and the winners for this phase are to be announced by November-end.
"We evaluate this (participation in UDAN scheme) consistently. We would evaluate and depending on the economics available, we will decide on the second round of bidding," Jet Airways Chief Financial Officer Amit Agarwal said during during a post-earnings analysts call here.
Significantly, airline chairman Naresh Goyal had, at the companys 25th annual shareholders meeting this week, said that aviation and connectivity nationwide is expected to witness further impetus due to the Governments Regional Connectivity Scheme.
Goyals Jet Airways, along with budget carrier IndiGo and a few other domestic cariers, had not bid for the first round of the scheme, in which five air operators, including Air India and SpiceJet, have been mandated to fly on 128 regional routes, connecting 70 unserved and under-served airports.
During the analyst call today, Agarwal also said that Jet Airways had no plans to opt out of any routes between India and the Gulf, despite the persisting "weakness" in the markets there.
"The weakness in the Gulf market, which accounts for 20 per cent of the airlines total international capacity, continues...There is no one specific route that we would like to take out at this juncture, because we continue to evaluate all routes at all points of time and depending on the full year structure on pulling out a route or not," Agarwal said.
"The short-term optimisation is not the right thing, but we continue to optimise continuously," he added.
Agarwal also said that the airline is open to deploy a wide-body aircraft on a route, which is currently being catered by a narrow body and an ATR operations could be converted into a bigger single-aisle plane, depending upon the demand on that particular route.
Jet Airways has phased out more that Rs 2,700 crore debt from its books, which currently stands at Rs 8,000 crore, and shaving it off further will remain a focus area for the airline.
"This (reducing debt) clearly reflects that the cash flow generation as well as improvement in finding ways to reduce the debt has been the focus and will continue to be the focus," he said.
He, however, said that the debt from the books cant be wiped off overnight and that "the focus continues to be that will take all the cash flow generation and deploy it towards de-leveraging and reducing debt on the balancesheet."
Naresh Goyal-owned Jet Airways may participate in the second phase of bidding for regional flights under the central governments UDAN scheme, but the final decision will depend on the "economics" of operations.
The second round of the bidding for RCS routes had commenced from August 24 last month and the winners for this phase are to be announced by November-end.
"We evaluate this (participation in UDAN scheme) consistently. We would evaluate and depending on the economics available, we will decide on the second round of bidding," Jet Airways Chief Financial Officer Amit Agarwal said during during a post-earnings analysts call here.
Significantly, airline chairman Naresh Goyal had, at the companys 25th annual shareholders meeting this week, said that aviation and connectivity nationwide is expected to witness further impetus due to the Governments Regional Connectivity Scheme.
Goyals Jet Airways, along with budget carrier IndiGo and a few other domestic cariers, had not bid for the first round of the scheme, in which five air operators, including Air India and SpiceJet, have been mandated to fly on 128 regional routes, connecting 70 unserved and under-served airports.
During the analyst call today, Agarwal also said that Jet Airways had no plans to opt out of any routes between India and the Gulf, despite the persisting "weakness" in the markets there.
"The weakness in the Gulf market, which accounts for 20 per cent of the airlines total international capacity, continues...There is no one specific route that we would like to take out at this juncture, because we continue to evaluate all routes at all points of time and depending on the full year structure on pulling out a route or not," Agarwal said.
"The short-term optimisation is not the right thing, but we continue to optimise continuously," he added.
Agarwal also said that the airline is open to deploy a wide-body aircraft on a route, which is currently being catered by a narrow body and an ATR operations could be converted into a bigger single-aisle plane, depending upon the demand on that particular route.
Jet Airways has phased out more that Rs 2,700 crore debt from its books, which currently stands at Rs 8,000 crore, and shaving it off further will remain a focus area for the airline.
"This (reducing debt) clearly reflects that the cash flow generation as well as improvement in finding ways to reduce the debt has been the focus and will continue to be the focus," he said.
He, however, said that the debt from the books cant be wiped off overnight and that "the focus continues to be that will take all the cash flow generation and deploy it towards de-leveraging and reducing debt on the balancesheet."
Dharmendra Pradhan rules out regulation; blames hurricane in US for petrol price hike
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While every other product and service has been put under the Goods and Service Tax (GST), the exclusion of petrol and diesel from the new tax regime has left consumers helpless as fuel prices have hit a new high in three years.
Currently, the central government is not considering a cut in excise duty to bring down the skyrocketing prices of petrol and diesel. "The government cannot interfere in the day-to-day affairs of oil marketing companies," Oil Minister Dharmendra Pradhan said today.
"The government cannot change fuel pricing on a knee-jerk basis," Pradhan added.
Tax on petrol and diesel makes up for around 50 per cent of the total fuel prices. The excise duty on petrol has gone up to Rs 21.48 today from Rs 9.48 in 2014 when Prime Minister Narendra Modi-led BJP government came to power. In Delhi, the VAT (Value-added Tax) levied by state government has gone up 27 per cent from 12.7 per cent earlier.
Since 2014, the excise duty on petrol and diesel was hiked by Rs 12 and Rs 13.47 per litre, a hike of 226% and 486% respectively over the May 2014 level.
The benefits of the slump in global crude price is yet to trickle down to the consumers in the country. The government may have boosted its own revenue collection but it is yet to pass on the gains on account of cheaper fuel prices to Indian consumers.
The duty hike resulted in government's excise mop-up more than doubling to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. The windfall from the excise duty hikes has helped the government bridge its budgetary deficit.
Pradhan said the global prices have risen due to factors like hurricane in the US and there already are indications of "softening in the rates". "As a result of these hurricanes, 13 per cent of US refinery capacity was shutdown," Pradhan said.
Asked if the government will cut excise duty to soften the blow, he said: "That is a call the finance ministry has to take but one thing is very clear - we have to balance the developmental needs with consumer aspirations."
"We have to fund massive highways and road development plans, railway modernisation and expansion, rural sanitation, drinking water, primary healthcare and education. Allocations on all these heads has gone up significantly. Where do we get resources for these," he said.
If petroleum products are brought under the Goods and Service Tax, the total tax incidence on petrol and diesel is expected to come down to 28 per cent.
Earlier this month, Oil Minister Dharmendra Pradhan had ruled out cutting taxes on petrol and diesel to cushion the impact of rising international oil prices.
While every other product and service has been put under the Goods and Service Tax (GST), the exclusion of petrol and diesel from the new tax regime has left consumers helpless as fuel prices have hit a new high in three years.
Currently, the central government is not considering a cut in excise duty to bring down the skyrocketing prices of petrol and diesel. "The government cannot interfere in the day-to-day affairs of oil marketing companies," Oil Minister Dharmendra Pradhan said today.
"The government cannot change fuel pricing on a knee-jerk basis," Pradhan added.
Tax on petrol and diesel makes up for around 50 per cent of the total fuel prices. The excise duty on petrol has gone up to Rs 21.48 today from Rs 9.48 in 2014 when Prime Minister Narendra Modi-led BJP government came to power. In Delhi, the VAT (Value-added Tax) levied by state government has gone up 27 per cent from 12.7 per cent earlier.
Since 2014, the excise duty on petrol and diesel was hiked by Rs 12 and Rs 13.47 per litre, a hike of 226% and 486% respectively over the May 2014 level.
The benefits of the slump in global crude price is yet to trickle down to the consumers in the country. The government may have boosted its own revenue collection but it is yet to pass on the gains on account of cheaper fuel prices to Indian consumers.
The duty hike resulted in government's excise mop-up more than doubling to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. The windfall from the excise duty hikes has helped the government bridge its budgetary deficit.
Pradhan said the global prices have risen due to factors like hurricane in the US and there already are indications of "softening in the rates". "As a result of these hurricanes, 13 per cent of US refinery capacity was shutdown," Pradhan said.
Asked if the government will cut excise duty to soften the blow, he said: "That is a call the finance ministry has to take but one thing is very clear - we have to balance the developmental needs with consumer aspirations."
"We have to fund massive highways and road development plans, railway modernisation and expansion, rural sanitation, drinking water, primary healthcare and education. Allocations on all these heads has gone up significantly. Where do we get resources for these," he said.
If petroleum products are brought under the Goods and Service Tax, the total tax incidence on petrol and diesel is expected to come down to 28 per cent.
Earlier this month, Oil Minister Dharmendra Pradhan had ruled out cutting taxes on petrol and diesel to cushion the impact of rising international oil prices.
Ericsson files insolvency case against Reliance Communications
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Ericsson's Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues, the Indian mobile operator said in a stock exchange filing on Wednesday.
The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide network, is seeking a total of 11.55 billion rupees ($180 million) from the three companies, the filing said.
Reliance Communications said it planned to challenge the insolvency petitions. The filing said the Ericsson case would go before the National Company Law Tribunal, the designated court for bankruptcy cases in India, on Sept. 26.
"Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract. As the legal process is ongoing, we don't have any further comments at this point," the Swedish company said.
The petitions come as the Indian phone company controlled by billionaire Anil Ambani races against time to seal deals to sell a stake in its tower assets to Canada's Brookfield and to merge its mobile services business with rival Aircel.
Reliance Communications reported its third quarterly loss in a row last month and is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017.
The Brookfield and Aircel deals are expected to reduce its debt burden by 250 billion rupees. Ambani said at the time of the loan reprieve that he expected to complete the deals by September.
The company's losses are, in part, a result of competition from free voice and cut-price data plans offered by Reliance Jio Infocomm, the telecom start-up backed by Ambani's elder brother and India's richest man Mukesh Ambani.
Ericsson is aiming to recover 4.91 billion rupees from Reliance Communications, 5.35 billion from Reliance Infratel and 1.29 billion rupees from Reliance Telecom, the filing said.
Reliance Communications shares closed 4 percent lower on Wednesday before the filing was released, after local media reports said Ericsson had filed an insolvency plea.
India last year revamped its bankruptcy laws to help cut a record $150 billion in impaired bank loans. The rules allow financial as well as business creditors to trigger bankruptcy proceedings against a company which has defaulted on payments.
Ericsson's Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues, the Indian mobile operator said in a stock exchange filing on Wednesday.
The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide network, is seeking a total of 11.55 billion rupees ($180 million) from the three companies, the filing said.
Reliance Communications said it planned to challenge the insolvency petitions. The filing said the Ericsson case would go before the National Company Law Tribunal, the designated court for bankruptcy cases in India, on Sept. 26.
"Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract. As the legal process is ongoing, we don't have any further comments at this point," the Swedish company said.
The petitions come as the Indian phone company controlled by billionaire Anil Ambani races against time to seal deals to sell a stake in its tower assets to Canada's Brookfield and to merge its mobile services business with rival Aircel.
Reliance Communications reported its third quarterly loss in a row last month and is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017.
The Brookfield and Aircel deals are expected to reduce its debt burden by 250 billion rupees. Ambani said at the time of the loan reprieve that he expected to complete the deals by September.
The company's losses are, in part, a result of competition from free voice and cut-price data plans offered by Reliance Jio Infocomm, the telecom start-up backed by Ambani's elder brother and India's richest man Mukesh Ambani.
Ericsson is aiming to recover 4.91 billion rupees from Reliance Communications, 5.35 billion from Reliance Infratel and 1.29 billion rupees from Reliance Telecom, the filing said.
Reliance Communications shares closed 4 percent lower on Wednesday before the filing was released, after local media reports said Ericsson had filed an insolvency plea.
India last year revamped its bankruptcy laws to help cut a record $150 billion in impaired bank loans. The rules allow financial as well as business creditors to trigger bankruptcy proceedings against a company which has defaulted on payments.
Is this a good time to invest in stocks? Find out here
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Value investing is simple, yet isn't easy. The wait for value to emerge and the subsequent wait for value to unlock, in most cases, is a protracted and a painful one. What makes it worse (emotionally of course) is when value emerges the slide doesn't stop just because it is undervalued, given market's manic tendency to undershoot. After all the wait for markets to come off the overshoot, the notional portfolio erosion during the under-shoot after initiating value buying, makes even the staunch value investors shaky. To digest the erosion and still have the nerve to add during the undershoot, knowing well the long wait ahead for the value to rerate (unlock), is what makes whole process gut-wrenching. Similarly, even the rerating ride (upward value unlocking journey) is equally rocky and bumpy with many false starts and vicious falls. If one adds client's expectations/pressure into the equation, hardly can anyone envy the money manager who has taken the road-less-travelled path of value investing. If this is not hard enough, such money managers have to go through this cycle multiple times to create value over long-term.
Add to these, the challenges that come frequently while deploying cash in a falling market. After holding cash for a reasonably long time while the market kept rising, when the market turns and cracks, it will be tempting to quickly deploy when valuation turns attractive. If the market undershoots further, as it normally does, depleting cash too quickly tempted by attractive valuation could hurt the portfolio. Alternatively, if the market bounces quickly without undershooting further, decision to deploy quickly could prove to be a genius one. Both are possible outcomes in any market (irrespective of the economic fundamentals at that point of time) depending on to what extent the fear cycle plays in the given point of time.
Let us illustrate this by an example. Given below is the price-chart that captures this dynamics for a stock that has moved into the deep value zone recently. In the below chart, point A represents the point of overshoot, point B represents the time from which value starts emerging, point C represents the point of undershoot where it becomes a deep value and point D representing the beginning of re-rating. As one would infer, the overall time for the entire cycle to play out, from overshoot to undershoot and then to re-rating, goes even beyond three long years. In some cases, the wait could be even longer if the undershoot turns ugly or re-rating gets retarded, depending on the extent of bearishness in the market. The above chart is not an imaginary one. It is a real one (except for the dotted segment) for a stock that has turned deep value in the ongoing correction. It is a price chart of a company that is into renting high tonnage cranes for the wind sector. With the wind sector suddenly losing shine on serious short-term setbacks, this stock is on a free fall, thereby providing a fat-pitch opportunity for value pickers.
Value opportunities are not limited only to few stocks. With bubble popping out in small and midcaps in the ongoing slump, many stocks have sunk to new lows, thereby providing entry opportunities. For anyone who is willing to invest on the emotional capital of "Waiting", these are great time to load up one's shopping carts.
Investing isn't easy. Superior skill and extra-ordinary nerve are required to achieve above average results in investing. To quote from Howard Marks memo, "So, in the end, there is only one absolute truth about investing. Charlie is right: It isn't easy"
Value investing is simple, yet isn't easy. The wait for value to emerge and the subsequent wait for value to unlock, in most cases, is a protracted and a painful one. What makes it worse (emotionally of course) is when value emerges the slide doesn't stop just because it is undervalued, given market's manic tendency to undershoot. After all the wait for markets to come off the overshoot, the notional portfolio erosion during the under-shoot after initiating value buying, makes even the staunch value investors shaky. To digest the erosion and still have the nerve to add during the undershoot, knowing well the long wait ahead for the value to rerate (unlock), is what makes whole process gut-wrenching. Similarly, even the rerating ride (upward value unlocking journey) is equally rocky and bumpy with many false starts and vicious falls. If one adds client's expectations/pressure into the equation, hardly can anyone envy the money manager who has taken the road-less-travelled path of value investing. If this is not hard enough, such money managers have to go through this cycle multiple times to create value over long-term.
Add to these, the challenges that come frequently while deploying cash in a falling market. After holding cash for a reasonably long time while the market kept rising, when the market turns and cracks, it will be tempting to quickly deploy when valuation turns attractive. If the market undershoots further, as it normally does, depleting cash too quickly tempted by attractive valuation could hurt the portfolio. Alternatively, if the market bounces quickly without undershooting further, decision to deploy quickly could prove to be a genius one. Both are possible outcomes in any market (irrespective of the economic fundamentals at that point of time) depending on to what extent the fear cycle plays in the given point of time.
Let us illustrate this by an example. Given below is the price-chart that captures this dynamics for a stock that has moved into the deep value zone recently. In the below chart, point A represents the point of overshoot, point B represents the time from which value starts emerging, point C represents the point of undershoot where it becomes a deep value and point D representing the beginning of re-rating. As one would infer, the overall time for the entire cycle to play out, from overshoot to undershoot and then to re-rating, goes even beyond three long years. In some cases, the wait could be even longer if the undershoot turns ugly or re-rating gets retarded, depending on the extent of bearishness in the market. The above chart is not an imaginary one. It is a real one (except for the dotted segment) for a stock that has turned deep value in the ongoing correction. It is a price chart of a company that is into renting high tonnage cranes for the wind sector. With the wind sector suddenly losing shine on serious short-term setbacks, this stock is on a free fall, thereby providing a fat-pitch opportunity for value pickers.
Value opportunities are not limited only to few stocks. With bubble popping out in small and midcaps in the ongoing slump, many stocks have sunk to new lows, thereby providing entry opportunities. For anyone who is willing to invest on the emotional capital of "Waiting", these are great time to load up one's shopping carts.
Investing isn't easy. Superior skill and extra-ordinary nerve are required to achieve above average results in investing. To quote from Howard Marks memo, "So, in the end, there is only one absolute truth about investing. Charlie is right: It isn't easy"
General Awareness
India-Afghanistan Second Strategic Partnership Council Meeting 2017
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On September 11,2017, the second Strategic Partnership Council meeting between two nations was held at New Delhi.As a part of the meeting, external affairs minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbaniheld talks on wide- ranging topics.The Strategic Partnership Council discussed a range of bilateral, regional and global issues of mutual interest and shared understanding and convergence of views on them.
Highlights of the meeting: –
- i) Political & Security Consultations: –
India agreed to extend assistance for the Afghan National Defence and Security Forces to fight againstterrorism, organized crime, trafficking of narcotics and money laundering.The Indian side reiterated its support for an Afghan-led and Afghan-owned peace and reconciliation process.
ii)Trade, Commerce and Investment Cooperation: –
The two sides welcomed the establishment of the Air Cargo Corridorbetween Kabul and Kandahar with New Delhi in June 2017.Both sides agreed to work towards operationalisation of the Chahbahar Port in Iran under the trilateral Agreement for Establishment of International Transport and Transit Corridor signed in May 2016.
The liberalization of visa measures by India for Afghan nationals, including decision to grant up to 5-year multiple entry business visa, was welcomed as a measure that would promote bilateral trade including direct trade in gemstones, pharmaceuticals, and agri-products. and commerce.
iii)New Development Partnership: –
Both sides agreed to initiate an ambitious and forward looking next generation ‘New Development Partnership’.
Both sides agreed to take up 116 High Impact Community Development Projects to be implemented in 31 provinces of Afghanistan, including in the areas of education, health, agriculture, irrigation, drinking water, renewable energy, flood control, micro-hydropower, sports infrastructure, administrative infrastructure.
iv)Projects with the help of Indian aid
- Shahtoot dam and drinking water project for Kabul that would also facilitate irrigation;
- Low cost housing for returning Afghan refugees in Nangarhar Province to promote resettlement; ·
- Road connectivity to Band-e-Amir in Bamyan Province that would promote tourism to the National Park and economic development; ·
- Water supply network for Charikar city in Parwan Province; ·
- Establishment of a Gypsum board manufacturing plant in Kabul to promote value added industry; and ·
v)People to People Contacts, Culture, Education, Health, Science and Technology
- Implementation of 500 scholarships for graduate studies in India for the next-of-kin of martyrs of the Afghan National Defence and Security Forces from the Academic year 2018-19 and expand the medical assistance for Afghan National Army personnel.
- Establishment of ANASTU (Afghan National Agricultural Sciences and Technology University) in Kandahar was agreed to explore further cooperation in strengthening of ANASTU as an agricultural university.
- Afghanistan’s participation in the South Asia Satellite launched in May 2017, India agreed to extend assistance to Afghanistan in applications of the remote sensing technology, including in agriculture and resource management.
- India-Afghanistan Foundation to promote cultural and people to people contacts, ICCR would provide assistance, including musical instruments to the Afghan National Institute of Music in Kabul.
- To promote tourism and people to people contacts, both on further promoting exchange between Parliaments, Election Commissions, media, women, youth, religious figures and institutions, sports teams and facilitating Sister State/ City relationships.
vi)Documents Exchanged
(a) Motor Vehicles Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic;
(b) Memorandum of Understanding between the National Medicine and Healthcare Products Regulatory Authority of Afghanistan, Islamic Republic of Afghanistan and the Central Drugs Standard Control Organisation (CDSCO), Directorate General of Health Services, Ministry of Health and Family Welfare for mutual cooperation in the field of pharmaceutical products regulation;
(c) The Orbit Frequency Coordination Agreement between India and Afghanistan on South Asia Satellite (SAS);
(d) Letters establishing the New Development Partnership and launching 116 High Impact Community Development Projects.
It was agreed to have regular meetings of the Joint Working Groups, including to monitor implementation of the decisions taken. Both sides agreed to hold the 3rd meeting of the Strategic Partnership Council in Kabul on mutually convenient dates in 2018.
On September 11,2017, the second Strategic Partnership Council meeting between two nations was held at New Delhi.As a part of the meeting, external affairs minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbaniheld talks on wide- ranging topics.The Strategic Partnership Council discussed a range of bilateral, regional and global issues of mutual interest and shared understanding and convergence of views on them.
Highlights of the meeting: –
Highlights of the meeting: –
- i) Political & Security Consultations: –
India agreed to extend assistance for the Afghan National Defence and Security Forces to fight againstterrorism, organized crime, trafficking of narcotics and money laundering.The Indian side reiterated its support for an Afghan-led and Afghan-owned peace and reconciliation process.
ii)Trade, Commerce and Investment Cooperation: –
The two sides welcomed the establishment of the Air Cargo Corridorbetween Kabul and Kandahar with New Delhi in June 2017.Both sides agreed to work towards operationalisation of the Chahbahar Port in Iran under the trilateral Agreement for Establishment of International Transport and Transit Corridor signed in May 2016.
The liberalization of visa measures by India for Afghan nationals, including decision to grant up to 5-year multiple entry business visa, was welcomed as a measure that would promote bilateral trade including direct trade in gemstones, pharmaceuticals, and agri-products. and commerce.
iii)New Development Partnership: –
Both sides agreed to initiate an ambitious and forward looking next generation ‘New Development Partnership’.
Both sides agreed to take up 116 High Impact Community Development Projects to be implemented in 31 provinces of Afghanistan, including in the areas of education, health, agriculture, irrigation, drinking water, renewable energy, flood control, micro-hydropower, sports infrastructure, administrative infrastructure.
iv)Projects with the help of Indian aid
The two sides welcomed the establishment of the Air Cargo Corridorbetween Kabul and Kandahar with New Delhi in June 2017.Both sides agreed to work towards operationalisation of the Chahbahar Port in Iran under the trilateral Agreement for Establishment of International Transport and Transit Corridor signed in May 2016.
The liberalization of visa measures by India for Afghan nationals, including decision to grant up to 5-year multiple entry business visa, was welcomed as a measure that would promote bilateral trade including direct trade in gemstones, pharmaceuticals, and agri-products. and commerce.
iii)New Development Partnership: –
Both sides agreed to initiate an ambitious and forward looking next generation ‘New Development Partnership’.
Both sides agreed to take up 116 High Impact Community Development Projects to be implemented in 31 provinces of Afghanistan, including in the areas of education, health, agriculture, irrigation, drinking water, renewable energy, flood control, micro-hydropower, sports infrastructure, administrative infrastructure.
iv)Projects with the help of Indian aid
- Shahtoot dam and drinking water project for Kabul that would also facilitate irrigation;
- Low cost housing for returning Afghan refugees in Nangarhar Province to promote resettlement; ·
- Road connectivity to Band-e-Amir in Bamyan Province that would promote tourism to the National Park and economic development; ·
- Water supply network for Charikar city in Parwan Province; ·
- Establishment of a Gypsum board manufacturing plant in Kabul to promote value added industry; and ·
v)People to People Contacts, Culture, Education, Health, Science and Technology
- Implementation of 500 scholarships for graduate studies in India for the next-of-kin of martyrs of the Afghan National Defence and Security Forces from the Academic year 2018-19 and expand the medical assistance for Afghan National Army personnel.
- Establishment of ANASTU (Afghan National Agricultural Sciences and Technology University) in Kandahar was agreed to explore further cooperation in strengthening of ANASTU as an agricultural university.
- Afghanistan’s participation in the South Asia Satellite launched in May 2017, India agreed to extend assistance to Afghanistan in applications of the remote sensing technology, including in agriculture and resource management.
- India-Afghanistan Foundation to promote cultural and people to people contacts, ICCR would provide assistance, including musical instruments to the Afghan National Institute of Music in Kabul.
- To promote tourism and people to people contacts, both on further promoting exchange between Parliaments, Election Commissions, media, women, youth, religious figures and institutions, sports teams and facilitating Sister State/ City relationships.
vi)Documents Exchanged
(a) Motor Vehicles Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic;
(b) Memorandum of Understanding between the National Medicine and Healthcare Products Regulatory Authority of Afghanistan, Islamic Republic of Afghanistan and the Central Drugs Standard Control Organisation (CDSCO), Directorate General of Health Services, Ministry of Health and Family Welfare for mutual cooperation in the field of pharmaceutical products regulation;
(c) The Orbit Frequency Coordination Agreement between India and Afghanistan on South Asia Satellite (SAS);
(d) Letters establishing the New Development Partnership and launching 116 High Impact Community Development Projects.
It was agreed to have regular meetings of the Joint Working Groups, including to monitor implementation of the decisions taken. Both sides agreed to hold the 3rd meeting of the Strategic Partnership Council in Kabul on mutually convenient dates in 2018.
(a) Motor Vehicles Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic;
(b) Memorandum of Understanding between the National Medicine and Healthcare Products Regulatory Authority of Afghanistan, Islamic Republic of Afghanistan and the Central Drugs Standard Control Organisation (CDSCO), Directorate General of Health Services, Ministry of Health and Family Welfare for mutual cooperation in the field of pharmaceutical products regulation;
(c) The Orbit Frequency Coordination Agreement between India and Afghanistan on South Asia Satellite (SAS);
(d) Letters establishing the New Development Partnership and launching 116 High Impact Community Development Projects.
It was agreed to have regular meetings of the Joint Working Groups, including to monitor implementation of the decisions taken. Both sides agreed to hold the 3rd meeting of the Strategic Partnership Council in Kabul on mutually convenient dates in 2018.
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