General Affairs
PM Modi, At Singapore Shangri-La Dialogue, Speaks Against Protectionism
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In a strong message against protectionism, Prime Minister Narendra Modi said countries could not find solutions behind walls of protection but in embracing change. "What we seek is a level playing field for all. India stands for open and stable international trade regime," PM Modi said at the Shangri-La Dialogue in Singapore.
"We will also support rule-based, open, balance and stable trade environment in the Indo-Pacific Region, which lifts up all nations on the tide of trade and investment," he said. In a speech that also laid out how India had many partnerships and its friendships were not aimed at containing others, PM Modi spoke about India's relations with the United States, Russia and China.
India's global strategic partnership with the United States continues to deepen across the extraordinary breadth of our relationship, he said, describing it as a measure of our strategic autonomy that India's first Strategic Partnership was with Russia and matured to be special and privileged.
On New Delhi's relations with Beijing, he said no other relationship of India had as many layers as the one with China. PM Modi and President Xi had held an informal summit in Chinese city of Wuhan in April last week during which they exchanged views on solidifying the relationship between the two Asian powers.
"I firmly believe that Asia and the world will have a better future when India and China work together in trust and confidence," he said, underlining that an Asia of "rivalries" will hold the region back while an Asia of cooperation will shape the century.
India stands for a free, open, inclusive Indo-Pacific region, which embraces us all in a common pursuit of progress and prosperity, he said.
"We will also support rule-based, open, balance and stable trade environment in the Indo-Pacific Region, which lifts up all nations on the tide of trade and investment," he said. In a speech that also laid out how India had many partnerships and its friendships were not aimed at containing others, PM Modi spoke about India's relations with the United States, Russia and China.
India's global strategic partnership with the United States continues to deepen across the extraordinary breadth of our relationship, he said, describing it as a measure of our strategic autonomy that India's first Strategic Partnership was with Russia and matured to be special and privileged.
On New Delhi's relations with Beijing, he said no other relationship of India had as many layers as the one with China. PM Modi and President Xi had held an informal summit in Chinese city of Wuhan in April last week during which they exchanged views on solidifying the relationship between the two Asian powers.
"I firmly believe that Asia and the world will have a better future when India and China work together in trust and confidence," he said, underlining that an Asia of "rivalries" will hold the region back while an Asia of cooperation will shape the century.
India stands for a free, open, inclusive Indo-Pacific region, which embraces us all in a common pursuit of progress and prosperity, he said.
Russell Wilson, Ciara invest in latest effort to bring MLB to Portland
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Seattle Seahawks quarterback Russell Wilson and singer Ciara have joined the effort to bring Major League Baseball to Portland.
Portland Diamond Project, the company leading the push, announced Friday morning that the husband-and-wife celebrities have each invested individually as "owner/investors" in the project. In doing so, they become the first outside investors to publicly announce their support.
"I want to see this vision come to life and empower more women owners in major sports franchises," Ciara said in a news release.
Each has pledged to hold a minority ownership stake should Portland acquire an MLB franchise, spokesman John McIsaac said.
"We believe Portland is the next great Major League Baseball city, and that's why Ciara and I are excited to announce we are a part of the Portland Diamond Project," Wilson said in a news release. "It is time for MLB in Portland."
The Diamond Project's leadership has stressed that its effort will take time, estimating an opening day in Portland would come in 2022 at the earliest. MLB commissioner Rob Manfred has called Portland a candidate to acquire a franchise whether by either expansion, which hasn't happened in 20 years, or relocation. The Oakland Athletics and Tampa Bay Rays are the likeliest candidates to move because each has pushed for a new stadium with little headway to show for it.
"I want to be clear about expansion," Manfred said in a May 30 interview with The Athletic's Ken Rosenthal. "We're fortunate. I would not have raised the issue of expansion. We've made clear we have two big issues -- Tampa Bay and Oakland -- that need to be resolved before we think about it. But the fact of the matter is, we're blessed. We've got cities out there that want to have Major League Baseball. And I think Major League Baseball has to show some receptivity to that because down the road, we are interested in it."
Friday's announcement is the latest in the effort to bring baseball to the country's 22nd-largest media market. Retired Nike executive Craig Cheek, former state senator Jason Atkinson and former Trail Blazers announcer Mike Barrett are Portland Diamond Project's managing partners.
In April, the group placed offers on two sites on which it hopes to one day build a 32,000-seat stadium and 8,000 units of housing. One offer is for the ESCO industrial site in Northwest Portland that used to be the home of Vaughn Street Stadium, a longtime baseball venue in the city. The other is an $80 million offer for the Portland Public Schools administration building near Moda Center and Memorial Coliseum.
Wilson and Ciara will tour the ESCO and PPS sites Saturday before speaking at a news conference.
A third site -- the Port of Portland's Terminal Two, on the Willamette River's west bank northwest of the Fremont Bridge -- is also being considered, the Port confirmed Thursday in news reports.
In a blog post, Wilson wrote Friday he hopes the project will help inner-city youth find a connection to baseball as he did as a child, recalling how his parents took him to games.
"With this project, we will make sure that every little kid in this country has the opportunity to learn the lessons of sportsmanship and competition," Wilson wrote. "No matter their skin color or economic status every kid deserves to have an equal opportunity and the resources it takes to play."
Cheek said the relationship with Wilson and Ciara began while he oversaw the NFL for the global sportswear giant based in Washington County.
Though Wilson is a Pro Bowl quarterback, he has a longstanding connection to baseball. He played in the minor leagues while in college and practiced with the Texas Rangers during spring training in March. He has also lent his status and invested his money in previous franchise-acquisition efforts. In 2016, Wilson joined a push to build a Seattle stadium that could hold NBA and NHL franchises.
Portland Diamond Project, the company leading the push, announced Friday morning that the husband-and-wife celebrities have each invested individually as "owner/investors" in the project. In doing so, they become the first outside investors to publicly announce their support.
"I want to see this vision come to life and empower more women owners in major sports franchises," Ciara said in a news release.
Each has pledged to hold a minority ownership stake should Portland acquire an MLB franchise, spokesman John McIsaac said.
"We believe Portland is the next great Major League Baseball city, and that's why Ciara and I are excited to announce we are a part of the Portland Diamond Project," Wilson said in a news release. "It is time for MLB in Portland."
The Diamond Project's leadership has stressed that its effort will take time, estimating an opening day in Portland would come in 2022 at the earliest. MLB commissioner Rob Manfred has called Portland a candidate to acquire a franchise whether by either expansion, which hasn't happened in 20 years, or relocation. The Oakland Athletics and Tampa Bay Rays are the likeliest candidates to move because each has pushed for a new stadium with little headway to show for it.
"I want to be clear about expansion," Manfred said in a May 30 interview with The Athletic's Ken Rosenthal. "We're fortunate. I would not have raised the issue of expansion. We've made clear we have two big issues -- Tampa Bay and Oakland -- that need to be resolved before we think about it. But the fact of the matter is, we're blessed. We've got cities out there that want to have Major League Baseball. And I think Major League Baseball has to show some receptivity to that because down the road, we are interested in it."
Friday's announcement is the latest in the effort to bring baseball to the country's 22nd-largest media market. Retired Nike executive Craig Cheek, former state senator Jason Atkinson and former Trail Blazers announcer Mike Barrett are Portland Diamond Project's managing partners.
In April, the group placed offers on two sites on which it hopes to one day build a 32,000-seat stadium and 8,000 units of housing. One offer is for the ESCO industrial site in Northwest Portland that used to be the home of Vaughn Street Stadium, a longtime baseball venue in the city. The other is an $80 million offer for the Portland Public Schools administration building near Moda Center and Memorial Coliseum.
Wilson and Ciara will tour the ESCO and PPS sites Saturday before speaking at a news conference.
A third site -- the Port of Portland's Terminal Two, on the Willamette River's west bank northwest of the Fremont Bridge -- is also being considered, the Port confirmed Thursday in news reports.
In a blog post, Wilson wrote Friday he hopes the project will help inner-city youth find a connection to baseball as he did as a child, recalling how his parents took him to games.
"With this project, we will make sure that every little kid in this country has the opportunity to learn the lessons of sportsmanship and competition," Wilson wrote. "No matter their skin color or economic status every kid deserves to have an equal opportunity and the resources it takes to play."
Cheek said the relationship with Wilson and Ciara began while he oversaw the NFL for the global sportswear giant based in Washington County.
Though Wilson is a Pro Bowl quarterback, he has a longstanding connection to baseball. He played in the minor leagues while in college and practiced with the Texas Rangers during spring training in March. He has also lent his status and invested his money in previous franchise-acquisition efforts. In 2016, Wilson joined a push to build a Seattle stadium that could hold NBA and NHL franchises.
BJP Will Emerge Stronger in 2019, Says Prakash Javadekar
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Union Minister Prakash Javadekar said today that the BJP will return to power at the Centre, even stronger after 2019 Lok Sabha polls.
"There is no question of the Modi magic fading. His magic persists and we will emerge even stronger at the Centre after 2019," Mr Javadekar said while speaking to reporters in Dehradun.
He added that those who looked at the bypoll results as an expression of public opinion on Narendra Modi government's performance were wrong.
Dealing a blow to the ruling BJP, opposition parties emerged victorious in 11 out of 14 bypolls while limiting the BJP and its allies at just three and snatching the high-profile Kairana Lok Sabha seat in Uttar Pradesh with a united force.
"Bypolls are different. Voter turnout is low and local factors are at work. These results cannot point to what is going to happen in the general elections," he said.
"Modi was not in the picture in the bypolls. He did not go anywhere. So it shouldn't be perceived as a verdict on his government under whom the country is doing well on every front," Mr Javadekar added. He also said that he BJP would do better in 2019 than it did in 2014 in Odisha, West Bengal, Kerala and the northeast.
Mr Javadekar also sought to shatter the perception that PM Modi and Amit Shah were the only people who mattered in the NDA and all ministries were answerable to them.
"Their vision may guide ministries but that is not to say they have no freedom to take their own decisions," he added.
Praising the BJP for providing clean governance, Mr Javadekar said that in the last four years of PM Modi's tenure, there had not been a single corruption charge against any minister.
"Not only that. We have also put in place a system which does not allow corruption to grow. Now, 100 percent of the money released by the Centre under welfare schemes reaches the beneficiaries," he said,
Highlighting infrastructural developments over the past four years, Mr Javadekar mentioned the all-weather road projects for Chardham in Uttarakhand , on which work is underway on a war footing.
Asked whether it would not be challenging for BJP to take on a united opposition in 2019, Mr Javadekar added that opposition unity was not so easy to come about, especially when it would come to seat sharing.
"There is no question of the Modi magic fading. His magic persists and we will emerge even stronger at the Centre after 2019," Mr Javadekar said while speaking to reporters in Dehradun.
He added that those who looked at the bypoll results as an expression of public opinion on Narendra Modi government's performance were wrong.
Dealing a blow to the ruling BJP, opposition parties emerged victorious in 11 out of 14 bypolls while limiting the BJP and its allies at just three and snatching the high-profile Kairana Lok Sabha seat in Uttar Pradesh with a united force.
"Bypolls are different. Voter turnout is low and local factors are at work. These results cannot point to what is going to happen in the general elections," he said.
"Modi was not in the picture in the bypolls. He did not go anywhere. So it shouldn't be perceived as a verdict on his government under whom the country is doing well on every front," Mr Javadekar added. He also said that he BJP would do better in 2019 than it did in 2014 in Odisha, West Bengal, Kerala and the northeast.
Mr Javadekar also sought to shatter the perception that PM Modi and Amit Shah were the only people who mattered in the NDA and all ministries were answerable to them.
"Their vision may guide ministries but that is not to say they have no freedom to take their own decisions," he added.
Praising the BJP for providing clean governance, Mr Javadekar said that in the last four years of PM Modi's tenure, there had not been a single corruption charge against any minister.
"Not only that. We have also put in place a system which does not allow corruption to grow. Now, 100 percent of the money released by the Centre under welfare schemes reaches the beneficiaries," he said,
Highlighting infrastructural developments over the past four years, Mr Javadekar mentioned the all-weather road projects for Chardham in Uttarakhand , on which work is underway on a war footing.
Asked whether it would not be challenging for BJP to take on a united opposition in 2019, Mr Javadekar added that opposition unity was not so easy to come about, especially when it would come to seat sharing.
Nipah Deaths In Kerala Rise To 16, Minister Warns Of Second Outbreak
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With two more deaths in the last two days in Kerala's Kozhikode, the death toll from Nipah virus has risen to 16. Health Minister KK Shailaja has also warned of a possible second outbreak. "We have to be very cautious," she said today and added that even though there is need to panic, as a matter of caution, all possible precautionary steps should be taken.
"We had indicated at the outset itself, there could be a possible second outbreak and the vulnerable are those who would have in come in contact with the affected. All such people have to be closely watched... tests will reveal only at the appropriate time when the symptoms of Nipah virus surface, so all those who have come in direct contact with the earlier affected have to see they get in touch with the special control room set up in Kozhikode," she said.
The staff, including nurses and four doctors of the hospital where the two patients died in the last two days, has been asked to go on leave for a week as a precautionary measure, officials said.
Rasin, 25, who died yesterday, was initially treated at the Balussery hospital. He had first tested negative for Nipah, but later developed symptoms again and was admitted to the hospital where he died yesterday. He is suspected to have contacted it from one of the earlier victims.
After the death of a superintendent of Kozhikode district court complex due to Nipah, the district bar association asked the collector to temporarily put operations on hold. The health minister, however, said that the situation didn't warrant the shutting down of the court, and people who were in contact with the victims are under surveillance.
Schools in Kozhikode will re-open from June 5 whereas schools across the state opened today after summer vacation.
Meanwhile, as part of 'Nipah alert', those who visited Kozhikode Medical College casualty, CT scan room and waiting room on May 14 and the Balussery Taluk Hospital on May 18 have been asked to contact the Nipah cell immediately.
So far, a total of 196 samples have been tested for Nipah, of which 18 have tested positive. Eleven of them have shown symptoms and are under quarantine while about 1,500 suspects are under home quarantine.
Union health ministry has issued a health advisory saying it's localised and there is no need to panic.
"We had indicated at the outset itself, there could be a possible second outbreak and the vulnerable are those who would have in come in contact with the affected. All such people have to be closely watched... tests will reveal only at the appropriate time when the symptoms of Nipah virus surface, so all those who have come in direct contact with the earlier affected have to see they get in touch with the special control room set up in Kozhikode," she said.
The staff, including nurses and four doctors of the hospital where the two patients died in the last two days, has been asked to go on leave for a week as a precautionary measure, officials said.
Rasin, 25, who died yesterday, was initially treated at the Balussery hospital. He had first tested negative for Nipah, but later developed symptoms again and was admitted to the hospital where he died yesterday. He is suspected to have contacted it from one of the earlier victims.
After the death of a superintendent of Kozhikode district court complex due to Nipah, the district bar association asked the collector to temporarily put operations on hold. The health minister, however, said that the situation didn't warrant the shutting down of the court, and people who were in contact with the victims are under surveillance.
Schools in Kozhikode will re-open from June 5 whereas schools across the state opened today after summer vacation.
Meanwhile, as part of 'Nipah alert', those who visited Kozhikode Medical College casualty, CT scan room and waiting room on May 14 and the Balussery Taluk Hospital on May 18 have been asked to contact the Nipah cell immediately.
So far, a total of 196 samples have been tested for Nipah, of which 18 have tested positive. Eleven of them have shown symptoms and are under quarantine while about 1,500 suspects are under home quarantine.
Union health ministry has issued a health advisory saying it's localised and there is no need to panic.
Separate Grenade Attacks At PDP MLA's House, CRRF Personnel In Anantnag
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Terrorists carried out two grenade attacks today in Anantnag and Pulwama districts of Jammu and Kashmir, one at the residence of ruling PDP MLA Mushtaq Shah, leaving four injured.
Terrorists threw a grenade towards the residence of Tral MLA Mushtaq Shah in Pulwama. It exploded in the lawn and no one was injured, a police official said, adding the legislator was not in the house at the time of the incident.
The terrorists also attacked CRPF personnel at Khanabal in Anantnag district this afternoon. Four persons, including two CRPF personnel, were injured in the explosion. Their condition is said to be stable.
A manhunt has been launched to arrest the attackers, he said.
Mr Shah is a legislator of the Peoples Democratic Party (PDP) which has a coalition government with the BJP in Jammu and Kashmir.
Terrorists threw a grenade towards the residence of Tral MLA Mushtaq Shah in Pulwama. It exploded in the lawn and no one was injured, a police official said, adding the legislator was not in the house at the time of the incident.
The terrorists also attacked CRPF personnel at Khanabal in Anantnag district this afternoon. Four persons, including two CRPF personnel, were injured in the explosion. Their condition is said to be stable.
A manhunt has been launched to arrest the attackers, he said.
Mr Shah is a legislator of the Peoples Democratic Party (PDP) which has a coalition government with the BJP in Jammu and Kashmir.
Business Affairs
Loans on EMI to get costly as SBI, PNB, ICICI Bank hike lending rates by 10 basis points
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Consumers expecting reduction in interest rates on loans should now be ready to pay more instead. India's three biggest banks, SBI, PNB and ICICI, have increased lending rates (MCLR) by 0.1 per cent, which would raise interest payable on loans. State Bank of India has hiked the Marginal Cost of Lending Rate by 10 basis points across all tenors up to three years. The second largest private lender ICICI has also raised MCLR by 10 basis points to 8.40 per cent for one year and three-year tenors. The new MCLR will be effective from June 1. Borrowers will not have to pay more interest if these banks decide to reduce their margin.
The hike in MCLR has been introduced just four days ahead of the RBI's bi-monthly monetary policy on June 6. This is the second time in a year that SBI has raised the MCLR. On March 1, it raised the lending rate for one year by 20 basis points to 8.15 per cent from 7.95 per cent. As per the SBI website, for the overnight and one month tenors, lending rates have been raised from existing 7.80 per cent to 7.90 per cent. For the three-month tenor, the new lending rate is 7.95; 8.10 for six-month tenor; 8.25 for one year; 8.35 per cent for two years; and 8.45 per cent for three years.
The state-owned Punjab National Bank (PNB), the country's second largest lender, raised the MCLR for three-year and five-year tenors to 8.55 per cent and 8.7 per cent, respectively. PNB has also increased the base rate to 9.25 per cent from the earlier 9.15 per cent.
ICICI Bank has also raised the MCLR by 10 basis points in loans with tenor of one year and three years. It raised five-year tenor MCLR by 10 basis points to 8.70 per cent. However, lending rate remains unchanged in case of loans up to three months.
MCLR includes marginal cost of funds, negative carry due to CRR (cost that banks incur on keeping funds with the RBI as CRR), operating costs and tenure premium (costs arising from loan commitments with a longer tenor). The final lending rate charged to a customer may include spread (a premium) to the MCLR.
Other banks may also follow suit. Most of home and auto loans are linked to MCLR. Meanwhile, mortgage lender HDFC said it has increased its retail prime lending rate (RPLR), on which its adjustable rate home loans (ARHL) are benchmarked, by 10 basis points, effective from June 2.
Karnataka Bank has raised its interest rates on deposits. Interest on domestic and NRE rupee term deposits for a period of one year to two years stands revised to 7.25 per cent from 7.10 (for deposits up to Rs 10 crore) representing a hike of 15 basis points, it said in a regulatory filing. The revised rates are effective from yesterday, it added.
The hike in MCLR has been introduced just four days ahead of the RBI's bi-monthly monetary policy on June 6. This is the second time in a year that SBI has raised the MCLR. On March 1, it raised the lending rate for one year by 20 basis points to 8.15 per cent from 7.95 per cent. As per the SBI website, for the overnight and one month tenors, lending rates have been raised from existing 7.80 per cent to 7.90 per cent. For the three-month tenor, the new lending rate is 7.95; 8.10 for six-month tenor; 8.25 for one year; 8.35 per cent for two years; and 8.45 per cent for three years.
The state-owned Punjab National Bank (PNB), the country's second largest lender, raised the MCLR for three-year and five-year tenors to 8.55 per cent and 8.7 per cent, respectively. PNB has also increased the base rate to 9.25 per cent from the earlier 9.15 per cent.
ICICI Bank has also raised the MCLR by 10 basis points in loans with tenor of one year and three years. It raised five-year tenor MCLR by 10 basis points to 8.70 per cent. However, lending rate remains unchanged in case of loans up to three months.
MCLR includes marginal cost of funds, negative carry due to CRR (cost that banks incur on keeping funds with the RBI as CRR), operating costs and tenure premium (costs arising from loan commitments with a longer tenor). The final lending rate charged to a customer may include spread (a premium) to the MCLR.
Other banks may also follow suit. Most of home and auto loans are linked to MCLR. Meanwhile, mortgage lender HDFC said it has increased its retail prime lending rate (RPLR), on which its adjustable rate home loans (ARHL) are benchmarked, by 10 basis points, effective from June 2.
Karnataka Bank has raised its interest rates on deposits. Interest on domestic and NRE rupee term deposits for a period of one year to two years stands revised to 7.25 per cent from 7.10 (for deposits up to Rs 10 crore) representing a hike of 15 basis points, it said in a regulatory filing. The revised rates are effective from yesterday, it added.
Commerce ministry ropes in the ED, RBI, CCI, I-T Dept to look into Walmart-Flipkart deal
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The Ministry of Commerce has roped in the Enforcement Directorate, enforcement and foreign exchange departments of the Reserve Bank of India (RBI), Competition Commission of India (CCI) and Income Tax department to examine the allegations raised by RSS affiliate Swadeshi Jagran Manch (SJM) against the Walmart-Flipkart deal.
The instructions came within a week of receiving a formal complaint from SJM.
In a representation on May 24, SJM had asked the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, to look into the alleged irregularities in various aspects including Foreign Direct Investment (FDI) policy norms, competition and taxation issues in the deal that saw Walmart acquiring home grown e-commerce company Flipkart.
Four days later, DIPP forwarded the copy of the representation to all the concerned departments for examination and appropriate action.
SJM has alleged that Flipkart is illegally carrying out multi brand retail trading through e-commerce by flouting FDI policy norms by creating a complex corporate structure. The letter mentions that Flipkart, while presenting itself as an entity in B2B segment, is operating in both in B2B and B2C segments. The DIPP says that FDI policy as contained in the 'Consolidated FDI Policy Circular 2017' is notified under Foreign Exchange Managcment Act (FEMA), 1999 and hence any violation of FDI regulations is covered by the penal provision of that Act. Similarly, the Reserve Bank of India administers the FEMA and the Directorate of Enforcement under the Ministry of Finance is the authority for the enforcement of FEMA. Stating that the violation of FDI policy is therefore, subject matter of the RBI/ Enforcement Directorate, it wanted the agencies to look into the matter.
SJM had said that by acquiring 77 percent of shareholding in Flipkart, Walmart was making a back door entry into multi brand retail trade in India which is not permitted under the present foreign direct investment policy.
"Walmart has already made its presence felt in B2B segment and has opened 21 stores and has plans to open 50 more such stores. Acquiring Flipkart at a very high valuation is only on account that through this it would be able to come into B2C segment", Ashwani Mahajan, National Co-convener, SJM had stated in his letter to the DIPP.
He also alleges that Flipkart promoters initially transferred the ownership of the companies operating in India to Singapore and in subsequent years made changes in ownership of the holding company at different valuations without paying any taxes in India on as happened in the Vodafone case.
"Flipkart promoters also segregated the B2C business from the B2B business by creating companies apparently owned by independent persons but actually controlled by them. Our records show that the directors of these companies are mostly employees of Flipkart group of companies. Operations of WS Retail Services Pvt. Ltd and Tech Connect Retail Private Limited can be clearly seen as camouflage for showing that B2B and B2C business are independent of each other. Flipkart India Private Limited, operating in B2B segment has confirmed before Income Tax authorities that it has been selling goods at prices lower than their cost to build brand which is actually Flipkart.com which is an e-commerce platform. The goods are sold to the so called independent companies at prices less than the cost with the conditions that they would be selling those goods only at the e-market places of the same Group. Even the prices of the products offered on e-commerce platform are determined by either the B2B company or e-commerce platform owned and operated by the same Group. This clearly establishes that transactions between B2B companies and B2C companies shown as independent companies are sham transactions and are in contravention of government policy on establishing 'market place'. Another indicator of the fact that these companies are being operated under one management is that these so called independent companies are able to carry on business to the tune of Rs 8000 crore (approx.) annually with a paltry investment of Rs 1.5 crore as share capital", the letter states.
SJM had called for an immediate enquiry into the dubious deal between Flipkart owners and Walmart which has been written outside India but for all the tangible and intangible assets placed in India and an enquiry into the nexus between Flipkart companies and the so called independent B2C companies and how they were allowed to carry on their activities without any objections from the regulators including DIPP in the past. The organisation also wanted the commerce ministry to make a strong representation before the CCI of India to not approve the takeover deal before the results of the enquiries initiated by the government are available.
The instructions came within a week of receiving a formal complaint from SJM.
In a representation on May 24, SJM had asked the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, to look into the alleged irregularities in various aspects including Foreign Direct Investment (FDI) policy norms, competition and taxation issues in the deal that saw Walmart acquiring home grown e-commerce company Flipkart.
Four days later, DIPP forwarded the copy of the representation to all the concerned departments for examination and appropriate action.
SJM has alleged that Flipkart is illegally carrying out multi brand retail trading through e-commerce by flouting FDI policy norms by creating a complex corporate structure. The letter mentions that Flipkart, while presenting itself as an entity in B2B segment, is operating in both in B2B and B2C segments. The DIPP says that FDI policy as contained in the 'Consolidated FDI Policy Circular 2017' is notified under Foreign Exchange Managcment Act (FEMA), 1999 and hence any violation of FDI regulations is covered by the penal provision of that Act. Similarly, the Reserve Bank of India administers the FEMA and the Directorate of Enforcement under the Ministry of Finance is the authority for the enforcement of FEMA. Stating that the violation of FDI policy is therefore, subject matter of the RBI/ Enforcement Directorate, it wanted the agencies to look into the matter.
SJM had said that by acquiring 77 percent of shareholding in Flipkart, Walmart was making a back door entry into multi brand retail trade in India which is not permitted under the present foreign direct investment policy.
"Walmart has already made its presence felt in B2B segment and has opened 21 stores and has plans to open 50 more such stores. Acquiring Flipkart at a very high valuation is only on account that through this it would be able to come into B2C segment", Ashwani Mahajan, National Co-convener, SJM had stated in his letter to the DIPP.
He also alleges that Flipkart promoters initially transferred the ownership of the companies operating in India to Singapore and in subsequent years made changes in ownership of the holding company at different valuations without paying any taxes in India on as happened in the Vodafone case.
"Flipkart promoters also segregated the B2C business from the B2B business by creating companies apparently owned by independent persons but actually controlled by them. Our records show that the directors of these companies are mostly employees of Flipkart group of companies. Operations of WS Retail Services Pvt. Ltd and Tech Connect Retail Private Limited can be clearly seen as camouflage for showing that B2B and B2C business are independent of each other. Flipkart India Private Limited, operating in B2B segment has confirmed before Income Tax authorities that it has been selling goods at prices lower than their cost to build brand which is actually Flipkart.com which is an e-commerce platform. The goods are sold to the so called independent companies at prices less than the cost with the conditions that they would be selling those goods only at the e-market places of the same Group. Even the prices of the products offered on e-commerce platform are determined by either the B2B company or e-commerce platform owned and operated by the same Group. This clearly establishes that transactions between B2B companies and B2C companies shown as independent companies are sham transactions and are in contravention of government policy on establishing 'market place'. Another indicator of the fact that these companies are being operated under one management is that these so called independent companies are able to carry on business to the tune of Rs 8000 crore (approx.) annually with a paltry investment of Rs 1.5 crore as share capital", the letter states.
SJM had called for an immediate enquiry into the dubious deal between Flipkart owners and Walmart which has been written outside India but for all the tangible and intangible assets placed in India and an enquiry into the nexus between Flipkart companies and the so called independent B2C companies and how they were allowed to carry on their activities without any objections from the regulators including DIPP in the past. The organisation also wanted the commerce ministry to make a strong representation before the CCI of India to not approve the takeover deal before the results of the enquiries initiated by the government are available.
India may boast best GDP figures, but all's not well with the economy
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There's much to cheer about the 7.7 per cent GDP growth rate in Q4 of 2017-18. The economy is surely and steadily accelerating - from 5.6 per cent in Q1 to 6.3 in Q2 to 7 per cent and now 7.7 per cent. It finally lays to rest the repetitive argument: "If GDP was calculated by the previous methodology..." because this growth and acceleration is good even by the old methodology.
Yet, there's still a lot that's not right with the economy. First, despite this smart recovery in Q4, the GDP for the entire fiscal was barely 6.7 per cent - 0.4 per cent lower than the previous financial year. The Economic Survey had projected a GDP growth rate of 6.75 per cent. The final GDP growth numbers for fiscal 2017-18 were higher than the government's own first and second advance estimates of 6.5 per cent and 6.6 per cent but they mirror the estimates of the World Bank and the IMF.
Also, since the Gross Value Added (GVA) for fiscal 17-18 grew just 6.5 per cent - a pace even lower than the GDP growth - this indicates that much of the growth in the GDP has been achieved through higher taxation and not necessarily substantially higher economic activity. For the un-enunciated, GDP equals GVA + taxes - subsidies. Gross Value Added is the total value of goods and services produced in the economy. Clearly economic activity, expansion and growth still lag the GDP growth. Technically it's possible to continue growing GDP by just raising taxes, even though consumption may not be growing or economy may not be expanding. Though that's not the case here as the GVA also grew 6.5 per cent but surely taxes made a greater contribution to the GDP last fiscal.
Next, despite this scorching rate of growth, several sectors experienced deceleration. Agri growth was 3 per cent lower than the previous year; mining growth 10 per cent lower; and manufacturing 2.2 per cent lower. Utilities also grew at a rate 2 per cent lower. In manufacturing specifically, there's some pick-up in private corporate sector growth (which accounts for 70 per cent of manufacturing). However, the sector was dragged down by proprietorships/partnerships and Khadi & Village industries, which grew barely 4.5 per cent in 2017-18.
One of the biggest indicators of a growing economy and higher industrial activity is the utilities consumption. However, electricity, water, gas other utilities was just 7.2 per cent against previous fiscal's 9.2 per cent. Electricity itself grew just 5.4 per cent. Lower growth is a combination of lower consumption due to more efficient use of energy as well as lower than expected industrial activity.
The sectors that experienced higher economic activity in 17-18 against the previous year are: Trade, hotels, transport, communication and broadcasting services, which grew at a rate 0.8 per cent higher; Financial, real estate and professional services also perked up and grew 6.6 per cent against 6 per cent last fiscal.
As for the current fiscal, global rating agency Fitch says India will grow at 7.3 per cent in 2018-19 and 7.5 per cent in 2019-20. The economy will struggle with the triple whammy of higher crude oil prices, higher interest rates, and still rising non-performing assets in the banking system. Overcoming these would be vital to the economic progress of India and Indians. So cheers can wait just a big longer.
Yet, there's still a lot that's not right with the economy. First, despite this smart recovery in Q4, the GDP for the entire fiscal was barely 6.7 per cent - 0.4 per cent lower than the previous financial year. The Economic Survey had projected a GDP growth rate of 6.75 per cent. The final GDP growth numbers for fiscal 2017-18 were higher than the government's own first and second advance estimates of 6.5 per cent and 6.6 per cent but they mirror the estimates of the World Bank and the IMF.
Also, since the Gross Value Added (GVA) for fiscal 17-18 grew just 6.5 per cent - a pace even lower than the GDP growth - this indicates that much of the growth in the GDP has been achieved through higher taxation and not necessarily substantially higher economic activity. For the un-enunciated, GDP equals GVA + taxes - subsidies. Gross Value Added is the total value of goods and services produced in the economy. Clearly economic activity, expansion and growth still lag the GDP growth. Technically it's possible to continue growing GDP by just raising taxes, even though consumption may not be growing or economy may not be expanding. Though that's not the case here as the GVA also grew 6.5 per cent but surely taxes made a greater contribution to the GDP last fiscal.
Next, despite this scorching rate of growth, several sectors experienced deceleration. Agri growth was 3 per cent lower than the previous year; mining growth 10 per cent lower; and manufacturing 2.2 per cent lower. Utilities also grew at a rate 2 per cent lower. In manufacturing specifically, there's some pick-up in private corporate sector growth (which accounts for 70 per cent of manufacturing). However, the sector was dragged down by proprietorships/partnerships and Khadi & Village industries, which grew barely 4.5 per cent in 2017-18.
One of the biggest indicators of a growing economy and higher industrial activity is the utilities consumption. However, electricity, water, gas other utilities was just 7.2 per cent against previous fiscal's 9.2 per cent. Electricity itself grew just 5.4 per cent. Lower growth is a combination of lower consumption due to more efficient use of energy as well as lower than expected industrial activity.
The sectors that experienced higher economic activity in 17-18 against the previous year are: Trade, hotels, transport, communication and broadcasting services, which grew at a rate 0.8 per cent higher; Financial, real estate and professional services also perked up and grew 6.6 per cent against 6 per cent last fiscal.
As for the current fiscal, global rating agency Fitch says India will grow at 7.3 per cent in 2018-19 and 7.5 per cent in 2019-20. The economy will struggle with the triple whammy of higher crude oil prices, higher interest rates, and still rising non-performing assets in the banking system. Overcoming these would be vital to the economic progress of India and Indians. So cheers can wait just a big longer.
GST collection in April at Rs 94,016 crore; e-way bill seems to have improved compliance
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The introduction of e-way bill from April 1 seems to have improved overall Goods and Services Tax (GST) compliance. This is evident from both better collection and higher number of returns filed. The total GST collection for the month of April 2018 (collected in May) is Rs 94,016 crore, compared to the average Rs 89,885 crore recorded in 2017/18.
Out of Rs 94,016 crore, Central GST (CGST) collected has been Rs 15,866 crore, State GST (SGST) was Rs 21,691 crore and Integrated GST (IGST) is Rs 49,120 crore (including Rs 24,447 crore collected on imports) and cesses Rs 7,339 crore.
The total revenue earned by the central government and state governments after settlement in the month of May, 2018 is Rs 28,797 crore for CGST and Rs 34,020 crore for SGST.
The finance ministry in a statement said that "Though the current month's revenue collection is less compared to last month's revenue, still the gross revenue collection in the month of May (Rs. 94,016 crore) is much higher than the monthly average of GST collection in the last financial year (Rs 89,885 crore). The April revenue figure was higher because of year end effect." The April figure refers to the collection done for the month of March.
On 29 May Rs 6,696 crore has been released to the states as GST compensation for the month of March, 2018. Therefore, the total GST compensation released to the states for 2017/18 (July 2017 to March 2018) has been Rs 47,844 crore.
Meanwhile, the number of returns filed for the month of April (till 31 May) is 62.46 lakh as against 60.47 lakh in March 2018.
Under the e-way bill, any transporter moving goods more than Rs 50,000 has to generate electronic way bill or e-way bill. The purpose of e-way bill was to keep a track of movement of goods so that tax evasion can be curtailed. Both inter-state and intra-state e-way bills have come into force. While e-way bills for inter-state transport of goods started was applicable from April 1, 2018, the states started implementing intra-state e-way bills in a staggered manner from April 15. From June 1, all states have mandatorily started implementing e-way bills on transport of goods within states.
Out of Rs 94,016 crore, Central GST (CGST) collected has been Rs 15,866 crore, State GST (SGST) was Rs 21,691 crore and Integrated GST (IGST) is Rs 49,120 crore (including Rs 24,447 crore collected on imports) and cesses Rs 7,339 crore.
The total revenue earned by the central government and state governments after settlement in the month of May, 2018 is Rs 28,797 crore for CGST and Rs 34,020 crore for SGST.
The finance ministry in a statement said that "Though the current month's revenue collection is less compared to last month's revenue, still the gross revenue collection in the month of May (Rs. 94,016 crore) is much higher than the monthly average of GST collection in the last financial year (Rs 89,885 crore). The April revenue figure was higher because of year end effect." The April figure refers to the collection done for the month of March.
On 29 May Rs 6,696 crore has been released to the states as GST compensation for the month of March, 2018. Therefore, the total GST compensation released to the states for 2017/18 (July 2017 to March 2018) has been Rs 47,844 crore.
Meanwhile, the number of returns filed for the month of April (till 31 May) is 62.46 lakh as against 60.47 lakh in March 2018.
Under the e-way bill, any transporter moving goods more than Rs 50,000 has to generate electronic way bill or e-way bill. The purpose of e-way bill was to keep a track of movement of goods so that tax evasion can be curtailed. Both inter-state and intra-state e-way bills have come into force. While e-way bills for inter-state transport of goods started was applicable from April 1, 2018, the states started implementing intra-state e-way bills in a staggered manner from April 15. From June 1, all states have mandatorily started implementing e-way bills on transport of goods within states.
Sensex, Nifty extend gains on robust GDP data
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The Sensex rose about 106 points in early session today, maintaining its positive form for the second day following robust growth data for the March quarter. Investors creating new positions at the beginning of the June futures and options (F&O) series also lifted the key indices.
The 30-share index, which had rallied 416.27 points in the previous session, was trading higher by 105.57 points, or 0.30 per cent, at 35,427.95.
Sectoral indices, led by metal, auto, teck, IT, consumer durables and capital goods, were trading in the positive zone with gains of up to 1.13 per cent.
The NSE Nifty also went up by 25.40 points, or 0.24 per cent, to 10,761.55.
Official data released after market hours on Thursday showed that January-March 2018 GDP growth soared to a seven-quarter high of 7.7 per cent, spurred by robust performance of manufacturing, construction and service sectors, helping it retain the tag of the fastest growing major economy.
The rupee appreciating against the dollar also fuelled the uptrend, brokers said.
Auto stocks were in demand on expectations of encouraging sales data for the May month, to be released today.
Big gainers included ICICI Bank, Bajaj Auto, Maruti Suzuki, Sun Pharma, L&T, Tata Motors, Hero MotoCorp, Wipro, HDFC Ltd, TCS, Infosys, HUL and RIL, climbing up to 3.64 per cent.
However, other Asian markets were mixed on fresh trade war fears after the Trump administration's tariffs on imports from key allies.
Hong Kong's Hang Seng was up 0.26 per cent and Japan's Nikkei rose 0.24 per cent in their early deals while Shanghai Composite index fell 0.33 per cent.
The US Dow Jones Industrial Average ended 1.02 per cent lower in yesterday's trade.
The 30-share index, which had rallied 416.27 points in the previous session, was trading higher by 105.57 points, or 0.30 per cent, at 35,427.95.
Sectoral indices, led by metal, auto, teck, IT, consumer durables and capital goods, were trading in the positive zone with gains of up to 1.13 per cent.
The NSE Nifty also went up by 25.40 points, or 0.24 per cent, to 10,761.55.
Official data released after market hours on Thursday showed that January-March 2018 GDP growth soared to a seven-quarter high of 7.7 per cent, spurred by robust performance of manufacturing, construction and service sectors, helping it retain the tag of the fastest growing major economy.
The rupee appreciating against the dollar also fuelled the uptrend, brokers said.
Auto stocks were in demand on expectations of encouraging sales data for the May month, to be released today.
Big gainers included ICICI Bank, Bajaj Auto, Maruti Suzuki, Sun Pharma, L&T, Tata Motors, Hero MotoCorp, Wipro, HDFC Ltd, TCS, Infosys, HUL and RIL, climbing up to 3.64 per cent.
However, other Asian markets were mixed on fresh trade war fears after the Trump administration's tariffs on imports from key allies.
Hong Kong's Hang Seng was up 0.26 per cent and Japan's Nikkei rose 0.24 per cent in their early deals while Shanghai Composite index fell 0.33 per cent.
The US Dow Jones Industrial Average ended 1.02 per cent lower in yesterday's trade.
General Awareness
INDOPACOM
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Context: The US military has renamed its Pacific Command to US-Indo Pacific Command, underlining the growing connectivity between India and Pacific Oceans. The symbolic move came in recognition of the growing importance of the Indian Ocean in US strategic thinking.
What necessitated this move?
The renaming reflects the existing geographic coverage of the command and the acknowledgment of the increasing connectedness between the two oceans — Pacific and India —, but also, more broadly, the process of India’s re-entry into the US government’s “Asia” orbit.”
Background:
Formerly known as United States Pacific Command, it is a unified combatant command of the United States Armed Forces responsible for the Indo-Asia-Pacific region. It is the oldest and largest of the unified combatant commands.
Its commander, the senior U.S. military officer in the Pacific, is responsible for military operations in an area which encompasses more than 100 million square miles, or roughly 52% of the Earth’s surface, stretching from the waters off the west coast of the United States to the west coast of India, and from the Arctic to the Antarctic.
The Commander reports to the President of the United States through the Secretary of Defense and is supported by Service component and subordinate unified commands, including U.S. Army Pacific, U.S. Pacific Fleet, U.S. Pacific Air Forces, U.S. Marine Forces Pacific, U.S. Forces Japan, U.S. Forces Korea, Special Operations Command Korea, and Special Operations Command Pacific.
Significance of INDOPACOM:
U.S. Indo-Pacific Command is critical for “a region open to investment and free, fair and reciprocal trade, not bound by any nation’s predatory economics or threat of coercion, for the Indo-Pacific has many belts and many roads.”
Also, renaming the combatant command is strategically significant, in that it reflects a recognition within the U.S. government that East Asia and the Indian Ocean Region are gradually becoming a single competitive space. It’s also shrewd marketing — a way of reaffirming to New Delhi and to the rest of the world that India is, and ought to be, an indispensable pole of the future Asian order.
Way ahead:
The US move comes in the wake of a series of measures by China that have raised tensions in the South China Sea. China claims almost all of the South China Sea. Vietnam, Philippines, Malaysia, Brunei and Taiwan have counter claims over the area. The US also rejects China’s claims of ownership of the area.
However, the effectiveness of an Indo-Pacific defense and security strategy and US-India cooperation will still depend on the level of discussion and coordination across combatant commands and bureaus.
What’s important?
For Prelims: INDOPACOM.
For Mains: Growing significance of Indian ocean region and the need for international collaboration.
Context: The US military has renamed its Pacific Command to US-Indo Pacific Command, underlining the growing connectivity between India and Pacific Oceans. The symbolic move came in recognition of the growing importance of the Indian Ocean in US strategic thinking.
What necessitated this move?
The renaming reflects the existing geographic coverage of the command and the acknowledgment of the increasing connectedness between the two oceans — Pacific and India —, but also, more broadly, the process of India’s re-entry into the US government’s “Asia” orbit.”
Background:
Formerly known as United States Pacific Command, it is a unified combatant command of the United States Armed Forces responsible for the Indo-Asia-Pacific region. It is the oldest and largest of the unified combatant commands.
Its commander, the senior U.S. military officer in the Pacific, is responsible for military operations in an area which encompasses more than 100 million square miles, or roughly 52% of the Earth’s surface, stretching from the waters off the west coast of the United States to the west coast of India, and from the Arctic to the Antarctic.
The Commander reports to the President of the United States through the Secretary of Defense and is supported by Service component and subordinate unified commands, including U.S. Army Pacific, U.S. Pacific Fleet, U.S. Pacific Air Forces, U.S. Marine Forces Pacific, U.S. Forces Japan, U.S. Forces Korea, Special Operations Command Korea, and Special Operations Command Pacific.
Significance of INDOPACOM:
U.S. Indo-Pacific Command is critical for “a region open to investment and free, fair and reciprocal trade, not bound by any nation’s predatory economics or threat of coercion, for the Indo-Pacific has many belts and many roads.”
Also, renaming the combatant command is strategically significant, in that it reflects a recognition within the U.S. government that East Asia and the Indian Ocean Region are gradually becoming a single competitive space. It’s also shrewd marketing — a way of reaffirming to New Delhi and to the rest of the world that India is, and ought to be, an indispensable pole of the future Asian order.
Way ahead:
The US move comes in the wake of a series of measures by China that have raised tensions in the South China Sea. China claims almost all of the South China Sea. Vietnam, Philippines, Malaysia, Brunei and Taiwan have counter claims over the area. The US also rejects China’s claims of ownership of the area.
However, the effectiveness of an Indo-Pacific defense and security strategy and US-India cooperation will still depend on the level of discussion and coordination across combatant commands and bureaus.
What’s important?
For Prelims: INDOPACOM.
For Mains: Growing significance of Indian ocean region and the need for international collaboration.
What necessitated this move?
The renaming reflects the existing geographic coverage of the command and the acknowledgment of the increasing connectedness between the two oceans — Pacific and India —, but also, more broadly, the process of India’s re-entry into the US government’s “Asia” orbit.”
Background:
Formerly known as United States Pacific Command, it is a unified combatant command of the United States Armed Forces responsible for the Indo-Asia-Pacific region. It is the oldest and largest of the unified combatant commands.
Its commander, the senior U.S. military officer in the Pacific, is responsible for military operations in an area which encompasses more than 100 million square miles, or roughly 52% of the Earth’s surface, stretching from the waters off the west coast of the United States to the west coast of India, and from the Arctic to the Antarctic.
The Commander reports to the President of the United States through the Secretary of Defense and is supported by Service component and subordinate unified commands, including U.S. Army Pacific, U.S. Pacific Fleet, U.S. Pacific Air Forces, U.S. Marine Forces Pacific, U.S. Forces Japan, U.S. Forces Korea, Special Operations Command Korea, and Special Operations Command Pacific.
Significance of INDOPACOM:
U.S. Indo-Pacific Command is critical for “a region open to investment and free, fair and reciprocal trade, not bound by any nation’s predatory economics or threat of coercion, for the Indo-Pacific has many belts and many roads.”
Also, renaming the combatant command is strategically significant, in that it reflects a recognition within the U.S. government that East Asia and the Indian Ocean Region are gradually becoming a single competitive space. It’s also shrewd marketing — a way of reaffirming to New Delhi and to the rest of the world that India is, and ought to be, an indispensable pole of the future Asian order.
Way ahead:
The US move comes in the wake of a series of measures by China that have raised tensions in the South China Sea. China claims almost all of the South China Sea. Vietnam, Philippines, Malaysia, Brunei and Taiwan have counter claims over the area. The US also rejects China’s claims of ownership of the area.
However, the effectiveness of an Indo-Pacific defense and security strategy and US-India cooperation will still depend on the level of discussion and coordination across combatant commands and bureaus.
What’s important?
For Prelims: INDOPACOM.
For Mains: Growing significance of Indian ocean region and the need for international collaboration.
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