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Despite a double-digit coal production growth of 10.6% by Coal India Ltd (CIL) during the first six months of the current fiscal, domestic coal supply remains constrained as production ramp-ups are unable to keep pace with rising demand.

This is on the back of a strong recovery in power demand, lower hydropower generation in the current fiscal, as well as a healthy growth in production levels from non-regulated consuming sectors like cement, aluminium, and steel. Icra, in its report, said the domestic coal shortage has led to rising thermal coal imports by end-users in the last one year, increasing from 75.1 million tonne (mt) in H1 FY2018 to 84.7 mt in H1 FY2019.

During the just concluded monsoon season, domestic coal production growth slowed down to 3.8% and 3.2% in September and August of 2018 respectively, against 10.6% in July and 13.2% in June, leading to coal stocks at power plants steadily deteriorating from a high of 21.1 mt in end-July to an estimated 15.8 mt in end-September, the report added.

Icra’s senior vice president Jayanta Roy said that given the tight domestic coal availability and healthy demand from coal consuming sectors, spot e-auction premia have reached 102% in September, surpassing the level of 95% reached during October 2017. '

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"With CIL’s pithead stock running critically low at around 18.4 mt as on September 30, govt’s ability to stage a recovery in production levels after the monsoon would remain critical,” he added.

Source: DNA Money

This is on the back of a strong recovery in power demand, lower hydropower generation in the current fiscal, as well as a healthy growth in production levels from non-regulated consuming sectors like cement, aluminium, and steel.&nbsp;


Power hungry India just not satisfied despite Coal India ramp-ups

Power sector experts have hailed the Supreme Court’s order asking the Central Electricity Regulatory Commission (CERC) to give its findings on the proposed amendments in power purchase agreements (PPAs) for the coal-based plants of Tata, Adani and Essar Power within eight weeks.

According to experts, this will help the companies with their plants in Gujarat to provide the necessary power to states at competitive power rates to meet their requirement.

The power companies had sought reconsideration of their agreements to be able to pass on the compensatory tariff to consumers. The companies cited a change in Indonesian rules in 2010 as a force majeure event that raised the cost of coal imported from that country to fuel their electricity plants. A two-judge bench headed by Justice Rohinton F Nariman sent the matter back to the CERC, asking the authority to decide on all issues relating to amendments to the PPAs.

CERC’s former chairman Pramod Deo told DNA Money, “CERC has got a clear mandate. It can reopen PPA and keeping consumer interest in mind can arrive at a viable price regime for both coal and electricity for consumers.’’

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It will be prudent not to ignore ground realities and make an adjustment so that the overall objective of affordable power can be achieved by all stakeholders, he said. PwC partner (grid) Kameswara Rao said that it’s a pragmatic resolution that rescues critical assets by getting all parties to bear some of the burden.

Source: DNA Money

Power sector experts have hailed the Supreme Court’s order asking the Central Electricity Regulatory Commission (CERC) to give its findings on the proposed amendments in power purchase agreements (PPAs) for the coal-based plants of Tata, Adani and Essar Power within eight weeks.


Tata, Adani, Essar Power case: Experts hail SC order, say will help firms to provide power to states at competitive rates

Slide in the rupee and the current volatility in the economy has not dampened the purchase of gold on Dussehra, market sources say. “Gold continues to be a safe haven for investors, especially when they are rapidly withdrawing money from equity, bonds and Non Banking Finance Companies,” Surendra Mehta, national secretary of Indian Bullion &amp; Jewellers Association (IBJA) told DNA.

“The price in the international market on Thursday was reported at Rs 31,700 per 10 gm (excluding GST) and it will remain in the range of Rs 32,700 to Rs 33,000 per 10 gm till Diwali.” There is likely to be a 5 per cent dip in the gold import to 830 ton from January to December 2018 compared to 880 ton for the corresponding period last year, he says.

This is due to depreciation of rupee and states affected by natural calamities. In Mumbai and Mumbai Metropolitan Region, city jewellers have estimated at least 15 per cent rise in the buying of the shiny metal against 30 per cent fall last year.

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This is despite price rising to Rs 32,750 per 10 gm (including GST) from last year’s Rs 29,570 per 10 gm. The purchase of yellow metal is also set to witness 20 per cent surge in the southern region, and 15 per cent rise in northern and western Regions and 5 per cent in the eastern region.

In Jaipur too, people have been flocking to jewellers. “The gold rate has begun to rise and people are confused whether it will rise or drop.&nbsp;Also, wedding season is around the corner,” says Kailash Mittal from the Sarafa Traders Committee.

Kumar Jain, vice president of Shri Mumbai Jewellers Association, said investors see gold as safe bet, especially given the blood bath in the stock market and slump in the realty sector.

“Gold purchase will continue on Friday as Dusherra is celebrated for two days,” he said. “Although the rapidly falling rupee is a matter of worry, consumers are coming forward to purchase gold as a long term investment. This year, the marriage season will continue till July 2019.”

Mehta said the rise in gold purchase is also an opportunity for consumer to make a fortune by selling jewellery and gold. Jewellers too make money in buying back gold from consumers. “Annually, 300 ton of gold is recycled across the country,” he said.

Leading gold analyst Bhargav Vaidya projected no major change in gold domestic prices from now to Diwali; they will remain in the range of Rs 32,000 per 10 grm. The purchase of yellow metal is also set to witness 20 per cent surge in the southern region, and 15 per cent rise in northern and western Regions and 5 per cent in the eastern region.

In Jaipur too, people have been flocking to jewellers. “The gold rate has begun to rise and people are confused whether it will rise or drop. Also wedding season is around the corner,” says Kailash Mittal from the Sarafa Traders Committee.

Kumar Jain, vice president of Shri Mumbai Jewellers Association, said investors see gold as safe bet, especially given the bloodbath in the stock market and slump in the realty sector. “Gold purchase will continue on Friday as Dusherra is celebrated for two days,” he said. “Although the rapidly falling rupee is a matter of worry, consumers are coming forward to purchase gold as a long term investment. This year, the marriage season will continue till July 2019.”

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Mehta said the rise in gold purchase is also an opportunity for consumer to make a fortune by selling jewellery and gold. Jewellers too make money in buying back gold from consumers. “Annually, 300 ton of gold is recycled across the country,” he said. Leading gold analyst Bhargav Vaidya projected no major change in gold domestic prices from now to Diwali; they will remain in the range of Rs 32,000 per 10 grm.

Source: DNA Exclusive

Slide in the rupee and the current volatility in the economy has not dampened the purchase of gold on Dussehra, market sources say.&nbsp;


This big factor drives India to gold in Dussehra

Power producers have asked the government to rope in Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to provide funds for implementing emission control systems (ECS) in thermal power plants. Banks and financial institutions have expressed reluctance to fund, citing the prevalent stress in the sector and exhaustion of their lending limits to the power sector.

They have also indicated that the environment norms were notified after the commissioning of the plants, and therefore, were not part of the earlier approved financing plans. Thermal Power Plants (TPPs) are required to install and upgrade various ECS as per the phasing plan finalised by Central Electricity Authority (CEA) to comply with the environment norms notified by the environment ministry on December 7, 2015.

Association of Power Producers (APP) in its missive to the power secretary Ajay Kumar Bhalla on October 11 has said as per the estimates by CEA additional financing worth Rs 500 crore will be needed for a 1,000 megawatt plant for the installation of ECS.

However, banks and financial institutions have asked thermal power plant operators to approach the power and environment ministries to seek equity or alternatively soft loan.

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APP director general Ashok Khurana told DNA Money, ‘’In view of the criticality of the matter, the power ministry has been requested to take up the issue with REC and PFC to see if they can be designated for funding the debt component of this proposed expenditure, or alternatively to convince the banks to ease restrictions of lending for the installation of ECS.’’

Power producers have asked the government to rope in Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to provide funds for implementing emission control systems (ECS) in thermal power plants.


To ensure clean air, here is what power companies want from govt 

The goods and services tax (GST) collections rose marginally to Rs 94,442 crore in September 2018 from Rs 93,960 crore in August, but experts said they may cross Rs 1 lakh crore from November or December.&nbsp;

The upcoming festive season, drive against bogus bills and evasion and additional sops will help the central government achieve Rs 1 lakh crore mop-up, they said.&nbsp;

KPMG in India partner &amp; head (indirect tax) Sachin Menon told DNA Money that since GST collection has not picked up as expected, the taxpayers may expect enhanced anti-evasion drive by the government.&nbsp;

“The buoyancy in GST collection is the key to further concessions in GST regime such as relaxing input credits restrictions and rates. Since the revenue is not picking up, we may have to wait longer for any further concessions in law and compliance process.’’

Of the September’s collection, Central GST (CGST) is Rs 15,318 crore, State GST (SGST) is Rs 21,061 crore, Integrated GST (IGST) is Rs 50,070 crore (including Rs 25,308 crore collected on imports) and cess is Rs 7,993 crore (including Rs 769 crore collected on imports), the ministry said.

“The total revenue earned by the central government and the state governments after settlement in September 2018 is Rs 30,574 crore for CGST and Rs 35,015 crore for SGST,” it said.

GST revenue had crossed Rs 1 lakh crore in April this year for the first time, but it is still hovering between Rs 89,000 crore and Rs 96,000 crore. The average GST collection for the last fiscal (from July till March, 2017) was Rs 89,885 crore.&nbsp;&nbsp;

PwC India partner &amp; head (indirect tax) said the monthly collections are now largely within a small range. The slight increase in collection despite rate cuts on several white goods products from end July is encouraging.&nbsp;

“Since September 30 is the last date for claiming credit for financial year ended March 2018, the quantum of credit might be much larger than previous months. Hence, the collection in October could get impacted,” he said.

Khaitan &amp; Co partner Abhishek A Rastogi said the GST collections are still 6% short of the desired number. The government will have a dual role -- to improve compliance and collections and to ensure that refunds are granted, especially to units located in area-based exempted zones. “The tax collections may improve due to increased demand in the festive season. Further, anti-profiteering Authority is coming in full flow, and there could be huge demands in certain cases,’’ he said.

However, Rastogi cautioned that in their endeavour to meet the revenue numbers, the authorities should not miss the track of the pending refunds. He said the units in various backward areas have become unviable due to non-grant of Budgetary support.&nbsp;

BUOYANCY AHEAD&nbsp;

<ul>
	<li>GST revenue had crossed Rs 1 lakh crore in April for the first time, but it is still hovering between Rs 89,000 crore and Rs 96,000 crore&nbsp;&nbsp;</li>
	<li>Of the September’s collection, CGST is Rs 15,318 crore, SGST is Rs 21,061 crore, IGST is Rs 50,070 crore&nbsp;</li>
</ul>

Source: DNA Money

The goods and services tax (GST) collections rose marginally to Rs 94,442 crore in September 2018 from Rs 93,960 crore in August, but experts said they may cross Rs 1 lakh crore from November or December.&nbsp;

&nbsp;


Black money crackdown coming as GST collection fails to hit Rs1 lakh cr mark

International Monetary Fund (IMF) hints that rising global trade tensions could have a negative impact on growth by creating uncertainty and thereby dampening investment, including foreign direct investment (FDI). However, IMF observes that a slowdown in global trade and lower oil prices could obviate the need to further rate hikes in India. IMF’s Mission India chief Ranil Salgado, a Sri Lankan born economist and international civil servant, speaks with Sanjay Jog on key issues in an e-mail interview.

On risk of fiscal slippages impacting GDP 
Fiscal slippage could have a negative impact on growth by raising the government’s borrowing requirement and thereby leading to higher interest rates in the economy. However, the government continues to reiterate its commitment to the fiscal deficit target in the FY 2018/19 Budget. Rising global trade tensions could have a negative impact on growth by creating uncertainty and dampening investment, including FDI. However, higher oil prices could also have an impact on growth by reducing demand for other goods, including tradable and non-tradable goods produced in India.

On increasing CAD &amp; falling exports 
India’s current account deficit (CAD) has been widening because the rising merchandise exports and the burgeoning inflow of remittances are not enough to offset the rise in oil imports and non-oil imports. In 2017, capital inflows were strong, including from FDI. These inflows helped to finance the current account deficit and allowed the Reserve Bank of India (RBI) to build up its international reserves while also allowing the rupee to appreciate. In recent months, the current account has widened and capital flows to India have moderated (though FDI inflows remain strong), in line with a moderation of capital flows to other emerging market economies. However, the RBI has responded to these developments by drawing on its international reserves while also allowing the rupee to depreciate.

On impact of depreciating rupee and soaring fuel prices 
The external pressures seen in recent weeks indeed present difficult trade-offs. In the event of further increases in external pressures, the recommendation for emerging market economies like India is typically that the exchange rate should remain the main shock-absorber, supported by tighter fiscal and monetary policy as needed.

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On the possibility of RBI hiking rates 
The adoption of the inflation-targeting monetary policy framework has helped to steer down inflation in India. The Monetary Policy Committee opted to increase the policy repo rate by 25 basis points (bps) in each of its last two meetings in view of the fact that headline inflation was forecasted to return to the upper half of the target band (4% CPI inflation&nbsp;2%) over the medium-term without further monetary tightening. However, a slowdown in global trade and lower oil prices could obviate the need to further rate hikes.

On whether India could benefit in the ongoing trade wars 
Economies in Asia, including India, have benefited considerably from the rapid growth of global trade in recent decades. Although a relatively closed economy, India would also be adversely affected by a slowdown in global trade. Lower commodity prices could indeed reduce the CAD and boost domestic demand.

Source: DNA Money

International Monetary Fund (IMF) hints that rising global trade tensions could have a negative impact on growth by creating uncertainty and thereby dampening investment, including foreign direct investment (FDI). However, IMF observes that a slowdown in global trade and lower oil prices could obviate the need to further rate hikes in India.

&nbsp;


'India would also be adversely affected by a slowdown in global trade'

In a bid to address stress in the power sector, the central government on Monday issued directives to the Central Electricity Regulatory Commission (CERC) to treat change in domestic duties, levies, cess and taxes by Centre, states and Union territories as "Change in Law'' unless it is specifically negated in the power purchase agreement.

The Centre has allowed the pass through of the addition or reduction in the cost of the impact of taxes, duties, cess and levies applied post bidding. Some of the Change in Law items comprise levy of clean energy cess on coal, central excise duty on domestic coal and increase in royalty on coal.

The Centre under Section 107 of the Electricity Act, 2003, issued the directive after it received the power ministry's representation. The ministry argued that generating companies are facing difficulties in getting pass through of changes in cost due to various taxes and duties. ''The difficulty is due to considerable time being consumed in the approval process resulting into severe cash flow problems to the generating companies. This has also resulted in stress in the power sector,'' the power ministry added.

Ashok Khurana, director general, Association of Power Producers, told DNA Money, ''This will expedite the cases relating to pass-through of additional cost due to Change in Law events, and help in early resolution of regulatory dues of about Rs 18,000 crore. On an average, the necessary orders for Change in Law pass-through took 3-4 years.'' He said it will also obviate the need for all aggrieved parties filing separate petitions as an order, once given by CERC, would be applicable for other cases. This will reduce the burden on CERC and state electricity regulatory commissions of multiple petitions on the same issue.

CERC will only determine the per unit impact of such change in domestic duties, levies, cess and taxes, which will be passed on. The central regulator will circulate a draft order for the determination of per unit impact under Change in Law to all the states and beneficiaries on 14th day of petition and any objection and representation will be submitted by them within 21 days of filing of petition.

The order for pass through giving the circulation for per unit impact will be issued within 30 days of filing petition and the impact of such change in law to be effective from the date of change in law.

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Kameswara Rao, partner (grid), PwC, said the pass through of new levies post-bid is clearly allowed in the tariff policy, but regulators have been slow to reflect this in the PPAs.

''It makes sense for the central government to provide a single escalation factor that all regulators can readily adopt. This may not help the already distressed assets much, but certainly improves outlook for new investments that are being increasingly held back due to a likely loss of returns from regulatory delays,'' he said.

Deloitte Touche Tohmatsu leader energy Debasis Mishra said timebound regulatory resolution of change in law cases would certainly help in working capital management of independent power producers. ''But much of the stress in this sector is due to overcapacity and lack of procurement by discoms,'' he said.

Centre in its directive clarified that no conditional petition would be required where CERC has already passed an order allowing pass through and this will apply to all cases ipso facto.

Source: DNA Money

In a bid to address stress in the power sector, the central government on Monday issued directives to the Central Electricity Regulatory Commission (CERC) to treat change in domestic duties, levies, cess and taxes by Centre, states and Union territories as "Change in Law'' unless it is specifically negated in the power purchase agreement.

&nbsp;


Relief for stressed power sector? Centre looks to give helping hand

Amidst rising revenue deficit and higher public debt, the Maharashtra government will seek increase in the devolution of divisible funds to 50% from 42% which will not only increase the flow of unconditional transfers but also give more flexibility in its spending. This is 8% more than what the 14th Finance Commission had recommended. The government will press for higher devolution in its presentation to the 15th Finance Commission led by former union revenue secretary NK Singh during its visit to Mumbai between August 21 and 24.

Besides, the state government, ahead of the ensuing Lok Sabha and state assembly election slated for 2019, will demand for allocation of more funds by devising some new fund flow mechanism for the removal of regional imbalance. The high level committee led by economist Dr Vijay Kelkar in its report submitted in October 2013 to the state government had road map for speedy and effective development of Vidarbha and and Marathwada, the two regions lagging far behind rest of Maharashtra (excluding Mumbai).

Furthermore, the state government, in view of rapid urbanization in Maharashtra, will call upon the 15th Finance Commission to incorporate urbanization as new criteria for higher allocation of funds. The government wants that million plus cities in the state should get more funds in proportion of total urban population in India. At the same time, the dispensation of funds for rural areas should be done based on rural deprived population to total rural population.

State Finance Department officer told DNA Money, ‘’A committee headed by former secretary V Giriraj has prepared a set of recommendations to be submitted to the 15th Finance Commission. The government will project its ambitious plan to achieve a trillion dollar economy by 2025 with an annual growth rate of 15%. The increase in the devolution of taxes from the centre to 50% will come quite handy.’’

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The officer said the state government will also appeal to the 15th Finance Commission to revise the measurement of per capita income-distance criterion. In 2017-18, the per capita income of Maharashtra was estimated to rise to Rs 1,80,596 as against Rs 1,65,491 in the previous fiscal. ‘’The government wants that the district level income should be used instead of state level per capita income. This is essential as the progressive and richer state like Maharashtra should not be deprived of funds especially in the wake of issues arising out of inter district inequality and intra state regional inequality,’’ he noted.

Source: DNA Money

Amidst rising revenue deficit and higher public debt, the Maharashtra government will seek&nbsp;increase in the devolution of divisible funds to 50% from 42% which will not only increase the flow of unconditional transfers but also give more flexibility in its spending. This is 8% more than what the 14th Finance Commission had recommended.

&nbsp;


As revenue deficit, public debt rise, Maharashtra to seek increase in devolution of divisible funds

Realty players are not enthused by Reserve Bank of India’s move to increase repo rate saying that it will adversely impact the homebuyers' sentiment. They said that RBI could have taken a pause, especially when the Centre is pushing a slew of decisions such as affordable homes, housing for all and creation of a stressed assets fund for the revival of the sector.

Knight Frank India CMD Shishir Baijal said the increase in the policy rate was expected given the current inflationary trend. “However, looking at the challenging residential market scenario, we were hoping that the RBI would have paused the rate hike, thereby providing a fillip to the buyer sentiment.”

National Real Estate Development Council president Niranjan Hiranandani said from a real estate perspective, the hike will negatively impact buyer sentiment, which will impact sales. “Real estate industry hopes the government comes up with initiatives that enhance buyer sentiment and give it a boost.’’&nbsp; According to Ajmera Group director Dhaval Ajmera, RBI’s move may further dampen the already low spirits of the sector, making the home loans more expensive.

However, Anaroc Property Consultants chairman Anuj Puri justified rise in repo rate saying that it may lead to a hike in home loan rates but the overall real estate sector now rests on a strong footing and buying decisions may not be altered by these marginal changes.

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‘’With lucrative deals on the table, serious end-user demand is back on the market and marginal hikes in home loan rates are unlikely to deter buyers who have been sitting on the fence for some time now, waiting for the right time to seal the deal.’’

Source: DNA

Realty players are not enthused by Reserve Bank of India’s move to increase repo rate saying that it will adversely impact the homebuyers' sentiment. They said that RBI could have taken a pause, especially when the Centre is pushing a slew of decisions such as affordable homes, housing for all and creation of a stressed assets fund for the revival of the sector.

&nbsp;


This is what RBI repo rate hike will make homebuyers do

The GST Council's decision to simplify and rationalise tax rate structure indicates that 28% rate bracket may be on its way out and it will be limited to ''sin and luxury" goods, according to tax experts and analysts. However, the companies need to ensure that the benefit of lower rate of taxes is passed on the consumer in alignment with the anti-profiteering clause, they said.

Pratik Jain, partner and leader (indirect tax), PwC, said the rate reduction is a good move from the policy standpoint. ''The industry need to be mindful of anti-profiteering provisions, given the government would expect the benefit of rate reduction being passed on to consumers. From a common man viewpoint, they may look forward to tying rakhi in a newly painted house, enjoying ice cream and watching movie on a smaller TV, with multiple fit options ranging from footwear on to consumers,'' he said.

R Muralidharan, senior director, Deloitte India, said the GST Council has reduced the rate of white goods to 18%, and with many items moved to 18% category, only 25-30 items will remain in the 28% category.

''This is a good step towards rationalisation of the GST rate slabs. Consumers will see a substantial price reduction with anti-profiteering provisions place, as the manufacturers and dealers are expected to pass on these benefits,'' he said.

Harpreet Singh, partner (indirect tax), KPMG India, said while the rate rationalisation would definitely bring cheer for the industry and consumers, it will be interesting to see how the government would try and compensate the revenue loss on account of tax rate reductions.

Motilal Oswal in its research report said over a period of time, the government may further consider pruning the list of items in the higher tax bracket.

''The reduction in rates is estimated to have an impact of Rs 6,000 crore to Rs 7,000 crore on government revenue. We believe that this shortfall will be partially offset by increased compliance and volume growth due to price elasticity of demand,'' it said.

This apart, the experts said the GST Council's decision on quarterly returns filing for assessees under a turnover up to Rs 5 crore will give a much-needed relief to nearly 93% taxpayers and pave the way for reducing compliance burden of the industry.

Abhishek Rastogi, partner, Khaitan &amp; Co, said, ''Separate returns for composite dealers, B2B and B2C businesses will significantly encourage better tax compliance and help businesses focus on day to day operations.''

Singh said simplification of the return process not only meant easier compliance and less costs but also fewer tax disputes and litigations in the long run.

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QUESTION ON PRICE CUT

<ul>
	<li>The industry need to be mindful of anti-profiteering provisions, given the government would want the benefit passed on to consumers&nbsp;&nbsp;</li>
	<li>With many items moved to 18% category, only 25-30 items will remain in the 28% category</li>
</ul>

Source: DNA Money

The GST Council's decision to simplify and&nbsp;rationalise tax rate structure indicates that 28% rate bracket may be on its way out and it will be limited to ''sin and luxury "goods, according to tax experts and analysts.&nbsp;

&nbsp;


Soon, only 'sin and luxury' goods may dot 28% GST slab

The foreign direct investment (FDI) equity inflows in India have grown at their lowest level in the past two years despite various measures undertaken by the government, according to CARE Ratings in its latest report. It was $43.478 billion in FY17 and $44.857 billion in FY18.

“FDI equity inflow has been lowest due to developments in global markets such as an increase in the US interest rates, growth in the advanced economies and lack of pick up in domestic investments which has led to disinterest among the foreign investors to invest in India,’’ Rucha Ranadive, associate economist at CARE told DNA Money.

However, CARE has estimated FDI inflows in equity to be stable at around $45 to $50 billion in FY19, she added.

Although Maharashtra maintained its topmost position, the FDI inflows to the state have declined by minus 32% to $13.4 billion in FY18 compared with $19.7 billion in FY17. On similar lines, the inflows to Andhra Pradesh declined by 43% while that of Gujarat has fallen by 38% in FY18.

However, Karnataka witnessed a substantial increase in inflow to $8.6 billion in FY18 from $2.1 billion in FY17, a growth by more than 300%.

CARE, however, argued that in order to achieve higher economic growth, increased foreign investment is imperative. The revival in the domestic investment along with further improvement in the ease of doing business will boost the foreign investment, it said. The services sector will continue to attract higher FDI inflows led by investments in the sunrise industries especially e-commerce.

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FICCI’s Maharashtra state executive member Dinesh Joshi said that the government has done a lot for the economy. However, these initiatives need to be communicated clearly to the right stakeholders. ‘’It should not sound political but rather should reinforce the faith of the end investors to make sure that India is the right investment destination. The fact that India has inched ahead of France shows the commitment of the government towards development and job creation,’’ he noted.

Indian Merchants Chamber president Raj Nair observed that FDI can double in the four years if the government addresses the issues relating to ease of winding up of sick business, challenges in getting construction permits and registration of property and delays encountered in enforcing contracts.

Source: DNA

The foreign direct investment (FDI) equity inflows in India have grown at their lowest level in the past two years despite various measures undertaken by the government, according to CARE Ratings in its latest report. It was $43.478 billion in FY17 and $44.857 billion in FY18.

&nbsp;


This is what is to blame for falling FDI inflows in India   

The Supreme Court has refused to overturn a Reserve Bank of India (RBI) ban on cryptocurrencies, making it impossible for the virtual currency players to carry out transactions through Indian banking and payment channels. A bench headed by Chief Justice Dipak Misra, refused to give interim relief to the RBI’s directive prohibiting banks, financial institutions and other regulated institutions from providing any services related to virtual currencies.

Legal and tax experts believe that it will be quite difficult for cryptocurrency players to operate in the country after the RBI circular came into effect July 6.

In a circular dated April 6, RBI had said entities regulated by it have been prohibited from “providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to purchase or sale of virtual currencies”. Three months’ time was given to the entities already providing such services to stop their activity.

Harshal Kamdar, partner (tax &amp; regulatory), PwC, said this makes it significantly difficult for crypto companies to operate in India or transact via India payment channels. “This is likely to add to the woes of this nascent and volatile sector. Woes will be largely due to lack of access to the Indian market,’’ he told DNA Money.

RBI told the apex court that cryptos cannot be treated as currency under the existing law that mandates coins to be made of metal or exist in physical form and stamped by the government. Khaitan &amp; Co associate partner Rashmi Deshpande said cryptocurrency players were anxiously awaiting the verdict since their business will virtually come to a standstill on account of the circular.

“The choking of banking channels means that virtually all cryptocurrency related transactions will have to be done in cash or not at all,” she said.

Raj Nair, president, Indian Merchants Chamber, said the Supreme Court did well to disallow a plea for temporary stay of the RBI order because it does not have the technical wherewithal to understand the subject.

‘A few major scandals are waiting to happen, but cryptocurrencies will mature. The underlying blockchain technology has so many good applications other than cryptocurrency, hence blockchain technology will develop rapidly and contribute to more reliable cryptocurrencies being issued in the future,’’ he said.

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Rachit Sharma of Taxmann.com said bitcoin will further lose its shine post this refusal. “It would be the last opportunity for the investors to exit cryptocurrencies, book a loss and withdraw their funds,’’ he said. 
K V Karthik, partner, Deloitte India, said, “This decision now will probably push the investors who have been sitting on the fence to now start withdrawing the funds before the window closes as per Reserve Bank of India circular.”

Source: DNA Money

In a circular dated April 6, RBI had said entities regulated by it have been prohibited from “providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to purchase or sale of virtual currencies”. Three months’ time was given to the entities already providing such services to stop their activity.


Sanjay Jog