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Table of Contents
Solar Panel Manufacturers Seek ALMM Order Amidst Rising Import Concerns
Despite government initiatives to promote domestic manufacturing, India’s solar panel industry is facing challenges due to cheap imports from China. The suspension of the Approved List for Models and Manufacturers (ALMM) Order has allowed for the influx of low-quality Chinese panels, leading to a decline in domestic production and capacity utilization.
Key Points:
Imports from China: – India has imported 18 GW of solar panels from China despite a 40% customs duty. – Chinese incentives have made imports cheaper than domestic production. – Imported panels lack quality guarantees and can lead to cost escalations.
ALMM Order Suspension: – The ALMM Order, which required quality certification for solar modules, was suspended in March 2023. – The suspension has allowed for the import of uncertified or under-certified panels. – The Ministry of New and Renewable Energy will review the suspension before April 1.
Domestic Production Challenges: – Capacity utilization of domestic solar manufacturers has fallen to 30-35%. – Domestic producers have relied on exports to survive, shipping 2.87 GW to the US in the last three quarters. – India has a solar module production capacity of over 40 GW, but 20 GW is awaiting ALMM approval.
Government Plans: – India aims to install 280 GW of solar power by 2030. – Domestic solar manufacturers face competition from uncertified imports, primarily from China.
PB Fintech to Establish Payment Gateway Subsidiary
PB Fintech Limited, the promoter of PolicyBazaar, has established a wholly-owned subsidiary, PB Pay Private Limited, to operate as a payment aggregator. This subsidiary will facilitate offline and digital payment acceptance for merchants and enable them to accept various payment methods.
Key Points:
Establishment of PB Pay Private Limited: – PB Fintech has set up a wholly-owned subsidiary named PB Pay Private Limited. – The subsidiary will operate as a non-banking finance company (NBFC).
Business of Payment Aggregator: – PB Pay Private Limited will carry out the business of a payment aggregator, both domestically and cross-border. – It will provide merchants with payment acceptance infrastructure for offline and digital transactions.
Payment Methods: – Payment aggregators enable merchants to accept various payment methods, including debit cards, credit cards, cardless EMIs, UPI, bank transfers, e-wallets, and e-mandates.
Paid-up Capital: – The paid-up capital of PB Pay Private Limited will be ₹27 crore.
RBI License: – The subsidiary will apply to the Reserve Bank of India (RBI) for a Payment Aggregator (PA) License.
Incorporation Process: – The application for the incorporation of PB Pay Private Limited will be subject to approval from relevant authorities.
Financial Performance of PB Fintech: – PB Fintech reported a net profit of ₹37.2 crore in the third quarter ended December 31, 2023. – Revenue from operations grew by 42.7% to ₹870.9 crore. – For the nine months ended December 31, 2023, PB Fintech reported a net profit of ₹4.2 crore.
SEBI to Implement T+0 Settlement for Selected Stock Trades
SEBI has introduced guidelines for a beta version of same-day (T+0) settlement cycle for the equity cash market, starting March 28th. This optional feature will be available for a limited set of scrips and brokers, alongside the existing T+1 settlement cycle. The T+0 settlement aims to enhance efficiency, transparency, and risk management in the securities market.
Key Points:
Introduction of T+0 Settlement Cycle: – Optional T+0 settlement cycle introduced from March 28th. – Limited to 25 scrips and a limited number of brokers.
Benefits of T+0 Settlement: – Cost and time efficiency. – Transparency in charges to investors. – Strengthened risk management.
Eligibility and Trading Details: – All investors are eligible to participate. – T+1 surveillance measures apply to T+0 scrips. – Trading session from 9:15 am to 1:30 pm.
Price Band and Calculations: – T+0 segment operates with a price band of +/-100 basis points from the T+1 market price. – Band recalibrated after every 50 basis points movement in the T+1 market. – T+0 prices excluded from index calculation and settlement price computation.
Other Details: – No separate close price for securities based on T+0 trading. – No netting between T+1 and T+0 settlement cycles.
IOB Introduces Tailored Gold Loan Solutions for Diverse Customer Requirements
Indian Overseas Bank (IOB) has launched two new jewel loan products: IOB Gold Powered Card and Jewel Loan Suvidha. These products offer flexible loan options, instant access to funds, and cater to the specific needs of housing loan borrowers.
Key Points:
IOB Gold Powered Card
- Instant access to a card linked to a jewel loan overdraft account
- Loan amounts from ₹25,000 to ₹25 lakh
- Can be used for cash withdrawals, POS transactions, and e-commerce purchases
- Validity of three years, subject to annual reassessment
Jewel Loan Suvidha
- Exclusive jewel loan product for housing loan borrowers
- Loan amounts from ₹25,000 to ₹50 lakh
- Reimbursement within 12 months of incurring expenses
- Flexible repayment options (bullet payment or EMI)
- Income tax benefits available under certain conditions
Fintech Platforms: Benefits and Risks in the Digital Financial Landscape
Fintech platforms offer convenience and personalization but also increase the risk of fraud and misuse. RBI Deputy Governor Swaminathan J. emphasizes the need for robust regulatory frameworks, enhanced cybersecurity measures, and increased consumer awareness to mitigate these risks.
Key Points:
Risks of Fintech Platforms:
- Cyberattacks, data breaches, and financial harm
- Difficulty resolving disputes due to lack of transparency
Regulatory Measures:
- Multi-factor authentication for electronic payments and fund transfers
- Security controls for internet banking, mobile payments, and card payments
- Risk assessment and suitability evaluation of digital payment products
- Suspicious transaction detection and customer alert systems
- Zero liability for customer losses due to bank or third-party negligence
Consumer Protection:
- Key fact statement (KFS) disclosure for digital lending
- Limitation of liability for customer negligence
- Grievance redressal mechanisms
Other Initiatives:
- Indian Cyber Crime Co-ordination Centre (I4C) for law enforcement coordination
- National Cyber Crime Reporting Portal with 24/7 helpline
Supervisory Framework:
- Evaluation of business conduct and IT system controls
- Imposition of business restrictions for non-compliance
IBC: Leveraging Successes for Future Growth
The Insolvency and Bankruptcy Code (IBC) has emerged as an effective mechanism to resolve non-performing assets (NPAs) in the Indian banking sector. Despite initial challenges, the IBC has facilitated the recovery of 40.3% of NPAs in 2022-23. The article highlights the successful resolution of Electrosteel Steels Ltd. through the division of debt into sustainable and unsustainable portions, with the latter converted into equity shares. This approach allowed banks to participate in the equity and potentially benefit from the company’s recovery.
Key Points
Prior Efforts by Banks – Banks faced limited success in resolving NPAs through mechanisms such as the Strategic Debt Restructuring Scheme and the Scheme for Sustainable Structuring of Stressed Assets. – Roadblocks included lack of provisions for loan-to-equity conversion in loan documentation and the need for debtor approval.
IBC as a Solution – IBC provides a comprehensive framework for resolving stressed assets. – It offers flexibility in debt restructuring and allows for the conversion of unsustainable debt into equity.
Case Study: Electrosteel Steels Ltd. – The resolution plan divided debt into sustainable and unsustainable portions. – Sustainable debt was paid upfront, while unsustainable debt was converted into equity shares. – The plan was approved by the Committee of Creditors with 100% majority. – Banks participated in the equity, potentially benefiting from the company’s recovery.
Market Rewards – Companies undergoing resolution through IBC have experienced significant market valuation increases. – Research indicates a rise in total market valuation from ₹2 lakh crore to ₹6 lakh crore post-resolution.
Maturity of IBC – IBC has evolved over the past 7-8 years through government involvement and judicial precedents. – It now focuses not only on recovery but also on company revival.
Equity Participation by Financial Institutions – Financial institutions often prefer upfront cash payments or short-term resolutions. – However, taking a small portion of equity in exchange for sustainable debt can be beneficial. – Unconventional resolution options and mechanisms should be considered.
Patanjali Ayurved Apologizes Unconditionally to Supreme Court for Misleading Advertisements, Baba Ramdev Expresses Regret
Patanjali Ayurved has issued an unconditional apology to the Supreme Court for airing misleading advertisements. The court had asked Baba Ramdev and Acharya Balkrishna to appear before it on April 2 to clarify their failure to respond to the contempt notice regarding the misleading ads. Shares of Patanjali Foods dropped over 5% following the notice.
Key Points: 1. Aacharya Balkrishna’s Assurance: Balkrishna stated that the misleading advertisements would not be repeated in the future. 2. Shares of Patanjali Foods: The shares of Patanjali Foods fell over 5% after the Supreme Court’s notice, but were up 0.7% at Rs 1,368.80 apiece on BSE Sensex. 3. SC Order to Patanjali: The Supreme Court questioned Patanjali Ayurved for violating the Drugs and Magic Remedies Act and warned against making false claims about medicinal cures. 4. Contempt Proceedings: The court expressed dissatisfaction with Patanjali Ayurved’s continued publication of false advertisements and issued notices to the company and Balkrishna. 5. Petition by IMA: The Indian Medical Association filed a petition against Baba Ramdev for criticizing allopathic medicines and spreading misinformation about modern medicine. 6. Previous Warning: In November 2023, the Supreme Court had warned Patanjali Ayurved to stop misleading claims against modern medicine, threatening to impose costs for false claims.
RBI Revokes Infrastructure Bond Status for HDFC Bonds Post-Merger
The Reserve Bank of India (RBI) has denied HDFC Bank’s request to classify over ₹1 lakh crore worth of bonds issued by the former HDFC Ltd as infrastructure bonds. This would have provided regulatory relief to HDFC Bank in terms of cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements.
Key Points:
RBI Norms: – RBI norms exempt funds raised through long-term bonds by banks for investment in infrastructure and affordable housing from SLR and CRR requirements. – SLR is currently at 18% of deposits, while CRR is at 4.5% of deposits.
Treatment of Bonds: – RBI has different norms for treatment of bonds issued by NBFCs and banks. – Bonds issued by NBFCs are secured, while those issued by banks are unsecured.
HDFC Ltd Bonds: – HDFC Ltd had issued ₹1.20 lakh crore of bonds classified as infrastructure finance instruments before merging with HDFC Bank. – HDFC Bank sought RBI’s permission to classify these bonds as infrastructure bonds.
IRDAI’s Decision: – In August 2023, IRDAI allowed insurance companies to categorize HDFC Ltd bonds owned as of April 4, 2022, as “housing and infrastructure” debt until maturity. – This decision was significant for insurers in managing permitted investment limits.
Paralyzed Man Regains Ability to Play Chess Using Neuralink Brain Chip
Brain-computer interface (BCI) technology is advancing rapidly, with companies like Neuralink and universities developing devices that connect brains to computers and robots. Neuralink’s first patient has demonstrated playing video games using a brain implant, while the University of Technology Sydney is working on projects to control robots and reconstruct dreams from brain signals.
Key Points:
Brain Implants:
- Neuralink’s brain implant allows paralyzed patients to communicate and control devices with their thoughts.
- Experts view Neuralink’s device as a positive development, but not a breakthrough.
Brain Chips Connected to Robots:
- The University of Technology Sydney is developing a system for soldiers to control robot dogs using brain signals.
- The technology aims to be multi-user, faster, and capable of controlling other vehicles.
DreamMachine:
- The University of Technology Sydney is also working on the DreamMachine, which uses AI and EEG data to generate images from subconscious brain signals.
IREDA’s Long-Term Vision as the Leading Green Financier: Insights from Pradip Kumar Das
IREDA, a leading green financier, has witnessed significant growth in the renewable energy sector, with a focus on solar energy. However, the loan portfolio in solar has slightly decreased to 30%, while IREDA explores new areas such as rooftop solar, CBG, and ethanol. The company aims to expand its portfolio in sustainable energy solutions, including pump storage, green hydrogen, and offshore wind.
Key Points
- Growth in Renewable Energy Sector: IREDA has doubled its loan book in the last three years, with a 28-fold increase in solar energy.
- Shift in Loan Portfolio: Solar energy’s share in IREDA’s loan portfolio has decreased to 30%, while new and emerging areas now account for 37%.
- Focus on New and Emerging Areas: IREDA is actively involved in rooftop solar (excluding residential projects), CBG, and ethanol, recognizing the potential in India’s agricultural economy.
- Expansion into Sustainable Energy Solutions: IREDA plans to delve into areas like pump storage, green hydrogen, and offshore wind to expand its portfolio in sustainable energy solutions.
- IPO Performance: IREDA’s IPO was successful, with the stock price rising significantly after its initial offering.
- Financing for Rooftop Solar: IREDA is not directly financing residential rooftop solar projects but is coordinating with REC and banks to support the government’s one crore household solarization program.
- Long-Term Road Ahead: IREDA aims to continue its growth in new and emerging areas, recognizing the need for a diverse energy mix to meet India’s growing energy requirements.
Fed Maintains Forecast of Three Rate Cuts in 2024 Despite Persistent Inflation and Economic Resilience
The Federal Reserve maintained interest rates but indicated plans to reduce them by 0.75% by the end of 2024, despite higher-than-expected inflation. The Fed upgraded its economic outlook, projecting stronger growth and a lower unemployment rate. However, the median policy rate is expected to fall at a slower pace than previously anticipated, with cuts of 0.75% in 2025 and 2026.
Key Points:
Interest Rate Outlook: – Fed maintains interest rates in the 5.25%-5.50% range. – Median policymaker expects a 0.75% rate cut by the end of 2024. – Rate cut path slightly slowed, with 0.75% cuts projected for 2025 and 2026.
Economic Outlook: – Economic activity expanding at a solid pace. – Job gains remain strong, unemployment rate remains low. – Growth projected at 2.1% for 2024, up from 1.4% in December projections. – Unemployment rate seen ending the year at 4%, down from 4.1% in December projections.
Inflation: – Inflation remains “elevated.” – Personal consumption expenditures price index excluding food and energy projected to rise at a 2.6% rate by the end of the year.
Policy Statement: – Fed seeks “greater confidence” in a continued decline of inflation before cutting rates. – Language adopted at the January meeting likely to remain in place until just before the first rate reduction.
Fed Chair Press Conference: – Fed Chair Jerome Powell will hold a press conference to elaborate on the policy statement and projections.
ED Accuses Singals of Causing ₹11,446 Crore Loss to Financial Institutions in Bhushan Steel Money Laundering Case
The Enforcement Directorate (ED) has accused former promoters of Bhushan Steel and Bhushan Energy of siphoning funds through over 150 shell companies, resulting in losses of ₹11,446.73 crore to financial institutions. The funds were invested in preference shares and properties in the names of the promoters or their controlled companies. The ED has attached assets worth ₹429 crore in connection with the case.
Key Points:
Allegations of Fund Siphoning: – Brij Bhushan Singal and Neeraj Singal allegedly incorporated over 150 companies to siphon funds from Bhushan Steel and Bhushan Energy. – The siphoned-off funds amounted to ₹11,446.73 crore, which the ED claims is the proceeds of crime.
Investment of Siphoned Funds: – The funds were invested in preference shares of Bhushan Steel Ltd in the names of the promoters or their controlled companies. – The funds were also used to purchase properties in the names of the companies.
Use of Shell Companies: – The ED’s probe revealed that group employees were made directors in the majority of the shell companies allegedly floated for money laundering.
Provisional Attachment of Assets: – The ED has provisionally attached assets worth ₹367.83 crore in the Bhushan Steel case, including movable properties valued at ₹25 crore and immovable properties valued at ₹342 crore. – In total, the ED has attached assets worth ₹429 crore in connection with the case.
Modus Operandi: – The Singals allegedly used a complex web of financial transactions through their group companies to siphon off funds from Bhushan Steel and Bhushan Energy. – Some of the diverted funds were used to acquire immovable and movable properties.
Foreign Transactions: – Neeraj and Brij Bhushan Singal allegedly siphoned off ₹48.38 crore from Bhushan Steel Ltd and channeled it into their four foreign-based companies in Dubai, Mauritius, Ethiopia, and Nigeria.
Money Laundering: – Funds diverted from Bhushan Steel Ltd were invested in various UTI/mutual funds in the names of Singal family members and their companies. – After redeeming these funds, they were integrated into NBFCs controlled by Neeraj Singal.
MGNREGS Wage Revision Expected Soon, Government Terms it a ‘Regular’ Process
The Ministry of Rural Development is set to revise wage rates under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) for the upcoming financial year. The Election Commission has granted clearance for the notification, despite the poll code being in force. The revision is a routine matter and is not related to the upcoming Lok Sabha elections.
Key Points:
Wage Rate Revision: – The Ministry of Rural Development will notify revised wage rates for MGNREGA beneficiaries. – The changes will be effective from April 1, 2024.
Election Commission Clearance: – The Election Commission has granted clearance for the notification of wage rate changes. – The clearance is subject to conditions similar to those imposed in 2019, including restrictions on publicity and political references.
Previous Wage Revision: – The last revision in MGNREGA wages was notified on March 24, 2023. – The increase in wages varied from 2% to 10% across different states.
Wage Variation: – The Parliamentary Standing Committee on Rural Development and Panchayati Raj has highlighted the high range of variation in MGNREGA wages across states. – The committee has also stated that the wages are inadequate and not in line with the rising cost of living.
Minimum Wage Recommendation: – The Anoop Satpathy Committee, a Central government committee on minimum wages, has recommended that MGNREGA wages should be Rs 375 per day.
Air India CEO Campbell Wilson: India’s Aviation Growth May Warrant Another International Hub
India’s rapidly growing airline industry has the potential to support at least three international hubs beyond Mumbai and Delhi, according to Air India CEO Campbell Wilson. The country’s booming consumer class and economic growth are driving demand for air travel, leading to significant investments in aircraft and airport infrastructure. Air India is undergoing a major transformation, including mergers and a rebranding campaign, to meet the growing demand.
Key Points:
Growth of India’s Airline Industry: – India can support at least three international hubs beyond Mumbai and Delhi. – Northern India has a strong east-to-west flow, while southern India offers Asia-to-Africa and Australia-Europe connections.
Air India’s Expansion: – Air India has ordered 470 aircraft from Airbus and Boeing. – The airline has taken delivery of one new aircraft every six days over the past six months. – Air India Express and AIX Connect will be merged into one entity, while Air India and Vistara will be combined into another.
Investment in Infrastructure: – Over 1,100 aircraft have been ordered by Indian airlines. – Approximately $12 billion is being invested in the construction of over 72 new airports by 2025.
Air India’s Transformation: – The airline has undergone a rebranding campaign to freshen its image. – Air India has injected nearly 5,000 people in the last 18 months, bringing down the average age of employees. – The airline’s IT systems have been rebuilt from scratch.
Urgent Security Alert for Apple Users: Indian Government Warns of Critical Vulnerabilities; Immediate Action Required
CERT-In has issued warnings about critical vulnerabilities affecting Apple devices, including iPhones, iPads, MacBooks, and Apple Watches. These vulnerabilities could allow unauthorized access, data disclosure, or denial of service attacks. Users are strongly advised to update their devices to the latest software versions or apply security patches to mitigate these risks.
Key Points:
Affected Devices and Software Versions:
- iOS and iPadOS devices running versions prior to 16.7.6
- iOS and iPadOS versions prior to 17.4
- Apple Vision Pro, Apple TV HD, Apple TV 4K, Apple Watch Series 4 and later
- Apple macOS Monterey versions prior to 12.7.4
- Apple macOS Ventura versions prior to 13.6.5
- Apple macOS Sonoma versions prior to 14.4
- Apple Xcode versions prior to 15.3
- Apple GarageBand versions prior to 10.4.11
Recommended Actions:
- Update devices to the latest software versions
- Apply security patches for older devices that may not receive regular updates
Importance of Vigilance:
- Staying vigilant and addressing security vulnerabilities promptly is crucial in the evolving cyber threat landscape
- The Indian government’s proactive approach in issuing warnings and guidance highlights the importance of safeguarding digital assets and maintaining a secure computing environment
CBI Raids Swastic Coppers Pvt Ltd in Alleged Rs 48.06 Crore Union Bank Fraud
The Central Bureau of Investigation (CBI) has conducted searches in Jaipur in connection with an alleged fraud of over Rs 48.06 crore at Union Bank of India. The agency has booked Swastic Coppers Pvt Ltd, its directors, and guarantors for allegedly cheating the bank by submitting false documents and diverting funds.
Key Points:
- Company and Directors:
- Swastic Coppers Pvt Ltd, a company engaged in manufacturing and repairing power distribution transformers
- Directors/guarantors: Sandeep Jain, Indra Jain, Neelam Jain, and Sharad Kumar Bakliwal
- Alleged Fraud:
- Cheating the bank of Rs 48.06 crore
- Submitting false and inflated documents to avail cash credit limit
- Defaulting on inland LCs and BGs
- Diverting bank funds through transactions with related parties
- CBI Investigation:
- FIR registered against the accused
- Searches conducted at five locations in Jaipur, including the company’s factory and the accused’s premises
Indian Banks’ Export Credit Soars to 12-Month High of Rs 20,489 Crore, Driven by Global Demand
Despite the Red Sea crisis, Indian bank loans to exporters reached their highest level in 12 months in January, driven by renewed global demand for Indian goods. India’s merchandise exports surged 11.9% in February, indicating sustained momentum. The Red Sea crisis has had a limited impact on exports so far, and the trend is expected to boost India’s current account.
Key Points:
1. Export Credit: – Outstanding export credit reached Rs 20,489 crore in January, the highest since February 2023. – Export credit has risen 5% this financial year.
2. Export Growth: – India’s merchandise exports surged 11.9% in February to $41.4 billion. – Exports have climbed for the third consecutive month.
3. Red Sea Crisis: – The Red Sea crisis has had a limited impact on India’s exports so far. – The crisis may affect prices when export contracts are renewed.
4. Export Diversification: – India’s export basket has diversified, including drugs and pharmaceuticals, engineering goods, and chemicals.
5. Current Account: – The export trend is expected to boost India’s current account, given the robust services trade surplus and healthy remittances.
Public Sector Banks Witness Declining Non-Performing Assets in Recent Months
The FICCI-IBA Bankers’ survey reveals that public sector banks in India have shown a significant reduction in non-performing asset (NPA) levels over the last six months, while only 67% of private sector banks reported a decline. The survey also indicates an optimistic outlook for non-food industry credit growth and a shift towards term deposits.
Key Points:
NPA Levels: – 77% of respondent banks reported a decrease in NPA levels in the last six months. – All public sector banks reported a reduction in NPA levels, while 67% of private sector banks reported a decline. – None of the respondent public sector banks or foreign banks reported an increase in NPA levels.
Non-Food Industry Credit Growth: – 41% of participating banks expect non-food industry credit growth to be above 12% over the next six months. – 18% believe it will be in the range of 10-12%. – 36% anticipate growth in the range of 8-10%.
Gross NPAs: – Over half of the respondent banks believe Gross NPAs will be in the range of 3-3.5% over the next six months. – 14% expect NPA levels to be in the range of 2.5-3%.
Deposits: – Term deposits have picked up pace, with 70% of respondents reporting a decrease in the share of CASA deposits in total deposits.
Credit Standards: – For large enterprises, 65% of respondent banks reported no change in credit standards. – For SMEs, 64% reported no change, while 27% reported easing of credit standards.
Long-Term Credit Demand: – Long-term credit demand has seen continued growth in sectors such as Infrastructure, Metals, Iron and Steel, and Food Processing. – 82% of respondents indicated an increase in long-term loans for Infrastructure.
Restructuring of Advances: – Over 40% of respondents reported a decrease in requests for restructuring of advances. – 17% reported an increase in such requests.
Sectors with High NPAs: – Sectors identified as continuing to show high levels of NPAs include Food Processing, Textiles, and Infrastructure.
Surge in Manufacturing Drives Business Activity to Highest Level in Eight Months
India’s private sector activity surged to an eight-month high in March, driven by robust growth in manufacturing and buoyant demand. The HSBC Flash India Composite PMI rose to 61.3, indicating a significant expansion in output.
Key Points:
1. Output Growth: – The HSBC Flash India Composite PMI Output Index rose to 61.3 in March, the highest in eight months. – Manufacturing led the growth, with the fastest expansions in factory orders and production in nearly three-and-a-half years. – Service providers also reported a sharp increase in business activity.
2. Demand and Sales: – Aggregate sales rose sharply, driven by efficiency gains, consumer appetite, and investment in technology. – New export orders expanded at the fastest pace in seven months, with gains from various regions.
3. Input Prices and Margins: – Input prices grew at a faster pace in March, but not all the increase was passed on to output prices. – Composite margins softened slightly as a result.
4. Employment and Purchasing: – Companies stepped up recruitment, but the pace of job creation was moderate. – Manufacturers increased input purchasing at the strongest pace in nine months.
5. Future Outlook: – The final manufacturing PMI for March is projected to remain at 59.2. – The services and composite PMI will be released on April 4.
Political Funding Revealed: Megha Engineering Tops BJP Donations, Future Gaming Supports TMC
The Election Commission’s latest data reveals that Megha Engineering and Infrastructures Limited (MEIL) has been the largest donor to the Bharatiya Janata Party (BJP) through electoral bonds, contributing a staggering ₹584 crore between April 2019 and January 2024. Other major donors to the BJP include Qwik Supply Chain Private Ltd, Vedanta Limited, and Bharti Airtel. The data also shows that Future Gaming & Hotel Services, the largest donor in the country, has distributed funds to various political parties, including the BJP, All India Trinamool Congress, YSR Congress Party, and Congress.
Key Points:
1. BJP’s Largest Donor: – Megha Engineering and Infrastructures Limited (MEIL) donated ₹584 crore to the BJP through electoral bonds.
2. Other Major BJP Donors: – Qwik Supply Chain Private Ltd: ₹375 crore – Vedanta Limited: ₹226.65 crore – Bharti Airtel: ₹197 crore
3. Future Gaming’s Donations: – Future Gaming & Hotel Services donated ₹100 crore to the BJP. – It was the largest donor to the All India Trinamool Congress (₹542 crore). – It also donated to the YSR Congress Party (₹159 crore) and Congress (₹50 crore).
4. Congress’s Largest Donor: – Vedanta Limited donated ₹125 crore to the Congress.
5. MEIL’s Support for BRS: – MEIL was the largest donor to the Bharat Rashtra Samithi (BRS), which ruled Telangana from 2014 to 2023.
6. Unaccounted Donations: – The Election Commission’s data does not reveal all donations received by political parties.
GST: A Landmark Indirect Tax Reform Finds Stability After Initial Challenges
The Goods and Services Tax (GST) has been a significant achievement for the NDA government, expanding the indirect taxpayer base and fostering cooperative federalism through the GST Council. Despite initial challenges, the system has stabilized, with average monthly collections exceeding ₹1.67 lakh crore. However, there is room for improvement in invoice matching, rate simplification, and slab overhaul to enhance revenue collection and reduce compliance burden.
Key Points
Achievements
- Expanded indirect taxpayer base
- Cooperative federalism through GST Council
- Integrated IT systems through GSTN
- Stabilized GST collections
- Reduced corruption and logistic expenses through e-way bills
What is Lacking
- Incomplete invoice matching
- Complex GST rates and slabs
- Revenue loss due to rate tweaks
The Imperative for a Maize Revolution in India
Maize is gaining importance in India as a source of raw material for ethanol production, poultry and animal feed, starch, and other industries. India has the potential to double its maize production to meet the growing demand. The adoption of high-yielding hybrid maize, biotech traits, and high input production technology can significantly increase maize productivity and production. Maize can play a crucial role in achieving the ambitious ethanol blending program (EBP) targets and contribute to sustainable food, feed, and fuel security.
Key Points
Global Maize Production – Maize is grown over 207 million hectares globally, producing over 1,218 mt in 2022-23. – The United States is the largest producer, accounting for almost one-third of global production. – Other major producers include China, Brazil, the European Union, and Argentina.
India’s Maize Production – India produced 34.6 mt of maize in 2023-24. – India has the potential to double maize production to meet the supply-demand gap.
Ethanol Production – India has embarked on a policy to permit the blending of maize and grain-based ethanol. – The target for ethanol blending in petrol has increased to 20% by 2024-25 and 30% by 2029-30. – Maize is a promising feedstock for ethanol production, particularly in the US.
Enhancing Maize Production – Maize is a crop of opportunity for future generations. – Diversification to maize cultivation can increase risk-free cropping intensity. – Maize cultivation with long duration single cross hybrid can offer high returns and save government subsidies on power and water.
Technology Adoption – Increasing per day productivity in maize growing States is crucial. – India can double maize productivity by covering 100% area under single cross-hybrid with biotech traits and adopting high input production technology. – Many neighboring countries have adopted Bt maize to reduce losses caused by fall armyworm pest.
Maize as a Game Changer – Maize can meet the E20 blending targets, requiring 165 lakh tons of maize. – India can increase maize production by ensuring the supply of high-yielding single cross hybrid with FAW-resistant biotech traits and offering MSP, procurement assurances, and transportation concessions. – Maize can contribute to sustainable food, feed, and fuel security.
SEBI Restricts Overseas Fund Inflows for Mutual Funds from April 1
SEBI has instructed the Association of Mutual Funds to halt inflows into overseas exchange-traded funds (ETFs) from April 1 due to the impending $1 billion limit set by the RBI. This follows a previous suspension of fresh subscriptions in overseas stock-investing schemes in January 2022. The mutual fund industry has requested an increase in overseas investment limits to facilitate diversification and capitalize on developed market rallies.
Key Points:
Overseas Investment Limit: – SEBI has directed the Association of Mutual Funds to stop inflows into overseas ETFs from April 1. – The overall industry cap for overseas investment is $7 billion. – The current limit was set in 2007-08 and has not been revised despite India’s increased forex reserves.
Valuation: – SEBI has instructed mutual funds to value overseas investment limits based on cost of acquisition, not current market valuation.
Industry Response: – AMFI and individual fund houses have requested an increase in overseas investment limits. – Nippon India Mutual Fund has suspended subscriptions into four of its overseas schemes.
Inflows and Outflows: – Inflows into overseas funds have remained stagnant due to uncertainty over fresh investments. – Net outflows from overseas fund of funds have increased in recent months. – Overall assets under management in overseas funds have increased by 10% in the past 11 months.
FICCI Survey Projects Gross NPAs for Banks to Reach 3-3.5% in the Next Six Months
The FICCI-IBA Bankers’ Survey reveals that a majority of banks anticipate their gross non-performing assets (NPAs) to remain within 3-3.5% of advances over the next six months. This optimism stems from policy and regulatory support, as well as the recent decline in NPAs to a decadal low of 3.2%. However, concerns remain about NPA risks in sectors such as textiles, MSMEs, and agriculture. Despite these concerns, the survey indicates continued growth in long-term credit demand, particularly in infrastructure and other non-food industries.
Key Points:
Gross NPA Outlook: – Majority of banks expect gross NPAs to range between 3-3.5% in the next six months. – 14% of banks anticipate NPAs within 2.5-3%.
NPA Risk Sectors: – Textile and Garments sector expected to see increased NPAs by over half of banks. – MSME and Agriculture sectors also identified as high NPA risk areas.
Credit Demand: – Long-term credit demand continues to grow in sectors like Infrastructure, Metals, and Food Processing. – 82% of banks report increased long-term loans in Infrastructure. – 41% of banks expect non-food industry credit growth above 12% in the next six months.
Arvind Kejriwal, Chief Minister of Delhi, taken into custody by ED for alleged involvement in money laundering case
Delhi Chief Minister Arvind Kejriwal was arrested by the Enforcement Directorate (ED) after the Supreme Court refused to grant him relief in the Delhi excise money laundering case. Kejriwal had skipped nine summons issued by the ED, claiming they were illegal. The AAP leader moved the Supreme Court seeking protection but was arrested and taken to the ED office for questioning.
Key Points: 1. Arrest of Arvind Kejriwal: – Kejriwal was arrested by the ED after the Supreme Court denied him relief in the Delhi excise money laundering case. 2. Legal Battle: – Kejriwal lost the legal battle seeking protection from the Delhi High Court against the ED’s coercive action. 3. Supreme Court’s Decision: – The Supreme Court did not intervene against the Delhi High Court’s order, leading to Kejriwal’s arrest. 4. Protests and Preventive Measures: – AAP leaders and supporters protested against the ED’s move, leading to increased security around Kejriwal’s residence. 5. Allegations and Arrests: – Kejriwal’s name appeared in the prosecution complaint filed by the ED, alleging undue benefits in the excise policy. Former Deputy CM Manish Sisodia and AAP MP Sanjay Singh have also been arrested. 6. Political Reactions: – Opposition parties criticized the timing of Kejriwal’s arrest, with Congress questioning the BJP’s motives.
India and US Settle Final WTO Dispute on Poultry Trade
India and the United States have resolved their long-standing dispute over poultry imports at the World Trade Organization (WTO), marking the settlement of all seven disputes between the two countries at the global trade watchdog.
Key Points:
- WTO Dispute: India lost a dispute over poultry imports from the US in 2015 due to concerns about Avian Influenza.
- WTO Ruling: India lifted the ban on poultry imports, but the US remained unconvinced about the import mechanism and duties.
- Compensation Demand: The US demanded compensation as India failed to implement the WTO decision within the stipulated time frame.
- Mutual Resolution: The two countries engaged in discussions to resolve the case mutually.
- Settlement of Six Disputes: Last year, India and the US settled six other disputes at the WTO.
- Tariff Reduction: After a meeting between Prime Minister Modi and President Biden, India agreed to reduce tariffs on certain American products, including frozen poultry and berries.
Spain DTAA: Royalty Rate Notification
India has notified lower tax rates on royalties and fees for technical services (FTS) under the India-Spain double taxation avoidance agreement (DTAA), reducing them to 10% from the domestic rate of up to 20%. This notification is significant in light of a recent Supreme Court ruling that the Most Favored Nation clause is not automatically enforceable.
Key Points:
- Tax Rates:
- Royalties and FTS may be taxed in the contracting state where they arise.
- Tax rate for beneficial owners of royalties or FTS is limited to 10% of the gross amount.
- Domestic Law:
- Tax rate under domestic law can reach 20% from the assessment year 2024-25.
- Most Favored Nation Clause:
- The notification ensures the availability of lower tax rates under the India-Spain DTAA.
- Significance:
- The notification is important in light of the recent Supreme Court ruling on the Most Favored Nation clause.
RBI Establishes Framework for self-regulatory organizations (SROs)
The Reserve Bank of India (RBI) has established a comprehensive framework for self-regulatory organizations (SROs), outlining common requirements and standards. SROs are mandated to implement grievance redressal mechanisms, establish non-discriminatory fee structures, and promote ethical practices within their respective sectors.
Key Points:
Objectives and Functions: – SROs must adhere to broad objectives and functions prescribed by the RBI.
Eligibility Criteria: – SROs must meet specific eligibility criteria to be recognized by the RBI.
Governance Standards: – SROs must maintain high standards of governance, including transparent decision-making and accountability.
Grievance Redressal: – SROs are required to establish effective grievance redressal mechanisms for their members.
Non-Discriminatory Fee Structure: – SROs must implement non-discriminatory fee structures to ensure fair treatment of members.
Dispute Resolution: – SROs must adopt efficient, fair, and transparent dispute resolution processes that align with regulatory requirements.
Counseling and Code of Conduct: – SROs are encouraged to provide counseling on unethical practices and to develop a code of conduct for their members.
Monitoring and Enforcement: – SROs are responsible for monitoring adherence to their code of conduct and taking appropriate enforcement actions.
Competition Law’s Applicability in Google Play Billing Case: A Crucial Test
The Competition Commission of India (CCI) is investigating Google Play’s billing policy for alleged unfair service fees. The Competition Amendment Act 2023 introduces new provisions, including leniency and settlement mechanisms, and a deal-value threshold for merger approvals. The Digital Competition Bill aims to regulate Systemically Significant Digital Enterprises. Balancing innovation and regulation remains a challenge, as does the CCI’s triple mandate and limited resources.
Key Points:
Google Play Billing Policy Investigation: – CCI investigating Google Play’s billing policy for alleged unfair service fees.
Competition Amendment Act 2023: – Introduces leniency plus and settlement and commitment mechanisms. – Includes a deal-value threshold for merger approvals.
Digital Competition Bill: – Aims to regulate Systemically Significant Digital Enterprises. – Proposes ex-ante regulations to prevent anti-competitive practices.
Balancing Innovation and Regulation: – Big Tech companies advocate for light-touch regulation to avoid stifling innovation. – CCI faces the challenge of balancing innovation and regulation.
CCI’s Triple Mandate and Resource Constraints: – CCI has a triple mandate of implementing the Competition Act, National Anti-profiteering Act, and Digital Competition Bill. – CCI’s sanctioned strength remains the same, with 70 of 195 places vacant.
CCI Review and Enforcement Challenges: – Ministry of Corporate Affairs to review CCI’s state of affairs. – Concerns over inaction on pending complaints and regulations. – Time-consuming nature of CCI’s investigation and enforcement proceedings.
