Direct taxes collections have already jumped by 18.7% in this fiscal till middle of January 2018 compared to the corresponding period last year. Direct collections have already crossed 70% of the full year target of Rs.980,000 crore. This is after giving effect for refunds to the tune of Rs.122,000 crore that have been issued during the period. The demonetization exercise and the focus on Jan Dhan Accounts, Aadhar and Mobile tracking have helped the government to substantially curtail the evasion of taxes. In the process the tax base has also expanded to a higher level.
India will be auctioning a total of 55 oil and gas exploration blocks on 18th January. The government is looking to aggressively monetize its vast hydrocarbon resources. India has already emerged as the world’s third largest oil importer and is looking to diversify its oil sources and depend more on domestic oil production. The identified blocks are spread across an area of 59,000 square kilometres. The Directorate General of Hydrocarbons confirmed that bidding will be used for greater transparency. India currently imports 2/3rd of its fuel needs and government wants to reduce dependence to 1/3rd.
Hindustan Unilever really flattered the street with a 28% growth in profits to Rs.1326 crore in the third quarter. Total income of the company was up by 4% while the consumer segment grew by 11% in volume terms and 17% in value terms. HUL also benefited by the GST on many of its items being reduced from 28% to lower brackets of 18%. Hindustan Unilever has appreciated sharply in the last 1 year and is likely to benefit in a big way from the rising rural incomes and the implementation of GST, which is likely to help the FMCG companies revamp their logistics structure more realistically.
Bitcoin fell below the psychological mark of $10,000 resulting in a correction of over 50% in less than a month. The concerns over Bitcoin started surfacing after South Korea and China put sharp restrictions on Bitcoin trading on the Bitcoin exchanges as it was almost creating a speculative bubble. In value terms, nearly $140 billion of value has been shaved off. The sharp fall in Bitcoin has also resulted in an increase in the price of gold, which is also a non-fiat currency like gold. Last year, Bitcoin was up by 1400% but the problems appear to have started after trading in Bitcoins futures was permitted.
When the GST Council meets on January 18th, some of the key items in its agenda will include GST rates, review of GST process, addressing technical issues and improving GST compliance. The Composition Scheme may be further simplified to result in just a single return being filed next year. The GST Council will also discuss centralized registration for corporate bodies that are present in more than 10 states. Combined with centralized return filing, this will go a long way in simplifying the compliance piece for these companies. The GST Council will also discuss the contours of including real estate transactions under the ambit of GST and there are already demands for further reduction in GST rates on select products. The meet will also discuss the launch of the proposed E-way bill effective from Feb 01st.
In a surprise data improvement, the YOY bank non-food credit grew by 12% as per the latest data released by the RBI. Overall credit still grew at a healthy pace of 10.65%. The growth in loans outstripped the growth in deposits which grew at just about 4.45%. Many banks have also confirmed that demand for corporate credit is finally coming back. Also consumer credit has been increasing at a very quick pace. Credit growth was a major worry after it touched a multi-decadal low a few months back. Of course one needs to adjust for the impact of low base effect in the demonetization period.
