The Delhi High Court has dismissed Vodafone’s petition seeking Rs.4759 crore as tax refund from the tax department. The High Court ruled that the department should have the right to withhold refund and adjust the same against tax demands made. These pertain to the refund claimed by Vodafone over the last four assessment years. There is already a huge tax bill pending against Vodafone and there is the passivity that this liability may go up after the scrutiny. Most of these tax disputes pertain to the company restructuring its subsidiaries for which the department had asked them to pay tax.
Nobel Laureate economist, Paul Krugman has opined that if he was a Fed member then he would pause on rate hikes. The comment comes ahead of the crucial meeting of the Fed on 19th December wherein the Fed is expected to raise the Fed funds rate by another 25 basis points. The CME Fed Tool is pricing in a probability of 75% for a 25 bps rate hike in the December meet. According to Krugman, the trade war could have a long standing impact on US growth and there was really no point in hiking rates at a time when even the IMF had warned of a 30-40 bps deceleration in global GDP growth.
It is now officially estimated that the combination of demonetization and GST implementation resulted in 35 lakh job losses in the trading and MSME sector. While these losses pertain to the last 4.5 years, the problem has actually become a lot more acute in the last 2 years since demonetization and GST were launched. The overall job losses has been to the tune of 40% among traders and over 30% among the small and medium sized enterprises. This is based on a survey conducted by the All India Manufacturers Organization (AIMO). Most job losses were a result of automation and a cash crunch.
Reliance Industries plans to expand its refining capacity by nearly 50% to over 100 million tonnes per annum (MTPA) capacity. This is to meet the increasing demand for refined products. This will entail a Brownfield expansion of two of its refineries in Jamnagar in Gujarat and will call for an investment of Rs.70,000 crore ($10 billion). Jamnagar went live in 1999 with a capacity of 33mtpa which was later raised to 60 mtpa in 2008 and again to 70 mtpa in 2017. Once this is done, Reliance will constitute nearly 1/4th of the total refining capacity of India at 439 mtpa.
As year 2018 comes to an end, it will go as one of the big negative year in terms of FII flows. During the full year, FPI outflows have been over Rs.88,000 crore as against net inflows of Rs.200,000 crore in the calendar year 2017. In the current year, the outflows have been to the tune of Rs.53,000 crore in debt and Rs.35,000 crore in equity. The FPI sell-off got accentuated in the second half due to rising bond yields, a weakening trade position, dollar strength and corporate governance issues like IL&FS leading to a liquidity crunch in the economy. Most foreign investors have been cautious ahead of the elections coming up next year. The outcome of the state elections, where the BJP lost 3 of its heartland bastions, has also raised some serious doubts over the sustenance of the reforms process.
According to data put out by MOSPI, large infrastructure projects saw cost overruns to the tune of Rs.358,000 crore. This hints at a cost overrun of nearly 19.83%, which could have serious implications for the viability of these infrastructure projects and also their payback period. Delays in project implemented range from 1 year to as high 5 years in many cases. There have been various reasons for this overrun including funding constraints, geological surprises, geo mining conditions, slow progress in civil works, land acquisition delays, labour shortage, court cases etc.
