GST rates have been cut on a total 29 goods and 53 categories of services and also propose to make the system of filing returns simpler to make the filing process more seamless. The GST Council has been struggling with falling GST revenues for quite some now. Some of the goods where GST rates have been cut include bio diesel for buses, sugar boiled confectionaries, drinking water and LPG gas. Within the ambit of services, the GST on tailoring services, entry to theme parks, oil exploration services have seen reduction of GST. The purpose is to leave the 28% tax only for luxury and demerit goods.
After the sharp fall in export growth and the increase in trade deficit to $15 billion for December, the commerce minister, Suresh Prabhu, has focused himself on expanding and diversifying the export basket with appropriate incentives. He also wants to ensure that India emerges as a Food & beverage hub for Asia. Imports have been rising rapidly due to the sharp rise in crude prices and the sharp demand for gold during the festival season. IT and pharma were the last big export thrust that India had focused on and now the government feels that it is time to renew the effort towards export expansion.
Yes Bank reported 22% higher net profits at Rs.1077 crore. The net interest income (NII) was also up by 27% for the quarter. Gross NPAs and net NPAs were lower in percentage terms. However, in absolute terms, Gross and net NPAs went up. Yes Bank also has an exposure to a total of 9 NCLT classified accounts with a total exposure in excess of Rs.1300 crore. In the last 2 quarters, Yes Bank had been pulled up by the RBI for huge discrepancies between the RBI approved NPA numbers and the NPAs reported by Yes Bank. Those problems have been apparently laid to rest.
Bharti Airtel’s 3rd quarter profits took a big hit after the TRAI more halved the interconnect fees for telecom networks. Interconnect fees was the major source of revenue for Bharti considering its wide all-India network. Net profit for the quarter was down by 39% at Rs.306 crore, slightly lower than street estimates. The price war with the entry of Reliance Jio has not only forced consolidation in the industry but has also made a huge dent on the ARPUs of Bharti as well as its profitability. Most telecom players have been forced into mergers to stand up to the competition posed by Jio.
Moody’s estimate that the MDAG group may sink nearly $23 billion as it takes Jio beyond the boundaries of wireless. The company has already sunk nearly $31 billion in putting the network in place and in providing a superior quality of connectivity and data service. Jio has already emerged as the fourth largest carrier in India and is likely to emerge as a much more powerful player in the years to come. In the next leg of capital spending, Jio plans to focus on Fibre to home, digital TV and in the enterprise business. The money will also be spent on fourth generation feature phones and allied services. Reliance is now betting on data-heavy services that will connect homes, businesses and cars. It surely appears to be very tough times ahead for the telecom sector as a whole.
NSE has now asked the Singapore Exchange (SGX) to delay the launch of single-stock futures. SGX has already made rapid strides in trading Nifty futures on the SGX and that product became very popular as a hedging tool considering that it was dollar denominated. NSE’s request appears to be predicated on the fact that the stock futures volumes had been dipping quite sharply and they feared further cannibalization of institutional volumes if single stock futures were permitted on the SGX. The current agreement between NSE and SGX only covers indices and not individual stock futures.
