Midnight News Update – Oct 10th 2017
Addressing industry leaders, prime minister Modi assured them that petroleum products will also be brought under the GST net after due consultation with the states. Current, petrol, diesel and petroleum products have been kept out of the ambit of GST. Currently, petrol and diesel face a high level of central excise and state level taxes. According to industry leaders, this situation can be rectified if petrol and diesel are also brought under the ambit of GST as it will result in uniform taxation. Prime Minister Modi also lauded the efforts to Saudi Aramco and Rosneft to invest in the Indian oil sector.
Tata Sons chairperson, N Chandrasekharan, has confirmed that the loss due to the Tata Nano was just 4% of the total losses of the passenger cars division. The previous Tata Sons chairperson, Cyrus Mistry, had alleged that over Rs.1000 crore had been lost in Nano and that Ratan Tata had held on to the project only for emotional reasons. Interestingly, the only passenger car from the Tata fold that makes profits is the Indica. One of the key mandates for Chandra is to reduce the number of companies and consolidate the entire portfolio alone 5-6 principal lines of business.
Cairn India, part of the Vedanta group, is planning to invest $4.6 billion in exploration off the East coast as well as its traditional Barmer fields in Rajasthan. Vedanta plans to raise the entire resources internally without depending on any external borrowing. The production sharing contract for the Barmer field was recently extended giving the company the required boost to go ahead with the investment. Cairn will also start drilling for oil off the Krishna Godavari Basin by March next year. Government also wants to bring in private investments in ONGC and OIL blocks where the production has been poor.
Even as Tata Teleservices has been trying to wind down its wireless business, American Towers has confirmed that its deal with Tata Tele is non-cancellable for the next 6 years. The relationship between ATC and Tata Tele became active after the VIOM acquisition by ATC. ATC currently, has a portfolio of nearly 58,000 towers in India and has been rapidly expanding its towers portfolio. For ATC, the question of cancelling the contract will not arise as Tata Tele contributes to nearly 5% of its top line. The Tata group is yet to firm up its stand on this issue.
According to Amitabh Kant, global oil firms could invest as much as $1 trillion into India and may substantially scale up their commitments towards India. Some of the world’s largest names like Saudi Aramco, Exxon Mobil, Rosneft of Russia and BP have evinced interest in investing into the Indian oil sector. In fact, Rosneft has already invested to the tune of $65 billion into India which includes the high profile Essar Oil acquisition. Saudi Aramco has also promised to invest up to $300 billion into the Indian oil sector over the next 4-5 years. Shell, on the other hand, is looking to partner with ONGC. Many large global players have appreciated the government’s move to free up gas prices and Indian oil players like Mr. Ambani have been asking for inclusion of oil and gas under the ambit of GST for simplicity.
The first indication of a turnaround in coal production by CIL came from the core sector numbers. Now the numbers have confirmed that for the month of September 2017 the supply of coal by CIL to power utilities was up by 21% at 35.2 million tonnes. CIL also confirmed that the higher off-take was also largely due to better synergy between CIL and Indian Railways leading to rake loading increasing by 19% for the month of September. There has been a consistent fall in coal imports due to higher domestic production resulting in huge savings in foreign currency outflows.
