The NCLAT has rejected a petition filed by the Income Tax Department against the approval granted to Reliance Jio to hive off its fibre business. The Income Tax Department had claimed that this demerger of Reliance Jio into 2 units would result in loss of revenue for the IT department as it would result in the conversion of redeemable preference shares into loans. The NCLAT struck down this petition on the grounds that the issue had been already given due consideration by the NCLT. The NCLAT also added that loss of revenue alone cannot be grounds for rejection of a private sector business proposal.
Public sector power generator, NTPC, is planning to invest Rs.50,000 crore to create 10 GW of solar power capacity. Currently, NTPC already has an installed renewable power capacity of 920 MW and this expansion will take the overall renewable capacity of NTPC into the big league. The overall goal of NTPC is to achieve overall power capacity of 130 GW by the year 2032 of which nearly 30% will be composed of non-fossil fuels. NTPC will look to funding this entire renewable capacity expansion via the green bond issue route. The Indian economy itself has a target of 175 GW of renewable capacity by 2022.
After Nestle, it is now the turn of Johnson and Johnson to be penalized under the provisions of the National Anti-profiteering Authority (NAA). The NAA was set up to monitor and ensure that any cuts in the GST rate effected by the government are seamlessly passed on to the end customer. In the case of Johnson and Johnson, the NAA has estimated that the company benefited financially to the tune of Rs.230 crore by not passing on such GST benefits to the end customer. Most FMCG companies have objected to such penalties on the grounds that FMCG pricing has an anticipatory element to it.
Mutual funds have added nearly Rs.400,000 crore to their overall AUM during the calendar year 2019 according to a note put out by AMFI. The overall AUM of the Indian mutual fund industry stood at over Rs.27 trillion as of the end of 2019. The AUM was just about Rs.800,000 crore in 2014 with most of the geometric growth in mutual fund investments coming in the last five years. According to AMFI, the MF AUM growth is expected to be around 19% in the year 2020. The big boost for the MF industry has come from the growth in the debt funds and the relentless flows of retail SIPs into equity funds.
The RBI has warned the banks about the risks about totally shifting their focus from industrial lending to retail lending. The RBI has issued this warning specifically with respect to the private banks that have been extremely aggressive in retail lending in the last few years. RBI has expressed concerns over the expansion of retail loans at a time when the economic activity is slowing and negative consumer sentiments are rampant in the Indian economy. The shift has been largely on account of the rising incidence of bad loans in industrial loans, something the PSU banks have been forced to contend with over the last five years. According to the RBI, aggressive private lending was resulting in a debt culture and rising indebtedness of Indian households. RBI has called on banks to focus on industrial lending.
Donald Trump indicated that the US and China will sign the first phase of the trade deal soon. The two nations are planning an elaborate ceremony to commemorate the deal. The deal has been in the works for a long time due to disputes over the historical tariffs and Chinese commitment on imports from the US. The first phase of the trade deal will specifically leave out the more contentious issues like intellectual property and security issues. The world markets have been looking forward to this deal as it would help to revive growth and demand for most of the economies in the world.
