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Top 10 biz headlines: Budget 2019, race for Mindtree CEO's post, and more

From race for Mindtree CEO's post to India's current account deficit, Business Standard brings to you stories that made the headlines on Friday

BS Web Team 

Netflix. Photo: Shutterstock

1. Streaming services like Netflix, Amazon may come under tax net in Budget

Encouraged by ballooning revenue from the equalisation levy on online advertising fees, the government feels there is scope to expand it to digital content streaming companies such as Netflix and Amazon Prime, said sources in the know.

The collection target this year is steep and the revenue situation less than ideal. In such a scenario, the government might consider the proposal to tax these services in the Budget, to be presented next week. Read more here

2. India's current account deficit narrows sharply to 0.7% of GDP in Q4

India’s current account deficit (CAD) narrowed sharply to 0.7 per cent of the gross domestic product (GDP) in the fourth quarter ended March 31, 2019 (Q4), from 2.7 per cent in the third quarter ended December 2018, primarily on account of a lower trade deficit, even as foreign portfolio inflows remained robust.

In Q4FY18, the CAD stood at 1.8 per cent of GDP. However, it rose to 2.1 per cent of GDP in FY19 from 1.8 per cent in FY18 “on the back of a widening trade deficit”, the Reserve Bank of India said in a statement on its website. Read more here

3. Fiscal deficit hits 52% of budgeted target in first two months of FY20

The Centre’s fiscal deficit for the first two months of 2019-20 came in at Rs 3.66 trillion, or 52 per cent of the full-year target of Rs 7.04 trillion.It was 55.3 per cent for the same period last year.

Ahead of the Union Budget on July 5, which will be the first by new Finance Minister Nirmala Sitharaman, the data released by the Controller General of Accounts (CGA) on Friday showed the fiscal deficit for April-May was kept in reasonable check in spite of heavy frontloading of expenditure. Read more here

4. Impact of Sebi's norms for debt MFs: Companies may shift funds to banks

The Securities and Exchange Board of India’s (Sebi’s) new investing norms for debt mutual funds (MFs) may compel companies to move part of their short-term money from MFs to banks at lower interest rates, or invest in riskier assets.

For borrowers, rates are likely to increase by 50-100 basis points (bps). Read more here

5. Finance Ministry cuts small savings interest rates for July-Sept quarter

The finance ministry, on Friday, cut interest rates for all but one of the 12 small savings schemes for the July-September quarter. This has been done in a bid to speed up the transmission of interest rates and to reduce cost of capital and enable higher lending and thus boost economic activity.

A notification on the finance ministry website on Friday showed that interest rates for all the small savings schemes, except savings deposits, were reduced by 10 basis points. Read more here

6. Race for Mindtree CEO's post: 3 on L&T shortlist to replace Ravanan

Larsen & Toubro (L&T), which has secured controlling stake in Mindtree, has started the process to pick the next chief executive officer of the IT services company amid talks of an early exit of CEO and co-founder Rostow Ravanan, sources said.

According to multiple sources in the know, the engineering major is evaluating at least two internal and one external candidates for the top post. Read more here

7. Crisis-hit DHFL defers March quarter financial results; stock falls by 12%

Housing finance firm Dewan Housing Finance (DHFL) on Friday postponed its board meeting — to get its audited financial results for the March quarter of 2018-19 (FY19) approved — to July 13, because of non-availability of a few of its directors”. The company’s stock closed at Rs 72 a share on Friday, down 12 per cent. Read more here

8. Mutual fund industry pays the price of failing to self-regulate

Self-regulation is always better than external regulation. With the former, industry participants have control over establishing good practices, while with the latter they have no control. In fact, because regulation often tends to be overbearing, the cost of failing to self-regulate can be high. India’s mutual fund industry is discovering this the hard way, reports LiveMint.

9. Curbs on non-audit work to have little impact on Big 4

As the government mulls capping non-audit work in audit firms in a bid to curb conflict of interest situations and tighten independence, contrary to popular belief, the impact on the Big Four firms will be marginal while the smaller firms which audit the majority of 6,000 plus listed companies may get hit more.

Tax will be one area which will be hit the most because in most cases companies club tax advisory and audit together to complete compliance work efficiently, reports Economic Times.

10. Boost to local manufacturing, structural change to farm sector top Budget wishlist

Structural changes to the agriculture sector, increasing import duties to boost local manufacturing, and clarity on the government’s plans for dilution of ownership of public sector banks topped the wishlist of participants at BusinessLine’s Count Down to Union Budget 2019 event in Mumbai on Friday.

First Published: Sat, June 29 2019. 09:38 IST