The auto industry may be desperate for a cut in the goods and services tax (GST) on cars from 28 to 18 per cent, but the bleak revenue position has prompted the GST fitment committee to hold back from approving such a reduction. “With the revenue situation quite grim, one cannot recommend a rate cut on autos at this stage, which is one of the highest revenue contributors.
In fact, the panel has not made any recommendation but only placed on record the revenue loss it will entail,” said a state government official and committee member. (Read more here)
2) In a first, Maruti Suzuki to lease 100 sales outlets to car dealers
In a first for a passenger vehicle maker in the country, Maruti Suzuki India (MSIL) will soon start leasing nearly 100 outlets for showrooms and workshops to its principal dealers, based on a lottery system.
In the past few years, the carmaker has acquired land parcels to build showrooms as part of its strategy to expand its reach in rural and semi-urban markets and deploy the surplus cash on its books, said a top official at the company. At the end of 2018-19, Maruti had cash and equivalents worth Rs 37,668 crore. (Read more here)
3) Indian consumers remain confident despite economic slowdown: Nielsen
Notwithstanding the slowdown, Indian consumers seem confident about the future, the data from market research agency Nielsen shows. India topped the global consumer confidence index in April-June at 138, the highest in six quarters, coming at a time when domestic economic growth has fallen sharply.
The Nielsen findings are in contrast to the Reserve Bank of India’s (RBI’s) consumer confidence index and gross domestic product growth numbers released by the government last week, which showed that India’s economy had slowed to 5 per cent — a steady decline over a year. What’s more worrying is that growth in private consumption — the key engine of growth — fell sharply to 3.1 per cent. (Read more here)
4) Opposition to RCEP grows within government, now from dairy ministry
Opposition to India’s ongoing negotiations on the proposed Regional Comprehensive Economic Partnership (RCEP) from within the government continues to get stronger.
After a significant pushback from the dairy industry, voices of discontent have now emerged from the Ministry of Fisheries, Animal Husbandry and Dairy, because it is felt that the RCEP will be detrimental to the country’s strong and growing dairy sector. (Read more here)
5) Fewer online offers likely to boost offline sales this festive season
Government scrutiny on deep discounting and predatory pricing by e-commerce companies might finally give a boost to sales of bricks-and-mortar players this festive season.
According to experts, offline players might see between 20 per cent and 30 per cent rise in sales over the last year as customers might again start venturing out and buying this festive season. This year around, sources said, online marketplaces are planning to cut down on deep discounting on millions of products to stay off the radar of the commerce and consumer affairs ministries. (Read more here)
6) Reliance Jio's broadband offers won't impact wireless tariff growth
Reliance Jio is expected to start monetising its fibre services, which have been offered without any free service period, much earlier than it did with the wireless business.
Analysts, however, do not see this effort offsetting slowdown in its wireless revenue growth and any hike in tariff in telecom wireless services is not expected before end of 2019-20 (FY20). “Jio has announced a no-upfront free period for fibre services, and so this segment is likely to start contributing revenues for the company in FY20 itself,” wrote Manish Adukia, analyst Goldman Sachs. (Read more here)
7) Used commercial vehicle sales see uptick amid auto sector slowdown
At a time when new commercial vehicle (CV) sales are coming down, those of used vehicles are seeing some momentum. This is mainly owing to a pick-up in light CV (LCV) and Intermediate CV (ICV) demand.
Those in this space have reported positive growth and a key reason is increase in realisation. According to industry estimates, while the organised sector is selling 10,830 units a month, the unorganised one is selling five times this. (Read more here)
8) Renewable firms can take discoms to NCLT: Power ministry to Andhra govt
Fearing loan default and burgeoning stress in the renewable energy sector, Union Minister for Power and New and Renewable Energy R K Singh has asked the Andhra Pradesh government to clear dues of power projects at the earliest.
In a latest letter to Andhra Pradesh Chief Minister Y S R Jagan Mohan Reddy, Singh said the delayed payment by the state could land its own power distribution companies (discoms) in the soup. (Read more here)
9) Coffee Day group puts Sical Logistics on sale
Coffee Day Enterprises Ltd (CDEL), founded by late coffee tycoon V G Siddhartha, has put its Sical Logistics unit on sale as it seeks to reduce debt, LiveMint reported on Monday, citing three people directly aware of the matter.
On the condition of anonymity, the sources cited above told the financial daily that the company has hired ICICI Securities as the adviser for the potential transaction, which could see the group holding company raise Rs 1,000-1,500 crore.
10) Binny Bansal to set up $400-mn VC fund
Binny Bansal, Flipkart co-founder, is firming up plans to launch his venture capital (VC) fund with a target corpus of $300-400 million and a focus on start-ups that need growth capital, the Times of India reported on Monday, citing two sources familiar with the development.
Bansal, who left the role of Flipkart group CEO in November last year, is likely to roll out the new fund, which will be based out of Singapore, by the end of the year, added the report.