AUGUST WHOLESALE INFLATION SPIKES TO 4-MONTH HIGH OF 3.24%
India’s wholesale price inflation (WPI) rose to 3.24 per cent from a year ago, its fastest pace in four months, government data showed on Thursday. The data suggests that the spike in inflation is driven by higher prices of food and fuel products.
The rise compares with a 3.0 per cent increase forecast by economists in a Reuters poll and a provisional 1.88 per cent rise in July.
The last such high level of inflation was witnessed in April when the rate of price rise was 3.85 per cent.
The government data showed that prices of food articles went up by 5.75 per cent in August on a yearly basis, as against 2.15 per cent in July.
Vegetable prices shot up by 44.91 per cent in August, as against 21.95 per cent in July. Onion prices witnessed a sharp surge at 88.46 per cent in August, as against a contraction of 9.50 per cent in the previous month.
Inflation in manufactured products witnessed a slight increase at 2.45 per cent in August, against 2.18 per cent in July.
In fuel and power segment, inflation saw a sharp surge to a near double digit inflation at 9.99 per cent, against 4.37 per cent in July. Fuel inflation shot up as petrol and diesel prices continued to remain high relentlessly on global crude oil rates, while power tariffs shot through the roof on lower domestic production.
Data released earlier this week showed retail inflation rose to a five-month high of 3.36 per cent in August due to costlier vegetables and fruits. Also industrial production grew by just 1.2 per cent in July from 4.5 per cent a year ago, bearing the brunt of a dismal show of the manufacturing sector.
Last month, the Reserve Bank cut policy repo rate by 0.25 per cent to 6 per cent citing reduction in inflation risk. The rate cut was the first in 10 months and brought policy rates to near 7-year low. The RBI said it will endeavour to keep retail inflation close to 4 per cent but in the near term, there might be some uptick on account of pay commission payouts and price adjustments post GST rollout from July 1.
GOOGLE WILL TRANSLATE STREET SIGNS FOR YOU
BENGALURU: Google has expanded the offerings of its Translate app to introduce offline translations and instant visual translations in Bengali, Gujarati, Kannada, Marathi, Tamil, Telugu and Urdu.
These features will be on Translate’s Android and iOS apps. It was earlier available only in Hindi among Indian languages.
Offline translations allow users to translate a word or sentence on Google Translate app without connecting to the internet. To make use of this feature, users will have to download language packs for both the languages they want to translate in the app while they are connected to the internet.
Instant visual translation, on the other hand, enables users to point their phone’s camera at printed text or a physical signboard and view the translation in augmented reality. Google has also introduced support for conversation mode in two Indian languages Bengali and Tamil. Conversation mode works like a mobile interpreter, enabling users to have a bilingual conversation with someone by simply talking to the Google Translate app.
launch comes nearly five months after Google introduced neural machine translation for nine Indian languages—Hindi, Kannada, Tamil, Telugu, Bengali, Marathi, Gujarati, Punjabi and Malayalam.
Barak Turovsky, head of product and design at Google Translate and Machine Intelligence, told ET that one of the critical gaps in translation of Indian languages is that there are not enough training data or translated data on the Internet. “With neural translation, we are now able to dramatically improve the translation quality and we will continue to further improve the translation quality,” Turovsky said.
Neural translation, which was introduced by the search giant in May last year, translates full sentences at a time instead of the old phrase-based system that translated pieces of a sentence. This has helped the company double the number of India users for its Translate service in the past six months. Google didn’t disclose the number of Translate users in India but globally it has more than one billion monthly active users.
ERICSSON FILES INSOLVENCY CASE AGAINST RELIANCE COMMUNICATIONS
MUMBAI: Ericsson’s Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues, the Indian mobile operator said in a stock exchange filing on Wednesday.
The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Reliance Communications’ nationwide network, is seeking a total of Rs 11.55 billion ($180 million) from the three companies, the filing said.
Reliance Communications said it planned to challenge the insolvency petitions. The filing said the Ericsson case would go before the National Company Law Tribunal, the designated court for bankruptcy cases in India, on Sept. 26.
“Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract. As the legal process is ongoing, we don’t have any further comments at this point,” the Swedish company said.
The petitions come as the Indian phone company controlled by billionaire Anil Ambani races against time to seal deals to sell a stake in its tower assets to Canada’s Brookfield and to merge its mobile services business with rival Aircel.
Reliance Communications reported its third quarterly loss in a row last month and is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017.
The Brookfield and Aircel deals are expected to reduce its debt burden by 250 billion rupees. Ambani said at the time of the loan reprieve that he expected to complete the deals by September.
The company’s losses are, in part, a result of competition from free voice and cut-price data plans offered by Reliance Jio Infocomm, the telecom start-up backed by Ambani’s elder brother and India’s richest man Mukesh Ambani.
Ericsson is aiming to recover 4.91 billion rupees from Reliance Communications, 5.35 billion from Reliance Infratel and 1.29 billion rupees from Reliance Telecom, the filing said.
ZOMATO ANNOUNCES RUNNR ACQUISITION IN ALL STOCK DEAL
MUMBAI: Online restaurant discovery and food delivery firm Zomato has acquired hyperlocal logistics startup Runnr in an all-stock deal.Both Zomato and Runnr CEO Mohit Kumar declined to comment on the financials of the transaction, but the deal pegs Runnr at around $40 million, according to two sources familiar with the development.
The acquisition is a part of the Info Edge-backed food tech company’s strategy to strengthen its delivery service that faces stiff competition from Naspers-backed Swiggy .
ET had reported in May, that both Zomato and UberEATS were in talks for a potential acquisition of the Nexus Venture Partners-backed logistics firm even as the fight in the food technology space is increasingly turning out to be three-legged between Zomato, Swiggy and UberEATS.
Runnr currently fulfils about 3,00,000 orders for Zomato monthly, which forms less than 10% of the Zomato’s total delivery volumes. Zomato currently clocks over 3 million orders monthly, the company had said in a blog post last month. The company’s two-year-old food ordering business contributes about 25% to its topline.
The deal will see Runnr function as an independent logistics company , with Runnr continuing deliveries in pharma, ecommerce and grocery as well.
“We have always maintained that the most cost-efficient delivery fleet is the restaurant’s own, where they can utilise the same staff during off-peak hours for back-of-house and marketing activities. That belief is still intact,” said Deepinder Goyal, CEO of Zomato in a blog post. Runnr has been working with Zomato for its delivery services since May .
Currently , about 92% of orders delivered through the Zomato platform are fulfilled by third-party logistics players as also restaurant partners with the remaining 7-8% being selffulfilled.
Through this deal, about 50% of the orders will be self-fulfilled by Zomato over the next few months. Runnr’s capabilities will now be used to fulfil Zomato’s deliveries in India, as well as internationally starting with UAE.
“About 95% of our orders come from the food delivery sector with the remaining from pharma, e-commerce and grocery. Zomato forms about 85% of the food delivery orders we fulfil currently ,” Mohit Kumar, CEO of Runnr told ET. Post this deal however, Runnr’s food delivery services will be offered completely to Zomato alone.
Over the past 18-24 months, Zomato has been steadily reducing its operational losses and pruning revenues with FY17 operational losses shrinking over 81% to Rs 77 crore.
EXPORTERS SEEK CLARITY ON INCENTIVES UNDER GST
MUMBAI: Exporters say they’re facing difficulties owing to ambiguity about benefits continuing under goods and services tax (GST) from the previous tax regime and queries over accessing input credit, further clouding their prospects amid a dull global market and an appreciating rupee. Some of them have sought clarity on the matter from the government ahead of the peak export season, said people in the know.
The development has led to exporters being unsure about pricing products set for the European Union (EU) and the US and warnings that overseas sales could suffer a setback in the upcoming quarter. The Foreign Trade Policy, FTP 2015-2020, has several incentives based on the earlier levies such as excise duty and service tax. It had been expected that these incentives would be recalibrated under GST but that hasn’t happened, exporters said.
“There is an urgent need for the government to clarify on the incentives available to exporters as their tax outgo has changed in GST,” said MS Mani, partner, Deloitte India, adviser to some top exporters. “It is expected that the newly constituted committee headed by the revenue secretary (Hasmukh Adhia) would fast track its recommendations so that exporters get muchneeded clarity ahead of the peak export season and are able to plan accordingly.”
Sales surge in EU and the US during the Christmas period and exporters need to ensure that goods are shipped in September or at least October to catch that bump. “This is the need of the hour as the objective of the FTP is to ensure that goods are exported and not the taxes associated with the procurement or manufacture of these goods,” said a person with direct knowledge of the matter. “Since the GST rates are not identical to the erstwhile indirect tax rates and because there is no exemption on procurements for exporters, the exporting community is not clear on whether the incentives would increase, decrease or remain the same.”
While one option would have been to provide an exemption in the GST legislation to procurements made by exporters, the government has provided a mechanism under which exporters pay the applicable tax to vendors and claim a refund on input taxes. “There are very stringent timelines provided for grant of refunds to exporters in the GST law,” admitted the person cited above. But exporters aren’t sure whether these would actually be followed, based on their past experience with refunds, the person added.
STRONGER AADHAAR LAW NEEDED: RAJIV KUMAR, VC, NITI AAYOG
NEW DELHI: Niti Aayog vice-chairman Rajiv Kumar on Wednesday said that the law underlining Aadhaar will have to be strengthened in the wake of the Supreme Court upholding the right to privacy as a fundamental right.
“Article 21 has been interpreted again. The law underlining Aadhaar will have to be strengthened,” he said at the conclave on financial inclusion organised by the United Nations. The Supreme Court, on August 24, declared right to privacy as a fundamental right guaranteed by Constitution, a ruling that could have a bearing on the case related to Aadhaar that has been made mandatory in various services.
Aadhaar will thus have to stand the test of constitutionality as the Supreme Court’s decision on the legislation still pending. Following this, the government will have to prove Aadhaar can restrain right to privacy on the grounds of dissemination of social benefits or national security.
The Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016, which aims to provide legal backing to the Aadhaar unique identification number project, was passed in 2016 by the Parliament.
Kumar said mistrust in some minds, over protection and usage of Aadhaar data, at the core of the issue. “We, in the government, need to work on it (removing mistrust) and try and do away with it to ensure we all are at the same page, in the same direction and for the same cause,” he said.
The government has said that it aims to achieve financial inclusion with the interplay of over a billion Aadhaar number, over a billion bank accounts and mobile phones (JAM trinity).
Kumar said financial inclusion has been around for a long time, but till current government took charge in 2014, 70% of our population was unbanked. “Financial inclusion will help in increasing household savings,” Kumar said, adding that a digital push and financial inclusion are required by India at the frontiers of technology.