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Retail inflation to hit 17-month high of 5.1% : Poll

India’s retail inflation likely rose to a 17-month high in December, a Reuters poll showed, and that could push the central bank to tighten monetary policy.

After November’s 15-month high of 4.88 per cent, consumer price inflation likely climbed to 5.10 per cent, which would the highest since July 2016, according to the median in the poll of nearly 40 economists over the past week.

Factors that indicate higher December inflation are increased prices for some foods and the impact of higher pay for government employees. In December, the Reserve Bank of India held its policy rate and reiterated a neutral stance but said that “all possibilities are on the table” depending on how price pressures and growth pan out.

For the six months through March, the RBI slightly raised its inflation projection – already above its 4 per cent medium-term target – to 4.3-4.7 per cent.

“The uptrend seen in food inflation in recent months appears to have sustained in December,” said Abhishek Upadhyay, economist at ICICI Securities PD.

While vegetable prices likely dropped moderately last month, a pay revision in July last year for government employees probably pushed up demand and inflation. The maximum impact of the pay revision was expected to have come in December.

Allowances made earlier for government employees “will continue to exert pressure on consumer inflation, which will remain at an elevated level for the rest of the (current fiscal) year,” said Madan Sabnavis, chief economist at CARE Ratings.

The wholesale price index likely rose marginally to 4 per cent in December from November’s 3.93 per cent, the poll found.

Industrial production was probably 4.4 per cent higher in November than a year earlier, after increasing 2.2 per cent in October, the poll also showed. “We had a strong run on exports in November and we should see some of that being reflected in firmer industrial production growth,” said Prakash Sakpal, an economist at ING.

Infosys Q3 net profit up 38.3%, revenue at Rs 17,794 crore

NEW DELHI: IT major Infosys on Friday declared its earnings for the third quarter. The Bengaluru-based company has reported net profit of Rs 5,129 crore in the quarter ended December, 2017, up 38.3 per cent, compared to Rs 3,708 crore during the same period last year, Infosys said in a filing to the stock exchanges.

Revenue of the company rose by 3 per cent to Rs 17,794 crore keeping FY18 revenue growth forecast at 5.5-6.5 per cent.

On the management changes, the company said that Rajesh K Murthy, President, has resigned citing personal reasons and his resignation will be effective January 31, it added.

With the appointment of its new CEO and Mangaging Director Salil Parekh, the company further approved the dissolution of the Committee of Directors. This is the first quarterly results since Parekh took charge as the new CEO and MD at Infosys on January 2.

The shares of company ended on a higher note both on BSE Sensex and NSE NIfty.

Investors and market watchers are expecting to hear from Infosys’ new CEO Parekh on his strategy to spur growth for the company that is trying to put behind the almost year-long public standoff between its high-profile promoters and the past leadership.

Earlier this week, Infosys had signed an Advance Pricing Agreement (APA) with the US revenue department, which will result in reversal of tax provisions of about $225 million.

The reversal of the tax provisions will have a positive impact on its consolidated basic earnings per share (EPS) for the December, 2017 quarter by approximately $0.10, Infosys said in a statement.

“In accordance with the APA, the company expects to reverse tax provisions of approximately $225 million made in previous periods which are no longer required (both under International Financial Reporting Standards and Indian Accounting Standards),” it added

‘No major, prolonged correction in Indian equities this year’

New Delhi, Jan 12 () Global brokerage Credit Suisse is “cautiously optimistic” on Indian equities but added that it does not expect any major and prolonged correction in the stocks this year.

The global financial services major said though it is enthused by the reform momentum in the country, the fiscal crunch, several state elections, earning downgrades and high valuations make it “nervous”.

The report authored by Jitendra Gohil, Head of India Equity Research at Credit Suisse however noted that any sharp and prolonged correction in Indian equities is ruled out owing to robust domestic flows and a solid global growth outlook.

“The ongoing reforms have not only put India on the top of investors’ radar but also lifted India’s long-term growth potential, in our view,” the report said adding that “given an unexciting outlook for other asset classes, we remain cautiously optimistic on Indian equities”.

The report further noted that considering a benign outlook for investments in gold and real estate, coupled with changing investments and spending patterns of the millennials, equity mutual fund flows are expected to remain elevated.

Within equities, Credit Suisse remained ‘overweight’ on consumption-related stocks, especially discretionary items with a rural focus and the energy sector, given a firm oil price environment and favourable government policies to support the sector.

“Amid high valuations and a volatile macro environment, we recommend investors to focus on long-term structural themes that have been shaping up in India,” it said.

The report said while the recent reform initiatives like GST and demonetisation could potentially push India’s GDP growth structurally on the higher path, the drag from these reforms, although fading, is to stay for some more time.

Around 45 per cent of India’s GDP and 85-90 per cent of employment come from the unorganised plus agriculture sectors, which are under severe distress and will recover gradually, leading to below potential growth in 2018, it added.

I-T prosecution complaints surge nearly 3-fold in Apr-Nov 2017

New Delhi, Jan 12 – The tax department said it has filed prosecution complaints in 2,225 cases during April- November 2017 for offences under the Income Tax Act, nearly three-fold jump over the corresponding period a year ago.

Besides, 48 persons were convicted for various offences during the said period as compared to 13 convictions for the corresponding eight months of 2016, marking an increase of 269 per cent, a finance ministry statement said.

Due to the decisive and focused action taken by the department against tax evaders, the number of defaulters convicted by the courts has also registered a sharp increase during the current fiscal, the ministry said.

“During FY 2017-18 (up to the end of November 2017), the Department filed Prosecution complaints for various offences in 2,225 cases compared to 784 for the corresponding period in the immediately preceding year, marking an increase of 184 per cent,” the ministry said.

Prosecutions have been initiated for various offences including wilful attempt to evade tax or payment of any tax, wilful failure in filing returns of income, false statement in verification and failure to deposit the tax deducted/collected at source or inordinate delay in doing so, among other defaults.

The number of complaints compounded by the department during April-November stands at 1,052 as against 575 in the corresponding period of the immediately preceding year, registering a rise of 83 per cent, the ministry said.

Compounding of offences is done when the defaulter admits to its offence and pays the compounding fee as per stipulated conditions.

The tax department has accorded the highest priority to tackle the menace of black money and has initiated criminal prosecution proceedings in a large number of cases of tax offenders and evaders.

“The Income Tax Department is committed to carry forward the drive against tax evasion and action against tax evaders will continue in all earnest in the remaining part of the current financial year,” the ministry said.

Among the cases where court has ruled in favour of the I-T department include a Dehradun Court convicted one defaulter for holding undisclosed foreign bank account and sentenced him to two years of imprisonment for wilful attempt to evade tax and to two years for false statement in verification along with monetary penalty for each default, respectively.

In Bengaluru, the MD of a company engaged in infrastructure projects was found guilty of non-deposit of TDS of over Rs 60 lakh and sentenced to rigorous imprisonment of three months along with imposition of fine.

Similarly, a Mohali resident was held guilty of non- deposit of TDS within prescribed time and sentenced to one year jail along with fine.

In another case of Hyderabad, director of an infrastructure company was sentenced to rigorous imprisonment of six months and fine for wilful attempt to evade tax. She was simultaneously sentenced to rigorous imprisonment for six months along with a fine for false statement in verification.

 

Affordable housing: Loans up to Rs 2 lakh see highest NPAs

With a sharp rise in loan disbursements and number of beneficiaries in the affordable housing segment, loans of up to ?2 lakh has ended up with the highest level of non-performing assets (NPAs) in home loans. Public sector banks reported higher NPAs in the sub-Rs 2 lakh housing loans slab than housing finance companies in 2016-17 and 2015-16, according to an RBI report on ‘Affordable Housing’.

NPAs for housing loans of up to ?2 lakh stood at a whopping 11.9% for PSBs during 2016-17. Housing finance companies also saw a sharp surge in housing loan NPAs in this slab. NPAs went up from 6.1% to 8.6% for the sub-?2 lakh slab between 2015-16 and 2016-17. NPAs stood at 10.4% for this slab.

The overall NPAs for housing loans stood at 1.5% and 0.6% respectively for PSBs and housing finance companies during 2016-17. The government’s recent thrust on affordable housing through policy measures that include incentive schemes, accordance of infrastructure tag, interest subsidy scheme under PMAY (Pradhan Mantri Awas Yojana) have resulted in sharp rise in new housing projects in the affordable segment for low income groups. New unit launches in the affordable housing segment registered a 10.1% y-o-y growth in 2016-17. Affordable housing was the only segment in the residential real estate sector that saw a double digit growth. New launches in the mid-range and high-end segments fell by 11.7% y-o-y and 26.7% respectively in 2016-17.

There has been a more than three-fold increase in the number of houses completed under PMAY between April-December 2017. Investments to the tune of ?1.72 lakh have been made under PMAY projects for constructing nearly 32 lakh houses.

India December vegoil imports drop 10 percent on lower soyoil purchases

MUMBAI- India’s vegetable oil imports in December fell 10 percent from a year ago to 1.1 million tonnes as refiners slashed overseas soyoil purchases after supplies rose from the local crop, a trade body said on Friday.

The country’s imports of soyoil stood at 79,250 tonnes for the month, well down on the 232,132 tonnes bought last year, the Solvent Extractors’ Association, a Mumbai-based trade group for oilseed processors, said in a statement.

“Indian import duty has gone up so people were waiting to see the impact of duty on prices. Supply from local soybean crop was also good,” said Sandeep Bajoria, chief executive of vegetable oil importer Sunvin group.

India, the world’s biggest edible oil buyer, in November doubled the import tax on crude palm oil to 30 percent, while the duty on refined palm oil was raised to 40 percent from 25 percent.

Soybean crushing has picked up after the duty hike, dealers said.

The country’s palm oil imports in December were 722,857 tonnes, slightly down from 723,158 tonnes a year ago, the SEA data showed.

India’s palm oil and soyoil imports in January could rise to 775,000 tonnes and 190,000 tonnes respectively, Bajoria said.

India primarily imports palm oil from Indonesia and Malaysia and soyoil from Argentina and Brazil. It also buys small volumes of sunflower oil from Ukraine and canola oil from Canada.

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