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Piyush Goyal lauds GST council for success

Union Finance Minister Piyush Goyal has lauded the Goods and Service Tax council for working as a responsive organisation and successfully implementing GST bill in the country in just a year.

“The GST council has worked as a responsive organisation and overcome all the challenges that came in during the process. They have made GST a huge success within a year,” said Goyal.

He further insisted that only minor issues are left to be solved.

“Only minor issues are left, many things have been solved. I am confident that the worries of the traders, business world, and consumers will also be solved soon. As the revenue increases, we will be able to reduce the prices,” he added.

Tourism in India is booming; in 10 years nation to become fourth largest travel economy, but there’s a problem

The travel habits of Chinese citizens are changing the world. Taking about 145 million overseas trips a year, the Middle Kingdom’s middle class is moving—and spending—more than that of any other nation: In 2016 they accounted for $261 billion overseas, a fifth of all sales by international tourists, according to the United Nations World Tourism Organization.

To the south, India’s own swelling, monied middle class—250 million smartphone-toting young professionals out of a population of 1.3 billion—is starting to emulate its regional rival. In less than 10 years, the World Travel & Tourism Council expects India to become the fourth-largest travel and tourism economy behind China, the U.S., and Germany.

Although more people are visiting India than ever before—two decades ago about 2.4 million international tourists came to India a year; in 2017 there were five times that—the real boost is coming from domestic travel. Almost 90 percent of travelers in India are Indians. For the last three years, their most popular destination has been the southernmost state of Tamil Nadu, thanks to pilgrims eager to visit its many temples.

Tourism in the subcontinent generated more than $230 billion in 2017, up from almost $209 billion in 2016. The vast country offers myriad options: 36 world heritage sites and 103 national parks, plus the Taj Mahal in Agra, Rajasthan’s hill forts, the holy city of Varanasi, and everything else in between the mountains of the Himalayas and the beaches of Goa. Add in its jungles with tigers, elephants, and the last of Asia’s lions, and no other country is better suited to take advantage of an adventure travel market that’s expected to grow to $1.3 billion by 2023.

“Indians are discovering their own country,” says Ahmed Chamanwala, the founder of the Fringe Ford, a five-room lodge in Kerala state, which sits on a 527-acre forest home to more than 400 kinds of animals. “In our initial years, most of our tourists were inbound travelers. But over the years we have seen an increase in the domestic weekend travelers from the major cities in India. Now the business is more dependent on the Indian market.”

As Venice, Barcelona, and Dubrovnik have learned, however, unchecked growth can threaten stakeholders in the fragile places supported by the surge in visitors. In India, steered by government subsidies and tax incentives, five regional budget airlines debuted 100 far-flung routes last year, helping fuel citizens’ desire to explore.

The country’s natural beauty is part of its marketing campaign, and wildlife is a huge draw. But one concern being discussed in hushed tones, Chamanwala says, is that the country’s weak infrastructure and stretched bureaucracy could allow certain areas to lose what makes them special before they ever reach their potential. In some areas, tiger reserves no longer have tigers, and nature safaris can feel like crowded parking lots where there are more shutterbugs than subjects to shoot.

Fringe Ford is already taking steps to limit tourism’s impact. The resort, sitting on an old tea plantation that’s been reclaimed by the forest, is staffed with locals to keep the community involved as stakeholders. Chamanwala plans to invest in adjacent plots to create a buffer that will encourage forest growth and conservation. “Keeping the footprint to a bare minimum” is a must, he says, and he invests a portion of his profits into conservation on the property.

These worries are most pronounced in the high-altitude Himalaya desert of Ladakh in Jammu & Kashmir, a region on the extreme northern side of the country where dramatic peaks and native snow leopards have created a tourism explosion. For years, the presence of the Indian army kept this region protected, but now almost 2.5 million visit annually, eager to see landscapes featured in Bollywood films.

Road construction here, in a region long cut off from the rest of the continent, is a defiant message to neighboring China. As the one major broken link in China’s Belt and Road Initiative, the new roads are a directive to citizens: travel. Throughout the Himalayas, the glaciers walling off the world’s tallest mountains from human encroachment are melting, opening more land for development. So far, much of the market has been from Indians, which presents enormous potential for international travelers.

Right now, there are about 650 hotels and homestays in a district with 4,300 households—too many for the land to support. There’s talk of capping visitors, but no standard regulations, and no one wants to turn off the money machine. “I really hope they don’t expand their capacity,” says Misty Dhillon, the founder of the Himalayan Outback, who leads tours throughout Ladakh and greater India.

Biggest trade war in economic history! US tariffs on Chinese goods worth $34 billion

China on Friday accused the US of starting “the biggest trade war in economic history” as American tariffs took effect on Chinese goods worth $34 billion.”China is forced to strike back to safeguard core national interests and the interests of its people,” the country’s Commerce Ministry said in a statement after the tariffs kicked in.

President Donald Trump’s administration’s 25 per cent tariffs are targeting Chinese products such as industrial machinery, medical devices and auto parts. The Commerce Ministry statement did not, however, provide details on its retaliation. Beijing said previously it would fire back against an equal value of US exports, including SUVs, meat and seafood. Even before Friday, the trade dispute between the world’s top two economies had rattled markets and prompted warnings from companies of damage to their bottom lines and higher prices for consumers.

The US is also set to impose 25 per cent tariffs on another $16 billion in Chinese exports later in the year and China has vowed to retaliate against US goods worth a similar amount. But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals, CNN reported. On Thursday, he suggested the possibility of tariffs on almost $500 billion more of Chinese goods.

“Thirty-four, and then you have another 16 in two weeks and then, as you know, we have 200 billion in abeyance and then after the 200 billion, we have 300 billion in abeyance. OK?” Trump told reporters aboard the Air Force One. “So we have 50 plus 200 plus almost 300.”

Trump and his advisers argue the tariffs are necessary to pressure China into abandoning unfair practices such as stealing intellectual property and forcing American companies to hand over valuable technology. Beijing denies it’s in the wrong and says it’s ready to fight a trade war until the end. The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union. American tariffs on steel and aluminium imports have provoked retaliatory measures against billions of dollars of American exports.

 

Karnataka budget 2018: from Rs 34,000 crore farm loan waiver to fuel, electricity, liquor cess; 5 highlights

Karnataka Chief Minister HD Kumaraswamy on Thursday presented his coalition government’s maiden Budget for fiscal 2018-19. While Karnataka Chief Minister HD Kumaraswamy provided loan relief to the farmers in the state, budget imposed a host of tax hikes on petrol, diesel, liquor and electricity. The budget has hiked tax rate on petrol from the existing 30 percent to 32 percent, hiking prices in the state by Rs 1.14 per litre. The tax rate on diesel has been hiked from the present 19 percent to 21 percent increasing its price by Rs 1.12 per litre.

HD Kumaraswamy has reasoned out the hike as a much needed step to increase resource mobilisation towards fulfilling loan waiver promise made to farmers before assembly election as the budget also announced farm loan waiver of Rs 34,000 crore for the farmers in the state. The loans of up to Rs 2 lakh per farmer will be waived, the budget document said. Other than hike in cess on petrol and diesel, tax on liquor was also hiked by 400 basis points (bps). An additional excise duty on Indian Made Foreign Liquor (IMFL) of 4 percent on all 18 slabs, over and above the existing excise duty was imposed, the budget document said.

The tax on consumption of electricity has been increased from existing 6 percent to 9 percent. The captive energy is now proposed to be taxed at double from 10 paise per unit to 20 paise per unit.

Promising to continue the flagship programmes of the previous Congress government, Kumaraswamy told the legislators that the overall size of the budget would be Rs 2,13,734 crore. “I propose to allocate Rs 150 crore for agriculture development based on the Israeli model. We will focus on agriculture as well as the services sector,” he said.

Meanwhile, according to the state agriculture department’s estimates, of the 74 lakh farmers across the state, 25 lakh of them don’t take institutional loans but borrow from private sources, including moneylenders at a high interest rate and get caught into debt trap.

In a related development, opposition BJP leader BS Yeddyurappa sought a White Paper on the state’s finances ahead of the Budget presentation, alleging that loans and bills amounting to Rs 2.38 lakh crore were outstanding.

PM Narendra Modi on msp hike: government committed to growth of agriculture sector

Prime Minister Narendra Modi said the government has fulfilled its promise of hiking the minimum support price to 1.5 times the production cost of farming produce and said the government is committed to the development of the agriculture sector.

The government hiked the minimum support price for paddy by a steep Rs 200 per quintal as it looked to fulfil its poll promise to give farmers 50 per cent more rate than their cost of production.

The decision, taken by the Union Cabinet headed by Prime Minister Modi, comes less than a year before the next general elections. “I am very happy that the promise made by the government to our farmer brothers and sisters of giving minimum support price at 1.5 times the production cost has been fulfilled. There has been a historic increase in the MSP. Congratulations to all farmers,” he tweeted in Hindi.

The government is committed to taking all initiatives needed for the development of the agriculture sector and farmers’ welfare, he said. “We have been taking steps in this direction and will continue to do so,” he said. –

Will MSP hike impact retail inflation? check what SBI report says

The hike in minimum support price (MSP) of 14 summer crops can increase retail inflation by 73 basis points, depending upon the level of procurement, an SBI report said. The government decision to hike the MSP of 14 kharif crops is a welcome step to address farmer distress in India, SBI said in its ‘Ecowrap’ report. The immediate fallout of the announcement is an inflation impact, it added. Various estimates placed inflation impact between 50-100 bps on Consumer Price Index (CPI), while fiscal impact would be in the range of 0.2 per cent to 0.4 per cent of GDP.

“However we believe, such estimated inflation impact could just be a statistical artefact and will only transpire if there is procurement by Government,” the SBI research report said. The report further said that it is well known that when the public agency starts procuring the crops at MSP, it ensures a convergence between market prices and MSP and thereby impacting inflation.

“For the statistically minded, our estimate suggests that, post announcement of MSP with 150 per cent hike in cost of production, the CPI inflation could increase by 73 bps and this could materialise in one or two quarters but purely subject to procurement by the Government/State Government,” it said.

The report added that historical trends suggest that with no government procurement, market prices have often fallen below MSP due to demand-supply dynamics. For example, in 2017-18 NAFED could procure only 6 per cent of overall pulses and oilseed production.

“To make the MSP effective, it is thus absolutely imperative that the Government needs to either procure/ supplement through price differential scheme /PDS,” the report said. It also suggested that farmers should have the right to sell at mandis at MSP and if the market price is less than MSP, the gap between MSP and market price should be reimbursed to the farmer.

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