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India’s nation brand value increases 5% in 2018; US, China dominate most valuable nation brands list

India lost one spot to rank as the 9th most valuable nation brand in the world, falling for the second consecutive year in the list of most valuable nation brands, despite its brand value rising 5% from the previous year, according to Brand Finance’s annual Nation Brands 2018 report. During the year 2018, the total national brand value of India was reported at $2,159 billion from $2,046 billion in 2016, the report showed.

The US grabbed the first spot in the list again with a brand value of $25,899 billion, which rose 23% from the past year as the US economy grew at a rapid pace and the growth is also expected to continue in the coming months, the report noted. Apart from GDP, construction orders, consumer sales, car output and other indicators all show growth.

China again came on the second position with a brand value of $12,779 billion, an increase of 25% from last year, followed by Germany ($5,147 billion), UK ($3,750 billion), Japan ($3,598 billion) and France with $3,224 billion of brand value, the report added.

In 2016, India was in the seventh position and was the eighth most valuable nation brand in 2017. The brand rating of the country, however, remained unchanged at AA. India is though ahead of countries such as Australia, Spain, Netherlands, Mexico and Switzerland.

Caught in election bind, Indian government looking for money in wrong places

India’s government is caught in a bind. It needs money to appease voters ahead of a tighter-than-expected reelection campaign. But it’s also set praiseworthy deficit targets for itself that it’s already breached once. So it could use new ways to finance more spending.

Such pressure often leads to bad decisions. This week, a senior official suggested that one solution might be to force big public-sector companies to buy back shares. In particular, the boards of Indian Oil Corp. Ltd., the Oil & Natural Gas Corp. Ltd., Oil India Ltd. and others might have to buy back shares worth about $2.7 billion.

It’s hard to see this as anything but the government squeezing these companies and riding roughshod over the rights of their minority shareholders. These aren’t firms that don’t know what to do with their money. ONGC, for example, needs cash for exploration. Yet its once sizeable cash reserves declined by 90 percent in the year to June 2018, according to source, in part because politicians ordered the company to buy out the state’s stake in the refining company Hindustan Petroleum Corp. Ltd. and to shell out a record dividend.

Doing so will eat up about 42 percent of ONGC’s remaining liquidity. The oil behemoth will have to ration funds for exploration as a consequence, even as India continues to import over 80 percent of its oil — a constant source of uncertainty for its economy.

This isn’t the only way that the government is leaning on oil companies. Responding to noisy protests from opposition politicians about high fuel taxes, it recently ordered companies to reduce the price at which they sell diesel and petrol to consumers. The companies will have to swallow the losses they make as a consequence and minority shareholders will have to lump it.

This is a reminder that in India, privatization doesn’t necessarily mean what it does in the rest of the world. Successive governments have preferred the term “disinvestment” — meaning the reduction of the state’s stake in big, strategic companies. The idea is that listing public-sector companies on the markets and drawing down the government’s stake will gradually help inculcate a bit of market discipline into their operations. There’s little evidence to support such faith, however: Instead, the government continues to view public-sector companies as convenient piggy banks for populist spending rather than as normal corporate entities that they just happen to own.

It’s increasingly hard to argue that the Indian government is a responsible steward of other people’s money. On this occasion, it’s ignoring minority shareholders’ interests. Over the past few months, it’s demonstrated that it can be equally irresponsible when it comes to protecting the interests of the millions of Indians who have entrusted their money to giant, state-run insurance companies. The Life Insurance Corp. of India, for example, has been told to buy a state-run bank that has the highest ratio of non-performing assets in the business — a massive 28 percent. There’s no logical commercial reason for this; the shares would be a bad buy even if they were free. The message to anyone investing in a public-sector company or fund in India is loud and clear: It’s not your money, but ours.

Finance ministry affirms October 20 deadline to avail gst itc for July-March; no return reconciliation

The Finance Ministry Thursday refuted concerns among businesses about reconciliation of returns and said the deadline to avail input tax credit (ITC) for last financial year will remain October 20. Businesses had expressed concern about the October 20 deadline for availing ITC for July 2017-March 2018 period saying that their returns cannot be reconciled with the returns filed by vendors. Such a concern arose after the last date for filing final sales return GSTR-1 has been set as October 31.

The ministry said since the ITC is being availed on the basis of summary sales return or GSTR-3B filed, hence the deadline has been kept at October 20. The GSTR-3B of a particular month has to be filed by the 20th day of the subsequent month. “With taxpayers self-assessing & availing ITC through return in Form GSTR-3B, the last date for availing ITC in relation to said invoices issued by corresponding supplier(s) from July, 2017 to March, 2018 is the last date for filing of such return for September, 2018 i.e. October 20, 2018,” it said in a statement.

The ministry clarified that furnishing of sales details in GSTR-1 by the corresponding suppliers and the facility to view the same in GSTR-2A by the recipient is in nature of taxpayer facilitation and does not impact the ability of taxpayer to avail ITC on self-assessment basis. GSTR-2A is a system generated purchase return.

“The apprehension that ITC can be availed only on the basis of reconciliation between GSTR-2A and GSTR-3B conducted before the due date for filing of return in GSTR-3B for the month of September, 2018 is unfounded as the same exercise can be done thereafter also,” it said.

The ministry further said that for those taxpayers who have been recently migrated from erstwhile tax regime to GST regime, the last date for availing ITC for the period July,2017 to March, 2018, is December 31, 2018 or the date of filing of annual return whichever is earlier.

 

Indians getting richer! 7,300 more people became millionaires last year; have this much total wealth

India is getting richer with the number of millionaires is increasing. During the last 12 months to mid-2018, India created a whopping 7,300 more millionaires, taking the total household wealth to $6 trillion and the total number of millionaires in the country to 3.43 lakh, according to Credit Suisse’s Global Wealth Report 2018.

The total household wealth in India rose by a modest 2.6%, while wealth per adult stayed flat at $7,020, primarily on account of recent free fall in rupee against the US dollar, it added.

Before 2008, India witnessed strong growth in personal wealth which rose from $1,830 in 2000 to $5,020 in 2007. However, after dropping 26% in 2008 due to the financial crisis at that time, it rebounded and grew at an average rate of 7% up to 2018, the report said.

Also, the growth, which has been rising over the years, has not been evenly spread and not everyone has shared this growth. There is still a considerable ‘wealth poverty’ reflected in the fact that 91% of the adult population in the country has wealth below $10,000. On the other side, a small fraction of the population, which 0.6% of adults in the country, has a net worth over $100,000, the report added. Of the total, 3,400 people in India have wealth of over $50 million, and 1,500 of them have more than $100 million of personal wealth each.

The personal wealth of the people in India is mainly dominated by property and other real assets, which constituted to about 91% of the estimated household assets, it added. In the last 12 months to mid-2018, the non-financial assets rose by 4.3%, accounting for all the wealth growth in the country.

Interestingly, India has also emerged to become the home to one of the highest proportions of female billionaires at 18.6% during the period, among the major nations across the world.

RBI against idea of setting up separate regulator to deal with payments system

The Reserve Bank of India (RBI) has opposed the idea of setting up an independent regulator outside the central bank to deal with issues relating to payments, making public its dissent note on Friday on certain recommendations of a government panel.

An inter-ministerial panel under economic affairs secretary was set up to finalise amendments to the Payment and Settlement Systems (PSS) Act, 2007.

“There is no case of having a regulator for payment systems outside the RBI,” said the dissent note submitted by the RBI representative on the committee. It stressed that the payment systems are a sub-set of currency, which is regulated by the RBI.

It also opposed the panel’s suggestion on the composition of the Payments Regulatory Board (PRB), saying it isn’t in sync with the announcement made in the finance bill. The panel has recommended that the central bank governor be replaced as chairperson of the PRB with a person appointed by the government in consultation with RBI.

“Changes should not result in existing foundations being shaken and the potential creation of disturbances in an otherwise well functioning and internationally acclaimed structure as far as India is concerned,” the RBI said.

The central bank, however, observed that it was not totally against a new PSS Bill.

“The overarching impact of monetary policy on payment and settlement systems and vice versa provides support for regulation of payment systems to be with the monetary authority,” the RBI said in the dissent note.

There is an underlying bank account for payment systems which is under the purview of banking system regulation that is already vested with the central bank.

Settlement systems are finally posted in the books of the account of banks with the RBI to attain settlement finality.

Regulating these entities goes hand in hand with the settlement function, the central bank argued.

On the recommendation to designate the Securities Appellate Tribunal (SAT) for grievance redress, the central bank said, “It was not clear why the SAT is being brought in for resolving payment system related cases and more so when exchanges and securities markets are not under the purview of the Payment Systems Bill.”

India vs China: Indians have $7,020 personal wealth per adult; Chinese have way more; check how much

Despite creating a whopping 7,300 more millionaires during the 12 months to mid-2018, India’s wealth per adult is far below when compared with neighbouring nation China. According to a report by Credit Suisse, during the last 12 months period to mid-2018, the wealth per adult in India remained flat at $7,020 (about Rs 515,970), as against the wealth per adult in China at $47,810 (Rs 35.14 lakh), which is comparatively quite higher.

Recent free fall in rupee against the US dollar was one of the contributing factors for the flat growth in total personal wealth in India, which grew by a modest 2.6% to approximately $6 trillion.

Globally, Switzerland is the richest nation in the world when it comes to wealth per adult with $530,240 during the past 12 months to mid-2018, followed by Australia ($411,060).

In terms of total personal wealth, US ranked first with $98 trillion, followed by China, which added $2.3 trillion during the past 12-months to the total household wealth of whopping $52 trillion. China is expected to grow by a further $23 trillion over the next five years, taking its share of global wealth from 16% in 2018 to just above 19% in 2023, the report added.

On the other side, Credit Suisse estimated that the personal wealth in India is expected to rise by 8% per annum to reach $8.8 trillion over the next five years to 2023, and the country could be home to 526,000 millionaires.

The growth, which has been rising over the years, has not been evenly spread and not everyone has shared this growth, Credit Suisse said, adding that there is still a considerable ‘wealth poverty’ reflected in the fact that 91% of the adult population in the country has wealth below $10,000. On the other side, a small fraction of the population, which 0.6% of adults in the country, has a net worth over $100,000, the report added. Of the total, 3,400 people in India have wealth of over $50 million, and 1,500 of them have more than $100 million of personal wealth each

The personal wealth of the people in India is mainly dominated by property and other real assets, which constituted to about 91% of the estimated household assets, it added. In the last 12 months to mid-2018, the non-financial assets rose by 4.3%, accounting for all the wealth growth in the country.

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