NITI Aayog ceo proposes nil road tax for electric vehicles
NITI Aayog CEO Amitabh Kant on Thursday said that he, along with other members, have proposed that road tax be exempted for electric vehicles (EVs).
“In our meeting we have proposed to the Chief Secretaries of the States that there should be no road tax for electronic vehicles,” Kant said. He was speaking at the Energy Storage India 2019 conference.
At present, road tax varies from one state to another and is different for vehicles falling under different price brackets. The government had last year suggested a 12 per cent uniform road tax under “one nation-one tax” proposal.
Kant added that these initiatives are being taken to bring the ownership cost of electric vehicles on par with combustion vehicles, adding that for India to successfully move away from fossil-fuel dependence, oil companies should become energy companies of the future.
As per government’s final guidelines and standards for charging infrastructure for EVs, existing fuel retail outlets run by public sector oil marketing firms (Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd) have been given priority status to set up public charging station (PCS) on their premises.
Niti Aayog’s had earlier proposed a cess to be levied on fossil fuel-powered automobiles to cross-subsidise electric vehicles. However, this proposal had received heavy criticism from the Indian automobile industry.
|Indian Economic Facts & Figures|
|GDP Growth Rate (%)||1.9||Jun/18||2|
|GDP Annual Growth Rate (%)||7.1||Sep/18||8.2|
|Unemployment Rate (%)||3.52||Dec/17||3.51|
|Inflation Rate (%)||2.33||Nov/18||3.38|
|Interest Rate (%)||6.5||Dec/18||6.5|
|Cash Reserve Ratio (%)||4||Jan/19||4|
|Balance of Trade (USD Million)||-16670||Nov/18||-17130|
|Current Account (USD Million)||-19100||Sep/18||-15807|
|Current Account to GDP (%)||-1.9||Dec/17||-0.6|
|Government Debt to GDP (%)||68.7||Dec/17||69.6|
|Government Budget (% of GDP)||-3.53||Dec/17||-3.52|
|Business Confidence (Index Points)||64.9||Jun/18||60.1|
|Services PMI (Index Points)||53.2||Dec/18||53.7|
|Consumer Confidence (Index Points)||94||Dec/18||95|
|Corporate Tax Rate (%)||34.61||Dec/18||34.61|
|Personal Income Tax Rate (%)||35.88||Dec/18||35.54|
Time for msmes to crank up as government does its part of the deal
After trials and tribulations, the government decided to support the old saw, MSMEs, to spur jobs and growth.
On Thursday, the GST Council doubled the tax exemption threshold to Rs 40 lakh from Rs 20 lakh and extended the composition scheme to traders with turnover of Rs 1.5 crore from Rs 1 crore earlier. The Council also allowed service providers with turnover of up to Rs 50 lakh to avail the scheme at 6 per cent.
From tax exemptions to easing restructuring norms for MSME loans, federal authorities are breathing sighs of relief into small businesses strangled by totally unrelated events such as weak credit flow, demonetisation and GST.
The focus on MSMEs ahead of elections may seem freshly urgent, but it isn’t. MSMEs have been in despair for a while, with banks favouring large borrowers following the high-growth periods starting 2011. As such, credit growth to MSMEs slackened, falling from 13.18 per cent in November 2013 to 5.84 per cent in September 2018. They account for just 14 per cent of the total bank credit now. Though access to credit picked up in 2015, note ban and GST rollout hit where it hurts the most. The recent liquidity crisis, the IL&FS fiasco that triggered an NBFC-default scare, further worsened the situation.
Luxury cars chug along in Indian market in 2018
Luxury car sales in India registered a healthy growth in 2018 even as the segment witnessed multiple setbacks including an increase in customs duties and the unavailability of adequate finance in the second half of the year.
The top five manufacturers of luxury vehicles in the Indian market— Mercedes-Benz, BMW, Audi, Jaguar Land Rover and Volvo — jointly clocked sales to the tune of 40,340 units in 2018 compared to 38,989 units sold in 2017, a growth of 3.4 per cent. Company wise, all these carmakers except Audi, registered a year-on-year sales growth.
Audi India’s total sales recorded a decline of 18 per cent for the year at 6,463 units, down from 7,846 units in 2017. The German carmaker attributed this drop, among other factors, to the closure of its largest dealership located in Delhi NCR.
“2018 was surely a challenging one for the automotive industry in India, especially in the second half of the year. The luxury segment was under pressure owing to financial market development, changing customer sentiment and changes in tax policies. We faced some unforeseen business challenges during the year, which led to reduced deliveries for 2018,” said Rahil Ansari, Head, Audi India. Fewer launches than its peers is also said to have impacted the carmaker’s sales last year. However, Audi is planning to launch the A8 flagship sedan and an updated R8 supercar in India this year.
Meanwhile, Mercedes-Benz India maintained its leadership position in the domestic luxury car market and sold a record 15,538 units in 2018, up 1.4 per cent over 15,330 units sold the previous year. Although the carmaker witnessed strong demand for its models in the first half of 2018, rising interest rates, depreciation of the rupee and rising import costs put volumes under pressure in the second half of the year, weighing on overall growth.
MSIL announces price hikes up to Rs 10,000
The country’s largest automaker Maruti Suzuki (MSIL) on January 10 announced that it would hike prices for select models by up to Rs 10,000 with immediate effect, with customers shelling out more for these models beginning Thursday. The quantum of the hike varies across models.
MSIL said it took the move to offset the impact of increasing commodity prices and adverse foreign exchange trends. The company last month hinted of the move, but had not disclosed the quantum of the hikes.
Not just MSIL, but almost every carmaker in the country announced price hikes last month, with the new prices going into effect from January 1 to offset rising cost of operations. Most carmakers have jacked up their selling prices between 2-4 per cent.
Currently, Maruti Suzuki cars have starting prices ranging from Rs 2.53 lakh for the entry-level Alto 800 to Rs 11.45 lakh for the premium crossover S-Cross (ex-showroom, Delhi).
Wagon R launch draws close
The carmaker also confirmed the launch date of its new Wagon R as January 23 and released a teaser image of the car. The Wagon R model has been on sale in India since 1999 and has consistently been one of the firm’s best selling models for nearly two decades.
However, with the launch of a new variant of its age-old rival— the Santro — and the positive traction seen by the Tata Tiago in the car market, Wagon R saw a dip in sales. MSIL however, expects the new Wagon R to boost sales in the compact segment. The new Wagon R will be available in seven variants and is expected to be priced between Rs 4.50-5.50 lakh (ex-showroom New Delhi).
Bandhan bank reports 10.4 per cent rise in net profit
Bandhan Bank on Thursday reported a 10.4 per cent rise in its net profit to Rs 331.3 crore in the quarter ended December. The private sector lender’s profitability has taken a hit primarily as provisions remain elevated due to exposure to IL&FS.
The bank’s provisions and contingencies more than tripled to Rs 377.64 crore in the quarter from Rs 122.54 crore a year ago and Rs 124.17 crore in the previous quarter. Provisions worth Rs 384.95 crore were made for exposure to the troubled infrastructure financier.
“We used to always take unsecured exposures. This was an experiment in secured lending to a AAA-borrower which has gone bad,” managing director and chief executive Chandra Shekhar Ghosh said. The bank has recognised the IL&FS account as a non-performing one, pushing up its gross non-performing assets ratio to 2.4 per cent compared with 1.17 per cent a year ago, he said. The net NPA ratio was, however, stable at 0.8 per cent versus 0.7 per cent a quarter earlier.
Having learnt lessons from the IL&FS exposure, Ghosh said the bank’s future strategy would be “to focus on affordable housing, small business and individual borrower to grow its book.”
During the quarter, net interest income, the core income a bank earns by giving loans, was up 53.5 per cent to Rs 1,124 crore, while other income grew 48 per cent and stood at Rs 234 crore. Net Interest Margin stood at 70.3 per cent against 9.9 per cent in the corresponding quarter the previous year. Deposits were up by 20 per cent at Rs 34,639 crore.
Earlier this week, the board of Bandhan Bank approved the acquisition of GRUH Finance, subject to regulatory and shareholder approvals. The merger would help the Kolkata-based lender achieve product and geographic diversification while improving penetration in its core customer segment.
GAIL to invest Rs 5000 crore in west Bengal pipelines
State-owned GAIL (India) Limited, the country’s largest state-owned natural gas processing and distribution company, plans to pump in an additional Rs 5,000 crore for the construction of pipelines to supply gas and CNG in West Bengal in the next five to six years.
The project, which is being executed as a part of the Pradhan Mantri Urja Ganga Pipeline Project, would involve a 555-km-long pipeline passing through eight districts in the state, such as Purulia, Bankura, Burdwan, Nadia, Hooghly, Howrah, East Midnapore and North 24-Parganas.
While Gail was entrusted with developing city gas distribution (CGD) networks in six cities, state-owned Greater Calcutta Gas Supply Corporation (GCGSC) was earlier authorised to distribute gas in Kolkata and its surrounding areas. Subsequently, it was decided that the CGD in the eastern metropolis would be developed jointly.
“Due to land acquisition issues, we are planning to put up CNG stations at the retail outlets of oil marketing companies (OMCs). We shall try to open CNG stations this year itself if we get space at the outlets. The same model we have followed in Bhubaneswar and Cuttack. We may use road transport till the pipeline connects the place,” said Gail (India) Limited’s Chief General Manager S Bairagi.
As Gail looks for more buyers as it is poised to start business with city gas distribution, Great Eastern Energy Corporation (GEECL) and Essar Oil are upbeat about shale gas reserves in the CBM blocks of West Bengal. Both the companies have expressed an interest in exploring and extracting shale gas, and under a new licensing regime the government has allowed shale exploration from CBM blocks.
“GEECL had already announced investment of $2 billion over the next 10 years in shale gas extraction. Given the opportunity in existing blocks and potential blocks, investment could be as high as Rs 50,000 crore,” GEECL MD and CEO Prasant Modi said.
SBI appoints bankers for rs 10,000 crore equity issue
State Bank of India is planning to raise up to Rs 10,000 crore through an equity issue through the QIP (Qualified Institutional Placement) route, as part of its capital raising plan, in a combination of bond and equity issuances, sources said.
The bank, which had sought shareholder approval to raise equity of up to Rs 20,000 crore in December, has decided to go for only Rs 10,000 crore now considering the market conditions, they said. The SBI chairman, Rajnish Kumar, had told reporters earlier that the bank was in the market for Tier I bonds and would do an equity QIP at an appropriate time.
Bank of America, CLSA, and HSBC have been picked up as the lead arrangers, along with Kotak Mahindra Bank and SBI Capital Markets, Bloomberg reported. The government has been pushing banks that are in a position to tap the markets to raise capital to fund loan growth.