INDIAN ECONOMY: OVERVIEW, GROWTH & DEVELOPMENT
RBI governor Shaktikanta Das’ first reaction to corporate tax cut
Reserve Bank of India Governor Shaktikanta Das gave his first reaction to the corporate tax rate cut at the India Conclave in Mumbai on Friday. “This is a bold and welcome decision… it will augur very well for our economy,” Das said at the event. Das was speaking at the India Conclave when Finance Minister Nirmala Sitharaman made the announcement in Goa ahead of the GST Council meet. The government has cut corporate tax from 30 percent to 22 percent. In his first reaction, Das said: “This (corporate tax) was one of the hurdles, and the measures will help revive the economy”, adding the new tax rates would bring India closer to “tax rates in this part of the world”.
On a series of key lending rate cuts since he took power, the RBI Governor said the law of the land mandated the RBI to ensure price stability. “But how much lower we can go down depends upon the data we gather on the economy. India can’t be compared with advanced economies,” he said.
Meanwhile, Finance Minister Nirmala Sitharaman also announced a tax cut for new manufacturing companies. “We propose to slash the corporate tax rates for domestic companies and new domestic manufacturing companies,” the finance minister said at a press conference in Goa. “To promote growth, a new provision has been inserted in the income tax act with effect from the fiscal year 2019-20, which allows any domestic company to pay income tax at the rate of 22percent subject to the condition they will not avail any incentive or exemptions,” the FM said. She said the effective tax rate for these companies would be 25.17 percent, inclusive of all surcharge and cess.
Modi govt gives big relief to India inc, slashes rate to 22pc from 30pc
Finance Minister Nirmala Sitharaman Friday proposed to slash corporate tax rate for domestic firms and new domestic manufacturing companies. The finance minister said this at a press conference in Panjim, Goa.
The current corporate tax rate is 30percent, which has been brought down to 22percent. For new manufacturing companies the existing tax rate is 25percent which has been brought down to 15percent.
“In order to promote growth and investment, a new provision has been included in the Income Tax act, that allows any domestic companies an option to pay income tax at the rate of 22percent without exemptions. Amendments will be made through an ordinance to IT Act. These companies will not be required to pay MAT,” said Sithraman in a press conference ahead of the GST meet.
Sitharaman announced that a domestic company can pay income tax at 22percent if they don’t seek any exemption or incentives. The effective tax rate will be 25.17percent inclusive of all surcharges and cess for such domestic companies. Such companies will also not be required to pay Minimum Alternative Tax.
Life-saving ECG app, irregular heart rhythm notification feature available for Apple
A year after Apple launched the ECG app on Apple Watch Series 4, the feature is finally being launched in India. Designed to help Apple Watch users identify early signs of warning, the feature has helped save lives of many.
The ECG app and irregular heart rhythm (IRN) notification feature will help users identify signs of AFib, the most common form of irregular rhythm. The feature is already live for Indian users and the same can be accessed by updating Apple Watch Series 4 to watchOS 6, available starting September 19. The ECG app will be preinstalled on the new Apple Series 5 that will be available in India starting September 27.
To enable these new heart features, users will be taken through an onscreen setup flow that includes details about who can use these features, what the features can and cannot do, what results users may get, how to interpret those results and clear instructions for what to do if users are feeling symptoms that require immediate medical attention.
These health features are specialized ones. And as each market is different, it requires a lot of backend work that needs to be put in place. When such services are launched, the idea is to offer a completely sorted and seamless experience. People familiar to the matter revealed that certain authorities were consulted before rolling out these features in India.
The ECG app that now appears on Apple Watch Series 4 and later running watchOS 6 in India, can be used to measure an ECG. This is a user-initiated process and takes around 30 seconds to record an ECG, which is similar to a single-lead reading. Apple had built-in new electrodes into the back crystal and Digital Crown of the Apple Watch Series 4 or later, that work together with the ECG app to enable customers to take an ECG. To take an ECG recording at any time or following an irregular rhythm notification, users can launch the ECG app on the Apple Watch and hold their finger on the Digital Crown. As the user touches the Digital Crown, the circuit is completed and electrical signals across their heart are measured. After 30 seconds, the heart rhythm is classified as either AFib, sinus rhythm or inconclusive. A sinus rhythm result means the heart is beating in a uniform pattern between 50 and 100 BPM. An AFib result means the heart is beating in an irregular pattern between 50 and 120 BPM.
Apple says that if a user receives an AFib classification and have not been diagnosed with AFib, they should consult the doctor. While taking an ECG, users can even add what prompted them to take an ECG and the data is stored in the Health app on the iPhone. A PDF of the results can also be shared with the physicians.
Donald Trump hints at Howdy Modi’ event in Houston
US President Donald Trump has said that he may make an announcement at the mega “Howdy Modi! event in Houston on Sunday when he would join Prime Minister Narendra Modi in addressing the 50,000-strong Indian diaspora.
The White House on Monday announced that Trump would join Modi at the Houston rally on September 22 as a “special gesture” by the US President to underscore the special bond between the two countries.
It is for the first time that Trump and Modi would share a stage together. The event is the third meeting between the two leaders in three months, after the G-20 summit in Japan in June and the G-7 summit in France last month.
“Could be. I have a very good relationship with Prime Minister Modi,” Trump told reporters on Wednesday aboard Air Force One on his way back from California to Washington DC while responding to a question if there would be any announcement when he goes to Houston for the rally.
According to media reports, officials of the two countries are trying to finalise a trade deal before Prime Minister Modi and Trump meet in Houston.
Trade tensions between India and the US have been rising with Trump complaining that tariffs imposed by New Delhi on American products were “no longer acceptable”.
The US in June terminated India’s designation as beneficiary developing country under the Generalised System of Preferences (GSP) programme.
India imposed retaliatory tariffs on 28 US products including almonds and apples from June 5, after the Trump administration revoked its preferential trade privileges.
Reacting to a record number of 50,000 Indian-Americans registering for the Houston event, Trump said the crowd for the event has now become bigger after it was announced that he would be going there.
YES bank share price falls over 17pc
YES Bank share price plunged to a fresh 52-week low after CARE Ratings downgraded ratings of non-convertible debentures (NCDs) of Rana Kapoor-owned Morgan Credits Private Limited, which is also a promoter entity of the private sector lender. YES Bank share price lost 17percent intra day to Rs 53.05 compared to the previous close of Rs 64.10 on BSE. YES Bank stock has been losing for the last 4 days and fallen 19.24percent during the period.
YES Bank is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The large cap stock was the top loser on both Sensex and Nifty. On Nifty, the stock fell 17.31percent to Rs 53. The stock closed 15.52percent lower at Rs 54.15 on BSE and 15.76percent lower at Rs 54 on BSE.
CARE Ratings has lowered the rating of non-convertible debentures (NCDs) issued by the lender worth Rs 800 crore to BBB- from A-.
CARE said the revision in rating takes into account the fall in the stock price of the underlying shares of YES Bank which are held by Morgan Credit Private Limited (MCPL) or promoters and their relatives. The revised rating considers the moderation in cover due to fall in the stock price of the underlying shares of YES Bank, it added.
Also read: YES Bank close to secure a deal to sell minority stake to global tech firm: Ravneet Gill
“The rating is based on the internal credit enhancement in the form of pledge of unencumbered listed shares of YES Bank held by MCPL or its promoters and their relatives in favour of the Debenture Trustee,” CARE Ratings said.
As of March 31, 2019, MCPL held 3.03 percent stake in YES Bank. MCPL with its associate entities held 10.62 percent stake in YES Bank. In August, the equity stake of Rana Kapoor and his late brother-in-law Ashok Kapur, who founded YES Bank, and that of two affiliates – YES Capital and Morgan Credit – had gone below the threshold of 10 percent, which guaranteed them directorship rights.
Former MD & CEO Rana Kapoor and his affiliates held 9.64 percent stake in the bank by August this year. According to the rating firm, the rating is constrained by limited income since MCPL is an investment company with primary source of income being dividend from YES Bank. Currently, the dividend from YES Bank is MCPL’s primary source of income.
Hence, income could fluctuate in case of any deterioration in the performance of YES Bank, it said. In the past four years, MCPL has received Rs 54.80 crore ( Rs 16.86 crore in FY18, Rs 14.05 crore in FY17, Rs 12.65 crore in FY16 and Rs 11.24 crore in FY15) as dividend income and in the current FY19, MCPL has received Rs 18.96 crore as dividend from YES Bank.
Corporate tax cut to cost govt Rs 1.45 lakh crore
Finance Minister Nirmala Sitharaman announced a corporate tax cut for domestic firms and new domestic manufacturing companies at a press conference on Friday ahead of the GST council meet. A press note released by the government stated that the revenue estimated to be foregone after the corporate tax cut would be Rs 1.45 crore.
The tax rate has been cut to 22 percent from the existing 30 percent. The effective tax rate for these companies would be 25.17 percent, inclusive of all surcharge and cess. For new manufacturing companies, the existing tax rate of 25 percent has been brought down to 15 percent.
“In order to promote growth and investment, a new provision has been included in the Income Tax act that allows any domestic companies an option to pay income tax at the rate of 22percent without exemptions. Amendments will be made through an ordinance to IT Act. These companies will not be required to pay MAT,” said Sithraman in a press conference.
Nirmala Sitharaman said that any domestic company would get an option to pay income tax at a rate of 22 percent if they do not avail any incentive.