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Monday, March 4, 2019

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Donald Trump wants to take back India's special trade status

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By: Jenny Leonard and Jennifer JacobsWASHINGTON - President Donald Trump delivered notice Monday he plans to end key trade preferences for India and Turkey.Trump notified Congress in letters of his "intent to terminate" trade benefits for both countries under the generalized system of preferences. The notification starts a 60-day countdown before the president can take the action on his own authority, the U.S. Trade Representative's Office said in a statement.Their designation under the program allows duty-free entry of about 2,000 products including auto components, industrial valves, and textile materials. The president can still walk back his notice to terminate the preference programs if the two countries satisfy the concerns of his administration.India was the largest beneficiary of the program in 2017 with $5.7 billion in imports to the U.S. given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January.The U.S. said in April it would review India's eligibility for the generalized system of preferences program after some U.S. companies said dairy and medical devices shipments to India were being hurt by non-tariff barriers.Trump said in a notification letter that India "has not assured the United States that it will provide equitable and reasonable access to the markets of India."He said in a separate letter that Turkey is no longer a "developing country based on its level of economic development."Trump's decision comes at a difficult time for India's prime minister, Narendra Modi. He faces a general election in a few weeks even as the longstanding animosity between India and Pakistan has escalated into violent clashes that could lead to all-out war.Trump has had several disagreements with Turkey's leader, Recep Tayyip Erdogan. His country's once-robust economy has weakened, and that will likely be a key issue in local elections at the end of the month.

Samsung puts Modi on 'Make in India' notice

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NEW DELHI: The government has sought a commitment from Samsung that the South Korean electronics company will bring production of TVs back to India if duty on 'open cells' — which prompted it to relocate manufacturing to Vietnam – was removed.The company has been "noncommittal so far," a senior government official told ET. He said the government and the company are discussing the matter.Samsung's decision to shift TV production to Vietnam last year was seen as a severe setback for the government's Make India initiative. The company's largest production hub is located in Vietnam."We feel Samsung was already planning to shift its production of TV panels to Vietnam and this imposition of duty on open cells was one opportunity they got," the official said. "They got an opportunity to shift out to Vietnam from where they can use the free trade agreement route to avoid the duty."The government doubled customs duty on imported LCD and LED TV panels to 15% from 7.5% in the 2018 Union budget. While the duty on 'open cells' used in the manufacture of LCD and LED televisions was hiked to 10%, it was halved after the industry immediately sought a rollback since it wasn't ready to manufacture the component.Open cells are among the most critical parts in a TV panel and account for 65-70% of a set's production value."We feel it was the hike of 15% duty on the LED panels which really hurt the company's India production and not the open cell duty," the official said.Samsung didn't respond to ET's emailed queries.Samsung's TV plant in Chennai produced around 300,000 units every year and was a flag bearer of the government's push to increase local manufacturing. The shift to Vietnam came soon after Samsung opened its largest mobile phone manufacturing facility in the world in India.Vietnam offers a host of incentives including income tax holidays for up to 15 years for manufacturers. Indian electronics manufacturers have been lobbying the government to provide similar exemptions to boost local production, which is suffering due to cheaper imports from Vietnam through the free trade agreement India has with ASEAN.The government also seems to be upset that it was informed about the move only after the company stopped manufacturing TVs in India. "We learnt only after," the official added.The government is actively considering the removal of the 5% customs duty on open cells with other TV makers such as LG joining the chorus and stressing that the duty was making it more expensive to manufacture in the country.Acceding to similar industry requests, the government had deferred the imposition of duties on key mobile handset components such as LCD displays, touch panels and vibrator motors, which were supposed to kick in from February 1.Samsung and other mobile phone manufacturers had urged the government to defer the imposition of customs duty by at least one year. As reported by ET, this could be the first step toward deferring the levy by a year — to April 1, 2020 — giving relief to handset makers. It will give them more time to get in place an ecosystem for locally manufacturing such components, they said.

Here's what could delay your tax refunds

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MUMBAI: The taxman is in for a chase with revenue from income tax (I-T) trailing a stiff target.Tax collection till the third week of February was a little less than Rs 8 lakh crore as against a target of Rs 12 lakh crore, said a senior I-T official.The numbers, professionals believe, could intensify the department's recovery drive and result in delaying of tax refund.According to figures compiled by the department from various regions, 'total net collection' as on February 20 was Rs 7,79,459.7 crore — roughly, Rs 7.79 lakh crore. Mumbai, which accounts for the largest I-T collection, recorded 7.4% increase in collection to Rs 2.39 lakh crore from Rs 2.22 lakh crore while I-T tax collection Delhi, the second largest region, is up 27% to Rs 1.2 lakh crore from Rs 94,754.3 crore in the previous year.ET's email to a CBDT spokesperson on the tax collection number went unanswered. 68261246 "Given the shortfall so far, we have seen that tax authorities are taking somewhat aggressive stand in not releasing refunds determined as payable to taxpayers or adjusting them against tax demands raised in latest assessment orders even though taxpayers are otherwise entitled to stay on disputed tax demands as long as they deposit 20% of such demands where appeals are filed with first appellate authority," said Sanjay Sanghvi, tax partner at Khaitan & Co, a law firm.Tax officials, evidently under pressure to meet the revenue target which was revised in the Interim Budget, are working on weekends and even on some of the public holidays. Soon after taking charge, P.C,Mody, chairman of the apex body, Central Board of Direct Taxes (CBDT), told senior I-T officials that the "immediate priority" of the tax office would be "maximizing Revenue collection", but this "must be done without any harassment or high handedness on the part of officers". "Our conduct must be impeccable, friendly, yet objective -without fear or favour as we move towards becoming a nonadversarial regime," said the communique from Mody, whose style and approach on the subject, say tax officials, is different from the outgoing CBDT chairman Sushil Chandra."Collection is growing by about 12.5% against an asking rate of 19.5%... it's a challenge," said an I-T official.According to Mitil Chokshi, senior partner at the chartered accountant firm, Chokshi & Chokshi, the department has been very active in issuing summons or conducting surveys on assessees who have deducted the TDS but have not deposited the same to tax authorities."It's also going after assessees who are yet to deposit self-assessment tax or tax on regular assessment of earlier periods. In metros, TDS is a significant source of tax... Assessees are also questioned about a lower deposit of Advance Tax (compared to the previous year's or previous quarter's)," said Chokshi. Other measures, he said, include attaching bank accounts of assesses, issuing notices to — and even initiating prosecution against — directors of companies which have defaulted in tax payment.The surveys, said an official of a company, can be very tiring and go on for hours with the staff made to wait in a room, often till midnight, with their phones either switched off or taken away, and statements, even on irrelevant issues, recorded by the tax department officials."In appropriate cases, assessees should approach committee looking into highpitched demands. It's an option given by the tax administration with the committee empowered to stay a demand without the assesssee having to mandatorily pay 20% in other cases," said senior chartered accountant Dilip Lakhani.

India nominates NITI Aayog's Ramesh Chand to head FAO

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United Nations, India has nominated NITI Aayog member Ramesh Chand for the post of the new Food and Agriculture Organisation's (FAO) Director-General and he will be facing candidates from China and three other countries.The FAO announced on Monday the slate of candidates nominated by their governments for the election that is scheduled in June to pick the successor to Brazilian economist Jose Graziano da Silva, who has served two terms since 2011.The other candidates are Qu Dongyu of China, Medi Moungui of Cameroon, Catherine Geslain-Laneelle of France and Davit Kirvalidze of Georgia.The next head of the Rome-headquarted FAO, a specialised agency of the UN, will be elected by a simple majority of its 194 members.An economist, Chand is a member of the NITI Aayog with the status of a Minister of State. He has a PhD in agricultural economics from the Indian Agricultural Research Institute (IARI) and has served as the Director of the National Institute of Agricultural Economics and Policy Research in New Delhi.Chand is expected to face stiff competition from Qu because of the influence China wields in developing countries through its aid and loan programmes that could even split the African votes away from Moungui.Quoting FAO watchers, Italian Insider, a publication that closely monitors the organisation, reported that India had tried to persuade China not to field a candidate so as not to split the Asian vote.It added that "many African countries receiving hefty Chinese aid are likely to come under pressure not to vote for Cameroon, which claims to have the backing of all African countries".The only Indian to head the FAO is Binay Ranjan Sen, who was the Director-General from 1956 to 1967.The next Director-General will have to help the organisation navigate the challenges of climate change, loss of bio-diversity and feeding a growing world population.The FAO reported last year that almost 800 million people are always hungry and 2 billion suffer from deficiencies in micronutrients in their diet that lead to health problemsThe report said that the world would have to feed a global population that is expected to reach about 10 billion by 2050. Growth of agricultural yields "has slowed to rates that are too low for comfort", even though investments in agriculture and technological innovations have been increasing productivity, it added.

ET Prime Women Leadership Awards jury shortlists finalists for their spirit of entrepreneurship, innovation, and excellence

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ET Prime Women Leadership Awards, India's first women-only awards, held its jury meeting at New Delhi recently.The awards celebrate and acknowledge current and future women leaders, who exhibit the spirit of entrepreneurship, innovation, and excellence. The 70 women business leaders considered under various categories have had stellar journeys. They are disrupting their respective industries with their growing presence and changing perceptions about leadership in their own unique way.A distinguished jury, comprising eminent members from diverse backgrounds – Naina Lal Kidwai, chairman, Altico Capital India Ltd (jury chair); Rekha Menon, chairman and senior managing director, Accenture in India; Deep Kalra, founder and CEO, MakeMyTrip; Debjani Ghosh, president, Nasscom; Kaku Nakhate, president and India country head, Bank of America; Meena Ganesh, CEO and MD, Portea Medical; Aisha de Sequeira, co-country head and head of investment banking India, Morgan Stanley; and Gautam Sinha, CEO, Times Internet Limited rigorously evaluated and shortlisted the winners across 11 categories.68264355 The process* The editorial team, along with the knowledge partner Accord India, did the initial research on worthy candidates and their companies.* The teams conducted extensive research on each nominee, cross-referenced each nominee and their companies/organisations.* An extensive financial due diligence was carried out on their companies – both listed and privately held.* Research was also done on the candidates' achievements and their innovative contributions to the company's growth and financial health, among other things.* The long list of 400 was then pruned to 70 and given to the jury to come up with its final list.The jury deliberated over the nominee list for about two hours. The discussion was engaging and at times, intense. There were a couple of dramatic moments during the discussion, especially when the jury members decided to use their personal knowledge to bat for candidates.This initiative by ETPrime.com seeks to recognise and embolden the growing presence of women leaders who not only go beyond their limitations and boundaries, but also empower and inspire other women to become the leaders of tomorrow. At present, there are various awards across industries but there is none which takes into account the contribution of women across the various roles such as an entrepreneur, CEO, HR head, marketing, etc. While challenges before an industry leader are many, for women some of these challenges are even more complex. Apart from managing a company, a woman plays many other roles. She is a mother, a wife, a daughter, or a daughter-in-law. However, women are breaking the shackles of old-world customs to emerge strong and confident leaders. This award seeks to recognise women leaders who not only made a name for themselves, but also paved the way for other women to follow in their footsteps. A formal award ceremony will felicitate the finalists on March 29, 2019.Award Categories 1. CEO of the year 2. Emerging Entrepreneur 3. Global Indian of the year 4. Emerging Innovator5. Lifetime Achievement Award 6. Functional Head of the year 7. Emerging Leader8. Beyond Business Awards 9. Accenture Vaahini Innovator of the year10. Entrepreneur of the year11. Business Woman of the year

RCom writes to telecom secretary seeking DoT NOC for spectrum deal with Jio

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Kolkata: Reliance Communications (RCom) has dialled telecom secretary Aruna Sundararajan, calling on the Department of Telecommunications (DoT) to issue a no objection certificate (NoC) to its pending spectrum trading deal with Reliance Jio Infocomm.The beleaguered Anil Ambaniled telco, in a letter to Sundararajan dated February 28, cited last week's order issued by the Telecom Dispute Settlement & Appellate Tribunal (TDSAT) that clarified the liability of past spectrum-related dues lies with the airwaves seller and not the buyer. Here RCom is the seller and Jio is the buyer.The telecom tribunal has asked DoT to reconsider approval to RCom's pact to sell spectrum to Jio, adding that buyer Jio cannot be held liable until the airwaves trading deal is concluded.In the event, if DoT does not clear RCom's spectrum trading pact with Jio, the Anil Ambani-led telco might move Supreme Court soon as "it's armed with a favourable telecom tribunal order", a person with direct knowledge told ET.Shares of RCom, which did not reply to ET's requests seeking comments till press time, closed about 2% higher on BSE at ?6.61Monday.DoT has so far refused to approve the spectrum sale after Mukesh Ambani-owned Jio said it can't be held liable for RCom's past dues. RCom had, subsequently, sought a clarification from the telecom tribunal on the interpretation of spectrum trading rules.Spectrum related dues amounting Rs 2,947 crore is at the heart of a dispute between RCom, Jio and the DoT, which has stalled a highstakes spectrum trading pact between the Ambani brothers.Earlier, the Supreme Court had directed DoT to approve RCom's pact to sell 4G airwaves to Jio after accepting a ?1,400 crore corporate guarantee, instead of a bank guarantee, as well as a parcel of land from an RCom subsidiary to cover for ?2,947 crore spectrum user charge (SUC) claim.However, DoT refused to play ball after Jio said it can't be held liable for RCom's dues, contending that both buyer and seller must agree to take care of previous dues of the seller, a stance subsequently backed by the apex court.Last week, a senior DoT official once again ruled out an early NoC to the spectrum trading pact on grounds that all previous guarantees extended by RCom are now infructuous, especially since the Anil Ambani-led telco has announced plans to move National Company Law Tribunal (NCLT) seeking bankruptcy protection.

Infosys’ settlement with Sebi vindicates Murthy’s position

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By V BalakrishnanRecent events in large companies like ICICI Bank and Infosys has brought the issues of corporate governance to the fore. The primary role of the board is to keep the company honest. While the board needs to support the management in strategy and execution, they also need to provide the required oversight in protecting the value system of the company. In both the instances the board was overawed by charismatic CEOs thereby failing to protect the interests of its stakeholders.In both these cases, the board rushed to give clean chit to the management at the first instance. It is only later when the issues became larger and larger that proper investigations were done and action followed. It is to be noted that in ICICI's case, the conflict of interest issues was flagged to the board by an investor in 2016.In the public markets, the PE (priceearnings ratio) of a company is a function of both earnings and the comfort factor. Investors want honesty and transparency. They understand that businesses go through ups and downs. What they don't like are surprises and any ethical issues which will destroy the "trust factor".The current ICICI board has done the right thing by conducting an investigation by a former Supreme Court judge and based on its recommendation sacked the CEO and clawed back the entitlements paid to her by the bank.In the case of Infosys, the earlier board dismissed lack of approvals by the board and its committees on the severance payment to its ex-CFO as bookkeeping issues and failed to clearly justify the reason for such high payment. Now, Infosys has paid a consent fee of ?34 lakh to Sebi, which found the severance payment was not in accordance with the remuneration policy of the company. Sebi's investigation also found that the severance payments were made without proper approvals from the Audit Committee and Nominations and Remuneration Committee of the company.Infosys was the gold standard for corporate governance in this country. Its founder NR Narayana Murthy always put value before profits. His statement that clear conscience is the softest pillow is legendary. Despite criticism from different quarters, he questioned the board and its management as his silence would have mortally wounded the core value system of the company. People close to him clearly understood the pain he went through when Infosys was accused of mis-governance. The recent settlement clearly vindicates his position. The least the company can do is to apologise to Murthy for the communication it issued to the stock exchanges that blamed him of interference. Also, there should be accountability for such lapses by the board. Trust in the management of a company and its board is essential to build a vibrant capital market. Building long-term businesses needs a vibrant board which takes its fiduciary duty seriously and acts in the best interests of all its stakeholders.(The author is a former board member of Infosys)

Should you jump onto index Next 50s bandwagon now?

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Despite the Sebi imposed disclaimer that past performance of a scheme is not indicative of future performance; mutual funds continue to launch schemes based on historical returns. For instance, Nifty Next 50 (earlier known as Nifty Junior) has generated better returns than Nifty in last 5 and 10 years. While Nifty has generated a CAGR of 12 per cent and 15 per cent during the last 5 and 10 year time periods, the same was 17 per cent and 22 per cent for Nifty Next 50. And naturally, mutual funds continue to launch Next 50 schemes highlighting the fact that it has outperformed Nifty in the long term. Some mutual funds have launched schemes based on Sensex Next 50. (See Next 50 Schemes Table for recent launches.) Though new schemes are being launched against Next 50 indices, the performances have started deteriorating. For instance, Nifty Next 50 has generated a negative return of 8 per cent during the last one year compared to 4 per cent return by Nifty. Mutual funds also try to spin this to their advantage by saying that the "recent underperformance gives a good entry option". 68263766 Just because Nifty Next 50 has outperformed Nifty over the last 10 years, investors should not assume that the same will get repeated in future. And as visible from the Next 50 / Nifty 50 Ratio Chart, Next 50 underperformed Nifty during the previous 10 year period. While Nifty generated a CAGR of 10 per cent between 1st March 1999 and 1st March 2009, Next 50's CAGR was only 8 per cent.Rising ratio means Next 50 is outperforming Nifty during that period and falling ratio means Next 50 is under performing Nifty during that period. That means, the possible outperformance of Next 50 depends on where this ratio is placed now. Despite the recent under performance, the Next 50 / Nifty 50 ratio is still placed above the long-term average and therefore, this underperformance may continue in medium term. 68250177 68229891 68211393

Govt may offer Samsung duty relief to restart its TV production

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NEW DELHI: The government has sought a commitment from Samsung that the South Korean electronics company will bring production of TVs back to India if duty on 'open cells' — which prompted it to relocate manufacturing to Vietnam – was removed.The company has been "noncommittal so far," a senior government official told ET. He said the government and the company are discussing the matter.Samsung's decision to shift TV production to Vietnam last year was seen as a severe setback for the government's Make India initiative. The company's largest production hub is located in Vietnam."We feel Samsung was already planning to shift its production of TV panels to Vietnam and this imposition of duty on open cells was one opportunity they got," the official said. "They got an opportunity to shift out to Vietnam from where they can use the free trade agreement route to avoid the duty."The government doubled customs duty on imported LCD and LED TV panels to 15% from 7.5% in the 2018 Union budget. While the duty on 'open cells' used in the manufacture of LCD and LED televisions was hiked to 10%, it was halved after the industry immediately sought a rollback since it wasn't ready to manufacture the component.Open cells are among the most critical parts in a TV panel and account for 65-70% of a set's production value."We feel it was the hike of 15% duty on the LED panels which really hurt the company's India production and not the open cell duty," the official said.Samsung didn't respond to ET's emailed queries.Samsung's TV plant in Chennai produced around 300,000 units every year and was a flag bearer of the government's push to increase local manufacturing. The shift to Vietnam came soon after Samsung opened its largest mobile phone manufacturing facility in the world in India.Vietnam offers a host of incentives including income tax holidays for up to 15 years for manufacturers. Indian electronics manufacturers have been lobbying the government to provide similar exemptions to boost local production, which is suffering due to cheaper imports from Vietnam through the free trade agreement India has with ASEAN.The government also seems to be upset that it was informed about the move only after the company stopped manufacturing TVs in India. "We learnt only after," the official added.The government is actively considering the removal of the 5% customs duty on open cells with other TV makers such as LG joining the chorus and stressing that the duty was making it more expensive to manufacture in the country.Acceding to similar industry requests, the government had deferred the imposition of duties on key mobile handset components such as LCD displays, touch panels and vibrator motors, which were supposed to kick in from February 1.Samsung and other mobile phone manufacturers had urged the government to defer the imposition of customs duty by at least one year. As reported by ET, this could be the first step toward deferring the levy by a year — to April 1, 2020 — giving relief to handset makers. It will give them more time to get in place an ecosystem for locally manufacturing such components, they said.

HRD plans decree to revive university-wise faculty recruitment

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NEW DELHI: The government may introduce an ordinance soon to revive the university-wise recruitment system for faculty, an official from the Ministry of Human Resource Development (HRD) said on Monday.It was changed to department-wise in 2017 by an Allahabad High Court order, the official added. A review petition filed by the HRD Ministry to revive the university-wise recruitment system was rejected by the Supreme Court on February 27. "We have proposed to the cabinet to issue an ordinance in this regard. The government will take a decision on it," R. Subrahmanyam, Higher Education Secretary, HRD Ministry, told IANS. He said the meeting is likely to take place in "two-three days" before the election model code of conduct comes into force. The HRD Ministry was under duress from academic groups to have the Supreme Court revoke the Allahabad High Court decision and restore the university-as-a-unit method for faculty recruitment, applicable earlier. Several groups of academics feel the department-wise recruitment will lead to undermining the hiring chances for SC/ST and OBC groups. While the central universities are beset with large vacancies, the government, facing protests from several quarters against the change in the recruitment method, had last year put on hold any recruitment till the resolution of the issue. According to the data IANS obtained from the HRD Ministry, the Delhi University and the Jawaharlal Nehru University have 47 per cent and 34 per cent vacancies, respectively. The situation is worse at the central universities in Haryana, Allahabad and Himachal Pradesh where the vacancy is stated to be 76 per cent, 67 per cent and 60 per cent of the sanctioned strength, respectively. The situation is even worse in Odisha, where 88 per cent faculty positions are vacant in central universities.