Finance Minister Nirmala Sitharaman presents Budget 2019. Budget 2019 highlights. Economic Survey tabled in Parliament. RBI waives RTGS and NEFT fees to encourage digital transactions. Ola Electric raises $250mn in Series B round from Softbank, enters unicorn club. IMF head Christine Lagarde tapped to be next chief of EU’s central bank.
Moving on to the top Business news of the week.
Finance Minister Nirmala Sitharaman presents Budget 2019. Sensex tanks 395 pts as it fails to cheer investors.
Budget For New India: The Finance Minister of India, Nirmala Sitharaman presented the Budget 2019 in the parliament today. Here are some of the highlights of Budget 2019:
- An expenditure of INR70,000cr to be provided to Public Sector Banks (PSBs) in order to boost capital
- To resolve the issue of Angel Tax the startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium.
- Additional Income Tax exemption Of`1.5 Lakh On Interest Paid On Loans for electric vehicles
- Government considering increase in FDI in aviation, media
- It proposed to enhance surcharge on individual income of INR2-5cr and over INR5cr by 3% and 7% respectively
- Custom duty on gold and other precious metals increased from 10% to 12%
- PAN, Aadhaar will now be interchangeable for filing of income tax returns
- To merge NRI portfolio with FPI route
- One nation, one card for seamless mobility
A deep dive into the Budget here.
Economic Survey tabled in Parliament - some of its highlights. Interestingly, the Survey is filled with references to and comparisons with China.
In Nirmala We Trust: The Economic Survey was tabled in the Parliament today by Finance Minister Nirmala Sitharaman.
Some key highlights:
The Dragon In The Room: Interestingly, the Economic Survey was rife with comparisons of India with China. Be it when talking about savings, exports, investments, wages or demographics, the Survey repeatedly kept coming back to China as a comparison.
RBI waives RTGS and NEFT fees to encourage digital transactions. Walmart plans to expand services of PhonePe abroad.
Digital India: The RBI has decided to waive off RTGS and NEFT fees that was levied on internet banking customers by banks. This move is expected to boost online transactions amongst the populace.
Presently, RTGS is charged on transfers above INR2 lakh while NEFT is levied on transactions below INR2 lakh.
It will be interesting to see how this will affect digital transactions in India, where cash remains king, especially in rural areas where only about 16% of the population uses online payment channels.
The Dark Horse: Flipkart’s payments arm PhonePe may prove to be the dark horse for Walmart which bought a majority stake in the online retailer for $16bn last year.
Walmart’s stake in PhonePe is expected to be worth more than $14bn in the medium term - a sharp rise from PhonePe’s $1.5bn valuation at the time when Walmart bought a controlling stake in Flipkart at a total valuation of around $21bn.
Perhaps realising its potential, Walmart is in plans to expand PhonePe’s services outside India. PhonePe also aims to expand its footprint to 300 cities by the end of 2019 vs the 100 presently.
Ola Electric raises $250mn in Series B round from Softbank, enters unicorn club. DPIIT summons Swiggy, Zomato to address problems of “deep discounting” and “predatory pricing”.
The What: Ola Electric Mobility has raised $250m in its Series D funding round from SoftBank valuing the company at $1 bn. Through the injection, SoftBank has acquired 25% stake in Ola Electric Mobility.
Previously, the company has raised $56mn from investors such as Ratan Tata, Tiger Global, and Matrix Partners.
Entry by Invitation Only: The funding round would make Ola Electric Mobility the 30th Indian startup to enter the unicorn club.
IMF head Christine Lagarde tapped to be next chief of EU’s central bank.
After days of hectic backdoor deal-making and horse-trading that exposed the deep faultines in the European Union, a consensus was finally reached over who should be nominated for the top four posts of the multinational body.
“Europe is a Woman”: Two of the four who are nominated are women. IMF head Christine Lagarde is tapped for the eight-year term as head of the European Central Bank and former German defence minister Ursula Von Der Leyen will head to the European Parliament (the EU’s legislature) to be confirmed as President of the European Commission (which functions as the EU’s executive).
Additionally, the Belgian Prime Minister was elected as President of the European Council (which consists of leaders of each member-state) while the Spanish Foreign Minister was chosen to be the foreign affairs chief.
There was relentless bickering over the initial favourites due to inter-member differences. Today’s events are reportedly the result of an agreement between the bloc’s two leaders – France and Germany: Lagarde is a former French Finance Minister and Von Der Leyen is a Merkel loyalist.
More Troubles Ahead?: Though a consensus was reached over nominations despite partisan differences, EU leaders will continue to have sweaty brows in the coming days. Von Der Leyen will have the be confirmed by the newly-elected European Parliament, where traditional centre-left and centre-right parties suffered historic losses.
And Lagarde’s years of experience as an internationally renowned economist notwithstanding, her lack of experience in monetary policy is already eliciting grumblings. (Meanwhile, Largarde will relinquish her responsibilities as Managing Director of the IMFduring the nomination period.)
Some still find reasons to be optimistic, though. Outgoing Council President Donald Tusk expressed satisfaction over the perfect gender balance in the four nominations, with the two top posts going to women for the first time. "I am really happy about it, after all Europe is a woman," he said, in a reference to Greek mythology.
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