Top News Today: FM Announces Roll Back of FPI Surchage, Amazon Fresh Launched, IRCTC IPO

Finance Minister Nirmala Sitharaman announces slew of reforms in an attempt to boost the slowing economy. “Unprecedented in 70 years”: NITI Aayog VC acknowledges economic slowdown. Govt exempts FPIs and domestic investors from surcharge. IRCTC files draft papers for IPO. Amazon to acquire 49% stake in Future Coupons. Pawan Munjal may invest in Ola Electric. Amazon Fresh launches in India. Qantas begins testing 20-hour direct flights. 

 

Moving on to top Business news of the day:

 

 ECONOMIC SLOWDOWN 
 
Finance Minister Nirmala Sitharaman announces slew of reforms in an attempt to boost the slowing economy. “Unprecedented in 70 years”: NITI Aayog VC acknowledges economic slowdown.

 
Mending Ways: Finance Minister Nirmala Sitharaman addressed the media today at 5pm to announce reforms hoping to boost the fast-slowing economy. She announced a centralised system for tax notices, that the surcharge on FPIs and domestic investors would be rescinded, INR70,000cr of capital to be infused, that CSR would be treated as a civil liability and not a criminal matter, and more. “The pre-budget situation is restored,” she said. More details here.
 
 
A Long Road Ahead: NITI Aayog Vice Chairman Rajiv Kumar acknowledged the crisis in the financial sector and the ongoing economic slowdown, describing it as an “unprecedented situation”
 
 
"From last 70 years (we) have not faced this sort of liquidity situation where the entire financial sector is in churn," he said, adding that the government should do whatever it can to relieve the stresses in the private sector.
 
 
 MARKETS 
 
Govt exempts FPIs and domestic investors from surcharge. IRCTC files draft papers for IPO.
 
 
The What: In a bid to boost the slowing economy, Finance Minister Nirmala Sitharaman today announced the rollback of surcharge on long-term and short-term capital gain on FPIs and domestic investors.

 
Recap: Sitharaman had proposed increasing the effective tax rate on individuals with taxable annual income of above INR2,000cr by about 3% and for those earning above INR5,000cr by 7%.  
 

Subsequently, FPIs withdrew more than $3bn from Indian shares, putting enormous pressure on stocks and the Rupee.
 

Public Appearance: State-owned Indian Railway Catering and Tourism Corp. Ltd (IRCTC) on Thursday filed draft prospectus for sale of two crore shares.
 

IRCTC’s business is divided into four segments — internet ticketing, catering, packaged drinking water, and travel and tourism.

 
The IPO could fetch the Centre c. INR600cr and reduce its stake by about 12.5%.

 
The Centre will also be listing the Indian Railway Finance Corporation (IRFC), which is expected to raise c. INR2,000cr through a sale of 15% stake. 
 
 
 DEALS 

Amazon to acquire 49% stake in Future Coupons. Pawan Munjal may invest in Ola Electric. 
 
 
Amazon's Future: E-commerce giant Amazon is set to acquire 49% stake in Future Coupons - a Future Group entity that holds minority stake in Future Retail. 
 
 
Future Coupons develops value-added payment products and solutions such as corporate gift cards, loyalty cards, and reward cards primarily for corporate and institutional customers.
 
 
"Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49% stake comprising both, voting and non-voting shares," Future Retail said in a release to the exchange.
 
 
As part of the agreement, Amazon has been granted a call option.
 
 
Gearing Up: The deal is suggestive of a full-fledged retail battle which can pan out in the near future considering that global retail giant Walmart had last year bought a majority stake in Amazon India's e-commerce rival Flipkart.
 
 
Investing the Electric Way: Hero Group Chairman Pawan Munjal is in advanced talks to invest in the electric mobility arm of ride-hailing company Ola – Ola Electric.
 
 
It is interesting to note that Hero Electric is also a manufacturer of electric vehicles in India and might have plans to source its EVs to Ola’s ride-hailing fleet.
 
 
 
 COMPANIES 

Amazon Fresh launches in India. Qantas begins testing 20-hour direct flights.
 
 
Fresh From Amazon: Amazon Fresh will launch in India today (August 23). The food delivery vertical of the e-commerce giant will reportedly provide two-hour delivery of up to 5,000 products including packaged food, personal care, fruits, vegetables and dairy products. The service will begin in Bengaluru first before being rolled out in other cities. 
 
 
Flight Testing: Australian airline Qantas Airways has announced that it will start testing 20-hour direct flights from New York and London to Sydney from early October. The flights would be mostly empty for tests, with only employees (and the pilots, of course). The test runs are to see if humans can withstand being cooped in a metal cage thousands of feet in the sky for 20 hours straight. If approved for commercial runs, the flight
 
 
 PAYMENTS 

Xiaomi to foray into India’s financial sector with loan credit service. RBI permits processing of e-mandates below INR2,000.
 
 
Your Loan Has Been Approved: The world’s fourth-largest mobile vendor, China’s Xiaomi, is making a pivot to India’s booming financial services sector. Its Mi Credit service, which is scheduled to launch in the coming weeks, will reportedly offer loans up to INR1,00,000 with interest rates starting at 1.8%. But before it forays into fintech, Xiaomi will have to contend with data privacy concerns, not to mention the formidable competition that awaits it.
 
 
Digital India: The RBI has permitted processing of e-mandate on credit and debit cards for recurring payments under INR2,000 from next month. What does this mean? Customers can make recurring payments below INR2,000 without being beholden to the two-factor authentication process.
 
 
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