RBI keeps repo rate unchanged at 5.15%, accommodative stance remains. FY21 GDP growth pegged at 6%. Income Tax Department launches e-calculator for individuals to estimate their tax liability. Cheque clearing to become quicker with RBI set to introduce pan-India Cheque truncation system by Sept 2020. Flipkart shuts down Jabong; to channelize all energies towards Myntra.
Table of Contents
Holding Your Horses (For Now)
The RBI has left the repo rate unchanged at 5.15%, as was widely accepted, while it has decided to maintain its accommodative stance. This was announced following the three-day meeting of the six-member Monetary Policy Committee (MPC). All six members voted in favour of maintaining the status quo due to rising inflationary rate and slow transmission of the already announced rate cuts.
The RBI cut GDP growth forecast for first half of FY21 by 30-40 basis points from 5.9%-6.3% to 5.5%-6%. The FY21 GDP growth forecast is at 6%, while for FY20 it is at 5% with 4.6%-5.5% for second half of FY20. Moneycontrol
The Central Bank also announced several measures to boost realty, housing, MSME and NBFC segments. You can read the RBI Governor's Sixth Bi-monthly Monetary Policy Statement, 2019-20 here.
In case you weren't aware of it, the 15th edition of Auto Expo - Asia's largest carnival of automobiles - is underway in Noida from February 5th to February 12th.
Many big auto companies like Tata Motors, Mahindra and Mahindra and Hyundai Motor India are announcing several new vehicles launches in the near to mid-term. But what's unique about this Auto Expo is the energy and eagerness with which Chinese carmakers have sought to enter the world's fourth-largest auto market.
Top Chinese carmakers SAIC Motor, Great Wall and Haima Automobile made their debut at the Expo yesterday. MG Motor India, a unit of SAIC, plans to roll out at least half a dozen new vehicles through 2025, to add to its existing Hector sport-utility vehicle and the ZS electric SUV. Great Wall and Haima said they would launch new vehicles in India in the next few quarters. The former also plans to invest in a lithium-ion battery manufacturing unit in the country. [Livemint]
Electric Some Other Day
Speaking of electric vehicle technology, Maruti Suzuki, India's largest carmaker, has said it will not be launching an electric vehicle even as its competitors in India and abroad go full throttle on going electric. Chief Executive Kenichi Ayukawa cited range anxiety and the high cost of acquisition as reasons for the auto giant's decision. [BS]
Waives on the Sand
Vodafone Group CEO Nick Read has said that Vodafone India is seeking a waiver of interest and penalties on its adjusted gross revenue (AGR) dues and wants to pay the principal over ten years with a two-year moratorium. Reiterating that the situation in India is critical, Read said his company won't infuse any fresh capital into Vodafone Idea.
Vodafone Idea faces AGR dues of over ?53,000cr ($7.44bn). Interest and penalties are estimated to account for over 75% of this amount. [ET Telecom News]
Airtel-ing it Like It Is
Meanwhile, Gopal Vittal, Bharti Airtel's CEO, has said the telecom operator will not bid for the 5G spectrum at the price recommended by telecom regulator TRAI. Airtel's balance sheet is debt-laden and it has statutory dues of around ?35,500cr ($4.98bn) as per the AGR verdict.
TRAI has recommended ?492cr ($69m) as the base price of the 5G spectrum, a price tag many telcos have criticised as too hefty. [BS]
The Income Tax Department has launched an e-calculator for individuals to estimate their tax liability if they opt for the new tax slabs, without claiming deductions and exemptions, for income tax return filing as announced by Finance Minister Nirmala Sitharaman in the recent Union Budget 2020. [Business Today]
The calculator can be found on the income tax department's official e-filing website here.
Need for Speed
In a bid to accelerate the time taken to clear bank cheques, the Reserve Bank of India (RBI) today has said that it has decided to implement a cheque truncation system (CTS) across the country by September this year.
CTS, implemented in Delhi in 2008 is currently operational in some major cities across India. The system essentially removes the need to move cheques across bank branches, other than in exceptional circumstances for clearing purposes. Instead of movement of cheques across banks, an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc. This effectively reduces the time required for their collection and brings elegance to the entire activity of cheque processing. [Financial Express]
Ecommerce platform Flipkart has formally shut its fashion portal Jabong.com, to focus on its lifestyle portal Myntra.
Following the development, Jabong’s portal and the app will redirect to Myntra’s shopping window.
Blast from the Past
Myntra, a Flipkart Group company, had acquired Jabong in July 2016 for $70 million in cash and Flipkart had bought Myntra in May 2014. [Hindu BusinessLine]
Nike to Fly
Nike's Vaporfly running shoe has caused an uproar in the last few weeks over claims that it offers its users unfair advantage by improving energy efficiency by at least 4%.
Despite many accusing the shoes of being like “technological doping”, the World Athletics has given it the seal of approval, making them eligible for Tokyo Games. Brushing aside all rumours and debates, the shoes will go on limited sale at end of month. More on this here.
How well do you know the top news of the last week? Have a go at our TheWeekThatWas Quiz and test your wits.