GST Council amps up anti-profiteering measures. NITI Aayog asks two-wheeler industry to step up efforts to adopt EV technology. Government seeks five-year ban on IL&FS’s auditors. Reason to hope for non-bank lenders. And a bright star on the dark NBFC horizon. Arvind Subramian’s GDP calculations would mean Germany overstates its growth while Brazil understates it. Piyush Goyal warns consultants against misguiding investors to break the law. Are teenagers growing horns because of smartphone addiction? And why the SMS industry is booming.
Moving on to the top Business news today:
GST Council amps up anti-profiteering measures. NITI Aayog asks two-wheeler industry to step up efforts to adopt EV technology.
As expected, when the new Finance Minister Nirmala Sitharaman chaired the GST Council meeting for the first time she extended the tenure of the National Anti-Profiteering Authority by two years.
Ease of Asking for Aadhaar: The Council also concluded that Aadhaar-based GST registration will simplify the process and, since businesses will not be required to provide any other documents, improve the ease of doing business.
Taxing Times for Tax-Evaders: Furthermore, besides extending the GST returns filing deadline for the last fiscal year by two months, the Council also introduced stringent anti-tax evasion measures. Businesses that pocketed tax cuts meant for consumers had to earlier pay a flat penalty of INR25,000. Now, the fine will be 10% of the profiteered amount.
Pull Up Your Socks: In a meeting with representatives of the two-wheeler industry, government think-tank NITI Aayog warned officials that if they did not wake up and board the electric vehicle (EV) train, start-ups would beat them to it.
Established players including Hero, Honda, Bajaj and TVS were present at the meeting. These players reportedly want a gradual conversion to EV technology while ambitious start-up companies, already springing up across the country, say they are ready to welcome a swifter transition.
NITI Aayog asked manufacturers to present an EV conversion plan in two weeks’ time. The government itself is eager to incentivise electric vehicles in India to decrease reliance on fuels, given India’s status as an oil importer and the environmental hazards of conventional fuel technology.
Government seeks five-year ban on IL&FS’s auditors. Reason to hope for non-bank lenders. And a bright star on the dark NBFC horizon.
Auditing the Auditors: Following the IL&FS Financial Services default in September, the government is seeking a five-year ban on its auditors. These included Deloitte and BSR, which were accused by the government of ignoring signs that pointed to IL&FS’s problems and which could have avoided the liquidity crisis the default sparked.
But Deloitte and BSR have protested the move, arguing that the National Company Law Tribunal (NCLT) doesn’t have the jurisdiction to decide on the ban since, they say, auditors can’t be put in the same category as independent directors and senior managemen.
Now the NCLT has adjourned the case till 15 July and has asked the Ministry of Corporate Affairs to file its reply in coming four days.
High Hopes: IL&FS’s default may have sparked a disastrous crisis in the non-bank lending sector but some industry leaders are still optimistic.
In his message to shareholders in Kotak Mahindra’s annual report, the bank's Managing Director Uday Kotak said he doesn’t see the troubles affecting non-bank lenders in India as a “systemic risk”.
He added that he is “confident that the policy-makers and regulators will take steps to manage the situation”.
Bright Star: Maybe there is indeed reason for hope. Bajaj Finance, for example has seen its stocks surge 25% since the IL&FS crisis began, even as many of its peers’ stocks plunged as much as 89%. Only this year, Bajaj Finance’s stock has gained as much as 36%.
A lot of the credit for this goes, of course, to the company’s policy of diversification of lending beyond the housing finance sector, unlike other NBFCs.
Arvind Subramian’s GDP calculations would mean Germany overstates its growth while Brazil understates it. Piyush Goyal warns consultants against misguiding investors to break the law.
No Dearth of Debates: Arvind Subramanian’s claim that the growth of GDP of India was over-estimated by 2.5% for most of this decade continues to spark passionate commentary.
Indian Express Contributing Editor Surjit Bhalla applied Subramanian’s methodology to calculate the GDP 89 countries and found that using the former CEA’s calculations would mean that GDP was over-estimated or under-estimated in as many as 43 countries. Germany, for example, would be over-estimating its annual growth by 1.8% while Brazil would be under-estimating it by 3%.
Commas & Full-Stops: Commerce and Industry Minister Piyush Goyal warned consultants against misleading investors by exploiting possible loopholes in policy to break the law.
Speaking on the government’s recent denial of FDI to multi-brand retail and addressing mainly the “Big Four” firms (PwC, Deloitte, KPMG and E&Y), Goyal said any attempt to find “commas and full-stops” in a law with the aim of bypassing or violating it “is not possible and that cannot even be possible for us to overlook”.