The Centre will stick to its borrowing programme for FY22 and will not tap the market for more funds to meet the GST compensation shortfall for states.
Government officials said the current revenue position, where both direct and indirect tax kitty of the government had seen a sharp rise, will prevent it from additional borrowing even if it meets full GST compensation shortfall for states during FY22.
The centre has pegged its gross borrowing target for FY22 at Rs 12.5 lakh crore in the Union Budget 2021-22, presented by Finance Minister Nirmala Sitharaman earlier in February. Out of this, the effective borrowing in H1 of FY 2021-22 was Rs 7.02 lakh crore.
The government now plans to borrow the balance Rs 5.03 lakh crore in the second half year (H2) of FY 2021-22 without looking for additional borrowing to meet GST obligation.
With regard to GST compensation shortfall, the government estimated that it would be Rs 1.59 lakh crore after paying states from the collections made through HST compensation cess in FY22. Out of this, an amount of Rs 1,15,000 crore has already been paid to states in two tranches from regular borrowings of the Centre. Now, it proposes to meet the balance Rs 44,000 crore through its already planned fund mobilisation exercise without disturbing the borrowing calendar.
"This is a good development that would keep the Centre's finances starting and deficit under check," said a tax expert not wanting to be named.
The Centre has estimated a fiscal deficit at 6.8 per cent of GDP in FY22. Any additional obligation or expenditure would have disturbed the equilibrium required to meet the target.
The Center's gross tax revenues in 5MFY22 grew 70 per cent while the net tax collections growth crossed the 100 per cent-mark yet again, surging by 127 per cent (largely reflecting a sharp surge in customs and excise duty receipts). The net tax collection was at 42 per cent of FY2022BE, improving further from 34 per cent of FY2022BE in July. Meanwhile, the pick-up in total expenditure remained weak, but registered positive growth in 5MFY22 at 2.3 per cent ((-)4.7 per cent in 4MFY22) led by 28 per cent growth in capital expenditure while revenue expenditure dropped to (-)1 per cent.
On the indirect tax front as well the going has been good. The gross GST revenue collected in the month of September 2021 stood at Rs 1,17,010 crore, a growth of 23 per cent over the same month last year.
Now the required run-rate is Rs 1.18 lakh crore for the rest of FY2022 to meet the Budget estimates for GST. This, with economic recovery in progress, should not pose much of a challenge.
Petrol and diesel prices on Sunday rallied to their highest ever levels across the country, as fuel rates were hiked again by 35 paise a litre.
The price of petrol in Delhi rose to its highest-ever level of Rs 105.84 a litre and Rs 111.77 per litre in Mumbai, according to a price notification of the state-owned fuel retailers. In Mumbai, diesel now comes for Rs 102.52 a litre; while in Delhi, it costs Rs 94.57.
This is the fourth straight day of 35 paise per litre increase in petrol and diesel prices. There was no change in rates on October 12 and 13.
Diesel prices have now increased 19 out of the last 23 days taking up its retail price by Rs 5.95 per litre in Delhi.
With diesel prices rising sharply, the fuel is now available at over Rs 100 a litre in several parts of the country. This dubious distinction was earlier available to petrol that had crossed Rs 100 a litre-mark across the country a few months earlier.
Petrol prices had maintained stability since September 5, but oil companies finally raised the pump prices last week. Petrol prices have also risen on 16 of the previous 19 days taking up its pump price by Rs 4.65 per litre.
OMCs had preferred to maintain their watch prices on the global oil situation before making any revision in prices. This is the reason why petrol prices were not revised for the last three weeks. But extreme volatility in the global oil price movement has now pushed OMCs to effect the increase.
Crude price has been on a surge rising over three year high level of over $ 84.6 a barrel now. Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to average prices during August.
The International Monetary Fund (IMF) has commended Indian authorities' "swift and substantial" response to the Covid-19 pandemic and noted that there is the possibility of "a faster than expected recovery".
"Directors commended the authorities' response to the pandemic which includes scaled-up support to vulnerable groups, monetary policy easing and liquidity provision, accommodative financial sector and regulatory policies, and continued structural reforms," the IMF said on Friday reporting on its executive board's consultations held with India to assess the state of its economy and finances.
"The authorities' economic response, which was swift and substantial, has included fiscal support, including scaled-up support to vulnerable groups, monetary policy easing, liquidity provision, and accommodative financial sector and regulatory policies.
"Despite the pandemic, the authorities have continued to introduce structural reforms, including labour reforms and a privatisation plan," it added.
The report of what is known as "Article IV Consultations" in reference to the article in the IMF agreement requiring the periodic assessment, however, warned of the risks from the Covid-19 pandemic lurking ahead especially due to its deleterious effect on people's development.
"The economic outlook remains clouded due to pandemic-related uncertainties contributing to both downside and upside risks. A persistent negative impact of Covid-19 on investment, human capital, and other growth drivers could prolong the recovery and impact medium-term growth.
"While India benefits from favourable demographics, disruption to access to education and training due to the pandemic could weigh on improvements in human capital," it said.
Along with the caution, the report added a note of optimism: "At the same time, the recovery could also be faster than expected. Faster vaccination and better therapeutics could help contain the spread and limit the impact of the pandemic. In addition, successful implementation of the announced wide-ranging structural reforms could increase India's growth potential."
The report repeatedly emphasised the importance of vaccinations.
"Directors agreed that addressing the health crisis remains a near-term policy priority. In that context, they welcomed the recent increase in vaccinations," it said.
Looking back, the IMF noted "that India was among the fastest-growing economies in the world in the decade before the pandemic, lifting millions out of poverty. While the economy was moderating prior to the Covid-19 shock, the pandemic implied unprecedented challenges".
"Two Covid-19 waves caused a health and economic crisis however, the economy is gradually recovering. Following the first wave, the GDP contracted an unprecedented 7.3 per cent in FY (fiscal year) 2020/21. The second wave resulted in another sharp fall in activity, albeit smaller and shorter, and recent high-frequency indicators suggest an ongoing recovery.
"Growth is projected at 9.5 per cent in FY2021/22 and 8.5 per cent in FY2022/23," the IMF said.
While the inflation pressures have been higher, inflation in fact eased to 5.6 per cent in July, "returning to within the RBI's (Reserve Bank of India) inflation target of 4.2 per cent, driven by softer food prices and base effects", it said.
The IMF said that the fiscal deficit has increased to 8.5 per cent for the central government and 12.8 per cent for the state governments because of "the contraction in economic activity, lower revenue, and pandemic-related support measures".
Large corporates have benefited from the "easier conditions in capital markets" even though "despite policy support, bank credit growth has remained subdued".
The foreign exchange reserves have increased because of net inflows and improvement in the current account, it said, but expected a "return to a deficit of about 1 per cent of the GDP in FY2021/22 due to a gradual recovery in domestic demand and higher oil prices".
Conglomerate Tata Group plans to pilot synergy between all its airlines to compete in various market segments.
Post the SPA transaction, Tatas will have two full-service carriers -- Vistara and Air India -- along with two low-cost airlines -- Air India Express and AirAsia India -- and a ground and cargo handling company, AISATS.
Accordingly, plans are afoot to run all these brands as independent entities under one vertical for some time after the SPA.
Nonetheless, the group intends to drive-in major synergies between the airlines in terms of fleet management, route deployment, flight timings and airport slot planning.
In terms of USPs, Vistara is expected to retain the premium services tag, while Air India will predominantly focus on key international and metro routes.
The domestic feeder traffic is expected to be driven by AirAsia India which may get few aircraft from Air India's fleet.
Furthermore, mergers will depend on profitability, performance and market situation apart from each airline's unique culture and suitability of brand.
Regarding the plans, a query sent to the Tata Group went unanswered.
The development assumes significance since Tata Sons' subsidiary Talace emerged as the highest bidder for the national carrier under the divestment process.
It quoted an enterprise value of Rs 18,000 crore for the 100 per cent equity shareholding of Centre in Air India along with that of Air India Express and AISATS.
Out of Rs 18,000 crore, Talace will retain Air India's overall debt worth Rs 15,300 crore, while the rest will be paid to the Centre as the cash component.
The Centre had stipulated a reserve price of Rs 12,906 crore.
Based on the bid results, which were announced last Friday, the Centre will enter into a share purchase agreement (SPA) with Talace by December-end.
All in all, Tata Sons' subsidiary Talace will, among other assets such as human resources, get more 140 aircraft as well as 8 logos.
In terms of fleet, Tatas will get Air India's 117 wide-body and narrow-body aircrafts and Air India Express's 24.
A significant number of these aircrafts are owned by Air India.
It will also operate these aircraft on over 4,000 domestic and 1,800 international routes.
Additionally, it will get access to Air India's frequent flyer programme which has more than three million members.
India's merchandise exports rose by 22.63 per cent on a year-on-year basis in September 2021.
Exports rose to $33.79 billion from $27.56 billion reported for September 2020.
The data furnished by the Ministry of Commerce and Industry showed that in comparison to September 2019, last month's exports rose by 29.86 per cent.
On a sequential basis, exports for last month, inched up from $33.28 billion worth of merchandise exports reported for August 2021.
"Non-petroleum and non-gems and jewelry exports in September 2021 were $25.34 billion, as compared to $21.33 billion in September 2020, registering a positive growth of 18.82 per cent," the ministry said.
"As compared to September 2019, non-petroleum and non-gems and jewelry exports in September 2021registered a positive growth of 33.39 per cent."
Similarly, India's merchandise imports in September 2021 increased, rising by 84.77 per cent, on a year-on-year basis, to $56.39 billion from $30.52 billion.
The data showed that in comparison to September 2019, last month's imports rose by 49.59 per cent.
Sequentially, September's imports were higher than $47.09 billion worth of merchandise imports reported for August 2021.
"Non-oil and non-gold imports were $33.84 billion in September 2021, recording a positive growth of 40.45 per cent, as compared to non-oil and non-gold imports of $24.09 billion in September 2020."
"Non-oil and non-gold imports in September 2021 recorded a positive growth of 23.79 per cent over September 2019."
The e-commerce players registered a whopping $4.6 billion (nearly Rs 32,000 crore) sales during the first week of the festive season -- a 23 percent on-year growth -- driven by mobiles and fashion products, a new report showed on Thursday.
Flipkart Group emerged as the leader during the festive week sales, with 64 percent market share, followed by Amazon with 28 percent market share.
Smartphones worth Rs 68 crore were purchased every hour across the platforms during the October 2-10 sale period, according to data provided by homegrown market research firm RedSeer.
RedSeer had forecast a sale of $4.8 billion (over Rs 36,000 crore) in the first week of the festive sale.
"Constructs were built carefully by the platforms through BNPL (buy now pay later) schemes and bank tie-ups, as well as seller-driven discounts to serve up the most competitive prices of top leading brands and serve the aspiring customer," said Ujjwal Chaudhry, associate partner at RedSeer Consulting.
The overall online shopper base grew by 20 percent compared to last year, with tier II population contributing to 61 percent of all shoppers.
The overall gross merchandise value (GMV) per shopper has grown by 1.04X.
After a poor showing during last year, customer demand for fashion was back this year with affordable models and new platforms targeting tier II users.
Online fashion platform Meesho has been able to garner a 39 percent share with their affordable offerings targeting a typical Indian household looking for good-value products.
However, the demand for other categories like home furnishings and decor was subdued during the festive week.
With 40 million shoppers coming from tier 2 cities and beyond, the festive sales were dictated by affordability schemes.
With affordability schemes and an aspiring customer base, the GMV per user went from Rs 4,980 in 2020 to Rs 5,034 in 2021, the report said.
India's key equity indices -- S&P BSE Sensex and NSE Nifty50 -- made gains during Thursday's morning trade session.
In the process, S&P BSE Sensex made an intraday high of 61,159.48 and Nifty50 touched 18,294.75 points.
At 10.30 a.m., the 30-scrip sensitive index traded at 61,086.23 points, up 349.18 points or 0.57 per cent.
The Sensex opened at 61,088.82 points from its previous close of 60,737.05 points.
Besides, the NSE Nifty50 traded at 18,282.65 points, up by 120.90 points or 0.67 per cent.
It opened at 18,272.85 points from its previous close of 18,161.75 points.
Almost a year after the State government suffered a big setback when the Kerala High Court dismissed their plea against Centre's move to lease out Thiruvananthapuram international airport to Adani Group, starting midnight Thursday, the running of the airport here will be handed over to the Adani Group by the Airports Authority of India (AAI).
This airport, which was declared as the fifth international airport in the country in 1991, will now be run by the Adani Group for the next five decades.
In February 2019, the financial bid for privatising five airports in the country was opened and it was won by Adani Enterprises.
The other airports that the Adani firm got are situated in Mangaluru, Ahmedabad, Lucknow and Jaipur.
The Kerala government too placed a bid, but the Adani firm won it by quoting a bigger amount. While the Kerala government bid for Rs 135 per passenger, the Adani firm quoted Rs 168.
After losing the bid, the Kerala government approached the Kerala High Court, but failed to get a favourable direction, following which they along with the Airport Employees Union approached the Supreme court and the case is going on.
Consequent to the takeover, for the next three years the employees of the AAI along with the Adani's will run the airport, after which they can either become part of the new group or get transferred to any of the other airports of the AAI.
Speaking to IANS, an airline official on condition of anonymity said what Adani needs to concentrate on is to increase the connectivity and the number of flights.
"As of now the present international airport terminal has facilities, which includes four aero bridges. The need of the hour is there are two terminals here. Terminal one sees the arrival of few domestic aircrafts, while terminal two has both international and domestic. The best idea would be to see that all the flights are handled from terminal two and leave the terminal one exclusively for cargo aircrafts," said the official who has worked in a few international airports in the country.
He also added that since Air India has now been taken over by Tata's, one will have to wait and see how much pressure the Adani's can put on Tata's.
"If this airport has to become really successful, Adani's should ensure there are direct flights from here to Europe, the US and to Australia through Singapore. After the Covid pandemic struck, flights to Singapore have not happened. Singapore is a crucial hub," added the official, who did not wish to be identified.
Incidentally, for the Adani's, they have the added advantage of building the Vizhinjam international seaport, which is coming up a few kilometres from the airport and one has to wait and see how best they are going to use it.
The 30-scrip Sensitive Index (Sensex) on Wednesday opened on a positive during the morning trade.
The Sensex of the BSE opened at 60,619.91 points and touched a high of 60,621.72 points. The Sensex touched a low of 60,452.29 points.
On Tuesday, the Sensex closed at 60,284.31 points.
The Sensex is trading at 60,522.68 points, up by 249.67 points or 0.41 per cent.
On the other hand, the broader 50-scrip Nifty at National Stock Exchange (NSE) opened at lower note at 18,097.85 points after closing at 17,991.95 points.
The Nifty is trading at 18,066.10 points in the morning.
The 30-scrip Sensitive Index (Sensex) on Tuesday opened on a negative note and turned positive during the morning trade.
The Sensex of the BSE opened at 60,045.75 points and touched a high of 60,258.48 points. The Sensex touched a low of 59,991.59 points.
On Monday, the Sensex closed at 60,135.78 points.
The Sensex is trading at 60,253.82 points up by 118.04 points, or 0.20 per cent.
On the other hand, the broader 50-scrip Nifty at National Stock Exchange (NSE) opened at lower note at 17,915.80 points after closing at 17,945.95 points.
The Nifty is trading at 17,965.45 points in the morning.
India's key equity indices - S&P BSE Sensex and NSE Nifty50 - made gains during Monday's morning trade session.
Accordingly, the 30-scrip sensitive index traded at 60,123.47 points around 9.45 a.m., up 64.41 points or 0.11 per cent.
The Sensex opened at 60,099.68 points from its previous close of 60,059.06 points.
Besides, the NSE Nifty50 traded at 17,939.35 points, up by 44.15 points or 0.25 per cent.
It opened at 17,867.55 points from its previous close of 17,895.20 points.