QBiz: Modi Talks GST With US CEOs; Amazon to Enter Food Retail Biz
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1. GST to Make India More Business Friendly: Modi in Meet With US CEOs
Prime Minister Narendra Modi on Sunday said India has now emerged as a business-friendly destination, more so with the upcoming implementation of landmark GST beginning next month, while asking CEOs of top US companies to invest in the country.
Modi also said India attracted largest foreign direct investment (FDI) as a result of the NDA government policies in the last three years, during his interaction with a group of CEOs of top 20 American firms.
In a round table interaction with the group, including Tim Cook of Apple, Satya Nadella from Microsoft, Sunder Pichai from Google, John Chambers from Cisco and Jeff Bezos of Amazon, Modi listed out steps taken by his government in the last three years and next moves.
Source: PTI
2. GST Expected to Spur Growth in Formal Job Sector to 10-13%
The job market is looking forward to a big boost from the new GST regime and expects over one lakh immediate new employment opportunities, including in specialised areas like taxation, accounting and data analysis.
The historic tax reform, to be rolled out from 1 July, is expected to help the formal job sector attain an annualised growth rate of 10-13 percent and fuel demand for professionals in various segments of the economy, experts said.
Indian Staffing Federation's President Rituparna Chakraborty said the GST (Goods and Services Tax) will make procurement and distribution of goods much faster while cash flow is expected to become more predictable and profitability should improve, too.
Source: PTI
3. Tap Equity Market: Govt Tells 5 PSU Banks
The central government has asked five state-owned banks to raise capital from the markets to meet their requirements for the fiscal year 2017-18. The Department of Financial Services has asked the relatively strong public sector banks (PSBs) — Canara Bank, Bank of Baroda (BoB), Indian Bank, Vijaya Bank, and Syndicate Bank — with a fairly good market capitalisation to not depend on the government’s recapitalisation plan.
“We have asked five strong banks that have consistently performed well, to raise funds on their own from the market. We are encouraging them to tap the market as their market capitalisation is fairly good,” said a government official.
“Three banks — Vijaya Bank, Syndicate Bank, and Indian Bank — are small but with good fundamentals and a good market price. We have encouraged them to tap the market,” the official said.
The Budget has allocated Rs 10,000 crore for the recapitalisation of state-owned banks as part of Indradhanush, the seven-pronged strategy to revive PSBs.
Source: Business Standard
4. RBI's New Diktat Could See Banks Face Rs 50,000 Crore Blow
The Reserve Bank of India shocked bank chiefs late on Friday by demanding a steep increase in provisioning requirements for loans being referred to the bankruptcy courts, a move likely to take a Rs 50,000-crore toll on their earnings this fiscal, said two bankers familiar with the order.
RBI told banks to set aside at least 50 percent of the loan amount as likely losses for all cases referred to the insolvency process. The regulator also said that provisioning should be 100 percent in those cases that don’t get resolved in the initial mandatory period for loan restructuring and instead are forced into liquidation, said the executives.
The central bank's letter unnerved bankers who were expecting liberal provisioning norms after RBI ordered them to start insolvency proceedings against the country's top 12 defaulters, which include Essar Steel, Bhushan Steel and Alok Industries.
Source: The Economic Times
5. Snapdeal Sale to Flipkart Delayed Due to Complex Due Diligence Process
A complex due diligence process is delaying the Snapdeal sale to Flipkart, two people familiar with the matter said.
Snapdeal’s sale to Flipkart is on track despite the delay with the due diligence process, the people said. The deal is expected to conclude sometime in July, they added. The due diligence process had started last month.
Flipkart is expected to pay slightly less than its preliminary offer of 1 billion dollars to buy out Snapdeal, with the final deal value expected to be in the range of 700-900 million dollars, said the two people cited above, both of whom spoke on condition of anonymity as the discussions are confidential.
Source: Livemint
6. India’s Holding of American Govt Securities Highest at $124.1 Billion
India increased its holding of American government securities to 124.1 billion dollars at the end of April. This is also the highest level since July 2016 when the exposure stood at 123.7 billion dollars.
At the end of April, Japan had the maximum holding of 1.106 trillion dollars, followed by China with 1.092 trillion dollars.
The latest data available with the US Treasury Department show that India's exposure jumped by 7 billion dollars to 124.1 billion dollars in April. The country had holding to the tune of 117.1 billion dollars in March.
Among the BRIC nations, India had the third largest exposure to the US government securities after China and Brazil.
Source: PTI
7. GST Impact on ad Spend: Positive For FMCG, Auto; Negative for E-Comm Firms, Say Reports
The levy of GST will improve the ability of corporates to spend on advertising, according to a recent report by Kotak Mutual Fund.
The report said GST could reduce the cost of advertisement and lead to an increase in spending by firms intent on promoting their products.
Companies that gain from the lower cost could plough back the money in advertising, thereby increasing their ad spend by about 10 percent.
An EY report, meanwhile, says automotive, FMCG and consumer durables firms are also set to advertise more due to GST. E-commerce and banking and financial services companies, on the other hand, are set to see a negative impact. Petroleum companies are slated to see the biggest impact on ad spends due to GST, the EY report adds.
Source: The Hindu BusinessLine
8. Amazon's Food Retail Plan May Get Government Nod in July
Amazon’s entry into the food retail business in India will move a step closer with the government set to issue the final certificate of approval to the company’s foreign direct investment (FDI) proposal in July, according to a senior official.
The Department of Industrial Policy and Promotion (DIPP), which had cleared the Seattle-based company’s proposal in April, will issue the clearance as the final authority on the matter after the abolition of the Foreign Investment Promotion Board (FIPB). DIPP had earlier sent the proposal to the Department of Economic Affairs for the final signing off by the finance minister.
Amazon will be the first big company to enter the food retail segment after the sector was opened up to foreign entities last year.
Source: The Economic Times
9. HDFC Life, Max Prepare New Structure For Merger
HDFC Life Insurance Co Ltd and Max Life Insurance Co. Ltd have carved out a new structure for their proposed merger after the Insurance Regulatory and Development Authority of India (Irda) rejected the original three-step union, said two people with knowledge of the discussions.
The two firms have decided to extend the deadline for completing the merger, they said, declining to be identified citing the sensitivity of the discussions. Meanwhile, HDFC Life has also informally asked its bankers to start preparing for an initial public offering (IPO). The deadline for the original merger plan expires on 30 June. HDFC Life and Max spokespersons did not respond to emails seeking comment.
Source: Livemint
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