Mahindra group to pump in $1 bn in US over next 5 years

The Mumbai-headquartered group, which currently employs around 3,000 people in the country, also plans to double the headcount over the next five years as it looks to expand operations.

Diversified Mahindra group plans to invest USD 1 billion across business verticals in the US over the next five years as it aims to double revenues from the American market to USD 5 billion.

The Mumbai-headquartered group, which currently employs around 3,000 people in the country, also plans to double the headcount over the next five years as it looks to expand operations.

“We have so far invested around USD 1 billion in the US among all the businesses and we should invest another billion over the next five years,” Mahindra & Mahindra Managing Director Pawan Goenka told PTI here in an interview.

The quantum of investment, however, would depend on various factors like market conditions and success of various projects that are currently underway in the US, he added.

Elaborating on various strategic projects, Goenka said the company has bid for a US postal service contract and if it comes through it would help the company grow exponentially in the country.

When asked about the group’s ambitions in terms of revenues in the US, Goenka said: “In the next five years, we are targeting doubling revenue to about USD 5 billion.”

The USD 19 billion group currently generates around USD 2.5 billion from its seven business verticals in the US. The major group firms active in the country include IT major tech Mahindra and Mahindra USA which sells tractors and utility vehicles in the country.

When asked to elaborate on the factors that would help the company achieve desired results, Goenka said the growth would be led by various factors like the launch of a new off road vehicle by its arm Mahindra North America Technical Centre (MNATC) besides other group entities.

“The growth will be led by Mahindra USA where we intend to double revenues from USD 500 million to USD 1 billion in next five years and then there is Tech Mahindra,” he added.

Mahindra is also looking at doubling its manpower in the country over the next five years.

“Mahindra currently employs more than 3,000 locals in the US and as things are going we are going to double that over the next 4-5 years,” Goenka said.

He said success of Mahindra brand in the US is very important as accomplishment in the country would mean recognition in various other geographies.

“Building the Mahindra brand in the US is very important for us because it is the place everyone looks up to. The brand which gets successful in this market gets automatic recognition in so many places,” he said.

While confirming that Tech Mahindra is facing visa issues, he said the IT major is working on resolving the matter.

“Other than IT business where… there are both locals and people brought in from India, none of our other businesses have huge number of Indians (brought) to the US for work,” Goenka said.

He further added: “The company’s objective has never been to bring in people from India. We have invested here we have employed people here and thus we are not really been impacted by the new polices.”

After being nudged by the Trump Administration, the IT major Tech Mahindra now has been focusing on local hiring. It has been recruiting from colleges in the US and this year it plans to add around 2,200 people in the country, which remains its biggest single market in the world.

When asked if the company is facing any discrimination in the US, Goenka said: “There is no discrimination I can think of in conducting business in the US…laws, taxes are same for everyone. I don’t see any kind if disadvantage for Indian multinationals here.”

Tata Tiago enters the list of India’s top selling cars of June 2017

Available in 17 different variants, Tiago ranges from Rs 3.28 lakh for the base model up to Rs 5.8 lakhs for the top end. The new revised prices are due to the new GST regime in the country and as per the new GST norms, cars across different segments and body styles have seen a tax reduction between 1.7 percent (all sub 4-metre vehicles).

Tata Tiago has made its way in the list of India’s top 10 selling cars in the month of June. Launched in 2016 at Rs 3.4 lakh, this is the first time the car has made it in the top 10 selling list. Tata managed to sell 5438 units of its hatchback Tiago in June which helped the cars to secure 10th position in the list.

Available in 17 different variants, Tiago ranges from Rs 3.28 lakh for the base model up to Rs 5.8 lakhs for the top end. The new revised prices are due to the new GST regime in the country and as per the new GST norms, cars across different segments and body styles have seen a tax reduction between 1.7 percent (all sub 4-metre vehicles).

In this range, the Tata Tiago competes with the like of Hyundai Grand i10, Renault Kwid, Maruti Suzuki Alto 800 and Datsun Redi-go.

NITI Aayog member says loan waiver relieves less than 10% of distressed farmers

National Sample Survey Office data from 2012-2013 shows that only 18 percent of farmers take loans from institutional sources.

A key agriculture expert at NITI Aayog has stated that the recently announced blanket farm loan waivers by state governments will benefit less than ten percent of the distressed farmers.

Professor Ramesh Chand of the government policy think-tank, told Hindustan Times that the National Sample Survey Office (NSSO) data from 2012-2013 points out that only 18 percent of farmers take loans from institutional sources, relying heavily on informal money lenders who do not come under the waivers’ influence. NITI Aayog puts the number of farmers, who borrow money from money lenders, at 50 percent.

The money lenders charge an exorbitant interest rate — three to four percent — in states such as Uttar Pradesh, Punjab and Haryana.

The latest data from the National Bank for Agriculture and Rural Development (NABARD) puts repayment figures at 70 percent. This means that only small section of farmers default on their loans in the first place. “So, eventually, loan waivers benefit around five to 10 percent of farmers and not all of them are non-wilful defaulters.”

“Waiving loan can bring short-term relief, but there has to be a full strategy in place to ensure that loans reach to them and their dependence on money lenders is minimised,” said a senior public sector bank official, who did not wish to be identified, reported Hindustan Times.

A majority of the low-interest credit goes to the farmers that are well-off.

Finance minister Arun Jaitley had increased the total agricultural loan target by Rs 1 lakh crore to Rs 10 lakh crore for 2017-18, in the Union Budget on February 1.

Previously, the RBI governor Urjit Patel, financial experts, institutional equities and even activists have given their arguments against the move.

On the other hand, protests by farmer organisations demanding loan waivers were supported by opposition parties.

G20 summit begins today in Germany: North Korea, climate, trade to dominate agenda

It is expected that Prime Minister Narendra Modi will reinforce India’s commitment to the Paris climate accord and renewable energy.

The two-day G-20 Summit kicks off today in the German city of Hamburg where leaders from the world’s 20 major economies will be meeting to discuss key issues, among which climate change and global trade are expected to take centrestage.

The success of the summit will rely heavily on Donald Trump and Angela Merkel finding common ground on a range of pressing issues. Trump’s first time at the G-20 Summit is clouded by US’ plan to withdraw from the Paris Agreement on climate change after the G7 summit in May.

Closer home, Prime Minister Narendra Modi, who will be heading to Hamburg after a three-day visit to Israel, will most likely reinforce India’s commitment to the Paris climate pact and renewable energy.

He is also likely to express his reservations over the trade protectionism advocated by some economies.

On the sidelines, PM Modi will hold a meeting with BRICS leaders ahead of the G20 summit. He will also likely be holding talks with Chinese President Xi Jinping. The meeting acquires significance as India and China are currently in the middle of a military standoff at the India-Bhutan-China trijunction in Sikkim sector of the border.

However, China said on Thursday that there is no possibility of a bilateral meeting between two leaders as “the atmosphere is not right.”

According to the 2015 Paris climate accord, 196 countries including the US, had agreed to the take steps to keep the global rise in temperatures well below two degrees Celsius.

As soon as Trump vowed to pull out from the Paris accord, world leaders across the spectrum criticised his decision. India, China, Canada, and other European countries including G20 president Germany reaffirmed their commitment to the agreement.

Since the United States is the second largest emitter of the carbon in the world, commentators are eagerly watching whether world leaders will decide to go on a collision course with President Trump.

US and Them

Given the US president’s unpredictable nature, his meetings with various world leaders will be scrutinised the world over.

As confirmed by various sources in the US government, Trump will be meeting with Russian President Vladimir Putin on the sidelines of the summit. The meeting assumes significance amid renewed doubts over Russian meddling in last November’s US Presidential elections. The FBI is currently conducting a probe in the matter.

In addition, the two leaders are embroiled in several contentious foreign policy issues — bombing Russia’s ally Syria, hostilities in Ukraine and Moscow’s “meek” support for North Korea.

Another interesting meeting would be between Trump and Chinese President Xi Jinping. Their interaction would come just after US approval of USD 1.3 billion arms sale to Taiwan. Add to it the US warship sailing near the disputed islands in the South China Sea on Sunday.

North Korea

On Tuesday, North Korea successfully test-launched its first Inter-Continental Ballistic Missiles (ICBM) named Hwasong 14 as “a gift” to the US on their Independence Day.

The missile, which has an estimated range of 6,700 km, comes as a blow to Trump, who had earlier said Pyongyang’s goal of having an ICBM “won’t happen”.

The reclusive state’s latest bravado is expected to overshadow all other trade and diplomatic disputes.

The US President expects China to contain North Korea, as he mentioned in a series of tweets. However, a few tweets later, he ridiculed China claiming that “Trade between China and North Korea grew almost 40 percent in the first quarter.”

Global Trade

As countries across the world are trying to deal with the steel overcapacity crisis, the US President’s “Buy American, Hire American” policy has made life more difficult for other world leaders.

The crisis has forced the steel giants like India’s Tata Steel to cut production and go for consolidation.

In March, Japan, the second largest producer of steel in the world, had approached the World Trade Organisation (WTO) alleging that duties imposed on steel imports by India violate trade norms.

 

Jobs, admissions on fake caste certificates not valid: Supreme Court

A bench of Chief Justice J S Khehar and Justice D Y Chandrachud did not concur with the findings of the Bombay High Court that if a person continues in service for a long period of time and the certificate is found to be fake at a later stage then, he or she may be allowed to continue in the service.

The Supreme Court today held that government jobs or admissions secured under reserved category by using forged caste certificates cannot be held valid or sustained in the eyes of the law.

A bench of Chief Justice J S Khehar and Justice D Y Chandrachud did not concur with the findings of the Bombay High Court that if a person continues in service for a long period of time and the certificate is found to be fake at a later stage then, he or she may be allowed to continue in the service.

The verdict came on a batch of petitions including the one filed by the Maharashtra government against the Bombay High Court judgement.

The Supreme Court, however, said that the findings of its verdict would not be made applicable with retrospective effect and would be applied now onwards.

Over 7.36 crore PANs linked with Aadhaar: IT dept

Out of that about 6.44 crore e-filers registered on the e-filing website of the income tax department, a senior official said.

Nearly a quarter of 30 crore Permanent Account Number (PAN) holders have linked their unique alphanumeric number with Aadhaar, with over one crore such seedings happening last month.

The jump in the number came after the government made it clear that the PAN-Aadhaar linking was mandatory from July 1 for filing of income tax returns (ITRs) and for obtaining a new PAN.

Out of that about 6.44 crore e-filers registered on the e-filing website of the income tax department, a senior official said, the Aadhaar-PAN linking had been done in about 3.06 crore cases.

“The total number of PAN-Aadhaar linkages is about 7.36 crore, as per latest figures updated till today. Seeding of over a crore Aadhaar numbers in the PAN database has come about in the last one month,” the official said.

The income tax department had recently made it clear that taxpayers without the Aadhaar number or its enrolment ID would not be able to e-file ITRs from July 1 even as it had said that in “no case” any PAN would be invalidated.

A senior official had clarified that people who were not able to link their Aadhaar with PAN by July 1, would have the option to mention the UIDAI-provided number in the e-ITR and this would be considered a valid linking of the two unique numbers.

E-filing of the ITR is mandatory for all individuals except those earning less than Rs 5 lakh per annum and those who are above 80 years of age.

The Supreme Court had last month upheld the validity of an Income Tax Act provision making Aadhaar mandatory for allotment of PAN cards and ITR filing, but had put a partial stay on its implementation till a Constitution bench addressed the issue of right to privacy.

The Central Board of Direct Taxes (CBDT), the policy- making body for the I-T department, had said on June 10 that the apex court’s order had only given a “partial relief” to those who did not have an Aadhaar or an Aadhaar enrolment ID, and the taxman, hence, “will not cancel” the PAN of such individuals.

Aadhaar has also been made mandatory for applying for PAN with effect from July 1.

While Aadhaar is issued by the Unique Identification Authority of India (UIDAI) to a resident of India, PAN is a 10-digit alphanumeric number alloted by the I-T department to a person, firm or entity.

There are about 30 crore PAN numbers allotted, while Aadhaar has been alloted to about 115 crore people.

India June services activity hits eight-month high on solid new orders

The Nikkei/IHS Markit Services Purchasing Managers’ Index climbed to 53.1 in June from the previous month’s 52.2. June was the fifth consecutive month the index has been above the 50 mark that separates growth from contraction.

Activity in India’s dominant service sector expanded at its fastest pace in eight months in June as new business orders surged, a private survey showed on Wednesday.

The Nikkei/IHS Markit Services Purchasing Managers’ Index climbed to 53.1 in June from the previous month’s 52.2. June was the fifth consecutive month the index has been above the 50 mark that separates growth from contraction.

“With services being the prevalent sector in India, the fainter rise in manufacturing was more than offset and growth of private sector output climbed to an eight-month peak,” said Pollyanna de Lima, economist at IHS Markit.

Though input prices rose significantly, firms did not fully pass that on to customers, suggesting overall inflation in coming months could remain below the Reserve Bank of India’s medium-term target of 4.0 percent.

India’s annual consumer price inflation eased to 2.18 percent in May, driven down by cooling food prices, and further falls could pressure the central bank to cut interest rates by the end of this year.

But weaker price rises fuelled domestic and foreign demand and drove the services PMI’s sub-index on new business to 53.3 from 51.6 in May.

This is still well below the 54.3 it reached just before Prime Minister Narendra Modi banned high-value currency notes in November, stunning the business community as it struggled in day-to-day business activities.

A sister survey on Monday showed growth in Indian factory activity slowed in June, with the PMI reaching a four-month low amid a slowdown in output and softer domestic demand.

Taken together, the manufacturing and service indexes pushed the composite PMI to 52.7 in June, its highest in eight months. The May figures was 52.5.

In June, service providers were optimistic about growth in the year ahead, although the expectations index slipped to a fourth-month low as firms remained concerned over the near-term impact of the newly-enacted goods and services tax.

A strong service sector is crucial for the Indian economy as it accounts for more than 60 percent of gross domestic product, and if momentum is maintained in 2017 it would lead to a faster economic recovery.

In January-March, India’s annual GDP growth was a lower-than-expected 6.1 percent, slumping to its lowest in more than two years.

De Lima of IHS Markit said the June services number “contributed to the highest quarterly average for the composite PMI” since the second quarter of fiscal year 2016.

“This suggests that GDP growth is likely to rebound from the sharp slowdown noted in the first three months of 2017,” she said.

Creating 120 million jobs in 24 sectors by 2020 is hard to achieve: TeamLease report

Creating more jobs is the key electoral pledge of the current government, which is mid-way through its five-year term. However, government initiatives are too little and too late and creating 120 million jobs in 24 sectors by 2020 will be difficult to accomplish, says the TeamLease Labour Law Report 2017 by human resources company TeamLease Services.

The report said that domestic and global economic factors have impeded job creation. The number of jobs created in 2015 stood at a mere 135,000. A cash crunch following demonetization of high-value currency notes has led to job losses in the informal economy, impacting many small manufacturing units, according to TeamLease.

In the last 2 years the central government has effected 54 changes in the Apprenticeship Act, Factories Act and Labour Laws Act. The report said that it does not address the core of the problem.

“To kick-start the job creation engine the government must immediately overhaul the most regressive labour laws in India, viz., Trade Union Act, Industrial Disputes Act and Contract Labour Act,” the report added.

India has between 47 central labour laws and 200 state labour laws. Sonal Arora, Vice President, TeamLease Services, said that our labour laws have remained dysfunctional, disharmonized, protracted and overreaching. She added that the complex anatomy comprising harassment, corruption and compliance overreach chokes businesses on productivity and competitiveness.

Manufacturing and its allied sectors are burdened the most by this regressive labour law regime. Equally impacted are textiles & garments, automobile and leather & footwear industries. According to the report, single window clearance is the most commonly needed change across all states.

CK Mendiratta, Head HR, Imperial Auto, an auto ancillary company that employs more than 5000 workers and staff across their multiple factories and offices said, “While women employees are more diligent but still restriction on employment of women at night shift makes it difficult for us to engage more women, the provision to employ women at nightshift needs to be eased off.”

The report has suggested structural reforms at three levels. These include abolition of archaic laws that refer to permission to lay off, retrench, close; permission to employ and thresholds of contract labour; involuntary imposition of employee benefits and advance notice for change in service conditions.

The second reform is rationalization and the need to give advance notice for closure of a firm, multiplicity of unions, employment limits as per Factory Act, time limit for raising disputes and filing claims, payment of bonus as linked to productivity and requirement of strike notice.

Further, the report also called for unified definitions of the labour market entities and consolidation of registers, returns and notices.

The TeamLease Labour Law Report 2017 also profiles the labour law ecosystem by state and by laws versus demand and supply of skills. With a few exceptions (notably, Andhra Pradesh), states scoring well on their labour law regime parameters carry demand-supply surplus as well.

Gujarat tops the list of Indian states with the most demand-supply surplus with Andhra Pradesh and Odisha having a big lead in the ease of setting up business. Jharkhand and Chhattisgarh score 100 percent on compliance and have a 5 percent demand-supply surplus each, but are the poorest (18 percent) on setting up business.

Maharashtra (87 percent), Madhya Pradesh and Gujarat (75 percent each) lead on infrastructure and have the best demand-supply surpluses (28 percent, 7.4 percent and 25 percent). Karnataka (99 percent) and Andhra Pradesh (90 percent) lead tax compliance and carry demand-supply deficits of 3.6 percent and 25 percent, respectively.

GST to widen tax net, make India Inc more competitive: CII

The implementation of the crucial tax reform gives tremendous confidence to the industry that the government will continue to facilitate investments and simplify the business environment, the industry body said.

The GST rollout will impart major competitiveness to Indian industry, incentivise exports and help expand the tax net, CII said.

The implementation of the crucial tax reform gives tremendous confidence to the industry that the government will continue to facilitate investments and simplify the business environment, the industry body said.

“We have emerged…into a new era of economic reform with the introduction of the game-changing GST. This will stand as an exemplar of collaborative reform for the world on an unprecedented scale,” CII President Shobana Kamineni said.

The CII President said that going forward, GST will contribute to ease of doing business and accelerate new business ventures.

She said that GST is based on self-compliance with the input tax credit as a powerful incentive to businesses to step into the tax fold.

“Input tax credit will curb inflation by avoiding tax- on-tax. We believe that most businesses would pass on the benefits of input tax credit to consumers so that inflation would be curbed,” said Kamineni, adding that the industry is prepared for implementing the Goods and Services Tax (GST).

Besides, Assocham said that with retail prices growing by the slowest pace in the last four years, the timing for the GST was perfect from the inflation point of view.

The chamber said that while the GST may face some initial hiccups, the broad and the most important macro matrix is perfectly placed.

“In the backdrop of subdued consumer demand, there is no reason for the industry not to pass on any benefit accruing from the GST. The top priority for the industry today is to step up its capacity utilisation by increasing production, helped by consumer demand,” Assocham said.

Govt orders shuttering of 1 lakh dodgy companies in last 48 hours; PM signals crackdown on tax evaders

Modi directly attacked some chartered accountants for helping clients in evading taxes and under-report incomes.

The government has deregistered and shuttered more than 1 lakh companies with doctored accounts in the last 48 hours, Prime Minister Narendra Modi said on Saturday, in a stern message that the government will come down heavily on tax dodgers who refuse to come clean despite repeated warnings.

“Just 48 hours back, more than 1 Lakh companies have been shut with the single stroke of a pen,” Modi told a gathering of chartered accountants, less than 24 hours after he signalled the switchover to a goods and services tax (GST) in a glittering midnight event in Parliament’s Central Hall.

More than three lakh companies have been identified so far, based on data mined after demonetisation, whose books haves been found to be suspicious and irregular books of accounts.

In addition, more than 37,000 shell or paper companies have been identified found to be funneling black money through obscure routes such as hawala.

“Nobody will have the courage to evade taxes,” Modi said that the foundation day function of the Institute of Chartered Accountants of India (ICAI) attended by hundreds of students, professional CAs, traders, union and state ministers in a packed Indira Gandhi Indoor Stadium

“Those who have looted the poor, will have to return money to the poor,” he said. “Strict action will be taken against law-breaking companies in the coming days”.

The government has been collating data on bank deposits and other transactions after November 8, 2017, when Modi announced demonetisation that outlawed Rs 500 and Rs 1000 notes as part of a broader strategy to clamp down on corruption and black money.

“Data mining is going on in banks of about how funds have moved after November 8,” the Prime Minister said.

Modi directly attacked some chartered accountants for helping clients in evading taxes and under-report incomes.

“After demonetisation, there must be somebody who have helped these companies. These thieves, these companies, must have gone to some financial doctor. Isn’t it your responsibility to identity and separate these people,” the Prime Minister said.

“The Parliament has handed down a pious responsibility to the CA community. To tell what is the truth and false through audit,” he said.

The government has been collating data on concealed assets of people who are suspected to have under-reported their incomes. The income tax department has also been collating data on property deals, a source of rampant black money transactions.

“There are big houses that number in crores in India. Last year more than 2.18 crore people travelled overseas. Despite this, it is hard to believe that only 32 lakh people say their annual income is more than Rs 10 lakh,” Modi said.

The Prime Minister warned that the government would not hesitate to launch a probe against CAs found to have advised clients on how to conceal income and dodge taxes.

“Investigation against wrong suggestion givers is also necessary. In the last 11 years only 25 CAs have been probed. Is it the case that only 25 CAs have been found to be indulging in irregular practices,” he asked. “Don’t allow the trust to falter on your (CA’s) signature.”

Amid looming question marks over GST’s impact in Asia’s third largest economy buffeted by opposing pulls and pressures from a multitude of sectors, Modi urged professional chartered accountants to hand-hold traders and businessmen to usher in GST, billed as India’s biggest ever reforms initiative.

Sharp fall in money parked by Indians in Switzerland’s banks last year also how the noose is tightening around those to who salt away millions in overseas havens to evade taxes.

Indians’ funds nearly halved to 676 Swiss francs (about Rs 4,500 crore) in 2016 to hit a record low,  a fall of 45 percent, marking the biggest ever yearly decline in such funds.

“Since 2014, the fall has accelerated. After two years, when real time data starts flowing from Swiss banks, people will face even more difficulties in stashing away wealth in foreign banks. Please give this message to your clients,” Modi said.

“You are the saints of the financial world. Saints show the road towards mokhsa. You have the same role for financial world for showing the right path,” he said.