Q2 GDP data at 5.30 pm today: 3 things to watch out for

The Central Statistics Office (CSO) will release gross domestic product (GDP) growth estimates for the second quarter (July-September) of 2017-18 at 5.30 pm today.

Has the Indian economy turned the corner after the disruptions caused by Goods and Services Tax (GST)? Or do the effects of GST implementation continue to hold sway over factory output and inventories? The national income statistics will have the answers.

The Central Statistics Office (CSO) will release gross domestic product (GDP) growth estimates for the second quarter (July-September) of 2017-18 at 5.30 pm today.

The Indian economy grew 5.7 percent in April-June, the slowest in 13 quarters. It was sharply lower than last year’s 7.9 percent expansion in the same quarter as also the previous quarter’s 6.1 percent growth, reeling under the stock management shock caused ahead of GST’s rollout.

Here are three things to watch out for from today’s national income data:

#Impact of GST restocking

India witnessed one of the biggest one-off sale season ahead of the rollout of GST from July 1. A mid-year switchover to GST had prompted anxious shops and companies to de-stock and clear up the inventory pile ahead of the new system’s kick off.

The scale down in production could have a bearing on the overall GDP growth numbers in April-June.

The government has been claiming the slowdown was a one-off affair, given the large scale inventory clearance before GST’s rollout. This may well be the case, with many companies building inventories from August, factoring in price and cost changes brought about by GST.

Consumption demand in both urban (vehicle sales, consumer credit) and rural (two-wheeler, tractor sales) areas has improved, as have indicators of private investment demand (railway traffic, capital goods production).  Export volumes have also risen 8.4 percent in July-September (from 4.6 percent in April-June).

#Tax accounting change

The July-September 2017 GDP data will be the first set of data giving out GDP estimates based on new GST tax estimates. With GST kicking in from July 1, and tax return filing still not smoothening out, official statisticians may have to rely on approximations to measure changes in India’s GDP in the absence of past tax collection data on a comparable scale.

Inter-period tax collections are critical for GDP calculations. GDP represents the total value of goods and services produced in the country. Gross Value Added (GVA), is GDP minus taxes. GVA is a more accurate guide to calculate changes in the total value of goods and services produced.

Since GST has subsumed a string of local and central levies such as value added tax, excise and service tax into a single tax, and considering erratic GST tax returns in July-September, analysts will be keenly looking for cues on the government’s own estimates about tax collections in this quarter. Official, but unannounced, estimates of GST tax collections could well be hiding in the second quarter GDP estimates.

#Nominal versus Real GDP

GST’s inflationary impact is still unknown. CSO gives out both the “real” or inflation-adjusted GDP figures as well as the nominal or current price numbers.

Analysts will also be keenly watching the CSO’s nominal GDP growth rate estimates for July-September for cues on GST’s inflationary impact. Real or inflation-adjusted GDP is usually calculated by subtracting the growth in actual or nominal GDP by the inflation rate or “price deflators.”

A flat or moderate growth in real GDP could also mean that GST may have had pushed up overall prices in the economy. On other hand, a higher real GDP growth could well be an indicator about GST’s minimal impact on prices of goods and services.

PM Narendra Modi has proved transformational change possible, says Ivanka Trump

Showering generous praise on the Prime Minister in her keynote address at the 8th annual Global Entrepreneurship Summit (GES) here today, she termed Modi’s achievement as “truly extraordinary”.

Prime Minister Narendra Modi has proved that transformational change is possible in rising from a humble tea seller to heading the country, said Ivanka Trump, daughter of and advisor to US President Donald Trump.

Showering generous praise on the Prime Minister in her keynote address at the 8th annual Global Entrepreneurship Summit (GES) here today, she termed Modi’s achievement as “truly extraordinary”.

“From your childhood selling tea to your election as India’s Prime Minister, you’ve proven that transformational change is possible,” she said. “And now, you are bringing that promise to hundreds of millions of people across your country. Thank you.”

Ivanka, 36, a businesswoman, fashion designer and the eldest daughter of the US President, was invited by Modi during his visit to the White House in June to speak at the Summit. She is leading the US contingent at the Summit themed ‘Women First, Prosperity for All’.

“And thank you, Prime Minister Modi, for joining us here today — and for all that you are doing to build India as a thriving economy — a beacon of democracy — and a symbol of hope to the world,” he said. “What you are achieving is truly extraordinary.”

She applauded Modi for his firm belief that “the progress of humanity is incomplete without the empowerment of women” and went on to congratulate Indians on celebrating 70 years of Independence. “You are celebrating it as the world’s largest democracy and one of the fastest growing economies on the earth,” Ivanka said.

“Through your own enterprise, entrepreneurship, and hard work, the people of India have lifted more than 130 million citizens out of poverty — a remarkable improvement, and one I know will continue to grow under the leadership of Prime Minister Modi,” she stressed.

Ivanka further said people of India inspire globally and went on to cite the example of CEOs like Microsoft’s Satya Nadella who went to school right here in Hyderabad.

“Today, we come together to celebrate what is happening here in India, what is happening in the United States – and all over the world: entrepreneurs are revolutionising our economies, and improving our societies,” she said. “You are rewriting the rules.

Indian rupee opens weak at 64.46 per dollar

The Indian rupee opened lower by 5 paise at 64.46 per dollar on Wednesday versus previous close 64.41.

According to Pramit Brahmbhatt of Veracity, the rupee will float in a range in absence of any directional cue. We expect the spot USD-INR pair to trade in a range of 64.20-64.80.”

The dollar index held onto overnight gains after the senate budget committee approved the republican tax bill, boost also coming in from strong US economic data as US consumer confidence unexpectedly improved in November to a 17-year high.

Dhawal Dalal of Edelweiss AMC said, “Bond market sentiment appears to have stabilised judging by the price action of last two days amid lack of market moving news.”

“Market participants await GDP data to get more cues on the state of economy amid relatively calm global markets.”

“We expect the 10-year benchmark bond yield to remain below 7.10 percent,” he added.

Centre tells SC: Willing to extend Aadhaar linkage deadline, put off hearing until next year

The attorney general requested the apex court to hear the matter after the expert committee submits its report in February 2018.

The Centre on Monday requested the Supreme Court to put off hearing of the legality of Aadhaar until next year and assured that it would postpone the deadline to link Aadhaar with various services to March 31, 2018, according to a report by The Economic Times.

Earlier, Attorney General KK Venugopal had told the court that an expert committee under Justice BN Srikrishna had suggested some changes in the law regarding the data protection regime including protection for data under the Aadhaar Act.

The white paper drafted by an expert committee headed by Justice BN Srikrishna, among other things has suggested minimal data collection and imposing penalties to deter data leakage.

Saying that the final paper is expected to come out by February, the attorney general requested the Constitution bench of the top court to hear the matter only after that.

However, senior advocate Shyam Divan rejected the suggestion and requested the court to deal with the plea seeking interim relief before the looming December 31 deadline, while waiting for the final hearing.

In the previous hearing, the government had softened its stand saying that it would not insist on those already having Aadhaar to link it with their bank accounts and mobile phones before March 31.

The Chief Justice is now expected to hear a plea seeking interim relief after the existing Constitution bench finished its hearings. The hearing could happen in early December, before the top court breaks for winter.

Govt, judiciary, bureaucracy must work for new India: PM Modi

The three pillars of democracy are all members of one family and should work together to strengthen one another, Modi said.

Prime Minister Narendra Modi today stressed on the need for the three pillars of the Indian democracy — government, judiciary and bureaucracy — to strengthen each other and work together for a new India.

The three pillars of democracy are all members of one family and should work together to strengthen one another, Modi said.

There is a need for them to brainstorm on how to move forward in the present scenario, he said.

Addressing a gathering here to mark the National Law Day, Modi said instead of pointing at each other’s weakness, the three pillars of democracy should work together for a new India.

He also emphasised on the Indian Constitution’s important role in the country’s overall development after independence and said it has withstood the test of time.

GST rate cut: FMCG companies asked to display new MRP on existing stock

The order came from the Department of Consumer Affairs’ Metrology Division, which looks at matters pertaining to measurement and labelling.

The government has ordered manufacturers of fast moving consumer goods (FMCG) to display new price tags on existing stock so that the recent Goods and Services Tax (GST) cut is reflected, The Economic Times reported.

The order came from the Department of Consumer Affairs’ Metrology Division, which looks at matters pertaining to measurement and labelling.

“Permission is granted under the legal metrology rules to affix an additional sticker or stamping for declaration of reduced MRPs (maximum retail prices). Earlier labelling of MRP will continue to be visible,” the division said in a letter dated November 16 that the newspaper reviewed.

In light of the cut in GST on 178 products by the GST Council, consumer affairs minister Ram Vilas Paswan said companies were allowed to “affix an additional sticker or stamping or online printing for declaring the reduced MRP on the prepackaged commodity”.

The Division in-charge clarified that both price tags – one with the old MRP and one with the revised - are applicable till December 31. It also allowed the revised MRP to be displayed on printed-on stickers, relaxing a rule that required the revised MRP to be printed directly on the packaging.

Experts the paper spoke to said that this helps consumers to a large extent as they will be aware of the benefits being passed on.  The experts also pointed that it is necessary for the companies to make sure that the two price tags are not misleading.

Earlier reports suggested that sector majors Nestle India, Dabur, and Hindustan Unilever, among others will soon reduce prices. However, the companies have already said that changing the price sticker on stock that is already on the shelves will not be possible.

Executives said that they will supply the stickers to the distributors for them to paste it on stock that has been manufactured but is yet unsold.

Israeli Prime Minister Benjamin Netanyahu to begin 4-day India trip on January 14

Netanyahu would be only the second Israeli Prime Minister to visit India since diplomatic relations were established between the two countries in 1992. His visit next year would be happening almost 15 years after the first visit by Prime Minister Ariel Sharon to New Delhi in 2003.

Israeli Prime Minister Benjamin Netanyahu will be on a four-day visit to India starting January 14, a little more than six months after his Indian counterpart Narendra Modi visited the Jewish state, informed sources said.

Netanyahu would be only the second Israeli Prime Minister to visit India since diplomatic relations were established between the two countries in 1992. His visit next year would be happening almost 15 years after the first visit by Prime Minister Ariel Sharon to New Delhi in 2003.

The Israeli Prime Minister would be received by Modi in Ahmedabad on his arrival on January 14. Modi has in the past welcomed Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe in his home state.

Netanyahu would then be holding most of his official meetings in New Delhi on January 15 and 16.

“The detailed programme is being still worked out but it will include meetings with top leadership in India”, informed sources here said.

The Israeli leader would also be going to Mumbai on January 17 where he would be visiting the Jewish Chabad House, a site of 2008 terrorist attack in Mumbai.

He would head back to Israel on January 18. There could also be a possible stopover in Agra during the visit.

“In the past year, I have visited all continents besides Antarctica,” Netanyahu said at the opening of the Knesset’s (Israeli parliament) winter session last month.

“And in January, I will make a reciprocal visit to my dear good friend, Narendra Modi, the Prime Minister of India, whose population is a significant part of humanity,” he added.

Modi’s standalone visit to Israel in July this year celebrated 25 years of establishment of diplomatic relations between the two countries. The Indian prime minister skipped Palestine during his trip leading many analysts to say that New Delhi was changing its rules of engagement in the region.

Modi’s visit, the first by an Indian Prime Minister to Israel, was termed by many as de-hyphenation of New Delhi’s ties with the Palestinians.

Palestinian President Mahmoud Abbas was invited to New Delhi a few weeks before Modi’s visit to Israel, in what was his fifth visit to India in 12 years and the third state visit.

Netanyahu had called Modi’s “historic visit” a “very significant step” in strengthening bilateral relations that are on a “constant upswing”.

The Israeli leader has also grabbed every opportunity to emphasise on his “personal chemistry” with his Indian counterpart, including at the United Nations General Assembly in September where he shared the memories of Modi’s three-day visit to Israel from July 4-6.

“…We imagined the endless possibilities for Israel, India, for all humanity,” he had said during his UNGA address.

Modi extended an invitation to Netanyahu to visit India “at a mutually convenient time” during a July 5 press conference in Jerusalem.

Netanyahu had described the invitation as “a deeply moving moment for me, both in personal, but also in national and international terms”.

Both the governments have taken several measures since Modi’s Israel trip to strengthen bilateral ties.

Some of them include establishment of a USD 40 million joint fund to encourage Israeli and Indian business cooperation, agreements permitting and extending incentives to Bollywood filmmakers looking to shoot in Israel, efforts to promote growth in tourism, and a joint government project in the fields of water and agriculture.

Rupee opens 11 paise higher at 64.80 against US dollar

The Indian rupee has opened higher by 11 paise compared with previous day’s closing level of 64.91 a dollar.

The Indian rupee has opened at 64.80 against the US dollar, higher by 11 paise compared with previous day’s closing level of 64.91 a dollar.

Mohan Shenoi of Kotak Mahindra Bank said US FOMC minutes sounded caution on potential impact of sudden reversal of asset price inflation on growth.

Activity in the currency market is expected to be muted due to the Thanksgiving holiday in the US, according to him.

He feels the Rupee holds on to its gains registered post the Moody’s upgrade and is expected to trade today in the range of 64.65-64.95 against the US dollar.

Govt to completely switch to electric trains, to phase out diesel engines in 5 years: Piyush Goyal

In a bid to switch to electric-driven trains entirely, Indian Railways has decided to phase out diesel engines in the next five years after a two-month run-in with manufacture giant GE over the manufacture of diesel locomotives.

In a bid to entirely switch to electric-driven trains, Indian Railways has decided to phase out diesel engines in the next five years. The move comes after two months post run-in with manufacturing giant GE over the making of diesel locomotives, reports Livemint.

“We have planned to switch all trains to electric-driven in the next five years,” Railway Minister Piyush Goyal said on Tuesday, adding that the diesel locomotives would be used for backup purposes in the yards.

The move will enable the national transporter to save around Rs 11,500 crore annually, railway minister Piyush Goyal said at a meeting of the executive committee of the industry lobby group Federation of Indian Chambers of Commerce and Industry (FICCI).

The government’s decision raises uncertainty about GE’s Marhaura diesel locomotive project in Bihar, where the company is setting up a factory at an estimated cost of Rs 2,052.58 crore.

The project in which the Railways Ministry has limited equity contribution was planned for over a period of 10 years, whereby, GE was to supply 1,000 diesel locomotives of 4,500 and 6,000 horsepower with high-level performance guarantees.

On September 7, Goyal had asked Indian Railways to review the GE project given plans for complete electrification of its network by 2022, following which GE issued a statement saying that scrapping the project would have a “serious impact on job creation and skills development and cause the government to incur substantial costs”.

In October, Goyal affirmed that the GE project was on track and if required, a diesel locomotive manufacturing facility could be upgraded to make electric locomotives, adding that GE will be informed if Indian Railways’ requirement change.

Spokespersons for GE did not respond to phone calls and text messages.

On railway safety, Goyal said that the production of German-based Linke-Hofmann-Busch (LHB) coaches with better safety features, which was recommended by a high-level safety review committee in 2012.

“I have asked the rail coach factories to develop the LHB coaches and also double up their production at Rae Bareli coach factory, which currently manufacturers 1,000 coaches annually,” Goyal said.

The Uttar Pradesh government has been approached for the allotment of 200 acres for the Rae Bareli coach factory’s expansion.

SEBI forms panel to look into erroneous classification of firms as shell companies

In some cases, the sub-committee will make representations to the Ministry of Corporate Affairs for relief.

The Securities and Exchange Board of India (SEBI) will be hearing cases filed by companies complaining that they have been wrongly classified as shell companies because of technical errors, according to a report by Mint.

SEBI has formed a sub-committee under the Secondary Market and Advisory Committee (SMAC) to look into these cases.

A member of SEBI SMAC told the newspaper, “For genuine cases of small technical errors or misinterpretation, the sub-committee will make representations or help companies to make representations to the Ministry of Company Affairs (MCA) for relief.”

According to the report, at least 500 listed companies were impacted when the MCA disqualified directors in September. These companies share directors who have been disqualified for associating with other firms which haven’t filed their financial statements or annual returns for three years.

The report states that the sub-committee will handle cases related to the 331 suspected shell companies which SEBI had put under surveillance after receiving letter from the MCA.

In September, the market regulator had updated its board on the action being taken against suspected shell companies allegedly abetting routing of illicit funds through stock markets.

Those under scanner include over 300 listed companies and hundreds of unlisted entities and individuals, suspected of misusing the stock exchange platform for tax evasion, among other wrongdoings, a senior official said.