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New Delhi: Finance Minister Arun Jaitley today welcomed Moody's Investors Service's first upgrade in nearly 14 years of its ratings on India's sovereign bonds, calling it a "belated recognition of the positive steps taken in last few years to strengthen the economy." Mr Jaitley also hit out at critics of the government's economic policies saying, "many who had doubts about India's reform process can now seriously introspect on their position."

The Finance Minister said the upgrade was recognition and endorsement that "a number of structural reforms in the last three years have placed India on a path of high trajectory growth," and also that "India continues to  follow a path of fiscal prudence which has brought stability."

 

Moody's said on Friday that it was lifting India's rating to Baa2 from Baa3 and changed its rating outlook to stable from positive, saying continued progress on economic and institutional reform will boost the country's growth potential.

The upgrade, Moody's first since January 2004, moves India's rating to the second lowest level of the investment grade.

 

It is a big boost for Prime Minister Narendra Modi's government and the reforms it has pushed and comes just weeks after the World Bank moved India up 30 places in its annual ease of doing business rankings.

All markets including stocks, bonds and the rupee rallied on the ratings upgrade.

The upgrade also comes just ahead of crucial assembly elections in PM Modi's home state Gujarat, where Congress vice president Rahul Gandhi has based his party's election campaign around an attack on the government over an economic slowdown, with growth slipping under 6 per cent in the June quarter. The Congress has blamed last year's demonetisation and its implementation of new national tax GST in July this year.

Mr Jaitley said, "steps, including demonetisation, among others is taking India into a digitised economy. Implementation of Aadhaar has also been a very significant step. Also, the GST, which the world has recognised as one of the most significant reform steps taken in the history of Independent India."

He refused to link today's development to the forthcoming elections saying, "In India, elections happen three or four times each year. That being the case, if everything is only linked to elections, then there would not be any steady economic development and growth. All of us will only be engaged with elections and speeches."

Sitting next to Mr Jaitley, Chief Economic Advisor to the government Arvind Subramanian said, "I think we should all keep in mind that ratings are not causes or motivators of government actions, they are welcomed collateral consequences of government actions. "

Moody's has noted that while a number of key reforms remain at the design phase, it believes those already implemented will advance the government's objective of improving the business climate, enhancing productivity and stimulating investment.

"Longer term, India's growth potential is significantly higher than most other Baa-rated sovereigns," the agency said.

It said GST will boost productivity by removing barriers to inter-state trade, also pointing out that challenges from the implementation of the new tax regime, continuing weakness in private sector investment, slow progress resolving banking sector asset quality issues, and lack of progress in land and labour reform remain key issues.

 

 

 

 

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New Delhi: The GST Council on Friday in the biggest tax overhaul slashed tax rates on over 200 items, ranging from chewing gum to chocolates, to beauty products to wrist watches to provide relief to consumers and businesses. As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent. After these changes, only 50 items will attract GST rate of 28 per cent. Tax on two items was cut from 28 per cent to 12 per cent while on six items was reduced from 18 per cent to 5 per cent. On eight items, tax was reduced from 12 per cent to 5 per cent and on six items from 5 per cent to nil.

Another big change, all restaurants will now be levied GST at 5 per cent, without input tax credit (ITC) benefits. Click here to know more on how eating out may get cheaper.

However five-star restaurants within starred-hotels with room rent above Rs. 7,500 will attract 18 per cent and can still avail ITC benefits, the council said. Outdoor catering will attract 18 per cent GST with input tax credit benefits.

Items on which GST was cut from 28 per cent to 18 per cent:

Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors
Electrical boards, panels, consoles, cabinets etc for electric control or distribution
Particle/fibre boards and ply wood. Article of wood, wooden frame, paving block
Furniture, mattress, bedding and similar furnishing
Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases
Detergents, washing and cleaning preparations
Liquid or cream for washing the skin
Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient;
Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodoriser
Perfumes and toilet waters
Beauty or make-up preparations
Fans, pumps, compressors
Lamp and light fitting
Primary cell and primary batteries
Sanitary ware and parts thereof of all kind
Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic
Slabs of marbles and granite
Goods of marble and granite such as tiles
Ceramic tiles of all kinds
Miscellaneous articles such as vacuum flasks, lighters,
Wrist watches, clocks, watch movement, watch cases, straps, parts
Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal
Articles of cutlery, stoves, cookers and similar non electric domestic appliances
Razor and razor blades
Multi-functional printers, cartridges
Office or desk equipment
Door, windows and frames of aluminium.
Articles of plaster such as board, sheet,
Articles of cement or concrete or stone and artificial stone,
Articles of asphalt or slate,
Articles of mica
Ceramic flooring blocks, pipes, conduit, pipe fitting
Wall paper and wall covering
Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware
Electrical, electronic weighing machinery
Fire extinguishers and fire extinguishing charge
Fork lifts, lifting and handling equipment,
Bull dozers, excavators, loaders, road rollers,
Earth moving and levelling machinery,
Escalators,
Cooling towers, pressure vessels, reactors
Crankshaft for sewing machine, tailor's dummies, bearing housings, gears and gearing; ball or roller screws; gaskets
Electrical apparatus for radio and television broadcasting
Sound recording or reproducing apparatus
Signalling, safety or traffic control equipment for transports
Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts, gymnastic and athletic equipment
All musical instruments and their parts

Artificial flowers, foliage and artificial fruits
Explosive, anti-knocking preparation, fireworks
Cocoa butter, fat, oil powder,
Extract, essence ad concentrates of coffee, miscellaneous food preparations
Chocolates, Chewing gum / bubble gum
Malt extract and food preparations of flour, groats, meal, starch or malt extract
Waffles and wafers coated with chocolate or containing chocolate
Rubber tubes and miscellaneous articles of rubber
Goggles, binoculars, telescope,
Cinematographic cameras and projectors, image projector,
Microscope, specified laboratory equipment, specified scientific equipment such as for meteorology, hydrology, oceanography, geology
Solvent, thinners, hydraulic fluids, anti-freezing preparation

Items on which GST was cut from 28 per cent to 12 per cent:

Wet grinders consisting of stone as grinder
Tanks and other armoured fighting vehicles

Items on which GST was cut from 18 per cent to 12 per cent:

Condensed milk
Refined sugar and sugar cubes
Pasta
Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning
Diabetic food
Medicinal grade oxygen
Printing ink
Hand bags and shopping bags of jute and cotton
Hats (knitted or crocheted)
Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery
Specified parts of sewing machine
Spectacles frames
Furniture wholly made of bamboo or cane

Items on which GST was cut from 18 per cent to 5 per cent:

Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
Flour of potatoes put up in unit container bearing a brand name
Chutney powder
Fly ash
Sulphur recovered in refining of crude
Fly ash aggregate with 90% or more fly ash content

Items on which GST was cut from 12 per cent to 5 per cent:

Desiccated coconut
Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit]
Idli, dosa batter
Finished leather, chamois and composition leather
Coir cordage and ropes, jute twine, coir products
Fishing net and fishing hooks
Worn clothing
Fly ash brick

Items on which GST was cut from 5 per cent to nil:

Guar meal
Hop cone (other than grounded, powdered or in pellet form)
Certain dried vegetables such as sweet potatoes, maniac
Unworked coconut shell
Fish frozen or dried (not put up in unit container bearing a brand name)
Khandsari sugar

GST rates on aircraft engines was cut from 28 per cent/18 per cent to 5 per cent, aircraft tyres from 28 per cent to 5 per cent and aircraft seats from 28 per cent to 5 per cent. also GST rate on bangles of lac/shellac from 3 per cent GST rate to Nil.

 

 

 

 

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New Delhi: Days after it gave India a 30 place jump in its ease of doing business ranking, the World Bank today said the Goods and Services Tax (GST) and reforms push by the government will catapult the country to the high middle-income economy in 30 years.

It credited India's "extraordinary" achievement of quadrupling of per capita income to reforms taken in last three decades.

Comparing the achievement of securing the 100th rank in the latest Doing Business Report to hitting the century in cricket parlance, World Bank Chief Executive Officer (CEO) Kristalina Georgieva said a jump of that nature is very rare since the beginning of the survey 15 year ago.


"It is particularly rare when we talk about size of India. I understand that in a cricket-loving nation hitting a century is a very important milestone," she said.

Last week, India moved for the first time into the top 100 of World Bank Ease of Doing Business global rankings due to sustained business reforms over the past several years. Last year the report had ranked India at 130.

Speaking at India's Business Reform even organised by Ministry of Commerce and Industry, she said, high-level ownership and championship of reforms is critical for success.

"We have learnt that in reforms what pays off is persistence...what we are recognising in India is that this success today is to be turned into more energy in reforms for the future," she said.

Praising the efforts of Prime Minister Narendra Modi to carry forward reforms, including unification of indirect taxes, the World Bank CEO said the GST reform creates an incredible opportunity for India to grow through a unified internal market.

There is visible impact of reforms on foreign investment, she said, adding that foreign direct investment (FDI) has doubled to $60 billion from $36 billion in 2013-14.

Besides, she said, investment in infrastructure building, investment in its people and strengthening of cooperative and competitive federalism are foundation for more progress in the future.

"We know that there is a very strong condition that extreme poverty would be history in India. The target date that was set 2026, I understand that the Prime Minister intends to shorten to 2022. Given the track record so far, I have no doubt that would be possible.

"And I have no doubt that when India hits another century, the century of independence in 2047, most people in India would be the part of global middle class. India will be a high middle-income country," she said.

The World Bank appreciated the fact that 60 million Indians in the recent past came out of destitution.

Noting that doing business is very pragmatic way to demonstrate that progress is being made, she said, the World Bank looks at doing business achievements in the broader context.

"What we have seen is the remarkable overall success story of India. Extraordinary achievements in the last three decades, the per capita income has quadrupled. It was done with an eye on lifting out people out of poverty," she said.

 

 

 

 

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NEW DELHI: State Bank of India (SBI) has cut is benchmark lending rate by 0.05 per cent across maturities, effective from Wednesday, according to an announcement by the state-run lender.

The reduction in marginal cost of funds based lending rate (MCLR) by the largest Indian bank, last made on January 1 this year, has thus brought its MCLR down to 7.95 per cent from 8 per cent, the SBI website said.

 

The MCLR on overnight borrowings has been reduced to 7.70 per cent from 7.75 per cent, while the rate for three-year tenures has been lowered from 8.15 per cent to 8.10 per cent.

On Tuesday, another public sector lender, the Kolkata-headquartered Allahabad Bank reduced their MCLR rate by 0.15 per cent across maturities. The reduction has brough down the one-year MCLR to 8.30 per cent, as against 8.45 per cent, effective November 1.

At its fourth bi-month monetary policy review here earlier in the month, the Reserve Bank of India kept its key interest rate unchanged at 6 per cent, reiterating its call for better transmission by the banks of earlier rate cuts made by the centrl bank.

 

 

 

 

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New Delhi: Indian stock markets surged today with Sensex and Nifty rallying to new highs, boosted by the bank recapitalisation plan announced by the government. The government also announced massive infrastructure spending to boost growth. The Sensex surged over 500 points to hit new high of 33,117 while Nifty surged to record 10,340. Public sector banks led the rally in banking stocks. The index of public sector banks on the NSE, Nifty PSU Bank, surged nearly 20 per cent, with SBI rising 18 per cent. 

The government on Tuesday announced a Rs. 2.11 lakh crore recapitalisation plan for public sector banks over two years to boost their finances, private investment and help revive the economy. As part of this plan, the government will infuse Rs. 1.35 lakh crore through recapitalisation bonds and Rs. 76,000 crore through budgetary support and market-raising.

Apart from helping the public sector lenders meet stricter capitalisation norms, the additional capital will also help increase credit supply to the economy. 21 state-run banks account for more than two-thirds of India's banking assets. But they also account for a bulk of the record Rs. 9.5 lakh crore of soured loans.

Welcoming the government's announcement, IMF's senior resident representative said: "We have a long view that more resources are needed for recapitalisation and from that sense, the plans put out is a positive step."  Tirthankar Patnaik, an economist with Mizuho Bank, said now that the government has taken cognisance of the capital problem, "we can now witness the banks starting to lend again".

 

The government also announced a massive Rs. 6.92 lakh crore infrastructure spending in building 83,677 km of road over the next five years. Infrastructure companies L&T and IRB Infra rose over 2 per cent. 

 

Software services company Infosys on Tuesday reported a larger-than-expected quarterly profit but trimmed its revenue forecast for the year. Infosys had announced its earnings after market hours yesterday. Another frontline IT company HCL Tech announced its earnings before the market opening today. The company maintained its full-year revenue guidance for a growth between 10.5 percent and 12.5 percent in constant currency terms. Both HCL Tech and Infosys shares were flat today. 

The strength in global markets also lifted the optimism in domestic equities. The Dow rallied overnight, registering its biggest daily percentage gain in more than a month, as stronger-than-expected results and forecasts from some companies i fuelled optimism about economic strength. Asian shares were mostly flat today.

Indian stocks markets have rallied nearly 25 per cent so far this year, boosted by optimism recovery in economic growth, strong domestic inflows into stock markets and a global rally.

At 9:45 am, the Sensex pared some of its early gains and was up 270 points while Nifty traded at 10,260.

 

 

 

 

 

 

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New Delhi: India's Goods and Services Tax (GST) collections in September totalled Rs 92,150 crore and were collected from 42.91 lakh businesses, the government announced on Tuesday.

"The total revenue in GST regime under different heads (up to October 23) for September 2017 is Rs 92,150 crore," a Finance Ministry statement said here.

 

Of this, Rs 14,042 crore is on account of Central GST, and Rs 21,172 crore as State GST.

Integrated GST collections stood at Rs 48,948 crore, of which Rs 23,951 crore came from imports.

The government also said that the Compensation Cess was Rs 7,988 crore, of which Rs 722 crore was from imports in September.

Till Monday, 42.91 lakh business entities had filed September's initial GSTR-3B return, which is basic self-assessment of sales and purchase, the statement added.

Over Rs 95,000 crore was collected through GST during July, the first month of its implementation, while the figure for August was over Rs 91,000 crore.

Earlier on Tuesday, the government waived the penalty for filing late returns for August and September.

"To facilitate taxpayers, late fee on the filing of GSTR-3B for August and September has been waived. Late fee paid will be credited back to taxpayer ledger," Finance Minister Arun Jaitley announced in a tweet.

Late fee of Rs 200 per day was being charged from businesses.

For August, only 55 per cent of businesses had filed returns till September 25. September 20 was the last date to file the GSTR-3B.

For September, the last date to file GSTR-3B was October 20.

GSTR-3B is a summary return of details of outward supplies, inward supplies, credit and payment of tax.

 

 

 

 

 

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New Delhi: Shares in telecoms rose sharply today after Reliance Industries Ltd's Jio increased mobile data tariffs, raising hopes of an easing in the cut-throat competition that has eroded profits in the sector.

Top-ranked Bharti Airtel Ltd rose to a more than eight-year high and Reliance hit a record on the first day of trading since Jio's announcement last week of new high-end data tariffs that effectively raise prices by as much as 20 percent.

Jio, backed by India's richest man Mukesh Ambani, has up-ended the world's second-biggest mobile services market by users with aggressive marketing and by slashing prices for its 4G data, forcing established players including Bharti Airtel and Vodafone's local unit to match the offerings.

As a result, Bharti Airtel posted a 75 percent drop in its April-June profit while Idea Cellular Ltd reported a third consecutive quarterly loss.

Analysts said Jio's prices remain low, although they welcomed the hikes as a good initial signal of more pricing discipline.

"Jio's announcement last week was a huge relief for all incumbent players as there is a feeling that the worst of pricing is behind them," said Satish Betadpur, director of research at William O'Neil & Co.
"Reliance is looking at making sure Jio is profitable. My guess is that from now on, they will focus on quality of network to get more customers," he added.

The energy conglomerate said on Oct. 13 that Jio would turn profitable "shortly" after the telecom unit posted a loss of Rs. 271 crore.

Reliance shares jumped as much as 3.8 percent on Monday to hit a fresh all-time high, before closing 3.3 percent higher.

Bharti Airtel led gains on the broader NSE index, climbing as much as 5.8 percent to hit its highest level since May 2009.

Idea Cellular Ltd surged as much as 8.8 percent to touch its highest since July 25, while Reliance Communications Ltd rose as much as 9.5 percent.

Jio's tariff plans included a mix of price hikes or reduced benefits, such as charging 15 percent more for an 84-day plan that offers users up to 1 gigabyte of 4G data per day, and reducing the validity for its 399 rupee pack to 70 days from 84 days.

 

 

 

 

 

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New Delhi: Some rejig in GST rate structure is required to reduce the burden on small and medium businesses, Revenue Secretary Hasmukh Adhia has said.

The Goods and Services Tax (GST), which amalgamates more than a dozen central and state levies like excise duty, service tax and VAT, will take about a year to stabilise, he told PTI.

"There is need for some rejig in rates... it is possible that some items in the same chapter are divided. There is a need for harmonisation of items chapter wise and wherever we find there is a big burden on  and on common man, if we bring them down, there will be a better compliance," Mr Adhia said.

Nearly four months since its introduction, the new indirect tax threw up teething troubles and compliance issues, which the GST Council, the highest decision-making body of the new regime, has addressed through several rounds of changes.

To ease hassles facing medium and small businesses in paying taxes and filing GST returns, it has tweaked various aspects of the new indirect tax regime to make it industry friendly. Also, the GST Council has rationalised rates on over 100 commodities and made refund process easier for exporters.

Mr Adhia, however, said the rejig would require some calculations by the fitment committee, which will decide which items need a rationalisation of rate under the GST regime which kicked in from July 1.

The GST Council has already cleared an approach paper for items to be considered for rationalisation but it is not binding and the council can always make deviations from the approach paper.

"We are very keen to do it as early as possible. It depends on how much time the fitment committee takes to work on it. They need data, calculate revenue loss. They need various comparisons. But harmonisation has to be done," he said.
The 23rd meeting of the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising representatives of all states, will be held in Guwahati on November 10.

The GST Council has reworked various provisions of the new indirect tax regime which was introduced from July 1 so as to make it more industry friendly.

The turnover threshold for composition scheme, under which businesses can pay taxes at a nominal rate, has been hiked to Rs. 1 crore from Rs. 75 lakh earlier.

Also, small businesses with up to Rs. 1.50 crore turnover have been allowed to file returns and pay taxes quarterly, as against monthly earlier.

When asked how much time it will take to stabilise the GST system, Mr Adhia said: "It will take one year. Because it is a new system for everybody... There has been a complete overhauling of tax system in GST, so one year is needed."

"If you see the experience of VAT, there was opposition for one year. People were on streets because nobody knew what VAT is, the last fellow was only paying sales tax. It was more opposition that time than this," he said.

Introduced in 2005, VAT replaced the earlier sales tax systems. VAT was a tax on sale or purchase of goods within a state and was levied by state governments.

The GST has subsumed over a dozen taxes and transformed India into a single market for seamless movement of goods and services.

 

 

 

 

 

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New Delhi:  India's annual rate of inflation based on wholesale prices eased in September to 2.6 per cent, official data showed here on Monday.

According to data from the Ministry of Commerce and Industry, the wholesale price index (WPI), with the revised base year of 2011-12, eased in September to 2.6 per cent from 3.24 per cent in August.

 

 

 

 

 

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