The 14th Finance Commission has recommended an increase in the share of states in the Centre’s tax revenue from the current 32 per cent to 42 per cent. The recommendation will give more power to states in determining how they spend this money. Besides sharing of tax revenues,
the commission has also laid down the principles for giving out grant-in-aid to states and other local bodies for a five-year period beginning 1 April 2015.
Coal block auction
The first round of coal block e-auction saw some of the key names in the industry bagging 18 mines with a combined extractable reserve of 90 million tonnes, along with attached end-use infrastructure. According to the auction amount and royalty payable, six mineral- rich states are likely to earn a little more than ?1 lakh
crore over the next 30 years. Some of the earlier owners of coal mines – Hindalco, Balco, Jindal Steel & Power (JSPL), GMR and CESC – bagged most of the blocks. Of them, JSPL won back one of the blocks it had lost after a Supreme Court order cancelled allotments.
The finance ministry has cited the exodus of rupee and Nifty trading outside Indian shores as the key wjtowmendation reason behind pursuing finance special economic zones (SEZs). A report put out by the ministry said that more than X2 lakh crore of yearly revenues are being generated outside India on account of trading in rupee derivatives – revenue which can potentially be brought onshore.
Food grain output likely to fall
The agriculture ministry has estimated total food grain output for 2014-15 at 257.07 million tonnes, as against 265.57 mt in 2013-14. All crops, barring sugarcane, are
expected to post production declines, as rainfall has been deficit in both the South- West and North-East.
‘Hike import duty on rubber’
The Association of Planters of Kerala has sought to enhance* the import duty on natural rubber to 30 per cent next fiscal onwards, besides an immediate ban on imports temporarily as an urgent intervention. The planters body said
that rubber production during the current fiscal till December was 529,000 tonnes, which is 16 per cent lower than the corresponding period last year. However, import during the current fiscal was 359,857 tonnes, which is 38 per cent more than the previous year.
Pulses production to decline
India’s pulses output is set to decline 7 per cent to 18 million tonnes during crop year 2014-15, according to the Second Advanced Estimate by the ministry
for agriculture. Pulses’ output during the previous crop year (July-June) was estimated at 20 million tonnes.
The Centre has fixed wheat procurement target for the 2014-15 mbi marketing season at 30.06 million tonnes, against the actual procurement of 28.02 mt. The target was fixed at a meeting with state food secretaries, held to discuss procurement arrangements, an official statement said.
WPI goes negative
The wholesale price index (WPI) dipped to -0.39 per cent in January, consequent to a fall in inflation recorded for the eighth consecutive month. Inflation was at 0.1 per cent in December. The WPI plunged into the negative zone, as the slide in fuel prices more than offset the increase in food prices, which continued to be high.
Priorities on gas allocation
The government is set to revise its priorities in allocation of natural gas, by putting city gas distribution at the top, followed by atomic energy, urea plants, power and domestic LPG.
It will also make this allocation policy uniform, implying that the order of priorities will be the same irrespective of what source the gas is coming from. Currently, top priority in gas allocation is accorded to fertilisers, followed by the power, although 100 per cent of the city gas sector’s needs is to be met by domestic gas, as per a Gujarat High Court order issued last year.
JLR expands its global footprints
Tata Motors, is contemplating to set up a plant in North America for
the production of its Jaguar and Land Rover (JLR) brands. Earlier JLR opened its first overseas manufacturing facility in China, with a view to double global sales by the end of this decade. Earlier in December JLR has progressed on its ?1,800 crore Brazilian project to set up a second plant in Rio de Janeiro.
This plant aims to produce 24,000 vehicles a year once it ramps up to full production in 2016.
Neyveli Lignite Corporation’s (NLC) Unit I of NLC Tamil Nadu Power has been test synchronised with the grid on 18 February, 2015. NLC Tamil Nadu Power is the subsidiary company of NLC.
Godrej woos Darling
Godrej Consumer Products (GCPL) has inked an agreement with the Darling Group for upping its shareholding in Darling South Africa and Mozambique businesses to 90 per cent. This is in line with its intent of gradually scaling up its ownership of the Darling businesses.
BHEL to build submarines
BHEL, Mishra Dhatu Nigam (Midhani) and Hindustan Shipyards have inked an MoU for setting up a consortium for bidding and if successful, building submarines for the Indian Navy at an Indian shipyard. The initiative was inspired by Prime Minister Narendra Modi’s ‘Make In India’ initiative for catering to the defence sector.
The BSE has announced rules on the inclusion of shares with differential voting rights (dvrs) on the s&p bse Sensex, BSE 100, BSE 200 and
BSE 500 indices. Shares with differential voting rights are similar to common equity shares in all respects other than dividend received and voting rights.
Simpler advertising norms
Association of Mutual Funds in India (AMFI) has approached market regulator, Securities and Exchange Board of India (SEBI), to simplify the current advertisement norms.
The association feels the current norms are too complicated and it needs to be made clearer so that investors can take informed decisions.
Maintaining that substantive questions of law need to be addressed, the Supreme Court has referred a petition challenging the validity of the National Company Law Tribunal (NCLT) and its appellate body to a five-judge constitution bench. Madras Bar Association (MBA), a body of practising lawyers, in the Madras high court, had challenged the NCLT and the National Company Law Appellate Tribunal (NCLAT) for violating the need for separation of powers between the executive and judiciary.
Regulating e-commerce sector
The rapidly expanding e-commerce sector, which has been attacked by brick and mortar businesses over issues such as predatory pricing, has found support within the government against a proposal that seeks to impose curbs on the likes of Flipkart and Snapdeal that have disrupted the market. The department of industrial policy and promotion (DIPP) has opposed a plan to regulate the e-commerce sector, arguing that it would curtail innovation and the spirit of entrepreneurship.
A new group for stocks
To check market manipulation through ‘penny stocks’, market watchdog SEBI will soon ask stock exchanges to create a new group for shares that are found to be prone to such activities. The new group may be called ‘T+’ and would include shares that remain susceptible to manipulative activities despite having been put in the ‘T’ group where trading is restricted to delivery-based trades within a small price band of up to five per cent and intra-day trades are not allowed.
Firms face SEBI’s heat
A large number of listed firms, including top blue- chips, are facing heat from the stock market authorities for sudden surge in their share prices and trading volumes as also for ‘speculative’ information leaks. In just about one and a half months since the beginning of this year, the stock exchanges have sought ‘clarifications’ from at least 19 Sensex blue chips, including giants like Mahindra & Mahindra, Hindustan Unilever, SBI,
Coal India, Wipro, Hero Motocorp, ICICI Bank, Cipla and L&T.
SEBI is yet to reach an agreement with banks on the pricing formula for conversion of debt of troubled companies into equity. According to sources, banks want full freedom to decide on the price of converting their debt into equity without any application of pricing formula stipulated by the stock market regulator.
Banks as brokers
The Insurance Regulatory & Development Authority of India has asked insurers to pursue an open architecture model in bancassurance.
In a meeting between the insurance regulator and industry players, the chairman of the authority said that guidelines to facilitate this would be issued soon.
Nuclear pool gets IRDAI nod
Insurance sector regulator IRDAI has given in-principle approval for setting up of ? 1,500 crore nuclear liability pool for providing risk cover to nuclear reactors.
Gold import norms eased
The Reserve Bank of India has allowed banks to import gold in bullion form on a consignment basis and given them a freehand in extending gold loans. Importers who have been accredited as ‘Star Trading Houses’ and ‘Premier Trading Houses’ can import gold on ‘documents against payment’ basis without any end use restrictions.
Interconnection charges slashed
In a move that is likely to lead to reduction in call rates – both for mobile as well as fixed line users – the Telecom Regulatory Authority of India slashed various interconnection charges one operator has to pay to another for using their network. However, it is not yet known how much the tariff reduction will be.
Mobile number portability
The Telecom Regulatory Authority of India (TRAI) has said that, starting May, mobile users will be able to avail themselves of full mobile number portability (MNP) in any part of the country. This is different from the existing system, which allows users to retain phone numbers only within a circle.