สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 18 ธันวาคม 2556

Circular soon on excise duty levy on sale of goods at loss

The finance ministry will soon issue a circular clarifying on the levy of excise duty on goods sold below production cost. The circular follows the Supreme Court verdict in the case of Fiat India, that companies selling goods below manufacturing cost to capture market share will have to pay duty at the normal price (production cost plus profit). The apex court ruled that where products are sold at considerable losses for an unduly long period of time for the purpose of market penetration, the transaction value cannot be accepted for the purpose of levy of excise duty. The ruling had dealt a double blow to companies in sectors such as automobiles and consumer goods, some of which were selling products at a loss to penetrate a fiercely competitive market. Pursuant to the Supreme Court’s decision, field authorities are asking assesses to furnish cost data of various products for past years. The circular may provide safeguards so that the judgment is not rampantly extended to other situations.

(Source: Business Standard)

RBI surprises again by holding interest rates steady: Experts views

The Reserve Bank of India (RBI) unexpectedly kept the country's policy interest rate on hold on Wednesday, despite calling current inflation too high, citing the prospect of easing retail prices and its concerns about the weak domestic economy. The RBI had been widely expected to lift its repo rate by 25 basis points, but instead opted to keep the country's main lending rate at 7.75 percent. Wholesale price index (WPI) climbed 7.52 percent in November from a year earlier, its quickest pace since September 2012, compared with 7 percent in October, data showed on Monday. Data showed last week October's industrial production output shrank 1.8 percent year-on-year, dampening sentiments after recent gross domestic product data had suggested the economy may have bottomed out. India's economy grew a higher-than-expected 4.8 percent in the three months through September, helped by an uptick in agriculture and construction, government data showed last month.

(Source: Economic Times)

First FDI in multi-brand retail as Tesco teams up with Tatas

Tesco, the world’s third-largest retailer, will soon be a player in India’s $490-billion retail space, setting up stores in India in partnership with the Tata-owned Trent Hypermarket (THL). The UK-based retailer’s application to the Foreign Investment Promotion Board (FIPB) to open multi-brand outlets will be the first the government receives after it threw open multi-brand retail to FDI in September 2012. Although WalMart has had a presence in India, since 2007, in partnership with the Bharti Group, it is yet to venture into the front-end. Although foreign retailers are permitted to hold 51% of the equity in a multi-brand venture, Tesco will pick up a 50% stake in Tata’s Trent Hypermarket, investing $110 million over three years. The firm appears to have shrugged aside concerns on mandatory local sourcing of up to 30% from small and medium enterprises and apprehensions of any change in regulation. However, global retailers need permission from state governments before they can operate.

(Source: Financial Express)

India Inc must embrace mandatory CSR, says HBS Dean Nohria

Management guru Nitin Nohria today asked Indian businesses to seize the opportunity provided by mandatory corporate social responsibility (CSR) spending, but warned people will become "extraordinarily cynical" if the provision is misused by companies. The India-born Dean of the prestigious US-based Harvard Business School (HBS) said the government's new policy on CSR allows corporates to do good for the society. If implemented in the right spirit, mandatory CSR is a welcome step and businesses should embrace it, said Nohria, considered one of the most influential global thinkers. A recent amendment in the Companies Act makes it mandatory for consistently profitable corporates to spend a portion of their profit on CSR schemes every year. Stating that a lot of importance is being paid to the sustainability aspect for businesses, he said now there is a need to devote energies towards the ethical and moral aspects.  There is a greater need for business people to do philanthropic activities and also regain the lost trust, the noted academic added.

(Source: Economic Times)

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