PROFESSIONAL UPDATES ON 30th November 2018

SEBI UPDATES:

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  • Security Exchange Board of India May introduce a new law to allow Mutual Funds to segregate distressed debt Securities in their portfolios. The proposal for the formation of law is recently approved by the mutual funds advisory Committee, appointed by security board exchange of India. The move comes in the wake of defaults by IL&FS that led to erosion in NAVs of various debt schemes. As the value of few schemes fall 3-6% on a single day. This is about 50-70% of the annual return of some bond schemes.
  • In previous 2 years, there are some Default in companies like Amtek Auto and JSPL, which leads to massive redemption in some mutual funds the presence of select NBFC papers in various debt portfolios had led to several liquid schemes facing redemption pressure.

RBI UPDATES:

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  • RBI should provide funds to non-banks through a dedicated window, buy more government bonds from the market to infuse money and even cut the cash reserve ratio. Before we move forward we should consider the problem already arising.
  • On the other hand the currency with the public is increased by 23% in only one year. As on 9 November, credit had increase by 14.9% in a year ago, while the Banks can only mop up maximum upto 9.1% more deposit than they did a year ago.
  • The option to borrow from its different repo tenders, RBI has been infusing more than o1 trillion daily through its repo operations, a sign of growing liquidity deficit liquidity. . The blow to the sterling image of non-banking financial companies (NBFCs) has made them unworthy of credit in the eyes of banks.
  • Urjit Patel The governor of Reserve Bank of India on Tuesday mainly focused on the need to protect the autonomy of the central bank before a parliamentary panel, but stayed away from any direct criticism of the government. Patel assured the members he would provide details on the specifics of certain non-performing assets held by various banks. Patel’s deposition came in the wake of public disagreements between RBI and the finance ministry on easing liquidity supply in the credit markets. Patel asserted in his responses that RBI’s autonomy was essential to both the interests of depositors and the credibility of the Indian economy before the international rating agencies, according to the people aware of the proceedings.
  • Patel recommended that the autonomy of RBI is essential for both the depositors and the and the credibility of the Indian economy before the international rating agencies. As per the people aware of the proceedings. He was responding to a series of questions raised on the recent RBI-finance ministry.
  • Some of the BJP Members such as Nishikant Dubey and Shivkumar C Udasi have enquired if the India being overenthusiastic in Basel-III norms compliance when many signatories are not following it in letter and spirit. In Answer RBI governor said India’s compliance was a matter of credibility besides its commitment to a G20 decision.Dubey, it’s learnt, quoted from Adair Turner’s prescription in his book “Between Debt and the Devil” to make the point that the RBI must help the government in difficult times. He claimed that a committee appointed by the UPA regime had recommended a more central role for the finance ministry in relation to RBI and markets regulator the Securities and Exchange Board of India (Sebi) to resolve contentious issues.
  • At the time of Demonetization in the Economy, the governor apparently said it was only transient as the volume of credit outflow had gone up by 15.5%. The digital economy had significant growth, he said, adding that inflation had come down to around 4%. Patel projected a robust outlook for the national economy and opined that the fall in international crude oil prices will give the Indian economy the much-need boost.
  • It is decided by the RBI if it needs to call the RBI governor again after examining his written response which he is expected to submit over the next couple of weeks.
  • It is the responsibility of government and the nation to respect the functional autonomy of RBI as happened in the board meeting of RBI its  autonomy came up when RBI governor Urjit Patel testified before Parliament’s standing committee on finance. It is important for all stakeholders to view and appreciate institutional autonomy in the right spirit.

GST  UPDATES:

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  • The total collection from goods and services (GST) was projected to be Min. Rs. 12 trillion in this current financial year. On the other hand, in each month it is expected to collect Rs. 1 trillion by GST averagely. The GST in two months i.e.(April and October) has hit target. As average monthly target stood at Rs. 970 billion in the first seven months of FY19. But the average monthly revenues will have to rise at least 14 per cent in the next five months than what was achieved in the first five months to hit the target.
  • Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula. Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula.
  • A notice to finance department, the commerce ministry and the Goods and Services council is issued by the Punjab and Haryana Government High Court for restricting the benefits of advance authorisation licence for exporters under the GST regime. The advance authorisation licence is issued to for allowing the duty-free import of inputs.
  • The CBIT and customs and the ministry of commerce had introduced a clause of “pre-import” for exempting imports done on advance authorisation licenses from integrated GST.

Other Updates:

  • The government is a data bank for all medicine brands to prevent pharmaceutical companies from using the same or similar looking and sounding brand names for drugs, especially those used to treat different conditions, senior officials close to the development said.
  • The brand ‘Medzole’ has been used to market at least four different kinds of medications, including an antifungal, an antibiotic and a medication for stomach acid problems. “This is dangerous, because the patient might accidentally be taking a medicine that they are not supposed to be consuming and which could cause unwanted side effects or health problems for them,” the person told ET on condition of anonymity. It was also said that medicines in different condition are sold with the same or similar brand names without the government’s knowledge.

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decision do consult your professional /tax advisor for their misrepresentation or interpretation of act or rules author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com for any query you can write to info@carajput.com. Hope the information will assist you in your professional endeavors. For query or help contact: info@carajput.com  or call at 09811322785/4- 9555555480