Govt cuts GST rates of 177 items in 28% tax slab
The Dollar Business Bureau The GST Council, in its 23rd meeting on Friday, has decided to cut rates from 28% to 18% for 177 items - from detergents to chewing gums. “The all-powerful GST council pruned the list of items attracting the top 28% tax rate to just 50 from 227 previously, Bihar Deputy Chief Minister Sushil Kumar Modi told reporters in Guwahati. The council, headed by Finance Minister Arun Jaitley, cut the list of items to 50 as against 62 items as recommended by the fitment committee. “There were 227 items in the 28% slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned 12 more items,” Modi said. He further said that ...
Policy rate cut unlikely as dollar, crude prices rise: ASSOCHAM
The Dollar Business Bureau A mounting pressure on rupee against dollars, strengthening US interest rates and rebounding of the crude oil prices may have adversely affected the Reserve Bank of India’s decisions for policy interest rate cut, an ASSOCHAM study on Sunday noted. “It is true that there is ample liquidity in the banking system following demonetisation and lowering of inflation both at the WPI and CPI levels, but then this cannot be taken as a normal situation. Once the scrapped Rs.500 and Rs.1000 notes are replaced and fresh currency is injected back into the system fully, the ball game would change,” the paper said, highlighting that certain commodities such as sugar and wheat are witnessing firming of prices. The study also pointed ...
Indias factory growth in July at its fastest in four months
The Dollar Business Bureau The factory activity in India in July increased at its fastest in four months on account of surge in export orders. However, prices stayed muted, providing room to the Reserve Bank of India (RBI) to further ease the policy if required, said a private survey on Monday. The Nikkei/Markit Manufacturing Purchasing Managers' Index (PMI) surged to 51.8 in the month of July compared to June's 51.7, marking its 7th month beyond the 50 level which segregates growth from contraction. “India's manufacturing economy is reviving at the beginning of the second half of 2016 after the slowdown seen in the April-June quarter, as growth in both production and new orders continued to strengthen in July," said Pollyanna De Lima, Economist ...
RBI likely to cut rates by 25bps in Aug
The Dollar Business Bureau The Reserve Bank of India is expected to cut key rates by 25 basis points in a policy review meeting, which is scheduled on August 9. The rate cut owes to benign inflation, low IIP growth and monsoon forecast, claims a report. According to the largest global financial service provider, Bank of America- Merrill Lynch (BofA-ML), easing of 25 basis points is expected as CPI inflation stands below the expected 4.8% for March while in February the IIP rose to a mere 2%. Earlier in April, RBI lowered its policy rate to 6.5%- the lowest rate in past five years. While that was the first rate cut after a gap of 6 months, RBI reduced its rate by an aggregate ...
More rate cuts on lower inflation, good monsoon
Source: PTI Reserve Bank may further lower the interest rate if inflation continues to ease and the monsoon turns out to be good, Governor Raghuram Rajan has said. "We are looking at inflation. If it continues on a downward path, that would create room (for further rate cuts)," he said. Earlier this month, RBI reduced its policy rate by 0.25% to 6.5% -- its lowest level in more than five years. While this was the first rate cut after a gap of six months, RBI has lowered its rate by 1.5% cumulatively since January 2015. Still, the industry wants further rate cuts from RBI to boost investment. During the same time period, the banks have lowered their own lending rate by 0.25-0.5%. Rajan, ...
FM calls for doubling of loans to small business sector
Source: PIB, Government of India. The Union Finance Minister, Shri Arun Jaitley in a meeting to review the performance of the Public Sector Banks (PSBs) and Financial Institutions (FIs), in New Delhi on June 12, 2015. Source: PIB, Government of India. The Union Finance Minister Arun Jaitley asked the Chief Executive Officers (CEOs) of both the Public Sector Banks (PSBs) and private sector banks as to why the banking system, in response to RBI’s rate cut of 75 basis points since January 2015, effected a corresponding rate cut of only 25 basis points. The Finance Minister was speaking at the Annual Performance Review Meeting of the PSBs and Financial Institutions (FIs) on June 12, 2015. The CMDs of banks, ...
Growth numbers look strong only due to special factors, says RBI
The Dollar Business Bureau With the RBI reducing the repo rate by 25 bps to 7.25% on Tuesday and then, in its commentary, virtually ruling out any further reduction later in the year, the focus is back fully on the government to spur India’s economic growth. Several questions, however, remain. Why did the RBI have to cut rates, if the economy is indeed growing at an annual rate of 7.5% (as the government claims)? While interacting with the media, RBI Governor Raghuram Rajan touched upon this issue, but didn’t completely rubbish the official government figures. “In the eyes of the rest of the world, it is a discrepancy why we feel the need for rate cuts when the economy is growing ...
