'Attractiveness of a company is determined not by what is the stock price today or next week''An economy as large as India cannot grow with a huge natural resources deficit' 'It is important to have a company that competes at world-scale, with world-class technology' As Cairn India gets ready to merge with its parent entity, Vedanta, it is grappling with issues that range from tax notices to expiry of the production sharing contract with government-owned Oil and Natural Gas Corporationfor its flagship asset in Barmer. Mayank Ashar, below, managing director and chief executive officer, talks on these issues with Business Standard. Edited excerpts: How would the merger with Vedanta, when completed, affect the larger business strategy of Cairn India? The merger requires the approval of minority shareholders. Until that time, it is the normal way of doing business. Once they decide, there will be a process (to carry the merger forward). I do not see any material change after the merger, … [Read more...] about ‘No free lunch for the government; businesses need returns to invest’
Small business tax relief
Assembly elections coming up in November and December could offer a window of opportunity to the government to make GST attractive through rate cuts. Illustration: Uttam Ghosh/Rediff.com Goods and Services Tax, which turned one on July 1, is likely to usher in significant reforms by 2019, experts and consultants believe. The changes could be in terms of tax rates, expansion of ambit, system of advance rulings, clarity on cess and procedural issues. But, some tweaking is possible much sooner. For instance, minor rate cuts in the range of 1-2 percentage points may be announced to incentivise digitalisation, anti-profiteering authority is likely to start imposing fine on companies and the refunds process is expected to be more streamlined. Some of the major changes, including single return filing system, would follow beta testing of new software for return simplification towards the year-end.Assembly elections coming up in November and December could offer a window of opportunity to the … [Read more...] about Will GST 2.0 lead to changes in tax rates?
By Gautam Chhaochharia Since the recent significant cut in corporate tax rates, there has been a significant debate on its efficacy in reviving growth, especially in light of the fiscal cost of the move. We believe the reform is more about solving the structural drag on India’s growth rather than solving near-term growth pangs. The structural drag on India’s growth has been one of a ‘slowing middle’, or slowdown in the creation of highquality jobs driving weaker growth in middle-income households. UBS’ detailed modelling two years back captured this trend. The growth in entry-level car sales, which has lagged overall car sales growth over last few years, was a clear symptom of this. However, in last few years, the fall in household savings and increasing consumer leverage, has helped consumption remain resilient vis-à-vis household incomes and, at the same time, made this structural issue less obvious to the markets. This was compounded by the fact … [Read more...] about Tax reforms can be a panacea for the structural drag on economic growth
BEIJING: London copper prices topped $6,200 a tonne for the first time in seven months on Friday and were set to gain for a seventh session in eight, as Washington and Beijing moved closer to ending their long-running trade row. Copper, widely used in power and construction, is on course to add 3.5 per cent this week in what would be its fourth straight weekly rise. The metal was on track for its biggest weekly gain since the week ended Feb. 22, after a year in which trade clouds have continued to weigh on prices for industrial metals. The United States has agreed to reduce tariffs on Chinese goods and delay a tranche of tariffs that were slated to go into effect on Dec. 15 as part of a "phase one" trade deal, according to a U.S. source familiar with the situation. Sentiment was also boosted by a pledge from top officials in top metals consumer China to make economic policies more effective in 2020. "Overall, we are of the view that this work plan for 2020 is quite favourable to … [Read more...] about Copper heads for best week since Feb on US-China trade relief
Leaders say they now want a quick divorce and to move on to talks on a free-trade accord with the EU, even if they are likely to be difficult. "I'm relieved for my country," Ireland's Prime Minister Leo Varadkar said at an EU summit on Friday. A so-called orderly Brexit with a transition period is crucial for investors and businesses who fear a "no-deal" departure would disrupt trade and financial markets. "We expect a vote on the withdrawal agreement as soon as possible," European Council President Charles Michel told reporters, referring to the deal that Johnson and the EU struck setting the terms of Britain's exit on Jan. 31, 2020. "It's important to have clarity as soon as possible," Michel said. Leaders from Italy to the Netherlands echoed that sentiment, with Luxembourg's Prime Minister Xavier Bettel saying: "Boris won the election by telling everyone he wants to deliver, so now it's time to deliver." Senior German conservative lawmaker Norbert Roettgen, an ally of Chancellor … [Read more...] about EU views UK result with relief, reluctance