Corporate Affairs ministry extends date for various schemes amid Covid-19

 Providing relief to companies amid the coronavirus pandemic-induced disruptions, the government has extended the duration of "several schemes" till December 31.

The corporate affairs ministry has extended the Companies Fresh Start Scheme and the LLP Settlement Scheme, besides allowing companies to conduct EGMs (extraordinary general meetings) and board meetings through video conference or other audio-visual means till end of this year.

Further, the scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 as well as the deadline for independent directors to register themselves on a data bank for them has been extended.

The earlier deadlines were to end on September 30.

In a series of tweets, Finance and Corporate Affairs Minister Nirmala Sitharaman's office said the corporate affairs ministry has "extended the duration of several schemes till 31.12.2020 in view of the continued disruption caused due to the COVID-19 pandemic in certain parts of the country and to provide greater Ease of Doing Business".

The Companies Fresh Start Scheme as well as the LLP Settlement Scheme -- which began from April 1 -- are aimed at enabling companies to make good on their previous defaults.

Under the schemes, entities are allowed to submit filings without late fee and also get immunity from penal proceedings with respect to delay in submission of requisite filings.

Independent directors are required to register themselves on the independent directors' data bank maintained by the Indian Institute of Corporate Affairs (IICA), which comes under the corporate affairs ministry.

The ministry is implementing the Companies Act and LLP Act, among other activities.

Govt looking to implement all 4 labour codes in one go by Dec: Gangwar

 The government is aiming to implement all the four labour codes in one go by December this year and complete the final stretch of labour sector reforms, Union minister Santosh Gangwar has said.

Parliament in its just concluded session passed three labour code bills: the Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health and Working Conditions Code.

The Wage Code Bill, 2019 was passed by Parliament last year.

The labour ministry had circulated the draft rules on the Wage Code Bill last year but held back its finalisation and implementation. The ministry wanted to implement all the four codes and rules under those in one go as all of them are interlinked.

Talking to PTI, Labour Minister Gangwar said, "Government is doing all efforts to complete the labour reforms by implementing all four labour codes by December this year..."

He further said the Wage Code Bill was passed last year and now with the passage of three more codes by Parliament, "the rules under these legislations would be enforced at once".

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After the passage of legislation in Parliament, it is sent for the President of India assent.

A law comes into force after notification of rules.

Initially, draft rules under law is notified with a stipulated time period to receive feedback. Thereafter, these rules are finalised and implemented for bringing the law into force.

The draft rules of the three codes on industrial relations, social security, and occupational safety, health and working conditions are likely to be circulated by the first week of November for feedback.

The labour ministry is expected to finalise and implement rules of the three codes along with already firmed wage code rules by December this year. Thereafter, these four codes would become the law of land to complete game-changing labour reforms in the country.

The government aims to catapult India to among the top 10 countries in the World Bank's ease of doing business rankings with the comprehensive labour reforms.

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As per the 'Doing Business' 2020 report, India had jumped 14 places to the 63rd position in the ease of doing business rankings. India has improved its rank by 79 positions in five years (2014-19).

The higher ranking would boost investment and job creation in the country.

Commenting on labour reforms K E Raghunathan, Convenor of CIA (Consortium of Indian Association), said, "The COVID-19 situation has made both the life of employer and employee difficult. If the government statistics say over 21 million Job loss during April to August then the figure of employers who lost enterprises is yet to be ascertained. We estimate them to be around 30 per cent of over 65 million enterprises."

He further stated, "Under these circumstances, these new (labour) codes are bound to make new enterprises investor friendly, increase ease of doing business and make it attractive to invite foreign entities which want to come out of China.

Partial relief for firms as govt extends IBC suspension for three months

 The government has decided to extend the suspension of insolvency and bankruptcy proceedings against companies for another three months till December 24 against the defaults since March 24, a notification by the corporate affairs ministry said.

In June, in order to give a breather to companies facing stress due to the pandemic, government brought an ordinance exempting companies from facing corporate insolvency resolution proceedings against any default arising for at least a six month period starting from March 25, assuring no such proceedings will ever be initiated for default during this period.

The six month period ended on September 24.

The IBC law has also been amended to include this provision which has empowered the government to issue a notification to extend the suspension for a period not exceeding one year.

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This suspension of IBC will not be applicable to any default committed before March 25. The three sections which stand suspended are Section 7, 9, and 10. A new Section 10A has been added to suspend the code.

The government had said that it is difficult to find adequate resolution applicants to rescue the corporate person who may default in discharge of their debt obligation and that the Covid-19 pandemic had impacted the economy all over the world creating uncertainty and stress for businesses for reasons beyond their control.

Fiscal deficit hits 132% of estimate till Dec on slow revenue collection

The government's fiscal deficit touched 132.4 per cent of the full-year target at December-end mainly due to slower pace of revenue collections, official data showed on Friday.
In actual terms, the fiscal deficit or gap between expenditure and revenue was Rs 9,31,725 crore, the data released by the Controller General of Accounts (CGA) showed.
The government aims to restrict the gap at 3.3 per cent of the GDP or Rs 7,03,760 crore in the year ending March 2020.
The deficit was 112.4 per cent of 2018-19 Budget Estimate (BE) in the corresponding period.
According to the CGA, the government's revenue receipts were Rs 11.46 lakh crore or 58.4 per cent of the 2019-20 BE. In the same period last fiscal, the collections were 62.8 per cent of the BE.
The data further revealed that total expenditure was 75.7 per cent of BE or Rs 21.09 lakh crore. During the corresponding period in 2018-19, the expenditure was 75 per cent of the BE.
Of the total spending, the capital expenditure was 75.6 per cent of the BE, higher than 70.6 per cent of the estimates during the same period in 2018-19.
The Economic Survey on Friday made a case for relaxing the fiscal deficit target of 3.3 per cent of GDP in view of the need to arrest the declining growth, estimated to touch an 11-year low of 5 per cent in the current fiscal.
The Medium Term Fiscal Policy (MTFP) Statement presented with the Budget 2019-20, pegged the fiscal deficit target for 2019-20 at 3.3 per cent of GDP, which was further expected to follow a gradual path of reduction and attain the targeted level of 3 per cent of GDP in 2020-21, and continue at the same level in 2021-22.
In September 2019, the government decided to lower tax rate for corporates, taking an estimated hit of Rs 1.45 lakh crore on its revenue mobilisation.
Tax sops were intended to boost investment cycle in the face of slowing GDP growth, which dipped to a six-year low of 5 per cent in the first quarter ended June.
It is widely expected that Finance Minister Nirmala Sitharaman will announce slew of measures to revive the slowing economic growth. The GDP growth is estimated to slow to an 11-year low of 5 per cent during the current financial year ending March 2020.
The Economic Survey expects the growth to pick up during the next year. It has projected the GDP growth rate to be in the range of 6-6.5 per cent in 2020-21.

Housing sales fall 9%, new supply down 10% in Oct-Dec on economic slowdown

Housing sales fell 9 per cent during October-Decemberacross nine cities to 60,453 units due to economic slowdown and liquidity crisis, according to a report.
Housing brokerage firm PropTiger recently reported 30 per cent fall in sales in nine cities during October-December quarter. However, during 2019 calendar year, realty consultants Knight Frank India and Anarock mentioned that sales rose by one per cent and 5 per cent, respectively.

"The absorption witnessed a dip of 9 per cent as compared to the same period last year and new launches have dropped by 10 per cent on a year-on-year basis. The downtrend observed was mainly due to economic slowdown and liquidity crisis in the market," PropEquity said in its Q4 report.
The nine cities tracked by PropEquity are Mumbai, Thane, Bengaluru, Kolkata, Chennai, Noida, Gurugram, Pune and Hyderabad.
"Residential real estate continues to be an end user driven market as ready to move-in or nearing completion properties are being preferred. Consumers are now looking for developers with excellent track records in terms of quality and execution," it added.
According to the data, housing sales in Pune declined 9 per cent during October-December period to 15,453 units as compared with the year-ago period.
Thane and Hyderabad saw 16 per cent fall at 11,933 units and 4,643 units, while Bengaluru and Mumbai witnessed 12 per cent dip each at 10,263 units and 5,996 units respectively.
Housing sales in Chennai too dropped 14 per cent to 3,632 units.
However, Kolkata saw sales rising by 26 per cent to 4,743 units. Housing sales in Gurugram rose by 19 per cent to 2,175 units and Noida by 20 per cent to 1,615 units.
"We expect markets to recover in 2020 and also expect government to announce positive measures in the forthcoming budget, said Samir Jasuja, founder and managing director at PropEquity.
PE Analytics owns and operates PropEquity, which is an online real estate data and analytics platform covering over 1,18,010 projects of 34,217 developers across 44 cities.

India's exports dip for fifth straight month in Dec, trade deficit narrows

India's merchandise exports shrank 1.8% in December, falling for the fifth straight month, while the trade deficit narrowed to $11.25 billion from a year ago, helped by lower oil imports, the Trade Ministry said in a statement said on Wednesday.
Merchandise exports fell to $27.36 billion in December compared with a year earlier, while imports were down 8.83% to $38.61 billion, the data showed.

India's trade deficit stood at $14.49 billion in December 2018, the statement said.

India's annual electricity demand grows at slowest pace in 6 years

India's annual electricity demand in 2019 grew at its slowest pace in six years with Decembermarking a fifth straight month of decline, government data showed, amid a broader economic slowdown that led to a drop in sales of everything from cars to cookies and also to factories cutting jobs.
Electricity demand is seen as an important indicator of industrial output in the country and a sustained decline could mean a further slowdown in the economy.

India's power demand grew at 1.1% in 2019, data from the Central Electricity Authority showed, the slowest pace of growth since a 1% uptick seen in 2013. The power demand growth slowdown in 2013 was preceded by three strong years of consumption growth of 8% or more.
In December, the country's power demand fell 0.5% from the year-earlier period, representing the fifth straight month of decline, compared with a 4.3% fall in November.
But in India's western states of Maharashtra and Gujarat, two of India's most industrialised provinces, monthly demand increased.
In October, power demand had fallen 13.2% from a year earlier, its steepest monthly decline in more than 12 years, as a slowdown in Asia's third-largest economy deepened.
Industry accounts for more than two-fifths of India's annual electricity consumption, while homes account for nearly a fourth and agriculture more than a sixth.
The slower demand growth is a blow for many debt-laden power producers, who are facing financial stress and are owed over $11 billion by state-run distribution companies.
India's overall economic growth slowed to 4.5% in the July-September quarter, government data released in November showed, the weakest pace since 2013 as consumer demand and private investment fell.
The government has estimated growth in the current financial year that runs through to March will be the slowest since the 2008 global crisis.
"This reflects overall economic slowdown, because if you look at other high frequency data like diesel consumption, everywhere you are seeing contraction," Rupa Rege Nitsure, chief economist at L&T Financial Holdings.
But India's central bank will not have much scope to cut rates to stimulate the economy because inflation has been rising sharply and reached 7.35% in December compared with 1.97% in January last year.
Economists say India's growth will continue to hover around 4.5% levels in the Oct-Dec quarter.
"In the Oct-Dec quarter as well growth (GDP) will be around the same level as July-September. My estimate for the full year is around 4.7% growth," Nitsure said.

Core sector growth slows down to 2.6% in Dec on crude oil, fertilisers

Eight core sectors grew at their slowest pace in 18 months at 2.6 per cent in December 2018 due to fall in output of crude oil, refinery products and fertilisers, official data showed Thursday.
The previous lowest expansion in output of these key industries was recorded in June 2017 at 1 per cent.

The growth rate of the eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- stood at 3.8 per cent in December 2017.
Crude oil, refinery products and fertiliser production recorded negative growth of 4.3 per cent, 4.8 per cent and 2.4 per cent, respectively in December 2018.
Growth of cement and electricity sectors slowed to 11.6 per cent and 4 per cent in December 2018 as against 17.7 per cent and 4.4 per cent in December 2017, respectively.
However, coal, natural gas and steel output grew by 0.9 per cent, 4.2 per cent and 13.2 per cent in December 2018.
Slow growth in the key sectors would also have implications on the Index of Industrial Production (IIP) number as these segments account for about 41 per cent of the total factory output.
According to Commerce and Industry Ministry data, during April-December 2018-19, the eight sectors recorded a growth of 4.8 per cent as compared to 3.9 per cent in same period of the previous fiscal.

Exports growth stays flat in Dec 2018; trade deficit falls to 10-month low

The country's exports growth remained almost flat in December 2018, recording a marginal expansion of 0.34 per cent to $27.93 billion, mainly on account of global trade tensions.
Subdued exports and declining imports have narrowed the trade deficit to a ten-month low of $13.08 billion in December 2018 as against $14.2 billion in the same month of the previous year.

According to trade data released by the commerce ministry, in last December, exports grew by 0.34 per cent (lowest in three months), while imports entered the negative zone, registering a decline of 2.44 per cent to $41 billion.
Last time, imports had plunged into negative territory in September 2016. It was dipped by 2.54 per cent then.
The import of gold, too, contracted by 24.33 per cent to $2.56 billion in December 2018.
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During the month under review, several key export sectors recorded negative growth. It includes engineering goods, gems and jewellery, leather, pharmaceuticals, marine products, iron ore, tea and coffee.
Commenting on the figures, exporters body FIEO said that the marginal growth in exports was due to uncertain global cues and challenges on the domestic front.
"China's exports contracted in December 2018, highlighting fragile global conditions. The weak global economic outlook are showing no signs of respite," Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta said.
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Engineering Export Promotion Council (EEPC) Chairman Ravi Sehgal too said the unfolding global situation comprises not only problems on account of trade tensions between China and the US but other issues like uncertainty over Brexit fall-out in the European markets.
"The situation certainly calls for a major rethink and redrawing of our export strategy," he said.
However, cumulatively during April-December this fiscal, exports grew by 10.18 per cent to $245.44 billion. Imports rose by 12.61 per cent to $386.65 billion.
The trade deficit widened to $141.2 billion during the nine months of the current fiscal from $120.57 billion in April-December 2017-18.
ALSO READ: India's exports contract, but trade deficit falls to five-month low
Oil imports in December 2018 rose by 3.16 per cent to $10.67 billion. During April-December this fiscal, imports grew by 42.85 per cent to $108.10 billion.
Non-oil imports during the nine-month period of the fiscal increased by 4.06 per cent to $278.54 billion. 

Why states are finding Centre's call to power all homes by December tough

The Union government recently announced its achievement of 100 per cent electrification of all villages before schedule. However, states, especially those in the non-special category, are saddled with a bigger worry to electrify all households by December 2018 as mandated in the Centre’s Saubhagya scheme.The Union government recently announced its achievement of 100 per cent electrification of all villages before schedule. However, states, especially those in the non-special category, are saddled with a bigger worry to electrify all households by December 2018 as mandated in the Centre’s Saubhagya scheme.
The country still has 31.2 million un-electrified households. Of this, the special category states (SCS) have 3.3 million households to cover while the non-special category states will have to electrify the rest. The funding requirement for SCS households is pegged at Rs 45 billion. Such states would be granted 90 per cent of the funding requirement, so they will find it easier to achieve the electrification targets.
In contrast, the non-SCS states need funds of the order of Rs 150-180 billion over the next seven months to electrify the balance households. A report by CARE Ratings points out that state discoms (distribution companies) with high outstanding UDAY (Ujjwal Discom Assurance Yojana) bonds and poor operational efficiency would find it difficult to quickly create infrastructure and ramp up transmission network for ensuring last mile connectivity.
Between them, Uttar Pradesh, Bihar, Odisha and Jharkhand have almost 22 million un-electrified households and would find it tough to achieve Saubhagya scheme targets by December 2018. Uttar Pradesh alone has 13.25 million un-electrified households, 42.4 per cent of the country’s total. The state is also amongst the top three power consuming states. Uttar Pradesh is followed by Bihar with 3.2 million un-electrified houses. Odisha, Jharkhand, Rajasthan, Assam and Madhya Pradesh have over one million un-electrified households each.
Discoms in UP and Bihar continue to lag on operational parameters, the report by CARE Ratings says. Both Bihar and Uttar Pradesh have steep AT&C (aggregate technical & commercial) losses at 36.8 per cent and 31 per cent respectively. A high AT&C loss is a pointer to a discom’s lower collection efficiency and lesser revenues which leads to mounting losses and affects the company’s fund raising capacity.
Uttar Pradesh along with Rajasthan account for 52.4 per cent of the UDAY bonds issued at Rs 1.21 trillion out of the total UDAY bonds issued worth Rs 2.33 trillion. Telengana, Madhya Pradesh and Odisha also have sizeable amounts of outstanding UDAY bonds. The bonds were issued to cut interest cost on the discoms while they improved their operational efficiency. For discoms with mounting losses, arranging Rs 150-180 billion is an immediate challenge unless state governments or financing agencies like Rural Electrification Corporation (REC provide for the same.
Since the introduction of the Saubhagya scheme in September 2017, 5.4 million households have been electrified. With barely 200 days left to achieve the target for electrification of balance households, almost 150,000 households need to be electrified each day.
The Union government has allocated Rs 215.50 billion for electrification scheme. Out of the total outlay, Rs 27.5 billion is set aside for the Saubhagya scheme and the residual funds for implementing Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGY).
State Un-electrified
households (mn) Householdselectrified (%) AT&C loss (%) UDAY Bonds (Rs bn)Uttar Pradesh 13.21 55.98 30.94 495Bihar 3.19 74.44 36.75 31.09Odisha 3.08 63.77 Not available Non-participantJharkhand 2.86 47.77 36.28 61.36Assam 2.25 56.99 20.00 Special category stateSource: UDAY.gov.in

India's Manufacturing PMI hits 5-year high in December

India's factory activity expanded at the fastest pace in five years in December, a private sector survey showed on Tuesday, buoyed by a rise in output and new orders, which allowed firms to raise prices.
Tuesday's data firms up views that business in Asia's third-largest economy continues to recover but also highlights risks that rising price pressures will keep the Reserve Bank of India (RBI) from slashing interest rates further.

The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, rose to 54.7 in December from November's 52.6, marking its fifth straight month above the 50 level that separates expansion from contraction.
"India's goods-producing economy advanced on its recovery path, with operating conditions improving at the strongest pace since December 2012," said Aashna Dodhia, an economist at IHS Markit.
"Strong business performance was underpinned by the fastest expansions in output and new orders since December 2012 and October 2016, respectively. Anecdotal evidence pointed to stronger market demand from home and international markets."
The country's manufacturing sector witnessed higher payroll figures in December while the rate of job creation rose to its highest since August 2012.
The latest survey showed the new orders sub-index, a proxy for domestic demand, also rose to 56.8 in December, the highest since October 2016.
Foreign demand also expanded at its quickest pace since June.
"Challenges remain as the economy adjusts to recent shocks, but the overall upturn was robust compared to the trend observed for the survey history. This outlook was shared by the manufacturing community as sentiment picked-up to the strongest in three months amid expected improvements in market conditions over the next 12 months," Dodhia added.
At the same time, stronger demand allowed firms to raise prices at the fastest pace in 10 months to make up for rising input costs, suggesting overall inflation could remain above the central bank's medium-term target of 4.0 percent in the coming month.
India's retail inflation in November breached the central bank's medium-term target of 4 percent, which could put pressure on it to raise policy rates in the coming months.
Minutes from the RBI's December meeting show bank members are becoming increasingly concerned about inflation.