The International Monetary Fund today lowered India’s growth projection to 6.7 percent in 2017, 0.5 percentage points less than its previous two forecasts in April and July, attributing it to demonetisation and introduction of the Goods and Services Tax.

It also lowered the country’s growth for 2018 to 7.4 percent, 0.3 percentage points less than its previous two projections in July and April.

India’s growth rate in 2016 was 7.1 percent, which saw an upward revision of 0.3 percentage points from its April report.Source: BloombergQuint

Union Finance Minister Arun Jaitley on Tuesday defended the government for maintaining secrecy over demonetisation before its announcement, saying transparency in this case would have been the “greatest instrument of fraud”.

Jaitley, who is on a week-long visit to the US to attend the annual meetings of the International Monetary Fund and World Bank, said that announcing this major initiative in advance could have resulted in people buying gold, diamond and land and going through various kinds of transactions with the cash they had.

“Transparency is a very nice word. But transparency in this case (of demonetisation) would have been the greatest instrument of fraud,” Jaitley told students of the Columbia University in New York. The Finance Minister was responding to a question that why Prime Minister Narendra Modi kept the demonetisation plan a closely guarded secret with only a handful of top officials privy to the move.Source: Financial Express

Anil Ambani-led Reliance Infrastructure (RInfra) has entered into exclusive talks with Adani Transmission for selling its Mumbai power business.

“The company has entered into a period of exclusivity until 15 January 2018, in relation to discussions for the proposed sale of its integrated business of generation, transmission and distribution of power for Mumbai city to Adani Transmission,” said Mumbai-based Reliance Infrastructure in a BSE filing.

Following the news, shares of Adani Transmission hit the upper circuit of 10 percent on the BSE. The scrip closed at Rs 193.25, up 10 percent, while RInfra closed marginally up at Rs 477.65.Source: Business Standard

A bipartisan consensus emerged on Tuesday after Gujarat, Maharashtra and Himachal Pradesh cut value added tax (VAT) on petrol and diesel in tandem with the central government’s decision last week to reduce excise duty, stoking expectations that the inclusion of petroleum products in the goods and service tax (GST) may happen sooner.

The actions of the three state governments will put pressure on other states to cut VAT on petrol and diesel; it also signalled the possibility of coordinated responses even on products outside GST- in this case it could have a salutary effect on retail inflation.

Bharatiya Janata Party (BJP)-ruled Gujarat reduced VAT on petrol and diesel by 4%, becoming the first state to give relief to consumers from a recent surge in oil prices.Source: Livemint

India’s only reinsurer General Insurance Corporation of India will launch what will be the country’s third largest initial public offering today as the government begins to pare stake in state-run insurers.

GIC will sell shares at Rs 855-912 apiece to raise Rs 11,370 crore in the three-day offer, valuing the company at Rs 80,000 crore at the upper end. It will offload close to 12.47 crore shares through a fresh issue and an offer for sale by the government. Retail investors and employees will get a Rs 45 discount per share.

Citi, Axis Capital, Deutsche Bank, HSBC and Kotak Investment Banking are the book-runners for the offer.Source: BloombergQuint

The government on Tuesday expanded the scope of the new insolvency rules to bring individual businesses under its purview.

On Tuesday, the Insolvency and Bankruptcy Board of India (IBBI) published the draft rules dealing with insolvency resolution process of individuals and firms on its website (; public comments can be submitted till 31 October.

Once notified, even individual businesses such as proprietorships will come under the bankruptcy regime. This will enable an orderly bankruptcy resolution within the purview of a transparent rules-based regime. The existing insolvency and bankruptcy code, at present, applies only to corporate defaulters.Source: Livemint

As public sector banks (PSBs) go slow in giving credit to industry, private sector banks and non-banking finance companies (NBFCs) have been quick to lend a helping hand.

PSBs have seen their market share in loans to the commercial sector erode from 70.9 percent in 2014-15 to 64 percent in 2016-17. Private sector banks have gained 680 basis points to reach 33.1 percent in the same period.

Compared to banks, whose year-on-year (YoY) credit growth rate was 5.1 percent in 2016-17, NBFCs registered 13 percent growth. NBFCs have increased their market share in credit to business from 2 percent in 2015-16 to 2.8 percent in 2016-17.

A study released by the Reserve Bank of India (RBI) on Tuesday showed that NBFCs disbursed Rs 84,000 crore of commercial loans in 2015-16, but the segment rose sharply to Rs 1.24 lakh crore in 2016-17, growing the book by 8.8 percent.Source: Business Standard

India will soon have a natural gas trading platform, which could lead to market-determined pricing of gas. At the end of the India Energy Forum by CERAWeek, Minister for Petroleum and Natural Gas Dharmendra Pradhan said: “We will soon move the Cabinet to seek approval for setting up a gas trading platform.”

This will be similar to global hubs such as Henry Hub of the US and National Balancing Point of the UK.

“Both imported natural gas (liquefied natural gas or LNG) and domestically produced gas will be traded at the hub. This will enable market determination of the Indian price for natural gas,” a government official told BusinessLine.

Pradhan said: “The gas exchange is in the interest of the Indian consumer. The world average of gas consumption is 24 percent, while in India it is 6-7 percent.” In future, all new production will have marketing freedom, Pradhan said.Source: The Hindu Business Line

India’s three biggest state-run oil marketers refused to roll back penalties against malpractices in sale of petrol and diesel at fuel stations even as dealer unions called a day-long strike on Friday.

The disciplinary issues are in the interest of customers and are not negotiable, BS Canth, director (marketing) at Indian Oil Corporation Ltd, told BloombergQuint, signalling there will be no further negotiations regarding any change in the guidelines.

The marketing discipline guidelines provide for a penalty of up to Rs 2 lakh on pumps that manipulate the quantity of fuel sold to customers or switch to the manual mode or tamper with the system without informing the companies. Dealers found violating the guidelines thrice will lose their licence.Source: The Hindu Business Line

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