Budget 2021: Power discoms get second chance, Rs 3.05 trillion for reforms

 Scheme will provide assistance to discoms for infrastructure creation, inclusion of prepaid smart metering, feeder separation, upgradation of systems

The Union Budget offered a second chance to financially ailing power distribution companies (discoms) with the Finance Minister announcing a Rs 3,05,982 crore outlay for a revamped reform scheme for the discoms.

In her Budget speech, finance minister Nirmala Sithraman said a revamped, result-linked scheme for five years would be launched for the discoms.

“The viability of distribution companies is a serious concern. A revamped, reform-based, results-linked, power distribution sector scheme will be launched with an outlay of Rs 3,05,982 crore over five years. The scheme will provide assistance to discoms for infrastructure creation, inclusion of prepaid smart metering, feeder separation, upgradation of systems,” she said.

This paper had reported that the discoms will get five more years to reform their financials and operations.

The FM also noted that consumers should be provided with the choice of power supplier. “The distribution companies across the country are monopolies, either government or private. There is a need to provide choice to the consumers by promoting competition. A framework will be put in place to give consumers alternatives to choose from among more than one distribution company,” she said.

The earlier discom reform scheme UDAY concluded in FY20 with most of the states failing to meet their stipulated targets. The Aggregate Technical & Commercial (AT&C) losses or power supply losses due to inefficient systems were supposed to come down to 15 per cent and average cost-revenue (ACS-ARR) gap of discoms, down to zero by FY20.

However, AT&C losses currently stand at 23.9 per cent and cost-revenue gap at 0.53 paisa, according to the UDAY portal. The numbers are the national average of last available data of all discoms of FY20 and indicative data of six states during Q1FY21

FM announces Rs 18,000 crore scheme for public transport in urban areas

 The government on Monday announced a Rs 18,000 crore scheme to augment public transport in urban areas

The government on Monday announced a Rs 18,000 crore scheme to augment public transport in urban areas.

In the first paperless Union Budget, Finance Minister Nirmala Sitharaman said there will be 100 per cent electrification of broad gauge rail tracks by December 2023.

She also said a record Rs 1,10,055 crore will be provided for railways, of which Rs 1,07,100 crore will be for capital expenditure in 2021-22.

Finance Minister Nirmala Sitharaman on Monday proposed to increase the capital expenditure to Rs 5.54 trillion in the financial year starting April 1, 2021.

Unveiling the Budget 2021-22 in the Lok Sabha, she announced raising the capital expenditure to Rs 5.54 trillion from the revised estimate of Rs 4.39 trillion in the current financial year.

The Budget estimate of capital expenditure for FY2020-21 was Rs 4.12 trillion.

Govt to launch national monetisation pipeline for brownfield infra assets

 Finance Minister Nirmala Sitharaman said the government will launch national monetisation for potential brownfield infrastructure assets

Finance Minister Nirmala Sitharaman said the government will launch national monetisation for potential brownfield infrastructure assets.

Sitharaman announced this while presenting 2021-22 Budget in Parliament.

"National monetisation pipeline for potential brownfield infrastructure assets will be launched," Sitharaman said.

Last month Road Transport, Highways and MSMEs Minister Gadkari has said that National Highways Authority of India (NHAI) is planning to raise Rs 1 lakh crore through monetisation of highways under the toll-operate-transfer (TOT) mode in the next five years.

"NHAI intends to raise Rs 1 lakh crore through the TOT plan of asset monetisation in the next five years. We are getting excellent response and have got a lot of new models and pension funds besides investors from abroad," Gadkari had said.

NHAI is authorised to monetise public-funded national highway projects, which are operational and are collecting toll for at least one year after commercial operation, through the TOT model on a case-to-case basis.

Read More : Union Budget 2021

Budget 2021 unveils scheme for setting up mega textile parks in India

 The government unveiled a scheme for setting up mega textile parks, as part of the efforts to position India as a fully integrated, globally competitive manufacturing and exporting hub for the sector

The government on Monday unveiled a scheme for setting up mega textile parks in the country, as part of the Centre's efforts to position India as a fully integrated, globally competitive manufacturing and exporting hub for the sector.

Finance Minister Nirmala Sitharaman made the announcement while presenting the Budget 2021-22 in Parliament.

"A scheme of mega investment textile parks will be launched in addition to the PLI scheme," Sitharaman said.

She informed that 7 mega textile parks will be launched in three years as part of the scheme.

The mega textile parks will have integrated facilities and quick turnaround time for minimizing transportation losses, eyeing big-ticket investments in the sector.

The textile ministry had recently said a scheme and a Mega Integrated Textile Region and Apparel (MITRA) Park, in over 1,000 acres of land with state-of-the-art infrastructure, common utilities and Research and Development (R&D) lab, are under consideration.

So far, 59 textile parks have been sanctioned under the scheme for integrated textile parks, out of which 22 have been completed.

The production-linked incentive (PLI) scheme, announced earlier for 10 key sectors including textile and automobiles, would help India become self-reliant, boost manufacturing and enhance exports.

The government had approved the PLI scheme for 10 sectors, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period.

Top corporate bond arranger expects spreads on highest-rated notes to widen

 "We think the RBI will guide liquidity toward more normal settings, which could lead to spreads widening on corporate bonds," ICICI Bank's top official said

ICICI Bank Ltd., one of India’s top corporate bond arrangers, expects spreads on the highest-rated local notes to widen further as the central bank begins to withdraw emergency liquidity.

The extra yield investors demand to hold AAA rated company notes due in one year over comparable government securities jumped to the highest since October last week and remains near that level. That came after the Reserve Bank of India on Jan. 8 announced plans to drain excess cash from markets.

Easy liquidity and record-low borrowing costs have been a crucial lifeline helping many companies make it through the financial fallout from the pandemic. But as economic data suggest India will bounce back strongly this year, authorities may need to pare stimulus further ahead. India isn’t alone in draining excess cash. China’s central bank is also taking steps to constrain excessive liquidity.

“We think the RBI will guide liquidity toward more normal settings, which could lead to spreads widening on corporate bonds,” B. Prasanna, ICICI Bank’s group head of global markets, sales, trading and research said in an email interview.

Yields on shorter bonds surged earlier this month after the Reserve Bank of India said it would withdraw 2 trillion rupees ($27.4 billion) via a 14-day reverse repo auction on January 15.

Mark Zuckerberg defends WhatsApp privacy policy amid India backlash

 In a quarterly earnings call with analysts on Wednesday, Zuckerberg said that the company has moved the date of this update back to give everyone time to understand what the update means.

Facebook CEO Mark Zuckerberg has defended the upcoming WhatsApp privacy policy that has witnessed a massive backlash in India, saying that the update does not change the privacy of anyone's messages with friends and family.

The WhatsApp policy has now been put on hold till May 15. It aims to share commercial user data with parent Facebook. The Indian government has also written a letter to WhatsApp CEO Will Cathcart to withdraw the policy.

In a quarterly earnings call with analysts on Wednesday, Mark Zuckerberg said that the company has moved the date of this update back to give everyone time to understand what the update means.

"All of these messages are end-to-end encrypted, which means we can't see or hear what you say and we never will, unless the person that you message chooses to share it and business messages will only be hosted on our infrastructure if the business chooses to do so," Zuckerberg said.

More than 175 million people message WhatsApp Business accounts every day.

"We are building new features to make it even easier to transact with businesses in the app," the Facebook CEO added.

"We're building tools to let businesses store and manage their WhatsApp chats using our secure hosting infrastructure if they would like and we're in the process of updating WhatsApp's privacy policy in terms of service to reflect these optional experiences".

Raising concerns over the WhatsApp privacy policy, the Union Ministry of Electronics and IT has asked the messaging platform to withdraw the update.

In its strongly worded letter to Cathcart, the ministry has slammed the platform's "all or nothing" approach. The letter noted that the proposed changes to the privacy policy raise "grave concerns regarding the implications for the choice and autonomy of Indian citizens."

The matter is also under discussion at the Delhi High Court.

High stakes as India vows to present a Budget like 'never before'

 Total spending plan for next fiscal may surpass last year's Rs 30.4 trn, with focus likely on expanding a jobs guarantee program to cities and increasing allocation on education, housing, and health

India will turn to Finance Minister Nirmala Sitharaman’s budget 2021 on Monday to see how she prioritizes spending to get the pandemic-ravaged nation back to being the world’s fastest-growing major economy.

Sitharaman’s plan will likely rely on generous public spending to spur activity, putting more money in the hands of the average taxpayer to boost consumption and easing rules to attract investments when she presents the budget at 11 a.m. in New Delhi.

“Expectations are high, going into this budget,” said Samiran Chakraborty, an economist with Citigroup Inc. “Expenditure profile could move from survival to revival as the focus on infrastructure increases.”

That spending may continue to keep the fiscal deficit far wider than the 3 per cent of gross domestic product mandated by law. The budget gap for the year to March will probably be 7.25 per cent of GDP against a planned 3.4 per cent, according to a Bloomberg survey. The same poll shows the target for the next fiscal year will likely be 5.5 per cent.

Missing deficit goals will be the least of the worries for Prime Minister Narendra Modi’s government. It has to contend with creating jobs for the millions who lost their livelihoods to lockdowns to combat the world’s second-largest coronavirus outbreak, quelling protests by farmers against agriculture reforms and reviving growth in an economy headed for its biggest annual contraction on record.

India’s GDP will shrink 7.7 per cent in the year ending March, according to the statistics ministry. The Finance Ministry estimates GDP will likely expand 11 per cent next fiscal year, people familiar with the matter said, commenting on the forecast that will once again make India the world’s fastest-growing major economy ahead of China’s estimated 8.1 per cent pace.

A pickup in tax collections in recent months will offer some respite for Sitharaman, who will also seek to raise record amounts by selling state assets in the new financial year starting April after the pandemic all but ruined disinvestment plans in the current year. The exchequer will also earn a dividend from the central bank, which is expected to complement fiscal steps with monetary stimulus next month as inflation cools.

Google allows gambling apps on Play Store in US and 14 other countries

 Google has allowed gambling and betting apps on its Play Store that will be available for users in 15 countries including the US.

Google has allowed gambling and betting apps on its Play Store that will be available for users in 15 countries including the US.

Currently, gambling apps are only allowed in four countries: Brazil, France, Ireland, and the UK.

From March 1, the new policy changes in Google Play Store will allow authorised and legal gambling apps like online casino games, lotteries, sports betting and daily fantasy sports that will depend on whether these gambling apps are allowed in the approved countries.

The new rules will permit gambling apps in Australia, Belgium, Canada, Colombia, Denmark, Finland, Germany, Japan, Mexico, New Zealand, Norway, Romania, Spain, Sweden, and the US.

Google said that the new rules applies as long as the developer completes the application process for gambling apps being distributed on Play, is an approved governmental operator and/or is registered as a licensed operator with the appropriate governmental gambling authority in the specified country.

"For all other apps which do not meet the eligibility requirements for gambling apps noted above, we don't allow content or services that enable or facilitate users' ability to wager, stake, or participate using real money (including in-app items purchased with money) to obtain a prize of real world monetary value".

Google said that a developer must successfully complete the application process in order to distribute the app on Play and the app must comply with all applicable laws and industry standards for each country in which it is distributed.

On Thursday, Google India said it is simplifying the policies around gamified loyalty programmes and features in the country, that are based on a qualified monetary transaction in the app and offer prizes of cash or other real-world value.

Apple may launch second-generation AirPods Pro in the first half of 2021

 A new report has claimed that the iPhone maker may launch second-generation AirPods Pro in the first half of 2021.

Apple is planning to upgrade its truly wireless earphones lineup, from the AirPods to AirPods Pro, and now a new report has claimed that the iPhone maker may launch second-generation AirPods Pro in the first half of 2021.

According to a DigiTimes report, the Cupertino-based tech giant is planning to launch the new generation of its popular earbuds soon, as per sources close to the company's flash memory supplier Winbond.

Furthermore, the company is also rumoured to launch the AirPods Pro in two different size variants, while another rumour pointed at a Lite variant of the AirPods Pro as well but would still contain Apple's W2 chip rather than a new W3 chip.

With second-generation 'AirPods Pro', the tech giant could go for a "less ambitious" design than it hopes for 'AirPods Pro 2' due to the difficulty in packing antennas, ANC and mics in a more compact form factor.

The 'AirPods Pro' could feature a rounded shape more similar to earbuds from companies like Google and Samsung.

At present, there is no word exactly when a refreshed version of the 'AirPods Pro' would come out, but the updated earbuds are expected sometime in 2021, the report mentioned.

Any new tax in budget could hurt India's recovery, warn economists

 A so-called Covid cess shouldn't be announced because the economy is still normalising after a strict and vast lockdown, Sonal Varma, an economist at Nomura Holdings, said on Thursday

Any new taxes in India’s budget would impede a nascent economic recovery, economists said, amid speculation that Finance Minister Nirmala Sitharaman could impose an additional levy on the wealthy to fund the government’s pandemic-related expenditure.
A so-called Covid cess shouldn’t be announced because the economy is still normalising after a strict and vast lockdown, Sonal Varma, an economist at Nomura Holdings, said on Thursday in a Q&A with Bloomberg. Abhishek Gupta of Bloomberg Economics warned that such a levy risks hastening capital outflows.

"The trend over the last few years has already raised the total taxes for high income earners to 42.7 per cent, including cess and surcharges, from around 30 per cent,” Gupta said during the Q&A. “A further rise could lower their incentive to invest and earn in India."

Sitharaman needs to boost spending to dig India out of an unprecedented recession when she presents her budget Feb. 1, while keeping a watchful eye so that the deficit doesn’t blow out. India’s financial year runs April 1 through March 31.

Here are some condensed excerpts from the interaction with Varma and Gupta:
Budget Deficit
Varma: We are expecting the centre’s fiscal deficit to widen to 6.8 per cent of GDP in FY21, nearly double the original budget target of 3.5 per cent set before the pandemic, but much better than our initial estimate of over 8 per cent in the midst of the pandemic. That’s because a faster-than-expected economic normalisation will boost tax revenue and total spending will be lower.

Gupta: While we were earlier expecting central government fiscal deficit to be roughly around 7 per cent or so, we have now estimated it to come in lower at about 6.6 per cent of GDP in fiscal 2021. The recovery has been sharper than anticipated, and we have seen more buoyant tax collections since October.

Why India should honour the $1.2 bn arbitration award in Cairn's favour

 Back when global investors still believed Prime Minister Narendra Modi would keep his promise to end the previous regime’s “tax terror,” his newly elected government made a costly error. In March 2015, someone in India’s labyrinthine bureaucracy decided to send a revenue demand to U.K.’s Cairn Energy Plc — ruining Chief Executive Officer Simon Thomson’s birthday.

This March 10, Thomson has every reason to celebrate both his birthday and victory in a tortuous legal saga that ended right before Christmas with a $1.2 billion international arbitration award in Cairn’s favor. But there’s still one big glitch: The check that should have been in the bank by now isn’t even in the mail. That raises the unpleasant prospect of a private company having to legally seize sovereign property globally, a course of action some of its shareholders are starting to recommend.

“It would be truly unfortunate if this were the only path to resolution but in the absence of India adhering to the ruling, the company may be left with no other choice as it has a fiduciary duty to act,” says Stan Majcher, a portfolio manager at Los Angeles-based Hotchkis and Wiley Capital Management, which owns more than 2% of Cairn.

It’s been arduous and time-consuming for private firms to seek enforcement against Venezuela, Qatar, Lithuania and Tunisia. But when the sovereign in question is the world’s largest democracy and a rising economic power, things could get outright messy. For India, it will also be a PR disaster. After giving assurances that it would honor the verdict, not doing so makes New Delhi appear unpredictable and recalcitrant. “Cairn’s claim needs to be resolved, and nobody wants it resolved this way,” Majcher said in an email.
Maybe India is dragging its feet to explore some kind of an appeal, even though the arbitration panel in The Hague was unanimous, and the whole point of the exercise was to resolve the dispute with finality. Or perhaps politicians and bureaucrats are too distracted by the ongoing vaccination drive, the upcoming federal budget, this week’s farmers’ protests and other pressing matters.

Time's up: TikTok to shut operations in India after permanent ban

 According to sources, the scaling back will occur in two batches over the next few weeks

Owned by Chinese technology giant ByteDance, TikTok will be scaling back its India operations, following the government making the seven-month-long ban permanent.

“It is deeply regretful that after supporting our 2,000-plus employees in India for more than half a year, we have no choice but to scale back the size of our workforce. We look forward to receiving the opportunity to rela­unch TikTok and support the hundr­eds of millions of users, artists, storytellers, educators, and performers in India,” said a spokesperson for TikTok.According to sources, the scaling back will occur in two batches over the next few weeks. People involved in the ongoing projects will be retained until their completion. ByteDance employees also said the company had handed out appraisals and bonuses after the ban last year, and the decision to make the ban permanent was a ‘rude shock’.

The Ministry of Electronics and Information Technology had asked for an interim ban on 59 Chinese mobile applications (apps) in June last year, including TikTok, SHAREit, UC Browser, and SHEIN, calling them a ‘security threat’. The government invoked its powers under Section 69A of the Information Technology (IT) Act and relevant provisions under IT Rules, 2009, in doing so.

Last week, the ministry made that ban permanent. “We have worked stead­fastly to comply with the Govern­ment of India order issued on June 29, 2020. We continually strive to make our apps comply with local laws and regulations and do our best to address any concerns they have. It is, therefore, disappointing that in the ensuing seven months, despite our efforts, we have not been given a clear direction on how and when our apps could be reinstated,” the TikTok spokesperson added.

Tax worries roil indices ahead of Budget; Sensex down 5% from peak

 Investors are having cold feet ahead of the Union Budget. Worries around an increase in taxation saw the benchmark indices correct for the fourth day in a row on Wednesday – the longest losing streak since September.

The Sensex fell 1.94 per cent, or 937 points, to end at 47,409.93, the lowest since December 28. The Nifty ended at 13,967.5, down 271 points, or 1.91 per cent, reporting the sharpest fall since December 21.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,688 crore on Wednesday, registering their third straight day of selling. After climbing to an intra-day high of 50,184 last Thursday, the Sensex has declined 5.5 per cent. Most global markets, too, have corrected over the past week, but the decline in India has been sharper.

Experts said investors are apprehensive about whether Finance Minister Nirmala Sitharaman will be able to pull off a market-friendly Budget given the constraints on the revenue front. Investors are booking profits or waiting on the sidelines over concerns that the government may tweak capital market-related taxes to bridge the Budget deficit, they said.

The Centre has been grappling with a decline in tax collections and other revenue receipts due to lower dividends and divestment delay. "The upcoming Budget will be a tightrope walk for the government and negative surprises of higher taxation which may impact consumption cannot be ruled out. The market has become jittery ahead of this major event. Investors should build for a defensive portfolio and also hold cash, as there will be good buying opportunities in the future," Naveen Kulkarni, chief investment officer, Axis Securities.

The India VIX shot up 5 per cent to 24.4 on Wednesday. The fear gauge has surged nearly 25 per cent this month. Market players said traders have been expecting more wild swings in the market in the run-up to the Budget.

RuPay's market share tops 60% in total cards issued, says RBI report

 As of November 2020, around 603.6-million RuPay cards have been issued by nearly 1,158 banks

India’s indigenous payment network RuPay has cornered a significant market share in the domestic card market since its launch. As of November 30, 2020, RuPay’s market share has increased to more than 60 per cent of total cards issued, from merely 17-per cent market share in 2017, revealed the data released by the Reserve Bank of India (RBI) in its booklet on Payment Systems in India (2010-20).

As of November 2020, around 603.6-million RuPay cards have been issued by nearly 1,158 banks. But a majority of these are debit cards and only 970,000 are credit cards. However, experts have cautioned that this statistic must not be looked at in isolation.

Experts pointed out that one of the reasons behind gaining such market share could be the fact that a significant portion of RuPay cards are issued to accounts opened under the Pradhan Mantri Jan-Dhan Yojana (PMJDY). As of January 13, 2021, more than 306-million RuPay cards have been issued to 416.5 million accounts opened under PMJDY.

“What needs to be checked are the value and volume of transactions,” said experts.

Interestingly, the number of debit cards issued in the country between 2010-11 and 2019-20 increased from 227.8 million to 828.6 million, of which around 300 million were RuPay debit cards issued to basic savings bank deposit (BSBD) account holders.

On the other hand, during the same period, the number of credit cards issued also increased from 18 million to 57.7 million. The increase in cards has facilitated growth in both online and physical point-of-sale (PoS) terminal-based card payments, resulting in an increase in digital transactions.

“The drive for a less-cash economy in the wake of demonetisation in 2016 and the issue of RuPay cards for BSBD accounts has increased user acceptance in the interiors of the country where paying with a card was a novelty five years back. RuPay has its popular debit card and its increasingly accepted credit version as well,” the RBI said.

Reckitt Benckiser leads Rs 45 crore investment in Bombay Shaving Company

 The coronavirus pandemic has accelerated the business for Bombay Shaving Company, which plans to scale its operations and cross Rs 150 crore top line by the end of this year

Reckitt Benckiser, the British multinational consumer goods company, has led a strategic investment round of Rs 45 crore in Visage Lines Personal Care Pvt. Ltd., the owner of the personal care brand Bombay Shaving Company (BSC).

The round also saw participation from individual HNIs (high net-worth individuals) such as Rajesh Sud from Bharti Enterprises, Anjali Bansal founder of Avaana Capital, and Kuldeep Jain, managing director of CleanMax Energy. The investment demonstrates RB’s commitment to innovative, purpose-driven brands and is in line with its strategy to play in new spaces and places.

“Our investment represents a commitment to bring the best of two worlds together, BSC’s expertise in digital-first brands with strong e-commerce capabilities, and RB’s expertise in branding, manufacturing, and global scale,” said Arjun Purkayastha, RB’s senior vice president, e-commerce, digital, and Ventures, who will join the board of Visage Lines board. “Together, this combination of complementary skills sets us up for huge success.”

The coronavirus pandemic has accelerated the business for BSC, which plans to scale its operations and cross Rs 150 crore top line by the end of this year. “The pandemic has created a few tailwinds and our business now is almost three times what it was pre-Covid,” said Shantanu Deshpande, founder CEO of Visage Lines.

Launched in 2016, BSC has a portfolio of over 100 products across shaving, bath and body, skin, and beard care. RB’s investment will support the company’s plans to scale its operations and provide BSC with access to RB’s global scale, expertise, and mentorship, helping to grow the startup as the leader in personal care for men and women.

“RB has an excellent record in building health and wellness brands over their 200-years heritage. Working in partnership, our young team is ambitious for what we can achieve together and scale our operations with an omnichannel presence,” said Deshpande.

Cabinet clears policy on PSU privatisation ahead of Union Budget

 The contours of the policy and the strategy to privatise PSUs will be announced by Finance Minister Nirmala Sitharaman in the Budget

The Union Cabinet has paved the way for the much-awaited policy on the privatization of public sector undertakings (PSUs), and its details are expected to be announced in the Union Budget.

The policy, which will lay out a road map for the presence of government-owned entities in strategic and non-strategic sectors, was taken up at the Cabinet meeting held on Wednesday and was approved, said two government officials in the know.

The contours of the policy and the strategy to privatise PSUs will be announced by Finance Minister Nirmala Sitharaman in the Union Budget, scheduled to be presented on February 1, said one of the two officials cited above.

The policy was part of the Aatmanirbhar Bharat package announced by Sitharaman in May 2020 as a coherent policy where all sectors would be opened for private sector participation. The government had then announced its intention to limit the presence of PSUs to one to four in strategic sectors, and to privatise, merge or bring the remaining companies under a holding company. Companies in non-strategic sectors would see the government exiting completely. The timing of privatisation of companies in non-strategic sectors is likely to be decided on a case-by-case basis. Detailed consultations within the government departments and ministries took place which led to the delay in getting the privatisation policy approved, the second official said.

Many discussions were held between a group of ministries that have carved and shaped the policy, the official added.
According to the initial draft of the policy floated by the Department of Investment and Public Asset Management, around 18 sectors were classified as strategic sectors, including power, fertilisers, telecom, defence, banking, and insurance. These have been categorised mining and exploration, manufacturing and processing, and services.

Will Budget 2021 slow down the digital tsunami?

 The govt has been responsive to the needs and asks of industry and keenly focused on Ease of Doing Business. We hope that answers to some of the ambiguities find their way into the upcoming budget

The Indian government introduced provisions for Equalisation Levy (EL 1.0) on digital advertising and related services in 2016. This levy was extended to a wide variety of digital activities through the Finance Act, 2020 (EL 2.0). EL 1.0 was introduced based on the work of the Organisation for Economic Cooperation and Development (OECD) under the Base Erosion and Profit Shifting Project under Action Plan 1 on Digital Economy. While the Action Plan 1 did not give any specific recommendations, it discussed a few alternative approaches, one of them being an Equalisation Levy-type provision, which India adopted.

Subsequently, OECD itself decided that more work was needed to evolve a consensus approach to address the challenges of the Digital Economy and set up the Inclusive Framework. The Inclusive Framework has since made recommendations referred to as Pillar 1 proposals which provide an approach by which digital businesses could be taxed. However, the proposals are still under discussion and a complete unity is yet to emerge among all countries. India and the US, two key stakeholders, are also not fully aligned to the current proposals.

Meanwhile, an international consensus has remained elusive, even as many countries have legislated unilateral measures similar to EL to tax digital companies. Developed countries like the UK, France, Australia, Spain, Austria, etc, and many developing countries like Indonesia, Turkey, Malaysia, Chile, etc, have proposed or already implemented such levies. EL2.0 was introduced by India in the wake of these developments. Ideally, countries should wait for an international consensus, which can avoid risks of double taxation that can be detrimental for the digital ecosystem. However, the counter from countries is that such a wait cannot be inordinate, and that the unilateral measures would be withdrawn once such a consensus emerges. While there is no official line from India on this, it is expected that if an international consensus emerges, India would reconsider EL 1.0 and EL 2.0.

Read More : Budget 2021

Receipt of exports from third party must be declared upfront: Expert

 We exported certain goods last year and received full payment. The buyer rejected a part of the consignment

We had exported certain go­ods to a buyer abroad against an order placed by him and also raised an inv­oice for payment. How­ever, before the due date, the bu­yer said the payment will be made by a third party, and it was rece­ived from the third party. Our bankers say this is irregular. Are they correct? If so, how to regularise the matter?

Para B.8 of RBI FED Master Direction no. 16/2015-16 dated January 1, 2016 (as amended), says that realisation of export proceeds in respect of export of goods/software from third party should be duly declared by the exporter in the appropriate declaration form. This condition is not fulfilled in your case. Also, Para A.3(vi) of the same Master Direction lists more conditions to be fulfilled for permitting receipts of export proceeds from third party. These conditions are not fulfilled in your case. So, I think your bankers are quite right in pointing out the irregularity. You may approach Reserve Bank of India with a request to condone the lapse and regularise the matter.

We refer to JDGFT, New Delhi Trade Notice No. 36/2020-21 dated January 4, 2021, asking us to implement the security protocols such as Sender Policy Framework (SPF), Domain Keys Identified Mail (DKIM) and Domain-based Message Authenticated, Reporting and Conformance (DMARC). We do not use any of these protocols. Does it amount to violation of DGFT instructions?

No. The Trade Notice is only an advisory. The JDGFT has drawn attention to increased instances of email spoofing/ phishing cyber frauds that are causing trade disputes and loss of cargo as well as payment for the victims. So, the JDGFT has advised the trade to adopt SPF, DKIM and DM­ARC protocols for standard email signatures. In your own interest, it is desirable that you heed the advice of the JDGFT.

We exported certain goods last year and received full payment. The buyer rejected a part of the consignment. So, we shipped free replacement to him against a GR waiver from the bank. Thus, we need not remit any mo­ney to the buyer. Now, we are importing the rejected goods. Are we required to surrender the export incentives taken?

In my opinion, if you pay full duty under Section 20 of the Customs Act, 1962, you need not surrender any benefits taken at the time of exports. However, if you opt for exemption under notification no.45/2017-Cus dated June 30, 2017, then you have to surrender the export incentives availed at the time of exports.

OLED panel sales help LG Display swing to net profit of $561.2 mn in Q4

 LG Display reported a net profit of 621 billion won (US$561.2 million) for the October-December period, swinging from a loss of 1.81 trillion won a year earlier

LG Display on Wednesday said it shifted to a net profit in the fourth quarter of 2020, on the back of increased demand of its panels for IT products and sales of OLED displays amid the pandemic-induced stay-at-home trend.

LG Display reported a net profit of 621 billion won ($561.2 million) for the October-December period, swinging from a loss of 1.81 trillion won a year earlier.

Operating income for the fourth quarter was 685.5 billion won, compared with a loss of 421.9 billion won a year ago, the company said in a regulatory filing. Sales rose 16.2 percent on-year to 7.46 trillion won.

For the whole of 2020, LG Display reported a net loss of 70.6 billion won, sharply narrowing from a net loss of 691.6 billion won a year ago.

Operating losses also narrowed to 29.1 billion won from 714.5 billion won, while sales rose 3.2 percent on-year to 24.23 trillion won in 2020.

Both operating profit and sales were higher than the market consensus of 377.3 billion won and 7.25 trillion won in a survey by Yonhap Infomax, the financial arm of Yonhap News Agency.

LG Display attributed its improved performance to increased demand of its display products amid the rising trend of remote working and distance learning caused by the novel coronavirus pandemic.

LG Display added that solid sales of OLED panels for TVs, supported by full operation of its plant in Guangzhou, China, and increased production of plastic OLED panels also helped the company to enhance its profitability.

By product, panels for IT products accounted for 37 percent of its revenue in the fourth quarter. TV panels accounted for 29 percent of its revenue, while mobile displays and other screen products made up 34 percent of its sales.

Microsoft logs 17% revenue growth at $43.1 billion riding on cloud business

 Revenue in Intelligent Cloud was $14.6 billion and increased 23 per cent (on-year)

An impressive growth in its Azure Cloud business in a pandemic-hit year helped Microsoft post a 17 per cent increase in its revenue which reached $43.1 billion, with declaring a net income of $15.5 billion, for the quarter ended December 31, 2020.

Microsoft stock rose as much as 6 per cent in extended trading on Tuesday.

"What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry," said Microsoft CEO Satya Nadella.

"Building their own digital capability is the new currency driving every organisation's resilience and growth. Microsoft is powering this shift with the world's largest and most comprehensive cloud platform," he said in a. statement.

Revenue in Intelligent Cloud was $14.6 billion and increased 23 per cent (on-year).

Server products and cloud services revenue increased 26 per cent driven by Azure revenue growth of 50 per cent, Microsoft informed.

"Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34 per cent year over year," said Amy Hood, executive vice president and CFO, Microsoft.

"We continue to benefit from our investments in strategic, high-growth areas."

The company said that the revenue in Productivity and Business Processes was $13.4 billion and increased 13 per cent (On-year).

Dip in PAT, weak asset quality: What to track in Bank of Baroda's Q3 result

 HSBC pegs Bank of Baroda's Q3FY21 net profit at Rs 164.1 crore, a staggering 90 per cent de-growth from September quarter's PAT of Rs 1,678.6 crore

Even as economic activity began to look up in the December quarter, Bank of Baroda (BoB) may not have been able to leverage on it, fear analysts. The lender, which is scheduled to report its December quarter results (Q3FY21) on January 27, may report muted earnings on the back of moderate treasury gains, higher operating expenses, and elevated provisions.

Picture at the bourses, however, is different. The stock price of the lender outran the benchmark Nifty50 and sectoral Nifty PSU Bank index, during the quarter under review, by surging 50 per cent on the NSE. In comparison, the Nifty and the PSU Bank index are up 24 per cent and 37 per cent, respectively, ACE Equity data show.

Here’s what leading brokerages expect:
HSBC
The global brokerage pegs the lender’s net profit at Rs 164.1 crore, a staggering 90 per cent de-growth from September quarter’s (Q2FY21’s) PAT of Rs 1,678.6 crore. In the year-ago quarter (Q3FY20), the lender had incurred a loss of Rs 1,407 crore.
Similarly, profit before tax (PBT) is expected to plunge by 91 per cent QoQ to Rs 219.4 crore from Rs 2,550.2 crore. The pre-tax loss was Rs 2,197 crore in Q3FY20.

Nomura
Analysts here expect the core pre-provision profit (operating profit) to decline 7.3 per cent on a yearly basis, to Rs 5,201.3 crore, driven by continued weakness in fee income. It was Rs 4,958.5 crore in Q3FY20, and Rs 5,551.8 crore in Q2FY21. Net profit is pegged at Rs 1,141.9 crore.

“We expect loan growth to see some pick-up (2.8 per cent QoQ; 5.2 per cent YoY). With stable margins, we expect an 8.2 per cent yearly growth in net interest income (NII),” it said in its earnings preview report. The bank had reported a NII of Rs 7,129.1 crore in the year-ago quarter, while it was Rs 7,507.5 crore in the preceding quarter of the current fiscal.

That apart, it expects credit cost to remain elevated at 210bps due to higher moratorium book.

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Blackstone-backed Aadhar Housing Finance files papers for $1 billion IPO

 Aadhar Housing Finance, backed by private equity firm Blackstone Group, has filed for an initial public offering (IPO) of up to Rs 73 billion ($999.68 million), draft papers submitted to the country’s market regulator, Securities and Exchange Board of India, showed on Tuesday.

The offering will comprise a fresh issue of shares worth up to Rs 15 billion by the housing financier and shares worth up to Rs 58 billion by BCP Topco VII, an entity managed by Blackstone that owns 98.72 per cent in the company.

The filing follows blockbuster IPOs by Burger King India and Mrs Bectors Food Specialities in December that cashed in on a stock market rally fuelled by improving outlook for an economy hit by the pandemic.

The filing also comes at a time when non-banking financial companies are under tighter scrutiny from the central bank after the collapse of some heavyweights in the sector.

Aadhar Housing Finance will use proceeds from the fresh issue to boost its capital base.

The company's capital to risk (weighted) assets ratio was 47.84 per cent as of September 30, 2020.

It is one of the country’s largest mortgage lenders to low-income earners. It had Rs 114.32 billion worth of assets under management as of March 31, 2020.

Shadow lender DHFL and other promoters of Aadhar Housing Finance sold their stake to BCP Topco in 2019.

Blackstone was seeking to raise at least $5 billion for its second private equity fund focused on Asia, Bloomberg News reported in November.

Uber lays off 185 workers at its food delivery service Postmates: Report

 Leading ride-hailing platform Uber has laid off about 185 workers -- about 15 per cent of total workforce -- at its food delivery service Postmates.

Uber acquired Postmates in July last year for $2.65 billion, after it failed to buy rival food delivery service Grubhub.

The company plans to further integrate Postmates' infrastructure within its Uber Eats segment, reports The New York Times.

The latest move will see "Postmates founder and CEO Bastian Lehmann depart the company, along with most of its executive team", the report said on Sunday.

The company said that bookings in its Uber Eats division rose 135 percent year-over-year in the third quarter of 2020.

Uber Eats now has 560,000 restaurants on its platform, including about 30 per cent of restaurants in the US.

Uber Eats continues to remain behind its rival food delivery service DoorDash, which went public in December.

Zomato last year acquired Uber's Food Delivery Business in India in an all-stock deal worth $350 million or Rs 2,500 crore, Uber had 9.99 per cent stake in the Deepinder Goyal-led food delivery platform.

Uber CEO Dara Khosrowshahi had said that the Uber Eats team in India has achieved an incredible amount over the last two years.

Samsung scion Lee Jae-yong won't appeal prison sentence for bribery

 Samsung scion Lee Jae-yong will not appeal a court ruling that sentenced him to two and a half years in prison for bribing South Korea's then-president for business favours.

Lee's lawyers informed reporters of the decision on Monday as prosecutors faced a deadline for filing an appeal to the Supreme Court, which would extend the legal saga over South Korea's largest business group.

They had sought a 9-year prison term for Lee, whose case highlighted often-corrupt ties between the country's family-owned conglomerates and politicians.

The bribery allegation involving Lee was a key crime in the 2016 corruption scandal that ousted Park Geun-hye from the presidency and sent her to prison.

In a much-anticipated retrial of Lee last week, the Seoul High Court found him guilty of bribing Park and one of her close confidantes to win government support for a 2015 merger between two Samsung affiliates. The deal helped strengthen Lee's control over Samsung's corporate empire.

Lee had portrayed himself as a victim of presidential power abuse and his lawyers criticised the ruling. But after mulling his options, Lee decided to humbly accept the High Court's decision, his lawyer Injae Lee said.

Samsung did not release a statement over Lee Jae-yong's legal issues. Prosecutors as of Monday afternoon have not revealed whether they would appeal the High Court ruling, which was criticized by some activists as being too lenient.

PM Modi lauds EC for strengthening democracy, ensuring smooth polling

 The Election Commission of India (ECI) has made striking contributions towards strengthening our democracy by ensuring smooth conduct of elections, said Prime Minister Narendra Modi on the occasion of 11th National Voters Day.

"National Voters Day is an occasion to appreciate the remarkable contribution of the EC to strengthen our democratic fabric and ensure smooth conduct of elections. This is also a day to spread awareness on the need of ensuring voter registration, particularly among the youth," tweeted PM Modi on Monday.

The theme for this year's National Voters Day celebrations is 'Making Our Voters Empowered, Vigilant, Safe and Informed'. It envisages active and participative voters during elections. It also focuses on EC's commitment towards conducting elections safely during the COVID-19 pandemic.

The National Voters' Day has been celebrated on January 25 every year since 2011, all across the country to mark the foundation day of the EC on 25th January 1950.

The main purpose of the National Voters Day celebration is to encourage, facilitate and maximise enrolment, especially for the new voters. Dedicated to the voters of the country, the day is utilised to spread awareness among voters and for promoting informed participation in the electoral process, a statement by the EC said.

Oxfam urges radical economic rejig in post-COVID era, warns inequality rise

 Anti-poverty campaigner Oxfam warned Monday that the fallout of the coronavirus pandemic will lead to the biggest increase in global inequality on record unless governments radically rejig their economies.

In a report geared to inform discussions at the World Economic Forum's online panels of political and business leaders this week, Oxfam said the richest 1,000 people have already managed to recoup the losses they recorded in the early days of the pandemic because of the bounce back in stock markets.

By contrast, Oxfam said it could take more than a decade for the world's poorest to recover their losses.

Rigged economies are funnelling wealth to a rich elite who are riding out the pandemic in luxury, while those on the frontline of the pandemic shop assistants, healthcare workers, and market vendors are struggling to pay the bills and put food on the table," said Gabriela Bucher, executive director of Oxfam International.

Using figures from Forbes' 2020 Billionaire List, Oxfam said the world's 10 richest people, including the likes of Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg and Warren Buffett, saw their fortunes increase by half a trillion dollars since the crisis began even though the global economy remains smaller than when the pandemic started a year ago.

Meanwhile, using data specially provided by the World Bank, Oxfam said that in a worst-case scenario global poverty levels would be higher in 2030 than they were before the pandemic struck, with 3.4 billion people still living on less than $5.50 a day.

Bucher said women and marginalised racial and ethnic groups are bearing the brunt of this crisis and are more likely to be pushed into poverty, more likely to go hungry, and more likely to be excluded from healthcare.

India's gender budget was almost same for 13 years; here's what it achieved

 Nearly 5 per cent of India's total Union Budget 2020-21 would be spent on schemes that benefit women, stated the gender budget for the year. Amounting to Rs 1.4 lakh crore ($19 billion) in 2020-21, the gender budget includes allocations made by different ministries for schemes that fully or partially benefit women.

Gender-responsive budgeting, along with supportive laws and other policy measures, could help governments track whether public funds are effectively allocated in furthering gender equality and empowering women. India was ranked 112th of 153 countries on the Global Gender Gap Index 2020.

India started releasing a Gender Budget along with the Union Budget in 2005-06. Ahead of the Union Budget 2021-22, we analyse how useful, or not, gender budgets have proved to be.

In India, many crucial sectors such as health and education are funded by both central and state governments. In this report, we are analysing the central government's gender budgets that feature schemes funded by the central government. (At least 16 states in India have adopted gender-responsive budgeting and introduced schemes benefitting women, which are included in the state budgets. These allocations do not get counted in the Union Gender Budget statement, and are not part of our analysis.)

Forget TikTok. Audio-based Clubhouse is social media's next big thing

 The next killer smartphone app has arrived — and it offers the potential to transform how we communicate, share knowledge and even make new friends.

I am talking about voice-and-audio-based social networking startup Clubhouse. Its platform enables users to drop in and out of ephemeral chat rooms and take part in a range of gatherings, from small "water-cooler" type conversations to larger discussions featuring expert panels, often attended by thousands of listeners. Since its launch last March, Clubhouse has increasingly become a cultural phenomenon, attracting politicians, celebrities and experts from all walks of life. With its success and prominent backing, it may now be poised to upend the entire social media space.

Clubhouse's latest figures reveal how quickly it is growing. During a weekly town hall event on Sunday, co-founder Paul Davison said the app's weekly active user base had doubled to 2 million over the last couple of weeks. He also announced the startup had raised another investment round led by venture capital firm Andreessen Horowitz, adding it now has more than 180 investors. While he didn't offer any specifics, The Information reported on Friday that Clubhouse was getting interest at a $1 billion valuation. If true, that means the company's value has risen by a factor of 10 since its earlier Series A round last May, also led by Andreessen Horowitz.

Something special is happening inside the Clubhouse community. Call it the power of the voice — and it's what separates Clubhouse from other platforms. A short back-and-forth live conversation, with its nuance and tone, can build closer relationships more quickly than dozens of written posts and text messages sent through more established social networks such as Facebook and Twitter. Since I joined Clubhouse last summer, I met and became friends with professors, filmmakers, artists, engineers and more from places all over the world. It has been intoxicating listening to people's life stories and absorbing their knowledge and experience, from learning how a streaming video executive greenlights projects to getting expert political analysis on the latest breaking news. It has easily become one of my favorite pastimes.

US labor market recovery fading; housing, factories underpin economy

 The number of Americans filing new applications for unemployment benefits decreased modestly last week as the Covid-19 pandemic tears through the nation, raising the risk that the economy shed jobs for a second straight month in January.

Despite the labor market woes, the economy remains anchored by strong manufacturing and housing sectors. Other data on Thursday showed homebuilding and permits for future residential construction surged in December to levels last seen in 2006. Factory activity in the mid-Atlantic region accelerated this month, with manufacturers reporting a boom in new orders.

The services sector has borne the brunt of the coronavirus crisis, disproportionately impacting lower-wage earners, who tend to be women and minorities. Addressing the so-called K-shaped recovery, where better-paid workers are doing well while lower-paid workers are losing out, is one of the key challenges confronting President Joe Biden and his new administration.

White House economic advisor Brian Deese said the fragile labor market underscored the urgency for US Congress to act quickly on Biden's $1.9 trillion relief plan to "get this virus under control, stabilize the economy, and reduce the long-term scarring that will only worsen if bold action isn't taken."Initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 900,000 for the week ended Jan. 16, the Labor Department said. Economists polled by Reuters had forecast 910,000 applications in the latest week.

Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs 1.4 million people filed claims last week.

Too early to say when Covid-19 induced curbs will be lifted: Boris Johnson

 UK Prime Minister Boris Johnson said that it was "too early to say when restrictions will be lifted" as coronavirus infections in the country continue to remain high.

"We've got to observe the lockdown, the stay at home message, protect each other and protect the NHS (National Health Service). It's absolutely crucial in what is unquestionably going to be a tough few weeks ahead," he said on Thursday during a visit to the Greater Manchester area hit by heavy flooding.

Johnson said figures from the Office for National Statistics (ONS) and other studies showed clearly that the new coronavirus variant, which was first discovered in the country late last year, is very contagious, reports Xinhua news agency.

"It is not more deadly but it is more contagious and the numbers are very great," he said.

Meanwhile, Boris Johnson's spokesman told journalists at a Westminster briefing that the UK government continues to keep all of the scientific evidence and data under review regarding the decision to lift lockdown.

"It remains our position that we want to ease restrictions as soon as it is safe to do so, but in order for us to do that we need to see the transmission rates of the virus come down and we need to see the pressure on the NHS reduce," said the spokesman.

Ministers "stand ready to strengthen our border policy where we think it's appropriate to protect the public", he said when asked about reports suggesting people coming to the UK could be required to pay to stay in a hotel for two weeks while they quarantine.

Google threatens to pull search engine in Australia over charging for news

 Google on Friday threatened to make its search engine unavailable in Australia if the government went ahead with plans to make tech giants pay for news content.

Australian Prime Minister Scott Morrison quickly hit back, saying we don't respond to threats. Australia makes our rules for things you can do in Australia, Morrison told reporters in Brisbane.

That's done in our Parliament. It's done by our government. And that's how things work here in Australia. Morrison's comments came after Mel Silva, the managing director of Google Australia and New Zealand, told a Senate inquiry into the bill that the new rules would be unworkable.

If this version of the code were to become law, it would give us no real choice but to stop making Google search available in Australia, Silva told senators.

And that would be a bad outcome not only for us, but also for the Australian people, media diversity, and the small businesses who use our products every day. The mandatory code of conduct proposed by the government aims to make Google and Facebook pay Australian media companies fairly for using news content they siphon from news sites.

Silva said it was willing to pay a wide and diverse group of news publishers for the value they added, but not under the rules as proposed, which included payments for links and snippets.

Falling cash flow: AirAsia Group to raise $113 mn via private placement

 (Reuters) - AirAsia Group plans to undertake a private placement to raise up to 454.5 million ringgit ($113 million) to address immediate and near-term cash flow requirements, the Malaysian budget airline group said on Thursday.

The struggling airline, which reported a fifth straight quarterly loss in November as the pandemic took its toll on travel, has been seeking to raise 2.5 billion ringgit from loans and investors.

The proposed exercise announced on Thursday entails issuance of up to 20% of its total existing shares, or 668.4 million shares, to be placed with third party investors to be identified later, AirAsia said in a bourse filing.

It will enhance the group's financial position with a marginal increase in net assets and an improvement in the group's gearing, or leverage. The issuance could be implemented in tranches, within six months of regulatory approvals.

AirAsia said the funds will be for fuel hedging settlement, aircraft lease and maintenance payments, technology development costs, product and market expansion costs, marketing expenses and general working capital.

"The proposed private placement will not fully address the Group's current financial concerns as the estimated gross proceeds of up to approximately 454.51 million ringgit would not be sufficient to meet its long-term cash flow requirements," it said.

Elon Musk promises $100-million prize for 'best' carbon capture technology

 Tesla Chief Executive Elon Musk, now the world's richest person with a net worth north of $180 billion, announced on Twitter that he planned to give away $100 million as prize for the "best carbon capture technology."

He added in a subsequent tweet that he would provide more details next week, so it is not yet clear how such a contest will work.

Capturing planet-warming emissions is becoming a critical part of many plans to keep climate change in check, but very little progress has been made on the technology to date, with efforts focused on cutting emissions rather than taking carbon out of the air.

The International Energy Agency said late last year that a sharp rise in the deployment of carbon capture technology was needed if countries are to meet net-zero emissions targets.

What is carbon sequestration?

Carbon dioxide is the most commonly produced greenhouse gas. Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide. It is one method of reducing the amount of carbon dioxide in the atmosphere with the goal of reducing global climate change.

Carbon capture explained

Carbon dioxide or CO2 is released by burning fossil fuels in electricity generation and industrial processes such as cement production. Carbon can be captured using different methods. The main ones are: post-combustion, pre-combustion and oxyfuel. Post-combustion technology removes CO2 from the flue gases that result from burning fossil fuels. Pre-combustion methods – carried out before burning the fossil fuel – involve converting the fuel into a mixture of hydrogen and CO2.

How can carbon capture help tackle climate change

Carbon capture can help reduce emissions from large industrial installations. When combined with bioenergy technologies for power generation, it has the potential to generate ‘negative emissions’, removing CO2 from the atmosphere. Many scientists and policymakers argue that this is crucial if the world is to limit temperature rise to under 2 degree C, the goal of the Paris Agreement.

Asian markets set for messy open after US stocks peak on Biden inauguration

 By Jessica DiNapoli

NEW YORK (Reuters) - Asian investors were expecting a mixed day of trading after Wall Street peaked on Thursday, pushed upward by continued optimism about economic stimulus to counteract the COVID-19 pandemic promised by newly inaugurated U.S. President Joe Biden.

"The markets had such a strong run yesterday after the presidential inauguration in the U.S. and the run-up to that, that the lead coming in from the U.S. is a bit messy," said Shane Oliver, chief economist at investment manager AMP Capital in Sydney. "A lot of the good news is out there. I suspect a fairly flat day."

MSCI's gauge of stocks across the globe gained 0.02%.

Australia's ASX 200 fell 0.08% in early trade Friday.

On Thursday, the Nikkei 225 index closed up .82%, and the futures contract is now down 0.49% from the close.

Hong Kong's Hang Seng index futures were down 0.17%.

On Wall Street, both the S&P 500 and Nasdaq Composite closed at record highs on Thursday, up .03% and .55%, respectively.

The Dow Jones Industrial Average fell 0.04%. It had been poised for a record until falling into negative territory in the final minutes of trading.

Stock Exchange clears $3.4 bn Future-Reliance deal in setback for Amazon

 By Aditya Kalra

NEW DELHI (Reuters) - Indian stock exchanges on Wednesday gave the go ahead for Future Group's $3.4 billion deal to sell its retail assets, taking it a step closer toward closing a deal that has soured its ties with its business partner Amazon.com Inc.

Future and Amazon are locked in legal tussles over the Indian group's August deal with Reliance Industries. The U.S. e-commerce giant alleges the deal breached some of its pre-existing contracts with Future.

In late night notifications, Indian exchanges said they had no objection or adverse observation on the deal, saying they had reached the decision after communicating with India's markets regulator, the Securities and Exchange Board of India (SEBI).

SEBI has advised that Future should share various details of company's ongoing litigation with Amazon when it approaches India's National Company Law Tribunal, which also needs to sign off on the deal, the Bombay Stock Exchange notification said.

SEBI has separately not made its observations public.

Reliance and Future did not immediately respond to a request for comment.

The notifications will be a setback for Amazon, which has in recent weeks repeatedly written letters to SEBI and stock exchanges to suspend the deal's review.

Sensex touching 50,000 was not a question of 'whether' but 'when'

 The number 50 has a lot of significance. Hitting the age of 50 is an important landmark in everyone’s life. Fifty weeks of run was the dream of every movie producer and actor till OTT platforms took over. A golden wedding anniversary confirms how successful a marriage has been…… and so on.

Similarly, Sensex touching 50,000 was not a question of ‘whether’ – but ‘when’? Just about 10 months back on March 23 we were staring at 25,000 and nobody’s wildest projections would have indicated 50,000 so soon as indicated in my earlier article – Expect the Unexpected in stock markets.

However, an analyst always looks for data and logic despite the fact that the markets have a mind of their own. And that’s currently driven by cheap liquidity with FIIs and over-confident Robinhood investors whose numbers have now soared to more than 10 mn. Markets are extremely stretched with market cap exceeding 115% of GDP with an expensive PE Ratio of 40x. Fiscal Deficit could show record divergence from the budgeted figures.

RBI governor’s warning that gross NPAs in the banking system can shoot up to 14.8% by September 2021 doesn’t seem to deter investors. Maruti, the auto sector leader having more than 50% market share, has stated that recent buying was more of latent and festive demand which may not continue for too long. Despite this, auto sector continues to boom.

Looking at the macro number, GST seems to be among the few data points which are encouraging. It could be a result of better compliance. The direct tax collections have been lower, divestment has been abysmal despite booming markets and the surging oil prices have put a cork on further milking of the retail petroleum sector.

Additionally, the stimulus package and now the vaccination drive will further put pressure on government finances. With the Budget looming around the corner, the finance minister wouldn’t be left with much choice but to increase collection sources. A Covid-surcharge though may be dubbed temporary and seems to be a foregone conclusion. The other possibilities could be estate duty and higher import duty on various products to encourage Atmanirbhar Bharat.

Jack Ma ends silence, prompts $58-billion sigh of relief by investors

 He appeared for less than a minute and said nothing about the Chinese government clampdown that had left his business empire in crisis.

But for investors who’d been waiting months to catch a glimpse of Jack Ma, the entrepreneur’s participation in a live-streamed video conference on Wednesday was enough to trigger a $58 billion sigh of relief. That’s how much Alibaba Group Holding’s market value soared after a clip of Ma speaking to a group of teachers began circulating online — his first public comments since disappearing from view late last year.

Much about the future of China’s most famous businessman remains unclear. Yet analysts said Wednesday’s video was a sign that worst-case scenarios — such as jail time for Ma or a government takeover of his companies –- are probably now off the table. It’s unlikely Ma would have participated in the event without at least tacit approval from Beijing; state-run media were among outlets that posted snippets of his talk or wrote stories about his appearance.

“There’s still a lot of uncertainty on regulators’ next moves, but this does mean the status of Jack Ma is much better than a lot of people speculated,” said Fang Kecheng, a professor at the Chinese University of Hong Kong.

Ma’s talk focused on philanthropic issues including the importance of narrowing income disparities and reviving China’s countryside, two big priorities for Xi Jinping’s Communist Party.

The comments offered a stark contrast to Ma’s last public remarks in October, when the billionaire launched into an unusually strong rebuke of Chinese regulators and state-owned banks.

Hyundai invests in startup UVeye for automated vehicle inspection system

 South Korean automaker Hyundai Motor has invested in Israeli startup UVeye, a developer of automated vehicle inspection systems, to use its platform in global production lines.

The Tel Aviv-based UVeye said it has raised more than $40 million from Hyundai Motor and other strategic investors since its launch four years ago, without disclosing financial terms due to the confidentiality agreement.

"We are especially proud to be partnering with Hyundai Motor Company and to be working together with them on exciting projects around the world that enable quick and efficient inspection of vehicles using deep learning and computer vision," Amir Hever, CEO and co-founder of UVeye, said late on Wednesday.

UVeye's drive-through system combines artificial intelligence, cloud architecture, machine learning and sensor fusion technologies to help standardise and speed up vehicle inspection processes, reports Yonhap news agency.

The company said its automated systems can be installed at assembly plants, vehicle auction sites and dealerships around the world.

Hyundai Motor had made a series of strategic investments in Israeli companies, including Autotalks, an automotive semiconductor design firm, and Opsys Technology, a Lidar control device and sensor developer, to use their platform and products in automotive factories

China plans online payment rules that may hit Ant Group, Tencent

 China proposed measures to curb market concentration in its online payment market, potentially dealing another blow to financial technology giant Ant Group and its biggest rival Tencent Holdings.

The central bank said on Wednesday that any non-bank payment firm with half of the market in online transactions or two entities with a combined two-thirds share could be subject to anti-trust probes, according to draft rules released by the People’s Bank of China.

If a monopoly is confirmed, the central bank can suggest the cabinet impose restrictive measures including breaking up the entity by its business type. Firms already with payment licenses would have a one-year grace period to comply.

The rules present the strongest and most detailed message yet of regulators’ plans to curb monopolistic practices in the online payments industry. Ubiquitous in China, Ant and Tencent have transformed how consumers shop through their mobile apps that are used by a combined 1 billion people.

The regulator also vowed “comprehensive” oversight of companies in the space, and their transactions with affiliated parties. It will step up supervision of any changes to shareholders or beneficiaries at payments firms, it said.

“This shows there’s no let-up in regulatory tightening on the sprawling fintech businesses,” said Dong Ximiao, a researcher at Zhongguancun Internet Finance Institute.

Asian stocks at record highs as Biden inauguration lifts stimulus hopes

 By Andrew Galbraith and Jessica DiNapoli

SHANGHAI/NEW YORK (Reuters) - Asian stocks rose to new record highs on Thursday, tracking U.S. markets as investors hoped for more economic stimulus from newly inaugurated U.S. President Joe Biden to offset damage wreaked by the COVID-19 pandemic.

Republicans in the U.S. Congress have indicated they are willing to work with the new president on his administration's top priority, a $1.9 trillion U.S. fiscal stimulus plan, but some are opposed to the plan's price tag. Democrats took control of the U.S. Senate on Wednesday, but will still need Republican support to pass the program.

But after record high closes on Wall Street overnight, markets in Asia reflected relief over an orderly transition of power and strong expectations that U.S. stimulus will provide continued support for global assets.

Kay Van-Petersen, global macro strategist at Saxo Capital Markets, said that Democratic control of the Senate "increases not just the probability of more fiscal (stimulus), but the magnitude."

"That means that this market should be way, way, way higher as a whole and we're going to get there. We're entering this regime of even more accelerated asset class inflation," he said.

MSCI's broadest index of Asia-Pacific shares outside Japan touched record highs and was last up 0.85%, with markets across the region posting gains.

Shriram Automall to foray into Rs 50,000 cr forward auction industry

 Shriram Automall India Limited (SAMIL), part of Shriram Group and MXC Solutions, has received the Standardisation Testing & Quality Certification (STQC) E-Procurement System (ePS) certificate from the Ministry of Electronics & Information Technology. The certificate will enable the company to foray into the Rs 50,000 crore public sector forward auction industry.

After going through extensive tests for nearly three years, SAMIL has become the first private company in India to have its auction portal certified by the prestigious STQC directorate for exclusively conducting “forward auctions”, which is among the first of its kind issued by the agency, said Sameer Malhotra, CEO SAMIL.

He added that STQC is an e-procurement system that is responsible for maintaining e-governance standards and related conformity according to DeitY-guidelines which are an essential requirement for various government agencies for their e-procurement needs and for various entities to conduct forward auctions under SARFAESI.

“The certification stands as an assurance that the SAMIL’s exclusive forward auction portal is extremely dependable, trustworthy and above all very secure. Data of each client is stored securely in encrypted form on cloud thereby maintaining desired level of privacy, adding to its existing firewalls deterring any deliberate breach,” said Malhotra.

The exclusive forward auction portal has been customised for disposal of both movable and immovable property and is capable of handling unlimited auction events; simultaneously for multiple clients across all public sector undertakings and varied state local authorities. The robust portal will provide a reliable platform for all the leading government agencies to conduct transparent and hassle free auctioning, he added.

Samsung launches its new SSD '870 Evo' with upgraded performance

 Samsung Electronics on Wednesday launched a new consumer solid state drive (SSD) product, boasting upgraded performance and reliability.

Samsung said its 870 EVO SSD series comes in five models -- 250 gigabyte (GB), 500GB, 1 terabyte (TB), 2TB, and 4TB -- and will go on sale in around 40 countries starting with South Korea and the US.

The new SSD can be used with all devices that have 2.5-inch serial ATA (SATA) interface connection, it added.

The 870 EVO delivers 38 percent higher rand read performance compared to its previous 860 model, offering a better storage solution for both general and professional users, reports Yonhap news agency.

"Representing the culmination of our SATA SSD line, the new 870 EVO delivers a compelling mix of performance, reliability and compatibility for casual laptop and desktop PC users as well as Network Attached Storage users," said Lee Kyu-Young, vice president of the memory brand product business at Samsung.

The latest SSD features Samsung's latest V-NAND chip and controller and supports the maximum SATA sequential read and write speeds of 560 and 530 megabyte per second.

Samsung said the 870 EVO also boasts around 30 percent improvement in sustained performance compared to its predecessor.

According to data from market researchers GfK and NPD, Samsung is the world's leading SATA SSD maker followed by Western Digital and Micron Technology's Crucial.

Netflix forecasts an end to borrowing for financing projects, shares surge

 By Lisa Richwine and Eva Mathews

(Reuters) - Netflix Inc said on Tuesday its global subscriber rolls crossed 200 million at the end of 2020 and projected it will no longer need to borrow billions of dollars to finance its broad slate of TV shows and movies.

Shares of Netflix rose nearly 13% in extended trading as the financial milestone validated the company's strategy of going into debt to take on big Hollywood studios with a flood of its own programming in multiple languages.

The world's largest streaming service had raised $15 billion through debt in less than a decade. On Tuesday, the company said it expected free cash flow to break even in 2021, adding in a letter to shareholders, "We believe we no longer have a need to raise external financing for our day-to-day operations."

Netflix said it will explore returning excess cash to shareholders via share buybacks. It plans to maintain $10 billion to $15 billion in gross debt.

"This is in sharp contrast to Disney and many other new entrants into the streaming market who expect to lose money on streaming for the next few years," said eMarketer analyst Eric Haggstrom.

From October to December, Netflix signed up 8.5 million new paying streaming customers as it debuted widely praised series "The Queen's Gambit" and "Bridgerton," a new season of "The Crown" and the George Clooney film "The Midnight Sky."

The additions topped Wall Street estimates of 6.1 million, according to Refinitiv data, despite increased competition and a U.S. price increase. Fourth-quarter earnings per share of $1.19 missed analyst expectations of $1.39.

Mis-selling, dividend tax change spur outflows from hybrid funds

 Balanced or aggressive hybrid funds saw sustained outflows last year as subdued performance and mis-selling led investors to pull out money.

Last year, the category saw outflows of over Rs 24,000 crore, data from the Association of Mutual Funds in India (Amfi) shows.

“Balanced funds were sold and misunderstood as ‘safe’ products. Last year’s market crash, however, led to significant capital erosion, which prompted investors to move out of such funds. A lot of investors had also invested on the premise that they would get consistent dividends, which did not materialise,” said Amol Joshi, founder, Plan Rupee Investment Services.

The funds were also mis-sold by distributors, especially by a number of bank branches, which sold them as products that could provide consistent dividends, said people in the know.

The performance of these funds improved in the past few months with the significant run-up in the market. In the last one year, aggressive and balanced hybrids have provided returns of 14.1 per cent and 11.2 per cent, respectively. However, outflows have continued, with December seeing outflows of over Rs 3,900 crore, the highest in 2020.

The other reason the fund has seen outflows is the change in the way dividends are taxed. Last year’s Union Budget made dividends taxable in the hands of investors, which would get added to their income to be taxed according to their slab rates. This would especially be a negative for someone in the 30 per cent tax bracket. This is one reason why, industry experts reckon, that these funds saw significant outflows from larger investors.

Budget 2021 needs to restore millions of lost jobs to boost demand

 India’s Finance Minister Nirmala Sitharaman has described her upcoming budget as unlike anything seen in the last 100 years.

When she presents it on Feb. 1, Sitharaman will not only aim to repair battered government finances and ensure demand recovers in an economy facing its worst contraction since 1952, she must also revive declining revenue and restore millions of jobs lost during the pandemic. That will be crucial to boosting consumer sentiment in a country where local demand contributes nearly 60% of gross domestic product.

“The virus has led to a demand shock and the budget might need to focus on that,” said Bank of America economist Indranil Sen Gupta, pointing to in-house surveys that showed 19% of respondents were laid off during the pandemic. Demand has to be created either through cutting taxes on fuels or providing income support and spending on infrastructure projects, he said.

Prime Minister Narendra Modi’s government has been parsimonious in pump-priming the economy, for fear of a rating downgrade to junk, and may find that kicking the can down the road is no longer an option. With the central bank halting monetary easing since mid-2020, citing high inflation, the onus is on Sitharaman to loosen the budget despite having meager resources to work with.

The fiscal cost of steps announced so far account for less than 2% of GDP, and compares to direct spending of roughly 3% on average in other emerging markets, according to S&P Global Ratings.

Analysts believe that tax cuts, higher capital expenditure and greater spending on infrastructure projects -- which tend to support low-income earners -- hold the key to unlocking demand for goods and services.

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