In this edition:
HUL & GSK merger, GST collections & good news for the Indian economy.

The government will borrow Rs 4.88 trillion in April-September, nearly 63 per cent of its total annual borrowing plan. That announcement came as the Goods and services tax (GST) collection fell below the Rs 1-trillion mark in March after four months. The government collected Rs 9.98 trillion as direct taxes during 2019-20, a record shortfall of Rs 1.75 trillion compared with the revised estimates. Hindustan Unilever said it had completed merging GlaxoSmithKline (GSK) Consumer with itself. The coronavirus has derailed Indian automobile companies' sales but an UN report said the country may escape the worst economic effects of the pandemic.

Business Standard
5th April

  • The government will borrow Rs 4.88 trillion, or 62.56 per cent of the 2020-21 gross borrowing target of Rs 7.8 trillion, in April-September. In FY20, the finance ministry had issued bonds worth 62.25 per cent of its full-year target of Rs 7.1 trillion. The government, contrary to market expectations, has not increased its borrowing plans for the fiscal year starting April 1.
  • Goods and services tax (GST) collection fell belowthe Rs 1-trillion mark in March after a gap of four months, even as disruptions caused by the coronavirus-induced lockdown would be known later. The numbers pertain to GST paid in February but collected in March, suggesting that collections might turn grimmer going forward.
  • The central government collected Rs 9.98 trillion as direct taxes during 2019-20, a record shortfall of Rs 1.75 trillion, or 14.7 per cent, compared with the revised estimates (RE). This may prompt the revenue department, under the finance ministry, to reset its Budget math for 2020-21, sources told Business Standard.
  • A nationwide lockdown to prevent the spread of the coronavirus has brought an already struggling auto industry to its knees. Automobile sales are down by an average 64 per cent as all manufacturing plants have been shut since the lockdown announced on March 24. Maruti, which sells one in every two cars in India, said it had sold 83,792 in March, down 47 per cent from a year earlier.
  • Hindustan Unilever (HUL) said it had completed the merger of GlaxoSmithKline (GSK) Consumer with itself, taking its combined food and refreshment business to over Rs 12,000 crore. The merger will also give HUL access to brands such as Horlicks and Boost, pitting the company against rivals such as Nestlé India.
  • The world economy will go into recession this year with a predicted loss of trillions of dollars of income due to the coronavirus pandemic, spelling serious trouble for developing countries with the likely exception of India and China, according to a UN trade report. The UN report called for a $2.5 trillion rescue package for developing nations.

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A few links for further reading

Hard path to growth

The signals for the economy are not positive: overall demand is yet to pick up; the share of total exports in India’s GDP is declining, and industrial output pattern remains worrying.

Small savings scheme

Investors breathed a sigh of relief when the government announced that interest rates on these instruments would not be revised for the fourth quarter of the calendar year.

Invest and emigrate

The great Indian dream of settling abroad is achievable if one has a few crores to invest. Rich nations offer a variety of investment options in a quid pro quo arrangement: immigrants get a better quality of life and revenue from them helps these countries’ finances. Wealthy Indians, troubled by polluted cities and the red tape holding up entrepreneurship, may want a quick ticket out of the country. Sanjay Kumar Singh lists a range of options: from a Canadian province’s investor programme to America’s US EB-5 plan.

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