The government hinted it would wait for a vaccine against the coronavirus before announcing its next fiscal stimulus. The Supreme Court rejected telecom companies' appeal for recalculating dues they owe the government. Indigo said it would lay off 10 per cent of its workforce. A share sale allowed the Burman family to strengthen their role in managing battery maker Eveready. For the first time in 10 years, the net headcount of India’s four leading IT services firms declined. Here is more on what made news this week.
- The government's next set of fiscal measures could be announced after a vaccine is developed against Covid-19, said Chief Economic Advisor Krishnamurthy Subramanian. A vaccine was not far off and it would end uncertainty and prompt people to spend money on discretionary consumption, he said.
- Direct tax refunds are down 10 per cent, compared to the same period last year, despite the government’s efforts to speed up these in the coronavirus pandemic. Refunds, or cash outflow from the income tax department, stood at Rs 74,000 crore till July 18 this fiscal, against Rs 82,000 crore worth of refunds disbursed in the same period last year.
- The Supreme Court rejected telecom companies’ demand for re-assessing their dues linked to adjusted gross revenue (AGR) and said it will decide later a government's plea to give the carriers a 20-year staggered payment timeline. The court upheld the amount to be paid by Bharti Airtel at Rs 25,976 crore and by Vodafone Idea at Rs 50,399 crore, factoring in the companies' payments of Rs 18,004 crore and Rs 7,854 crore.
- The Burman family--the promoters of Dabur India--may join hands with the Khaitans of the Williamson Magor Group to manage the country’s largest dry cell battery maker, Eveready Industries India. The Burmans, after a share purchase, hold a 19.84 per cent stake in Eveready and the promoters 15.07 per cent.
- IndiGo, the country’s largest airline, will shed 10 per cent of its workforce to control the impact of the coronavirus pandemic. IndiGo is flying 30 per cent of its capacity and "even the most optimistic scenario" would take it end of the year to normalise business, its CEO said.
- Lenders to Kishore Biyani-led Future Retail are considering converting part of its debt into equity before possibly selling it. A decision could take a month, as the company will be unable to service its debt once the moratorium on repayment ends August-end, Business Standard reported.
- For the first time since the global financial crisis in 2008-09, the net headcount of India’s four leading IT services firms declined in April-June 2020-21. Tata Consultancy Services, Infosys, Wipro and HCL Technologies had not seen staff count fall for a decade. The coronavirus pandemic has been the worst event for the IT industry in 30 years.
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.