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India’s gold demand dropped 12% in January-March quarter: World Gold Council

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Mumbai, May 3 (IANS) Demand for gold in India for January-March quarter (first quarter) of 2018 was down by 12 per cent at 115.6 tonne compared to overall Q1 demand for 2017 due to rising gold prices, exaggerated by a weakening rupee, a World Gold Council statement said here on Thursday.

Total Jewellery demand in India for Q1 2018 was down by 12 per cent at 87.7 tonne as compared to Q1 2017 (99.2 tonne).

“Local gold price rises led to the second weakest quarter for jewellery demand in almost 10 years. After the strongest Q4 on record in 2017, Indian jewellery demand saw a sharp downturn in Q1 2018, falling 12 per cent year-on-year to 87.7 tonnes,” said Somasundaram PR, Managing Director, India, World Gold Council.

“A substantial drop in the number of auspicious wedding days during the period compared with Q1 2017, could be a factor for muted demand as consumers made less wedding-related purchases. Imports were also down 50 per cent year-on-year, in anticipation of an import duty cut in the Union Budget that did not materialise,” he added.

India’s Q1 2018 gold demand value was Rs 31,800 crore, a fall of 8 per cent in comparison with Q1 2017 (Rs 34,440 crore).

Total Investment demand for Q1 2018 was down by 13 per cent at 27.9 tonne in comparison with Q1 2017 (32 tonne). Total gold recycled in India in Q1 2018 was 14.1 tonne, a drop of 3 per cent compared to 14.5 tonne in Q1 2017.

However, Somasundaram said: “The positive sentiment following the announcement in the Union Budget about an impending gold policy to make gold an asset class will boost the industry momentum to get more organised and transparent and build a strong case for a central gold body under the gold policy.”

He said trade activity resumed positively during Akshaya Tritiya demonstrating the resilience of the industry.

“Policy focus on doubling farm income and ease of business under GST augur well for the gold industry in 2018 and the medium term. New ways of buying gold through digital platforms are catching up quickly; this will not just promote ease of savings but bring about a mindset change, thereby enhancing acceptability of centrally vaulted gold – which underpins any attempt to mainstream gold including Gold Monetisation Scheme,” he added.

According to World Gold Council, for year 2018, full year gold demand expectations for India is in the range of 700 – 800 tonne.

Globally, gold demand had a soft start to 2018, reaching 973 tonne, the lowest first quarter since 2008. This was largely caused by a fall in investment demand for gold bars and gold-backed exchange-traded funds, as a subdued gold price environment hampered demand, the statement said.

“Global jewellery demand was roughly flat at 488 tonne, down 1 per cent on Q1 2017. Demand in China was buoyed by holiday demand, and US demand continued to improve in response to the supportive economic backdrop. In contrast, Indian consumers were discouraged by rising gold prices, exaggerated by a weakening rupee, with demand down 12 per cent compared with 2017,” it added.

IANS

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Centre suspends fresh IBC proceedings till Dec

In June, the Union Cabinet approved the suspension, which came into effect from March 25 and was brought in through the ordinance route.

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Nirmala Sitharaman

New Delhi, Sep 24 : In a major relief for stressed companies amid the pandemic woes, the Centre on Thursday announced the suspension of fresh insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) by three more months till December.

In a gazette notification, the Ministry of Corporate Affairs (MCA) said that the suspension on operation of Section 7, 9 and 10 of the IBC has been extended.

“In exercise of the powers conferred by section 10A of the Insolvency and Bankruptcy Code, 2016, the Central Government has extended the suspension of sections 7,9, 10 of the IBC for a further period of three months,” the Minister of Finance and Corporate Affairs, Nirmala Sitharaman said in a tweet.A

She said that the decision reinforces the government’s commitment to protecting businesses.

“It also gives companies breathing time to recover from financial stress,” she said.

In June, the Union Cabinet approved the suspension, which came into effect from March 25 and was brought in through the ordinance route.

Section 7 of the IBC allows initiation of corporate insolvency resolution process by financial creditor, while Section 9 allows operational creditors to file application for initiation of insolvency process by operational creditor.

Further, a corporate debtor who has committed a default, can file for initiation of a corporate insolvency resolution process under Section 10 of IBC.

Although the decision to extend the suspension has brought much-needed relief for business stressed in the midst of the pandemic, sector experts, however, have raised concerns regarding the financial stress it may create once the suspension is revoked.

Sumit Batra, Partner at India Law Alliance, said: “Another extension of three months beyond 25.09.2020 for initiation of bankruptcy against defaulting corporate entities will further aggravate the situation and lead to an unprecedented rise in fresh filing once the suspension is revoked.”

Noting that while the logic of suspension for not being able to initiate proceedings under Section 7 and 9 of IBC, seems justified to an extent that lockdown triggered due to widespread outbreak of Covid-19 affected the paying capacity of the corporate debtors, but “why such a suspension is being imposed for applications under section 10 seems illogical”.

The intent and extent of section 10 petition is to enable the corporate debtor to initiate insolvency against themselves in order to resolve the financial stress in a time-bound manner, Batra said, adding that, therefore, Section 10 petitions should have been excluded from being covered under this suspension.

In a recent debate in the Parliament, Finance Minister Nirmala Sitharaman had defended the decision to suspend Section 10 saying that in view of the economic situation, the companies filing for bankruptcy would not have achieved high valuations and bidding amounts would have been low, thereby not achieving the desired goal.

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Oil Ministry yet to recover $510 mn from contractors under PSC: CAG

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Dharmendra Pradhan

New Delhi, Sep 23 : The Comptroller and Auditor General (CAG) has said that the Ministry of Petroleum and Natural Gas has not recovered $510 million as cost of unfinished minimum work programme (CoUMWP) from contractors in respect of 45 blocks.

The CAG report on Union Government (Economic & Service Ministries-Civil) – Compliance Audit Observations, which includes important audit findings, was presented in the Parliament on Wednesday.

It noted that the government awarded 254 blocks during the New Exploration and Licensing Policy’s (NELP) I to IX rounds for exploration of oil and gas. As per the terms and conditions of Production Sharing Contracts (PSC), contractors are required to pay the cost of unfinished minimum work programme, if the block is relinquished or terminated by government.

However, contractors of 54 relinquished blocks failed to pay the CoUMWP as specified in the PSCs.

“An amount of $510.79 million (Rs 3,652.64 crore), which was 77 per cent of the Ministry of Petroleum and Natural Gas’s (MoPNG) approved amount of $664.67 million (Rs 4,753.03 crore) on account of CoUMWP in respect of 45 blocks still remained unrecovered (September 2019),” the report said.

It added that the CoUMWP for nine blocks is yet to be worked out by Directorate General of Hydrocarbons (DGH) or yet to be approved by the ministry.

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IT Dept ignored land/flat sellers as ‘potential assessees’: CAG

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New Delhi, Sep 23 : The Comptroller and Auditor General (CAG) has said that during financial years 2014-15 to 2017-18, the IT Department did not initiate any action regarding land and flat sellers who could be potential assessees.

The Performance Audit on ‘Search and Seizure Assessments in Income Tax Department’, tabled in the Parliament on Wednesday, said: “The Department did not initiate any action in respect of sellers of land/flat/ commodities pointed out in the respective Appraisal Report, who could be potential assessees. The department also did not confirm whether these were in the tax net of the department and regularly filing returns.”

It also said that there were loopholes and deficiencies in the provisions of the Act in respect of search assessments, mainly relating to absence of specific provisions in the Act and Rules, the report said.

“In respect of certain Groups, 76.5 per cent of additions made in search assessments did not stand the test of judicial scrutiny in appeals at the level of CIT (A)/ITAT,” it said.

The report found that assessing officers (AOs), while finalising the assessments, did not take a uniform stand in making additions on account of bogus purchases, accommodation entries and in adoption of figures of assessed income or revised income.

“The additions were made arbitrarily either on lump sum amount basis or different percentage ranging from five per cent to 50 per cent under similar circumstances without proper justification,” the report said.

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