September CPI inflation up at 3.77%, August industrial output falls to 4.3% | WeForNews | Latest News, Blogs September CPI inflation up at 3.77%, August industrial output falls to 4.3% – WeForNews | Latest News, Blogs
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September CPI inflation up at 3.77%, August industrial output falls to 4.3%

Instead, India’s industrial output eased in August with a slower rise of 4.3 per cent as compared to 6.52 per cent in July.

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New Delhi, Oct 12 : Higher food and fuel prices marginally accelerated India’s September retail inflation to 3.77 per cent from 3.69 per cent in August, even as the country’s industrial output took a sharper fall in August with a slower rise of 4.3 per cent as compared to 6.52 per cent in July, official data showed on Friday.

Even on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in September 2018 was higher than in the corresponding period of last year, when it stood at 3.28 per cent.

According to the data furnished by the Central Statistics Office (CSO), the Consumer Food Price Index (CFPI) rose 0.51 per cent in September from 0.29 per cent in August 2018.

Instead, India’s industrial output eased in August with a slower rise of 4.3 per cent as compared to 6.52 per cent in July.

CSO data also showed the Index of Industrial Production (IIP) in August was lower even on a YoY basis.

The industry output had increased by 4.8 per cent in August 2017.

“The cumulative growth for the period April-August 2018 over the corresponding period of the previous year stands at 5.2 percent,” said the Quick Estimates of IIP for August 2018.

On the YoY basis compared to August last year, factory output’s growth expanded by 4.6 per cent, whereas the mining sector’s production declined by (-) 0.4 per cent and the sub-index of electricity generation increased by 7.6 per cent.

Commenting on the latest data, rating agency Crisil said the overhang of food disinflation is very visible despite higher fuel prices and the ongoing depreciation of the rupee.

“Consumer inflation for September surprised at 3.8 per cent, a clear 20 bps (basis points) below the RBI’s medium-term target for the second straight month. Mind you, this is despite higher fuel prices and depreciation in the rupee,” Crisil Chief Economist Dharmakirti Joshi said in a statement.

“The slowdown in manufacturing and mining weighed the Index of Industrial Production down 220 bps in August to 4.3 per cent over July,” he added.

Industry chamber Assocham welcomed the benign retail inflation of last month.

“Even as the fuel inflation of 8.47 per cent was a given in the wake of sharp rise in the crude oil prices, the impact is not seen creeping into the rest of the basket of consumer items, most notably the food and vegetables. So any worry about the consumer inflation, impacting the interest rates, is abated for now, as the level of price rise is well below the RBI target of 4 per cent,” an Assocham statement said.

“As for the industrial growth of 4.3 per cent for August, sectors like manufacturing and capital goods still need a leg up, while infrastructure and construction are visibly improving.”

Belying market expectations of a hike, the RBI earlier this month held its key lending rate unchanged at 6.5 per cent in the context of an uncertain global economic scenario but turned hawkish, moving to a “calibrated tightening” from the “neutral” stance it has maintained over its six previous policy reviews.

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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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