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Tata Motors posts Rs 464.99 crore Q4 profit

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Tata Motors

Mumbai, May 30 : Automobile manufacturer Tata Motors on Monday said it posted a standalone quarterly net profit of Rs 464.99 crore for the quarter ended March 31, 2016, as against a loss of Rs 1,164.25 clocked in the corresponding quarter of 2014-15.

According to the statement of financial results posted on the Bombay Stock Exchange (BSE), the auto major earned a total income of Rs 12,569.79 crore in the quarter under review against Rs 10,785.79 crore in Q4, 2014 – 15.

On a consolidated basis, this Q4 net profit rose to Rs 5,206.45 crore from Rs 1,747.43 crore posted in the year ago quarter while consolidated total income spiked to Rs 80,684.41 crore from Rs 67,777.72 crore in Q4 of 2014-15.

Annual net profit on a standalone basis witnessed a profit of Rs 234.23 crore for fiscal 2015-16, emerging from a loss of Rs 4,738.95 crore in the last fiscal, while annual standalone total income rose to Rs 42,369.82 crore from Rs 36,301.63 crore.

Consolidated annual net profit declined to Rs 11,108.29 crore in 2015-16 from Rs 14,059.65 crore while total consolidated income rose to Rs 2,75,561.11 crore from Rs 2,63,158.98 crore.

Tata Motors owned luxury car manufacturer Jaguar Land Rover announced retail sales crossing 5,00,000 units for the first time, witnessing a year-on-year growth of 13 per cent at 5,21,571 units.

It plans to invest 3.75 billion pounds for 2016-17.

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Reform, liquidity measures for MSMEs get Cabinet nod

Further, the Rs 50,000 crore ”fund of funds” for MSMEs was also cleared by the CCEA which would help these entities get equity.

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Nirmala Sitharaman

New Delhi, June 1 : The Union Cabinet on Monday gave a green signal to the reform and liquidity measures announced by Finance Minister Nirmala Sitharaman under the ”Aatmanirbhar Bharat economic package last month.

Apart from approving the distressed asset fund for MSMEs and the Rs 50,000 crore fund of funds, the Cabinet also widened the definition of MSMEs by allowing more entities into the criteria to avail the benefits.

Further widening the definition of micro, small and medium enterprises (MSMEs), the Cabinet Committee on Economic Affairs (CCEA) decided that manufacturing and service units with turnover of up to Rs 250 crore or investment of up to Rs 50 crore will qualify as medium enterprises.

Addressing the media here post the Cabinet meeting, Union Information & Broadcasting Minister Prakash Javadekar said that the decision was taken post suggestions coming in after the government announced broadening of the scope of MSMEs to support more businesses.

Also, the turnover criteria for MSMEs will not include revenue from exports, further providing flexibility to the sector to expand their operations and push overseas sales, he said.

On May 13, Sitharaman hd announced an increase of investment limits for MSMEs. The Centre had raised the medium enterprises” definition to one with investment and machinery to the tune of Rs 20 crore and turnover of Rs 100 crore. This stands further enhanced now after the Cabinet decision.

As per the new changes, businesses with investment of less than Rs 1 crore and turnover of Rs 5 crore would be classified as micro enterprises. Under the existing criteria, a company with investment of less than Rs 25 lakh in the manufacturing sector and less than Rs 10 lakh in the services sector were considered as micro enterprises.

The Cabinet has changed this distinction as well and a unified criterion will be applied for micro enterprises now.

The investment limit of small enterprises has been increased to Rs 10 crore, and the companies would have to have a turnover of less than Rs 50 crore.

Further, the investment limit for medium enterprises has been increased to Rs 20 crore and the turnover limit has been kept at Rs 100 crore, which has now been extended to companies with investment of Rs 50 crore and turnover of up to Rs 250 crore.

Under the ”Aatmanirbhar Bharat” package, the government has also done away with the distinction of services and manufacturing MSMEs.

Further, the investment limit for medium enterprises has been increased to Rs 20 crore and the turnover limit has been kept at Rs 100 crore, which has now been extended to companies with investment of Rs 50 crore and turnover of up to Rs 250 crore.

The CCEA also approved a distressed asset fund for MSMEs to facilitate provision of Rs 20,000 crore as subordinate debt as announced under the economic package.

The government”s contribution to the distressed asset fund is Rs 4,000 crore through its investment in the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) set up by it along with Sidbi. The CGTMSE, in turn, provides partial credit guarantee to the banks.

Functioning MSMEs, which have become non-performing assets or are stressed, will be eligible for access to the fund.

Under the scheme, the Centre will provide guarantee coverage of up to 85 per cent for loans up to Rs 5 lakh and 75 per cent for loans beyond Rs 5 lakh to MSMEs from financial institutions.

It provides a debt facility of up to 15 per cent of promoter contribution or Rs 75 lakh to the promoters, who, in turn, will infuse the amount in the MSME unit as equity.

According to the government, around 2 lakh MSMEs will be benefited by the move.

Further, the Rs 50,000 crore ”fund of funds” for MSMEs was also cleared by the CCEA which would help these entities get equity.

The fund of funds will be set up with a corpus of Rs 10,000 crore and provide equity funding for MSMEs. It will be operated through a mother fund and a few daughter funds and its structure will help leverage Rs 50,000 crore of funds at the daughter funds level.

It will also help MSMEs get listed on the main board of stock exchanges.

An official statement said that MSMEs are the backbone of the Indian economy and silently operating in different areas across the country, more than 6 crore MSMEs have a crucial role to play in building a stronger and self-reliant India.

These small economic engines have a huge impact on the country”s GDP, making a contribution of 29 per cent. They contribute to almost half of exports from the country and over 11 crore people are employed in the MSME sector.

“The MSME Ministry is committed to support the MSMEs, and the people who depend on them. All efforts are being made to encourage MSMEs to take benefit of the initiatives under the ”Aatmanirbhar Bharat” package and our other schemes,” said the official statement.

Among the other steps taken amid the novel coronavirus pandemic, the government has laid out several schemes to provide immediate relief to the MSME sector, including Rs 3 lakh crore collateral-free automatic loans for MSMEs to meet operational liabilities, buy raw material and restart businesses.

The government has also disallowed global tenders in procurements of up to Rs 200 crore to create more opportunities for domestic players.

–IANS

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Fuel prices hike by Rs 2/l in Mumbai

The Value Added Tax (VAT) on petrol and diesel is 26 per cent and 24 per cent respectively in the state.

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diesel petrol

Mumbai, June 1 : Petrol and Diesel prices in the economic capital of the country have been increased by Rs 2 per litre on Monday. Now, petrol will cost Rs 78.32 per litre to Mumbaikars while diesel will be available at Rs 68.21 in the city.

The prices were increased after the Maharashtra government decided to levy a cess of Rs 2 on the vehicular fuel w.e.f. June 1. This increase will be applicable in the entire state.

The Value Added Tax (VAT) on petrol and diesel is 26 per cent and 24 per cent respectively in the state.

Beside, a cess is also applicable on both type of fuels that the state government has increased from Rs 8.12 to Rs 10.12 per litre on petrol and Rs 3 per litre from the earlier Re 1 on diesel.

According to the Indian Oil website, prices of petrol in the four metro cities, Delhi, Kolkata, Mumbai and Chennai were Rs 71.26, Rs 73.30, Rs 78.32 and Rs 75.54 per litre, respectively. While the diesel prices were Rs 69.39, Rs 65.62, Rs 68.21 and 68.22 per litre, respectively.

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Amid sharp GDP data revision, debate continues over its fairness

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GDP data

New Delhi, May 31 : The sharp revision in quarterly GDP data has grabbed the eyeballs of economists and experts and the government has also received flak over it.

The debate still continues over whether the revision of the previous quarter’s GDP growth numbers were justified or not.

State Bank of India (SBI) Group Chief Economic Adviser, Soumya Kanti Ghosh, in a report, has questioned the data quality and ‘remarkable’ volatility in the new series adopted by the CSO that has led to frequent sharp revisions in GDP numbers in each of quarterly estimates with wide upward and downward swings in numbers in each of the quarter estimate from excisions.

Noting that the loss of economic activity due to the lockdown in last few days of March has dragged GDP growth to a 40-quarter low of 3.1 per cent in Q4 FY20, he said: “However, CSO has significantly revised the previous quarters’ growth rates (compared to Q3 release) which is quite puzzling and raises questions about data quality and remarkable volatility in the new series and we believe that a methodological note from CSO explaining the frequent revisions will be very useful.”

The SBI Ecowrap report, authored by Ghosh, said that in February, the quarterly numbers underwent significant upward revisions and such numbers have now been steeply revised downwards by an almost equal amount, within a span of three months.

“While it is customary to change the quarterly numbers in May when the 3rd estimate of FY20 is released, the extent of such revision reveals possibly the loss in Q4 because of lockdown may have been evenly distributed across quarters/Rs 1.18 lakh crore loss estimated and distributed across quarters in FY20 (Q4 accounted for only 50 per cent of such),” it said.

Talking to IANS, former Chief Statistician of India Pronab Sen said that the fourth quarter numbers are fine, but the revision of the third quarter numbers was the major problem which should have been avoided as it was out of schedule.

“As far as changes were concerned, the changes that were released during this fourth quarter… those are fine. There is no problem at all, that is how it should be. The problem here was the change made with the third quarter data. That was problematic, that was off schedule.”

He explained that as per the normal schedule, the quarterly data is not changed till the provisional estimates of the year are released in June.

“But prior to that, the three quarters data is not changed. When the provisional annual data is released, then the quarterly data has to be changed so that there is consistency between the four quarters and the annual figures. That is the standard operating procedure… now that got violated this year,” Sen said.

N.R. Bhanumurthy, Professor at the National Institute of Public Finance and Policy, however, noted that official GDP data has revisions and this is the third revision, which is called provisional estimates. He was of the view that revision in previous quarters’ GDP numbers should not be a matter of concern as it is a routine process.

On the concerns regarding the quality of data, he said that improving the quality of data is a work in progress as the country is now getting into a new data basis.

Bhanumurthy, who is also a member of the Advisory Committee on National Accounts Statistics (ACNAS), said: “We are now getting into a much more wider data sense in getting the GDP numbers. I would say it’s still a long way to go. The contribution of the informal sector is always taken on a pro-rata basis based on some survey done in 2011-12… those things need to be updated.”

He was of the view that the problems would have existed in the old GDP data calculation methodology.

Bhanumurthy noted that the GST data is not given in a “disaggregated level” which is also a major obstacle in getting accurate data.

“Previously, we used to use indirect tax data, now we don’t get that kind of a granularity. There used to be VAT separately, there used to be service tax separately. GST is a combination of that, we don’t know what is goods and what is services,” he added.

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