GST Council Meet
- It could be a stormy one
- Opposition ruled states – compensated for the shortfall in collections
- State could force a vote on the issue
- Opposition-ruled Punjab, Kerala, Delhi, Tamil Nadu, Telangana, Chhattisgarh, Rajasthan, West Bengal and Puducherry insist that the Centre must borrow to compensate them for the revenue loss on account of the transition to the GST regime
- They are likely to invoke the dispute resolution mechanism.
- BJP-ruled states want the Centre to urgently set up a special window so that they can borrow to make up for the shortfall, one of two options proposed by the Centre.
- The GST Council will also take up a proposal to extend the GST compensation cess by two years to 2024 and set up a committee to look at changes needed.
- It will take up the simplification of procedures, besides rate rationalisation for non-alcohol-based sanitisers.
- August 27 – GST Council meeting – Centre proposed that the states could borrow ₹97,000 crore, equivalent to the revenue loss due to the GST transition, or ₹2.35 lakh crore, equivalent to the revenue loss due to the GST transition and Covid-19.
- In the first option, the principal and interest would be paid from the cess fund, while in the second option, the states would bear the interest.
- Bihar deputy chief minister Sushil Modi asked the Centre to initiate arrangements for setting up the special window so that willing states can go ahead and borrow.
- Sushil Modi: the government should not lose time by trying to find alternatives.
- Narayanasamy said Puducherry was not in favour of borrowing, but if all states agreed, then it could go for the lower borrowing option.
- The key would lie in the Centre building a consensus among the states, otherwise the dispute resolution mechanism would be brought into force.
- Google deferred the enforcement of 30% commission on in-app purchases of digital goods from its Play Store in India to April 2022
- Globally, the fee comes into effect in September next year.
- The company is “listening” to the Indian startup and app developer community to understand its concerns and is ready to “find ways” to ensure both sides can be successful together.
- More than 50 technology entrepreneurs were joining hands to petition the government for support to create an overarching Indian digital app ecosystem to counter what they view as the dominance of US technology giants Google and Apple.
- The government has responded positively to the demand and has said it’s “open” to launching an alternative.
- The idea behind giving “a lengthy period of time” before the policy comes into effect is to make sure that businesses are not “unduly stressed,” Sameer Samat, VP of product management at Google
- “During this time, we could have conversations and work together.“
- Finance Ministry: India may have crossed the Covid-19 peak and the declining positivity rate will help fuel an economic recovery
- Ministry was “not averse to taking any further measures to ameliorate suffering of people.
- The economy was “regaining normalcy,” with a palpable resurgence in demand in many sectors.
- The upcoming festive season is expected to further bolster growth in the wake of improvement in many high-frequency indicators, it said.
- The pandemic is far from over and said that the sustained spread of the virus poses a downside risk to short-term and medium-term growth.
- Ministry of Finance has taken proactive and prompt action both in policy and in implementation to serve the people in a holistic manner, especially providing support to those who need it the most.
- Almost all sectors of the economy were showing a steady recovery with some even surpassing last year’s performance based.
- Consumer electronics sales across categories such as smartphones, laptops, televisions, refrigerators and washing machines through ecommerce platforms grew by as much as 17 percentage points.
- Consumers opted for online purchases and kept away from physical stores
- Online transactions accounted for 42% of total laptops sold in India during June-August as compared with 25% in the same period last year.
- 32% of smartphones were sold through ecommerce platforms in June-August compared with 29% in the corresponding period of the previous year.
- For television, online now accounts for almost a third (32%) of overall sales as compared to 22% a year ago.
- Online channels also accounted for 43% of premium smartphones (₹30,000 plus) as against 38% last year.
- Industry experts and executives believe this trend will continue in the future, cementing a shift in shopping habit of Indian consumers, as brands and even brick-and-mortar stores beef up their online presence.
- Industry executives too believe that online shopping is here to stay.
CII CEO Survey
- India Inc is estimating capacity utilisation to rise above 50% during the second half of the fiscal year, according to an industry survey released on Sunday.
- A substantial percentage of the 115 CEOs polled by the Confederation of Indian Industry (CII) expect conditions to improve going forward.
- “A large percentage of the CEOs polled have shown confidence in the days ahead, indicating that the worst may be behind,” said a CII statement.
- However, most respondents see demand and revenue conditions remaining below last year’s levels, it added.
- According to the survey, which included firms from across sectors, 32% of CEOs saw consumer demand surpassing levels seen in the second half of the previous fiscal year, while 27% saw no change relative to the year-ago period.
- On the other hand, only 31% of respondents expected positive revenue growth for the period against last year.