Rising attacks forced shippers to consider the longer route 

 Indian exporters have asked the central government to help facilitate more credit as freight rates have jumped nearly 300 per cent due to the disruption in the Red Sea route forcing global shipping lines to take longer trade routes, which is ultimately affecting exports of low value items such as Basmati rice. 

  Increasing attacks on ships sailing in the Red Sea region since November 2023 have forced shippers to consider the alternative, longer route past the Cape of Good Hope, which has not only stretched delivery time by 15 to 20 days, but also increased the transit cost substantially because of incremental freight rates and insurance premium. 

  Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai told The Indian Express that freight costs have surged by 300 per cent as global shipping lines are taking the Cape of Good Hope route, which is why exporters have sought more credit to match the rising cost of shipments to Europe.

  Meanwhile, ratings agency Crisil on Thursday said that players operating in sectors such as agricultural commodities and marine foods could see a significant impact due to the perishable nature of their goods or lean margin profiles, which limit their ability to absorb the risks from rising freight cost. 

  “Not all sectors are expected to be impacted to the same extent. In fact, for agricultural  products  like Basmati rice (30-35% of production is shipped to these regions), exporters are feeling the pressure as rising  transportation costs have reduced exports.  exports and  part of their inventory is now  sold  on  the domestic  market.  leading to  censorship of achievements,”  the report said.  

 Indian companies use the Red Sea route  via  the Suez Canal to trade with Europe, North America, North  Africa  and parts of  West  Asia. Crisil said  these regions accounted for 50 per cent of  India’s  exports worth Rs 18  billion  and 30 per cent of  its  imports worth Rs 17  billion in the  last  financial year.  

 “Marine foods  – mainly  shrimp  – could also  be significantly impacted  as  80 to 90%  of  production is exported, more than half of  which via  the Red Sea.  The  perishable nature and  low  margins  leave  exporters vulnerable to rising  shipping costs  and competitive pressure from Latin American suppliers,” the report added.  The Indian Express had earlier reported that the  Ministry of Finance  is  scheduled  to hold a high-level meeting on February 5 to ensure smooth trade payments amid challenges  stemming  from  regional disruptions.  Red Sea  area.  

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 RBI has  agreed  to  let  LIC  buy 9.99%  stake in HDFC Bank, India’s largest private sector bank. 

  HDFC Bank  on Thursday  announced  that the Reserve Bank of India (RBI) has  authorized  the Life Insurance Corporation (LIC) of India to acquire  9.99  per cent  stake in the company.

  “RBI  has  advised  LIC  to acquire the  said  major  stake of  the  bank  within  one  year,  i.e.  before  January 24,  2025,”  the bank said in  the  regulatory filing.  

 Pursuant to Regulation 30 of the SEBI Listing  Rules,  we would like to inform you that the Reserve Bank of India  (RBI),  vide its letter dated January 25, 2024  to  the  Life Insurance Corporation of India  (LIC ), licensed  to  LIC. . to acquire total shares amounting  to 9.99% of the paid-up share capital or voting rights of HDFC Bank Limited,” the bank  added  in its regulatory filing. 

  LIC currently  holds  5.19% stake in HDFC Bank. The insurance giant had earlier sent  a request  to  the  RBI  to increase  its  stake  in the bank.  

 RBI has advised LIC to acquire  majority stake  in HDFC Bank within  one year, i.e.  before  January 24, 2025. Further, LIC must also ensure that the shareholding  n  does not exceed 9.99  %  of  contributed  capital or voting  rights. from  the bank at  any time. 

 HDFC Bank shares  are facing difficulties in  the  market  

 This development comes as HDFC Bank shares  are attempting  to  regain  their former potential  in  the Indian stock  market,  after  witnessing  a  significant decline  due to the  company’s  quarterly  results. This  private  lending institution.  

 HDFC Bank shares  closed down 1.4 per cent at ₹1,440.70  on  Thursday.  The  private bank’s  shares  took a  hit  after the  release of its third-quarter results, which showed a modest profit  for the quarter ending  December 2023.  

 A day after the quarterly results were announced, HDFC Bank shares  fell 9%,  while  shares listed on the US  market fell about 10%  on January 17.  

 HDFC Bank reported a  2.65%  rise in consolidated net profit of ₹17,258 crore in its  third quarter results, compared  to ₹16,811 crore  reported in the quarter  ended  September 2023. 

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 “The acquirers are  systemically  important  non-banking  finance  companies (NBFCs)  whose main  business  is investing  in capital markets and providing secured  loans,” the  commission  said.  and there are no guarantees.”  

 The Competition Commission of India has  approved  the acquisition of  5.27%  stake in Religare Enterprises Ltd and  subsequent open offer  for  up to  26%  of  other  financial services  companies  by  Burmese family-led  entities  control.  

 “The acquirers are  systemically  important  non-banking  finance  companies (NBFCs)  whose main  business  is investing  in capital markets and providing secured  loans,” the  commission  said.  and there are no guarantees.”  

  Burma’s takeover project faced stiff opposition from Religare’s current management.  

 “By making  the  agreement,  the CCI has clearly  specified the exact  sections  for  which the  buyer can be prosecuted.  It is  clear that  the  purchaser may be prosecuted  under the sections  mentioned relating  to

misrepresentation,  false information  etc.,  which  is  punishable in nature.  

A Religare spokesperson said this will  also  have  implications  for  acquirers  as  other regulators  consider  the  issue. “Therefore,  proceedings  may  be  commenced  under  sections  43A, 44 and/or 45 of the Competition  Act 2002, notwithstanding  approval,” he said. 

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 This comes a week after the Ministry of  Trade  and Industry  asked  DFS to maintain credit  flows  to  exporters amid  disruptions  in the Red Sea region that could  affect more than 80%  of  exports to  Europe , after  an inter-ministerial meeting on  Jan.  17. 

  The  Ministry of  Finance  is  expected  to hold a high-level meeting on February 5 to ensure smooth trade payments amid challenges  from disruptions  in the Red Sea region.  The payment  settlement  mechanism  for  disrupted trade routes  as well as outstanding  issues  related  to vostro accounts are likely to be  discussed during  the meeting, officials said. 

  The meeting,  chaired by  Secretary  Department of Financial Services (DFS)  Vivek Joshi, will  bring together  officials from the  Ministries  of Finance, Commerce and Industry, External Affairs, Reserve Bank of India (RBI) and  the  Insurance  Management  and Development  Agency. Government  of India (IRDAI). 

  “This  is a  planned  coordination meeting  between government  ministries,  regulators and banks to discuss  trade-related  payment issues.  The aim  is to  listen to  all stakeholders and find solutions for orderly  business  transactions and  settlements,”  a senior government official told The Indian Express.

  This comes a week after the Ministry of  Trade  and Industry  asked  DFS to maintain credit  flows  to  exporters amid  disruptions  in the Red Sea region that could  affect more than 80%  of  exports to  Europe , after  an inter-ministerial meeting on  Jan.  17.  

 Freight rates  for transporting goods  to Europe have more than doubled due to security  tensions  in the Red Sea region.  Concerns about disruption in the Red Sea region have grown and oil prices have begun to rise since the US and UK attacked Houthi rebels in Yemen earlier this month in retaliation for attacks on US commercial vessels. They are in the Red Sea area. 

 India’s export shipments of low-value products such as agricultural products and textiles to Europe are expected to mainly face the impact  of disruptions in the Red Sea region  due to  shipping  costs.  transfer increases. Previously,  the government  asked  the  Export Credit Guarantee Corporation (ECGC) not to  increase  insurance premiums  in response to  rising  shipping  costs  to Europe. 

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 With immediate effect,  Sankey Prasad becomes Chairman and  Managing Director  (CMD)  of  India and CMD  of  the Middle East  engineering business, operating  under the name  Colliers Project Leaders Middle East. 

 Investment management firm Colliers  announced  Wednesday  that Sankey Prasad will expand his leadership role to include project  managers  in the Middle East. 

  With immediate effect,  Sankey Prasad becomes Chairman and  Managing Director  (CMD)  of  India and CMD  of  the Middle East  engineering business, operating  under the name  Colliers Project Leaders Middle East. 

  “It  will also take a significant stake in  Colliers’  rapidly growing project management business in the Middle East, supporting the  region’s thriving  real estate market  combined  with  its Colliers’  existing real estate services business in the Middle East  region. , “It says.  

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 “There is no immediate deadline or  limit  for FPIs to liquidate  their shares,”  sources said. Sebi had earlier asked  FPI  to  reduce this  exposure by January 29, 2024. 

  Foreign portfolio investors (FPIs) will  have  seven months to liquidate their holdings if they  fail to  meet the  January-end deadline  set by the Securities Commission, top sources said. and India Exchange set out  to  reveal  data about their  investors.  

 In August last year, the Securities and Exchange Board of India (Sebi)  issued a circular  asking  high-risk  FPIs to hold  more than  50%  of their  assets under management  in  the form of shares of  a single  group. company  or  having aggregate shares  in  the  Indian  Stock Exchange worth more than  Rs 25,000 crore,  disclose  detailed  details of all entities holding  ownership, economic  interest  or exercising control in  REIT.  

 “There is no immediate deadline or  limit  for FPIs to liquidate  their shares,”  sources said. Sebi had earlier asked  FPI  to  reduce this  exposure by January 29, 2024. 

  If  the REIT continues  to meet the  enhanced disclosure  criteria  by the end  of  January, it will  have an  additional  10/30  business  days to provide the  necessary  additional  details, it  said. “Even  then,  if they  don’t  provide any details, they  will  have  another six  months to reduce their  assets,” the source  said.  

 Sources said  REITs that meet enhanced disclosure  criteria  as of October 31, 2023  have until the end of  January 2024  to rebalance their holdings if they  wish.  

  According to stock exchange data, FPI  sold  shares  worth over Rs 27,000 crore between January  17 and 23  in the cash  market. According  to data from National Securities Depository Ltd  (NSDL), FPIs sold a net of Rs 19,308 crore of local stocks as of January.  Net  inflows from FPIs,  after  taking into account  their investments in IPOs and  markets debt, stood at  Rs 4,439 crore in January. 

  The  Sebi  circular  comes  into effect  from  November 1, 2023.  As per  the standard operating procedure (SOP) issued by  the depository of FPIs  on additional disclosure norms,  FPIs  are  not currently compliant  investment limits as  of  October 31,  2023 will  be  subject  to  this de-risking  within 90 calendar  days,  i.e.  January  29, 2024  (the settlement  date), unless they fall  within one  of the  following categories: exempt items.  

 According to sources, FPIs  may be  asked  to provide enhanced disclosures  that  are expected to be significantly  lower  than  estimates  in the consultation paper and  SEBI board  notes.  In May, Sebi had said that based on  data as of March 31, 2023, FPI assets under management  worth  around Rs 2.6 lakh crore  could  be identified as high-risk  FPI and need  to  be Reveal more.  

 Sources said  enhanced  disclosure exemptions  have been  granted  to  REITs that  are sovereign wealth funds (SWFs),  companies  listed  on  several  global  stock  exchanges,  mass  retail  funds They  and other  pooled investment vehicles  are managed  with  globally  diversified  holdings.  

 The markets regulator  has imposed  additional disclosure norms for  high-risk  FPIs after  observing  that  some  FPIs  held a  concentrated portion of their equity  portfolios  in a  company/group of companies.  

 Such concentrated investments raise  concerns and  the  possibility that  backers  of such  companies/groups of companies  or other investors acting in  concert may use  the FPI route  to circumvent the requirements legal  requirements such as  disclosure requirements  under  the Regulations. Sebi said, 2011.  (SAST Regulations) or maintaining  minimum public shareholding  (MPS) in the listed  company. 

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 As per CBDT, a taxpayer is a person who  has filed a return of income for the relevant assessment year (AY) or in  which  case tax has been deducted at source  during  the relevant financial year but the taxpayer has not filed the  return. 

  The direct  tax-to-GDP ratio, which reflects the share of taxes in  total  output generated in the country,  touched  a 15-year high of  6.11%  in  fiscal  2022-23,  according to  time-series data  announced  by the  power plant.

 The Department  of Direct Taxes (CBDT) under the Ministry of Finance showed  this on  Tuesday. This  comes with  an increase in the  number of Indian taxpayers  to 7.4 crore in FY23, up  6.3% over  FY22, even as  fiscal momentum –  the  pace of taxes compared to  the  nominal  growth rate of  the economy – decreased to 1.18.  in  2022-23, compared with  2.52 in 2021-22 and 1.29 in the pre-Covid year  2018-19. 

  Tax revenue expenditure – which represents the share  of  spending  on tax collection  in  total tax  revenue – fell slightly  to  0.51%  in FY23, the lowest level since 2000-01, but  increased in absolute  terms.  to Rs 8,452 crore, the highest  since 2000-01, the year for which data  was  last available,  according to  CBDT  data.  

  Fiscal momentum  stood at (-)1.21 in 2019-20 and it  has  not  been calculated  for  FY  2020-21  due to fall in  nominal GDP and tax  revenue over  the previous year. Tax  momentum  improved to 2.52 in 2021-22 due to  low base effect. Now,  the  tax  dynamic has declined  to 1.18 in  2022-23, although tax  growth  was recorded at  17.79%  in 2022-23, higher than  the  nominal GDP  growth of 15.11 %.  

 A tax  dynamic  greater than 1 reflects a faster  rate of tax  growth  relative to  the  country’s  national income.  

 Net direct tax collections, which reflect collections after  tax  refunds,  “rose 160.52%  to Rs 16.63  billion  in FY  2022-23, compared to  Rs 6.39  billion  in  2013-14,”  CBDT said in a  report. declare. He said total  direct tax  revenue  stood at Rs 19.7 lakh crore in FY 2022-23,  up  173.3 per cent from Rs 7.21 lakh crore in FY  2013-14.  On a  year-over-year  basis, net direct tax  revenue  increased  17.8%,  while  total  direct tax  revenue increased 20.5%.  

 While the number of  income tax  filers  increased to 7.4 crore in  the  financial year 2022-23,  of which 6.97 crore were individuals,  there is no  corresponding data  on taxpayers.  In the previous financial year 2021-22, while  taxpayers  stood at 6.96 crore (with 6.55 crore individuals),  total  taxpayers stood at 9.37 crore  –  a  difference  of 2.41 crore  crore – this shows  that a significant number of taxpayers are  taxed through  as TDS but  do  not  file  income tax returns.  

 As per CBDT, a taxpayer is a person who  has filed a return of income for the relevant assessment year (AY) or in  which  case tax has been deducted at source  during  the relevant financial year but the taxpayer has not filed the  return. 

  Of  the  government’s total  tax  revenue,  direct tax  revenue  accounted for 54.62 per cent  in  the  financial year 2022-23,  the highest in four years. The  share of  direct  taxes  in total taxes  stood at  52.27%  in FY22,  46.84%  in FY21,  52.42%  in FY20 and  54.83%  in  FY19 .A  higher  ratio of  direct  taxes  to indirect taxes  is considered progressive  because  indirect  taxes hurt  the poor more than direct taxes.  

 Among states and union territories, Maharashtra accounted for 36.4 per cent (Rs 6.05 lakh crore) of the  country’s total  direct tax  revenue  in the financial year 2022-23, followed by Delhi  with 13, 3%  (Rs 2.22 lakh crore),  from Karnataka.  at  12.5% ​​(Rs  2.08 lakh crore) and Tamil Nadu at  6.4%  (Rs 1.07 lakh crore).  Collectively,  these four states accounted for  68.6%  of  total  direct tax  revenue  in FY23. 

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