Toyota Kirloskar sells 15,001 units, its highest dispatch during March in eight years

Source: The Economic Times, Apr 01, 2021

Toyota Kirloskar Motor (TKM) on Thursday said it sold a total of 15,001 units in March, registering the highest ever domestic sales in the month of March since 2013. The automaker had sold 7,023 units in March 2020, amid a nationwide lockdown due to the COVID-19 pandemic.

In February this year, the company had reported wholesales of 14,075 units.

“We have been able to sustain the growth momentum as we closed the last quarter registering a 73 per cent growth in domestic sales, when compared to the sales in the corresponding period last year (January-March 2020). In fact, last month witnessed the highest ever domestic sales in the month of March since 2013,” TKM Senior Vice President Naveen Soni said in a statement.

The company’s sales performance in the last quarter proved to be better than the sales in the festive season of the third quarter (October- December 2021), he added.

“The demand for personal mobility still continues to grow as we witness a surge in both enquiries and customer orders thereby registering a 7 per cent growth in domestic sales in March 2021 when compared to the sales in February 2021,” Soni noted.

This reiterates the popularity of the brand amidst customers which has been further enhanced by the two new recent launches of the new Innova Crysta and the New Fortuner, as well as the Legender, he said.

CBDT notifies new rules, forms for trusts and non-profit organisations

Source: The Hindu Business Line, Mar 28, 2021

New Delhi: The Income Tax Department has notified a new set of rules and forms for trusts and non-profit organisations. Registration under these rules will help these organisations to get tax exemption for their own income. Also, the new rules will help in attracting funds where contributors will get exemption.

The Central Board of Direct Taxes (CDBT) has come out with a specific format of application to grant the approval of a fund, trust, institution, university, any hospital or other medical institution under various provisions of section 10.

As per the provision, mentioned in this section, there are incomes from certain funds, universities, educational institutions, hospitals, etc, that are not included in the total income for the taxation purpose.

The notification has also stated the rules are related to the approval of the institution for the fund under various provisions of Section 80G. Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act. All donations, however, are not eligible for deductions under section 80G. Only donations made to the prescribed funds qualify as a deduction. These funds and institutions have been defined in the notification.

Sanjoli Maheshwarri, Director at Nangia Andersen India said the CBDT has finally issued a notification about amendments in the IT Rules and Forms for granting the approval to various non-profit organisations , under section 80G(5). Notably, the amendments were enacted through Finance Act 2020 wherein compliance and registration procedure for such entities were entirely revamped.

However, the required rules and forms to be prescribed got delayed given the nationwide pandemic crises. The rules and forms prescribed in the said notification indicates the procedure and details to be complied in the applicable forms for seeking registration of charitable & religious entities, hospitals, schools, scientific and industrial research organisation by DSIR, etc.

The newly notified forms are comprehensive and detailed as compared to the earlier forms requiring certain key details to be filled in the applications. “As per Section 12A, the requirement for registration has been mandated for all the existing registered entities under12AA as well as for the new entities seeking provisional registration. Further, the timeline to file the application for provisional registration was at least one month prior to the commencement of the previous year from which the said registration is sought,” Maheshwari said. However, considering the said notification has been issued on the verge of year end and the timeline for filing the application for seeking provisional registration has already lapsed, it has been provided that for applications filed during previous year on or after April 1 2021, the provisional registration sought shall be effective from AY 2022-23. “With this clarification, the Government has helped in removing various concerns and anxiousness of the concerned entities who were in dilemma and perplexed as to how to proceed and strategize in the absence of forms notified,” she said.

MSMEs look at Foreign Trade Policy for relief from up to 50% spike in input, fuel costs

Source: The Economic Times, Mar 30, 2021

It’s not just bigger companies that are facing input cost rise.

Medium micro, small and medium enterprises (MSME) are severely hit by rising raw material and fuel costs, prompting them to seek government help.

The rising prices of metals, plastics, fuel and other raw materials along with a shortage of shipping containers have been adding to the woes of the MSME sector, said Rupa Naik, senior director, MVIRDC World Trade Center, Mumbai – a trade facilitating organisation.

The Ministry of Commerce and Industry is likely to roll out its new foreign trade policy for a five-year period effective from April 1 in a bid to boost India as a leader in international trade.

The need to address the inflationary trend in commodity prices needs to be addressed as India’s MSMEs, which contribute over 48% of the country’s exports, are operating on too thin a margin to absorb this cost pressure, Naik said.

Also, the forthcoming foreign trade policy should provide renewed thrust on 235 commodities that witnessed strong growth in exports despite the challenging world economic environment amidst the pandemic.
The trade
In the calendar year 2020, India’s trade surplus across select 235 commodities grew to $33 billion from $12 billion in the previous year as imports declined by 14% to $27 billion, while exports surged 36% over last year, as per the data analysed by World Trade Center, Mumbai.

Out of the 235 commodities, pharmaceuticals including medical equipment and agro-products are the largest categories accounting for 22 percent each with an export value of $13.4 billion and $13.2 billion, respectively. Metals and chemicals stand at third and fourth positions accounting for 18 percent and 11 percent respectively, out of these 235 commodities.

MSME trade bodies in Karnataka have said that the operating cost of over 60 lakh medium, small and micro enterprises (MSMEs) in Karnataka will go up at least 30% due to the recent hike in petrol and diesel prices. Manufacturing, engineering, and auto component firms are hit the most as they have to run their machines on diesel gen-sets during daily power cuts.

Also, MSME operations are heavily dependent on transport and logistics as they have to deliver products to OEMs and procure raw materials on a daily basis.
Corrugated box makers
The rising input cost coupled with the unabated increase in kraft and board paper prices has forced the corrugated box manufacturers of eastern India to go for a voluntary shutdown of their units this month.

A release issued by the Eastern India Corrugated Box Manufacturers’ Association (EICMA) said, “The corrugated box industry comprising MSME entrepreneurs has been suffering immensely as it neither has any control on the unabated increase in input costs nor over escalating kraft paper prices. The situation is critical and the survival of the industry is under threat.”

Other inputs including steel stitching wire, starch, labour, energy, transportation and other costs have witnessed unprecedented rise thereby increasing the conversion cost by 40 per cent to 50 per cent, it said.

Centre offers 67 mines in second coal auction

Source: The Hindu Business Line, Mar 25, 2021

New Delhi: The Ministry of Coal on Thursday put on sale as many as 67 coal blocks under the second tranche of commercial mining auctions since the parliament allowed the entry of private firms in the industry in March last year.

Out of the total 67 mines offered, 37 have been fully explored, while the rest have been partially explored. “The coal mines on offer are a mix of mines with small and large reserves, coking and non-coking mines and fully and partially explored mines spread across six states: Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Maharashtra and Andhra Pradesh,” the ministry said in a statement.

This round will kick off the “rolling auction” regime, under which bids for coal blocks can be received anytime, Minister of Coal and Mines Pralhad Joshi told industry executives at the auction launch event. “Coal mines will be up on offer on our website. Whenever you show interest, we will go for auction,” he said.

“Even if only one person shows interest, we will go for auction. If only one person participated, then we will put the same block up for auction for a second time, and if the second time too no one else makes a bid, then we will allot the mines to that single bidder,” he added.

Earlier, in case of a single bid for a block, the ministry had formulated an Empowered Committee of Secretaries from across central government departments to decide whether or not to allocate the block.

“Coal blocks will now always be available on our website for bidding,” said Coal Secretary Anil Kumar Jain. “Among the 67 blocks that we have offered this time, those which do not get picked up will remain on our website, and maybe we will determine a date every two months when the bids will be received.”

“The new blocks of which the Central Mine Planning and Design Institute completes the exploration and offers to us will get added to the list. We will not need to do bidding rounds,” he added

“With this round, commercial coal block auction will come to have become a permanent feature in the country,” Jain said. “Coal will be the first natural resource which will always be available to anybody wishing to set up coal-based activity.”

Last year, in the first tranche of auctions under the new regime, the ministry had put up 38 blocks on offer, out of which 19 blocks were auctioned successfully.

“Today, the coal and mining sectors contribute 1.25 per cent to India’s GDP,” Joshi said. “By 2024-25, we want to raise it to 2.5 per cent.”

This period is also likely to be the final hour of coal auctions, Jain added. “Considering the minimum gestation period to get the coal out and make it economically viable, you need at least a working span of about 15-20 years. With the increasing press of clean energy, we are sitting at the right time. I think it is only the next 2-3 years that virgin coal blocks may go in for mining. Thereafter you may not be left with sufficient time,” the secretary said.

Ayurveda market saw 50-90% growth in last quarter due to Covid-19 pandemic: Studies

Source: The Hindu Business Line, Mar 23, 2021

Mumbai: The onset of the Covid-19 pandemic has pushed the demand for Ayurveda products in India. The interest in these products has mostly been fuelled by the recommendations from the Ministry of AYUSH to fight the Coronavirus.

According to the Maharishi Ayurveda study report during pre-Covid, the ayurvedic market typically witnessed 15-20 per cent growth annually. In the last quarter, many companies, large and small, have witnessed anywhere between 50-90 per cent growth.

Since last March, the demand for honey has gone up by 45 per cent, Chyawanprash by 85 per cent; and turmeric by 40 per cent in ayurvedic stores.

Speaking on the market growth, Anand Shrivastava, Chairman – Maharishi Ayurveda said in a statement: “Of course, we see the rising demand of different Ayurveda products ranging from Ayurvedic Rasayanas to various immunity-boosting products of Ayurveda.”

Nielsen’s report

Market Research Company, Nielsen’s report in the month of July revealed that Chyawanprash sales have increased by 283 per cent in June. While the sales of branded honey increased by 39 per cent.

The rising sales were also registered by Indian Medicines Pharmaceuticals Corporation Limited (IMPCL), a government enterprise and manufacturer of Ayurveda and Unani medicines.

IMPCL revealed that the consumption of ayurvedic medicines and products has increased during the Covid-19 pandemic significantly. The IMPCL registered sales of ₹69.60 crore up to August 2020 as compared to last year’s ₹26.73 crore. The Ayurveda market in India was valued at ₹300 billion in 2018 and is expected to reach ₹710.87 billion by 2024, expanding at a compound annual growth rate (CAGR) of 16.06 per cent.

Parliament passes bill to boost private investment in mining, Opposition protests

Source: Financial Express, Mar 22, 2021

Parliament Monday passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 which seeks to bring more reforms in mining sector for boosting private investment and creating more jobs.

However, opposition parties demanded a select committee scrutiny of the bill, saying the government may face same backlash against this Bill as they are in the case of farm laws.

Assuring members in Rajya Sabha, Mines Minister Pralhad Joshi said the “progressive” bill will not curb the powers of states while creating more jobs.

The Bill was passed by a voice vote in Rajya Sabha Monday. It was passed in Lok Sabha on March 19, 2021.

The Bill seeks to create employment opportunities and also allow private players in mining activities that would bring in modern technology.

Allaying concerns of the members about the Bill curtailing states’ powers, the minister told the Upper House, “I assure you that not a single iota of power of state will be snatched or taken away by this bill.”

On the demand of the Parliamentary standing committee scrutiny, he said, “Wide consultations on bill were held. The bill was circulated to states and 10,500 comments were received. As many as 10 association and six NGOs had recorded their comments.”

“A 143 mines have been given to states. Since 2015, these mines are with them. Neither those were allotted nor auctioned. Who suffered the loss? We are importing coal despite having the 4th largest resource of coal.”

The minister submitted before the House that the funds allocated for exploring mines remained largely under-utilised as they don’t have the capacity to explore.

Earlier while moving the bill for consideration, Joshi said its major objective is to generate employment in the sector and enhance the contribution of the mining sector in the total GDP of the country.

“Currently, the contribution of the mining sector, putting all together, is around 1.75 per cent and we want to take it to 2.5 per cent which is our commitment,” he added.

According to him, the mining sector contributes around 7 to 7.5 per cent of the GDP in countries like South Africa and Australia which are just as mineral-rich as India.

“Major reason why we are lacking in the mining sector is we do not have explored mines. Only 10 per cent of the Obvious Geological Potential (OGP) area we have explored so far and out of that, in only 5 per cent of OGP we are mining,” he said, adding that in countries such as Australia and South Africa 70 to 80 per cent of OGP is mined.

The reason is that only government agencies are involved in the process, he said.

“We want to bring private players into this because we have rich minerals like coal, gold, silver, but we are not being able to bring it out. That’s why we are bringing these changes and trying to redefine exploration,” he added.

The government is proposing to make National Mineral Exploration Trust (NMET) an autonomous and professional body, which would provide fund for exploration, Joshi added.

The minister informed the House that the bill was even supported by many non-BJP-ruled states as it is in national interest.

A total of “334 working merchant mines have expired in 2020 and out of that, 46 mines were working and were dispatching. Out of that 46, only 28 have been auctioned despite all clearance given by us and in between that there was a shortage of iron ore,” he said.

It would create a level-playing field and end the system of captive and non-captive mines, which was followed in India only and “created a lot of problems”. The government is also fixing the mechanism to calculate extra royalty into the schedule of the bill.

“Without any charges, we have allowed the transfer of mines. We want to bring a transparent system,” he said, adding it is a progressive bill and will bring a lot of change.

The bill to amend the Mines and Minerals (Development and Regulation) Act, 1957, would bring in mega reforms in the sector with resolution in legacy issues, thereby making a large number of mines available for auctions, he said.

Congress leaders Digvijaya Singh and Jairam Ramesh among other opposition members pressed the government to send the bill to a select committee for scrutiny.

Participating in the discussion on the bill, Ramesh said, “Eleven parties in House, have requested that the bill be referred to a select committee…consensus today is that the bill should go to select committee but government is unlikely to agree and respect this consensus…by passing this bill, today we are going against the general consensus.”

Singh also echoed similar views said, “Don’t treat this bill as you had done with the farm laws.”

M Thambidurai (AIADMK) said the minister should ensure that states’ rights are not taken away. He referred to the spectrum case where joint Parliamentary committee was constituted.

K Keshava Rao (TRS) said, “If you want to take people along then send this bill to a select committee. Don’t make the same mistake you have done with farm laws.”

V. Vijayasai Reddy (YSRCP), “This bill should not be passed in its present form…It is pro-private sector and anti-public sector.”

Ram Gopal Yadav (SP) said, “This bill will take towards privatisation of the entire mineral sector…Heaven would not fall if this bill would be passed in next session after the select committee scrutiny.”

Govt to set up empowered committee for manufacturing in high tech areas

Source: Business Standard, Mar 22, 2021

New Delhi: The government notified the composition of an empowered committee for manufacturing in high technology areas, which will be headed by the minister of Commerce and Industry, and notable people from the Indian industry.

Other members of the proposed ten-member committee include the Cabinet Secretary, the deputy national security adviser Rajinder Khanna, secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), additional secretary of the Ministry of External Affairs, Tata Sons chairman N Chandrasekaran, Bharat Forge Chairman Baba Kalyani, Mahindra Group managing director and CEO Pawan Goenka, Zoho Corp CEO Sidhar Vembu, and semiconductor expert Anshuman Tripathi.

The Committee will be serviced by the DPIIT.

The objective of the committee is “to facilitate investments and promote manufacturing in technology intensive sectors including semiconductors”, take action or facilitate investments and production and make recommendations for seeking approvals of the competent authority.

These details were enumerated in an office memo dated Friday, March 19. Secretaries of Department of Economic Affairs, Department of Revenue, Department of Expenditure and sponsoring ministries or departments may also be asked to attend the committee meetings, as required, it said.

Marine box demand boost for Indian makers

An acute shortage of marine containers since October 2020 due to a global equipment imbalance has severely affected Indian trade. However, it has also come as a blessing in disguise for it has led to an awakening — both in the government and in the trade — on the need for India to aggressively restart container manufacturing locally and be less dependent on China, which has a monopoly with over 90 per cent market share globally.

Local container manufacturing is also critical for the success of Centre’s AatmaNirbhar Bharat (self-reliant India) programme.

Container manufacturing is not new to India. As containerisation started to flourish two decades ago, Indian companies manufactured them locally. However, the momentum fizzled out as Chinese companies gained dominance due to cheap labour, availability of abundant raw material and the ability to scale quickly — all of which were largely missing in India.

But action is now being taken — albeit a bit late — to revive local container manufacturing. Earlier this month, Container Corporation of India (Concor) placed orders for 1,000 containers each from Braithwaite & Company Ltd and Public Sector undertaking BHEL.

Concor, which earlier always sourced containers from China, discovered that locally made containers were cheaper by about 25 per cent. Each container costs about ₹2.5 lakh. It is looking to source more from within India.

There are reports that Gujarat government is exploring a plan to make Bhavnagar a hub for container manufacturing.

Bijoy Paulose, Managing Director of the Chennai-based VS&B Containers, said the company annually procures around 4,000 boxes, and all from China. India once had container manufacturers such as Balmer Lawrie (Chennai and Kochi); DCM Hyundai (Chennai); Nathaniel and Transfreight (Mumbai) and HIM Containers (Kolkata). However, these companies all shut down 10-20 years ago. Only DCM is doing local containers in Delhi, he added.

China has a monopoly and can quickly undercut the prices and squeeze the Indian initiative unless the government looks at serious intervention to prevent dumping. There is an annual demand for nearly 4,000 boxes in India. India now has raw materials such as Corten steel needed for the manufacture of these containers. However, 25 years ago even screws were imported, he added.

In the backdrop of the Covid-19 pandemic, local production will benefit the domestic trade during any future disruption, said Sai Krishna, Assistant Vice President, ICRA Ltd, an investment information and credit rating agency. However, matching China on the costs will be a challenge for Indian container manufacturers, he added.

The government can help by providing exemptions for manufacturers on key inputs such as steel or steel scrap. The key to success will be to build scale, else on the cost front the initiative might not take off, he said.

According to Sunil Vaswani, Executive Director, Container Shipping Lines Association (India), the limited access to available containers is driving up the buying price of new containers since manufacturers charge a premium due to the high demand. A relaxation of 40.8 per cent import duty after 18 per cent GST on Corten steel and/or suspension of iron ore exports will help Indian container manufacturers. Favourable policy framework, cost/price competitiveness and quality will boost the business. This would not only help India become self-reliant in the sector but also give the world another option — which would help during the peak demand months of the year — for sourcing of containers, so far largely restricted to China.

DPIIT changes norms on NRI downstream investments

Source: The Hindu Business Line, Mar 19, 2021

New Delhi: The Department for Promotion of Industry and Internal Trade (DPIIT) has said the downstream investments made by Non-Resident Indians (NRIs) on a non-repatriation basis shall be treated at par with domestic investments and not considered for calculation of indirect foreign investment.

Statement

“Investments by NRI(s) on a non-repatriation basis as stipulated under Schedule IV of Foreign Exchange Management (non-debt instruments) Rules 2019 are deemed to be domestic investments at par with the investments made by residents. Accordingly an investment made by an Indian entity which is owned and controlled by NRI(s) on a non-repatriation basis shall not be considered for calculation of indirect foreign investment,” as per Press Note 1 (2021 series) issued by the DPIIT on Friday. The change in the FDI policy in relation to investments made by an Indian company owned and controlled by NRIs on a non repatriation basis and in order to provide clarity on downstream investments, made through appropriate additions in the consolidated FDI Policy Circular of 2020 (FDI Policy), is effective from October 15, 2020, the release said.

20 states complete ease of doing business reforms, eligible for additional borrowing

Source: The Economic Times, Mar 20, 2021

As many as 20 states have successfully completed ease of doing business reforms, the Finance Ministry said on Saturday. States completing the reforms are eligible for additional borrowing of 0.25 per cent of Gross State Domestic Product (GSDP).

“The number of States who have successfully completed the ‘Ease of Doing Business’ reforms has reached to 20. Five more states namely, Arunachal Pradesh, Chhattisgarh, Goa, Meghalaya and Tripura have completed the ‘Ease of Doing Business” reforms stipulated by the Department of Expenditure,” the Ministry said in a statement.

The Department of Expenditure has granted permission to these 20 States to raise additional financial resources of Rs 39,521 crore through Open Market Borrowings.

The ease of doing business is an important indicator of the investment friendly business climate in the country. Improvements in the ease of doing business will enable faster future growth of the state economy.

Therefore, the government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business, the Ministry added.