TUESDAY, 21 JUNE 2022

26 pages in 2 section www.business-standard.com

MUMBAI
~11.00
VOLUME XXVI NUMBER 216

THE MARKETS ON MONDAY chg#

Sensex 51,597.8 p 237.4

Nifty 15,350.2 p 56.7
Nifty Futures* 15,347.7 q 2.5 COMPANIES P2 TAKE TWO P7
Dollar
Euro
Brent crude ($/bbl)
~78.0
~82.1
115.0##
~78.1 **
~82.1 **
117.0 **
A STRAW IN THE AMAZON INDIA: BUYER’S
Gold (10 gm)### ~50,801.0 q
*(June) Premium on Nifty Spot; **Previous close;
# Over previous close; ## At 9 pm IST;
~163.0
WIND FROM UFLEX REMORSE?
### Market rate exclusive of VAT; Source: IBJA P U B L I S HE D S I MU L T A N E O USL Y F R O M AH M E D AB AD , B E NG AL UR U, B H UB ANE SW AR , CH AND I G AR H , CH E NNAI , H Y D E R AB AD , K OCHI, K OL K ATA, L UCK N OW , MUMBA I (AL SO P R IN TE D IN BHOP AL ), N E W DE L HI AN D P UN E

THE CMIE TRACKER

Consumer Sentiments Index
(Base: September - December 2015 = 100)
India is staring BHARAT BANDH SEES SCATTERED PROTESTS

at a twin deficit
Unemployment rate (%)
problem: Govt
But says the country faces low risk of stagflation SEVERAL
ARUP ROYCHOUDHURY
New Delhi, 20 June FISCAL DECISIONS LOOK
INDICATORS: IT UNFAIR AT

ON THE JOB
AGNI PAREEKSHA
The Centre’s offer of a million jobs in 18
months is generous. However, what took
centre stage was, a smaller but more
tangible offer of government jobs for the
wrong reasons. MAHESH VYAS writes
1-YEAR RETURNS FOR 3/4TH
EQUITY FUNDS NOW IN RED
Equity funds, which had delivered robust
returns in the past few years, are facing
turbulence now. A set of data reveals that of a
total of 513 equity schemes, around 372 have
given negative returns in the past year. II, 1 >
Scan to Open
FREE Demat
Account
T
he finance ministry on Monday cau-
tioned the re-emergence of the twin AIN'T ROSY PRESENT.
deficit problem in the economy, with
Source: CMIE
higher commodity prices and rising (As percentage IN TIME, THOSE
subsidy burden leading to an increase in both to GDP) DECISIONS WILL
fiscal deficit and current account deficit. It’s
HELP IN BUILDING
also the first time the government has explicitly
Passengers wait at Patna railway station after as many as 587 trains were cancelled
talked about the possibility of fiscal slippage in
the current fiscal year. on Monday due to 'Bharat Bandh', called to protest against the Centre's 'Agnipath' THE NATION
“As government revenues take a hit follow- scheme PHOTO: PTI
Gross fiscal deficit
ing cuts in excise duties on diesel and petrol,
Net fiscal deficit 6.76 ARMY ISSUES NOTIFICATION
upside risk to the budgeted level of gross fiscal EDIT: AVOID SUDDEN NARENDRA MODI,
deficit has emerged. An increase in the fiscal FOR REGISTRATION P11 CHANGES P9 Prime Minister
7> deficit may cause the current account deficit 4.93
to widen, compounding the effects of costlier
imports, and weaken the value of the rupee,
thereby further aggravating external imbal- 4.87
6.64
India Inc bullish on Agnipath, Ex-servicemen
ances, creating the risk (admittedly low, at this
find it hard to
time) of a cycle of wider deficits and a weaker
currency,” the finance ministry said in its latest vows to hire soldiers in 4 years
Monthly Economic Review.
The report said rationalising non-capex
CURRENT ACCOUNT BALANCE/GDP
(in %) BS REPORTERS
bag govt jobs
expenditure has thus become critical, not only
for protecting growth supportive capex but also -4.8 -1.2
Mumbai, 20 June
BELOW THE MARK
for avoiding fiscal slippages. Corporate India has gone all out to support the government on the Organisation Ex- Ex-
The ministry had earlier hinted that India’s ‘Agnipath’ scheme, which triggered a mass agitation across the country. servicemen servicemen
fertiliser subsidy bill for FY23 could rise to Top business leaders on Monday promised to hire the soldiers in Group C* in Group D*
around ~2.5 trillion against the Budget Estimate (Agniveer) once they retire from active military services in four years. (In %) (in %)
of ~1.05 trillion because of a global supply short- The stir against the controversial military recruitment scheme has CPSUs 1.15 0.3
age amid the war in Ukraine. Apart from the continued for several days now. PSBs** 9.1 21.34
Notes : 1. Data for 2020-21 are Revised Estimates and data for
already announced ~1.10-trillion increase in fer- 2021-22 are Budget Estimates
Capturing the India Inc gesture, Finance minister Nirmala
tiliser subsidy, the Narendra Modi govern- Source RBI Compiled by BS Research Bureau Sitharaman said in a Twitter message that top industry leaders were Central govt depts 1.29 2.66
ment’s decision to extend the PM Garib Kalyan hailing ‘’the pathbreaking scheme of the Modi government as a much- CAPF** 0.47 0
Anna Yojana (PMGKAY) until September shall needed reform to strengthen the Armed Forces and a great opportunity Data as of 30 June, 2021; *10% of vacancies in central
government jobs in Group C & 20% in Group D are
increase the food subsidy outlay for FY23 to vide a subsidy of ~200 per gas cylinder (up to for the youth to serve the nation.’’ reserved for ex-servicemen; **For PSBs & CPSUs, and
~2.87 trillion, from the Budget Estimate of ~2.07 12 cylinders) to over 90 million beneficiaries of N Chandrasekaran, chairman of the salt-to-software Tata group CAPF (Central Armed Police Forces), the reservation is
14.5% and 24.5%y
trillion. The impact of the latest round of excise the Pradhan Mantri Ujjwala Yojana will cost called the scheme a great opportunity for the youth to serve the nation. Source: Directorate General of Resettlement
duty cuts on petrol and diesel will be around ~6,100 crore a year to the exchequer. He added Agnipath would help the industry including the Tata group
~85,000 crore for the year, while the recent
import duty cuts on other items shall lead to a
The report said even as the world is looking
at a distinct possibility of widespread stagfla-
get a pool of disciplined and trained youth. ‘’We recognise the potential
of the Agniveers and welcome the opportunity this represents,’’ he
LOW SCORES
% employed Uttar Pradesh 1.8
revenue foregone worth ~10,000-15,000 crore. tion, India is at low risk of stagflation, owing to said in a statement. Turn to Page 6 >
Additionally, the government’s decision to pro- its prudent stabilisation policies. Turn to Page 6 > Bihar Rajasthan Punjab Haryana
0.01 2.6 1.8 1.8
Data as of December 2019 Source: Rajya Sainik Board

For firms, borrowing gets costly ACCENT REGION

ARINDAM MAJUMDER, DHRUVASKH SAHA &
SHREYA JAI
New Delhi, 20 June

BHASKAR DUTTA
GOING UP Mumbai, 20 June
Bloomberg FIMMDA
Corporate Bonds After two years of a record low
interest-rate regime, Indian
corporate houses are experi-
encing a sharp and abrupt
increase in funding costs.
With the Reserve Bank of
India last month making an
unequivocal turn towards pol-
icy tightening amid high infla-
tion, firms looking to tap the
capital markets for funds are
ending up shelling out more.
The yield on the bench- Villagers are creating Even as Union ministers allay mis-
mark triple-A-rated corporate capital out of cow dung givings over Agnipath, figures show a
bonds maturing in three years meagre 2.4 per cent of the ex-ser-
has climbed 98 basis points Guarding cow dung may not look "WE AT THE TATA "WITH LEADERSHIP, “I DO HOPE OTHER vicemen who applied for a govern-
(bps) since the policy rate hike like a full-time job but Mantu Ram GROUP RECOGNISE TEAMWORK & COMPANIES WILL ment job could get one as the Centre
in May. It was last at 7.47 per Kashyap and his wife Meera are doing THE POTENTIAL OF PHYSICAL TRAINING, ALSO JOIN US TO and the states have been unable to
cent, Bloomberg data showed. just that with full dedication. THE AGNIVEERS AGNIVEERS PROVIDE TAKE THIS PLEDGE recruit against the reserved quotas.
The yields on triple-A rated Residents of the sleepy Kutru village, AND WELCOME MARKET-READY AND ASSURE OUR Public sector undertakings (PSUs),
paper maturing in 5 and 10 tucked away in Chhattisgarh’s restive THE OPPORTUNITY PROFESSIONAL YOUTHS OF A ministries, and officials of Sainik
years have risen 79 bps and 59 Bijapur district, Kashyap and his wife THIS REPRESENTS" SOLUTIONS" FUTURE” Boards have blamed it on the lack of
bps, respectively. The yield on work in shifts during the night to N CHANDRASEKARAN, ANAND MAHINDRA, HARSH GOENKA, skill among ex-servicemen. They say
the 5-year corporate bonds was keep an eye on the dung, so that it’s Chairman, Chairman, Mahindra Chairman, RPG veterans’ inability to qualify in selec-
last at 7.63 per cent, while that not stolen. Tata Sons Group Group tion exams is one of reasons for this.
on 10-year securities was at R KRISHNA DAS writes 11 > Turn to Page 6 >
7.87%, it showed. Turn to Page 6 >

July 1 will mark five years of goods and services tax (GST) in India. Starting today, we track the journey through a series of reports

Indirect tax reformed, but there’s still some way to go

INDIVJAL DHASMANA from many concealed impositions that now. For instance, the GST Council has
New Delhi, 20 June HOW IT STANDS were built into complex taxes earlier. so far shown coherence in arriving at
Pratik Jain, leader of indirect tax, PwC decisions barring a few occasions such
Goods and services tax (GST) was intro- 2017-18* 2018-19 2019-20 2020-21 2021-22 2022-23** India, said: “GST has brought in a lot of as tax rates for lottery and the initial tus-
duced five years ago to do away with a structural simplicity as multiple laws and sle on borrowing to tide over the shortfall
GST collection (in ~ trn) 7.18* 11.77 12.22 11.37 14.83 14.4
plethora of Central and state taxes in the compliances have been replaced with in the compensation cess owing to
hope of taking India to a Growth in GST collection common uniform laws. For large corpo- Covid-induced lockdowns.
9.75*** 3.8 -6.95 30.43 -2.9
transparent “one nation ( in % YoY) rations, doing business has become eas- This harmonious arrangement seems
one tax” system and Average monthly GST ier and in general, tax incidence has gone to be giving way now or at least there is
0.9 0.98 1.02 0.95 1.23 1.2

5 YEARS
OF
ushering in greater
cooperative federalism.
It was expected to be
a regime that would
collection (in ~ trn)
GST as % of GDP 6.23 6.09 5.74 6.09
Notes:* Eight months from August to March, ** Derived from Budget Estimates and assumption on GDP, *** August to
March growth Source: GST Council site, finance ministry, MoSPI
5.58
down, helping the consumers.”
However, small firms complain that
their cash flow is disrupted as bigger
ones charge them GST even when the
uncertainty over the consensus
approach because states demand
extending compensation beyond this
month and due to a recent Supreme

GST have revenue buoyancy,

improve ease of doing
business, and end hid- exemplified by the fact that collection cal year because of conservative projec- At least big companies are witnessing
former are sellers. Chandrakant Anant
Salunkhe, president SME Chamber of
India said this is one of the main prob-
Court verdict.
Chhattisgarh Commercial Tax (GST)
Minister T S Singh Deo told Business
den taxes. remained above ~1.4 trillion for the third tions. The first two months in FY23 aver- better ease of doing business and cost lems, besides high fee charged by char- Standard the states were guaranteed 14
The GST story, however, has been month on the trot in May. The numbers aged ~1.54 trillion each, much higher than saving because they no longer need to tered accountants for filing their returns. per cent growth in GST every year on the
mixed. derived from the Union Budget (given in the monthly ~1.2 trillion derived from the have their supply chains aligned to low- In broader sense too, the GST system base year of 2015-16.
Revenues have started being buoyant, the chart) show a dismal picture this fis- Budget Estimates for the fiscal year. tax areas. Consumers too have got relief is likely to face some severe challenges Turn to Page 6 >