Around Rs 10.52-trn corporate debt may default over 3 years: India Ratings

At least Rs 10.52 trillion worth of corporate loans — around 16 per cent of the system-level corporate debt — is probably going to default over subsequent three years due to prolonged slowdown in the economy. Further, around 25 per cent of the vulnerable debt is probably going to show delinquent, leading to additional Rs 2.54 trillion of delinquent debt, consistent with a recent report by India Ratings & Research. This is likely to end in incremental delinquencies to the extent of 4 per cent of the system-level corporate debt, the report adds.

A loan becomes delinquent when a borrower makes payments late (even by one day) or misses a daily installment payment(s).

India Ratings has taken under consideration top 500 debt-heavy private-sector issuers for the study after assessing their asset quality. The report buckets issuers in five categories of vulnerability — low, moderate, high, extreme and stressed.

The report details the base, bull and bear case estimates for system-wide credit costs based on the historical default rates and loss, given default for each vulnerability bucket. Credit costs on the corporate book are likely to amount to 2.15 per cent of the system debt in the base case.

"Of the businesses which are already stressed (that is, recognized as defaulters by banks and credit rating agencies), lenders to a minimum of half these companies are likely to be required to take deep haircuts, given the inherently weak asset quality of these issuers," said Arindam Som, analyst at the ratings company.

However, just in case the expansion in real gross domestic product (GDP) sees a pointy recovery (around 7 per cent over FY21-FY22), delinquencies might be lower by 87 basis points (bps) to 3.13 per cent of the system debt. But, if the slowdown accelerates, to say 4.5 per cent over FY21-FY22, delinquencies could be higher by an additional 159 bps to 5.59 per cent of the system debt, the report added.

India's gross domestic product (GDP) growth slipped to nearly a 7-year-low of 4.7 per cent in the December quarter, owing to contraction in investment and manufacturing output. Looking ahead, GDP growth is about to stagnate at 4.7 per cent within the March quarter (Q4), too, consistent with the annual estimate by the National Statistical Office (NSO), which has forecast 5 per cent growth for full fiscal year .

Bajaj Auto plans to drive in three more KTM models by March-end

KTM AG, the Austrian maker of motorcycles partly owned by Bajaj Auto, plans to launch three new models and a couple of refreshes of existing ones this fiscal year .On Monday, the corporate , during which Bajaj owns 48 per cent stake, entered the super-bike segment with the Duke 790. Priced at Rs 863,945, the model went on sale from 460 Bajaj Probiking showrooms.Notwithstanding slowdown within the broader two-wheeler market, Bajaj envisages sales of KTM motorcycles to grow by a 3rd in 2019-20. It sold 50,000 units last year, said Sumeet Narang, president, probiking, at Bajaj Auto. He attributed the expectation to the 125 Duke, which helped KTM “create a strong brand in the entry level of the market”.Four in every 10 KTMs that Bajaj sells in India is accounted for by the Duke 125. A focus on product and brand experience has helped, he said.In this backdrop, Bajaj plans to launch three new KTM models and refreshes; Narang wouldn't elaborate further. It also plans to launch the Husqvarna brand later this financial year; these will also be retailed through Probiking showrooms. Bajaj plans to extend the amount of such showrooms to 500 by end-March, said Narang.In line with the broader slowing within the automobile market, two-wheeler sales in India skidded 14.8 per cent within the first six months of the fiscal year to eight ,039,959 units over the year-ago period, consistent with the Society of Indian Automobile Manufacturers. Most segments have been affected but not sales of 125cc motorcycles. Sales of such models that include the KTM Duke 125, Hero Super Splendor, Suzuki Hayate and TVS Victor expanded to 1,152,589 units in the April-August period, first five months of the financial year, from 940,482 in the same period a year before.Deepesh Rathore, co-founder at Emerging Market Automotive Advisory, said not having a formidable competitor in the performance segment had worked to KTM’s advantage. “They are in their own league.” No other brand has similar levels of brand name name name equity, network and after-sales, he added.What has also helped is that unlike Yamaha or Suzuki that have spread themselves thin by getting into every segment, including scooters, “KTM is not a confused brand.” This gives confidence to buyers, said Rathore.

'Severe damage done': Sensex falls over 3,000 points in 7 days

Indian markets gave up early gains to settle lower after two fresh cases of coronavirus were detected within the country. One of the new cases was detected in the capital New Delhi, and the other in the Telangana, the government said in a statement on Monday, triggering a selloff in the domestic markets that extended into the seventh day. The Sensex fell over 150 points to close at 38,144, losing over 3,000 points in seven sessions. The broader Nifty settled down 0.62% at 11,132. The Nifty bank index fell by nearly 1% to settle at 28,868.

The Indian rupee slipped to 72.73 against the US dollar at the day's low.

Indian equities had rallied as much as 2.1% earlier in the session on hopes that major central banks would take steps to stabilize financial markets amid the coronavirus epidemic.
"Markets witnessed strong gap-up for the primary half the session but they lost ground and corrected sharply closing sharply within the negative. We continue to maintain that recovery is likely to be shaky and fragile. The index is likely to face stiff resistance near the 11,550 zones. It’s a classical sell-on-rise market and bottom fishing should be avoided for any longs. 10,900-11,000 is that the next support zone on the downside. Severe damage has been done and repair will take considerable time."

"Nifty Bank too witnessed a volatile session and lost all gains and closed the red. The uptrend has been severely fractured and repair goes to require a while. Contra long bets should be avoided especially on a positional basis. Traders should look to have a sell-on-rise approach. The next support zone on the downside for the index is placed near 28,350 zones.
The market witnessed a sharp sell-off from higher levels after a first-half rally which was on the back of pullback rally in Dow futures. The pullback was weak towards 11,400 and news of new coronavirus cases in India led this sharp fall.

Delhi court defers hanging of 4 Nirbhaya case convicts till further orders

Delhi court Monday deferred till further order the hanging of four death row convicts in the 2012 Nirbhaya gang rape and murder case pending disposal of a convict's mercy plea, saying it was "an important constitutional legal principle".

All the convicts in the case were to be hanged together on Tuesday at 6 AM.

 

The execution of their death warrants has now been deferred thrice due to delays in exhausting legal remedies.

Additional Sessions Judge Dharmender Rana said the death sentence cannot be executed pending disposal of mercy petition of convict Pawan Gupta.

"Despite stiff resistance from the victim's side, I am of the opinion that any condemned convict must not meet his Creator with a grievance in his bosom that the courts of the country have not acted fairly in granting him an opportunity to exhaust his legal remedies," the judge said.

"As a cumulative effect of the discussion, I am of the opinion that the death sentence cannot be executed pending the disposal of the mercy petition of the convict. It is hereby directed that the execution of death warrants against all the convicts, scheduled for March 3 at 6 AM, is deferred till further orders," the judge added.

 

The court passed the order on Pawan's plea seeking to stay the execution as he filed a mercy petition before the President on Monday.

"I have no hesitation in holding that mercy petition is an important constitutional legal principle 'Ubi jus ubi remedium', i.e., where there is a right, there is a remedy, I am of the opinion that the application is very much maintainable," the judge said in a 6-page order.

 

While it was reserving the order on Pawan's fresh plea to stay the death warrant for Tuesday morning, the court had rapped the convict's lawyer for acting so late in filing the curative and mercy pleas.

 

"You (counsel) are playing with fire. You should be cautious," the judge told the counsel. Pawan's curative plea was rejected by the Supreme Court earlier in the day.

The trial court had earlier in the day dismissed Pawan's and co-accused Akshay Kumar Singh's applications for staying their death warrants. However, Pawan's lawyer, A P Singh, said he has filed a mercy plea and execution ought to be stayed. The court, thereafter, asked him to come post lunch to argue his case.

In the post-lunch hearing, the court pulled up Singh saying, "You are playing with fire, you should be cautious" and while considering that hearing was scheduled for tomorrow morning, added "one wrong move by anybody, and you know the consequences".

 

Tihar jail authorities, during the hearing, said the ball is in the government's court after the filing of the mercy petition, and the judge has no role for now.

"The plea is not maintainable... it is for the government to decide whether to carry on the sentence or not. At this juncture the courts cannot intervene as such intervention would be merely based upon presumptions and conjectures," the jail authorities said.

 

They said the President will seek a status report from the jail on Pawan's mercy plea and when that happens, it will suo motu stay the execution. The authorities, however, informed the court that they had received the information about filing of the mercy petition.

 

BRING IN MORE EFFICIENT TECH FOR PFMS : said the financial Minister

Bring in more efficient tech for PFMS: Financial Minister


Finance Minister Nirmala Sitharaman on Sunday asked civil accounts officers to focus on bringing in more efficient and adaptive  technologies to further smoothen the working of the public financial management system (PFMS).



Speaking at a function to mark the 44^th civil accounts Day, She said there is so much more to be accomplished and officers need to be responsive to the changes.

The minister further said the officer are not only competent accounts person, but also competent technology professional.


“Even as we are talking of technology , that itself is a challenge. Everyday it changes, newer version come in , rapid changes are happening and therefore to keep on top of it is a big exercise . You have to constantly keep changing the milepost bring in more and more efficiency and adaptive technology ,”sitharaman said



She also said that they have “revolutionized” technology-driven PFMS and it has empowered India to be accountable , responsive and transparent .


“Today all over the world DBT ( direct benefit transfer) and GST ( goods and service tax) are being talked about as one of the silent revolution that democracy can show off to the world,” the minister added.


She said the officer have shown that public finance is not opaque, but efficient and responsive to the public.

Possible duties on Chinese imports over Covid-19 scare

India may impose duties on top 100 Chinese imports

The Commerce Department of India is considering a raise on import duties on Chinese imports over the Coronavirus (Covid-19) outbreak. Although strict measures are being undertaken to quarantine the infected and restrict its spread, further measures are to be put in place, especially after the total death toll due to the virus crossed the 2000 mark in China. The matter regarding the raise in import duties is to be finalized next week when the Department meets with industry bodies to discuss the decision and it's implications. 

This move has been taken at a time when the inflow of Chinese goods has taken a hit due to the epidemic. Raising the duties can curb the inflow of these goods in the Indian market, thereby allowing Indian manufacturers to establish a proper foothold in the home market. 

However, the issue remain that Indian manufacturers are not fully capable of utilizing and availing the proper machinery required to manufacture many of the products currently being supplied by Chinese industries. Progress in this area is to be the first step that has to be taken with regards to deepening the roots of the Indian manufacturers in the Indian markets.

The Confederation of All India Traders has however warned that existing inventories of basic, yet crucial commodities are rapidly being depleted especially at wholesalers and retailers. Furthermore, they have predicted prices to rise unless the problem is to be resolved by Mid-March. Industry bodies too, have warned that importers have not been able to obtain supples since January.

The International Chamber of Shipping recently stated that by implementing certain preventive measures for Covid-19, ports in China can continue to operate. It recommenced exit screening at all ports in the affected areas to isolate passengers displaying symptoms of the disease.

As of now, the government has ordered that Customs clearance facility remain open 24x7 at all sea ports and airports till May, as per the official statements released by sources.

10 incomes that are exempted under the new income tax regime

                                      Those opting for the new income tax regime from the next financial year will enjoy the benefit of reduced tax rates but only after forgoing 70 exemptions and deductions. But the new simplified  income tax regime, which is optional, still allows you to get the benefit of several other exemptions and deductions.

10 income tax exemptions and deductions that you can claim under the new tax regime for FY 2020-21 (AY 2021-22):

1) Withdrawal by an employee from the Employees' Provident Fund (EPF) is not taxable after 5 years of continuous service, Archit Gupta, Founder and CEO, ClearTax, said.

2) The amount received on the maturity of PPF (Public Provident Fund) account and the yearly interest credited to the PPF balance.

3) Withdrawal from National Pension Scheme (NPS) on maturity or premature closure up to 40% of the amount received on such withdrawal remains tax free for all. In case of partial withdrawal from NPS, up to 25% of the contributions made by the individual will be tax free.

Employer’s contribution to NPS up to 10% of their basic salary and dearness allowance also remains tax free.

4) Under Section 10 (10D) of the Income Tax Act, the sum assured and any bonus paid on maturity or surrender of the life insurance plan is tax free. Maturity proceeds continue to be exempt under Section 10(10D) even in the new regime, Jain said.

5) The maturity amount including interest received on the Sukanya Samriddhi Yojana will not attract any tax.

6) Conveyance Allowance granted to meet expenditure incurred on conveyance in performance of duties of an office and any allowance granted to an employee to meet the cost of travel on tour or on transfer (including relocation) are tax free.

7) Interest received from post office savings account balance up to ₹3,500 annually per individual will remain free from tax.

8) Any scholarship granted to meet education costs is tax exempt under Section 10 (16) of the Income Tax Act.

9) Gratuity received from the employer up to ₹20 lakh after rendering 5 years of continuous service.

10) Leave encashment received at the time of resignation or retirement up to ₹3 lakh.