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<ul><li>Nirmala Sitharaman announced that the government will increase <keyword id="2847984" type="PERSON" weightage="20" keywordseo="public-expenditure-on-health">public expenditure on health</keyword>.</li><li>There will be an integrated <keyword id="491144" type="PERSON" weightage="20" keywordseo="public-health-labs">Public Health Labs</keyword> in all districts at block level as the current lab network in rural areas is inadequate to deal with an epidemic. </li><li>All districts will have infectious diseases hospital blocks. </li></ul>In a bid to make India ready for future epidemics Nirmala Sitharaman announced that the government will increase public <keyword id="3961654" type="PERSON" weightage="20" keywordseo="expenditure-on-health">expenditure on health</keyword>. For grass root healthy institution in particular, the government plans to introduce new investments. All districts will have infectious diseases hospital blocks. Moreover, there will be integrated <keyword id="6364896" type="UNKNOWN" weightage="20" keywordseo="public-health">Public Health</keyword> Labs in all districts at block level as the current lab network in rural areas is inadequate to deal with an epidemic. "<keyword id="144853" type="PERSON" weightage="20" keywordseo="public-expenditure">Public expenditure</keyword> on health will be increased, we will be ramping up the infrastructure” Finance Minister Nirmala Sitharaman said on Health Reforms. The government will focus on developing both hospitals and labs — including those which are privately funded. The government will also encourage research by introducing a National Institutional Platform for One health by ICMR. The National Digital Health Mission will receive a special impetus by implementing a ‘national digital health blueprint’. “We should see the opportunity in this crisis. Health reforms and initiative have been put in place. Investments in grass-root level will be ramped up — clinics and wellness centres. Viability gap funding was discussed yesterday,” Sitharaman added. The health reforms are announced at the same time when India reported the highest spike of 4,987 coronavirus cases in a single day, taking the total coronavirus cases above 90,000 mark. In the last two months, the government has released ₹15,000 crore for health-related steps. According to Sitharaman, an insurance cover of ₹50 lakh per health worker was announced. India’s 33-year-old Epidemic Disease Act was also <a href="https://www.jagranjosh.com/general-knowledge/amendment-in-epidemic-disease-act-1897-1587621500-1">amended </a>to prevent attacks on health workers. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/finance-minister-nirmala-sitharaman-final-stimulus-plan-to-boost-gdp-of-india/articleshow/75784571.cms">India's Finance Minister reveals the final lot of Modi's economic stimulus programme</a>

India to increase expenditure on health — will set up public health labs at block levels in all districts

The government on Wednesday asked state-owned banks to defer <keyword id="9420782" type="UNKNOWN" weightage="20" keywordseo="avoidable-expenditure">avoidable expenditure</keyword>, including purchase of <keyword id="9420781" type="UNKNOWN" weightage="20" keywordseo="staff-cars">staff cars</keyword> and refurbishment of guest houses, to ensure more productive utilisation of <keyword id="625899" type="PERSON" weightage="20" keywordseo="financial-resources">financial resources</keyword> amid the coronavirus pandemic. In a detailed advisory to the heads of all <keyword id="6355548" type="UNKNOWN" weightage="20" keywordseo="Public-sector-banks">public sector banks</keyword>, the Department of Financial Services (DFS) said it was necessary that the banks take appropriate measures to ensure productive use of their financial resources for core business activities. The advisory also comes against the backdrop of <keyword id="62034" type="CITY" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> recently purchasing three <keyword id="6363321" type="COMPANY" weightage="20" keywordseo="audi">Audi</keyword> cars worth over Rs 1.30 crore for travel of its top executives. Banks are advised to defer avoidable expenditure beyond the current financial year, including purchase of staff cars, except where unavoidable, the advisory said. DFS has also directed the banks to postpone expenditure on decorative, non-functional items for the interiors in non-customer facing premises like administrative offices and back offices, and refurbishment of guest houses. Further, the banks have been asked to effect significant reduction in expenditure on activities other than those pertaining to core business activities. "Economy in expenditure to the tune of 20 per cent year-on-year or more may be effected on activities or heads of expenditure such as entertainment, publicity, by making efficacious use of social media and press releases, and pooling resources with other PSBs (Public Sector Banks) for common publicity campaigns where appropriate," it said. Besides, DFS has directed banks to avoid travel and adopt digital means of communication as well as make effective use of locally available administrative officers. "The bank board's executive committee/ management committee may review the composition of the existing fleet of vehicles engaged on hire, while taking into account functional imperatives and the profitability and the cost to income ratio of the bank's operations and the occupancy level of guest houses," the advisory said. DFS, which comes under the finance ministry, has asked banks to place the advisory before their respective boards and issue appropriate instructions internally. "Top management may also suitably sensitise senior executives to give effect to this advisory in letter and spirit," it said. In addition, DFS has directed banks for revision of entitlements and perquisites such as entitlements to fixed assets like vehicles and furniture and lease/ rent amounts admissible for hired residential accommodations. Amid the pandemic, the finance ministry has asked all ministries and departments not to initiate any new scheme in the current financial year. Earlier this month, the ministry said there was a need to use resources prudently in these difficult times. Schemes that have already been approved for the current financial year would remain suspended till March 31 next year or further orders. SEE ALSO: <a href="https://www.businessinsider.in/business/news/interest-rate-waivers-for-bank-loans-during-moratorium-will-harm-depositors-aibda/articleshow/76419600.cms">Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA</a> <a href="https://www.businessinsider.in/finance/news/only-5-of-the-governments-msme-emergency-loan-package-is-disbursed-after-a-month/articleshow/76437386.cms">Only 5% of the government’s MSME emergency loan package is disbursed after a month ⁠— private banks are sitting tight</a> <a href="https://www.businessinsider.in/business/news/indian-companies-shifting-accounts-to-large-stable-banks-amid-covid-crisis-report/articleshow/76411271.cms">Indian companies shifting accounts to large, stable banks amid COVID crisis: Report</a>

PNB buying Audi cars for its execs is followed by government telling PSU banks to cut 'avoidable' expenses

(Eds: Adding details) New Delhi, Mar 23 () Spending by corporates to deal with the coronavirus outbreak will be considered as CSR activity under the companies law, the government said on Monday. In India, over 400 people have been infected by the coronavirus and at least seven people have died, while many states have announced lockdown to curb spreading of the infection. Under the companies law, certain classes of profitable entities have to shell out at least 2 per cent of their three-year annual net profit towards Corporate Social Responsibility (CSR) activities in a particular financial year. "It is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity," the corporate affairs ministry said in a circular on Monday. The ministry is implementing the Companies Act. CSR funds could be utilised for various activities related to COVID-19, including those relating to preventive healthcare and sanitation, as per the circular. A senior official said the CSR funds could be used for direct expenditure to contain the spread, morbidity and mortality due to the disease. Corporate Affairs Minister Nirmala Sitharaman tweeted the circular. "In view of the spread of novel #CoronaVirus in India, its declaration as pandemic by the WHO, and decision of Government of India to treat this as notified disaster, it is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity...," she tweeted. Consultancy Corporate Professionals Group Founder Pavan Kumar Vijay said the ministry's clarification on CSR was a welcome step. "For the purpose, it is suggested that the government may immediately create a portal on which specific requirements by way of equipment, medicines, etc may be posted and the corporates may be permitted to contribute in cash or kind towards those specific requirements. This will ensure coordinated efforts and avoid duplication," he said. Under Section 135 of the Companies Act, 2013, every company having net worth of at least Rs 500 crore, turnover of Rs 1,000 crore or more, or a minimum net profit of Rs 5 crore during the immediately preceding financial year has to make CSR expenditure. RAM RVKRVK

Companies' expenditure to tackle COVID-19 to be considered as CSR activity: Govt

India's economy is likely to shrink by 5.3 per cent this fiscal, the <keyword id="8057424" type="UNKNOWN" weightage="20" keywordseo="Lowest-GDP-growth">lowest GDP growth</keyword> in the Indian history and the sixth instance of economic contraction, India Ratings and Research said on Wednesday. "The disorder caused by the COVID-19 pandemic unfolded with such a speed and scale that the disruption in production, breakdown of supply chains/trade channels and total wash out of activities in aviation (some activities have started now), tourism, hotels and hospitality sectors will not allow the economic activity to return to normalcy throughout FY21," the rating agency said in a report. As a result, besides contracting for the whole year, GDP will contract in each quarter in FY21 (April 2020 to March 2021). However, the agency believes the GDP growth would bounce back in the range of 5-6 per cent in <keyword id="5027223" type="COMPANY" weightage="20" keywordseo="FY22">FY22</keyword> (April 2021 to March 2022), aided by base effect and return of gradual normalcy in the domestic as well as global economy. India Ratings (Ind-Ra) said India's gross domestic product (GDP) will contract 5.3 per cent in FY21. "This will be the lowest GDP growth in the Indian history (Indian GDP data is available from FY51) and sixth instance of economic contraction, others being in FY58, FY66, FY67, FY73 and FY80; the previous low was negative 5.2 per cent in FY80," it said. The government had announced an economic package of Rs 20.97 lakh crore (10 per cent of GDP) on May 12, 2020 to mitigate the adverse impact of COVID-19 and related lockdown. However, Ind-Ra's calculations, excluding the <keyword id="35025" type="PERSON" weightage="20" keywordseo="monetary-measures">monetary measures</keyword> and existing proposals in the union budget, show that the direct fiscal impact is only Rs 2.145 lakh crore (1.1 per cent of GDP). "The credit and liquidity enhancing measures announced in the economic package in combination with some of the earlier steps announced by the Reserve Bank of India (RBI) will certainly address the supply-side issues of the economy," it said. The Indian economy even before the COVID-19 related lockdown was suffering on the demand side, as all the demand drivers, except government final consumption expenditure (GFCE), namely private final consumption expenditure (PFCE), <keyword id="756316" type="PERSON" weightage="20" keywordseo="gross-fixed-capital-formation">gross fixed capital formation</keyword> (GFCF) and net exports were <keyword id="2258914" type="PERSON" weightage="20" keywordseo="Floundering">floundering</keyword>. The lockdown and its impact on the economy and livelihoods only aggravated the sagging consumption demand. "Ind-Ra believes the government is aware of it; but, the near absence of demand-side measures in the economic package indicates the hard budget constraint facing the government," the report said. Ind-Ra saw PFCE contracting 5.1 per cent in FY21 (FY20: 5.3 per cent yoy) to reach a level lower than FY19's. Even GFCF will contract 17.6 per cent in FY21 and the investment revival will now be pushed beyond FY22 due to a combination of excess capacity, weak demand, stretched balance sheet of Indian corporates and budget constraints leading to reduced government capex. "The external environment continues to be challenging due to COVID-19 related restrictions coupled with trade friction and protectionist policy pursued by many developed economies," it said. Ind-Ra expected merchandise exports to decline 9.4 per cent in FY21 (FY20: negative 4.9 per cent), as all major export commodities would clock negative growth. Merchandise imports are expected to decline 17.4 per cent in FY21 (FY20: negative 8.9 per cent). As a result, the trade deficit is estimated to decline to a four-year low of USD 97.7 billion (3.9 per cent of GDP) and current account deficit to USD 3.3 billion (0.1 per cent of GDP) in FY21. However, 1QFY21 may see a current account surplus. "From the supply side, agriculture is the only bright spot. Agricultural gross value added (GVA) is expected to grow 3.5 per cent in FY21," the rating agency said adding the Indian Meteorological Department has predicted the monsoon rainfall to be 102 per cent of long period average (1961-2010) in 2020. Ind-Ra expects the retail and wholesale inflation to come in at 3.6 per cent and 1.2 per cent, respectively, in FY21. "Fiscal deficit of the central government in FY21 is expected to more than double (7.6 per cent of GDP) the budgeted amount (3.5 per cent of GDP). The majority of the fiscal slippage will be from the revenue side," it added. SEE ALSO: <a href="https://www.businessinsider.in/india/news/karnataka-health-minister-hints-at-lockdown-in-covid-hit-bengaluru-again/articleshow/76542217.cms" data-type="tilCustomLink">Karnataka Health Minister hints at lockdown in Covid-hit Bengaluru again </a> <a href="https://www.businessinsider.in/business/news/mukesh-ambani-radhakishan-damani-and-shiv-nadar-took-over-10-years-to-become-a-billionaire/slidelist/76547186.cms" data-type="tilCustomLink">Indians took 17 years on an average to make their first billion— and it has gotten a lot faster recently</a>

India's GDP to contract by 5.3% due to coronavirus 'disorder', says India Ratings

New Delhi, Apr 7 () BPO company Startek, which employs over 20,000 people in India, on Tuesday said it has cut all non-essential expenses and capital expenditures and is in discussions with lenders to restructure debt.Further, its Executive Chairman and CEO Aparup Sengupta will forgo all cash compensation in 2020 to mitigate the impact of corovirus pandemic on financial health of the company. "Executive Chairman and CEO Aparup Sengupta has not received compensation in any form since his appointment on January 15, 2020 and will forgo any cash salary for the remainder period," the company statement said. "The decision comes in order to mitigate financial impacts to the company as global markets are impacted from widespread disruption and mandated steps to slow the spread of the novel coronavirus," Startek said. Headquartered in Colorado, US, Startek acquired India's leading BPO firm Aegis in 2018 and now has presence in 13 countries, employing over 47,000 people across 54 BPO centres globally."Our top priority continues to be the health and safety of our employees and we've implemented key measures to maximize our operations and efficiency in response to the covid-19 pandemic," Sengupta said.The company employees around 20,000 people in India across about 20 BPO centres located in tier 1 and 2 towns."We are continuously enabling employees to work-from-home after obtaining requisite client approvals. We are aligning our workforce to match with the current revenue levels and also managing our operating costs with an emphasis on minimizing disruption to our global business operations," Sengupta said. PRS MKJ

Startek cuts non-essential expenditures; CEO to forgo 'cash compensation' in 2020

New Delhi, May 17 () Additional public expenditure of 3-5 per cent will be required by the central government in order to return to modest but positive economic growth in 2020-21, think-tank NCAER has said.Prime Minister Narendra Modi had on May 12 announced the raising of spending to Rs 20 lakh crore or about 10 per cent of India's GDP, to help the economy get back on its feet after weeks of coronavirus lockdown."The policy simulations done by the Quarterly Review of the Economy (QRE ) Team suggest that something like 3 per cent to 5 per cent of additional public expenditure will be needed to return to modest but positive GDP growth in 2020-21," NCAER said in its first coronavirus report for the first quarter of fiscal 2020-21.The economic think tank said in case of no stimulus base-case for each 2020-21 quarter and the fiscal year, industry and services growth will stop shrinking by the end of December 2020 and show zero growth in the last quarter of the current fiscal."This base-case, hypothetical scenario then suggests that aggregate GVA (gross value added) would shrink by some 26 per cent in first quarter 2020-21 and by 13 per cent overall for the fiscal year in the absence of any specific coronavirus recovery assistance," it said.Elaborating further, National Council of Applied Economic Research (NCAER) said building on no-stimulus, hypothetical base case, QRE research team developed four policy-based growth scenarios for government fiscal expenditures of 0 per cent, 1 per cent, 3 per cent, and 5 per cent over the fiscal 2020-21 budget presented in February 2020.The economic think tank said if the central government expenditure is maintained as proposed in the Union Budget 2020-21, then in this scenario GDP will decline by (-) 4.1 per cent.It further said if the central government increases public expenditure by 1 per cent of GDP, then in this scenario, the decline in GDP will be limited to (-) 1.9 per cent.Likewise, if the government increases public expenditure by 3 per cent of GDP, then in this case GDP growth for 2020-21 will positive at 1.2 per cent.In case if the fiscal stimulus is raised to 5 per cent of the GDP, then it will grow by 3.6 per cent in the current fiscal.The nationwide lockdown began on March 25 and it is schedule to stay in place until May 17, although there has been some relaxation since May 4.Moody's Investors Service on May 8 had said it estimates India's GDP growth to hit 'zero' in FY21 and pointed to a wide fiscal deficit, high government debt, weak social and physical infrastructure, and a fragile financial sector. BKS BALBAL

Need 3-5 pc additional public expenditure to help growth stay in positive terrain: NCAER

<ul><li>The Finance Ministry and <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> will hold a meeting on Tuesday to decide on government's borrowing plan for the first half of 2020-21 </li><li>The meeting between the Finance Ministry and Reserve Bank of India (RBI) will be held through video conferencing for the first time as there is lockdown across the country. </li><li>Post meeting, the borrowing calendar for issuance of dated government securities and short term papers will be announced in the evening.</li></ul> The Finance Ministry and RBI will hold a meeting on Tuesday to decide on government's borrowing plan for the first half of 2020-21 amid the lockdown to contain the spread of <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword>.According to sources, the government would resort to front-load its borrowing plan to deal with the challenges posed by COVID-19 on the economy. The meeting between the Finance Ministry and Reserve Bank of India (RBI) will be held through video conferencing for the first time as there is lockdown across the country, the sources said. Post meeting, the borrowing calendar for issuance of dated government securities and short term papers will be announced in the evening. As per the Budget, the government plans to borrow Rs 5.36 lakh crore from the market in 2020-21, higher than the Rs 4.99 lakh crore estimated for the current financial year ending March 2020. The gross borrowing would be Rs 7.8 lakh crore for the next financial year as compared to Rs 7.1 lakh crore estimated for the current financial year. Gross borrowing includes repayments of past loans. Repayment of past loans in the next financial year has been pegged at Rs 2.35 lakh crore. Presenting Budget for 2020-21, Finance Minister Nirmala Sitharaman had said, "Net market borrowings for the year 2019-20 would be Rs 4.99 lakh crore and for the year 2020-21, it would be Rs 5.36 lakh crore". "A good part of the borrowings for the financial year 2020-21 would go towards capital expenditure of the government that has been scaled up by more than 21 per cent. "As I had previously mentioned another about Rs 22,000 crore have been allocated for equity to fund certain specified infrastructure finance companies, who would leverage it manifold and provide much-needed long-term finance to the infrastructure sector. That should spur growth impulses in the economy," she had said. The government raises funds from the market to fund its fiscal deficit through dated securities and treasury bills. The Budget has pegged fiscal deficit at 3.5 per cent for the next fiscal, down from 3.8 per cent of the GDP in the current financial year. The government had earlier estimated the fiscal deficit to be 3.3 per cent of the GDP for the current fiscal but due to revenue shortage, the Centre had to increase it and utilise the 'escape clause' in the Fiscal Responsibility and Budget Management (FRBM) Act. The 'escape clause' allows the government to breach its fiscal deficit target by 0.5 percentage points at times of severe stress in the economy, including periods of structural change and those when growth falls sharply. DP BAL

FinMin and RBI to connect over videocall to decide borrowing plan for FY21

Industry body <keyword id="6355001" type="ORGANIZATION" weightage="20" keywordseo="ficci">Ficci</keyword> on Sunday said its Economic Outlook Survey has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent. With the rapid spread of COVID-19 pandemic manifesting into an economic and healthcare crisis globally, the latest forecast marks a sharp downward revision from the growth estimate of 5.5 per cent reported in the January 2020 survey, it said. The pandemic outbreak has severely impacted the economic activities as the country had to go through a lockdown to check spread of the virus. However, the restrictions are being gradually eased. While addressing SBI Banking and Economics Conclave on Saturday, RBI Governor Shaktikanta Das said the Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions. "It is, however, still uncertain when supply chains will be restored fully; how long will it take for demand conditions to normalise; and what kind of durable effects the pandemic will leave behind on our potential growth," he said. In May, the Reserve Bank had said the GDP growth during 2020-21 is likely to remain in the negative territory. Releasing details of the survey, Ficci said the present round of 'Economic Outlook Survey' was conducted in June 2020 and drew responses from leading economists representing industry, banking and financial services sector. "The latest round of Ficci's Economic Outlook Survey puts forth an annual median GDP growth forecast for 2020-21 at (-) 4.5 per cent - with a minimum and maximum growth estimate of (-) 6.4 per cent and 1.5 per cent respectively for 2020-21," it said. As per the survey, the quarterly median forecasts indicate GDP growth to contract by (-) 14.2 per cent in the first quarter of 2020-21, with a minimum estimate of (-) 25 per cent and a maximum estimate of (-) 7.4 per cent. Economic activity-wise annual forecast indicated a median growth of 2.7 per cent for agriculture and allied activities for 2020-21. "Agriculture seems to be the only sector with a silver lining right now. There is an apparent upside as far as the performance of monsoon is concerned this year and the water reservoir levels in the country stand at good levels," the industry chamber said. According to the survey, the rural sector supported by a steady agriculture performance and hopefully a contained number of COVID-19 cases will be a key demand generator for India this year. The survey further said that industry and services sector, on the other hand, are expected to contract by 11.4 per cent and 2.8 per cent, respectively in 2020-21. Weak demand and subdued capacity utilisation rates were already manifesting into a drag on investments and the COVID-19 pandemic has further extended the timeline for recovery, it said. Even though activity in sectors like consumer durables, FMCG is gaining traction, majority of the companies are still operating at low capacity utilisation rates. Labour availability and feeble demand remain as major issues for the companies, it added. "Therefore, fresh investments will be difficult to come by in the near to medium term. Also, a significant change in consumption patterns is expected on back of uncertainty with regard to jobs and income losses," Ficci said. It noted that absence of demand stimulus, a second wave of the pandemic and continuation of social distancing and quarantine measures will weigh heavy on growth prospects. "With demand and investment outlook muted, robust government expenditure has been the only saviour. Nonetheless, growth is likely to bottom out post the second quarter of current fiscal year," it said. According to the survery, some of the stimulus measures are reaching to the ground – especially through the credit guarantee scheme for MSMEs and support through MGNREGA – which is positive. During the survey, economists were asked to share their views on the fiscal stimulus package 2.0 and any additional measures that can be undertaken. Participants were of the view that government measures in stimulus focussed broadly on saving lives and undertaking deep structural reforms. "They, therefore, felt that while the quasi fiscal measures and structural reforms announced were undoubtedly steps in the right direction, on ground implementation and results will take a long time to work through in the present environment," it added. A majority of economists believed that the government could have undertaken "a more aggressive" fiscal stance than what has been announced in the two packages combined. Participating economists also highlighted that the measures announced by both the Reserve Bank of India and government focussed largely on addressing supply side constraints with limited support for creation of demand. Ficci said the surely participants unanimously believed that the RBI would undertake further cuts in the repo rate going forward to minimise the economic shock and stabilise financial markets. Nonetheless, a majority of the participants also opined that cutting interest rates would not pump economic growth given that the demand conditions have remained subdued from even before the COVID pandemic struck the economy. The fast-changing macroeconomic environment and deteriorating outlook for growth necessitated off-cycle meetings of the Monetary Policy Committee (MPC) of the RBI – first in March and then again in May 2020. The MPC decided to cumulatively cut the policy repo rate by 115 basis points over these two meetings, resulting in a total policy rate reduction of 250 basis points since February 2019. Ficci said economists were asked to suggest ways with which India could best utilise the present opportunity to expand its presence in the global value chains. Efforts towards liberalisation of FDI policy must be complemented with improving infrastructure and ease of doing business in the country, it added. RSN NKD BAL

GDP growth in 2020-21 likely to be negative, says FICCI survey

<ul><li>Even as <keyword id="45856" type="PERSON" weightage="20" keywordseo="Malls">malls</keyword> are open now, <keyword id="144998" type="CITY" weightage="20" keywordseo="Phoenix-Mills">Phoenix Mills</keyword> is ready for a long haul of recovery. </li><li>The retail consumption at Phoenix stood at ₹13, 874 million for Q4 FY20 which was down 15% year-on-year.</li><li>While Phoenix Mills is confident that slowly people will return to malls as they will be considered as safe spaces, it is also building a war chest – it’s raising ₹1200 crore through funds.</li></ul>Phoenix Mills, one of the largest mall operators in India, has opened its doors in several cities, but is still reeling under the impact of coronavirus. During its earnings, the retail consumption at Phoenix stood at ₹13, 874 million for Q4 FY20 which was down 15% year-on-year. The malls were shut in early March, even before the lockdown. But even while malls are open now, Phoenix Mills is ready for a long haul to recovery. “At least the current outlook is that FY22 should see normalcy, so we should be similar to the levels of FY19 if not FY20,” said Shishir Shrivastava, managing director of Phoenix Mills during an earnings call last week. <div type="image" title="mall" msid="76825856" hostid="261" caption="&amp;lt;p&amp;gt;An empty mall as lockdown began&amp;lt;/p&amp;gt;"></div> A ₹1200 crore war chest for uncertain times and possible acquisitions While Phoenix Mills is confident that slowly people will return to malls as they will be considered as safe spaces, it is also building a war chest – it’s raising ₹1200 crore through funds.The company is raising the money even though it has a current liquidity of ₹770 crore and has also availed the six-month moratorium offered by the Reserve Bank of India, as shared during the call. But the company is keeping the door open for acquisitions. “We are seeing unprecedented times and there is no visibility to the end of the crisis, so it will help to have some kind of a war-chest to meet uncertain times to pay down debt to probably even if there is some spectacular distress opportunity that comes our way because we believe in the long-term potential of our business to be able to participate in such an acquisition opportunity,” said Shrivastava. <div type="image" title="phoenix share price." msid="76825834" hostid="261"></div> Capping the capex The company has also resumed construction of new spaces but with limited labour force. But Phoenix Mills, which has taken a hit in the first quarter of the current financial year with the malls reopening in limited capacity only in the last month, is also capping its capital expenditures. “It is roughly around ₹340 crore odd between now and by the end of 2.5-3 years but within this year again we don’t expect to spend more. Between now and end of the year FY21 this number would be closer to ₹50 crores,” said Shrivastava. Limited income from rentals Phoenix Mills had earlier said that it will defer the rentals for retailers who have shops in its malls. The deferment works in a way that retailers can pay the rent for April in July, May in August, June in September and so on. However, the strategy is still evolving, while for some it is considering a relief on rentals, it is also preparing for an increase in revenue share. “It may be for one to maximum of two quarters, it varies from contract to contract and while we may offer relief of some 20%-30% on the minimum guarantee rent, we are on the other side also negotiating with retailers for an increase in the revenue share percentage for this period,” he said. SEE ALSO: <a href="https://www.businessinsider.in/india/news/air-india-pilots-are-angry-over-pay-cuts-want-salaries-to-be-reduced-in-a-graded-manner/articleshow/76813410.cms">Air India pilots are angry over pay cuts⁠— want salaries to be reduced in a graded manner</a> <a href="https://www.businessinsider.in/careers/news/ibm-accenture-morgan-stanley-and-others-hiring-software-developers-and-big-data-engineers/articleshow/76809207.cms">IBM, Accenture, Morgan Stanley and others hiring software developers and big data engineers</a>

One of India's largest mall operators is prepping for a two-year coma

<ul><li>The <keyword id="150653" type="ORGANIZATION" weightage="20" keywordseo="Indian-Revenue-Service">Indian Revenue Service</keyword> Association (IRSA) has suggested imposing a <keyword id="46812" type="COMPANY" weightage="20" keywordseo="Wealth-Tax">wealth tax</keyword> on India's super rich, which will include anyone with net wealth greater than ₹5 crore.</li><li>They have also suggested imposing a one-time coronavirus relief cess of 4%.</li><li>According to their report, "super rich have a higher obligation towards ensuring the larger public good".</li></ul>The Indian Revenue Service Association (IRSA) has suggested the imposition of wealth tax on the super rich, with net wealth at least Rs 5 crore and a one-time COVID relief cess of 4 per cent. Titled Fiscal Options &amp; Response To COVID-19 Epidemic (FORCE), the report of recommendations on revenue mobilization amid the coronavirus crisis said that in times like these, the so-called "super rich have a higher obligation towards ensuring the larger public good". The tax officers' body said they can be taxed through two alternative means, for a limited, fixed period -- 3-6 months. It noted that the super rich enjoy a higher capacity to pay with significantly higher levels of disposable incomes compared with the rest. Also, they have a higher stake in ensuring the economy springs back into action, and their current levels of wealth itself is a product of the social contract between the state and its citizens. It suggested raising the highest slab rate to 40 per cent for total income levels above a minimum threshold of Rs 1 crore or re-introduction of the wealth tax for those with net wealth of Rs 5 crores or more. "Most high-income earners still have the luxury of working from home, and the wealthy can fall back upon their wealth to cope with the temporary shock. In view of several European economists, taxing the wealthy would be the most 'progressive fiscal tool', as wealth is far more concentrated than income and consumption," it said. Suggesting the imposition a one-time COVID relief cess, the IRSA said as opposed to surcharges, cess are more broad-based since they relieved on every taxpayer and are likely to mobilize more revenue as well. The current rate of cess is 4 per cent, including 2 per cent health cess and 2 per cent education cess. "Thus, an additional one-time cess of 4 per cent on account of COVID Relief (could be called COVID Relief Cess) could help finance capital investment in COVID Relief work," it said. As per IRSA, the extra revenue mobilised through the additional cess could be between Rs 15,000-18,000 crore. It, however, said that to mitigate the extra hardship on the middle class, the cess may be made applicable only in cases where the taxable income is greater than Rs 10 lakh. The report also suggested increasing the surcharge applicable to the higher income foreign companies having a branch office or permanent establishment in India. It said the surcharge has not been revised for some time now, and with companies operating in India and deriving profits through their PEs, it is time that a flourishing market like India with its huge prospects flexes its customer-base muscle. The tax incentives for CSR should be extended at the time of national disaster, it said. Those companies who are undertaking the COVID relief activities under CSR should be allowed to claim as expenditure incurred for the purpose of business deduction section 37 for FY 2020-21 only. This incentive helps in mobilizing CSR funds for the disaster management, the report said. See also: <a href="https://www.businessinsider.in/india/news/dhfls-kapil-and-dheeraj-wadhawan-taken-into-custody-by-cbi-for-role-in-yes-bank-scam-case/articleshow/75388823.cms">DHFL's Kapil and Dheeraj Wadhawan taken into custody by CBI for role in Yes Bank scam case</a> <a href="https://www.businessinsider.in/india/news/pm-modi-says-indias-fight-against-coronavirus-is-people-driven/articleshow/75387305.cms">PM Modi says India's fight against Coronavirus is 'people-driven'</a> <a href="https://www.businessinsider.in/india/news/lockdown-may-be-extended-in-covid-19-hit-urban-areas-of-maha/articleshow/75386981.cms">Coronavirus lockdown may extend beyond May 3 in urban areas of Maharashtra</a> <a href="https://www.businessinsider.in/entertainment/news/doordarshan-has-plans-to-bring-back-shri-krishna-after-20-years/articleshow/75387419.cms"></a>

The super rich in India may face wealth tax and one-time COVID-19 relief cess of 4%

<ul><li><keyword id="248051" type="PERSON" weightage="20" keywordseo="Ashish-Bhasin">Ashish Bhasin</keyword>, President of AAAI has sent a detailed set of recommendations on behalf of the members of AAAI, to the Union Minister of Information &amp; Broadcasting <keyword id="119642" type="PERSON" weightage="20" keywordseo="Prakash-Javadekar">Prakash Javadekar</keyword>. </li><li>AAAI has asked by way of IT &amp; GST refunds from Government &amp; PSUs for their advertising bills to be settled immediately.</li><li>The recommendation has also asked for a direction to banks and the industry's debtors to provide the much needed cashflow to pay salaries and meet other essential expenses.</li></ul>Everyone has been witnessing with growing alarm the spread of the <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> across the globe and in India. Our country has been on a lockdown for a few weeks now and governments, both Central and the States, have taken many effective steps to reduce the impact of this pandemic. But all this is coming at a huge economic cost. The Advertising Agency business, like many other businesses have been seriously affected. The bulk of the agency’s costs are fixed in nature, be it salaries, rent, electricity, communication, upkeep, media audience measurement reports, etc. The income and cash flow has been in serious stress in the last month and unless there is some intervention, many businesses will either file for bankruptcy or will have to undersize considerably. INS and IBF, the media associations representing the interest of Print and TV respectively, have been kind enough to permit AAAI members to pay monies they have collected from their clients and not insist on what is due to them on the due dates. But the continuity of the Agencies business cannot be for long without the help of the Government of India. In this regard, Ashish Bhasin, President of AAAI has sent a detailed set of recommendations on behalf of the members of AAAI, to the Union Minister of Information &amp; Broadcasting Prakash Javadekar. In this he has stressed the importance of advertising industry for the accelerated revival of the economy. “What we have asked the Government is very reasonable. We want principally money that is owed to us by way of IT &amp; GST refunds, and dues from Government &amp; PSUs for our advertising bills to be settled immediately. We have also said that any payment made to us should not suffer any TDS deduction going forward, since there is unlikely to be any significant profit for the year. Further we have sought a direction to banks and our debtors that they provide the much needed cashflow to pay salaries and meet other essential expenses, etc,” said Bhasin. “These do not lead to any revenue loss to the Government. They just need to show a kind heart. The timely help they will provide actually is the help they are providing to the people of India, since advertising is a critical input that can provide a ripple effect in reviving many sectors of the economy,” added Bhasin. One other recommendation made is to treat advertising expenses as an investment and have this cost amortised over the next three years. AAAI believes this will encourage larger advertising outlay which will help revive the economy faster. In the same vein, AAAI also suggested that advertising expenses could be given weighted deduction while computing taxes. The suggestion was that every Rs 100 spent on advertising, should be treated as Rs 200, while computing the taxable income. Here is the complete list of recommendations: 1.0 Advertising is an investment: 1.1 Advertising or brand-building expenses should be treated as an asset and be allowed to be amortized over the next three years. Many companies recognize the enduring benefits of advertising and this will encourage them to invest without fear of considerable decline in profits. This will no doubt spur enhanced consumption thereby accelerating the economic activity. 1.2 The advertisers can also be given an option to account the expenditure on a weighted scale. A Rs 100 expense could be allowed to claim an expenditure of say twice that amount (Rs 200), while computing income tax. This may encourage a higher level of expenditure by profitable companies, which again will accelerate the revival of the economic activity. 2.0 Government dues to be paid 2.1 The TDS on advertising agencies have always been significantly more than the profits they make. Several Crores of Rupees of IT refunds are due to each one of the agencies. Can this be immediately refunded for the past years, including for the Assessment Year 2019-2020? 2.2 Many of the advertising agencies have substantial dues from Government of India, as well as from the Central Government controlled PSUs. Can these be ordered to be released within the next few days? 3.0 Income Tax and GST 3.1 Since profitability and cash flow is going to be poor this financial year, TDS should not be deducted when agencies bills are being paid by advertisers. In any event, Advance Taxes will be payable if applicable as per Income Tax deadlines. 3.2 GST should be allowed to be paid on collection of bills by agencies, as against by 20th after the month of billing. If a firm date is indeed needed, this should be after 60 days from the current due date. 3.3 Government should not block the utilization of GST credit and release all credits blocked so far immediately. 3.4 Government should stall all e-invoicing programs till further notice. This could add to the disruption of the economic revival. 3.5 Transfer of accumulated GST input credit - allow establishments for utilization of accumulated ITC having the same PAN across all the registrations in different States. This will result in free flow of working capital and ease of doing business. 3.6 Speed up all the refund of GST applications within 2-4 weeks. 4.0 Business Credit related 4.1 Our industry is unique in that our credit terms with media owners are pre-fixed, while advertisers are under no legal pressure to pay us on the due date. May we request that the Advertising Service be categorised as an essential service, given the potential it has to revive the economy? And consequently, direct the advertisers to settle agencies’ bill within 45 days of receipt? 4.2 Media houses are much larger entities and therefore there should be a directive to provide additional credit to agencies, should the contra-payment be not available from advertisers. The agency cashflow is fragile and the business could come crumbling down in the absence of such a protection, at this time of economic revival. 4.2 Advertising Agencies, after significant drop in revenue, are struggling to match the cashflows. We would request you to get the banking sector to allow an additional 33% cash credit limit for at least one year, at prime lending rates, without any additional security. The additional cashflow will permit them to steady their business.

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One of India's largest mall operators is prepping for a two-year coma

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