Chennai: Thanks to the GST rate cut, consumer durables, which have been witnessing a slower growth for the past six quarters, are expected to return to double-digit growth with the sentiments improving during the festival season.
The government reduced the GST rates of refrigerators, freezing equipment, washing machines, vacuum cleaners and television sets measuring less than 27 inches from 28 per cent to 18 per cent.
In smaller appliances, the rate cut is applicable to food grinders, mixers, juice extractors, storage water heaters, immersion heaters, hair dryers, hand dryers and electric smoothing irons.
“The rate cut is applicable for a few products. But this will build positive sentiment during the festival season and hence propel growth. Further, a normal monsoon and increased agricultural income would support growth,” said Kamal Nandi, business head and EVP, Godrej Appliances.
“It is a very positive move for us as our sales numbers in washing machines and televisions would pick up substantially. We have been waiting for this to happen and finally government has cut the rates from 28 per cent to 18 per cent,” said Vijay Manuskhani, MD, Mirc Electronics.
According to Nandi, the industry has been witnessing a slower growth of around 5 per cent during the past six quarters of disruptions.
Some of the categories have also witnessed stagnant growth in these quarters.
“For refrigerators and washing machines, we expect that the growth will return to the levels prior to the troubled quarters. The industry was growing at 12-15 per cent in those times. For other categories, the growth might be lesser but better. But overall we expect the consumer durable sector to grow by 10 to 12 per cent during the festival season,” he added.
The biggest beneficiary would be washing machines, which account for 18 per cent of the total sales in consumer durables. The festival season accounts for 20 to 25 per cent of the yearly sales of washing machines, said Eric Braganza, president, Haier Appliances India.
Refrigerators account for 45 per cent of the festival season sales. But for this category, summer too is a big season and it was a washout this time.
According to him, 80 per cent of the TVs sold are above 27 inch and hence the impact of rate cut will be limited for the category. Air-conditioner is the next big category sold during the festival season, but the rate cut is not applicable for it. Summer too saw ACs posting a negative growth in sales.
“The cost benefit for the customer with the rate cut from 28 per cent to 18 per cent will be around 8 per cent. We will pass on the entire benefit to the customers in order to improve sales,” said B Thiagarajan, joint managing director of Bluestar.
The industry has been reeling under the pressure of higher input costs and higher US dollar rates. Prices of most of the industrial metals have gone up and the dollar rates make the components costlier for the industry which is heavily dependent on imports. Diesel prices have gone up and so has inflation.
“GST is an opportunity for us to spur demand and hence we would are not looking at any further hike for the festival season,” added Nandi.
The government also had reduced the GST rate of paints from 28 per cent to 18 per cent and the paint too is a fast moving category during festival and wedding season.
“The Indian paint market is expected to reach Rs 70,875 crore by 2019-20 according to the Indian Paint Association. The reduction in GST will accelerate the expected growth. This step is a reprieve for the paint industry and its consumers as the high GST rate on paint had added to the consecutive price hike caused by a surge in the cost of raw materials, the last few years. This decision will augur well for the industry as the consumption will subsequently rise. Nippon Paint will reduce its prices in accordance with the revised GST rates to the benefit of the customers. This rationalisation of rates will potentially encourage sales to go up by 12-14 per cent in the decorative segment,” said Mahesh Anand, President – Nippon Paint India.
RBI needs to ensure stability: Shaktikanta Das
New Delhi: The head of the Reserve Bank of India (RBI) said he would take the steps necessary to maintain financial stability in the country and help create favourable conditions for growth.
India’s economy has grown because of measures such as the nationwide goods and services tax and the insolvency and bankruptcy code that prevents wilful defaulters from bidding for stressed assets, Shaktikanta Das said in his address to an investor roundtable.
The country’s growth story is backed by its strong domestic fundamentals, he said, citing lower inflation.
Annual retail inflation rate dropped to an 18-month low of 2.19 per cent in December, strengthening the views of some economists that the central bank could ease monetary policy next month.
India’s top business groups on Thursday urged the central bank to cut its benchmark interest rate by at least half a percentage point and lower the cash reserve ratio it imposes on banks.
The country also needs to watch out for any sudden turbulence in the gloal financial market, Das said.
Centre removes two PNB executive directors for lapses in Rs 13,500-cr fraud
Chennai:The Central government has removed two Punjab National Bank (PNB) Executive Directors — Sanjiv Sharan and K.Veera Brahmaji Rao — for the lapses in the Rs 13,500 crore fraud allegedly perpetrated by absconding diamantaire Nirav Modi.
The PNB has intimated the action to the stock exchanges.
“We welcome the Central government’s action to dismiss the two Executive Directors. The scam of such proportions could not have happened without the knowledge of the top management,” C.H. Venkatachalam, General Secretary, All India Bank Employees’ Association (AIBEA), told IANS.
“Perhaps for the first time, the Centra has removed the Executive Directors of a nationalised bank under the Nationalised Banks (Management and Miscellaneous Provision) Scheme, 1970. All these days it was said the top management of government-owned banks — Chairman, Managing Director, Executive Directors — are governed only by the contract of appointment.
“It is also good that the central government has followed the due process of giving the two PNB Executive Directors opportunity to put forth their views before dismissing them,” Venkatachalam added.
According to the Central government’s notification, on July 3, 2018, Sharan and Rao were issued a show cause notice as to why they could not be removed from office for having failed to exercise proper control over the functioning of PNB, thus enabling the fraud through the misuse of SWIFT at the bank’s Brady House branch in Mumbai.
After considering Sharan and Rao’s replies and the comments of the bank’s Board, the Centre removed them from office as it found it was expedient in the interests of PNB.
According to the notification, the dismissal of Rao is subject to the outcome of a plea in the Delhi High Court.
“We are happy to see some action being taken. Whether it is only the two Executive Directors and other officials are also involved in the scam has to be probed in full,” Venkatachalam said.
According to him, in the past, low-level officers would have been the scapegoats for such massive scams.
“With the action taken on the top management, people will be satisfied that public sector bank officials are answerable for their lapses,” Venkatachalam added.
In this new world, data is the new wealth: Ambani
Mumbai: Reliance Industries chairman and managing director Mukesh Ambani urged Prime Minister Narendra Modi to take steps against ‘data colonisation’, specially by global corporations, stating that Indian data must be owned by Indians.
Invoking Mahatma Gandhi’s movement against political colonisation, Ambani said India now needs a new movement against data colonisation.
“Gandhiji led India’s movement against political colonisation. Today, we have to collectively launch a new movement against data colonisation,” he said Gandhinagar at the Vibrant Gujarat Global Summit.
Stressing that, in this new world, data is the new wealth, Ambani said, “India’s data must be controlled and owned by Indian people and not by corporate, especially global corporations.”
He further said, “For India to succeed in this data driven revolution, we will have to migrate the control and ownership of Indian data back to India. In other words, give Indian wealth back to every Indian.”
Stating that the “entire world has come to recognise” Modi “as a man of action”, Ambani said, “Honorable Prime Minister, am sure you will make this one of the principal goals of your digital India mission.”
Later in the day, countering Ambani’s call, Governor – Commonwealth of Kentucky, Matthew Griswold, asked Modi “to think in the opposite” in order to realise the tremendous opportunity that lies in Indo-US partnership.
“Honorable prime minister you have been asked from this stage to think about limiting the amount of competition, limiting the exchange of ideas, information and goods. I would encourage you to think in the opposite,” he said.
While stating that it is important to put the people of India first, Griswold said, “It is also important to put their opportunity and our opportunity as citizens of the world to trade with one another and exchange ideas because iron sharpens iron.”
The greatest possibility comes from the exchange of these idea, he added.
“If we can cut the regulations, cut the bureaucracy, cut the red tape, the opportunity is enormous between our nations,” he added that India is now the 10th largest trading partner for the US and “climbing quickly”.
“The opportunity before us between India and the United States is incredible, but responsibility falls on each of one us, those of us in elected positions, those of you in the industry, those of you who represent various constituencies, we have much work to do…we must do this, ” Griswold said.