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“You are listening to the Expresso Business update. Here’s the latest news from the world of Indian and international business, brought to you by The Indian Express and The Financial Express.
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As crude oil prices began to fall under the weight of recession fears, the Center scrapped the Rs 6 per liter tax it had imposed on petrol exports since the start of the month, cut export taxes on diesel and aviation turbine fuel by Rs 2 per liter of Rs 13 and Rs 6 per liter imposed on July 1 respectively. Additional excise duty on domestic crude has been reduced by 27% to Rs 17,000 per barrel. The new tariffs come into effect from today. Although the idea of imposing excessive domestic crude production by upstream firms like ONGC and Reliance to get their hands on the “windfall profits” from their sales at international parity prices to refiners, the transport fuel export tax had to aimed at reversing the growing trend of refiners selling to export markets while neglecting domestic needs.
In the economic sector, Finance Minister Nirmala Sitharaman on Tuesday said the 5% Goods and Services Tax levied on items such as cereals, pulses and flour has been approved by the GST Council after approval from all states, defying criticism on the new tax on labels and unlabelled prepackaged food products. However, she clarified that 11 items, when sold in bulk and not pre-packaged or pre-labelled, will not attract GST. Therefore, the sale of such items could lead to an increase in demand, she said. Items that will not attract GST when sold in bulk include pulses, wheat, oats, maize, rice, flour, suji, besan, puffed rice and curd.
Meanwhile, the government has stepped up import scrutiny to identify irrational peaks in each segment, official and FE industry sources said, amid indications that “non-essential imports” may be targeted if the situation warrants. Separately, the finance ministry told parliament on Tuesday that the government and the central bank are closely monitoring inflation and are ready to take appropriate action. The government has also tightened its surveillance on global price movements of various commodities and their impact on the Indian economy through trade, Minister of State for Finance Pankaj Chaudhary said in a written reply in the Rajya Sabha. Retail inflation reached 7.01% in June, remaining above the central bank’s comfort level for the sixth consecutive month. A final decision on whether to curb “non-essential imports” by raising duties is yet to be taken, an official source said.
Now some exciting news from the aviation sector. With newer airlines close to entering the market and existing players increasing their fleets, the good times are back for Boeing and Airbus as a large chunk of their sales will be driven by Indian carriers for the next few years. The pipeline of domestic airline orders is long and, according to rough estimates, more than $45 billion at list prices. Industry analysts say that with airlines placing large numbers of orders, they can also get volume discounts. Air India, which was taken over by the Tata Group, besides considering beefing up its fleet with Airbus A350 wide-body aircraft, is also in talks with Airbus and Boeing for narrow-body aircraft, according to sources.
Moving of. Metals and mining company Vedanta said on Tuesday that its board has approved the payment of an interim dividend of Rs 19.5 per share to shareholders, valuing it at Rs 7,250 crore. This is the second interim dividend from the company in FY23 and amounts to a total payout of Rs 18,958 crore. The company, a subsidiary of billionaire Anil Agarwal’s metals and oil conglomerate Vedanta Resources, has set July 27 as the record date for the second interim dividend, it said in a regulatory update. On April 6, Vedanta approved an interim dividend of Rs 11,709 crore, according to stock exchange data. In its FY22 annual report, the company said it will distribute a minimum of 30% of its underlying net profit as dividends, depending on various factors, including cash flows, the economic situation and commodity price cycles, among others.
Finally, here’s what to expect from the stock market today. Indian benchmarks are likely to open higher as the SGX Nifty traded 114 points higher than the previous close, indicating the beginning of a gap for local stocks. In the previous session, the BSE Sensex rose 246 points to 54,768, while the NSE Nifty 50 jumped 62 points to settle at 16,340. Global cues were positive as Asian markets were mostly positive in morning trade. Japan’s Nikkei rose 2.12%, South Korean shares rose 1.1%, Hong Kong’s Hang Seng fell 0.89%. Meanwhile, U.S. stocks closed sharply higher on Tuesday as more companies joined big banks in reporting earnings that beat estimates, offering respite to investors worried about higher inflation and rising interest rates.
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