The hike in income-tax surcharge has raised tax burden on non-corporate FPIs, mainly mutual funds and pension funds, by nearly 7 per cent. That's a serious trigger for them to revisit India strategies, as it would shrink returns substantially, unless Dalal Street outperforms its emerging markets peers by a wide gap. If not, don't blame them for fleeing. A double-whammy is never fair.
STREET PULSE: Where we stand  | Nifty futures on Singapore Exchange traded 33 points lower at 7 am (IST), signalling a weak start for Dalal Street. Asian stocks eased as investors cut expectations of an aggressive interest rate cut by the US Fed. Australian stocks fell 0.2%, Kospi 0.3% and Nikkei 0.5%. Globally stocks had risen briefly towards the end of last week but gave up the gains, with Wall Street shares ending in the negative territory. Read More |
| Crude oil is buoyant after Iran's Revolutionary Guards on Friday captured a British-flagged oil tanker in the Gulf, raising tensions along a vital international oil shipping route. WTI crude futures advanced 0.83% to $56.09 a barrel, while Brent futures rose 1.26% to $63.26. Read More |
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From the horse's mouth... RBI Governor Shaktikanta Das says the central bank is doing everything to be in sync with the government's efforts to accelerate economic expansion, be it in interest rate cuts, ensuring sufficient liquidity or enabling more bank lending. In an interview with ET, he said global economic uncertainty, corporate leverage and sector-specific issues have been a drag on growth.
Read More Cease-fire?... Day after a board meeting, IndiGo's two warring founders are trying to find a middle ground on the contentious issue of related-party transactions but a consensus remains elusive. The talks are inconclusive but they might come to an agreement by Monday, ET reported quoting people close to the matter.
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When there is a will, there is a loophole...
The super-rich in India are racking their brains to figure out ways to soften the blow from the stiff surcharge on income tax. Many business families that hold their assets under local private trusts are exploring options such as changing the character of the trusts or parking the assets in limited liability partnerships, which have to pay less tax.
Read More Pressure tactic... Overseas sovereign and pension funds may use diplomatic channels to lobby the Indian government against the increase in tax surcharge on non-corporate entities. They include a leading Middle East government fund and three big-ticket pension funds based in Canada, among others.
Read More Meanwhile... India's luxury car market shrank by as much as a quarter in the first half of this year, industry executives said, as a slowdown in economic growth and uncertainty around elections made buyers cautious. Between 15,000 and 17,000 luxury cars were sold in the first six months of 2019, compared with 20,000 units a year earlier.
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