Advance Tax Collections Are Up 21%
Provisional advance tax collections for this fiscal year till 16 September stood at ₹3,55,481 crore which is 21% higher than advance tax collections of last fiscal year
Our Top Reports For Today
- [01:00] Advance tax collections are up 21% in a sign of economic stability
- [03:20] Stockmarkets take a pause but public sector bank stocks spring a surprise
- [05:30] Oil now heads into worrying territory. How far or up can it go? with Vandana Hari
- [13:36] Spices inflation is around 20% and more most of this year. Why are prices of spices not going down? with Sanjeev Bisht
- [20:19] And hmm. Thailand will provide tax exemptions to Indians on jewellery imported for marriage, in Thailand of course
NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.
---
Tax Collections
The economy, as represented by tax collections, continues to grow.
Provisional advance tax collections for this fiscal year till 16 September stood at ₹3,55,481 crore which is 21% higher than advance tax collections of last fiscal year.
Meanwhile, the Government’s provisional direct tax collections reached ₹865,117 crore or $104 billion between April and 16 September, up 23.5% from the corresponding period of the last fiscal during which the collections.
The tax collection includes corporate tax of 416000 crore and personal income tax of 447,000 crore , said a statement from the Ministry of Finance.
The government has issued refunds amounting to ₹Rs. 1,21,944 crore in fiscal year 2023-24 till 16 September.
“The provisional figures of Gross collection of Direct Taxes for the Financial Year 2023-24 grew 18%, said a release from Central Board of Direct Taxes, a part of the Ministry of Finance, according to reports..
The growing direct tax collection displays success in the government's efforts on enforcement and use of technology in the tax collection process.
A Day of Action for all Markets
After a 11-day winning run, the stock markets took a breather. The Sensex fell 242 points to end at 67,597 pulled down by index heavyweights Reliance Industries, HDFC Bank and Infosys. The broader NSE Nifty50 index fell 65 points to end at 20,127.65.
Both benchmarks had closed at record highs last week.
There is a strong liquidity boost in the system, thanks of course to millions of new investors pouring into the market. Retail investors have gone from approximately 40 million to 140 million in just four years.
And there is a long line up of initial public offers, including promoters selling their stock, a figure which has already crossed Rs 80,000 crore this year, double of last year.
India will see at least $30 billion raised annually through primary and secondary share sales in 2024 and in the years to come, as companies and their shareholders are more willing to tap the market for funding, a JPMorgan Chase & Co official told Bloomberg News.
The momentum can sustain into next year and beyond as owners of Indian companies are keen to raise funds for other investments, the JPMorgan official said, adding that demand from local asset managers as well as foreign investors is also driving share sales.
PSU BANK STOCKS
Did you know that one category of stocks which cannot be dismissed as questionable mid caps or small caps and have been zooming in recent months…well it's the completely forgotten public sector banks who the markets have fallen in love with post the balance sheet clean up phase.
In the last year, the PSU Bank index has jumped 52 percent compared with an average 12 percent jump in the share prices of some major private banks, according to Moneycontrol.
Shares of PSBs such as UCO Bank and Punjab And Sind Bank are up 223 percent and 179 percent, respectively. Bank of Maharashtra and Central Bank of India also gained 140 percent and 123 percent, respectively.
The larger point of course is that they are doing better than the private sector banks who of course have had a good run over time, but not of late. And they are all at higher bases.
Since we mentioned private sector banks, HDFC Bank grew 9.28% over the past year, Kotak Mahindra was - 5.93 percent. However, ICICI Bank maintained stability with a return of 7.15 percent. Axis Bank and IndusInd Bank were strong, with returns of 23.58 percent and 27.28 percent, respectively. Good but lower than the public sector banks.
One does not know how long this will last and in what form.
But if there is a moral of the story for the day, it would be, don’t bet against the Government !
Elsewhere, the rupee fell to a fresh record closing low against the US dollar on Monday amid rising crude oil prices which we will come to shortly. The rupee ended 8 paise lower at 83.27 a dollar as against Friday’s close of 83.19.
The reasons cited for a weakening rupee, apart from rising crude oil prices are the strength of the US Dollar and foreign fund outflows.
Last week, fresh trade figures showed a further slowdown in merchandise exports to $34.4 billion in August versus $37 billion in the previous year.
Exports of services were somewhat steady around $26 billion. Imports slowed down too.
---
On oil prices, crude prices are now hovering above $94 a barrel, with the markets at large looking at supply gaps in the fourth quarter after Saudi Arabia and Russia extended supply cuts.
Oil prices are up 30% since the end of June.
Brent and West Texas Intermediate (WTI) prices are at the highest since November and are on track for their biggest quarterly increases since Russia's invasion of Ukraine in the first quarter of 2022.
Interestingly, the demand outlook is not so strong going by what analysts are saying.
Analysts at investment bank Nomura meanwhile have said that a rise in crude oil prices beyond $90 per barrel, along with a rise in food prices, is likely to be a double-whammy for Asian economies, including India.
India's latest headline inflation stood at 6.83% in August, above the Reserve Bank of India's tolerance band of 4% (+/- 2%).
India imports 80% of its crude requirements. Since it's a net importer of crude oil, the consumer price inflation index may see a rise of 25 basis points for every 10% rise in prices of the commodity, Nomura Global Markets Research said in a note on Friday, as quoted by BQ Prime.
"We expect weaker growth, higher inflation and worsening twin current account and fiscal balances, if oil prices remain high," Nomura economists said.
To get a sense on where oil was going, I reached out to Singapore-based oil analyst Vandana Hari of Vanda Insights and began by asking her why prices were rising so high and so suddenly ?
---
Food And Spices Back Home
Spices are a key ingredient in most Indian staple food and life without them in one form or the other is difficult to imagine.
To pick up some numbers, food inflation in India is ruling around 9.19%. But spice inflation is around 23% and has been in the 20% range since at least the beginning of the year. Spices are 2.5% of overall inflation
Take jeera, the prices of which have doubled or coriander which has shot up too. Prices of cumin which were Rs 300 per kg in April were Rs 700 in July. Clove is a similar story and similarly with cardamom and turmeric.
If you have not been looking at these items in your shopping runs, perhaps this is a good time to do so.
So why are spice prices shooting up so much and why, more importantly, are prices not coming down. For example, could there be interventions that could bring down prices ?
I spoke with Sanjeev Bisht, Chairman of the All India Spices Export Forum of India and also a vice president in ITC working in spices and other products. I began by asking him why spice prices were so consistently high.
---
And hmm..Thailand…
Thailand is going all out to woo Indian tourists and particularly wedding groups.
In order to do that, it may offer tax exemptions on jewellery imported for Indian weddings held in Thailand, a popular destination for such ceremonies, Thai prime minister Srettha Thavisin said on Monday in a public forum.
It is of course interesting that Thailand has identified this as a pain point and has thought of a solution, reflecting of course the size of the Indian outbound tourism market and its increasing clout.
Not surprisingly, the Thai PM alsos said he would like to see more flights as well, likely curtained by insufficient bilaterals, and would take it up with India’s prime minister Narendra Modi.
The visa itself is not an issue and can be either got easily in India or on arrival in Thailand.
So presumably, more incentives were called for.
Thailand has approved temporary visa exemptions for Chinese and Kazakh tourists ahead of the high season.
Thailand wants to raise tourism revenue to its pre-Covid levels, with a target of 3.1 trillion baht ($87 billion) in 2024.
Some 18.5 million foreign tourists have visited Thailand so far this year with as many as 28 million expected by the year-end. Before the pandemic, the nation hosted a record 40 million tourists in 2019, according to Bloomberg.
Well, that’s it for me for now. On the happy note that you can safely carry your jewellery to Thailand without any duty let me wish you a happy Ganpati. I would urge you to check on customs on return though.
If you were curious about my colleagues who really make this show happen, they are:
Richa Jain, Joshua Thomas and Shiva Chowdhury
