Canada’s GDP growth slows to 2% in third quarter

The pace of economic growth in Canada slowed in the third quarter as business investment spending moved lower and the growth in household spending slowed.

Statistics Canada says the Canadian economy grew at an annualized pace of 2.0 per cent in the quarter. That compared with an annualized pace of 2.9 per cent in the second quarter. The result matched the expectations of economists, according to Thomson Reuters Eikon.

The move came as non-residential investment in buildings and engineering structures fell 1.3 per cent as spending in the oil and gas sector slowed. Investment in machinery and equipment by businesses fell 2.5 per cent.

Meanwhile, the growth in household spending slowed to 0.3 per cent in the quarter compared with 0.6 per cent in the second quarter.

Non-subsidised LPG rate reduced by Rs 133

NEW DELHI: Domestic cooking gas (LPG) price on Friday was cut by Rs 6.52 per cylinder on account of tax impact on the reduced market rate for the fuel.

A 14.2-kg subsidised LPG cylinder will cost Rs 500.90 in the national capital from midnight tonight as against Rs 507.42 currently, Indian Oil Corp (IOC), the country’s largest fuel retailer, said in a statement.

The price reduction comes soon after six consecutive monthly hikes in rates since June. Prior to this price cut, rates had gone up by Rs 14.13 per cylinder since then.

Subsidised LPG rates were last hiked by Rs 2.94 per cylinder with effect from November 1.

IOC said non-subsidised or market priced LPG rates have been cut by a steep Rs 133 per cylinder to reflect fall in international oil rates and strengthening of the rupee. It will now cost Rs 809.50 per 14.2-kg bottle in Delhi.

All LPG consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users.

This subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.

When international rates move up, the government provides a higher subsidy. And when they come down, subsidy is cut.

As per tax rules, GST on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates.

So, with the fall in market price or non-subsidised LPG price, the tax incidence on subsidised cooking fuel has also come down, leading to the current price reduction.

“Accordingly, the upfront cash payment by the consumer for purchase of domestic LPG refill will reduce by Rs 133 cylinder, i.e. from Rs 942.50 per cylinder to Rs 809.50 cylinder in December, 2018 in Delhi market,” IOC said.

Subsidised cooking gas consumers will get Rs 308.60 per cylinder subsidy in their bank accounts for the month of December. The subsidy transfer in the customer’s bank account has been reduced from Rs 433.66 in November.

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Govt breaches full-year fiscal deficit target at Oct-end

NEW DELHI: The full-year fiscal deficit target of Rs 6.24 lakh crore was breached at October-end mainly on account of lower revenue collections, showed government data Friday, reflecting deterioration in public finances.

The fiscal deficit or gap between expenditure and revenue was Rs 6.48 lakh crore or 103.9 per cent of Budget Estimate (BE) during April-October of the current financial year. At end of October 2017-18, the deficit was 96.1 per cent of the BE.

The government has budgeted to cut fiscal deficit to 3.3 per cent of GDP in 2018-19 from 3.53 per cent in the previous financial year.

According to the data released by the Controller General of Accounts (CGA), the revenue receipts of the government totalled Rs 7.88 lakh crore or 45.7 per cent of the BE for 2018-19 as compared to 48.1 per cent of BE last year. The government has budgeted to mop up Rs 17.25 lakh crore revenue during the current fiscal.

Tax revenue was 44.7 per cent of BE compared to 51.6 per cent achieved in the comparable period of the last year.

As per the CGA data, the total expenditure of the government at October-end was Rs 14.56 lakh crore or 59.6 per cent of the BE. The expenditure in terms of percentage of the BE was marginally higher in the year-ago period.

“Fiscal deficit figure shown in monthly accounts during a financial year is not necessarily an indicator of fiscal deficit for the year as it gets impacted by temporal mismatch between flow of not-debt receipts and expenditure up to that month on account of various transitional factors both on receipt and expenditure side, which may get substantially offset by the end of the financial year,” CGA said.

Q2 GDP growth drops to 7.1% from 8.2% in Q1

NEW DELHI: The country’s GDP (gross domestic product) growth slowed to 7.1 per cent in the September quarter (2018-19) from 8.2 per cent in the June quarter, government data showed on Friday. The GDP growth rate came at 6.3 per cent in the same period last year.

The gross value added (GVA) growth rate for the second quarter came at 6.9 per cent from 8 per cent in Q1. Despite the slow GDP growth, the country still remained ahead of China to retain the world’s fastest growing economy tag.

The GVA gives a picture of the state of economic activity from the producers’ side or supply side, as opposed to GDP which gives the picture from the consumers’ side or demand perspective.

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The data showed that mining and quarrying output has declined by 2.4 per cent in the quarter from a growth of 6.9 per cent in year ago period. However, the manufacturing activities expanded at the rate of 7.4 per cent in the quarter under review up from 7.1 per cent in the year ago quarter.

The construction sector too showed an improvement by recording a growth of 7.8 per cent as against 3.1 per cent earlier. And, the farm sector too grew at a higher rate of 3.8 per cent in the quarter as against 2.6 per cent a year ago.

The growth rate came below expectations as a Reuters poll had projected that the Q2 figures may slow down to 7.4 per cent. A majority of analysts had expected a slip from the surprisingly high growth figure of 8.2 per cent, achieved in the first quarter.

Growth will continue to be under pressure for the remainder of the current fiscal as well and the FY19 growth number will come at 7.1 per cent, economists at private sector lender Axis Bank said in the report.

In another set of data released by the government, the growth of eight infrastructure sectors accelerated to 4.8 per cent in October from 4.3 per cent in September.

‘Still, the highest growth rate in the world’

Reacting to the GDP numbers, economic affairs secretary Subhash Chandra Garg said, “7.1 per cent GDP growth for September quarter “seems disappointing”, but growth rate for the first six months of the fiscal is robust and healthy.”

“GDP growth for second quarter 2018-19 at 7.1 per cent seems disappointing. Manufacturing growth at 7.4 per cent and agriculture growth at 3.8% is steady. Construction at 6.8 per cent and mining at -2.4 per cent reflect monsoon months deceleration,” Garg tweeted.

The growth during April-September stood at 7.6 per cent, which is “quite robust and healthy”, he said. “Still, the highest growth rate in the world”.

The second quarter growth of 7.1 per cent keeps India ahead of China, which had expanded at the rate of 6.5 per cent in the July-September period this year.
(With inputs from agencies)


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Govt extends deadline for filing TDS returns for Oct-Dec

NEW DELHI: The government has extended the due date of filing tax deducted at source (TDS) returns under GST laws for the October-December period till January 31, 2019.

The TDS provisions under the goods and services tax (GST) were brought into effect from October 1, 2018.

According to the Central GST (CGST) Act, the notified entities are required to collect TDS at 1 per cent on payments to goods or services suppliers in excess of Rs 2.5 lakh. Also, states levy 1 per cent TDS under state laws.

The Finance Ministry, through a notification, extended the due date for filing TDS returns under GST for the October-December 2018 period, till January 31, 2019.

PwC India Partner and Leader (Indirect Tax) Pratik Jain said issues were being faced on GST portal as regards acceptance of tax deducted by the deductor for claiming credit/ benefit by the deductee and generation of TDS certificates.

“Even after following the steps, TDS certificates were not getting generated in certain cases, leading to disputes between deductor and deductee,” Jain said.

He said the government should consider all such challenges being faced in the entire workflow of TDS return filings and make necessary changes on the GST portal.

Sensex, Nifty end higher ahead of Q2 GDP data

NEW DELHI: In a volatile trade, markets on Friday edged higher and managed to finish the week in green due to last-minute buying. The benchmark BSE Sensex inched 24 points or 0.07 per cent up to close at 36,194 and the broader NSE Nifty settled 18 points or 0.17 per cent higher at 10,877. This is the fifth straight gain for both the equity indices.

Yes Bank, Wipro, Kotak Mahindra Bank, Mahindra & Mahindra and Infosys were among the top gainers on the BSE index, rising as much as 5.92 per cent. On NSE, sub-indices Nifty Realty, Pharma and IT surged the most by gaining as much as 2.20 per cent.

The indices marked their highest level in nearly two months, while the rupee strengthened to a fresh 3-month high ahead of key economic growth (GDP) data to be release later in the day.

The Indian currency gained up to 0.35 per cent on the day to 69.59 per dollar, its best since August 21.

“Decline in international crude oil prices and strengthening of rupee are the positives today,” said RK Gupta, managing director at Taurus Asset Management.

“Investors are also eyeing outcome of the G20 meet over the weekend,” he added.

Meanwhile, shares in Tata Motors dropped as much as 3.02 per cent after its British unit Jaguar Land Rover (JLR) said on Thursday that it is going to cut 500 jobs temporarily at its plant in central England.

(With inputs from agencies)

‘Drone ports in hospitals to allow quick transportation of organs’

NEW DELHI: Drones may soon be able to beat Indian cities’ notorious traffic and ensure speedy transportation of organs between hospitals, a possibility without creating green corridors or special road routes. Union minister of state for aviation Jayant Sinha said the authorities concerned, which will begin registration of big drones (non-toys) from December 1, are looking at creating “drone ports” in hospitals.

“We will begin registration from December 1 and then the required licences will be issued from a month later to accord drones a legal status in India. We are working on the next step of our recently announced drone policy where we are looking at allowing flying drones beyond line of sight (enabling operators to fly drones without having them in sight) in certain areas,” Sinha said.

One of the main areas being considered for this application is having designated air corridors between big hospitals. “Drone ports in hospitals can allow quick transportation of harvested organs to recipients under the Drone 2.0 policy or the next generation of our policy that was recently announced. The draft civil aviation requirement for the same will be issued for consultation on January 15, at a global aviation summit India is hosting in Mumbai,” Sinha said.

Special digital airspace will be created for use of drones, he added. In the next phase, big changes are likely in the drone policy by allowing one pilot to operate multiple drones to allow things like using drones to deliver things in some areas. A white paper on this will be issued shortly, Sinha said.

India recently got its first set of rules for legally using drones. Getting a licence to operate a big drone (over 2 kg in weight) will cost Rs 25,000 and extending the same will cost Rs 10,000. The Directorate General of Civil Aviation (DGCA) has come out with rules to operate remotely piloted aircraft systems (RPAS) like drones, which have been categorised into five categories — nano (weighing up to 250 grams), micro (250 grams to 2 kg) and then small, medium and large drones that are in the weight range of 2-25 kg; 25-150 kg and above 150 kg, respectively.
Anyone flying a drone weighing over 2 kg will need formal training to do so from a DGCA-approved flying training organisation. Apart from those flying nano drones, which are mostly used as toys, and RPAS owned by security agencies, Indian nationals using all other categories of drones will need to get a unique identification number (UIN).

Why old GDP numbers are political fodder today

NEW DELHI: While the release of the latest round of GDP data is about the past (2005-12 financial years) it reverses an important political point of argument in the current context. Before the numbers were revised, the average GDP growth rate under the Congress-led UPA government (2004-14) was 7.75%, higher than current NDA government’s 7.35% but now UPA figures have gone down to 6.82%. That’s a good selling point for the current government and a reason to cry foul for the last one.

Row erupts as new GDP data slashes growth rate in UPA era

In the run-up to 2019 general elections, a sharp political debate has erupted over the Modi government’s handling of the economy and the latest data is expected to trigger sharp responses from both sides. Following the new data, the average growth during the 10 years of UPA works out to 6.8% while the NDA’s four-rule has seen average growth of 7.3%.

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GDP isn’t Niti’s job: GDP data is the responsibility of the Central Statistics Office (CSO), which has been responsible for maintaining India’s national accounts since 1951, but the latest data was jointly released by Niti Aayog. That led to allegations of political involvement and undermining the CSO. Niti chairman justified it by saying: GDP data is a broader macroeconomic issue and not entirely technical and Niti Aayog is a principal user of statistics. But a former chief statistician says: This is the first time that the GDP data has been presided over by what is a political organisation, which does serious damage to the official statistical system.

Process wasn’t smooth: While waiting for the official old data under the revised format, a report by another government body this year showed even better four 9%-plus growth years during UPA rule (the revised data doesn’t cross 9%) which the (embarrassed) government dubbed ‘unofficial’. Following that, there was a continuous flip-flop over the release of the data (a press conference to announce the data was cancelled earlier this month at the last moment).

Niti Aayog vice-chairman accepts Chidambaram’s ‘challenge’ on revised GDP data

“Hon. @PChidambaram_IN Ji,challenge accepted. Let’s discuss & dissect back series data. I gave 3 hrs of detailed interview yesterday & it is somewhat disingenuous of you to say that I asked the media to not ask questions. Do give more coherent reasons for ur difficulty with new data,” Rajiv Kumar said in a tweet.

Missing statistician: While all this was on, India’s chief statistician demitted office, and the government was unable to find a replacement for eight long months (until October). That not just delayed the process but raised questions about Centre’s intent.

Missing statistics: It’s not just GDP but other data sets that have made news for the wrong reasons – from the top-secret price of Rafale jets, to missing data on jobs to the delay in releasing caste census data or even the demonetisation-related numbers released by RBI. Many of these have political implications.

War of GDPs: Row erupts after new data slashes growth in UPA era

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War of GDPs: Row erupts after new data slashes growth in UPA era

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Meanwhile, former chief economic advisor Arvind Subramanian, has an explanation for the dip in GDP in 2017 – demonetisation. “Demonetisation was a massive, draconian, monetary shock: In one fell swoop, 86% of the currency in circulation was withdrawn. The real GDP growth was affected by the demonetisation. In the six quarters before demonetisation, growth averaged 8% and in the seven quarters after, it averaged about 6.8%,” he says in his yet-to-be-released book.

Indian IL&FS workers held hostage in Ethiopia

NEW DELHI: The external affairs ministry is investigating claims by expatriates in Ethiopia who say they are being held hostage by local staff that haven’t been paid after the financier Infrastructure Leasing & Financial Services Ltd began defaulting on $12.6 billion in debt.

Seven Indian workers from the shadow lender, which rocked financial markets after it began missing debt payments earlier this year, have been detained since November 25 at three sites in Ethiopia’s Oromia and Amhara states by unpaid local staff, according to an emailed letter from the employees.

The untold tale behind government’s takeover of IL&FS

With the economy already grappling with surging fuel prices and a plunging currency, the last thing the government needed was more turmoil in the debt market. Another consideration that the government faces a general election in early 2019 and any indecisiveness on IL&FS would have eroded the political capital of the government.

They said the possible termination of some road projects being built by Indian and Spanish joint ventures may have triggered local employees to panic. The workers said police and officials are taking the side of locals against the expatriate staff and that they were caught in the “middle of corporate disagreements, blame games and bureaucratic issues.”

Oromia’s police commissioner general, Alemayehu Ejigu, the state’s deputy spokesman Deressa Terefe, and Amhara state’s spokesman Nigusu Tillahun didn’t immediately respond to two calls and two text messages.

An official at the Indian embassy in the capital Addis Ababa said it was “closely following up with local Ethiopian authorities and IL&FS management to resolve the issue,” while a separate official in the foreign ministry in New Delhi confirmed they were looking into the matter. A spokesman for IL&FS declined to comment.

“Concerns of project termination and absence of senior management from project camps might have triggered panic in local employees and led them to believe confining expat employees might force the organization to pay their salaries,” the employees wrote in a letter addressed to the Indian and Spanish ambassadors, as well as a number of Ethiopian ministries and the local World Bank representative.

Can’t send funds

The son of detained IL&FS employee Sukhvinder Singh Khokher said his father has been in touch with the Indian embassy and there are efforts underway to try and get the local Ethiopian staff paid.

“The local Ethiopian workers shut the gates and the local policeman support them,” Satinder Pal Singh Khokher, who works for the Aditya Birla Group in Gujarat according to LinkedIn, said in an interview. “I have tweeted my concern to the Prime Minister of India.”

According to the employees’ letter, management cited restrictions imposed by the Reserve Bank of India for its inability to send funds. IL&FS had defaulted on paying both taxes and local employee pensions for nine months, the letter said. Ethiopian Revenue Ministry spokesman Addis Yirga and Attorney General Office spokesman Zinabu Tunu said by phone they couldn’t comment on the employees’ concerns expressed in the letter.

“We tried to reason with local employees and tried to assure that salaries will be paid in due course and restricting expat colleagues will not result in what they are trying to achieve.” the employees said in the letter.

The detention of IL&FS employees in Ethiopia, who were reported to be working on road construction projects for joint ventures between IL&FS Transportation Networks Ltd and Spanish firms Elsamex SA and Ecoasfalt SA, illustrates the sprawling nature and global reach of the beleaguered infrastructure lender. The firm hasn’t stopped missing debt payments even after the Indian government fired the lender’s board and tapped well-known Indian banker Uday Kotak to help lead the firm’s recovery as the company reeled under $12.6 billion of debt.

Representatives of Elsamex SA and Ecoasfalt SA in Spain were not immediately able to comment when contacted on their office numbers on Thursday.

Asking for help

Several men identifying themselves as IL&FS employees in Ethiopia, who didn’t respond to requests for comment, have been tweeting Indian politicians asking for help.

“We 7 employee from #ILFS are hostages by local labor/staff at in Ethiopia from last 4 days coz of nonpayment of creditors and local salaries,” Neeraj Raghuwanshi said in a tweet on November 27, in which he tagged Prime Minister Narendra Modi. “#ILFS denied to send fund from India. Kindly save us. Day2day situation worsening.”

Raghuwanshi posted a screen grab of an email he wrote pleading for help, mentioning IL&FS’s local partner, the Ethiopian Roads Authority. He said the Authority would not take any action to help the detained employees before local staff were paid.

Ethiopian Roads Authority director general Habtamu Tegegne didn’t immediately respond to two calls to his office phone. The Spanish ambassador to Ethiopia, Borja Montesino Martínez del Cerro, didn’t immediately respond to two emails seeking comment.

Barista to enter FMCG business, open restaurants

NEW DELHI: Barista, one of India’s largest café chains, is getting ready for its second innings. The troubled espresso bar chain, which has seen four owners, is giving a fillip to its food business by opening restaurants under the Barista brand.

It is also foraying into the FMCG category.

The New Delhi-headquartered chain, which competes with Café Coffee Day, Tata Starbucks and Costa Coffee, will also add 300 outlets in three years, taking the total number of Barista cafés to 500, Barista’s CEO Puneet Gulati told TOI.

“We will open 50 new outlets, mainly through the franchise route by March next year,” he said. “In addition, we will open one new multi-cuisine restaurant called Barista Diner every month, which will be an all-day diner with live cooking. We have opened a diner in Noida and will follow it up with new ones in Punjab and Banjara Hills in Hyderabad.”

Barista will launch FMCG products, including honey, instant coffee, chocolates and cookies, which will be sold through modern retail. “We got the idea to enter the FMCG segment when we realised merchandise sales at our outlets contributing 12-14% to our top line,” said Gulati. He claimed Barista currently has a market share of around 11% in the organised café market.

Market research firm Euromonitor had pegged the size of the market for specialist coffee shops in India at around Rs 2,500 crore in 2017. The segment has been growing by around 13% annually.