Passenger car sales inch up 2% in April, total car+UV sales up 11%: SIAM
Rs 43,000 crore lies in inoperative EPF accounts: Govt
Domestic passenger car sales inched up by 1.87 per cent last month, industry data showed on Monday.
According to the data furnished by the Society of Indian Automobile Manufacturers (SIAM), passenger car sales during April stood at 162,566 units against 159,588 units in the corresponding period of last year.
However, sales of total passenger vehicle, which include cars, utility vehicles and vans surged by 11.04 per cent to 242,060 units from 217,989 units sold in April, 2015.
The total passenger car sales rose on the back of healthy demand for utility vehicles (UVs) and vans.
The utility vehicles sales rose by 42.83 per cent to 62,170 units, whereas the off-take of vans increased by 16.46 per cent to 17,324 units.
DBT reduces zero balance PMJDY accounts
About Rs 43,000 crore is lying in inoperative Employees' Provident Fund accounts and interest would be credited to such accounts, government said on Monday.
Minister of State for Labour and Employment, Bandaru Dattatreya told Lok Sabha that 118.66 lakh claims were settled by the Employees' Provident Fund Organisation (EPFO) in 2015-16, adding that 98 per cent of them were settled within 20 days.
"There is around Rs 43,000 crore in inoperative (EPF) accounts," Dattatreya said during Question Hour.
Listing the steps taken, the Minister said it has been recently decided to credit interest to the inoperative accounts.
Indirect tax collections grow 41% in April
With all government welfare schemes switching to the direct benefit transfer (DBT) regime soon, the Centre is hopeful that the high incidence of zero-balance accounts in the Pradhan Mantri Jan Dhan Yojana will come down substantially.
“With more people becoming beneficiaries under the DBT and receiving cash transfers, there should be a significant reduction in zero balance or no-activity accounts under the PMJDY,” said a senior government official.
Insurance cover under the Pradhan Mantri Jan Suraksha Yojana is also linked to these accounts and will improve the transaction status, the official added. The issue of zero balance accounts has dogged the government’s ambitious financial inclusion scheme that was launched in August 2014, with critics pointing out that bank accounts are not sufficient if there is no activity associated with them. Of the 21.68 crore bank accounts opened under the PMJDY scheme, a quarter or 26.39 per cent have zero balance. In the past one year, zero-balance accounts have substantially reduced from a level of 45 per cent in September 2015 with schemes such as DBT PAHAL or cash transfer for cooking gas kicking off.
FDI tide turns in India’s favour
Indirect tax collections witnessed an increase of 41 per cent to Rs. 64,394 crore mainly on the account of spurt in central excise realisation. Revenue Secretary Hasmukh Adhia said excise duty mop up in April spurt by 70 per cent to Rs. 28,252 crore as against Rs. 16,546 crore in the year-ago month.
“Provisional revenue figures for indirect tax for April 2016 are Rs. 64,394 crore, a 41 per cent growth over April 2015 of Rs. 45,417 crore,” Adhia tweeted.
He further said that after discounting for the additional resource mobilisation measures taken in the Budget, the growth in indirect tax collection was 17 per cent in April.
As regards collection of customs duty, Adhia said there was 25 per cent increase to Rs. 17,945 crore in April, as against Rs. 14,286 crore in the same month a year ago.
Besides, service tax collections grew by 27 per cent to Rs. 18,647 crore in April 2016, as against Rs. 14,585 crore in the same month last fiscal.
Foreign direct investment (FDI) inflows into India are on the rise. According to the IMF, FDI refers to “an investment made to acquire lasting interest in enterprises operating outside of the economy of the investor.” FDI is considered one of the most stable forms of non-debt creating capital inflows, with significant positive effects on the economy.
In the case of India, FDI inflows have risen rapidly, from $24 billion in 2012 to $44.2 billion in 2015 — a seven-year high. This increase is also fairly broad-based. It is not just the e-commerce (trading) sector that has received more inflows; other sectors such as computer software and hardware, construction, services, autos and the telecom sectors also account for a large share of the increase.
Interestingly, even though China continues to attract larger FDI inflows than India in absolute terms, India has started to close the gap, when FDI is measured as a share of GDP. FDI inflows into China have moderated to 2.3 per cent of GDP in 2015, from 2.6 per cent in 2014. During the same period, FDI inflows into India rose to 2.1 per cent from 1.7 per cent.
Additionally, one could also argue that the quality of FDI inflow into India is much better. Over the last decade or more, China has accumulated a large stock of FDI. As a result, almost half of the FDI inflow into China includes retained earnings. In contrast, almost three-quarters of FDI inflows into India are fresh equity infusions.
The resurgence of FDI inflows into India can be traced to both domestic pull factors as well as global push factors. On the domestic front, India has emerged as one of the fastest-growing Asian economies, while China’s growth has stumbled due to large overcapacity and high leverage.
More importantly, ongoing economic reforms in India are likely attracting FDI flows. FDI limits have been increased in various sectors such as defence, railway infrastructure, insurance and construction (to name a few). Incremental reforms aimed at improving the ease of doing business and to improve public infrastructure have perhaps also encouraged long-term investors.
What may also have helped are pull factors such as rising labour costs in China. Rising costs in China have partly pushed multinational corporations (MNCs) into shifting production base to South-East Asia, such as Vietnam. India, belatedly, is possibly benefiting from production facilities moving out of China.
India has not been a part of the Asian supply chain in the past. Because of their widespread operations, MNCs have tended to segregate their production process into various stages, with different countries specialising in different stages based on their relative comparative advantage (vertical FDI). This led to a rapid rise in trade of components and parts across the supply chains located in various Asian countries. India could become a part of this supply chain in years ahead.