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The monthly collection under the Goods and Services Tax (GST) is likely to peak to another all-time high of Rs 1.45-1.50 lakh crore, CNBC-TV18 reported on April 26, citing sources in the Finance Ministry.

The projected numbers mark a consecutive month-on-month (MoM) surge in GST collections. In March, a record-high amount of Rs 1.42 lakh crore was collected, which was 6.8 percent higher as compared to the previous month.

If the projected numbers for April 2022 turn out to be accurate, it would be the 10th month in a row when GST collections would cross the Rs 1 lakh crore-mark.

Also Read | Ministers' panel yet to take a view on GST rate rationalisation

For FY22 as a whole, total GST collections amounted to Rs 14.83 lakh crore, up 30 percent from Rs 11.37 lakh crore in FY21. The Finance Ministry attributed the rise in GST collections to the ongoing economic recovery along with anti-evasion activities and the various rate rationalisation measures undertaken by the GST Council to correct inverted duty structures.

While the GST collections are on a high, deliberations are also reportedly underway to rationalise the taxation rates. The Finance Ministry, on April 25, said that the Group of Ministers - constituted in September last year to deliberate on the rates - was yet to submit their report.

Also Read | CAIT, IFA urge government to roll back hike in GST rate on footwear

The GoM, headed by Karnataka Chief Minister Basavaraj Bommai, was set up by the GST Council to recommend ways in which any anomalies in tax rates could be corrected and revenue could be augmented.

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Former Reserve Bank of India Governor Raghuram Rajan said that the central bank will have to increase the headline rate at some point. "With inflation soaring in the country, the Reserve Bank of India (RBI) will, at some point in time, have to raise benchmark interest rates, and it is important for politicians and bureaucrats to understand that the rise in policy rates is not some anti-national activity benefiting foreign investors, but is an investment in economic stability, said Raghuram Rajan, former RBI governor.

In March, headline inflation in the country spiked to 6.95 per cent compared with 6.07 per cent in February. The headline inflation has now breached the 6 per cent mark for three consecutive months. In the recently concluded monetary policy meet, the RBI sharply revised its inflation projection from 4.5 per cent to 5.7 per cent for FY23. Further, the headline inflation is expected to stay above 6 per cent in the first quarter of FY22, as per RBI’s projections. And, for the June-September period, the CPI inflation rate is projected at 5.8 per cent. Consequently, economists have forecast aggressive rate hikes in the next one year.

“Of course, no one is happy when rates have to be raised”, Rajan said in his note. “I still get brickbats from politically-motivated critics who allege the RBI held back the economy during my term. Some of my predecessors were similarly criticized. At such times, it helps to let the facts talk. And the correct facts are important to guide future policy. It is essential that the RBI does what it needs to, and the broader polity gives it the latitude to do so”, he added.

Rajan recalled that when he took over as the governor of RBI in September 2013, India was seeing inflation soar as high as 9.5 per cent. There was a currency crisis too, with the rupee experiencing a free fall. Consequently, the RBI then increased the repo rate from 7.25 per cent in September 2013 to 8 per cent to tame inflation. As inflation came down, the RBI then cut rates by 150 basis points to 6.5 per cent and signed onto an inflation targeting framework with the government.

“These actions not only helped stabilize the economy and the rupee, they also enhanced growth”, Rajan said. “Between August 2013 and August 2016, inflation came down from 9.5 per cent to 5.3 per cent. Growth picked up from 5.91 per cent in June-August 2013 to 9.31 per cent in June - August 2016. The rupee depreciated only mildly over 3 years from 63.2 to 66.9 to the dollar. Our foreign exchange reserves rose from US $ 275 billion in September 2013 to US $ 371 billion in September 2016”, he added.

The RBI has since maintained low inflation and low interest rates through troubling times like the demonetization, the fall-off in growth, and the pandemic. Today, reserves have climbed to over $ 600 billion, allowing the RBI to calm financial markets even as oil prices have climbed, Rajan said.

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Natural farming is the need of the hour as the cost of production of foodgrain has increased due to the use of chemicals and fertilisers, NITI Aayog CEO Amitabh Kant said on Monday. Addressing the 'National Workshop on Innovative Agriculture' organised by NITI Aayog, Kant further said India is now an exporter of wheat and rice.

"Natural farming is the need of the hour and it is important that we identify scientific ways through which we can ensure farmers can directly benefit from it, thereby increasing their income," he said. Kant added: "The cost of production of foodgrain and vegetables rose due to excess use of chemicals and fertilisers."

Natural Farming ichemicals s a chemical-free farming method. It is considered as an agroecology-based diversified farming system which integrates crops, trees and livestock with functional biodiversity. Also, speaking at the event, NITI Aayog member (Agriculture) Ramesh Chand said there are many methods of natural farming that can be adopted, such as organic farming, diversification and agroecological farming.

The CBI has taken over the probe into the case of coins worth Rs 11 crore going missing from the vaults of the SBI branch in Mehandipur Balaji in Rajasthan, officials said on Monday.

On the high court's directions, the CBI has taken over the FIR earlier registered by the Rajasthan Police.

The matter came to light after the SBI branch decided to carry out counting of money after a preliminary enquiry indicated discrepancy in the cash reserve at the bank.

A Jaipiur-based private vendor was roped in to carry out the counting of coins worth over Rs 13 crore, according to branch account books.

The counting revealed that over Rs 11 crore worth of coins were missing from the branch.

Only 3,000 coin bags carrying about Rs 2 crore could be accounted for and were transferred to the RBI's coin holding branch.

It is also alleged that the employees of the private vendor who was doing the counting were threatened in the night on August 10, 2021 at the guesthouse where they were staying and were asked to refrain from the counting, the FIR has alleged.

The Minister of State for Electronics and IT Rajeev Chandrasekhar on Monday said India will consume semiconductors of about $70-80 billion to manufacture electronics products worth $300 billion by 2026 in line with the government's vision.

Chandrasekhar says the government will achieve the target of establishing a semiconductor ecosystem in India depending upon the interest it is getting from around the globe.

He was speaking on the eve of announcing the first conference on setting up the semiconductor ecosystem in the country -- Semicon India 2022 - that is expected to attract Semiconductor leaders from across the world.

He said, "Demand for digital devices and electronics products is only going up. If you have seen our electronics vision document, we have announced a target of $300 billion in electronic manufacturing, with $120 billion in exports. Our consumption, based on $300 billion electronics (production target by 2026), will be almost $70-80 billion of semiconductors," reported by PTI.

Notably, under the Semicon India Programme, the government has received proposals from five companies to set up the electronic chip and display manufacturing plants with an investment of ₹1.53 lakh crore.

Semicon India programme entailed incentives to the tune of ₹76,000 crore.

As per the report, companies like Vedanta Foxconn JV, IGSS Ventures, and ISMC have submitted proposals to set up electronic chip manufacturing plants with a $13.6 billion investment. They have sought the support of $5.6 billion from the government under the ₹76,000 crore programme.

Further, Vedanta and Elest have proposed a projected investment of $6.7 billion to set up display manufacturing units -- used in mobile phones, laptops, etc. They have sought the support of $2.7 billion from the government under the scheme for setting up display fabs in India.

The minister stated that the applications are being processed at the moment and declined to provide an estimated timeline for their approval.

Prime Minister Narendra Modi will inaugurate the first-ever Semicon India 2022 Conference at 11 am, on 29th April 2022 in Bengaluru.

Chandrasekhar stated that Semicon India – 2022, a 3-day conference, is being organized to take forward the vision of PM Modi which is to make India a leader in electronics manufacturing, semiconductor design, manufacturing & innovation.

Chandrasekhar said that PM’s vision is to make India a significant player in the Global Semiconductor value chain. First time in the last 75 years- rapid decisive strides have been made in this space, he added. Semicon India 2022 conference will attract the best minds from across the world from the semiconductor industry, research & academia and will act as a big step in fulfilling PM’s vision of making India a global hub for electronics manufacturing and the semiconductor industry.

The ministry will organize Semicon India 2022 conference from April 29 – 01 May 2022 at ITC Gardenia, Bengaluru.

This conference will serve as the first roadshow in the series of a roadshow that the Ministry of Electronics & Information Technology will be organizing. Global experts from industry and academia involved in semiconductor design and manufacturing and key representatives from Government are proposed to participate in the event.

As per the ministry, India Semiconductor Mission (ISM) has been set up as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to formulate and drive India’s long-term strategies for developing semiconductors and display manufacturing facilities and semiconductor design ecosystem. Envisioned to be led by global experts in the Semiconductor and Display industry, ISM will serve as the nodal agency for efficient, coherent, and smooth implementation of the schemes.

India's inflation based on the Wholesale Price Index (WPI) rose to a four-month high of 14.55 percent in March from 13.11 percent in February, according to data released by the commerce ministry on April 18.

The WPI inflation was 7.89 percent in March 2021. Another 10 percent-plus print means WPI inflation has now been in double-digit territory for 12 consecutive months.

The rise in wholesale inflation in March comes after data released on April 12 showed the more closely-tracked headline retail inflation rate based on the Consumer Price Index (CPI) jumped to a 17-month high of 6.95 percent last month.

While the Reserve Bank of India's (RBI) policy target is spelt out in terms of CPI inflation, high WPI inflation is seen as a precursor to higher consumer prices as producers pass on rising costs to customers.

The rise in WPI inflation in March was driven by an increase in prices across the board, although non-food items led the charge.

"The high rate of inflation in March, 2022 is primarily due to rise in prices of crude petroleum & natural gas, mineral oils, basic metals, etc owing to disruption in global supply chain caused by Russia-Ukraine conflict," the commerce ministry said.

The index for the fuel and power group of the WPI jumped 5.68 percent month-on-month in March, while that for manufactured products rose 2.31 percent over the same period.

Manufactured products account for 64.23 percent of the WPI basket.

The food index, in comparison, rose by only 0.54 percent in March from February. However, the month-on-month increase in March is higher than the 0.06 percent posted in February.

Overall, the all-commodities index of the WPI was up 2.69 percent month-on-month as against 0.76 in February, indicating rising momentum in price pressures.

The impact of the war between Russia and Ukraine seems to be spilling into non-fuel prices, with the index for wheat rising 3.19 percent in March from February. As a result, wheat inflation increased to 14.04 percent from 11.03 percent in February.

Russia and Ukraine are major global exporters of wheat.

Prices of petrol and diesel remained steady for the tenth day in a row on April 16. Since the end of a four-and-half-month hiatus in rate revision on March 22, rates of petrol and diesel have increased by Rs 10 per litre each through 14 rounds of revision. The prices were last hiked on April 6 by 80 paise a litre each.

According to a price notification from fuel retailers, petrol in Delhi costs Rs 105.41 per litre and diesel Rs 96.67 per litre.

In Mumbai, petrol and diesel prices per litre are Rs 120.51 and Rs 104.77 respectively. In Chennai, petrol costs Rs 110.85 and diesel Rs 100.94. In Kolkata, petrol is Rs 115.12 and diesel Rs 99.83.

Amid an outcry over high fuel prices, Petroleum and Natural Gas Minister Hardeep Singh Puri on April 14 said the government has been appealing to states which have not reduced value added tax on petrol and diesel to cut the VAT.

A report on April 12 stated that the current domestic retail fuel prices are benchmarked to international oil prices at $95 per barrel. With Brent crude oil prices close to $100 per barrel in the week, domestic fuel prices could freeze again for some time. 

India is 80 percent dependent on imports for its oil needs. Here is how petrol and diesel prices are calculated in India. Also, know how much of it is tax.

137-day freeze on fuel prices ended on March 22

From November 3, 2021 until March 22, 2022, there had been a freeze on fuel prices after the central government's excise duty cut of Rs 5 a litre on petrol and Rs 10 a litre on diesel, and many states also lowering state tax.

During this period, there was also a spike in international crude oil prices. This triggered speculation that the freeze was due to assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur.

It was widely anticipated that fuel prices at the pump would increase after the poll results were out on March 10.

Consumer inflation came in at a surprisingly high 6.95 percent in March versus a CNBC-TV18 economists’ poll that saw inflation at 6.28 percent.

Most economists including those from Citi, HSBC and Kotak have revised their inflation forecasts for the year upward and now see as many as six repo rate hikes in consecutive Monetary Policy Committee meetings starting in June. Citi and HSBC see the repo rate at 5.5 percent by April 2023. The rate is currently 4 percent.

The 10-year bond yield, which has surged since the Reserve Bank of India’s policy day (April 8), is expected to shoot up to 7.25 percent from the overnight close of 7.17 percent.

INFLATION DETAILS

The Consumer Price Index (CPI) for March rose to 6.95 percent because of mostly sharp price increases in a wide range of goods and services – edible oils (expected after the Russia-Ukraine war), meat, eggs, fish, vegetables, pulses, clothing, footwear, household goods and services, transportation, health goods and services.

Food inflation was up 7.68 percent from a year ago, while core inflation (excluding food and fuel) jumped to 6.4 percent from 6.1 percent a month ago.

The almost 1 percent month-on-month jump in March inflation has pushed up the CPI index number so much that inflation readings will have to be revised higher for several succeeding months. Economists now expect CPI readings of over 6 percent all the way till September. Readings in January, February and March are already above 6 percent.

POLICY IMPACT

CPI of 6 percent-plus for three consecutive quarters will bring the inflation-targeting monetary policy framework into play. This framework mandates the MPC to keep inflation at 4 percent, plus or minus 2 percent, or between 2 percent and 6 percent.

Also Read | New lessons in managing inflation in the West: KV Kamath

If CPI remains above 6 percent for three quarters in a row, the RBI must write to Parliament explaining why it failed in its mandate and also take steps to bring CPI back under 6 percent.

The only instrument the MPC and the RBI have to drag down inflation is hiking the repo rate. Hence the widespread expectation that India’s rate-hiking cycle will start in June.

MARKET IMPACT

Bond market yields have been surging since the Russia-Ukraine war and more sharply since the April 8 policy, when the RBI changed its stance to “withdrawal of accommodation.”

With the massive government borrowing programme also kicking in this week, 10-year government bond yields may remain above 7.25 percent, which will in turn pull up the cost of borrowing for companies.

Equities may take the expected rate hikes in their stride, as is being witnessed in the US. In the early stages of an inflation and interest rate hiking cycle, equities normally do well as firms that have pricing power are able to pass on raw material inflation to consumers via higher product prices. Such companies see their revenue and earnings rise in nominal terms.

It’s only in the latter part of the rate-hike cycle, probably after a dozen or more hikes, that the economy slows down and lower demand hurts earnings per share.

India is planning to boost shipments to Russia by an additional $2 billion as the two nations work out a payment system in local currencies to continue bilateral trade amid sweeping international sanctions on Russia for invading Ukraine, people with the knowledge of the matter said.

To do this, Prime Minister Narendra Modi’s administration is in talks with Moscow to liberalize market access for several Indian-made products, the people said, asking not to be identified as the talks are private. This comes as the two governments work toward a proposal to settle trade in rupees and rubles and look for ways to balance the trade given that India is a net importer of Russian goods.

India is looking to export products supplied by countries who have halted shipments after U.S. and its allies imposed sanctions, they said.

On the list are pharmaceutical products, plastics, organic and inorganic chemicals, home furnishings, rice, beverages such as tea and coffee, milk products, and bovine products.

India has come under severe criticism for lifting imports of oil to take advantage of a dip in prices after U.S., Europe, Australia and Japan piled economic sanctions onto Russia in response to its war against Ukraine. President Joe Biden met with Modi on Monday and conveyed that the U.S. stands ready to help India diversify its energy imports, which would make it less reliant on Russia.

A Commerce Ministry spokesperson did not immediately respond to an email seeking comment.

An analysis by the trade department shows that India can easily scale up exports to Russia in the top 20 items it needs to imports. Marine products, textiles and apparel, footwear, machinery, and electronics are some of the other items India is seeking to send to Russia.

Currently, India’s exports to Russia stand at a miniscule $3 billion compared to the over $68 billion of shipments to the U.S. It could be higher but for steep logistics cost, sanitary rules, the language barrier and lower allocations in government procurement done by Russian state-run firms. Total bilateral trade between the two countries stood at $11.8 billion in the first 11 months starting April 2021, higher than $8.1 billion recorded for the previous full-year.

India has historically attempted a neutral stance on tensions between major powers, even as it has joined groups such as the Quad security alliance with Australia, Japan and the U.S.

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Domestic petrol and diesel rates are directly benchmarked against international crude oil prices, and with oil prices soaring in the last two months, state-owned fuel retailers needed a price hike just to break even.

Now, with petrol and diesel prices increasing by Rs 10 per litre over 14 revisions since March 22, sources told CNBC-TV18 that "sustained fuel price hikes may not be needed if crude prices stabilise at current levels".

According to the sources cited by the channel, the current domestic retail fuel prices are benchmarked to international crude oil at $95 per barrel. With the last week's Brent crude oil prices at not more than $100 per barrel, the sources indicated that domestic fuel prices could again be put on a freeze for some time.

At the same time, they also stated that oil marketing companies (OMCs) may still recover about a month's worth of losses.

"Approximately one month more of losses may still be recoverable by OMCs," said the sources.

According to the report, OMCs made gains till January end and the gains balanced out in February. It is further said that though discussions have been held about a central excise duty relief, a decision has not been taken yet.

It is said that Rs 5 per litre excise cut on petrol and diesel will cost Rs 70,000 crore revenue loss at this stage for the government.

The last time when the central government cut excise duty of Rs 5 a litre on petrol and Rs 10 a litre on diesel and many states also reduced state tax, there had been a freeze on fuel prices from November 3, 2021, to March 22, despite the spike in international crude oil prices.

The domestic rates of petrol and diesel have remained steady for the sixth day in a row on April 12.

On a daily basis, OMCs adjust the price of petrol and diesel depending on the average price of benchmark fuel in the worldwide market over the previous 15 days and foreign exchange rates. Every day at 6 am, any changes in petrol and diesel prices take effect.

Here is how petrol and diesel prices are calculated in India. Also, know how much of it is tax.

Also Read: RBI Governor Shaktikanta Das forecasts crude oil price will be at $100 per barrel in FY23

On March 24, Moody's Investors Service estimated that India's fuel retailers IOCL, BPCL and HPCL have together lost around $2.25 billion or Rs 19,000 crore in revenue in the November 2021 to March 2022 period after they kept petrol and diesel prices unchanged despite a sharp rise in crude oil prices.

JP Morgan in its report said for OMCs to revert to normalised marketing margins, retail prices need to increase by Rs 9 a litre or 10 percent.