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State-owned Indian Bank has revised the marginal cost of funds-based lending rates (MCLR) by 0.10 per cent across tenors from Saturday, which will make most of the consumer loans costlier.

It has also revised the lending rates benchmarked on treasury bills.

The Asset Liability Management Committee (ALCO) of the bank has reviewed the Benchmark Lending Rates and decided on an upward revision in MCLR and TBLR across various tenors, the lender said in a regulatory filing on Thursday.

The benchmark one-year MCLR will be 7.75 per cent from September 3 against the existing rate of 7.65 per cent.

The one-year rate is used to fix most consumer loans such as auto, personal and home loans.

The overnight to six months tenor MCLRs are raised by 0.10 per cent each in the range of 6.95 to 7.60 per cent.

Besides, the lender also revised the treasury bills benchmark lending rate (TBLR) in the range of 5.55 per cent to 6.20 per cent for various tenors.

Can a project that was granted a single licence be split into phases without being unfair to existing buyers? Can completed phases be delinked from newer ones, which can then be redesigned without the approval of existing allottees?

These issues were first discussed at the Urban Development Conclave in February, where KK Khandelwal, Chairman, Gurugram Real Estate Regulatory Authority (RERA), raised the issue of the difficulty in getting the consent of two-thirds of the allottees for any changes in the design of unbuilt phases. Three RERA chairmen — from Gujarat, Uttarakhand, and Rajasthan — indicated that the pro

Why Redesign?

The bigger issue is why does a project have to be redesigned after RERA registration? The first reason is that with new policies such as transit oriented development (ToD), extra floor area ratio (FAR) is offered to developers building along these corridors. Also, there is extra built-up area available by way of transfer of development rights (TDR), which a developer can utilise on this project, if the supporting infrastructure is available. A third reason why designs need to be changed is because of rapid changes in consumer preferences, necessitating changes to make the project more saleable in the present scenario.

Going by past experience, these design changes have been detrimental to those already residing in the vicinity. The prime example is that of the Supertech twin towers that were demolished on August 28 by a Supreme Court order because they violated the minimum setback principles from existing towers, thus spoiling their environment, and ambience.

Two-Third Consent

In Haryana, a new proposed policy was uploaded, without much fanfare, by the Department of Town and Country Planning (DTCP) for suggestions from consumers on the draft notification issued on July 18. A policy for allowing phasing in licensed colonies and seeking consent from two-third of the allottees in case of revision in the layout plan/building plan for co-ordinated functioning of statutory authorities has in-principle been approved by the state government. The co-ordination was under the Haryana Development and Regulation of Urban Areas Act 1975; the Real Estate (Regulation and Development) Act 2016, and the Haryana Apartment Ownership Act 1983. It rests upon a January 25, 2021, notification by the DTCP.

The constitutional validity of this policy has been challenged in the Punjab and Haryana High Court.

The proposed policy applies to parts of projects in licensed colonies, which are yet to be registered with the RERA. The first objection by consumer bodies is to the clause, “An undertaking from the coloniser regarding such non-registration of the colony or such part of it shall be considered adequate along with such disclosure.” Consumer bodies say that this is in violation of the protection they receive under Section 14 of the RERA Act which mandates approval by two-thirds of existing allottees before any revision in the plan can be allowed. The policy seeks to redefine what amounts to revision of plans and which revision will require previous written consent of two-thirds of the allottees.

Short-Changing Buyers

So, what can happen when this proviso is enacted? Without any stipulation on the size or composition of each phase, consumers fear that a few completed towers would be converted into a completed phase, and they may lose their right to protest against injustice. While the entire colony was planned as a whole and complement each other in services, it is quite possible that the developer may place the sewage or garbage treatment facility close to the old, completed phase, and they may never be able to protest as they are part of a completed phase.

Also, if the developer consolidates a few extra acres adjoining the boundaries of the existing layout, they may well take the remaining land from the existing project(s) and turn that into a new phase/project. With greater FAR allowed because of the ToD policy and some TDR purchased from other developers, the new phase can be made premium, and viable.

However, it might infringe on the rights of the existing completed phases in terms of club house or other facilities, making those crowded and less premium. For instance, a Gurugram-based developer used the space for amenities to build another tower at the cost of promised amenities, by arbitrarily revising plans for the low-rise economically weaker section wing to a high-rise tower.

Problem Clause

There are parts of the notification which consumers are interpreting as developer-friendly. For instance, the one-sided developer-led disclosure clause quoted above seems to violate the rights of the consumer (home buyer). A simple disclosure by the coloniser (developer) to the authority, without any clause of intimation to existing consumers seems to reek of collusion. In an ideal world, the safeguard of RERA approval to the final plan seems all right, but with the lack of trust in the market, consumers are still wary.

The clause in the proposed amendment that a phase can be deemed complete with essential services, seems misleading as essential services have not been spelled out. Without that, developers do not have to follow any benchmark in minimum services.

Future projects can be planned in phases with clear announcement of services and facilities in each phase. The marketing then should also be in accordance with that. Consumers of the phase can then complain to RERA if the promised facilities are not provided. However, for legacy projects that have been planned and executed as single entities with common areas being shared across the project, phasing is a tricky business that can lead to consumers being short-changed.

India's tax collection from the sale of goods and services soared 28 per cent to Rs 1.43 trillion in July aided by rising demand, higher rates, and greater compliance.

The GST collection remained above the Rs 1.4-trillion mark for the sixth straight month in August and the ensuing festival season will help continue the trend.

Better reporting coupled with economic recovery has have a "positive impact on the GST revenues on a consistent basis, the finance ministry said in a statement.

The gross GST revenue collected in August 2022 is Rs 1.43 trillion of which CGST is Rs 24,710 crore, SGST is Rs 30,951 crore, IGST is Rs 77,782 crore (including Rs 42,067 crore collected on import of goods) and cess is Rs 10,168 crore (including Rs 1,018 crore collected on import of goods), the ministry said.

The revenues for the month of August 2022 are 28 per cent higher than the GST revenues of Rs 1,12,020 crore collected in August 2021.

"The growth in GST revenue till August 2022 over the same period last year is 33 per cent, continuing to display very high buoyancy. This is a clear impact of various measures taken by the Council in the past to ensure better compliance, the Ministry said.

The collection in August is, however, lower than Rs 1.49 trillion collected in July. The mop up was at a record high of Rs 1.67 trillion in April.

KPMG in India Partner Indirect Tax Abhishek Jain said, "The consistent high collections indicate upward economic trajectory despite fluctuating COVID cases and to some extent attributable to inflation and better compliance being ensured by the government."

N A Shah Associates, Partner, Indirect Tax, Parag Mehta said the collection increase is due to better compliance and the removal of various exemptions from July 2022.

"Further, with the festive season setting in, the collections for the next 2-3 months will also show an upward trajectory, Mehta said.

Deloitte India Partner MS Mani said the collections reflect the strength of the underlying economic factors.

"With the onset of the festival season, which is typically a large consumption driver for all businesses, the GST collections in the coming months would also be expected to be robust," Mani added.

Nexdigm, Director Indirect Tax, Sanjay Chhabria said higher collections are signs of recovery of trade & economy post the COVID-19 pandemic and we could continue to witness such higher tax buoyancy during the upcoming festivities in the country.

ICRA Chief Economist Aditi Nayar said looking ahead, the YoY growth in GST collections is likely to remain well above 20 per cent in September 2022, before tempering down to 12-15 per cent in December quarter, on a normalising base, trending close to the nominal GDP expansion.

"We continue to foresee a considerable upside in the CGST collections relative to the FY2023 BE, more than offsetting the expected loss in excise collections," Nayar said.

The idea of smart grid, of which a smart meter is a sub-set, is to increase the efficiency of power usage by the introduction of bi-directional flow of information from utilities to consumers, and vice-versa. This can be possible by the introduction of ‘Advanced Metering Infrastructure (AMI)’. The information about electrical consumption of a consumer is recorded in a timely manner, and this data is aggregated and analysed by ‘smart meters’ installed at consumer premises. The analysed data is communicated to utilities using the AMI. The AMI includes the advanced communication system, including home area networks (HAN), neighbourhood area networks (NAN), and wide area networks (WAN).

It is not as if it is only the power distributor’s hands that are strengthened. It is a two-way street. The consumers’ hands too are strengthened with the distributor alerting to wastage at the consumer end, which they can plug instantly — say, for example, a television drawing power though not in use; the same is the case with an air-conditioner that may not be in use, but power is consumed if the power switch of the appliance is not switched off.

Such alerts galvanise somnolent consumers into action, resulting in prevention of guzzling and heightened bills. Consumers can also monitor their consumption on a daily basis and accordingly initiate suitable measures as against the present norm of waking up with a shudder when the bill lands in our letterbox/inboxes. When metering becomes fairer and advanced like higher peak-time rates as in Malaysia, the utility of real time information would be even more — shifting peak loads to leaner times of the day wherever possible to avoid peak time tariffs. A smart meter also enables switching from conventional power to renewable energy (like solar) thanks to the two-way communication which is its centrepiece.

The PGCIL’s weak alibi is that the latest technology is as yet unproven. Really? One doesn’t have to go very far. The Tata Power Delhi Distribution, which supplies electricity in the north and north-west Delhi, last year chose the latest platform and connectivity technology — Narrow Band Internet of Things (NBIoT). This technology can work with 4G and 5G networks.

Surprisingly, the PGCIL has tweaked the technology requirement from the latest to the dated in the tender inviting bids for setting up 10 million smart meters just days before the bid closed on August 30.

The atavistic instinct for hurtling to obsolete technology is a throwback to State-run BSNL remaining a 2G service provider for long when its fleet-footed private sector competitors were progressing from generation to generation. The PGCIL cannot pivot, and smugly counter saying unlike in the telecom sector, in the power sector competing for custom is not yet on.

At any rate, it would be wasteful and cynical to embrace a dated technology, even if it is cheaper only to report sub-optimal results at the end of the day, when enthusiastic adoption of the state-of-the art tech can prevent the downside of such short-sighted courses of action. We are in a fortunate position to have requisite technology that can make a huge difference to the power sector.

As India grows so does its power needs, and astute usage of power is crucial for India’s development. Seen from such a prism, the decision to make good with outdated technology will hamper India’s growth in the years to come. Therefore, it would be foolish to embrace junked technology.

India's manufacturing activity improved in August, although S&P Global's Purchasing Managers' Index (PMI) edged down to 56.2 from eight-month high of 56.4 recorded in July.

A reading above 50 indicates expansion in activity, while a sub-50 print is a sign of contraction.

This is the 14th consecutive 50-plus print for the manufacturing PMI.

Firms were at their most optimistic for six years," S&P Global said.

India’s economy probably grew at the fastest rate in a year last quarter driven by healthy consumption, but the pace of expansion is seen slowing as policymakers prioritize rising prices over growth.

Gross domestic product is estimated to rise 15.4% in the three months to June from a year ago, according to a Bloomberg survey of economists. That’s the fastest reading since the April-June quarter of 2021 and compares with a 4.09% expansion in the previous three months.

The Statistics Ministry is due to release the data for the first quarter of the fiscal year that started April 1 at 5:30 p.m. India time on Wednesday. Stock and bond markets will be shut on the day for a local holiday.

Resumption of activity in India’s dominant services sector, following the lifting of pandemic curbs, and a record jump in exports added to the momentum. The pace will likely moderate in coming quarters as the central bank raised rates by 140 basis points  this year to bring price gains under its 6% target ceiling.

The resilient growth backdrop means the RBI will retain its focus on containing inflation,” said Rahul Bajoria, an economist with Barclays Bank Plc. “That makes its policy choices relatively clear, in the short term,” he said, projecting another 50 basis points of rate hikes over two meetings in September and December.

The International Monetary Fund sees Asia’s third-largest economy sustaining its world-beating growth tag as the lender estimates a growth of 7.4% this year and 6.1% thereafter. A fast pace of expansion is crucial for India to attract investors and create jobs for its growing population.

Risk Factors

Besides rate hikes, a global slowdown will also weigh on the Indian economy. The US Federal Reserve’s resolve to keep raising rates until inflation comes under control may hurt Indian exports and thus drive domestic output lower.

The Indian rupee Tuesday dropped to a fresh record low and key stock gauges declined amid a global surge in risk-off sentiment after central bankers delivered a hawkish message at Jackson Hole.

Challenges also remain on the domestic front from rising prices of key staples such as rice and wheat amid factors such as climate change. If not contained, this could again fuel food inflation, which comprises about half of India’s consumer price index basket.

Exogenous forces will act as counterweights, including impact of the heatwave on farm output followed by uneven start to the monsoon, sharp rise in commodity prices impinging on corporate margins and an uncertain global environment,” said Radhika Rao, an economist with DBS Bank Ltd.

For now, indicators are giving mixed signals on activity going forward. While global demand is softening, government spending and a possible pick up in private investment is stoking hopes of a revival.

Shares of information technology (IT) companies fell up to 6 per cent on the National Stock Exchange (NSE) in Monday's intra-day trade after the US Federal Reserve Chairman Jerome Powell said that higher inflation is likely to inflict pain across households and businesses.

At 09:23 am, the Nifty IT index was the top loser among sectoral indices, and was down 4.5 per cent, as compared to 2 per cent decline in Nifty 50. Meanwhile, in the past eight days, the index has slipped 10 per cent, as compared to 4 per cent decline in the Nifty 50 index.

Shares of Tech Mahindra, Infosys, Tata Consultancy Services (TCS), Mindtree, Larsen & Toubro Infotech, Coforge, HCL Technologies, Wipro and L&T Technology Services fell up to 6 per cent intoday's intra-day trade.

The April-June quarter (Q1FY23) saw execution pick up for IT companies as it is a first full quarter of execution (barring company specific seasonality) after full/partial impact of furlough in Q3 and Q4. Operating margins, however, were impacted due to wage hikes rolled out in the quarter for few companies, while for others, supply side challenges, increase in sub-contractor expenses, travel & visa related expenses acted as major headwinds.

Despite minor pain in select verticals of IT companies, analysts at ICICI Securities remain optimistic of no downward revision in revenue growth guidance for FY23.

"The demand environment continues to be strong, which reflects in healthy order book growth. However, companies did mention about weakness in a few pockets as far as tech spending is concerned due to some impact of macro headwinds. The weakness largely pertains to BFSI and retail verticals. It is also heartening to see no downward revision in revenue growth guidance in FY23 by any of the companies," the brokerage firm said.

On the contrary, a media report by the Economic Times stated that the revenue of the IT service providers may be impacted by up to 33 per cent due to a fall in the growth rate of three platforms - Amazon Web Services, Microsoft Azure and Google Cloud. In the first half of 2022, the three platforms have reported a 7 per cent fall in incremental revenues