Indian solar energy to get $1 bn from World Bank

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The World Bank Group signed an agreement with the International Solar Alliance (ISA), consisting of 121 countries, led by India. It has committed to provide $1 billion support to Indian solar energy projects.

The World Bank-supported projects include solar rooftop technology, infrastructure for solar parks, bringing innovative solar and hybrid technologies to market and transmission lines for solar-rich states. The cumulative investment in solar would be the World Bank’s largest financing in this sector for any country.

ISA was launched at the UN Climate Change Conference in Paris at end-November last year, by Prime Minister Narendra Modi and French President François Hollande. Through ISA, India aims to collaborate with global agencies and mobilise around $1 trillion of investment in solar energy by 2030.

The agreement was signed for India by Arun Jaitley and Piyush Goyal, the minister of finance and coal, power & renewable energy, respectively, and World Bank Group President Jim Yong Kim.

“India’s plans to virtually triple the share of renewable energy by 2030 will both transform the country’s energy supply and have far-reaching global implications in the fight against climate change,” said Jim Yong Kim. He hopes this agreement would spur a global movement.

The World Bank Group will develop a road map to mobilise financing for development and deployment of affordable solar energy, and work with other multilateral development banks and financial institutions to develop financing instruments in this regard.

The World Bank also signed an agreement to give close to $625 million for the Grid Connected Rooftop Solar Programme under the National Solar Mission. The project will finance the installation of around 400 megawatt of solar photovoltaic power projects. The development of a $200-million shared infrastructure for the Solar Parks Project under a public-private partnership model, is also under preparation, said the Bank.

Source:   hhttp://www.business-standard.com/article/economy-policy/indian-solar-energy-to-get-1-bn-from-world-bank-116063000413_1.html

India jumps 19 places in World Bank’s logistics performance index

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India’s logistics performance at its key international gateways has improved in the last two years, according to a World Bank report released on Tuesday.

In the World Bank’s biennial measure of international supply chain efficiency, called Logistics Performance Index, India’s ranking has jumped from 54 in 2014 to 35 in 2016.

While Germany tops the 2016 rankings, India is ahead of comparatively advanced economies like Portugal and New Zealand. In 2016, India’s international supply chain efficiency was at 75% of top-ranked Germany, said the report titled Connecting to Compete: 2016 Trade Logistics in the Global Economy. This is an improvement over the 66% efficiency when compared to the leader (again Germany) in 2014.

Better performance in logistics will not only boost programmes, such as Make in India, by enabling India to become part of the global supply chain, it can also help increase trade. In 2015-16, India’s foreign trade shrank by around 15%.

The Logistics Performance Index analyses countries across six components: efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, and the frequency with which shipments reach consignees within scheduled or expected delivery times.

It is computed from the survey responses of about 1,051 logistics industry professionals.

Programmes, such as Make in India, and improvements in infrastructure have helped India improve its logistical performance, said Arvind Mahajan, partner and national head (energy, infrastructure and government) at KPMG India, a consultancy. He also said that the emergence of skilled professionals and technological improvements that have enabled services such as track-and-tracing have helped India close the gap with leaders.

That said, Logistics Performance Index does not address how easy or difficult it is to move goods to the hinterland. For that, World Bank has another measure—a domestic LPI which analyzes a country’s performance over four factors: infrastructure, services, border procedures and supply chain reliability.

While not all yardsticks are comparable across countries, there are some which show that India still has some way to go.

For instance, only 69% of shipments from India meet the quality criteria, compared to 72% for China and 77% for Kenya. On the other hand, it takes two and three days to clear shipments, without and with inspection, respectively—numbers comparable to China but longer than what it takes in top-ranked Germany.

Similarly, India has an average of 5 forms required for import or export, compared to 4.5 for China and 2 for Germany.

In this regard, the Goods and Services Tax (GST) has the potential to revolutionize the transport industry in India, said Capt. Uday Palsule, former managing director of Spear Logistics Pvt. Ltd. “Inter-state travel time will be drastically reduced if the hurdle of checking documents at every state border is done away with,” he said. It will also help boost the returns of the trucking industry and feed into better performance of the logistics sector, added Palsule.

Source: http://www.livemint.com/Politics/aqBXOSWqMObUMUAffuGH6I/India-jumps-19-places-in-World-Banks-logistics-performance.html

IPOs: here’s how much money India Inc raised in May

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Money raised through public issues in 2016 so far is three fold higher compared to the same period in 2015.

Indian companies raised Rs 6,744 crore through initial public offerings (IPOs) during the first five-and-a-half months of 2016, according to Prime Database.

The year so far witnessed 11 companies making their debut on the exchanges, with healthcare, finance and investments firms dominating  issuances.

Although all the IPOs were oversubscribed, only five of the 11 companies reported listing gains. Firms such as Ujjivan Financial Services, Thyrocare Technologies and Team Lease Services saw an overwhelming response, with their issues being oversubscribed between 38% and 41%.

The public issue of Mahanagar Gas, which closed last week, was oversubscribed 65 times. The IPO, which aimed to raise R1,040 crore, was fully subscribed on the first day. The public issue of Bangalore-based staffing firm Quess Corp, which aims to raise R400 crore, will open on Wednesday.

Source: http://www.financialexpress.com/article/markets/indian-markets/firms-raise-rs-6744-crore-via-ipos-till-mid-may/300205/

CBDT clears the air on tax collection at source

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The Central Board of Direct Taxes (CBDT) has made it clear that the 1 per cent tax collection at source (TCS) — introduced in this year’s Budget — will apply only to the cash component and not the entire sale consideration. This has been conveyed in a clarificatory circular issued by the CBDT on Friday.

To curb the cash economy, Budget 2016 had introduced a provision in income tax law requiring the seller to collect 1 per cent tax at source from the purchaser on the sale in cash of certain goods or provision of services in excess of ₹2 lakh.

Q&A format

The circular — in the form of question and answer — has been issued to clarify the applicability of the provision where the sale consideration received is partly in cash and partly in cheque

TCS will be applicable only on the cash component of the sales amount, and not on the whole of sales consideration, the CBDT circular said.

For instance, if goods worth ₹5 lakh are purchased for ₹2 lakh in cheque and ₹3 lakh in cash, 1 per cent tax will be levied only on ₹3 lakh.

Also, in cash-and-cheque transactions where the cash component is less than ₹2 lakh, there won’t be any TCS, the CBDT clarified. Further, TCS will not be levied if the cash receipt does not exceed ₹2 lakh, even if the sale consideration exceeds ₹2 lakh, said the circular.

Amit Maheshwari, Partner at CA firm Ashok Maheshwary & Associates, said the CBDT has rightly restricted the 1 per cent TCS to the cash component. This is in line with the Centre’s objective to curb the cash economy and target the expenditure side of black money, he noted.

Rahul Jain, Partner, Nangia & Co, said the Centre’s constant efforts to clarify the law and avoid possible disputes are heartening. In the absence of clarification, various local trade associations, head offices of stores selling high value items, etc had taken a conservative position.

“While it is excellent to see the Centre pulling all stops to nip disputes in the bud, one wishes the law was drafted better to avoid confusion in the first place,” he added.

Source: http://www.thehindubusinessline.com/economy/policy/cbdt-clears-the-air-on-tax-collection-at-source/article8775966.ece

Audit giants see dominance waning

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India’s audit landscape is undergoing a quiet change as the new rules for time-based rotation of auditors gather pace.

Early audit changes this year indicate the larger entities, such as Deloitte’s network, could face some pressure on their dominance. And, those lower down the order could gain ground. Leading firms are looking at increasing the focus on quality and are exploring new opportunities, such as private equity-backed ones in the unlisted space. Smaller entities such as Walker Chandiok, part of the Grant Thornton network, have ramped up their staff strength to handle new clients.

Close to 400 companies listed on the National Stock Exchange (NSE) have already changed auditors over the past three years, with clients changing hands among top audit firms. There is also pressure on pricing as the war for market share begins to intensify among top audit firms. This has resulted in a spike in demand for experienced auditors, with joining remuneration seeing 20-30 per cent jumps.

Audit giants see dominance waning
The revamped Companies Act of 2013 said every Indian company with a paid-up equity capital of Rs 20 crore or more was required to replace auditors after two five-year terms in succession. The law had given a three-year transition period for those which had to change auditors, ending March 2017. In the current financial year, 2016-17, around 40 NSE-listed companies have already switched to new auditors. More announcements are expected over the coming three months, shows data from Prime Database. In 2014-15 and 2015-16, a total of 339-NSE listed companies had settled for new auditors.

“We will be rotating off some of the larger companies. Simply because of the number and size of listed companies we audit, there will be changes in our audit market share,” said Shyamak Tata, partner, Deloitte Haskins Sells. He said large-scale changes in their portfolio were only expected from the third year onwards.

The Deloitte group’s network of audit companies is expected to see the largest churn. It has the biggest number of marquee audit clients. The network earned Rs 300 crore in fees for the year 2014-15, representing 15 per cent of the total pie of the Rs 2,000 crore audit fee market for 1,451 NSE-listed firms. It also audited the highest number of listed entities, at 149. The EY network made Rs 121 crore from the 108 companies. The PwC network audited 65 listed ones but had the lowest fee income among the ‘Big Four’ in audit, of Rs 65.6 crore. The KPMG network audited the lowest number of listed entities, at 58; however, it earned more than PwC at Rs 99.4 crore. Companies are still in the process of reporting the FY16 numbers.

Churn on
Early numbers suggest this pecking order is already going through a churn. A Business Standard analysis of data provided by Prime Database showed of the 41 auditor changes reported so far this year in listed companies, the KPMG network was the biggest gainer, with 11 new firms for the financial year ending March 2017. It was rotated out of two existing clients, a net gain of eight for FY17. The EY network added six and lost two, while Walker Chandiok gained a lone company. The PwC and Deloitte networks have lost more than they’ve gained so far this year. At the end of the changes, other smaller audit firms had 23 clients, up from 18 in FY16, among these 40 companies.

Grasim, Cipla, Biocon, Vedanta, Hindustan Zinc, United Spirits and Century Textiles are some of the large companies that have reported auditor changes for the new financial year.  In FY16, as many as 168 listed companies changed their auditors. The Deloitte network was the top gainer among the first five, gaining 17 and losing 11. The KPMG network was also a net gainer, with seven gains and four losses. EY, PwC and Walker Chandiok lost more than they gained.

In FY15, when 171 companies changed auditors, Walker Chandiok’s client list swelled by eight. While the EY network and Deloitte registered a net gain of one each, the KPMG and PwC networks recorded a net loss of four and one, respectively.

Strategy
Deloitte, expecting a strong attack on its dominance, is looking for greener pastures. “We are large in the listed company space, and have a majority share across industry sectors.  Our audit breadth and experience in this changing regulatory environment provides us, currently and over the next two-three years, an opportunity to provide audit services to untapped listed and unlisted entities, with a bias in favour of unlisted clients,” said Tata.

Other large entities are also gearing up for the transition. Russell Parera, partner, Price Waterhouse Chartered Accountants LLP, said his network had embarked on a transformation programme focussing on people, technology and processes for close to two years. “We have taken significant efforts in training our people for this change. Also, with rotation kicking in, it is going to be important to focus on investing in relationship building.”

The PwC network also bets on technology as another aspect, which will go a long way in these ever-evolving market scenario. “Today, technology has become a crucial enabler, with more data audits getting conducted. It is also relevant in cross border and multi-location audits to ensure consistency. We as a firm have been preparing for this change,” Parera added.  Tata of Deloitte spoke of pricing pressure in certain pockets. “We are seeing this as a section of the market looks to gain market share.  There will be some short- term blips. However, with continuing investment in innovation and quality, which will lead to enhancing value to clients, over the short term, this will correct. We already have a large pool of audit talent. We are looking at consolidating and not dramatically increasing the headcount. Audit will remain the primary identity of our firm and, with our focus on quality, we will retain our leading position in the overall  space.”

Impact
According to Akhil Bansal, deputy chief executive of KPMG India, with European audit rotation also coming into effect, the impact of Indian mandatory company rotation regulations will be felt around the globe. “The choice of the audit firm in India might influence the choice in Europe and other geographies,” he added. Bansal said the impact of mandatory firm rotation will also be felt on other services, including internal audit, due to stringent independence requirements. “It is important that the companies make their choice of audit firm early, since the best resources will be committed to clients who are first off the block,” he said.

Audit companies have been preparing for this, with investment in personnel, training and ramping up headcount numbers. For instance, the Grant Thornton network plans to double its auditor numbers across its network from 1,500 to 3,000. Vishesh Chandiok, national managing partner, Grant Thornton India LLP, said: “Several local Indian firms are very competent and the belief that only us international firms are the option is misplaced. Not all 50,000 firms for each company but certainly 50 firms can audit most companies, not only four of five firms.”

The EY group, which has 3,000 auditors across its network, added 400 over the past 12 months. “Internally, our focus continues to be on strengthening our teams with more hiring, greater investments in training, sharpening technical and industry capabilities  and increasingly, using more technology and, data analytic tools when performing audits,” said  Sudhir Soni, national leader, SR Batliboi, the Indian member-firm of EY Global.

Most audit companies have resorted to internal promotions and inducting of new talent to expand resources.

With the threshold for audit rotation being low, most audit companies are looking at tapping the unlisted private audit space in a big way. That’s a space the Deloitte network companies plan to play the game hard, indicated Tata. The client churn among audit firms is expected to last over the next two-three years, before it stabilises.

Source: http://www.business-standard.com/article/companies/audit-giants-see-dominance-waning-116062600777_1.html

Taxmen told to step up efforts for black money window success

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Income Tax Department has asked its officers to make “all out efforts” to attract potential declarants under the domestic black money window by assuring them of confidential and hassle-free disclosures.

In order to give wide publicity, the CBDT has also suggested putting up posters about the Income Declaration Scheme-2016, at places frequented by potential declarants, like club houses, posh markets, showrooms of high end products.

The four-pronged strategy prepared by the CBDT for the success of the scheme, includes single point contact to ensure confidentiality, setting up of facilitation centres across the country, giving wide publicity and monitoring at the highest level.

Finance Minister Arun Jaitley in Budget had announced a four-month window under the Income Declaration Scheme 2016. The scheme, which opened on June 1, allows domestic black money holders to declare ill-gotten wealth and come clean by paying a tax and penalty totalling 45 per cent.

“All out efforts are to be made to ensure the targeted taxpayers are well informed about the scheme and are adequately guided and facilitated for filing declarations so that they can avail maximum benefits under the scheme, which is under highest consideration of the government during the coming months,” the CBDT said in an office memorandum.

In order to ensure confidentiality of the declarants, the Central Board of Direct Taxes (CBDT) has said only Principal Commissioner or Commissioner Income Tax should act as a “single point of contact” for interacting with the declarants.

“Such Pr CIIT/CIT should be the one and only point of contact with the respective declarant. The idea is to ensure the declarant is not exposed to multiple persons in the office so that his confidentiality is not compromised and he is able to file the declaration in a hassle free manner,” it added.

The detailed action plan for the success of black money disclosure scheme was discussed at the annual conference of tax administrators last week.

In its strategy, CBDT has asked Principal Commissioners and Commissioners to provide all “procedural facilities” at the time of disclosure so as to avoid additional interaction with anyone else in the office.

“All records related to IDS-2016 must be kept in the personal custody of the respective Principal CIT /CIT officer in a safe and secure manner,” it said, adding officer with “good inter-personal skills” be deputed as ‘Facilitation Officer’ to answer queries related to the scheme.

In every city where Principal Commissioner is stationed, a “facilitation centre” in the nature of help desk may be opened for disseminating information about the scheme.

The CBDT has also asked its senior officers to hold “frequent meetings” with trade and industry bodies and professional associations, besides organising town halls and seminars.

In order to step up publicity for the scheme at local level, tax officers should disseminate information through posters in regional languages, stalls at local fairs.

In order to ensure monitoring at the highest level, CBDT said ‘IDS Banner’ will become functional next week on its website where the officers would upload their meeting details.

This will help compare the progress made in organising the campaign.

Last year the government came up with a similar scheme for persons having unaccounted black money abroad. Disclosures during that window were charged with a total tax and penalty of 60 per cent.

A total of Rs 4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30. At 60 per cent (30 per cent tax and 30 per cent penalty), the government got a net tax of Rs 2,500 crore from the declarations.

Source: http://www.financialexpress.com/article/economy/taxmen-told-to-step-up-efforts-for-black-money-window-success/294763/