'Goods and Service Tax (GST): A Road Ahead' by Financial Research Group (FRG), USMS

RBI’s Monetary Policy Committee gets three outside experts as members

By: Kartik Gupta

The government has named three outside experts as members of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), moving to a model followed in the developed world.

The Appointments Committee of the Cabinet on Thursday approved the names of Chetan Ghate, a professor at Indian Statistical Institute; Pami Dua, director at Delhi School of Economics (DSE); and Ravindra Dholakia, professor at Indian Institute of Management, Ahmedabad, as MPC members.

“Ghate and Dua were chosen because they are macro-economists of repute. Dholakia was selected because we needed somebody who has a broader view on issues related to agriculture, poverty and food inflation as the challenges before the committee will be diverse,” a person involved in the process of selecting the experts said on condition of anonymity. Ghate was part of the Technical Advisory Committee on monetary policy to RBI while Dua runs a leading indicator project at DSE.

The experts will serve for four years and are not eligible for re-appointment.

The members of the committee from RBI are governor Patel, deputy governor R. Gandhi, who is also in charge of the monetary policy, and executive director Michael Patra. The RBI governor will have a casting vote in case of a tie.

The MPC framework replaces the current system where the RBI governor and his internal team have complete control over monetary policy. While a committee advises RBI on monetary policy decisions, the central bank is under no obligation to accept its recommendations.

The US and the UK, too, have similar panels in place, with representation from both the central bank and the government.

The preamble in the RBI Act, as amended by the Finance Act, 2016, now provides that the primary objective of India’s monetary policy is to “maintain price stability, while keeping in mind the objective of growth”.

The appointment of the MPC may have implications for monetary policy, economists at Nomura Research, said in a note to clients on Thursday. “The coming 4 October monetary policy meeting could now be MPC based, although this is not yet confirmed and could be a challenge because of the very few days left before the next policy meeting. In our view, all three selected external members are reputed academicians and will be seen as credible and independent experts,” they said.

RBI is now required to publish a monetary policy report every six months explaining the sources of inflation and the forecasts of inflation for the period between six to 18 months.If RBI fails to meet the inflation target, it shall, in the report, give reasons for failure and remedial actions as well as estimated time within which the inflation target shall be achieved.

The MPC will strive to ensure that the inflation target decided by the government and the central bank is met. RBI has the mandate to adopt a retail inflation target of 4%, plus/minus 2 percentage points on either side, till 31 March 2021.

Allo! The WhatsApp killer??

By: Gursahib Singh Buttar

This week on Wednesday, 21st September, google launched its most awaited application for mobile platforms, Allo. Google first announced Allo back in May 2016 that it would be launched this summer. It has all the oldies in the Market sitting at the edge of their seats, because it’s new and user friendly features will give them all a run for their money.

While WhatsApp dominates the world of Android and iOS messaging alike, and has a user-base of a population of a few large countries combined, Allo might just be on its way to steal its spotlight. Although WhatsApp and all other apps offers a plethora of highly advanced features that is definitely making life easier for the smartphone user community, Allo does one better and introduces a bunch of ‘smart abilities’, where it can pretty much act as your personal virtual assistant, that will give it its edge.

 As Apple have the Siri, Microsoft have the Cortana, Facebook Inc. Messenger app is building a digital nest for AI-powered assistants. This AI-powered assistants is a new gateway to the internet, to advertising, to e-commerce, so market share is worth trillions of dollars over time to google and its rivals.

Google assistant app is just like any other messaging app but the smart digital assistant makes it stand out in the market. On a smartphone Allo monitors a user’s chat to suggest appropriate responses, using Google’s Smart Reply system. That tools was built a few years ago using a thousands of computers arranged in a deep neural network. Allo and the Google Assistant will learn what phrases people prefer over time, it will adjust to your typography.

With Google Allo, you can just type @google and ask about prospective restaurants or the particular song in the middle of the chat and it will provide you with the links to both in the chat- so it can be viewed and shared with your contact at your discretion. So it’s saving the user the trouble of temporarily closing the chat to find the relevant data, providing it on screen for both instead. Also it has auto response which work through machine learning technology and a photo recognition tool is incorporated for the same purpose.

The assistant also performs tasks that get it into e-commerce territory. Users will be able to book a restaurant through the assistant buy tickets for game or event, anything that involves getting things done more easily will be addressed over time. Looking over the market expectations, it can have a reasonable share in advertising industry of mobile devices.

Although WhatsApp is the current undisputed leader of the virtual-chat communications platform, there is a possibility that Google Allo will soon take the lead. 

GST Exemption at 20 Lacs.

By: Priyanka Yadav

The Goods & Services Tax (GST) Council has decided that businesses in the Northeastern and hill states with annual turnover below Rs.10 lakh would be out of the GST net, while the threshold for the exemption in the rest of India would be an annual turnover of Rs.20 lakh.

The Constitutional Amendment paving the way for the GST has a provision to accord special status to the Northeastern and hill states.

Is it good ?

“A higher threshold of Rs.20 lakh [as against earlier proposed limit of Rs.10 lakh] is also a good news,” Rajeev Dimri, Leader, Indirect Tax, BMR Associates, said in an e-mailed statement. “Many small scale traders and service providers would be saved from undertaking GST compliances and it also reduces a substantial burden for tax authorities to assess small time dealers.”

Other decisions

·        Mr. Jaitley said the Council had also reached consensus on another contentious issue, that of administrative control over indirect tax assessees.

·        The States would have sole jurisdiction over assessees (currently in the Value Added Tax [VAT] net at present) having a turnover of Rs.1.5 crore or less, while the administrative control of businesses with a turnover exceeding that limit would be jointly with the Central and State governments, Mr. Jaitley said.

·        The Council also decided that the existing 11 lakh service tax assessees will continue to be under the jurisdiction of the Centre. Since the GST will allow the States to also tax services, over time the revenue officials in the States will be trained after which they will begin assessing assessees in the services sector.

·        “Retention of administrative control over existing Service Tax assessees by Central authorities highlights an open mindset to facilitate smooth transition to GST,” Mr. Dimri said.

The Council would reconvene on September 30 to finalise the categories of goods and services that would be exempt from the GST. After that, it would meet on October 17, 18 and 19 to fix the slabs and rates at which the GST would be paid by consumers, Mr. Jaitley said.

Compensation formula

The compensation that the Centre would pay to the States for losses of revenue because of the transition to the new regime would be routinely, quarterly or bi-monthly, Mr. Jaitley said. The Council agreed to settle for 2015-16 as the base year for calculating the compensation.

On Thursday, Tamil Nadu called for ascertaining the quantum of compensation based on the average growth rate in the best three of the preceding six years. A formula would be set based on suggestions, Mr. Jaitley said.

HDFC-Most Valuable Indian Brand

By: Hitesh Sharma

HDFC bank, the largest private sector bank in India, has emerged as the India’s most valuable brand for third time in a row. As per the report released by WPP & Kantar Millward Brown, HDFC maintained its number 1 position with a brand value of USD 14.4 billion following a 15% growth over the past year. The third annual Brandz “Top 50 Most Valuable Indian Brands” kept Airtel with a brand valuation of $10 billion and State Bank of India with a valuation of $6.4 billion at Second and third spots respectively.

  

The total brand value of the top 50 brands in India saw a dip of 2%, mostly owing to a decline in brand value of state owned banks. Still, the total value of India’s most valuable brands has risen by 30% over the last three years, with top 50 brands now worth $90.5 billion from $69.6 billion in 2014.

Interesting highlights from the report:

o   Finance brands, 10 in the Top 50 accounted for 38% of the total brand value of the list.

o   Out of Top 50 Indian Brands, 38 were of Indian origin compared to 35 in 2015.

o   With 39% jump in brand valuation, Kotak experienced highest growth among all brands in Top 50 rank.

o   With the entry of Indigo and jet airways, the airlines category gains representation in the Top 50 for the first time.

o   The only retail brand that managed to secure a spot in Top 50 for the first time in 3 years was Reliance retail, signalling a strong growth in the sector.

o   Royal Enfield experienced a massive 35% growth which was never seen before an Indian motorcycle brand.

Reports like these are very useful not just from consumers point of view but also for marketers. In this age when competition is increasing and Consumer’s attention span is decreasing, a consolidated study like this helps them map a better strategy for their clients. 

Patanjali’s CEO debut in Forbes’ richest Indian list

By: Divya Vohra

Patanjali Ayurveda Limited is an Indian fast-moving consumer goods (FMGC) company and one of the fastest growing companies in India. It manufactures minerals and herbal products.

Baba Ramdev with Acharya Balkrishna established the Patanjali Ayurved Limited in 2006 with the objective of establishing science of Ayurveda in accordance and coordination with the latest technology and ancient wisdom.

Balkrishna holds more than 90 percent stake in the company and runs the operations as its managing director, while Baba Ramdev is its brand ambassador. In past interviews the CEO has claimed that he doesn’t draw a real salary. He is the man in charge of executing the company’s day-to-day operations, including expansion into new business such as setting up food parks and educational institutes. He also oversees 5,000 Patanjali clinics, the Patanjali University, and a yoga and ayurveda research institute.

According to a report in Business world, initially, the company had very low sale and visibility in market. But the brand’s fortune changed in 2011 when the company made an effective strategy unlike MNCs and took the route of retail units with its health centers. In the last four-five years the company has seen an exponential increase in sale. And hence Balkrishna’s personal wealth increased drastically.

On September 22, Balkrishna made his debut on Forbes’ 2016 list of the 100 richest people in the country at number 48. He entry into the Forbes list comes a few days after a Chinese magazine, Hurum, featured him in a similar set of ranking. Now, his estimate net worth is $2.5 billion.

Balkrishna Suvedi was born in 1972 in Nepal, later he and his parents migrated to India. His early education was at gurukul in Kalwa, Haryana, under Acharya Shri Baldevji, who was a member of the Arya Samaj, a Hindu religious sect. There he met Ramdev for the first time. The two moved to Haridwar, Uttarakhand, after Balkrishna received a postgraduate degree from Sampurnanand Sanskrit Vishwavidyalya, a university dedicated to the teaching of Sanskrit and ancient philosophy in Varanasi. In Haridwar, they opened Divya Pharmacy and began selling ayurvedic medicines and herbs for common ailments. In 2006, they established the Patanjali Ayurved Limited.

Over the time the company gave some 400 stock keeping units such as noodles, soaps, shampoos, etc to the market under the Patanjali brand, competing with almost every consumer good company in the county. They also invested in food parks to grow herbs and plants and building a large retail network to sell goods. By 2020, the company is expected to generate Rs. 20,000 crore in turnover.

Despite Baba Ramdev’s claim that the aim of company is not making profit, Patanjali had done it. Balkrishna will have to indeed thank the rising pop patriotism for his good fortunes. And this goes against the very basis of a free market economy.  

India To Be No.2 Market For Amazon After US

By: Simarjeet Singh

Amazon is the largest internet-based retailer in the world having separate retail websites for the United States, the United Kingdom and Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India and Mexico.

According to the news coming out from the amazon, India could become the second largest market for amazon after US, analyst from bank of America Merrill Lynch believe. Given Amazon CEO Jeff Bezos interest in Indian Market, they feel, India could see more investments – over the budgeted $5 billion - management focus and import of some best practices from the US

“On our estimates India could potentially generate 21% of Amazon’s international GMV; $81 billion in GMV and $2.2 billion in operating profit by 2025. In our view, if other Indian e-com companies do not continuously innovate and receive timely adequate funding, then we see potential for Amazon to emerge as the No. 1 e-com platform in India,” the analysts wrote.

Amazon could also become Second largest player in the online market in India after Flipkart by 2019.Flipkart is the current market leader in india and even in terms of customer satisfaction, reports indicate that Flipkart is way ahead of its competitors either it is Amazon or Snapdeal.

Bank of America estimates market leader Flipkart's market share to be 43%, while the second-largest Amazon garnered 28%. Snapdeal.com, owned by Jasper Infotech, held a 12% share at the third position. Bank of America expects Amazon's market share to improve to 37% by 2019, from 21% in 2015, and predict it to be a close no. 2 behind Flipkart.

Ever since the Amazon become operational in India, Amazon has enjoyed the brand image it has created over the years globally and now Amazon is building reliability of service among consumers, concentrating on offering superior customer service and wider assortment of products.

Amazon has also tied up with Vakrangee, a franchisee with strong presence in rural/underdeveloped areas to fortify its rural presence at relatively lower investments.As of June this year, Amazon is already active in more than 1,000 outlets, with plans to increase to 75,000 outlets by 2020.

Banks log-in to E-commerce

By: Himanshu Modi

Banks got a wake-up call when the Indian retailers aspired to play the role of a bank & applied for payments bank license after capturing the consumer’s wallets & payments business. The entry of Paytm, a mobile payments facilitator, into retailing as a marketplace with the backing of China's Alibaba has made banks like Axis Bank, State Bank of India (SBI) and HDFC Bank look at ways to ensure the likes of Flipkart and Snapdeal do not eat into their share. Hence, the Indian banks are now opening up to possibilities dawning on them. The E-commerce players are betting on the Unified Payments Interface (UPI) to replace the cash on delivery as the preferred mode of payment. But bankers such as SBI, Axis & HDFC have created & enhanced their mobile wallet applications in the recent times to help the consumers get multiple offers from leading E-commerce players to capture the urban Indian consumers on the move. Now a tap on the app can throw up a list of restaurants & deals or jewellery shops in the vicinity in augmented reality. Banks have now realized that there is no point throwing a hundred e-mails with exciting offers to customers that too at odd times which may not even be read by them. Location specific deals increase the chance of actual consumption. Banks have also realized that single-click authentication, faster checkouts, along with multiple things to buy from, come to the bank application only.

But to become a marketplace, banks have multiple hurdles, like they are heavily regulated & doing anything beyond banking is very difficult. It may be easy to tie up with merchants who are already on digital platforms, but full-fledged retailing requires an enormous build-up of a logistics platform which is difficult for banks to manage. Banks cannot enter into selling of physical merchandise because it involves a whole new idea around logistics, which is going to be a nightmare. Banks will end up burning cash, which the RBI will not entertain. Also the success of this marketplace model for the banks depends on the number of customers the bank has. Yes Bank, in existence for about a decade, partners with marketplaces rather than compete with them, including integrating with PhonePe, an arm of Flipkart. Even Kotak Mahindra Bank has tied up with the likes of Flipkart and GoIbibo to facilitate smooth pay ments through its applications. 

The battle for customers has only just begun between Banks & E-commerce marketplaces. While the banks have deep financing options, marketplaces face increased scrutiny after heights of valuation, some even higher than some banks.

Ensuring Continuity: Urjit Patel as new RBI Governor

By: Prateek Godara

After months of speculation, the Appointments Committee of the Cabinet (ACC) on 20^th August 2016 announced the appointment of Reserve Bank of India Deputy Governor Urijit Patel as successor to Governor Raghuram Rajan. The appointment was made based on the recommendation of the Financial Sector Regulatory Appointments Search Committee (FSRASC), headed by the Cabinet Secretary P.K. Sinha.

Institutional Investors both domestic & foreign have welcomed the appointment of Dr Urjit Patel as successor to Dr Raghuram Rajan as it signals continuity in the monetary policies pursued by the RBI.

It was Dr Patel's path-breaking report that has helped India join the league of developed nations where adoption of flexible inflation targeting has helped anchor inflationary expectations and brought about a structural control over inflation for which Dr Rajan was greatly applauded.

 

The main Expected areas for the new governor to work on:

Inflation-targeting

The appropriateness of inflation-targeting in India is still questioned.

As agriculture products, which reacts very little to monetary policy, makes up half of India’s inflation basket, and a routinely loose fiscal policy has threatened to blunt monetary decisions in the past.

At the same time, the Government has given fiscal consolidation precedence over growth, thus providing a more conducive environment for effective monetary policy. Further support to iron out structural constraints of physical and soft infrastructure is also required to ensure supply-side don’t change disinflationary trends.

Until these problems are solved, there is a risk that an inflation-targeting RBI might tend to run a tight monetary policy during phases of food price shocks. Which could prove to be a big problem if the food price shock coincides with a phase of weak aggregate demand and subdued growth. Hence, RBI will need to be adaptive, that is, to differentiate between supply-induced shocks to inflation and demand-driven pressures so that they don’t harm growth

New Framework

The decision to retain the 4 per cent CPI inflation target (2-6 per cent range) for the next five years points towards policy continuity. It also lowers concerns that growth would take precedence over inflation. While the decision to maintain these targets is encouraging, achieving the 4 per cent target on a sustainable basis will be a challenge.

CPI inflation fell to 4.9 per cent in FY16 from 6 per cent the year before and 9 per cent the year before that. But the downward move was largely due to cyclical factors — global disinflation and easing rural wages at home. In recent months, inflation has begun to creep up again (at 5.9%). The structural hurdles of poor infrastructure, rain/groundwater dependency and agricultural bottlenecks must be addressed if inflation is to continue further towards the Government’s 4 per cent target. The market also awaits clarity on how the incoming governor and the new committee will view this new inflation target. How it reacts to any possible overshoot from the 4 per cent mid-point also remains an open question.

At present, it is assumed that the officials will view 5 per cent as a step target this year and move towards 4 per cent next fiscal. Working with this assumption and a conservative governor, set against a background of firm April-July inflation numbers, the odds of a rate cut in October is low.

December will be the next window, hinging primarily on the inflation outlook and the appointment of a dovish policy committee. Further, it is expected the rates to remain steady as the bulk of the disinflationary phase has passed and full-year inflation looks set to miss the 5 per cent target. Apart from the volatile food component, demand dynamics will also be important to monitor ahead of an increase in public sector wages and a pick-up in rural demand due to a good monsoon.

With targets in place, Patel’s views will be important to get a clearer sense of policy direction. Inferring from the tone of his monetary policy report back in January 2014 and his sparing comments since, he appears to be largely aligned with Rajan’s views. This lays the ground for a cautious approach towards rate cuts, while being critical of excessive public spending. Thus, one should expect the new governor to push for active fiscal management and structural reforms to improve the effectiveness of monetary policy on price expectations.

Unknown Quantity

While much of his views on mainstream policy can be inferred from past academic papers and occasional public comments, little is known of his thoughts on other aspects, including plans to deal with banking sector stress and financial sector reforms. As a governor, clear and frequent communication on policy and other related issues will become important.

Besides mainstream policy, the new governor will also take office in the midst of the FCNR maturities, where some short-term impact on balance of payments are expected, strain on domestic liquidity conditions and a temporary bout of rupee volatility. However, active liquidity management and tapping available tools are likely to ensure that this impact does not persist. Measures to tackle banking sector stress will be important, especially amidst signs that there is more pain ahead.

Apart from the change of leadership in the RBI, the make-up of the policy committee will also be important.

While the committee marks a shift towards collective decision-making, the known two (of six) members fall in the relatively cautious camp. If the rest of the panel carries shades of the present technical advisory committee, the overall policy bias would be more balanced.

It is worth remembering that Raghuram Rajan took office in the midst of the US taper tantrums when the rupee had depreciated to record lows and foreign investors sold local assets heavily. This required him to immediately take corrective measures. The new governor, by contrast, will assume responsibility in a relatively calm environment, with the emphasis likely to be on policy continuity and maintaining macro-stability.

A step into the international markets: SpiceJet partners with Hahn Air.

By: Anjali Gupta

SpiceJet , the country's often preferred airline company, has yet again come up with a way to increase its business and elevate customer convenience. On Sep 12 , SpiceJet presented its global market strategy to enter into international business, initially targeting on Europe, by partnering with Hahn Air.

Hahn Air is a German scheduled airline founded in 1994 and has specialised in distribution services for other airlines since 1999. As the world's largest company of its kind, Hahn Air covers 190 markets and cooperates with more than 300 air, rail and shuttle partners and over 95,000 travel agencies. Its network of HR Ticketing Centres includes 5,000 agencies worldwide that receive additional benefits.

The partnership which will enable the airline to now sell its flights via the code H1 on Hahn Air’s HR-169 ticket, thus giving it a presence in all Global Distribution Systems (GDS) while easing passengers’ travel worldwide. SpiceJet is trying to benefit from Hahn Air's economic of scale to increase its revenue.

This partnership may also bring better traveling experience for the passengers as the partnership is expected to elevate customer convenience, improve service procedures and interline payment.

Samsung Galaxy Note 7 Fiasco

By: Hitesh Sharma

The world’s largest smartphone maker is in news again. But this time around not for a good reason. The latest addition to their flagship series, Samsung Galaxy Note 7, turned out to be a game changer in a different way than Samsung would have expected. Galaxy note 7’s battery has been exploding for users globally.

Impact

Just two weeks into the launch and world has already witnessed more than 2 dozen cases of battery explosion. Following this fiasco Samsung issued a global recall of Note 7 and promised to replace every unit already sold. Samsung’s decision to replace some 2.5 million Galaxy Note 7 phones that were already shipped to retail partners and customers will cost Samsung up to $1 billion. Samsung has seen 11 billion euro wiped off its market value after this recall.

Also, the sales projections for Note 7 device have been cut from 14 million units to 10 million units. This could have a huge financial impact but these numbers are almost insignificant for a company as large as Samsung. The major task for Samsung will be to limit the damage to its brand image.

Samsung’s loss could be Apple’s gain?

Apple and Samsung are two of the biggest players in the smartphone world and fierce competitors. Samsung’s Note 7 recall is a godsend opportunity for apple as it coincides with the Iphone launch. Apple could not have find a better time to unveil Iphone 7. Although Samsung has promised to replace galaxy note 7 units, the damages might have already been done. Users may not wanna go back to Note 7 which in turn will be fruitful for apple. Hence , Apple is set to reap the benefits of samsung’s unfortunate loss.

What’s next ?

Samsung was looking to gain a headstart over its rival but, the decision led to a devastating compromise on quality. The acknowledgement of mistakes on their part and quick pull out of the faulty devices was a positive stroke by Samsung to limit the damage. The best Samsung could do in this situation is to be very transparent in their communication and marketing.

Reliance Communications and Aircel Merger

By: Gursahib Singh Buttar

Anil Ambani's Reliance Communications (RCom) on Wednesday announced a merger of its wireless telecom businesses with Aircel, which will create India's third biggest telecom operator in terms of subscriber base. Ownership will be divided in half to RCom and to Aircel's parent, Malaysia's Maxis Communications. RCom and Aircel had been talks for the merger since December 2015.The deal will help reduce Reliance Communication's debt by Rs. 20,000 crore, or more than 40 per cent of its total debt, while Aircel's debt will fall by about Rs. 4,000 crore, the companies said.

As of end of March 2016, Reliance Communications had a net debt of Rs. 41,362 crore, according to latest company data whereas Aircel had Rs. 18,500 crore of debt as of 2013, according to rating agency ICRA. RCom being India's fourth biggest telecom operator in terms of wireless subscriber base with 9.87 crore customers while Aircel ranks sixth, with 8.8 crore subscribers. The combined entity will surpass Idea Cellular as number three in the sector in terms of subscriber base although it will still lag in terms of revenue. Bharti Airtel is the current market leader, followed by Vodafone.

The merger is sketchy on details as the all-important detail of how much equity the two companies plan to bring in to the merged entity has been left unanswered. In a meeting with investors, they provide some insights on details but the investors didn’t like what they saw. Although for future company’s capital needs they are in talks with Global investors to raise about a billion dollars.

The merged entity will have a net worth of Rs 35,000 crore and asset base of Rs 65,000 crore. It will hold 451 MHz of spectrum pan-India -- Aircel's 187.6 MHz, Sistema Shyam's 39.4 MHz and Reliance Communication's 224 MHZ. This forms 19.3 per cent of total spectrum. According to RCom, this is the second-largest spectrum holding among all operators and spreads across 448 MHz, 850 MHz, 900 MHz, 1,800 MHz and 2,100 MHz bands.   

Transaction is likely to be closed by in six to eight months in 2017 and will need regulatory, court and shareholder approvals. India’s telecom industry is expected to see a consolidation wave as smaller companies find it difficult to cope with high spectrum costs and inability to provide nationwide services at a price that makes business sense.

And after the new entrant Jio, it will be much more difficult for small companies to stay in market.

Now looking at this merger, unless the company clears the air about the debt that will sit in the new entity and how they plans to infuse equity, there is little reason for investors to get excited about the merger announcement. This merger is just another way of surviving in the market, they can become better only if the two partners bring further cash into the business and they buy a reasonable amount of 4G spectrum so as to compete with the other market giants.

Snapdeal Invests 200cr on Rebranding

By: Simarjeet Singh

Snapdeal was launched 6 years ago on 4^th February 2010 as a daily deals platform by Kunal bahl, a wharton graduate and Rohit bansal,an alumnus of IIT Delhi.It ascended in september 2011 to become a online marketplace.Snapdeal has flourished over the years to become one of the largest marketplace in india

Seeking to capture the essence of a inspiring and confident india,snapdeal unveils its new brand identity that is “Unbox Zindagi”.It has reportedly invested about $30 Million (INR 200 Cr) for the brand overhaul.Snapdeal also launched a new logo,the logo consists of two arrows forming a box that profess to convey snapdeal’s Journey as partners and enablers,reflecting progress-onwards and upwards.The new brand identity has been rolled out at all the possible touch points:on the mobile site,app,website and through all brand communication.A campaign introducing the rebranding has started on all digital media like facebook,twitter,youTuBe and instagram and also in the form of TVCs,print,outdoor.

Highlighting the philosophy behind the rebranding, Kunal Bahl, co-founder and CEO, Snapdeal said, “India is transforming rapidly and millions of Indians believe that the best days of their lives are ahead of them. Their aspirations and desires are based not on where they come from but where they can reach. Snapdeal will be the platform that will enable users to unlock their aspirations. That is why we are moving the narrative to the users and to their desire to upgrade to a better life. With this new positioning, we also focus on the next phase of our growth, as we seek to engage with the next 100 Mn online shoppers from all parts of an increasingly connected India.”

Hoping to exploit the Diwali season as much as it can,Snapdeal which is backed by investors such as Japan’s Softbank,China’s Alibaba Group Holding and Taiwan’s Hon Hai Precision Industry -is focusing on a marketing campaign to boost up consumer awareness about the discounts and offers provided by snapdeal

Earlier this month, the company said it had lined up 10 billion rupees of collateral-free loans for its sellers to enable them to stock up for Diwali.

INDIAN RAILWAYS EXPLORING NEW AVENUES TO EARN RS 1,000 CRORE THIS FESTIVE SEASON

By: Himanshu Modi

The Indian Railways, country's largest transporter, with a network of more than 7,000 railway stations, runs more than 12,000 passenger trains and is installing one lakh digital screens at 2,000 stations. It is the first time that Railways is throwing all its assets open to advertisers to run outdoor campaigns during the festive season. Almost 50 Rajdhani and Shatabdi trains will be made available to advertisers. The national transporter has hired Ernst & Young as its consultant for the same.

Indian Railways expects to mop up Rs 1,000 crore through train advertisements in the festive season between October and December and has lined up its premium trains for ad-wrapping to cash in on the advertising spree about to be unleashed by the ecommerce, FMCG (fast-moving consumer goods) and auto companies.

The Indian Railways carry two crore passengers every day and according to industry estimates, advertisers-mostly driven by ecommerce and auto companies, go full hog on their ad spend for Diwali season. Brands spend almost 25-30% of their advertising budget during this period. Online retail giant Snapdeal has already kept aside Rs 200 crore as advertising budget to be spent during Diwali.

The screens will be sold along the train wraps as a part of the advertising package. There's no better outdoor mass media product for advertisers as Indian Railways as it gives them a pan-India presence.  Railway minister, Suresh Prabhu added that the Indian Railways is targeting to get almost 20-25% of its revenue from non-fare segment, dominated by advertising.

IMPACT ON GST ON THE ECONOMY- A Broad Perspective

By: Kartik Gupta

The Goods and Services Tax (GST) - the biggest reform in India’s indirect tax structure since the economy opened up 25 years ago at last looks set to become a reality. The Constitution (122nd) Amendment Bill, which came up in Rajya Sabha on 3rd August on the back of a broad political consensus was subsequently passed by the Lok Sabha on 8th August. The GST aims to subsume the current tax regime (which is riddled with a series of indirect taxes) with a single comprehensive tax, bringing it all under a single umbrella. The bill aims to eliminate the cascading effect of taxes on production and distribution prices on goods and services which is caused by different charges by union and state government respectively.

Key Benefits:

1. India becomes a single market, reducing cost and time on movement of goods.

2. More tax revenues for government yet lower tax burden for industry.

3. Reduction in paperwork & time wasted in paying taxes.

4. Increased exports between 10-14%

IMPACT on Various Sectors.

AUTOMOBILES

With no embedded tax costs on inter-state movement of goods (CST or non-creditable entry taxes), automakers would have greater flexibility to re-design their supply chains and thus, optimize logistics costs. Automobile exports shall also benefit with the elimination/ reduction in embedded tax costs.

However, the main issue facing the auto sector is the ambiguity regarding rate of GST - whether there would be a differential rate for mid-segment/ luxury-segment cars (as recommended by the CEA's report on GST rates). If yes, how would the segments be defined and what would be the change in the rates vis-à-vis small cars or the RNR (Revenue Neutral Rate), is the big question on industry's mind. Also, the model GST law is silent on the treatment of used-car sales which is another important area where clarity is required.

INFRASTRUCTURE

With the uniform tax, developers will have free input credits on GST paid for services and goods purchased by them which will reduce cost and can be passed as reduction to buyers. It will benefit real estate sector by ensuring a uniform tax structure and improve tax compliance by developers. It looks at bringing in greater transparency for the sector and may minimize unscrupulous transactions. GST will have a cascading effect for the home buyers, as developers with more margins in their hands will be able to restructure the cost of the products in favour of consumers.

OIL AND GAS INDUSTRY

The Oil & Gas Industry would largely be negatively impacted by the introduction of GST; the reason being that 5 petroleum products (ie crude, natural gas, ATF, diesel and petrol) are excluded from the coverage of GST for the initial years while the remaining petroleum products (for eg kerosene, naphtha, LPG, etc) are covered within the coverage of GST. Because of this peculiarity, this industry would be pained to comply with both the current tax regime as well as the GST regime.

MEDIA AND ENTERTAINMENT TAX

Since the levy of entertainment tax will remain the right of local bodies, chances are that under the GST regime, cinema tickets prices may come down though experts remain skeptic on the overall impact. DTH and cable television services are expected to become cost effective under the GST regime. But the quantum of DTH and cable bill will depend on the levy of entertainment tax.

FMCG

Consumer goods are expected to become cheaper under the GST regime as the current rates of taxation are in the range of 23-25 per cent while the GST rate is expected to be much lower. GST will also address the challenge of tax leakages in supply chain when procured products through contract manufacturing.

In order to prepare for the implementation of GST, the companies need to understand the GST policy development and its implications to scenario planning and preparing a transition roadmap.

Dell’s $60 Billion Merger with EMC

By: Gursahib Singh Buttar

Dell Inc. on Wednesday completed its $60 billion deal to acquire EMC Corp., the largest technology merger in history. The deal, announced Oct. 12, took nearly 11 months to complete. What makes this deal even more interesting is that Dell, with a valuation of around $25 billion, was by far the smaller fish at approximately half the size of EMC. The merger was extraordinarily complex. Dell, which is privately held, purchased not only EMC but its Byzantine federation of wholly and partially owned subsidiaries.

Those include cybersecurity firm RSA Security LLC, software-development company Pivotal Software Inc., cloud-software company Virtustream and virtualization software vendor VMware, which will remain public. Combining Dell and EMC gives the companies an opportunity to take advantage of complementary strengths in sales. Dell, which ranks third in international PC sales, according to IDC, traditionally has appealed to smaller and midsize companies. EMC, IDC’s No. 1 storage vendor by sales, has made inroads in large enterprises.

Dell has been looking to move away from the server business, which has grown commoditized in recent years and get deeper into enterprise with private cloud computing and storage where it could compete with IBM, HP and other traditional vendors, as well as Pure Storage and newer vendors. There’s no getting around the fact that this is a huge gamble on Dell’s part, forcing it to find a new financial partner to make the deal happen, but the fact is this is the only way it could get big enough to compete in this space.

Together, the two companies can presumably sell far more of Dell’s products to EMC’s customers, analysts say. Many if not most mergers actually destroy value, and merging two companies that have had trouble renewing and reviving themselves rarely succeed when combined. The merger is thus extremely risky. EMC and Dell are in complementary segments of the computer industry and if all goes well the two companies might be more valuable together than apart. 

With the supply chain that they have and the go-to-market strength and the scale, they are very well positioned both in the new areas of technology and in the existing areas of technology today. The new company, to be named Dell Technologies, will aim to be a one-stop shop for information technology sold to business. The company employs about 140,000 people globally and will maintain operations in Hopkinton, Mass., where EMC was located. With $74 billion in revenue, Dell Technologies will be the world’s largest privately controlled tech company.

Integration with 'Digilocker'

 By: Hitesh Sharma

The central government on Wednesday announced the integration of digilocker with traffic department. Once this system is in place, It will spare people the trouble of carrying licences and vehicle papers.This digilocker is a part of digital india campaign and will discourage the use of paper in interaction between government departments and public.

So What's Digilocker ?

It is a cloud based platform that enables citizen to store their important douments online. These documents can then be accessed anywhere, anytime. The service was launched last year by the government under digital india initiative.

The app is available for free on Android playstore. It provides 1 gb of storage and requires Aadhar for authentication.

How it will work ?

Till now only traffic department has integrated itself with this service but soon enough other government departments will follow the same suit.

After downloading app and uploading the necessary documents. If at any point of time, the need arises and asked for a document, a copy of your license on digilocker app can be shown to the policeman who wants to inspect your driving licence or other documents. No other physical proof is required.

The enforcement official will also have the app to seamlessly verify documents from the National Register of the Ministry of Road Transport and Highways which contains data of licences and documents issued by all states.

Government's Intent

Union road Transport minister Nitin gadkari launched the integration and said "The system will not only eliminate corruption, but is also a step towards realising the prime minister’s Digital India drive. It will be at par with the physical certificates and documents as per the IT Act, 2000. Air travellers can also use this at airports as valid identity documents." With this initiative the government has taken another step in digitizing the nation.

 

YES BANK SAYS NO TO SHARE SALE AFTER SCRIP TANKS

By- Divya Vohra

Yes bank scrapped its $1-billion share sales within 24 hours of launch. The major reason behind this were an innocuous provision in the Securities and Exchange Board of India’s regulations of 2015 on listing obligations and disclosure requirements (LODR) and poor investor appetite as investors were not able to comprehend QIP (Qualified Institutional Placement). (QIP is a capital-raising tool, primarily used in India and other parts of Southern Asia, whereby a listened company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares to a qualified instructional buyer).

Yes Bank was among the top losers in the BSE with its shares falling 5.32% to end at Rs 11,330.65. In two days bank’s share lost 9.43% of its value.

Initially the demand was good but later it declined. After such a drastic change investors refused to put money in it and in result bank scraped it.

This is the first such cancellation of an ongoing share sale by a private sector bank in recent memory due to lack of demand, while other banks have been successful with their sales receiving strong response.

YES Bank CEO Rana Kapoor told CNBC that the offer was fully subscribed at 4 a.m. in India on Thursday, but he was advised to keep it open for three days before the regulator would allow the shares to be priced and allocated. That inordinately long window rattled bidders, especially after the stock fell as low as 1,321.25 rupees, below the minimum 1,350 rupees new share sale price.

Yes Bank can always claim that it was merely following the Securities and Exchange Board of India’s guidelines on not unfairly diluting current shareholders. But in that case, it would have done well to eschew the hubris of trying to raise $1 billon, half the bank’s existing equity, in a single shot from investors who may not be entirely convinced it deserved to be bought at more than four times last year’s book value.

Yes Bank might continue to outperform its rivals, giving investors many good reasons to take a punt on it. 

"The best iPhone we have ever created. This is iPhone 7"

By: Anjali Gupta

The unveiling of iPhone 7 by Tim Cook has created a buzz in the markets. Apple claims to have created the most innovative phone of its times but the critics' reviews tells us a different story.

·        The iPhone 7 comes with a 4.7-inch display with 750x1344 resolution at a pixel density of 326 pixels per inch.

·        It is powered by quad-core Apple A10 Fusion SoC and it comes with 32GB/ 128GB/ 256GB storage options.

·        In terms of camera, the Apple iPhone 7 sports a 12-megapixel primary camera and a 7-megapixel front shooter for selfies.

·        As usual, Apple has not revealed iPhone 7 RAM and mAh value of the iPhone 7 battery.

The iPhone 7 Plus is similar to the iPhone 7 in terms of specifications, but it comes with a bigger, 5.5-inch 1080p display and it packs dual 12-megapixel sensors on the rear. The iPhone 7 Plus RAM was tipped to be higher than iPhone 7 before the leaks, but there's no official confirmation yet. The iPhone 7 Plus also likely packs in a bigger battery than the iPhone 7.

iPhone 7 is priced at 60000Rs. for the new 32 GB base storage model , whereas, in US the same phone is priced at $649 ( nearly 43000Rs.). Apple has completely done away with the 16 GB variant. The 128 GB variant is priced at $749 and the 256 GB variant is priced at $849.

iPhone 7 plus starts at $769 for the 32 GB storage model , $869 for the 128 GB model and $969 for 256 GB .

The phones will be available to customers in India beginning Friday, October 7 .

Apple has introduced two features to the newest iPhone - it has now become dust resistant and water resistant. It also launched to new black colors - Jet Black and Black.

The iPhone 7 headphone jack is the hot topic of the town. The newest version does not include any headphone jack , instead it comes with Lightning Ear Pods. The box includes adaptor for standard headphones and wireless Air Pods are available at extra cost.

Though many of the customers do not find anything completely new in the new iPhone 7 , Apple still manages to keeps it's market and keep it's customers interested