Intellectual Thoughts by Sanjay Panda


Evonik to Acquire Monarch Catalyst of India



Evonik Industries   to strengthen its global catalysts business, has signed an agreement with Monarch Catalyst Pvt. Ltd., India to acquire 100% of the company’s shares. The transaction is expected to close during the first half year of 2015 subjected to  regulatory approvals.


Evonik with its Business Line Catalysts is a global leader in producing specialty catalysts, custom catalysts and catalysts components for the Life Sciences & Fine Chemicals, Industrial & Petrochemical and Polyolefines market segments. This bolt-on acquisition in India with annual sales in the low double-digit million € range complements Evonik’s leading positions in activated base metal catalysts and precious metal catalysts. Monarch’s global oils & fats hydrogenation catalysts business is a broadening of the Evonik catalysts portfolio. Monarch Catalyst has about 300 employees.

Indian Budget Highlights ( FY 2015-16)



PERSONAL INCOME TAX

  •    No revision of income tax brackets.
  •  Limit of deduction of health insurance premium increased to INR 25,000 from 15,000; limit increased to  INR 30,000 from 20,000 for the elderly People.
  •  People aged above 80 and not covered by health insurance to be allowed deduction of  INR 30,000  for medical expenses.
  •  Additional deduction of  INR 25,000 for the disabled.
  •  Limit on deduction for contributions to pension fund and new pension scheme increased to 150,000  from 100,000.
  •  Additional deduction of 50,000 rupees for contribution to new pension scheme under section 80CCD.
  •  Monthly transport allowance exemption doubled to 1,600.

FISCAL DEFICIT

  • Fiscal deficit seen at 3.9 percent of GDP in 2015/16.
  • Remain committed to meeting medium term fiscal deficit target of 3 percent of  GDP. ( By FY 2017-18).

GROWTH

  • GDP growth seen at between 8 - 8.5 % y/y.
  • Expects consumer inflation to remain close to 5% by March.

REVENUES

  • Revenue deficit seen at 2.8 percent of GDP.
  • Non tax revenue seen at 2.21 trillion rupees.

MARKET REFORMS

  • Propose to merge  FMC  with SEBI.
  • Bankruptcy code to be brought by FY 2015-16.
  • Public Debt Management Agency (PDMA) bringing both external and domestic borrowings under one roof to be set up this year.
  • Proposes to introduce a public contract resolution of disputes bill.

POLICY REFORMS

  •  To enact a comprehensive new law on black money.
  •  Propose to create a social security system for  all Indians.
  •  To raise visa-on-arrival facility to 150 countries from 43.

GENERAL ANTI-AVOIDANCE RULES (GAAR).

  • Government defers rollout of anti-tax avoidance rules GAAR by two years.
  • GAAR to apply prospectively from April 1, 2017.
  • Retrospective tax provisions will be avoided.

TAXATION

  • To abolish wealth tax.
  • Replaces wealth tax with additional 2 pct surcharge on super rich.
  • Proposes to cut Corporate tax  to 25 % over next four  years from 30%.
  • Net gain from tax proposals seen at 150.68 billion rupees.
  • Expects to implement goods and services tax by April 2016.
  • To reduce custom duty on 22 items.
  • Basic custom duty on commercial vehicle doubled to 20%.
  • Proposes to increase service tax rate and education cess to 14% from 12.36 %.

IMPORT TAX

  • Import tax on iron and steel increased to 15 %from 10 %.
  • Import tax on metallurgical coke increased to 5 % from 2.5 %.
INFRASTRUCTURE

  • Investment in infrastructure will go up by 700 bln rupees in 2015/16 over last year
  • Plans to set up national investment infrastructure fund ( NIIF).
  • Ports in public sector will be encouraged to corporatize under Companies Act.
  • Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects.
  • 5 New  "ultra mega" power projects for 4,000 MW each to be set up.
EXPENDITURE

  •  Plan expenditure estimated at about 4.65 trillion rupees.
  • Non-plan expenditure seen at about 13.12 trillion rupees.
  • Allocates 2.46 trillion rupees for Defence.
  • Allocates 331.5 billion rupees for health sector.
SUBSIDIES
  • Food subsidy seen at 1.24 trillion rupees
  • Fertiliser subsidy seen at 729.69 billion rupees
  • Fuel subsidy seen at 300 billion rupees
  • Major subsidies estimated at 2.27 trillion rupees.

31 Minerals to be notified from major to Minor in India



The Ministry of Mines in India  will notify 31 additional minerals as minor minerals. These minerals are currently under the list of major minerals. Notifying them as minor minerals will give regulatory and administrative powers to the State Governments over these minerals. This is being done with the intention to devolve more power to the States, and consequently expedite the process of mineral development in the country.

After being notified as minor minerals, State Governments can frame rules, prescribe rates of royalty, contribution to District Mineral Foundation and decide on the procedure for granting mineral concessions for these 31 minerals. These minerals account for over 55% of the total number of leases and nearly 60% of total leased area. Further  in order to strengthen the mineral inventory database of India, the Government is planning to notify PSUs to carry out prospecting work and  the Geological Survey of India has plans to scale-up exploration operations.