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BW Businessworld

Fresh Hope For Stalled Tax Regime

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Hope it works. The appointment of Sushil Kumar Modi as chairman of the empowered panel of state finance ministers on goods and services tax (GST) is expected to re-energise efforts to bring consensus in the implementation of the new tax system. Modi, deputy chief minister and finance minister of Bihar, will now head centre-state endeavours on GST execution. A BJP veteran, Modi holds a commanding position across the political spectrum, and it was Delhi chief minister Sheila Dikshit who proposed his name. The Congress, especially finance minister Pranab Mukherjee, was keen on getting Modi on board as it hopes the move will ensure support from BJP-ruled states in building a consensus on GST. That said, India may not move to GST next fiscal, as many expect. Negotiations on structural issues still have a long way to go.

Oil Concerns
Is it bad, or is it not? Iran will stop shipping 400,000 barrels of oil a day to India next month, courtesy a seven-month-long payment dispute. But the oil ministry says there is nothing much to worry. Petroleum minister S. Jaipal Reddy says India has a back-up plan, even though reports say refiners such as MRPL, IOC, Essar Oil, HPCL and BPCL are already searching for new suppliers — Saudi Arabia, for one. Since last December, India has not paid Iran for crude after the Reserve Bank of India stemmed a clearing mechanism, apparently under the US pressure to crack down on doing business with Iran. India already owes Iran about $5 billion. Even though the market looks unaffected by the development, and the snap in supply may not hit us in the short-term, experts say there is some cause for concern in the longer term.











TOUCHDOWN: US Secretary of State Hillary Clinton (left) was in India last week; and space shuttle Atlantis completes final journey (AFP)

‘Vanakam' Hillary
US Secretary of State Hillary Clinton last week paid a maiden visit to Chennai, where several US companies have investments. Clinton described Tamil Nadu as one of the "most indu-strialised, globalised and educated" states in India. She called on Tamil Nadu chief minister J. Jayala-lithaa. "The US is betting on India's future," said Clinton, in a meeting at the Anna Centenary Library. "The opening up of India's markets will lead to a more prosperous India, Asia and beyond the Asia-Pacific region." Interacting with women's forum members, she said the US and India will set up a programme at Bangladesh's Asia University of Women to train more women to be local leaders.

Space Matters
After 33 flights and 125,935,769 statute miles, the iconic US space shuttle Atlantis ended its final flight safely on 21 July at the Kennedy Space Center in Florida. And with it ends a three-decade long US dominance on space programmes.

Nasa, the US space agency, will not be sending another human spaceflight for an indefinite period. The US space shuttle story has blown off an estimated $210 billion so far. The country will now have to rely on other countries to launch astronauts. The retreat of Atlantis is likely to render 3,200 of the programme's 5,500 contract workers jobless. But the move also opens up avenues for a new commercial space transportation industry.

Smart Job
Steve Job's Apple this week unseated Nokia as the world's top smartphone seller. While Nokia sold 16.7 million smartphones in second quarter of this fiscal, over 20 per cent less than the previous quarter, Apple sold 20.3 million iPhones. Nokia, still the largest phone maker by volume globally, lost more market share in Q2. An estimate shows its overall market share fell from about 30 per cent in the previous quarter to about 24 per cent in the second quarter. During the period, Apple's sales revenues rose 82 per cent, whereas Nokia's operating profit suffered a steep loss of €487 million.

(This story was published in Businessworld Issue Dated 01-08-2011)