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The GST Council will meet on Wednesday to review the taxation structure for shoring up the revenue as lower-than-expected collections has led to a delay in compensation payment to states.

Some of the states such as West Bengal have opposed any hike in cess rates or rate calibration amid a slowdown in the economy, stating that consumers as well as the industry are passing through a distressing time.

With the revenue shortfall looming large, there have been suggestions for raising GST rate and cess to meet the gap.

The GST Council headed by Finance Minister Nirmala Sitharaman had sought suggestions from states on review of GST and compensation cess rates on various items, rate calibrations for addressing the inverted duty structure, compliance measures other than those currently under implementation to augment revenue.

In a letter to Sitharaman, West Bengal Finance Minister Amit Mitra said states have received letter from the GST Council wherein suggestions have been sought on review of items currently under exemption for shoring up GST revenues.

"This is indeed alarming. We should not in any way tinker with the rate structure or impose any new cess at a time when the industry and consumers are going through the most distressing times with 'stagflation' knocking at our door (stagnation accompanied by growing inflation)," Mitra said.

Many economists, including former RBI Governor Raghuram Rajan, have expressed fear of India getting into a slow growth high inflation or stagflation mode.

Rising food prices pushed retail inflation in November to an over three-year high of 5.54 per cent, while industrial sector output shrank for the third month in a row by 3.8 per cent in October, indicating deepening slowdown in the economy.

India's economic growth slowed to a 6-year low of 4.5 per cent in the July-September quarter. With inflation rising, fears of stagflation -- a fall in aggregate demand accompanied by rising inflation -- have resurfaced.

"Instead of increasing or imposing new taxes or cesses the GST Council has to collectively find ways and means to provide relief to industry so that they are able to tide over the present crisis...the solution of additional resource mobilisation lies not in tinkering with the rate structure but focus on anti evasion and fraud detection measures," Mitra said.

Facing heat over delay in payment of GST compensation, the central government on Monday released Rs 35,298 crore to states to make up for the loss of revenue due to rollout of the Goods and Services Tax (GST).

When GST was rolled out on July 1, 2017, states were through legislation promised to be compensated for the loss of revenue as not just their taxes such as VAT were being subsumed in the new levy but also their right to levy taxes was being snatched.

The compensation amount was fixed at 14 per cent on top of revenue in the base year of 2016-17. The corpus for paying compensation was collected by levying a cess on top of GST rates on tobacco products, cigarettes, aerated water, automobiles, and coal.

The Central GST collection fell short of the Budget Estimate by nearly 40 per cent during the April-November period of 2019-20, according to government data.

The actual CGST collection during April-November stood at Rs 3,28,365 crore, while the Budget Estimate was Rs 5,26,000 crore for these months.

According to sources, the Finance Ministry has set a Rs 1.1 lakh crore monthly GST collection target for the remainining four months of 2019-20 financial year

Revenue Secretary Ajay Bhushan Pandey had a video conference meeting with top tax officials and impressed upon them to step up measures to achieve direct and indirect tax collection targets.

Officers have been particularly urged to ensure that during field enforcement drive and visits, no taxpayer is overreached or troubled, the source said.

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A 15 per cent corporate tax rate for services companies in SEZs, setting up a fund for deep-tech startups and establishing clusters to demonstrate design-to-manufacturing capabilities of tech firms were some of the key demands made by the IT sector at the pre-budget consultation on Monday.

Representatives from the IT, startups and mobile devices sectors met Finance Minister Nirmala Sitharaman to put forward their demands from the Budget next year.

"What we have suggested is that given that they have reduced the manufacturing corporate tax rate to 15 per cent...the fact that the SEZ sunset is happening, at least for the new services companies in SEZs, if you make it 15 (per cent), then you will have one composite rate in SEZ for both manufacturing and services," Nasscom Senior Director and Public Policy Head Ashish Aggarwal told PTI after the over two-hour meeting.

He added that combined with other criteria like employment and investments over a period of time, SEZs can drive further growth.

Aggarwal said another recommendation made was to drive innovation and growth for deep-tech startups in the country.

"Set up a fund for deep-tech companies...it is no longer just about low-value jobs. The focus is on deep-tech. China has attracted a lot of investment. Globally, we see a trillion dollar opportunity till 2035 in deep-tech, so setting up a fund for enabling access of capital to deep-tech startups," he added.

Nasscom has also suggested setting up innovation clusters where "design-to-manufacture" capabilities of engineering and IT companies can be demonstrated.

"So you walk in with an idea and go out with a prototype. Such clusters do exist globally and this can be used as an opportunity to showcase India's capabilities as a sector," he said adding there were other areas as well where clarity has been sought by the industry body.

Indian Private Equity and Venture Capital Association President Rajat Tandon said the body's demands were primarily around clarity and consistency of rules.

"Our demands have been primarily around clarity and consistency, so that confidence of international stakeholders is there and hopefully, we can see more investments coming in. We are at the tip of the iceberg, and the minister has been very assuring," he added.

He said clarifications were needed around areas like certain treaties, sunset clauses and if pool of capital can be increased from investments done by global pension funds that can "further help build the ecosystem".

Vishakha Saigal, Vice President and Head at Reliance Jio, pointed out that it is important that a robust data centre infrastructure is created to meet the burgeoning data demand seen in the country.

"It is very important to have a robust data structure and complete infrastructure in India because without that, nothing is going to happen...Our current data centre capacities, they are extremely less, the demand is already outstripping the supply," she said.

Saigal noted that India is already the largest data consumer in the world and has outpaced even developed countries.

"So if we don't catch up on data centre infrastructure in India, it is very difficult to achieve our target for USD 1 trillion (digital) economy," she said.

Saigal highlighted that it is also important to create an "enabling PoS (point of sale) infrastructure" in areas which are under- penetrated.

"Currently, there are large number of merchants which are still not on board, so to drive government vision of cashless economy, it is imperative that the government comes out with a subsidy, fiscal measures or incentives for players who are actually reaching out with innovative solutions and PoS infrastructure in rural areas in tier II and III cities, which are under-penetrated in terms of financial transactions," she said.

Sitharaman will meet different stakeholder groups as part of pre-budget consultations for the forthcoming General Budget 2020-21.

During Monday's meeting, issues around use of Big Data technology, digital infrastructure and role of government, and regulation of digital economy, especially in the wake of privacy concerns were discussed.

Financial regulation, ease of doing business for startups, infrastructure gaps for digital India and taxation issues were also discussed, an official statement said.

The participants shared their views and suggestions regarding Big Data, incentives for encouraging setting up of data centres, fiscal incentives for data localisation, incentives for pushing digital penetration in rural areas, and corporate guarantee to startups for competing with other nations, it added.

Other demands included rationalisation of MAT tax rate, tax exemption for startup units, creation of specific agency for looking after cross border financial crimes, increasing women employment (gender dividend in skill development), training youth in skill development along with international internships and incentivising Research & Development (R&D) within India.

"While the experts suggested improvements in their respective fields, they also gave a variety of solutions to the sector specific problems. Many speakers suggested giving tax sops to startups and nurture them in the country," the statement said.

The meeting was attended by Minister of State for Finance and Corporate Affairs Anurag Thakur, Finance Secretary Rajeev Kumar, Economic Affairs Secretary Atanu Chakraborty, Revenue Secretary Ajay Bhushan Pandey, MeitY Secretary Ajay Prakash Sawhney, Telecom Secretary Anshu Prakash and others.

Representatives from the industry included Wipro Global Chief Legal Officer Deepak Acharya, Apple India Managing Director (Strategy and Policy) Virat Bhatia and Lava International CMD Hari Om Rai.

Electronic and Computer Software Export Promotion Council Chairman Mandeep Singh Puri, Telecom Equipment Manufacturers Association of India (TEMA) President NK Goyal and Indian Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo were also present.

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The series of pathbreaking and ambitious reforms unleashed by the Modi government in the last few years will make India a very competitive and productively-efficient economy in the long run, a top Indian official said on December 13.

"There is a great positivity about India," NITI Aayog CEO Amitabh Kant told PTI in an interview here as he wound up his three-city US tour for a series of interaction with academicians, innovators, startups, corporate leaders and government officials in Boston, New York and Washington DC.

People here believe that the fundamental reforms that have been gathered out in India across the economy, including GST, in terms of ending crony capitalism with the bankruptcy code, in terms of real estate reforms through RERA and in terms of direct benefit transfer, "will make India a very competitive and productively-efficient economy in the long run," Kant said.

"India's story has just begun," he added.

The series of pathbreaking and ambitious reforms unleashed by the Modi government in the last few years will make India a very competitive and productively-efficient economy in the long run, a top Indian official said on December 13.

"There is a great positivity about India," NITI Aayog CEO Amitabh Kant told PTI in an interview here as he wound up his three-city US tour for a series of interaction with academicians, innovators, startups, corporate leaders and government officials in Boston, New York and Washington DC.

People here believe that the fundamental reforms that have been gathered out in India across the economy, including GST, in terms of ending crony capitalism with the bankruptcy code, in terms of real estate reforms through RERA and in terms of direct benefit transfer, "will make India a very competitive and productively-efficient economy in the long run," Kant said.

"India's story has just begun," he added.

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Vegetable oil imports fell marginally to 11.28 lakh tonne in November due to decline in inward shipments of non-edible oil, according to Solvent Extractors' Association.

Out of the total vegetable oil import, the shipments of edible oil rose to 10,97,424 tonne in November 2019 from 10,73,353 tonne in the same month last year.

Non-edible oils import, however, fell to 30,796 tonne compared to 60,450 tonne in the year-ago period, SEA said in a statement.

Out of the total vegetable oil import, the shipments of edible oil rose to 10,97,424 tonne in November 2019 from 10,73,353 tonne in the same month last year.

Non-edible oils import, however, fell to 30,796 tonne compared to 60,450 tonne in the year-ago period, SEA said in a statement.

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In a major thrust to infrastructure development in Karnataka, the Road Transport and Highways Ministry on December 10 gave the nod for 22 Green express highways in Karnataka worth Rs 1.5 lakh crore.

This includes a new alignment of the Pune-Bengaluru Express Highway, which will be completed in the next few years at a cost of Rs 50,000 crore.

"Today we met Karnataka Chief Minister BS Yediyurappa. We have just sanctioned projects worth more than Rs 1.5 lakh crore for the state. Actually, the annual infrastruture plan for Karnataka was Rs 2,150 crore, which we decided to increase to Rs 3,990 crore," said Nitin Gadkari, the Union Minister for Road Transport and Highways.

He was speaking at the inaugural session of the 10th edition of Excon-2019, a five-day International Construction Equipment and Construction Technology Trade Fair here.

The event has been organised by the Confederation of Indian Industry in association with the Karnataka government, Ministry for Road Transport and Highways and the National Highway Authority of India.

“We are making 22 green express highways. Today we cleared the Pune-Bengaluru project as a Green Express Highway, a new alignment of 600 km, costing about Rs 50,000 crore." Gadkari said, adding his ministry and the state have sanctioned 2,300 km of new roads where the Detailed Project Report is ready.

The bidding process would start soon, he said, adding that the Chief Minister had given an assurance on clearing any hassles related to land acquisition and environment clearance for these projects.

Another important infrastructure project of ring road in Bengaluru was also resolved in the meeting, with the Centre agreeing to the States request to bear 80 per cent of the land acquisition cost, he said.

However, the Ministry expected the state to exempt taxes on steel and cement to be used for building the ring road.

“So, today the problem with the ring road is resolved and today it will be a great present from the chief minister to the people of Karnataka, Gadkari said.

He opined that these highway projects would become the growth engine for Karnataka.

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Voicing concern over increasing default in loan repayment under the Pradhan Mantri Mudra Yojana (Mudra), the Trinamool Congress (TMC) on Tuesday demanded that the government rollback the scheme before rising NPAs stifle credit growth and bring ruin to the MSME sector.

The Mudra Yojana was launched in 2015 for providing small loans to income generating small enterprises in manufacturing and services. Raising the issue during Zero Hour in the Upper House, TMC member Manish Gupta said, "Public sector banks have suffered hugely because of this scheme as collateral is not mandatory under the scheme. Over 2,300 cases of fraud have been detected and Mudra category loans have increased over last few years."

The NPAs (non-performing assets) have been on a rise in public sector banks. The number of NPA accounts have increased from 17.99 lakh accounts in 2018 to 30.57 lakh accounts in just one year, he said.

Total value of non-performing assets (NPAs) by public sector banks is Rs 7.07 lakh crore.This figure has increased more than 100 per cent, he added.

Gupta said the RBI has advised that rising NPAs under Mudra loans should be addressed aggressively. So far this fiscal year, Rs 1.41 lakh crore loan has been disbursed under Mudra Yojana.

"However, sources have claimed that bankers are pressured to grant Mudra loans to people who sometimes have no business plan," Gupta said. The average loan under the scheme is Rs 45,000, which many reports say is not enough to start a business and create jobs, he added. Moreover, the data suggests, the Trinamool Congress member said only one out of five or 20 per cent of Mudra loans has resulted in job creation. "Sir, this is yet another example of poor economics and poorer implementation. I would only urge the government to roll back the scheme before rising NPAs stifle credit growth and bring ruin upon the MSME sector," Gupta noted.

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State-run trading company MMTC is importing onions to check spiralling prices and the shipment is expected to arrive by January 20, Union Minister Danve Raosaheb Dadarao said in Rajya Sabha on Friday.

Delayed and prolonged rains are the main reason for damage to onion crops, Minister of State for Consumer Affairs, Food and Public Distribution, Dadarao said during Question Hour.

He said the government used buffer stock to meet the crisis.

"Onion prices are rising ... there can be no two opinions. Late rains and prolonged rains damaged onion crop...But government had buffer stock, it was distributed from that. MMTC is importing from various countries and it is expected by January 20," the Minister said replying to a supplementary.

On Thursday, onion prices which have been fluctuating for over a month in Delhi, touched Rs 109 per kg in many markets in the city.

About edible oil, the minister said its domestic production is not adequate to meet demand in the country and gap between demand and production is met through imports.

"The production of soyabean in Maharashtra for 2019-20 is expected to be 42.08 lakh tonne as compared to 45.48 Lakh tonne in 2018-19. However, the expected production of 42.08 LT of soyabean in 2019-20, in Maharashtra, is more than the last five year average production of 34.77 LMT," the minister said.

In case of any decline in the domestic production, the gap between demand and availability is met through import of edible oils, he said.

He said while government has taken various steps to enhance edible oil production, 60 per cent of its requirement is met through imports while only 40 per cent was met through domestic production.

He said its minimum support price has been increased.

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India's services sector activity returned to growth after two months of decline in November, driven by new business orders, faster job creation and strengthening business confidence, a monthly survey showed on Wednesday but noted that there were signs of "fragility".

The IHS Markit India Services Business Activity Index improved to 52.7 in November from 49.2 in October.

Notwithstanding the upturn, the headline figure remained below its long-run average of 54.2, the survey added.

"Although the services economy shrugged off some of the weakness seen in September and October, the latest PMI results continue to sound a note of caution regarding demand and the underlying state of the sector," said Pollyanna de Lima, Principal Economist at IHS Markit.

Lima further cautioned that "while the sector moved along nicely and looks set for a sustained expansion in December, there were signs of fragility".

"Rates of expansion in sales and activity were mild by historical standards, while the degree of business confidence remained subdued. Also, a moderation in charge inflation, which came despite the strongest upturn in cost burdens for over a year, highlights a lack of pricing power among services firms," Lima said.

On the prices front, the survey said that the average input prices increased solidly in November, with the rate of inflation quickening to a 13-month high. While, average prices charged for the provision of services in India increased only slightly and at the weakest pace since July.

"This relatively weak rise in charges likely supported demand in November, but leads to questions on how long firms can absorb cost increases and sacrifice margins in favour of demand growth," Lima said.

The Composite PMI Output Index that maps both the manufacturing and services sector, rose from 49.6 to 52.7, signalling a moderate pace of increase that was below the long-run survey average.

According to official data, India's GDP growth hit an over six-year low of 4.5 per cent in July-September 2019.

Bankers and experts believe the Reserve Bank may cut interest rates for the sixth straight time on December 5, to support growth that has continued to slip.

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The government on Tuesday assured the Rajya Sabha that merger of 10 public sector banks will not lead to any job losses and employees' interest will be protected.

In August, the government announced a mega plan to merge 10 public sector banks into four with a view to creating fewer and stronger global-sized lenders with robust balance sheets that can be used to boost credit and spur growth.

During the Question Hour, Minister of State for Finance Anurag Singh Thakur said lending and other banking services to eastern states will be improved after two Kolkata-based banks are merged.

While United Bank of India (UBI) will be merged with Punjab National Bank, Allahabad Bank will be amalgamated with Indian Bank. These two banks are headquartered in Kolkata.

"Merger of banks will strengthen the lending capacity. It has been ensured that no person loses job. The employees of merging banks will benefit the maximum. Merger is being done keeping their interest in mind," he said.

"We have taken enough precaution," he said, adding that Narasimham Committee in 1998 and Leeladhar Committee in 2008 recommended amalgamation of the banks.

"Amalgamating banks was advised to duly factor in and draw road maps for converging IT systems and HR and to put in place institutional arrangements to ensure expeditious integration," Thakur said.

After due consideration by their respective boards, the banks have informed that multi-level coordination and integration committees have been set up to ensure faster integration across functionalities, he added.

The minister was responding to a query from Trinamool Congress member Manish Gupta who said that about 50,000 employees will be jobless by next year due to the merger.

To another query on banking services likely to be affected in eastern states due to the merger, the minister said the reach and lending capacity will be "much larger and better" with the amalgamation.

"In today's time of competition, I think expansion of these banks is very important...It was our government which went for asset quality review of bank loans given between 2004 and 2014. We adopted an approach for better functioning of the banks and recapitalised them with over Rs 2.35 lakh crore for better strengthening and functioning," he said.

As far as lending to eastern states is concerned, the minister said, "Let me assure the member there would not be any shortage or shortfall of services."

Responding to another query from Trinamool Congress member Manas Ranjan Bhunia on reasons for merger of UBI with PNB, the minister said, "I think the overall intention was to create a strong and competitive bank that may serve as catalyst of growth with improved risk profile of the bank. As far as the interest of the employees are concerned, pay allowances were less favourable overall."

He said UBI's total business size is Rs 2,08,000 crore, whereas that of PNB is Rs 11,82,224 crore. With the merger, total business size will be Rs 17,94,526 crore, making it the second largest bank in the country.

"What we have kept in mind is the software 'Core Banking System' being used by them. All these banks which are using similar kind of software have been merged accordingly so that there would not be any difficulty for the employees," he said.

As far as the sentiment of eastern states or Kolkata is concerned, that will be taken care of, Thakur added.

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The country's manufacturing sector activity inched up in November, but the upturn remained subdued as growth rates for new orders as well as production were modest, a monthly survey said on Monday.

The IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in October, when it had fallen to a two-year low, indicating only a slight improvement in the health of the sector.

Although business conditions in the Indian manufacturing sector improved in November, the rise, however, remained subdued compared to earlier this year and the survey history, the study said.

This is the 28th consecutive month that the manufacturing PMI has remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

"After pulling back noticeably in October, manufacturing sector growth displayed a welcoming acceleration in November. Still, rates of expansion in factory orders, production and exports remained far away from those recorded at the start of 2019, with subdued underlying demand largely blamed for this," said Pollyanna de Lima, Principal Economist at IHS Markit.

According to the survey, growth of manufacturing activity in November was supported by the launch of new products and better demand, though restrained by competitive pressures and unstable market conditions.

"Some level of uncertainty regarding the economy was evident by a subdued degree of business optimism. Also, companies shed jobs for the first time in over a year-and a-half and there was another round of reduction in input buying," Lima said.

Lima further noted that the weakness of these forward-looking indicators suggest that firms are bracing themselves for challenging times ahead.

On the inflation front, there were only marginal increases in both input costs and output charges in November.

"PMI data continued to show a lack of inflationary pressures in the sector which, combined with slow economic growth, suggests that the RBI will likely extend its accommodative policy stance and further reduce the benchmark interest rate during December," Lima said.

The Reserve Bank may cut interest rates for the sixth straight time on December 5 to support growth that has continued to slip to more than six-year low on slump in manufacturing, bankers and experts said.

The RBI has cut interest rates on every single occasion the monetary policy committee (MPC) has met since Shaktikanta Das took over as the Governor in last December.

In five reductions so far in 2019, interest rates have been lowered by a total of 135 basis points over concerns that growth momentum is slowing down and also to try to boost liquidity in the financial system.

GDP growth slowed sharply to a pace of 4.5 percent in the July-September, hit by a slump in manufacturing output. The pace of GDP growth has moderated from the 5 percent rate in April-June and 7 percent in July-September quarter of 2018.