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Amid the rupee declining against the US dollar, Finance Minister Nirmala Sitharaman on Thursday said the Indian currency is relatively better placed than other global currencies against the greenback.

Emerging market currencies have been falling against dollar amid geopolitical tensions in the wake of the Russia-Ukraine war, concerns over growth, high global crude prices, sustained inflation and central banks worldwide adopting hawkish monetary policy approach.

"We are relatively better placed. We are not a closed economy. We are part of the globalised world. So, we will be impacted (by global developments)," the finance minister said on the sidelines of an event here. She was responding to a question on the movement of rupee against the dollar.

The rupee breached the psychologically significant level of 79 per dollar level for the first time ever on Wednesday and has also hit a series of lifetime lows this month. However, on Thursday, the domestic currency rose 13 paise to 78.90 against the US dollar in early trade.

Since the war in Ukraine broke out in late February, the Reserve Bank of India (RBI) has expended its foreign exchange reserves in order to shield the rupee from steep depreciation. Since February 25, the headline foreign exchange reserves have declined by USD 40.94 billion. Last week, Reserve Bank Deputy Governor, Michael D Patra said the central bank will not allow "jerky movements" of the rupee and stressed that the Indian currency has witnessed least depreciation in recent times.
We will stand for its stability and we are doing it. We are there in the market and we will not allow disorderly movement of the rupee. We have no level in mind, but we will not allow jerky movement. That is for certain," Patra had said.

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A bipartisan group of American state governors and top officials have vouched for strong bilateral ties with India and pitched for investment from the Indian corporate sector who they said not only brings foreign direct investment but also skills and creates local jobs in the US.

Governors Tom Wolf from Pennsylvania and Asa Hutchinson from Arkansas along with Lt Governors Garlin Gilchrist from Michigan, and Eleni Kounalakis from California made an aggressive pitch before a group of more than 100 Indian businesses travelling to the US to attend the annual Select USA Investment Summit in the American Capital.

In their remarks at a reception hosted at the popular India House by India's Ambassador to the US, Taranjit Singh Sandhu, these top State level elected officials asserted that Indian businesses add value to their state economy, bring in new skill sets and most important of all create most sought-after jobs.

According to a 2020 survey by the Confederation of Indian Industries, more than 155 Indian companies have invested USD 22 billion. Referring to the unicorns appearing in India almost every week, Pennsylvania Governor Wolf told the audience that India is a dynamic nation, and it's a sleeping giant.

The Republican governor said that he is proud to have maintained his admiration and friendship with India through all these years. Governor Hutchinson from Arkansas, who is from the Democratic party, asserted that the India-US relationship enjoys bipartisan support.

This really illustrates he's a Democrat, I'm a Republican... We all in a bipartisan way support our relationship with India. I think that speaks well of our National Governors Association that we work together, we promote our states, that we promote the relationship that we have with our allies such as India, said Hutchinson. He travelled to India in 2019.

Arkansas, he said, has benefited from great foreign direct investment coming from Indian companies, including Welspun Mahindra Group, Infosys, TCS and Wipro employing several thousand people from Arkansas. Just last year, Wipro announced that they will build a new large-scale service centre employing 400 Arkansans.

So we value the great investments that are made. Tata Consulting Services (TCS) is another example of an Indian firm investing in their business in Arkansas and also in students promoting STEM education in our state, he said. STEM stands for the fields of science, technology, engineering and math.

Lt Gov Gilchrist said that Michigan is already home to a number of influential Indian-American companies, including Mahindra, Tata Group, and Wipro.

We are grateful for the continued partnership and investment of Indian businesses and the community in Michigan, where they enjoy not only a strong business climate but also a cost of living that is 10 per cent more affordable than the national average, a highly skilled and loyal workforce and an incredible quality of life that my counterparts will appreciate you saying is unmatched across the United States of America, he said.

I encourage all of those here today to continue to reach out and work with us in Michigan, in my Michigan Economic Development Corporation to continue to grow economic opportunities that will benefit both our State, this country and the nation of India, he said. Opportunity certainly awaits all of you in Michigan for all of your ideas and imagination. ...Michigan also happens to be home to a very vibrant Indian American community.

It actually is the fastest growing racial and ethnic group in our State. We are very proud of this distinction, Gilchrist said. Opportunity certainly awaits all of you in Michigan for all of your ideas and imagination. ...Michigan also happens to be home to a very vibrant Indian American community.

Lt Gov Eleni Kounalakis from California, the fifth-largest economy in the world if this was a country, exuded confidence that the relationship between California and India will continue to grow. Why am I so confident? First, because more Indian Americans live in California than in any other state.

In places like Los Angeles, the San Francisco Bay Area, and Silicon Valley, where they make up 6.4 per cent of the population in the San Jose Sunnyvale Santa Clara census tract. This is the highest percentage anywhere in the United States, she said. Why am I so confident? First, because more Indian Americans live in California than in any other state.

Second, I'm confident that this relationship will continue to grow because total trade between California and India continues to grow in spite of the pandemic. Before COVID-19 trade between our sub-national government and the country of India was over USD10 billion and in 2021, it amounted to USD12.5 billion, she said. Finally, Indian investment in California continues to thrive, with nearly 300 Indian-owned firms operating in our state, employing more than 8,000 people and generating more than USD980 million every year in wages, she said.

So, in short from the Golden Gate to India Gate, the ties between California and India are strong and are growing stronger, be they between Hollywood and Bollywood or Silicon Valley and Bangalore. So, as lieutenant governor,... I cherish the strong ties of friendship, and I look forward to a brighter and more collaborative future for all, she said. Welcoming the top governors, Lt Governors and other top officials from the US Government, Sandhu, underlined that Indian companies in the United States bring strength, resilience, competitiveness to the United States.

They create jobs in local communities and build capacity and technical know-how. Welcoming the top governors, Lt Governors and other top officials from the US Government, Sandhu, underlined that Indian companies in the United States bring strength, resilience, competitiveness to the United States.

In my travels, I'm amazed to see what our companies have done from the neighbourhood and to partner with schools and universities. In my recent visits to Indianapolis, Chicago and San Antonia, I have seen firsthand what contribution they are bringing, Sandhu said.

India, he said, has accelerated the speed and scale of economic reforms, making India an excellent place to do business, hire talent and manufacture for the world. Arun Venkataraman, Assistant Secretary of Commerce for Global Markets and Director General of the US and Foreign Commercial Service said that India's FDI in the United States is over USD12.7 billion and that has created over 70,000 jobs in the United States.

It is self-evident that India is an important commercial partner... We are partners bound by shared values, by rule of law, by a commitment to democracy and as a diaspora that is stubborn enough to refuse to let this relationship backtrack one step. We are proud to be here to keep this relationship on track and to ensure that the commercial side underpins what is already a critical and long-standing strategic partnership, Venkataraman said. Jasjit Singh is the Executive Director of SelectUSA, this year Indian delegation of 138 delegates is the second-biggest delegation by all standards of Select USA Investment Summit.

Reliance Industries chairman Mukesh Ambani has resigned from the board of his group's telecom arm, Reliance Jio and handed over the reins of the company to elder son Akash, a step seen as succession planning by the 65-year old billionaire.

In a stock exchange filing, Reliance Jio Infocomm said the company's board at a meeting on June 27, "approved the appointment of Akash M Ambani, non-executive director, as chairman of the board of directors of the company." This comes after his father resigned with effect from close of working hours on June 27, it said.

The announcement comes days ahead of the RIL AGM where Street is expecting demerger plans from the oil-to-telecom conglomerate.

Among other appointments, Pankaj Mohan Pawar was appointed Managing Director of the company for five years beginning June 27.

Raminder Singh Gujral and K V Chowdary were appointed independent directors for a period of five years commencing from June 27, 2022, it added.

Akash Ambani takes over at a time when the Indian telecom firms will be rolling out 5G network in a few months and are looking at increasing the average revenue per user, a key metric to suggest profitability in the industry.

On Tuesday, RIL's scrip on BSE closed 1.5% higher at Rs 2,529.

Mukesh Ambani will continue to be the Chairman of Jio Platforms Ltd, the flagship company that owns all Jio digital services brands, including Reliance Jio Infocomm.

Akash Ambani has graduated from Brown University with a major in Economics.

Akash Ambani led the key acquisitions made by Jio in the digital space in the last few years and has also been keenly involved with development of new technologies and capabilities, including AI-ML and blockchain. He was also closely involved with the creation of the digital ecosystem around Jio’s 4G proposition.

Pallonji Mistry, the Indian-born billionaire whose engineering empire built luxury hotels, stadiums, palaces and factories across Asia and whose family’s epic showdown with the Tata Group sparked India’s biggest corporate feud, has passed away in Mumbai. He was 93.

A company spokesperson confirmed the death of the Indian tycoon after social media posts on the news spread.

Mistry and his family control the Shapoorji Pallonji Group, which started more than 150 years ago and today employs more than 50,000 people in over 50 countries, according to its website. Its landmark projects include the Reserve Bank of India and the Oberoi Hotel in Mumbai and the blue-and-gold Al Alam palace for the Sultan of Oman.

Mistry accumulated a net worth of almost $29 billion, according to the Bloomberg Billionaires Index, making him one of the richest men in India and in Europe. He surrendered his Indian nationality and became an Irish citizen in 2003 through his long marriage to Dublin-born Patsy Perin Dubash.

Most of the family wealth, however, derived from being the largest minority shareholder -- 18.5% as of early 2022 -- in Mumbai-based Tata Sons Pvt., the main investment holding company for India’s largest conglomerate.

That stake proved to be a double-edged sword for the media-shy Mistry when the shock ouster of his son Cyrus as Tata Sons chairman in 2016 triggered a very public, years-long courtroom and boardroom battle between two of India’s most-storied corporate clans.

The country’s top court ruled in 2021 that Cyrus’s ouster was legal and also upheld Tata Sons’s rules on minority shareholder rights, which made it difficult to sell shares without board approval. That meant the stake, worth almost $30 billion in early 2022, was basically illiquid.

Early Partners

The family business was founded in 1865, when Pallonji Mistry’s grandfather started a construction business with an Englishman. The initial project was the first reservoir in Mumbai, then known as Bombay. The company began doing business with the Tata family in the 1920s; both families are Zoroastrians whose ancestors fled Persia to India to escape religious persecution.

Mistry was born on June 1, 1929, in Mumbai. His father, Shapoorji Mistry, worked for the family company, which the son joined in 1947.

He led the company’s expansion into the Middle East, including Abu Dhabi, Qatar and Dubai, in 1970. It won a contract to build the Sultan of Oman’s palace in 1971 and many ministerial buildings there.

His management style and desire to expand globally was in sharp contrast to that of his father, who traveled abroad just twice to help some family members seek medical treatment, according to the 2007 book “Moguls of Real Estate,” by Manoj Namburu.

Unlike his father, who exercised personal control over the smallest detail and had his engineers apprise him every day on projects, Mistry delegated authority and only retained supervisory and planning powers.

To protect the company’s reputation, Mistry was often willing to complete a construction project even at a loss, according to “Moguls of Real Estate,” which cited Zafar Iqbal, a former chief executive officer of SP Group.

Under his watch, the business developed into a conglomerate that included real estate, water, energy and financial services. Its stake in Forbes & Company Ltd. provided access to textile, engineering, home appliance and shipping businesses, while it held a majority stake in Afcons Infrastructure Ltd., which built projects in India.

Tough Times

To Indians, besides the Oberoi Hotel and RBI’s building in the nation’s financial hub, the company is also known for building the Mumbai World Trade Centre in 1970 and the Imperial, two 60-story residential towers, in the city in 2010. It also built an 80-acre (32-hectare) information-technology park called Ozone, in the western Indian city of Pune. That was an offshoot of a 110-acre stud farm Mistry bought in the 1980s, which went on to breed Indian Derby winning stallions, according to Namburu’s book.

The family’s stake in Tata Sons increased as the company built car factories and steel mills for the group. His father also bought stakes from Tata family members over the years. Meanwhile, the Tata portfolio expanded to more than 100 companies, including brand names such as Jaguar, Land Rover, Tetley Tea and Corus Steel.

India’s news outlets called Mistry “the Phantom of Bombay House,” the Tata group’s head office, because he was rarely seen there and because of his quiet demeanor and avoidance of the media. The family is generally secretive and even such details as when he and his wife married are not publicly known.

Mistry took a backseat after Shapoor, his eldest son, took over as chairman of SP Group companies in 2004.

Boardroom Coup

Cyrus became the Tata Sons chairman in 2012, succeeding Ratan Tata. But he was removed four years later in a boardroom coup led by Tata Trusts, which owned 66% of Tata Sons and was controlled by Ratan Tata. The dispute snowballed with allegations of mismanagement and suppression of minority shareholder rights. The 2021 court ruling in Tata’s favor left burnt bridges between the two families, which had been partners for 70 years.

After his Tata stint, Cyrus went on to set up a venture capital firm, Mistry Ventures LLP.

Despite a diversified set of businesses, the SP Group was forced to look at asset sales as it faced a cash crunch, burgeoning debt and even a payment default in 2020. The Covid-19 pandemic hit its core real estate operations. In October 2021 a unit of Reliance Industries Ltd. agreed to acquire 40% of Mistry’s Sterling & Wilson Solar Ltd.

In addition to his two sons Mistry had two daughters, Laila and Aloo. The latter married Noel Tata, the half-brother of Ratan Tata, who was named chairman emeritus of Tata Sons.

In a letter written to all ministries earlier this month, the Department of Economic Affairs (DEA), under the Ministry of Finance, said that while budget announcements should be implemented within the same financial year, it has been observed that some of them take longer, requiring closer monitoring.

As per sources in the government, all budget announcements from 2014-15 onwards will be considered.

As part of the exercise, the DEA has six categories for all budget announcements across ministries.

They include those on which action has not been initiated due to unavoidable circumstances, those which are under reconsideration or have been dropped because of changed circumstances or those on which action has been initiated and are at a planning or approval stage.

Other categories include announcements which need monitoring because of challenges from inter-ministerial or other coordination issues, have been substantially implemented or where the targets in the announcement have been substantially achieved. The implemented category includes all budget announcements which have been converted or merged into schemes or projects.

The letter—accessed by News18—sought details of pending budget announcements from every ministry and department in a set format, divided into the six categories. It has also sought a monthly review of the announcements and a status report on pending budget announcements by 25th of every month for further monitoring.

WHAT IS IMPLEMENTED, DROPPED?

Some of the past budget announcements which are either being reconsidered or could be dropped include establishing a National Institute for Inclusive and universal Design at New Delhi, estimated receipts of Rs1,75,000 crore as disinvestment in 2021-22, museum on numismatics and trade at Kolkata’s historic Old Mint building and measures for a 100 water-stressed districts, among others.

Past announcements which have already been implemented include organic farming in the North-East, Pradhan Mantri Gramin Digital Saksharta Abhiyan, the model tenancy law, implementation of four labour codes and upgrading rural haats into gramin agricultural markets.

The establishment of industrial smart cities, setting up of a National Institute of Speech and Hearing, development of each district as export hub and promoting entertainment industry are among the past announcements which need monitoring, while Pradhan Mantri Krishi Sinchai Yojna, Institutes of Eminence recognition scheme, Bharatmala Project and the integrated farming system have been categorised as those that have been substantially implemented.

One of the major budget announcements for the current financial year 2022-23 was the implementation of the Vibrant Villages Programme. This featured as a major action point during PM Modi’s interaction with secretaries in April. All ministries were directed to take concerted efforts towards making it a success and officers would be deputed to villages for on-ground assessment of challenges and suggested ways for developing and mainstreaming these villages.​

A study of fiscal parameters of states by the Reserve Bank of India (RBI) identified Bihar, Kerala, Punjab, Rajasthan and West Bengal as highly stressed due to their high debt levels, the quality of expenditure and the level of fiscal deficit. These states could face a crisis if they fail to curb non-merit expenditure, the study has warned.

High debt also implies that a state spends a significant share of its revenues on servicing the debt. Several states spend about 10 percent or more of revenue receipts on interest payments, with Punjab and West Bengal spending more than 20 percent.

The study, published in the June edition of the central bank’s monthly bulletin, identified another five states as fiscally vulnerable due to their high debt levels. These are Andhra Pradesh, Haryana, Jharkhand, Madhya Pradesh and Uttar Pradesh. The study group was guided by deputy governor Michael Patra.

Of the 10 stressed states, Punjab seems to be in the most perilous situation, an outcome of years of freebies such as free power to farmers handed out by successive governments. Among all states, Maharashtra is in the most comfortable situation with its debt to gross state domestic product (GSDP) ratio under 20 percent.

The ratio of debt to GSDP of the five most stressed states is in the high thirties (see chart). The debt to GSDP is an indicator of a state’s ability to repay its debt, and higher ratios mean a high risk of default.

Some of these states breached either one or both the targets for debt and fiscal deficit for 2020-21 set by the 15th Finance Commission due to economic contraction and depressed tax collections.

The study also noted that the share of revenue expenditure in total expenditure in these states was 80-90 percent, which leaves them with little resources for capital expenditure or asset creation.

Low capital expenditure hurts in the medium to long term, as the state will continue to experience slow revenue growth and remain deep in debt. States such as Rajasthan, Kerala, Punjab and Kerala spend 90 percent of their revenue expenditure on paying salaries, pensions and interest on loans.

So how stressed are the five states identified by the RBI? We take a look at their key fiscal indicators.

Bihar

The state’s debt to GSDP ratio for 2022-23 was estimated at 38.7 percent, about the same level as the last fiscal year but higher than the 36.7 percent seen in 2020-21, as outstanding debt continues to expand faster than the state’s economy.

Bihar’s economy is expected to expand about 9.7 percent in nominal terms to Rs 7.45 lakh crore this year.

The outstanding debt of about Rs 2.88 lakh crore in the budget estimates for the current year is about 70 percent higher than it was in 2018-19, the year before India’s economy started slowing. The RBI study estimates that the state will lower its debt to GSDP ratio to 31.2 percent by 2026-27.

As a ratio of the state’s revenue receipts for the current year, outstanding debt is about 146 percent. The state borrowed more than it had budgeted for in 2020-21 and 2021-22 due to a shortfall in revenues.

Expenditure continued to climb faster than revenues. The revised estimates for 2021-22 projected a 48 percent rise in revenue expenditure against a 32 percent rise in revenue receipts from the previous fiscal year.

In the current fiscal year, the state has budgeted to spend Rs 2.38 lakh crore, including Rs 14,670 crore for loan repayment. Of the balance, just about 13 percent is proposed for capital outlay. Over 86 percent of the net expenditure would be on the revenue account, which includes salaries, pension and interest.

The state is highly dependent on central transfers — a share in taxes collected by the Centre and grants—to keep its economy running.

The share of taxes collected by the state, referred to as its own taxes, is just a little more than 20 percent of its revenue receipts. These taxes include state goods and services tax, state excise, stamps and registration. The economic slowdown and pandemic affected its tax revenues but increased grants from the Centre helped.

Kerala

The southern state’s debt to GSDP ratio for 2022-23 was estimated at 37.2 percent, almost unchanged from the ratios for the preceding two fiscal years. The state’s debt to GSDP ratio was below 32 percent in 2019-20, when the state suffered a second successive year of flooding due to heavy rainfall.

The ratio climbed sharply to 37 percent in 2020-21 when the economy contracted about 3 percent and the debt stock climbed 14 percent.

The state has projected a 10.8 percent growth in its nominal GDP to almost Rs 10 lakh crore for the current financial year.

The debt stock of the state as per the budget estimates for 2022-23 stood at Rs 3.71 lakh crore, up 58 percent from 2018-19. As a ratio of the revenue receipts for the current year, the outstanding debt is about 277 percent.

The state has projected a narrowing of the difference in the growth rate of its nominal GSDP and debt stock in the revised estimates for 2021-22 and budget estimates for 2022-23.

However, the debt to GSDP ratio is unlikely to see any significant decline anytime soon—the state has projected it to be 35.7 percent in 2024-25 in its medium-term fiscal policy and strategy statement. The RBI study has estimated it will be 38.2 percent in 2026-27.

The state estimates that the share of its own tax revenues in revenue receipts will bounce back to 55 percent in the current year after falling below 50 percent in the last two fiscals.

The share of resources transferred from the Centre is set to decline to 36 percent in the current financial year from over 41 percent following the improvement in revenue generation from the state.

The state expects its revenue expenditure growth to moderate after a spike in the last two years led to some extent by expenditure related to the COVID-19 pandemic.

The rise in expenditure last year was mostly due to pay revision, payment of dearness allowance arrears and deferred salary payments. Yet, 91 percent of the expenditure net of loan repayment will be on the revenue account in the current fiscal year, with a bulk of it spent on salaries, pensions and interest.

West Bengal

The state’s debt to GSDP ratio for 2022-23 was estimated at 34.2 percent, down from about 37.1 percent in 2020-21.  The state has brought down the ratio gradually from 40.7 percent in 2010-11, by slowing the growth of debt stock.

In seven of the last 11 fiscal years, the rise in debt stock was lower than the expansion of the nominal GSDP. The situation reversed in 2019-20 and 2020-21 when the economy slowed. Yet, the debt is very large, with the ratio of debt to revenue receipts for the current year estimated at 296 percent.

The RBI study estimates that the fiscal situation of the state will deteriorate. It expects the debt to GSDP ratio to deteriorate to 37 percent in 2026-27.

The state expects its economy to expand by 11.5 percent to Rs 17.1 lakh crore and its debt to rise 10.9 percent to Rs 5.86 lakh crore in the current fiscal year.

The share of its own tax revenues in total revenues has been fairly steady at 40-42 percent even in the recent slow growth years, while the share of central taxes was been about 30-33 percent. The growth in own tax collections fell marginally in 2019-20 and 2020-21.

The state has budgeted for a slower revenue receipt and expenditure growth for the current year after a sharp pick-up in the last fiscal. The revenue deficit is also expected to narrow.

The share of revenue expenditure in the total expenditure net of loan repayment for the current fiscal year has been budgeted at about 87 percent. More than half the expenditure on the revenue account would be on the payment of salaries, pensions and interest.

Rajasthan

The state’s debt to GSDP ratio for 2022-23 was estimated at 39.8 percent, which was about the same levels in the previous two fiscal years.

Rajasthan’s debt to GSDP ratio shot up in 2020-21 when its total debt stock rose more than 16 percent, while GSDP growth was just a little over 1 percent. The ratio was mostly below 35 percent before the onset of the coronavirus pandemic when growth in debt exceeded GSDP growth by a small margin.

The RBI study does not foresee any improvement in the state’s debt to GSDP ratio and estimates that it would be at current levels in 2026-27.

The state’s nominal GSDP is projected to expand by 11.6 percent to Rs 13.3 lakh crore in 2022-23 and total debt by 12.3 percent to Rs 5.3 lakh crore.

Like Kerala and West Bengal, the state’s debt is very large compared to its revenue receipts. The ratio for the current year is estimated at 247 percent.

The share of own tax revenues in the state’s revenue receipts has been around 40-45 percent in recent years and the share of taxes transferred from the Centre at 23-30 percent. Own tax revenues were estimated to have jumped 37 percent in 2021-22 when economic growth recovered.

The expansion of the economy and growth of own tax revenues as well as revenue receipts are projected to moderate in the current fiscal year due to the base effect.

The pace of expenditure growth is also projected to moderate but the quality of expenditure is unlikely to improve.  Of the total expenditure net of loan repayment, 87 percent would be on the revenue account, half of which are committed expenses such as salaries, pension and interest payment.

Punjab

The newly elected government has estimated that the state’s outstanding debt to GSDP ratio at 45.2 percent for 2022-23, little changed from 45.9 percent in the revised estimates for 2021-22.

The state’s debt to GSDP has been 40 percent or more for six years. The RBI study does not anticipate any improvement in the ratio in the near term and has projected it at 46.8 percent for 2026-27.

Also read: Punjab proposes Rs 1.56-lakh-crore expansionary budget for FY23

The state has revised its estimates of outstanding debt at about Rs 2.63 lakh crore at the end of 2021-22 in the budget presented on June 27.  That apart, state agencies, public enterprises and other state-owned bodies have a debt of Rs 55,000 crore, of which Rs 22,250 crore is guaranteed by the state government.

Over 50 percent of the state’s revenue receipts come as transfers from the Centre, largely in form of grants. The GST Compensation cess was a significant share of the state’s resources and the termination of the cess could set the state back by about Rs 14,000-15,000 crore, the state finance minister said in the budget speech. The share of the state’s own revenues was less than 48 percent.

The RBI study has cautioned that it was among the states the most vulnerable to fiscal shocks arising out of the realisation of contingent liabilities, particularly financial restructuring or bailout of ailing electricity distribution companies.

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Egypt has contracted to buy 180,000 tonnes of wheat from India, Supply Minister Aly Moselhy said on Sunday, less than previously agreed, a deal that is part of the country's efforts to diversify its wheat supplies.

Egypt, one of the world's biggest wheat importers, is looking for alternatives to Black Sea grain exports which face disruptions caused by Russia's invasion of Ukraine.

Russia and Ukraine have been Egypt's main wheat suppliers.

The Ukraine crisis has also raised import costs for Egypt, which heavily subsidises bread for its 70 million population.

Moselhy had said in May that Egypt had agreed to buy 500,000 tonnes of wheat from India but that a contract had not been signed.

India banned wheat exports in May because of lower domestic production, but made allowances for countries like Egypt with food security needs.

"Based on what the supplier said, the condition was that the wheat has to be at the ports, then it would be available," Moselhy said on Sunday.

"We had agreed on 500,000 tonnes, turns out [the supplier]has 180,000 tonnes in the port," he said.

Moselhy added that Egypt was also in talks with Russian suppliers for a wheat purchase agreement.

Egypt is also looking at ways to extract more flour from its grain, Moselhy said, by raising the extraction percentage for flour used for subsidised bread to 87.5% from 82%.

It plans to save around 500,000 tonnes of imported wheat, and to import 5-5.5 million tonnes of wheat for the 2022/23 fiscal year, he added.

Current wheat reserves are sufficient for 5.7 months after the procurement of 3.9 million tonnes in the local harvest, Moselhy said on Sunday.

It has been almost five years since the Goods and Services Tax (GST) was introduced in India and it is now time to review whether one of the country’s most transformational tax reforms since Independence has delivered on its promise and if the economic rationale behind moving to GST is yielding the expected benefits for both the government and business.

The concept of subsuming existing central and state taxes into GST was very novel and the resultant three-tax structure (Integrated GST, Central GST and State GST) instead of a multiplicity of levies, was a significant improvement over the earlier indirect tax regime.

However, this three-tax structure has led to a lack of fungibility of Input Tax Credit (ITCs) for businesses with operations in more than one state. While SGST credits cannot be used for payment of either IGST or CGST even within the same state, there is a specified sequence for using IGST credits for payment of CGST and SGST.

Any of the GST tax credits in one state cannot be used for payment of a similar tax in another state. The three-tax structure of GST with a requirement to register and pay each of the three taxes in every state of operation without fungibility across states, has made it essential for all businesses to maintain separate state-wise records which makes GST complex, more so for mid-sized and small businesses. The attendant complexity makes it necessary for businesses to have more reconciliations, record keeping and automation efforts, which lead to increased costs for businesses.

Equally, the requirement of vendors to pay GST and fulfil their compliance requirements in order to entitle buyers to take the ITC does create an additional workflow requirement for all businesses, both from accounting and tax perspectives. While there was some leeway in the past for taking unmatched credits, it has been completely done away with now, putting businesses that have non-compliant vendors at a disadvantage, despite their own compliances and payments being spotless.

In the present situation where many businesses have been handicapped by working capital shortages due to elongated payment cycles from customers, the above structure imposes significant a funding burden due to:

a)    The inability to adjust ITC across states and in some cases across taxes in a particular state.

b)    The requirement that the vendor is compliant with tax payment and return filing.