Only 50% of ` 94k-cr IL&FS debt to be addressed
Mumbai: The IL&FS resolution process is expected to address only half of group’s debt of Rs 94,000 crore, according to Uday Kotak, the government-appointed chairman of the troubled infrastructure and finance group. The government on Tuesday amended banking laws to enable Kotak to be on the IL&FS board for one more year.
“The government has given me a term of one year, but we are targeting to achieve resolution for a significant quantum of addressable debt by March 2020,”said Kotak.
Addressing newspersons on completion of one year of the government-appointed board at IL&FS, Kotak said management was seriously considering getting lenders to invest units issued by the infrastructure investment trust (InvIT) in place of the debt they hold.
This follows lack of interest from strategic investors with four projects not receiving any bids at all. Under this structure, the investors get cash flows generated from the infrastructure asset which, in this case, would be the toll from the roads.
Kotak said that the Rs 30,000-odd crore of debt that has been addressed includes Rs 4,320 crore for sale of wind energy assets. In addition, there is close to Rs 8,000 crore in companies that are classified as ‘green’, which are in a position to service their debt from their existing cash flows.
Firm bids have been received for five road projects with debt of Rs 8,100 crore and the InvIT route is being considered for another nine projects with debt of over Rs 10,000 crore. New Delhi: Goods and services tax (GST) collections in September fell 2.7% to Rs 91,916 crore, the lowest monthly mop-up in 19 months, as floods and the auto slowdown took a toll on government revenue.
Latest data released by the finance ministry showed that tax collections in September were the lowest since February 2018 when the kitty was a shade short of Rs 86,000 crore. This is the first time since August 2018 when there has been a
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decline on a year-on-year basis, with tax experts putting the blame on the overall economic slowdown.
Latest numbers also make the task of the government to achieve the revenue target more challenging as growth during first half of current fiscal year was estimated at 4.9% compared to the annual target of 13%. “Challenging times ahead for the government,” said Harpreet Singh, a partner at consulting firm KPMG in India.
In terms of the split, weakness in imports was seen to be one of the main reasons for the decline as Integrated GST declined 10%. Weak imports are seen as a pointer to an overall economic slowdown as capital goods and raw material consumption is lower across the economy. The central GST collections were seen to be a little better, registering an 8.6% rise in September, compared to 7.3% increase in case of state GST.
“Lower collection perhaps reflect economic reality on the ground and the government will need to find ways to spur demand,” said Pratik Jain, who leads the indirect tax practice at PwC India.
From an overall perspective, the numbers will put pressure on the fiscal position of states as well as the Centre. “This is a risk not only for the central government’s fiscal situation, but also for state governments, which receive 42% of shareable central taxes as devolution. Therefore, lower-than-budgeted GST collections would likely reduce central taxes devolved to states in FY2020,” said Aditi Nayar, principal economist at ICRA. has failed to take the industry to positive trajectory.
The auto industry has been demanding a cut in GST rate, which is currently pegged at 28%. Industry body Siam president Rajan Wadhera has requested that GST rate be brought down by 10% to drive in affordability. Apart from Maruti, others were also in the red. These included Hyundai, Mahindra & Mahindra, and Honda. Tata Motors saw a tough second month as its volumes shrankby 56% to around 8,100 units. Two-wheeler numbers have been equally subdued .