Cigarrete prices to increase after GST

The stock market saw a fall of 15 percent in the shares of ITC Ltd, its steepest fall in 25 years. Many brokerages downgraded the stock and reduced their target prices as the government increased their cess on cigarettes, which ultimately led to the company going through an erase of nearly Rs50,000 crore in market value.

Not just that, other cigarette companies like VST Industries Ltd went down 3 percent and Godfrey Phillips India Ltd shares have also gone down by 6 percent mentioned Inshorts.

CLSA in a note mentioned “We were forced to downgrade to ‘sell’ as earnings outlook weakens,” adding, “Price hike would be required to grow earnings which may also impact volumes. The outcome is clearly negative from the neutral stance that the government always mentioned.”

Livemint also reported, that the prices of cigarettes will also increase by Rs 4.8-7.9 per 10 sticks, which further depends upon the specific filters and length of the cigarettes. Finance Minister Arun Jaitley, quoted after GST Council meeting, the increase in cigarette cess will ultimately benefit the exchequer by an approximate amount of Rs5,000 crore per year.

Sources: Inshorts, Livemint

Railway hikes passenger fares in Rajdhani, Shatabdi and Duronto.

In a bold move, the Railway Ministry has brought in a reform to increase the fare prices of the Duronto, Rajdhani and Shatabdi express trains. Even after the hike, the railway is still the cheapest mode of travel for a common man. The decision has been made on the model of dynamic fare system in vogue in the aviation sector. The flexi fare system will be introduced in the II AC, III AC, Chair Car in the three trains where the 10 per cent of the seats will be sold in the normal fare in the beginning but it will go on increasing by every 10 per cent with every 10 per cent berths sold with a maximum cap of 50 per cent. The I AC and the Executive Class has not been included in this system because of the already prevailing high fares. The sleeper class will also be charged in the Duronto Trains. While the maximum hike for II AC and Chair Car will be 50 per cent, for III AC, it will be 40 per cent. The Ministry targets to earn Rs. 500 crore from 42 Rajdhani, 46 Shatabdi and 54 Duronto trains by introducing the flexi fare system. It targets to achieve Rs. 51,000 crores of revenue which is passenger induced in contrast to the Rs. 45,000 crore in the last fiscal year, an increase of Rs. 6000 crore in 2016-17. There will be hardly any difficulty for the common man to avail to the railway services as the majority of the population use the unreserved segment where there is no price hike. The aforementioned train mostly cater to the high-end category of the passenger segment and comprises of a small segment of the population.A price hike in the railway was much needed as the carrier service had been facing losses in the passenger segment. As mentioned by Minister of State for Railways, Manoj Sinha in the Lok Sabha inApril, the total loss incurred by the Ministry in the passenger segment was Rs. 33,490.95 crore in the financial year 2015. While railways’ primary mandate is to make cheaper travelling possible for the common man, it is in the interest of the public that railways remain operationally viable to stay here for long.

Petrol price cut by 32 paise per litre, price of diesel hiked

New Delhi: On Wednesday, the price of petrol was cut by 32 paise per litre, while the diesel front faced a hike of 28 paise per litre considering the global trends.

According to Indian Oil Corp (IOC), in the capital city of Delhi, petrol will now cost 59.63 per litre from Wednesday midnight against Rs 59.95 a litre which was the rate before the change. On the other hand, a litre of diesel will now cost Rs 44.96 a litre against Rs 44.68 before the hike. The price of petrol has seen sixth straight reduction on softening international rates. But diesel seems to be seeing a different trend altogether. The fuel rates were previously revised on February 1 after the government raised excise duty to take away the benefit from fall in international oil prices. Excise duty on petrol was raised by Re 1 per litre and that on diesel by Rs 1.50 to accumulate an additional Rs 3,200 crore.

Since November 2015, this was the fifth hike in excise duty that has given the government a cumulative of Rs 17,000 crore additional revenue.

In a statement, IOC said that the current level of international product prices of petrol and diesel and Rupee-US Dollar exchange rate warrant decrease in price of petrol and increase in price of diesel, the impact of which is being passed on to the consumers with the price revision.

IOC, Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) which are the State-owned fuel retailers revise rates of the fuels on 1st and 16th of every month. This revision is based on average oil price and foreign exchange rate in the preceding fortnight.

 

Sources: NDTV Profit, The Times of India.

Hike in car price by up to Rs 50 K: Nissan, Skoda and Renault

Image source: Moneycontrol                               Nissan, Renault, Skoda to hike prices by Rs 50K from Jan

 

New Delhi: 2016 is set to experience a price hike up to Rs. 50,000 by major auto makers like, Nissan, Renault and Skoda. The announcement of almost three per cent price hike made by the three corporate giants will commence from the first week of January as a way to countervail the influence of surging input costs.

In a statement, Nissan Motor India Managing Director Arun Malhotra, said, “The price increase is to offset the rising input costs. The revision of prices will soften the negative impact and help the company stay competitive”.

According to the records of a showroom in Delhi, the range of vehicles under the brand Nissan Motor India, which is a 100% subsidiary of Nissan Motor Co. Ltd, Japan, is from the Micra hatchback to SUV Terrano, are priced from Rs. 4.47 lakh to Rs. 12.91 lakh. Whereas, the prices of the Datsun vehicles including the entry level small car Datsun Go and multi-purpose car Datsun Go Plus range from Rs. 3.23 lakh and Rs. 4.76 lakh. Renault, who had also made similar announcement of price hike, is a fully owned subsidiary of France’s Renault SAS, which has seven models, Pulse, Kwid, Duster, Scala, Lodgy, Kolos and Fluence, ranging from Rs. 2.56 lakh to Rs. 23.47 lakh.
To this, Skoda Auto India commented,” The increase will vary from two to three per cent across the entire product portfolio. The new prices, effective from January 1, 2016, are in line with increasing input cost and changing market conditions”.

Furthermore, depending on the model and the variant , the hike will get exhibited through a price rise ranging from Rs. 14,000 to Rs. 50,00. Skoda selling the four models, Octavia, Superb, Yeti and Rapid, has prized them between Rs. 7.55 lakh and Rs. 26.83 lakh.

According to experts, this is a strategy devised by the automobile companies to present year-end declarations, that help them to clear off stocks, just after the huge festival discounts.

 

Sources: Business Standard , Deccan Herald

Government to hike duty on imported medical devices

As per sources, the government may increase the duty on all imported medical devices

like stents, pacemakers and catheters. According to sources, the

hike will be 5 per cent.

Currently, the custom duty on imported devices is between 5-10%. The custom

duty varies based on the kind of devices which are further classified into three categories.

The high end devices like MRI machines and CT scanners used in hospitals and

radiology laboratories, syringes, catheters, etc have 10% customs duty while

devices like stents and pacemakers have a 5% basic customs duty.

This proposal was put forward by the government keeping in line with Prime

Minister Narendra Modi’s ‘Make in India’ mission. This further created a dissension

in industry regarding lack of indigenous manufacturing and costly medical services

for patients.

“Most of these devices that are imported are not being manufactured in India

currently. Therefore, an increase in customs duty would not help manufacturing

here, instead it may work against the government’s FDI policy,” said Himanshu

Baid MD of Poly Medicure.

India imports around 80% of medical devices which are commonly used in

hospitals. Even recently it gave nod for 100% investment of foreign direct

investment (FDI) in medical device. This is perhaps part of its global strategy

to promote local goods on a

Image Courtesy: cam.ac.uk
Image Courtesy: cam.ac.uk

worldwide basis which is worth $400 billion.

LPG price hike at exorbitant rates per cylinder

Picture Courtesy - Tehelka
Picture Courtesy – Tehelka
Pune: Earlier on Tuesday, the price of non-subsidized cooking gas (LPG) increased by Rs 16.50 per cylinder and that of jet fuel by over half a percent after oil prices hiked internationally due to the ongoing crisis in Iraq. This ascent in rates of non-subsidized LPG and ATF corresponds with the Rs 1.69 a litre hike in petrol and 50 paisa a litre in diesel as announced on Monday.

The price of non-subsidized LPG, which customers buy after using up their quota of 12 subsidized cylinders, was raised by Rs 16.50 per 14.2 kg cylinder and is the first hike in six months.

This most recent hike breaks the declining trend that started in February with Rs 107 cut in rates to Rs 1,134 per cylinder. Then followed Rs 53.5 per cylinder reduction in March to 23.50 cut last month, marked by subsequent reductions in between.
According to reports, a statement by Indian Oil Corp, the nation’s largest oil firm blamed the rising international prices of gasoline and the deterioration of Rupee-US dollar exchange for this significant hike.

http://www.ndtv.com/article/india/army-chief-heads-to-china-in-key-confidence-building-measure-551160?curl=1404219136

Govt postpones hike in natural gas prices, Reliance suffers setback

New Delhi: In a major setback to Reliance Industries Limited (RIL), the NDA government on Wednesday decided to postpone the proposal for revision of natural gas prices by three months in the wait for a comprehensive review which would be acceptable to all sectors.

Representational Image. Reuters
Representational Image. Reuters

The current rate of USD 4.2 per million thermal units (as per British standards) will continue until September end, said Oil Minister Dharmendra Pradhan.

The new Government was intending to hike the prices from July 1 to USD 8.4 per million thermal units, a decision taken by the previous UPA government. In this regard, the Oil Minister has been in discussions with the Prime Minister since Friday and postponing the hike until September was seen as the best solution.

The repercussions of every dollar hike would lead to an increase in gas prices upto Rs 1,370 per ton rise in urea production cost and 45 paise per unit increase in electricity tariff. Additionally, it will lead to a minimum of Rs 2.81 per kg increase in CNG price and Rs 1.89 per standard cubic meter hike in piped cooking gas.

The gas price revision was one of the immediate decisions the government intended to take to revive investor interest in the stagnant oil and gas sector. The country’s natural gas output has been on the decline. It has spiralled down to 35.4 billion cubic metres (FY14) compared to 47.56 bcm the previous year.

A panel headed by C.Rangarajan had proposed the the hike in natural gas prices which was to take effect from 1 April, however, with the general elections around the corner, the proposal was deferred.

However, there are some issues in implementing Rangarajan’s formula, such as whether Reliance Industries’ foreign partners- BP and Niko resources- should be allowed to charge the higher prices, whether the pricing should be on gross calorific value or net calorific value, among others.

Read more at: http://www.financialexpress.com/news/Narendra-Modi-govt-orders-status-quo-onnatural-gas-prices—4-2-rate-to-continue-till-Sept-end/1264155