Source: IBEF News Letter
Estimated cost for distribution of food grains (Rice and Wheat) and pulses under Pradhan Mantri Garib Kalyan Ann Yojana during April – November 2020 is around Rs 1,48,938 crore
Prime Minister Shri Narendra Modi had announced the extension of Pradhan Mantri Garib Kalyan Ann Yojana till the end of November 2020. He said that the PMGKAY scheme is extended from July till the end of November 2020. During this five-month period, more than 80 crore people will be provided 5 kg free wheat/rice per month along with 1 kg free whole chana to each family per month.
The Department of Food and PD has worked out estimated cost under TPDS @ 5 Kg per person per month for three months i.e. April-June 2020 would entail an estimated subsidy of Rs 44,131 crore (US$ 6.26 billion) taking the estimated Economic Cost of Rs 37,267.60 (US$ 528.69)/MT for rice and Rs 26,838.40 (US$ 380.74)/MT for wheat (as per BE 2020-2021).
Further, while under NFSA, the expenditure towards intra state transportation and handling charges for movement from FCI depots to Fair Price Shops (FPSs) as also dealer’s margin etc. is shared between Govt. of India and States/UTs as per the sharing pattern and norms for expenditure on this account as per rules framed under NFSA. As Govt. of India is bearing the entire expenditure towards this Scheme, an expenditure of Rs 1,930 crore (US$ 273.80 million) would be required to be met towards transportation and handling and FPS dealers’ margins etc. by Government of India as per the existing norms in this regard under NFSA. ln view of the above, the total estimated expenditure to be borne by Government of India towards food grain subsidy and expenditure on account intra state transportation, dealer’s margin including additional dealer’s margin towards use of ePOS would be Rs 46,061 crore (US$ 6.53 billion).
On the basis of above, an estimated cost of 32 million tonne (12 Million Tonne for April-June 2020 and 20 LMT for July-November 2020) for distribution of food grains (Rice and Wheat) from April to November 2020 will be approx. Rs 1,22,829 crore (US$ 17.43 billion).
As per Department of Consumer Affairs note, the estimated expenditure towards distribution of pulses is Rs 5,000 crore (US$ 709.32 million) for the period April-June 2020. Accordingly, the estimated expenditure for distribution of pulses during the period April-November 2020 will be Rs 11,800 crore (US$ 1.67 billion) approx.
In addition to above, the estimated cost for distribution of food grains to migrant labours for the period of two months is Rs 3,109.52 crore (US$ 441.13 million). The foregone cost of Central Issue Price for food grains which comes to approximately Rs 1,400 crore (US$ 198.61 million) per month entails an expenditure of approximately Rs 11,200 crore (US$ 1.59 billion).
Thus, the estimated cost for distribution of food grains (Rice and Wheat) and pulses will be Rs 1,48,938 crore (US$ 21.13 billion) approx.
GST Revenue collection for June 2020; Rs 90,917 crore gross GST revenue collected in the month of June
The gross GST revenue collected in the month of June 2020, is Rs 90,917 crore (US$ 12.90 billion) of which CGST is Rs 18,980 crore (US$ 2.69 billion), SGST is Rs 23,970 crore (US$ 3.40 billion), IGST is Rs 40,302 crore (US$ 5.72 billion) (including Rs 15,709 crore (US$ 2.23 billion) collected on import of goods) and Cess is Rs 7,665 crore (US$ 1.09 billion) (including Rs 607 crore (US$ 86.11 million) collected on import of goods).
The government has settled Rs 13,325 crore (US$ 1.89 billion) to CGST and Rs 11,117 crore (US$ 1.58 billion) to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of June 2020 is Rs 32,305 crore (US$ 4.58 billion) for CGST and Rs 35,087 crore (US$ 4.98 billion) for the SGST.
The revenues for the month are 91 per cent of the GST revenues in the same month last year. During the month, the revenues from import of goods were 71 per cent and the revenues from domestic transaction (including import of services) were 97 per cent of the revenues from these sources during the same month last year. During the month of June, returns of February, March, and April 2020 have also been filed in addition to some returns of May 2020 since Government has allowed a relaxed time schedule for filing of GST returns. Some returns of May 2020, which would have otherwise got filed in June 2020, will get filed during first few days of July 2020.
The revenues during the financial year has been impacted due to COVID-19, firstly due to the economic impact of the pandemic and secondly due to the relaxations given by the Government in filing of returns and payment of taxes due to the pandemic. However, figures of past three months show recovery in GST revenues. The GST collections for the month of April was Rs 32,294 crore (US$ 4.58 billion) which was 28 per cent of the revenue collected during the same month last year and the GST collections for the month of May was Rs 62,009 crore (US$ 8.80 billion) which was 62 per cent of the revenue collected during the same month last year. The GST collections for the first quarter of the year is 59 per cent of the revenue collected during the same quarter last year. However, a large number of taxpayers still have time to file their return for the month of May 2020
Dr Reddy’s partners Fujifilm to launch Avigan for COVID-19 treatment
Indian generic drug maker Dr Reddy’s Laboratories entered in partnership with the Japanese pharma giant Fujifilm Toyama Chemical and Global Response Aid (GRA) for development, manufacture, and sale of antiviral drug Avigan (favipiravir) tablets for potential treatment of COVID-19.
Under this agreement, Dr Reddy’s is given exclusive rights for India and grants both Dr Reddy’s and GRA the rights to develop, sell and distribute Avigan in all countries other than Japan, China, and Russia.
An upfront license fee and royalties on sales would be given by Dr Reddy’s and GRA to Fujifilm.
Earlier in 2011, Dr Reddy’s had formed a joint venture with Fujifilm for generic drugs business in the Japanese market, but both the companies called off the venture after two years as the venture did not take off.
In 2014, Fujifilm Toyama Chemical received approval for manufacturing and selling Avigan tablet as an influenza antiviral drug in Japan. This drug is to be considered for use only when there is an outbreak of novel or re-emerging influenza virus infections in which other influenza antiviral drugs are either not effective or insufficiently effective. The Japanese government decided to use the drug as a countermeasure against such influenza viruses.
Fujifilm developed Avigan and is presently under trail in several parts of globe targeting COVID-19 patients and a large trial result is expected this month. A clinical study in Japan and the US is currently being conducted by Fujifilm group and it has been partnering with both the Japanese and overseas drug makers.
According to a statement released by Dr Reddy’s, GRA and it will obtain from Fujifilm an array of data on Avigan’s preclinical and clinical studies accumulated so far. Dr Reddy’s and GRA will use this data for clinical studies, targeting COVID-19 in regions where the infection was spreading.
“Dr Reddy’s and GRA shall introduce the product in the market post all applicable approvals in the respective countries,” said the statement.
It will also obtain rights from Fujifilm to use Avigan’s patents of formulation and manufacturing method, added the statement. The Hyderabad-headquartered drug maker will establish a setup for manufacturing drugs of the same quality as Avigan. Moreover, Dr Reddy’s said it will use GRA’s global sales network to supply the manufactured drugs swiftly and in a stable manner.
Recently, Glenmark has received emergency approval for the generic favipiravir from India’s drug controller to manufacture the drug but the drug is yet to be part of the treatment protocol reviewed last week by the Indian Council of Medical Research.
Jio’s string of deals drives up PE investments 12 per cent in H1 2020 to US$ 18.8 billion
The private equity (PE) investments registered a 12 per cent increase in the first half of this calendar year to US$ 18.8 billion (across 341 deals). This rise was driven by a string of deals struck by Reliance Industries’ Jio Platforms. Though, this was despite the subdued April-June quarter for PE activity on account of the coronavirus crisis, according to a report by financial data tracker Venture Intelligence.
In 2019, during same period, PE investments worth US$ 16.8 billion (across 503 deals) were recorded.
In HI 2020, Jio Platforms accounted for 51 per cent of the total investment value, as per the data.
Jio Platforms’ US$ 9.5 billion private equity haul, excluding Facebook’s US$ 5.7 billion strategic investment, was led by investors from Middle East to the US. KKR, Saudi Arabia’s Public Investment Fund, and Vista Equity Partners invested US$ 1.5 billion each, while by Silver Lake Partners and Mubadala Investment invested over a US$ 1 billion each.
H1 2020 witnessed 24 PE/VC investments worth US$ 100 million or more, down from 37 such transactions in the same period last year.
Without the Jio investments, PE-VC investments during H1 2020 would have been 45 per cent lower year-on-year, according to the Venture Intelligence data.
At US$ 4.1 billion across 270 deals, venture capital investments fell 11 per cent in value terms and 31 per cent in terms of volumes when compared with the corresponding period in 2019, which had witnessed US$ 4.6 billion across 393 transactions. There was a decrease in VC investments by 52 per cent in value terms year-on-year to US$ 1 billion in the April-June quarter.
HPL acquires majority stake in Lummus Technology for enterprise value of US$ 2.725 billion
Haldia Petrochemicals Ltd (HPL), flagship company of The Chatterjee Group (TCG), and Rhone Capital, a global private equity firm, have jointly acquired the US-based Lummus Technology from McDermott International for an enterprise value of US$ 2.725 billion.
As per the press statement released by HPL, Lummus Technology is a leading master licensor of proprietary technologies in the refining, petrochemicals, gas processing and coal gasification sectors, as well as a supplier of proprietary catalysts, equipment and related engineering services. It has around 130 licensed technologies and more than 3,400 patents and trademarks.
Lummus Technology will operate as an autonomous entity with the acquisition.
“This development would accelerate India’s progress towards self-reliance in the materials technology space. HPL, with two decades of experience in manufacturing polymer products and downstream chemicals, would partner Lummus in evolving technological improvements for these segments,” added the press statement.
This deal is expected to provide required boost to HPL’s initiative to pivot upstream investments in the ‘oil to chemicals’ sector.
“Our investments are both strategic and long-term, most of which span 25 to 30 years. We have primarily focused on knowledge-based enterprises, and as such, Lummus is a great addition to our portfolio,” Mr Purnendu Chatterjee, founder Chairman of TCG, said in the statement.
State Bank of India was the lead banker in the deal.
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