GST collections for February continue to be robust Rs.119,875 crore, the fifth straight month of clocking over Rs.1 trillion in GST revenues. The GST collections were up 7% over Feb-20, but marginally lower than the Jan-21 collections. Out of the total GST collections, Rs.21,092 crore was by way of CGST, Rs.27,273 crore as SGST, Rs.55,253 crore as IGST and Rs.9,525 crore as cess. For the month of February 2021, revenues from merchandise imports were 15% higher while revenues from domestic transaction were 5% higher. However, it may not significantly change the total fiscal deficit for the financial year 2020-21.
India’s first auction of telecom spectrum since 2016, attracted bids worth Rs.77,146 crore on day-1 with Jio, Bharti and VI putting bids. Total spectrum on offer is 2,250 MHz of spectrum in seven bands worth Rs.392,000 crore as reserve price. Bids were received for 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz bands, but there no takers for the premium 700 and 2500 MHz bands. Nearly 33% of the spectrum being auctioned is in the 700 MHz band. Bidding will continue on Tuesday also. Most of the telecom operators are unwilling to bid for a new spectrum bands requiring incremental investments. The assigned spectrum will be valid for 20 years. Upfront payment is 25% of final bid amount in 700 MHz, 800 MHz and 900 MHz and 50% in the rest, with balance payable in 16 EMIs after a 2-year moratorium.
BPCL board approved the sale of its 61.25% stake in Numaligarh Refinery, Assam for Rs.9,876 crore ahead of the divestment of government stake in BPCL. The deal will entail sale of 45.36 crore shares of NRL to a consortium of Oil India and Engineers India while the Government of Assam gets 13.65%. Final approval from BPCL shareholders is awaited. Government plans to divest its 52.98% stake in BPCL to cede control and the sale of NRL was a pre-condition. Numaligarh had reported total revenues of Rs.14,244 crore for FY20. NRL has a big advantage as it gets excise duty exemption due to being located in the North East.
As announced in Budget 2021, provident fund holders investing above Rs.2.50 lakh in their PF accounts annually will not earn the mandated 8.5% tax-free from April 2021. In such cases the entire interest earned will be treated as other income and taxed at the incremental tax rate applicable to the individual. The idea of imposing this tax was because it found huge contributions made by some individuals into their PF accounts. Some of them have tried to take advantage of the 8.5% tax-free earnings by deposits amounts in excess of Rs.100 crore in their PF accounts. Top 20 HNIs have Rs.825 crore parked in PF accounts.
There was a slight tapering in the PMI manufacturing for February 2021 as it eased from 57.7 in January to 57.5 in February. However, PMI being above 50 indicates that the industrial expansion is still the story although it can be said that some momentum may have been lost in the recent month. The good news is that the headline figure for Feb-21 remained above the long-run median of 53.6.While parameters like output, purchases and inventories were growing, job creation continued to reduce and remain under pressure. Rising prices of raw materials and semi-finished goods are exerting upward pressure on costs.
It was another month of robust auto sales for the biggest names in the auto sector during the month of Feb-21. Maruti Suzuki recorded 8.3% growth in domestic sales at 144,761 units even as export volumes grew by 11.9% to 11,486 units. The second largest carmaker, Hyundai, reported 29% increase in domestic sales at 51,600 units even as exports grew 14.6% to 10,200 units in Feb-21. Even Tata Motors recorded 119% increase in domestic sales at 27,225 units representing the highest-ever volumes in a month in last nine years. M&M reported 41% growth in domestic volumes at 15,391 units in Feb-21. In two wheelers, Hero Motor saw sales rise just 1.45% to 5,05,467 units helped by scooters. Bajaj Auto saw 6% increase in sales at 375,000 units driven by 13% growth in exports and despite a 2% fall in domestic vehicle sales.