Citizens' Issues
India 97th on Forbes best countries for business list
India has been ranked 97th, three notches below China, in Forbes annual ranking of the best countries for business with Denmark topping the list for the sixth time in ten years.
 
European countries represent two-thirds of the top 25 with the US sliding four spots to No. 22, continuing a six-year descent since 2009 when the US ranked second overall.
 
Denmark ranked in the top 20 in all but one of the 11 metrics used by Forbes to gauge the Best Countries for Business. It finished 28th for red tape.
 
New Zealand moved up one spot to No. 2 (it ranked first in 2012). Rounding out the top five are Norway, Ireland and Sweden.
 
While the US fell in Forbes ranking, the world's next four biggest economies all improved their overall standing. Britain and Japan both moved up three spots to No. 10 and No. 23 respectively.
 
Germany improved two places to No. 18. China rose from No. 97 to No. 94.
 
India is developing into an open-market economy, yet traces of its past autarkic policies remain, Forbes said.
 
India's rankings on the 11 metrics were: Trade Freedom 125, Monetary Freedom 139, Property Rights 61, Innovation 41, Technology 120, Red Tape 123, Investor Protection 8, Corruption 77, Personal Freedom 57, Tax Burden 121 and Market Performance 65.
 
India's growth in 2014 fell to a decade low, as India's economic leaders struggled to improve the country's wide fiscal and current account deficits, the business magazine noted.
 
Rising macroeconomic imbalances in India, and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee, Forbes noted.
 
However, investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee.
 
The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy, Forbes said.
 
However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system and ineffective enforcement of intellectual property rights, it said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex continue to be bullish – Thursday closing report

Nifty will stay in an uptrend as long as it closes above 7,735

 

We had mentioned in Wednesday’s closing report that Nifty, Sensex are on course to head higher and that while the market will be volatile on Thursday following the US Fed decision on Wednesday, if Nifty stays above 7,650, the rally would continue. There was a sharp rally in all the major indices in the stock market and gains were more than 1%. The trends of the major indices during Thursday’s trading are given in the table below:

 
Bargain hunting, coupled with a dovish US Fed's monetary outlook and broad-based buying propelled Indian equity markets on Thursday. Initially, both the bellwether indices of the Indian equity markets opened on a positive note in sync with their Asian peers, as suspense cleared on the US Federal Reserve's move on a rate hike. Investors breathed a sigh of relief as the US Fed's Federal Open Market Committee (FOMC) raised key interest rates by only 25 basis points. The interest rate rise was widely expected and factored-in by investors. A higher rate hike would have led to massive pull-back of foreign funds from emerging economies like India. In addition, a dovish outlook by the US Fed, which said that it will maintain an accommodative stand, soothed investors' nerves. Besides rate hike, the FOMC projected an improved US economic outlook, lower unemployment and stable inflation. This was a major positive trigger for Indian markets, as US is India's key exports market. However, both the key indices ceded their initial gains during the mid-afternoon session, as profit bookings subdued markets. The rally at the time of market close showed gains of around 1% in the major indices.
 
The government is mulling waiting till the budget session of parliament to secure passage for the Goods and Services Tax Bill, a highly placed source said on Wednesday. The government is expecting improved numbers in the Rajya Sabha in April 2016 since a number of Congress members are retiring in March and April next year. In March, five nominated members of the upper house are retiring. The BJP-led government will get to nominate new members. "Instead of getting the bill passed now with compromises, we can get it passed in April 2016," the source said. The Congress is adamant on at least three changes in the GST Bill to enable its passage in the Rajya Sabha. "If not in April, the GST can be implemented in May, June or July... it will be a matter of delay of a few months only," the source added. According to government sources, all parties, except the Congress and AIADMK, are supporting the GST Bill at present. The government is in a minority in the Rajya Sabha. The bill was sent to a select committee of the upper house, and a report is with the house now.
 
The top gainers and top losers of the major indices are given in the table below:
 
The closing values of the major Asian indices are given in the table below:
 

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Maruti Suzuki minority shareholders' nod to deal with Suzuki Motor Gujarat
Minority shareholders of Maruti Suzuki India Ltd.'s (MSIL) have cleared the company's proposal to source cars to be made by sister company Suzuki Motor Gujarat Pvt. Ltd. (SMG), a wholly-owned subsidiary of Suzuki Motor Corporation, Japan.
 
According to MSIL, 89.75 percent of the minority shareholders voted in favour of the related party transaction and 10.25 percent voted against.
 
The voting on the ordinary resolution sought MSIL's minority shareholders' approval for: contract manufacturing agreement to set up the requisite manufacturing facilities in Gujarat; lease deed in relation of land; deed of assignment; and any other agreement or documentation needed.
 
The Indian car maker also sought the minority shareholder's approval for recovery of all sums on arm's length basis from SMG. Originally it was MSIL that proposed to invest in Gujarat.
 
Proxy advisory firms like InGovern had advised minority shareholders to vote against the proposal as there is no business logic for MSIL to opt for this arrangement.
 
The MSIL scrip closed at Rs.4,666 at the BSE as against the closing price of Rs.4,618.95 on Wednesday.
 
Taking the investors and others by surprise, Suzuki Motor Corporation decided to
take over MSIL's project in Gujarat and invest in it directly. 
 
The decision raised concerns amongst institutional shareholders.
 
According to the contract manufacturing agreement between the two uploaded on MSIL's website, SMG, the price of vehicles will be determined on mutual consent on such a basis that the latter does not have any profits or losses at the end of any financial year.
 
In the event of SMG having either profits or losses at the end of the immediately preceding financial year, the operation of the aforementioned principle shall be dealt with in the following manner: If at the end of a financial year, SMG retains profits, as per the audited financial statements for such financial year, such profits as well as any interest earned thereon, shall be utilised by SMG for reducing the vehicle price for the immediately following financial year; and If at the end of a financial year, SMG retains losses, as per the audited financial statements for such financial year, the vehicle price for the immediately following
 
financial year shall be correspondingly increased to offset such losses. 
 
Any non-operating income accrued to SMG, arising out of any surplus funds shall be solely utilised for the purposes of its capex. 
 
According to the agreement, SMG shall reduce the vehicle cost to the extent of fiscal incentive received from the Gujarat government in the relevant year or, to the extent such incentive not being set off, in the subsequent year, and the same shall be adjusted for computation of the vehicle price.
 
The capital expenditure needs of the SMG would be met by the depreciation amount available with the subsidiary and by Suzuki Motor Corporation infusing fresh equity, to the extent necessary.
 
The Gujarat subsidiary would determine its capital expenditure needs jointly with
MSIL consistent with the production needs of the latter.
 
According to MSIL, the Gujarat based sister outfit SMG will have an ultimate capacity of 1,500,000 units involving an outlay of Rs.18,500 crore.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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