Economy
Indian kitchens demand oil; production declines, imports soar
Pushed by the rising use of oil as a medium for cooking in rural areas and the falling production of oilseeds, India’s edible oil imports more than doubled in the decade to 2015, according to ministry of consumer affairs data.
 
Consumption in rural households rose 40% and urban 29% between 2004 and 2012, and oilseed production declined seven per cent between 2005 and 2012, according to a August 2015 report from the ministry’s department of food and public distribution.
 
Indian use of edible oil has varied based on prices and availability, but demand appears uninterrupted, a likely consequence or rising population and growing prosperity.
 
“Growth has also been driven by government policies relating to oilseeds production, domestic processing and imports, all of which have affected the edible oil price and demand in the country,” said a May 2016 report by management consultancy ICRA.
 
“With India’s population increasing from 541 million in 1971 to 1.02 billion in 2001, and to 1.28 billion at present; and per capita income growth rising throughout the last three decades, consumption growth in India has been almost uninterrupted till recently. Consumption growth has been variable in recent years, primarily because of sharply higher product prices,” the report added.
 
Indian oilseed production cannot cope.
 
Edible oil is produced from oilseeds, and the department of food and public distribution report suggests that their production fell by a million tonnes over a decade ending 2015.
 
Some reasons proffered for stagnant production of oilseeds:
 
* Erratic rainfall is the main reason, according to the government
 
* Farmers are losing interest in oilseeds; yield not worth the cost
 
* Farms producing oilseeds have moved to rice and wheat, according to November 2014 report from the Indian Institute of Management-Ahmedabad.
 
As demand rises, imports are taxed to protect domestic manufacturers
 
The government hiked import duties on edible oils to protect the domestic industry, the Times of India reported in September 2015, from 7.5% to 12.5% on crude edible oil and from 15% to 20% in 2014-2015 on refined oil.
 
Imports now account for two-thirds of the India’s edible oil demand, which is unlikely to reduce as the population grows and incomes continue to increase. The consumer is likely to pay for taxes imposed on imports.
 
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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US taxmen sue Facebook on transferred assets to Ireland
The US Internal Revenue Service has sued social networking giant Facebook for the delay in sharing documents related to transferring its assets to Ireland in 2010 to cut corporate taxes.
 
Ireland’s top corporate tax rate is 12.5%, much lower than the US 35%, the Wall Street Journal reported on Friday.
 
The lawsuit is part of an investigation into whether some of those assets were undervalued “by billions of dollars,” the report added.
 
In 2010, Facebook entered into agreements with Facebook Ireland Holdings Unlimited to transfer the rights to its “online platform” and its “marketing intangibles” outside the US and Canada, said the lawsuit filed in US District Court in San Francisco this week.
 
The company also entered into a cost-sharing agreement with the Irish subsidiary to cover future development.
 
Facebook, however, rejected the lawsuit, saying that “Facebook complies with all applicable rules and regulations in the countries where we operate.”
 
According to the tax authorities, they went to court because Facebook has not responded to its requests and the statute of limitations on its probe which expires on July 31.
 
Facebook was ordered to produce the records on June 17 but “failed to appear.”
 
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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Bond Schemes: Return-free Risk?
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