Debt schemes at risk as volume of commercial paper collapses: India Ratings

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The daily average trading volume of commercial papers (CP) has fallen to less than 1 per cent of the outstanding amount, and just about 1 per cent of the holding of debt mutual funds, posing a serious challenge to the liquidity profile of these mutual funds, has warned.


The total outstanding of commercial papers is close to Rs 4.3 trillion, while the average trading volume is now at less than Rs 4,000 crore. Non-bank financial companies (NBFC) and housing finance companies (HFC) are the major issuers of commercial papers.



Generally, the daily volume is Rs 10-15,000 crore in CPs in the secondary market.


“The daily CP trades in the secondary markets is less than 1 per cent of the total outstanding amount and around 1 per cent of the total exposure of debt mutual funds in CPs,” and Research said in a note.


They are not as active in these markets as before as investors are also shying away from buying these papers both in the primary and the secondary market. On the other hand, papers issued by All India Financial Institutions, such

Indian economy may expand by around 5% in FY22: Ex-RBI governor Subbarao

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The country’s economy may expand by around 5 per cent next financial year after likely contracting by 5 per cent this time, former RBI governor has said.


Rating agency Crisil on Tuesday had said the may shrink by 5 per cent in fiscal 2021, adding this could be the country’s fourth since Independence and perhaps the worst to date.


“I do believe that getting up to 5 per cent next year (FY22) is quite probable. The reason I say that is because this (COVID-19) is not a natural disaster. Our factories are still standing, our infrastructure and transport systems are still there,” Subbarao said.


He was speaking at a webinar on ‘– Navigating through a Crisis’, organised by the Centre for Financial Studies (CFS) at Bhavan’s SPJIMR business school.


“Once the is lifted and the economy is given a green signal to restart, I am sure that we can ramp up pretty soon and reach at least 5 per cent (growth rate),” he said.


ALSO READ: FY21 GDP to contract 5%; pre-virus level unlikely in next 3 fiscals: Crisil

Land trouble? Scrap portions of proposed contracts, NHAI tells branches

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To reduce build-up of arbitration cases, the Authority of India (NHAI) has asked its project managers to cancel portions of the proposed contracts in case of hurdles in the process.


Chairman Sukhbir Singh Sandhu, in a letter to the authority’s regional offices and project director, has said the matter of should not be left pending as it leads to litigation cases in the future.



“In future, the stipulated land would be acquired and handed over encumbrance free to the contractor in time or that part of the project will be cancelled if the land is not handed over,” Sandhu wrote in the letter, a copy of which is with Business Standard.


Such disputes mostly land in arbitration, for which contracts have provision. It is not just the projects that get delayed but also the invested money — either of the government or the private party — gets stuck in the dispute. It is learnt that not just for future projects, the has done the same for some project stretches in the past. “The idea is to stay away from any future litigation and arbitration,

CBIC clears Rs 11,052 crore GST refund claims since Apr 8 to benefit MSMEs

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The Central Board of Indirect Taxes (CBIC) on Monday said it has sanctioned GST refund claims worth Rs 11,052 crore in 47 days.


In a tweet, the said it is “committed to ensuring liquidity to GST taxpayers especially sectors during the lockdown”. The tweet added that 29,230 refund claims amounting to Rs 11,052 crore disposed of between April 8-May 24, the added.



Refunds have been sanctioned while ensuring work from home, it added. The had on April 8 said that to provide relief during the cor it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including


The total refund granted will be approximately Rs 18,000 crore, it had said.


The had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and Customs refunds and instead use official email for all communication.


The CBIC had said that the decision to process pending refund claims has been taken with a view to providing immediate relief to the taxpayers in

Tier-II, III cities now preferred destinations for warehousing: Experts

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Restricted movement due to the nationwide lockdown has underscored the importance of in-city warehousing, with tier-II and -III locations emerging as preferred investment destinations, say industry experts.


The warehousing sector, which was mainly concentrated in tier-I cities, especially the major eight metros, had started shifting to tier-II locations after certain policy initiatives, according to the experts.



“Due to various reasons of urbanisation, warehousing has been more focused in the top eight metros. Later, due to certain policy initiatives, some of the tier 2 cities also emerged as preferred locations.


“However, with lockdown being a national reality now, with movement of people becoming restricted, smaller cities or the hinterland of the country could be the mini warehousing hubs or focal points,” property consultant Savills India Head of Research Arvind Nandan told PTI.


ALSO READ: Maharshtra to allow 25 daily landings, take-offs from Mumbai airport


Though the supply of new warehousing space in 2020 could be merely 12 million sq ft as against the previous estimate of 45 million sq ft due to Covid-19 crisis, in the long-term, the demand for warehousing space will grow significantly and there

Don’t fear CBI, CVC, CAG; extend loan to eligible borrowers: FM to bankers

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Finance Minister on Saturday said have been asked to extend loans automatically to eligible borrowers without fear of 3Cs — CBI, CVC and CAG.


She said clear instructions have been given in a meeting with CEOs and MDs of public sector and financial institutions on Friday that the should not be scared to extend loans as 100 per cent guarantee is being given by the government.


In case of default, the individual bank or official will be hauled up, she said in a conversation with BJP leader Nalin Kohli uploaded on the party’s social media platforms.


“Yesterday, I reiterated that by saying, if a decision goes wrong, and if there is a loss, the government has given 100 per cent guarantee now. It is not at all going to be on the individual official and on the bank, and therefore without fear they should take this automatic route in the sense, everybody eligible for additional term loan and additional working capital should be given,” she said.


As part of the Rs 20.97 lakh crore comprehensive economic package, the government announced the Emergency Credit Line Guarantee

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