BackNews in numbers | 285 firms wiped out their net worth as of March 2015
A panel proposed that the standard revenue-neutral GST rate could be in the range of 23-25%
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23-25%
What is it? The revenue neutral rate for the proposed goods and services tax (GST), which will bring together state and central government taxes under one umbrella. Revenue neutral rate is the rate at which both the Central and state governments will get the same tax revenue even after GST is implemented.
Why is it important? The new rate is lower than 27% suggested last November and considered too steep by the industry. At present, the average excise duty—a tax levied by the Central government on the production of goods—is 12% and service tax is 14%. A higher tax will increase the price of goods and services and can have an adverse effect on demand.
Tell me more: NIPFP, a Delhi-based research institute, was asked by the empowered committee of state finance ministers to recommend a rate that will not result in loss of revenue when GST is implemented. This report will be an input for another committee headed by the government’s economic advisor that is looking into all aspects of GST implementation.
₹ 7,000 crore
What is it? Income to Air India from the sale and leaseback of nine Boeing 787 Dreamliner planes to a Singapore-based lessor.
Why is it important? It will help the loss-making state-owned airline to pare its debt of ₹ 40,000 crore. It will make economic sense for Air India if the lease rental is lower than savings on account of reducing the debt.
Tell me more: In 2006, Air India placed an order for 68 aircraft from Boeing that included 27 Dreamliners. This was one of the factors that contributed to the swelling debt burden. IndiGo Airlines, the most profitable among Indian carriers, follows the sale and leaseback model.
70%
What is it? The extent by which a three-hour-plus domestic chore a day can reduce the chance of completing secondary education among 12-year-old children. The conclusion was drawn from a study including 952 children over a period of 11 years from age eight to 19 in Andhra Pradesh and Telangana.
Why is it important? The report highlights the negative impact of work on children’s education. There is a proposal to amend the Child Labour Act that will permit children below 14 years to work in non-hazardous family enterprises.
Tell me more: The research report by Young Lives shows the dropout ratio for kids who worked less than two hours at 39%.
10%
What is it? The percentage of listed companies which have wiped out their net worth as of March 2015: 285 out of the 3,133 listed firms. A company’s net worth is negative when its liabilities are more than its assets.
Why is it important? This is twice the number in 2011 with big companies like Suzlon Energy, Lanco Infratech and Shree Renuka Sugars entering this league in the last four years. Those that were already in the list, including Jet Airways and Tata Teleservices (Maharashtra), have eroded their net worth even further. The data also indicates the stress on the balance sheet of Indian companies and the resultant increase in bad loans for banks.
Tell me more: 86% of the firms that showed negative net worth are in the micro-cap (less than ₹ 100 crore market capitalization) segment.
25
What is it? The number of listed state-run firms (among 27) that are not complying with at least one corporate governance norm. Compromising on the independence of the board tops the list of corporate governance failures.
Why is it important? Investors put a premium on companies that comply with corporate governance norms. This is crucial for government finances as it plans to raise it by nearly ₹ 70,000 crore from selling stakes in state-run entities in the current fiscal.
Tell me more: Independence of the audit committee is not compiled in 16 government-run firms, and a fourth of them don’t have a women director.
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