Month: February 2021

Republicans press Biden to downsize $1.9 trillion COVID-19 relief plan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ten moderate Republican US senators urged President Joe Biden on Sunday to significantly downsize his sweeping USD 1.9 trillion COVID-19 relief package to win bipartisan support as Democrats in Congress prepared to push ahead with his plan this week.

A top White House economic adviser signaled willingness to discuss the ideas raised by Republican senators who floated a USD 600 billion alternative but said the Democratic president was not willing to compromise on the need for a comprehensive bill to address the public health crisis and economic fallout.
”He is open to ideas, wherever they may come. … What he’s uncompromising about is the need to move with speed on a comprehensive approach here,” Brian Deese, director of the National Economic Council, told NBC’s ”Meet the Press” program. ”A piecemeal approach … is not a recipe for success.”\

It was unclear whether the outreach by 10 of the 50 Republicans in the 100-seat chamber would shift plans by congressional Democrats to take up legislation in the coming days. Biden and fellow Democrats are seeking to make use of their control of the House of Representatives and Senate to move quickly on the president’s top goal of addressing the pandemic.

Senate Majority Leader Chuck Schumer has said his chamber would begin work on it as early as this week. House Speaker Nancy Pelosi said Congress would complete a preliminary step before the end of the week.

Congress enacted USD 4 trillion in COVID-19 relief last year.

Passage of the new relief legislation not only would impact Americans and businesses reeling during a pandemic that has killed about 440,000 people in the United States but also offers an early test of Biden’s promise to work to bridge the partisan divide in Washington.

Biden, who took office Jan. 20, has proposed USD 160 billion for vaccines and testing, USD 170 billion for schools and universities, and funds to give certain Americans a USD 1,400 per-person stimulus check, among other provisions. Some Republicans have questioned the overall price tag, while others urged more targeted measures, particularly over the direct payments to individuals.

LESS SCHOOL FUNDING

In their letter to Biden, Susan Collins, Lisa Murkowski, Mitt Romney and seven other senators asked Biden for a meeting and said their compromise plan could be quickly passed with bipartisan support, promising more details on Monday.

They said their bill included more targeted assistance for families in need and additional funds for small businesses while echoing Biden’s USD 160 billion for more funding to boost vaccines and testing. They also pointed to unspent money from previous COVID-19 relief bills.

”We’re targeted to the needs of the American people,” Senator Bill Cassidy, one of the 10 senators, told the ”Fox News Sunday” program. Cassidy added that their plan included less school funding, saying many private schools had already reopened and that the ”the real problem is public schools” and ”teachers’ unions telling their teachers not to go to work.”

Fellow Republican Rob Portman, who also signed the letter, told CNN’s ”State of the Union” program that direct checks should be limited to individuals making USD 50,000 and less and families making USD 100,000 or less. The 10 Republicans endorsed keeping extra federal unemployment aid amid the pandemic at USD 300 a week versus Biden’s proposed USD 400 a week. But Portman questioned the need for the Biden plan’s extension of enhanced unemployment aid through September, noting ”we don’t know what the economy is going to look like” then.

Deese said the White House was reviewing the letter from the Republicans but did not say whether Biden would meet with the group, which also included Republicans Shelley Moore Capito, Todd Young, Jerry Moran and Michael Rounds.

Biden ”is absolutely willing to negotiate,” Jared Bernstein, a member of Biden’s Council of Economic Advisors, told ”Fox News Sunday,” but said more details were needed.

The United States leads the world in COVID-19 cases and deaths by a large margin. Public health experts have urged an immediate scaling up of lagging vaccination efforts as new problematic variants of the novel coronavirus emerge.

At USD 1.9 trillion, Biden’s plan ”is scaled to have the punch to finally put these dual crises behind us,” Bernstein added, referring to virus control and economic relief.

Some moderate Democrats also have urged changes to Biden’s package, while more liberal Democrats want more spending and other provisions such as a federal minimum wage hike to USD 15-an-hour – more than double the current USD 7.25-and-hour.

With the Senate split 50-50 and Vice President Kamala Harris wielding the tie-breaking vote, Democrats are considering using a parliamentary tool called ”reconciliation” that would let the chamber approve the legislation with a simple majority. Under Senate rules, legislation usually requires 60 votes for passage.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia shares slip for 5th session, silver gets retail boost

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares wavered on Monday amid worries that problems with vaccine rollouts combined with new strains of COVID-19 will delay a global economic recovery that has already been baked into the market’s rich valuations.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 percent, following four straight sessions of losses. Japan’s Nikkei bounced 0.4 percent, after shedding almost 2 percent on Friday.

Futures for the S&P 500 lost another 0.7 percent in heavy trade, while NASDAQ futures fell 0.9 percent. Dealers were also warily awaiting new developments in the headline-grabbing battle between retail investors and funds that specialise in shorting stocks.

US hedge funds bought and sold the most stock in more than 10 years amid wild swings in GameStop Corp, according to an analysis by Goldman Sachs Inc.
Talk on Monday was that silver was the new target for the retail crowd as the metal jumped 5.7 percent to a six-month high.

Yet many analysts see this entertaining episode as a sideshow compared to signs of a loss of momentum in the United States and Europe as coronavirus lockdowns bite.

Indeed, a survey from China on Sunday showed factory activity grew at the slowest pace in five months in January as restrictions took a toll in some regions. Neither was the news on vaccine rollouts positive, especially given doubts about whether they will work on new COVID strains.

”It is these considerations, not what is happening to a video gamer retailer day today, that has weighed on risk assets,” said John Briggs, global head of strategy at NatWest Markets. ”So much of the market’s valuations, risk in particular, is premised on the fact we can see a light at the end of the COVID tunnel.”

Doubts have also emerged about the future of President Joe Biden’s USD 1.9 trillion relief package, with 10 Republican senators urging a USD 600 billion plan.

The jitters in stocks caused only a brief ripple in bonds with Treasury yields actually rising late last week, perhaps a refection of the tidal wave of borrowing underway.

A record USD 1.11 trillion of gross Treasury issuance is slated for this quarter, up from USD 685 billion the same time last year. Early Monday, US 10-year yields held at 1.07 percent and near the recent 10-month top of 1.187 percent.
Higher yields combined with the more cautious market mood have seen the safe-haven dollar steady above its recent lows. The dollar index stood at 90.628, having bounced from a trough of 89.206 hit early in January.

The euro idled at USD 1.2121, well off its recent peak at USD 1.2349, while the dollar held firm at 104.74 yen. Gold followed silver higher to USD 1,853 an ounce, but has repeatedly stalled at resistance around USD 1,875. Global demand concerns kept oil prices in check. US crude eased 30 cents to USD 51.90 a barrel, while Brent crude futures dropped 20 cents to USD 54.84.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

January GST collection at nearly Rs 1.2 lakh crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The gross GST revenue collected in January 2021 reached a record level of Rs 1,19,847 crore.

Out of the total GST collection, CGST was Rs 21,923 crore, SGST was Rs 29,014 crore, IGST was Rs 60,288 crore (including Rs 27,424 crore collected on import of goods) and cess was Rs 8,622 crore (including Rs 883 crore collected on import of goods), a Finance Ministry statement said.

The total number of GSTR-3B returns filed for the month of December up to January 31, 2021, was 90 lakh.

The government has settled Rs 24,531 crore to CGST and Rs 19,371 crore to SGST from IGST as regular settlement. The total revenue earned by the Central government and the state governments after regular settlement in the month of January 2021 was Rs 46,454 crore for CGST and Rs 48,385 crore for the SGST.

In line with the trend of recovery in the GST revenues over past five months, the revenues for the month of January 2021 are 8 per cent higher than the GST revenues in the same month last year, which in itself was more than Rs 1.1 lakh crore.

During the month, revenue from import of goods was 16 per cent higher and the revenue from the domestic transaction (including import of services) was 6 per cent higher than the revenue from these sources during the same month last year.

The GST revenues during January 2021 are the highest since the introduction of GST and has almost touched the Rs 1.2 lakh crore mark, exceeding the last month’s record collection of Rs 1.15 lakh crore.

GST revenues above Rs 1 lakh crore for a stretch of last four months and a steep increasing trend over this period are clear indicators of rapid economic recovery post-pandemic.

Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax and Customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue over last few months, said the statement.

The average YoY growth in GST revenue over the first four months in the second half of the financial year has been 8 per cent as compared to (-) 24 per cent during the first half of the year.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Delhi BJP president launches party’s campaign for bypolls in 5 municipal wards

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Delhi BJP president Adesh Gupta on Sunday launched the party’s campaign for bypolls in five municipal wards. He launched it by worshipping at Maharishi Valmiki temple at Trilokpuri in East Delhi. The ruling AAP and the Congress are other main players in the bypolls on five municipal wards in the national capital which are being seen as a litmus test before the civic body elections due in 2021. Four of the five wards fell vacant after sitting councilors contested assembly polls on AAP ticket in 2020 and became MLAs.

The bypolls will be held on February 28. Two wards in North Delhi Municipal Corporation (NDMC), Shalimarbagh and Rohini-C, and three under the East Delhi Municipal Corporation (EDMC), Trilokpuri, Kalyanpuri and Chauhan Bangar, will go for the bypolls. The Shalimar Bagh ward fell vacant since death of Renu Jaju who had won the seat on a BJP ticket in 2017.

The Aam Aadmi Party (AAP), which is eyeing to capture the three municipal corporations ruled by the BJP since 2012, will be a frontrunner in the bypolls trying to regain the four seats held by it earlier. The AAP and BJP were involved in a war of words, accusing each other of corruption in view of the civic body polls in 2022.

The AAP leadership has mounted a sustained attack on the BJP, levelling allegations of corruption, including an alleged ”scam” of Rs 2400 crore involving the NDMC. The BJP has been accusing the AAP government of holding back funds worth Rs 13,000 crore due to the three municipal corporations to paralyse their functioning.

The Delhi BJP has stepped up its preparations for the by-election on five municipal seats in Delhi. State BJP president Adesh Gupta chalked out a strategy after interacting with the booth level workers of Trilokpuri and Kalyanpuri wards. Other party leaders met workers in other wards to make a strategy for the bypolls.

In a meeting of senior Delhi Congress leader, AICC general secretary and in charge of party unit Shaktisingh Gohil advised leaders and workers to expose the ”failures and corruption” of the BJP and the Aam Aadmi Party governments in view of the municipal bypolls.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2021 Highlights: Rakesh Jhunjhunwala gives a 10/10; shot in the arm for economy, says S&P

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Budget 2021 Reactions Highlights: Finance Minister Nirmala Sitharaman on Monday unveiled the Union Budget for fiscal 2021-22, which targets to bolster an economy badly-hit by the novel coronavirus pandemic. The FM’s budget focused on higher infra spending, healthcare expenditure, boost to transport infra and public sector bank privatisation, while no major income tax relief has been provided to the common man. Markets surged nearly 4 percent particularly led by the private sector banks. Here are the Feb 2 updates:

India has been among the worst-hit major economies due to the virus-induced lockdown, with the economic growth contracting by a massive 23.9 percent year-on-year (YoY) in the June 2020 quarter, the first GDP contraction in over 40 years. There are only four occasions in India’s history when GDP growth has suffered a contraction: 1957-58 (1.2%), 1965-66 (3.7%), 1972-73 (0.3%) and 1979-80 (5.2%).

For the current fiscal year, the government had earlier pegged the fiscal deficit of 3.5 percent. While unveiling the Budget 2021-22 in the Lok Sabha, the Finance Minister said, the government proposes to bring down the fiscal deficit below 4.5 percent of GDP by 2025-26. A fiscal deficit is an indication of the government’s borrowing to meet the shortfall between expenditure and receipts from taxes and other sources. The deficit had soared to a high of 4.6 percent of the GDP in 2019-20, mainly due to poor revenue realisation. The Finance Minister said the government plans to borrow Rs 80,000 crore during the residual two months of the current fiscal year.

Meanwhile, the government will borrow about Rs 12 lakh crore in 2021-22.
Sitharaman said expenditure for the next fiscal year has been pegged at Rs 34.83 lakh crore, which includes Rs 5.54 lakh crore of capital spending. She also said states will get 41 percent share of taxes as per the 15th Finance Commission recommendation and the government has accepted the recommendation.

Exemption from tax audit limit has been doubled to Rs 10 crore turnover for companies doing most of their business through digital modes, she said. The finance minister said advance tax liability on dividend income shall arise only after payment of dividend.

The FM also reduced the time limit for reopening of income tax assessment cases to three years from six years, while for serious tax fraud cases where concealment of income is Rs 50 lakh or more it would be 10 years. In her Budget speech for 2021-22, Sitharaman also announced that senior citizens above 75 years of age having only pension and interest income would not be required to file income tax returns. Banks paying the interest would deduct the tax on their behalf.

FM has also proposed an extension of the eligibility for claiming tax holiday and capital gains exemption for investment in startups till March 31, 2022.

The Indian stock markets lauded the Union Budget FY22 with the BSE Sensex gaining over 1,600 points. Banking and finance stocks surged after Finance Minister Nirmala Sitharaman announced that two public sector banks will be privatised apart from the IDBI Bank and one general insurance company. Sensex opened at 46,617.95 and has touched an intra-day high of 48,004.71 points.

The President of the US-India Strategic and Partnership Forum (USISPF), Mukesh Aghi, applauded FM’s efforts in regards to the Budget 2021. Nirmala Sitharaman tabled the Union Budget 2021 in the Parliament on Monday and it has received a largely positive response from markets and experts alike. Aghi said the budget reflects a robust growth plan for the Indian economy. Increased government spending in critical areas of the economy such as agriculture, infrastructure, healthcare, education and defence was much needed, he added.

He believes these measures along with an ambitious plan of PSU divestment, further opening of sectors like insurance, and establishing an institutional framework for the corporate bond market will provide much-needed capital to the economy.

Fitch had rated India BBB negative, just one rank above the junk category. In the economic survey, CEA highlighted it is unreal for the fifth largest economy in the world. Now, having announced an increase in the deficit in the Budget speech, FM has clarified her govt is not afraid of taking debt.

Consequently, in its analysis of Budget, Fitch has warned of rating pressure if the GDP does not grow according to the expected percentage points. What happens to the ratings remains to be seen, but here’s how Fitch responded.

S&P Global Ratings believes fiscal consolidation would pose a stout challenge to policymakers going forward. It does not see any material effect from the budget on India’s key credit factors, but the improving growth prospects will be key to maintaining the sustainability of public finances. It said the government did not give priority to fiscal consolidation, saying aggressive provisioning might prove to be costly for the economy.

Stay tuned with all the live reactions by experts on FM’s Union Budget speech today:

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow