BACK PAGE, P16 COMPANIES, P4 INTERNATIONAL, P3 CANNES DIARY SALES UP 40-50% TWO MEMBERS RESIGNED A big comeback is on the cards for India this year Hot summer spells record business for cooling products Netanyahu scraps war Cabinet after key departures BENGALURU, TUESDAY, JUNE 18, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVII 49, 16 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 76,992.77* ▲ 181.87 NIFTY: 23,465.60* ▲ 66.70 NIKKEI 225: 38,102.44 ▼ 712.12 HANG SENG: 17,936.12 ▼ 5.66 `/$: 83.56* ▼ 0.01 `/€: 89.30* ▲ 0.95 BRENT: $83.15 ▲ $0.53 GOLD: `71,596* ▲ `212 IN THE NEWS PRIYANKASETFOR WAYANAD DEBUTAS RAHULVACATES SEAT THE CONGRESS MONDAY announced that party MP Rahul Gandhi will retain Rae Bareli seat in Uttar Pradesh and vacate Wayanad in Kerala, from where party general secretary Priyanka Gandhi Vadra will contest, reports Asad Rehman. MONSOON RAINS A FIFTH BELOW NORMAL SO FAR THE MONSOON HAS delivered a fifth less rain than normal so far this season, the weather department said on Monday, in a worrying sign for the vital agricultural sector, reports Reuters. ■ PAGE 2 MID-SIZED BANKS SEE MORE FAILED UPI TRANSACTIONS CUSTOMERS OF MIDSIZED universal banks, including RBL Bank, India Post Payments Bank (IPPB) have seen higher UPI transaction failure rates in the past year, according to National Payments Corporation of India (NPCI) data, reports Piyush Shukla. ■ PAGE 6 COACHING BODIES IN A FIX OVER NEET IMBROGLIO AFTER REPORTS OF paper leaks and controversy around the grace marks given to certain students in the NEETUG (National Eligibility-CumEntrance Test-Undergraduate) exam, the coaching industry is asking for re-examination for all students, reports Manu Kaushik. ■ PAGE 16 GTRI FLAGS SURGE IN GOLD, SILVER IMPORTS FROM UAE Advance tax receipts Softer interest regime for up a robust 27% in Q1 SUBVENTION OF 3-6% LIKELY FOR LOANS UP TO `50 LAKH urban housing on menu RUN-UP TO THE 11.8 MN & COUNTING BUDGET ■ The scheme has sanctioned a total of 11.8 million houses out of which 8.37 million have been completed ■ On June 10, the Cabinet approved assistance for 30 million 2024-25 additional houses PRASANTA SAHU New Delhi, June 17 ■ The cost of the The carpet area under the reworked scheme will likely be "much higher" than CLSS ■ scheme may be around THE UNION BUDGET, likely to be presented in the Lok Sabha in the second half of July, may announce a revamped interest subvention scheme for affordable urban housing. According to sources, the subvention could be 3-6% per annum on home loans up to `50 lakh in urban areas, with the cost to the exchequer of roughly `60,000 crore over five years. On June 10,the first Cabinet meeting of the new government approved assistance to construct 30 million additional houses, including under PMAY-Urban and PMAY-Rural. Sources said the carpet area under the reworked scheme will likely be "much `60,000 crore in five years ■ The scheme would replace the previous Pradhan Mantri Awas Yojana-Urban higher"compared with the Credit Linked Subsidy Scheme (CLSS) for the urban poor under PMAY-U. The CLSS scheme expired in March 2024. Under CLSS scheme of PMAY-U, the Centre gave an interest subsidy of 6.5% for home loans up to `6 lakh for the economically weaker sections (carpet area 30-60 sqm),4% and 3% on loan amount of `6-12 lakh and `12-18 lakh to bene- ficiaries belonging to MIG-I (160 sqm) and MIG-II (200 sqm) categories respectively for acquisition/constructions of houses (including re-purchase). After PMAY-U was launched on June 25, 2015, the scheme has made significant progress in its goal of providing affordable housing. Continued on Page 9 Govt mayclear‘Pillar-2’tax regime Finance Act will need to be amended to include the OECD-compliant provision PRIYANSH VERMA New Delhi, June 17 THE CENTRAL GOVERNMENT is likely to announce adoption of ‘Pillar-2’ tax regime anchored by the Organisation for Economic Cooperation and Development (OECD) in the coming Budget as part of the country's efforts to support and benefit from the global system combating tax avoidance. The Finance Bill, 2024, passed after the interim Budget presentation,will be amended after the tabling of the Budget in the second half of July to this effect, an official said, on condition of anonymity. The provisions,however,will be notified and come into effect only from September, the person added. The Pillar 2-GloBE Rules, which provide for a global minimum tax for ‘multinational enterprises’ (MNEs), aims to deter profit shifting by ensuring that these firms maintain a minimum Effective Tax Rate (ETR) of 15% across all jurisdictions in which they operate. MNEs, as per the rules, are defined as those entities with a global turnover exceeding €750 million. To make Pillar 2 operational in India, the Centre would have to amend the tax laws to include the rules, namely Qualified Domestic Minimum Top-up Tax (QDMTT), Income Inclusion Rule (IIR), Undertaxed Profits Rule (UTPR), and Subject to Tax Rule (STTR). ON THE BUDGETTABLE ■ The Pillar 2-GloBE Rules which provide for a global minimum tax for ‘multinational enterprises’ (MNEs), aims to deter profit shifting ■ MNEs, as per the rules, are defined as those entities with a global turnover exceeding €750 million Continued on Page 5 Why the economic situation is worrying Inflation and poor job prospects worry Indians the most, said the RBI Consumer Confidence Survey ■ EXPLAINER, P7 The rules allow a ‘top-up tax’ on either intermediate parent entity or the ultimate parent entity ■ ● 9 DEAD IN TRAIN MISHAP At least nine people were killed and 41 injured after a goods train rammed into the stationary Kanchanjunga Express in Darjeeling on Monday. Senior police officials, however, put the casualty count at 15. The goods train violated speed restrictions, the Railway Board said. FE S P E C I A L S With new offerings like Curvv & Sierra, it will broaden product range ■ INVESTOR, P7 ■ The move is part of the country's efforts to support and benefit from the global system combating tax avoidance Almost double of 14% rise seen last year PRASANTA SAHU New Delhi, June 17 THE CENTRE’S ADVANCE direct tax receipts for the first quarter of the current financial year from companies, LLPs and individuals rose by a robust 27% on year to `1.49 trillion as of June 16, sources said. Given that the advance tax had increased by 14% in Q1FY24, the sharp increase in Q1FY25 indicates continued traction in the economic activity. Advance tax collections are a good indicator of corporate profitability and rise in the earnings of individuals. Advance taxpayers have to pay 15% of their income tax liability by June 15 of each year. Direct tax receipts rose bya robust 17.8% on-year to `19.64 trillion in FY24, helping the Centre undershoot the fiscal deficit at 5.6% of GDP as against INSIDE the revised target of Capital gains 5.8%. Despite higher up 105% refunds during Q1FY25, inAY23 direct tax receipts (after ■ PAGE 2 refunds) stood at `4.62 trillion, an increase of 21.6% on year, indicating that receipts for the full year will likely exceed the target of `21.99 trillion. Refunds were at `53,140 crore till June 16 of the current fiscal, about 34% higher than `39,578 crore in the year-ago period. The operating profit margin (OPM) of India Inc will remain steady in the range of 15-18% in Q1FY25, despite the expected tapering in revenue growth, as raw material costs are expected to remain steady,Icra said in a report on Monday. Till June 16, direct tax collections comprised corporation tax of `1.81 trillion, up 15.3% on year. Income tax receipts, including securities transaction tax (STT) stood at ADVANCE TAX COLLECTIONS (` trillion) 1.17 1.49 Q1FY24 Q1FY25 DIRECT TAX RECEIPTS (As of June 16, FY25)^ ` trillion Growth (%, yoy) Direct tax collections 4.62 21.6 Corporate tax 1.81 15.3 2.81 Income tax* 26.6 ^After refund; * includes STT `2.81 trillion, an increase of 26.6% on year. So far in the current fiscal, TDS and TCS receipts stood at `3.21 trillion, securities transaction tax at `11,605 crore and equalisation levy of `698 crore. Higher tax and non-tax revenues would give cushion to the government to provide for additional expenditure in the current financial year towards capex and welfare schemes. Higher tax and non tax revenues would give cushion to the government to provide for additional expenditure in the current financial year towards capex and welfare schemes. In profit per car,Hyundai races past Maruti,TaMo Earns 25% more than Maruti SWARAJ BAGGONKAR Mumbai, June 17 INDIA NEEDS TO rigorously verify the claimed value addition on gold & silver imports from the UAE and probe linkages between exporting and importing firms following a massive surge in imports of these metals last financial year, GTRI said, reports Mukesh Jagota. ■ PAGE 2 Tata Motors targets 20% market share *Prv close HYUNDAI MOTOR INDIA may be the second largestcarmanufacturerinthecountrybutwhen it comes to profit percarsold,it overshadows its nearesttworivalsMarutiandTataMotors. During the first nine months of FY24,the net profit of the South Korean carmaker’s India INSIDE subsidiary was `75,000 Carmaker per car, 25% more than to roll out the market leader Maruti four EVs Suzuki’s `60,150 for the same period. ■ PAGE 4 Tata Motors, India’s third largest carmaker, does not share net profit for its passenger vehicle division but it declaredaprofitbeforetaxof`21,300perpassenger car for the nine months to December. Havingfavourablyshedthesmallcarmanufacturer tag with the scrapping of the restoredSantroafewyearsago,HyundaiMotor India,the entitywhich is preparing to go public, had an average selling price of `8.92 lakh per car. Though this is higher than Maruti Suzuki’s `6.33 lakh, it is smaller than Tata Motors’`9.07 lakh. Hyundai shares soar in Seoul on India IPO plan HYUNDAI MOTOR'S shareshit arecordhighasinvestorsbeton the South Korean automaker's plan to list its India unit in Mumbai, which would help Hyundai Motor boost its presence in the world's third biggest auto market, reports Reuters.Shares of Hyundai Motorrose as much as 6.3% on Monday to 285,000 won ($206.47) in Seoul, and closed up 3.9%, a record high close which lifted its marketcapitalisationto58.3trillionwon. From having a hatchback-heavy product portfolio, Hyundai steered towards the high marginsportsutilityvehicle(SUV) segmentin pursuit ofpremiumisation.Itsbest-selling car isn’t a hatchback anymore but the mid-size SUV Creta, which alone sees more volumes than its only remaining hatchbacks – Grand i10 and i20 Elite – put together. Continued on Page 9 iPHONE SLIM MODEL LIKELY TO BE PRICED HIGHER Apple devices may go slimmer and lighter in 2025 FE BUREAU New Delhi, June 17 APPLE DEVICES ARE likely to go slimmerandlighter.TheCupertinobasedtechgiantmaybeplanningto launchathinneriPhone17in2025, accordingtoaBloombergnewsletter. Other Apple products like the MacBook Pro and the Apple Watch are also likely to be introduced in thinner and ligher versions. This means, Apple may once again be focusing on its old design language of making devices slimmer. The latest iPad might be a pointertoApple’s next line of products.The latest iPad Pro is powered by the new M4 chip and is the slimmest iPad Pro at 5.1mm. “Apple’s new iPad Pro sets the CUTTING EDGE ■ In 2023, Apple analyst Ming-Chi Kuo had claimed that Apple will use a thinner motherboard technology in the high-end iPhone 17 series models ■ The latest iPad Pro is powered by the new M4 chip and is the slimmest iPad Pro at 5.1mm ■ Apple is likely to stay with ■ Despite being released in a thinner version, the iPad Pro offers the same battery life as previous generation devices stage forthinneriPhones and other devices.Over the past several years, Apple appeared to be shifting away from making devices as thin and lightaspossible,”Bloomberg’sMark Gurman said in the newsletter. Despite being released in a thinner version, the iPad Pro offers the same batterylife as previous generation devices. the current dimensions for iPhone 16 series, expected to be launched in September this year “The plan is for the latest iPad Pro to be the beginning of a new classofAppledevicesthatshould be the thinnest and lightest products in their categories across the whole tech industry,”Gurman notes. In2023,AppleanalystMing-Chi KuohadclaimedthatApplewillusea thinner motherboard technology in the high-end iPhone 17 series models.The iPhone 17 Pro and Pro Max mayget under-displayFace ID scanners and a near bezel-less look.They maycomewithincreasedscreensize and a new scratch-resistant antireflective screen. The iPhone Slim model is likely tobepricedhigherthantheProMax model and would feature a complete design overhaul with a slimmer chassis. It may boast of an aluminium chassis and centrally aligned rear camera. Apple is likely to stay with the current dimensions for iPhone 16 series, expected to be launched in September this year. Apple’s keynote presentation at last week’s Worldwide Developers Conference (WWDC) didn’t reflect the exact features that will be arriving in the fall. Instead, it essentially gave a road map of what’s coming in late 2024 and the first half of 2025. “That rollout strategy marks an important shift forApple.Foryears, the company unveiled features at WWDC for release in the fall, but they sometimes ultimately had to delay features. This time around, Apple is telegraphing to users —via its website, online presentations and briefings with journalists — that its latest technologywon’t followa strict timeline,”thenewsletter says. BENGALURU