Weekly Wrapup: Deep seated issues
In this week's wrapup, we will talk about why Tiger Global might end up paying its dues to Indian tax authorities, the reforms in India's coal industry, how startups use sweat equity, why real estate developers refuse to cut property prices, and the government's plan to monetize its idle assets.
Do not underestimate the Taxman
On Monday, we talked about why Tiger Global still hasn't paid taxes on gains it made two years ago off that Flipkart sale.
Tiger Global was one of the earliest investors in Flipkart. They held 22% of the company until 2018 when they offloaded about 17% to Walmart’s Luxembourg entity FIT Holdings for over INR 14,500 Cr.
Tiger Global made its investments through funds based out of Mauritius, in order to exploit a tax treaty between the countries. But the thing is, the Indian taxman is relentless. And it looks like tax authorities will have the last laugh after all.
Find out more here.
The Indian Coal Industry is getting a Makeover
On Tuesday, we talked about the changes happening within India's coal industry. India is the world’s second-largest producer of coal- we have resources amounting to 319 billion tonnes (as on 2018). Despite this, increased demand and domestic inefficiencies forced us to spend Rs. 1.71 lakh crore on importing 235 million tonnes of coal last year. And the government is now taking steps to ensure this never happens again.
Find out all about their reforms here.
More sweat equity for startups?
On Wednesday, we talked about how startups use ESOPs and sweat equity. Startups are an important part of India's growth story. They drive employment, influence consumer spending and provide solutions to pressing problems. But their success largely depends on their ability to attract and retain highly skilled and experienced employees. The problem is, they might not have the resources to afford this kind of talent. And now, the coronavirus has exacerbated this little dilemma.
However, startups still have a couple of incentives up their sleeves and you can find out more here.
Cut the prices already
On Thursday, we explored the problem with real estate prices in India. A few days ago, the honourable minister Piyush Goyal addressed the top Real Estate Developers in the country. He said — “Unless you reduce your rates, you are stuck with your material. You can choose to be stuck with your material and default with the bank and let the material go away, or you can choose to get rid of whatever you bought at high prices. You can think it as a bad decision or an unfortunate situation and move forward.”
Pretty blunt statement to make. So why did Piyush Goyal make these assertions and why are Real Estate developers so reluctant to reduce property prices? Find out here.
The government's idle asset problem
On Friday, we discussed the government's latest plan to monetize unused/underutilized assets.
The government has a big problem with its finances right now. Tax revenues have been inadequate. Demand is on the decline. GDP is cratering. And many people have been asking the government to spend and spend with intent. So they need to raise some cash, quick. One idea is to sell bits and pieces of government owned entities that could unlock large amounts of cash. Think gas pipelines, transmission lines, telecom towers, buildings, airports, ports, railways stations, and vast tracts of land. However, selling assets aren't as easy as they appear. And if you want to find out why, go ahead and click the link right here.
Well, that's it from us. See you on Monday!
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