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Effect of global economic slowdown ‘more pronounced’ in India: IMF chief

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Kristalina Georgieva, the new chief of International Monetary Fund, has said the global economy is witnessing “synchronized slowdown” and its effect is “more pronounced” in emerging markets like India.

In her speech, ahead of the IMF-World Bank autumn meetings next week, Georgieva said slower growth is expected this year in nearly 90% of world economies.

The IMF boss said growth in 2019-2020 will fall to its lowest rate since the beginning of the decade due to widespread deceleration. “In the United States and Germany, unemployment is at historic lows…In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year,” she said.

Georgieva took over from Christine Lagarde as the head of the IMF earlier this month.

The Indian economy is facing a slowdown. The gross domestic product (GDP) growth slowed to 5% in the quarter ended June, the slowest pace it has grown since March 2013, when it expanded 4.7%.

This was the fifth straight quarterly decline in growth. Slowing household demand, which took its toll on other sectors, was one of the major factors for the decline in growth.

In July this year, IMF had projected a slower economic growth for India and cut its projection by 0.3 percentage points for both 2019 and 2020. It said India’s GDP will grow at 7 and 7.2 per cent in 2019 and 2020.

The world economy had been projected to grow by 3.2 percent in 2019 and 3.5 percent in 2020 but Georgieva said on Tuesday that the IMF is cutting its forecasts. The IMF is expected to release details in its updated World Economic Outlook on October 15.

The IMF chief also warned that there could be a loss of around $700 billion by 2020 due the effect of the trade conflicts. “This amount is approximately the size of Switzerland’s entire economy,” she said.

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What happens if you don’t link PAN card with Aadhaar by December 31

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Still have not linked your PAN (Permanent Account Number) card with Aadhaar? Do it right away as the Central Board of Direct Taxes (CBDT) is expected to declare PAN cards which are not linked to Aadhaar as “invalid” if not linked till December 31, 2019.

The income tax department has extended the deadline of linking PAN cards with Aadhaar for the seventh time to December 31, 2019, from September 30, 2019.

The income tax department said, “In case of failure to intimate the Aadhaar number, PAN allotted to the person shall be deemed to be invalid and other provisions of this Act shall apply, as if the person had not applied for allotment of PAN.”

The Finance Bill says that all PAN cards that will not be linked with Aadhaar by December 31, 2019, will become “inoperative”. There is a possibility that the income tax department might allow revival of the “inoperative” PAN cards when they are linked with Aadhaar.

Here are ways you can easily link your PAN card with Aadhaar:

For linking your PAN card with Aadhaar, you don’t have to stand in queue and the process is simple and quick. People who still have not linked their PAN cards with Aadhaar can simply visit the income tax e-filing portal or can link PAN and Aadhaar through SMS.

Linking PAN card with Aadhaar online

To link PAN card with Aadhaar online, users will have to visit to the e-filing portal where on the left side they would find a “Link Aadhaar section.

e-filing link: https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/LinkAadhaarHome.html

Users will need to submit PAN, Aadhaar number and name as per Aadhaar to complete the process. The authentication is done through an OTP sent to your registered mobile phone.

Linking PAN card with Aadhaar via SMS

As mentioned, users can also link their PAN card with Aadhaar through SMS. To link PAN with Aadhaar go to the message or SMS option of your mobile phone, type UIDPAN<SPACE><12 digit Aadhaar><Space><10 digit PAN> ad send the message to either 567678 or 56161.

Make sure to link PAN card with Aadhaar, a person’s name, gender, date of birth should be exactly the same in both the documents.

If the name on person’s Aadhaar card is different from that mentioned in PAN card, the linking will fail and the person will have to get the name changed in database of either of the two documents.

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Sri Lanka wants to undo deal to lease port to China for 99 years

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Sri Lanka’s new government led by President Gotabaya Rajapaksa wants to undo the previous regime’s move to lease the southern port of Hambantota to a Chinese venture, citing national interest.

Former Prime Minister Ranil Wickremesinghe in 2017 changed the terms, saying it would be difficult to pay the loans taken to build the project. He agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings Co. in return for $1.1 billion. That helped ease the Chinese part of the debt burden raised to build the port, Wickremesinghe said in an interview in 2018.

“We would like them to give it back,” Ajith Nivard Cabraal, a former central bank governor and an economic adviser to Prime Minister Mahinda Rajapaksa, said in an interview at his home in a Colombo suburb. “The ideal situation would be to go back to status quo. We pay back the loan in due course in the way that we had originally agreed without any disturbance at all.”

The port is emblematic of the controversy dogging Chinese President Xi Jinping’s Belt and Road initiative from Kenya to Myanmar, including accusations that the world’s second-largest economy is luring poor countries into debt traps. In Sri Lanka, where the transaction to lease the port was opposed by Rajapaksa’s party, Mahinda took Chinese loans during his 10-year rule as president to build the project in his home district.

“This is a sovereign agreement” and it’s unlikely that it will be scrapped or altered in a big way, said Smruti Pattanaik, a research fellow at the Institute for Defence Studies and Analyses in New Delhi. “The Chinese may reconsider some clause, if it is considered crucial for the Rajapaksa regime.”

An attempt to rework the transaction will help the new Sri Lankan government, led by Gotabaya and his brother Mahinda, showcase their drive to change contracts seen as hurting national security, a key campaign platform for Gotabaya, a former defense secretary.

“China-Sri Lanka cooperation, including the Hambantota port project, are built on the basis of equality and consultation,” China’s Foreign Ministry said in a faxed statement from its spokesperson’s office. “China looks forward to working with Sri Lanka to make Hambantota a new shipping hub in the Indian Ocean and developing the local economy.”

China’s infrastructure-building in Sri Lanka became part of Beijing’s Belt and Road Initiative, prompting concern in India about its geopolitical rival using a port close to its southern coastline for future military or strategic uses. Gotabaya is in India on Friday for his first state visit overseas.

China has dismissed worries over any military dimension to its investment in the Hambantota port, which lies on the main shipping routes between Asia and Europe, and said it was mutually beneficial that would aid Sri Lanka’s economy.

“Sri Lanka will have to offer it something equally, if not more, attractive in financial terms for Beijing to agree to the cancellation of the lease agreement,” said Brahma Chellaney, a professor of strategic studies at the Center for Policy Research in New Delhi. “With the Rajapaksa family back in power, China hopes to expand its footprint in Sri Lanka.”

A similar port deal under the Belt and Road program in Myanmar was drastically scaled to $1.3 billion from $7.5 billion, while in Malaysia the government canceled $3 billion worth of pipelines and renegotiated a rail project in 2019, cutting that one’s cost by a third to $11 billion.

“Bilateral agreements once you’ve signed those, are serious agreements,” Cabraal said in his house adorned with pictures of local and foreign leaders. “At the same time, we’ve got to look after the national interests. And if one government had bartered it away, there is a necessity for the new government to find ways and means by which it can be done amicably.”

For its part, China Merchants, whose $93 billion of revenue dwarfs Sri Lanka’s gross domestic product, has been able to use its experience stretching from China to Europe to help kick start the Hambantota port, which once hardly attracted any ships.

China Merchants’ Hambantota joint venture also last month said it had entered into an agreement with Japanese shipping conglomerate Nippon Yusen KK, for vehicle transshipment through the port.

New Ports Minister Johnston Fernando wasn’t immediately available for comment.

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Subhash Chandra to lose control of Zee Entertainment after stake sale to repay loans

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The Subhash Chandra-led Essel group on Wednesday said that it is planning to sell 16.5 per cent stake in Zee Entertainment Enterprises Limited (ZEEL) to financial investors in order to repay loan obligations to certain lenders of the group.

After this transaction, the promoter stake in Zee Entertainment will be reduced to 5 per cent, which means that media baron Subhash Chandra will lose control of Zee Entertainment Enterprises Ltd.

Zee, considered to be the pioneer of television entertainment industry in India, was launched by Subhash Chandra in 1992. Ever since the launch year, the company expanded operations to enter packaging, infrastructure, education, precious metals, finance and technology sectors.

“The Group seeks to sell up to 16.5% stake in ZEEL to financial investors in order to repay loan obligations to certain lenders of the Group for whose benefit such shares are currently encumbered (and who have consented to such share sale by the Group),” the Essel Group said.

Earlier this year, Essel Group sold up to 11 per cent in Zee Entertainment to Invesco Oppenheimer Developing Markets Fund for Rs 4,224 crore.

“Out of the aforesaid, the Group seeks to sell 2.3 per cent stake in ZEEL to OFI Global China Fund, LLC and/or its affiliates. Pursuant to the aforementioned transactions, the post-transaction overall holdings of the Group in ZEEL will be 5%, out of which encumbered holdings of the Group will reduce to 1.1% of ZEEL,” it added.

Prior to Wednesday’s announcement, Subhash Chandra’s Essel Group companies held 22.37 per cent promoter stake in Zee. Of this, 21.48 per cent was pledged as collateral against finances availed by Essel Group firms.

Post the completion of the transaction announced on Wednesday by the company, Oppenheimer Developing Markets Fund and OFI Global China will together hold 18.74 per cent.

ZEEL closed higher by 7.89 per cent at Rs 307.15 apiece on the BSE on Wednesday.

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