Private sector lender ICICI Bank has slashed the fixed deposit (FD) rates by up to 50 basis points effective May 11. The customers will now get 5.25 per cent interest on deposits up to one year, while those above one year will earn 5.7 per cent to 5.75 per cent, ICICI Bank said on its website. It comes as the banks are flush with liquidity on account of low credit growth. The lenders are instead parking their funds with the Reserve Bank of India (RBI) at a rate of interest as low as 3.75 per cent. The average amount deposited between May 4 and May 6 stood at over Rs 8 lakh crore, which is considered on the higher side.

The banks were also not comfortable to lend to weak companies in an economy slowing due to coronavirus, the experts said. "Since banks are flooded with liquidity, the FD deposit rate cut may be to deter the depositors from parking more cash in the banks," said SEBI-registered investment adviser Basavaraj Tonagatti. The rates are getting lowered by the banks since  inflation is also easing according to the RBI data, Tonagatti also said.

In March, the country's largest bank State Bank of India (SBI) had sharply reduced the fixed deposit (FD) rates after the RBI, in its 7th bi-monthly monetary policy statement, announced a 75 basis points (bps) cut in repo rate along with 90 bps reduction in reverse repo rate to offset the impact of coronavirus pandemic on the economy.

SBI had earlier announced an interest rate cut on FDs on March 10. The bank had reduced domestic retail term deposit (TD) interest rates by 20 bps to 50 bps across tenors and bulk TD interest rates reduced by 50 bps to 100 bps across tenors.

Indian pharmaceutical exports have taken a $1.5 billion hit in FY20 as the last quarter (Jan-Mar) registered negative growth, pulling down pharma exports to $ 20.58 billion instead of an estimated $22 billion. For the whole year, pharma exports registered a growth of 7.57 percent as against 10.72 percent in FY 19.

According to figures declared by the Pharmaceutical Export Promotion Council of India (Pharmexcil), pharmaceutical exports registered a growth of 11.21 percent during the first quarter of FY20. For the second quarter and third quarter it was 8.69 percent and 14.64 percent, respectively. Exports in January (11.72%) were also on par with the average of first nine months (11.5%). However, due to COVID-19 related supply chain disruptions, export bans and lockdown in key markets, the growth rates in February and March slipped to 7.7 percent and -23.24 percent, respectively, resulting in negative growth of - 2.97 percent in the fourth quarter.

"India being dependent on China to an extent of 60-70% of its needs of bulk drugs has suffered disruption in the supply chain with the outbreak of COVID-19. Our imports of bulk drugs went down significantly in February. Combined with lockdown measures across the countries, and export restrictions on some of the products, have contributed to the situation of downturn in export growth," Udaya Bhaskar, Director General, Pharmexcil, said.

"Usually Indian pharma exports during February and March are quite brisk. Having seen the good pace of export trend in first three quarters and price stabilisation in the United States, it was estimated that in FY20 exports would reach $22 billion," he added. Drug formulations and biologicals, which contributed to almost 72 percent of exports, showed 9.5 percent growth in FY20. However, exports of bulk drugs and drug intermediates, the second largest category grew -0.73 percent. Vaccines and surgicals recorded 22 percent and 10.5 percent growth, respectively.

Bhaskar also said that the government has approved some promotional schemes suggested by Pharmexcil to reduce import dependency on bulk drugs and other key raw materials. The first scheme is to develop three mega bulk drug parks in partnership with states. Central government will give grants, in aid to states, amounting to Rs 1,000 crore for each park in the next five years under the scheme.

The second scheme provides financial incentive for eligible manufacturers of 53 critical bulk drugs (26 fermentation-based and 27 chemical synthesis-based bulk drugs) on their incremental sales over base year FY20 for a period of six years. A sum of Rs 6,940 crore has been approved for the eight year period, Bhaskar said.

Taxes on liquor are the low hanging fruits for states battling with revenue constraints on the back of a nationwide lockdown due to coronavirus.

After the Delhi government levied a Corona fee of 70% on the MRP of the liquor sold, the Andhra Pradesh government has also increased taxes on liquor by 50% to 75%. Earlier, Rajasthan government increased the taxes on liquor and beer by 10 percentage point. The maximum tax on liquor in Rajasthan is 45%.

Others might follow suit given the state governments face tremendous scarcity of resources owing to outbreak of coronavirus and the resultant lockdown. Since taxes on liquor are outside GST, the states have the authority to change the rates without seeking permission from a central authority like GST Council.

Revenue from taxes on liquor accounts for 15-25% of states' own tax revenue. In case of Delhi, the state expects to mop up Rs 6,300 crore from taxes on liquor out of its estimated own tax revenue of Rs 44,100 crore in 2020-21. In the previous year, Delhi is likely to have collected Rs 5,500 crore from liquor alone.

The 70% corona fee will be big boost for Delhi government tax collection. It is still not known if the special Corona fee is just a short-term levy or it will be extended for the whole year.

In case of Andhra Pradesh, the state raised around Rs 8,300 crore in the previous financial year through taxes on liquor sale.

Rajat Bose, Partner, Shardul Amarchand Mangaldas and Co, says "Tax on liquor is a low hanging fruit at the moment for state governments to garner revenue, which has otherwise dried up in light of the economic lockdown. Given the massive queues in front of liquor shops since yesterday, the state government can hope for a robust collection of taxes in the immediate future which can be channelised for funding the growing demand for testing and health care services during these times."

Tax on liquor, which is also called state excise, helped states mop up close to Rs 1.7 lakh crore in the previous financial year. This year, total collection through state excise could cross Rs 2 lakh crore. Alcohol is not part of the Goods and Services Tax (GST), and hence states have authority to decide the rate of tax to be levied on alcohol.

Any rate changes under GST have to be approved by the governing body -- the GST Council -- and the rates under GST are uniform across states

GCMMF, which markets dairy products under Amul brand, expects its turnover to grow 15 per cent this fiscal year from Rs 38,550 crore in 2019-20 despite economic slowdown caused by the nationwide lockdown to control coronavirus outbreak.

The household consumption of milk and other dairy products is expected to rise and will compensate any temporary loss of sales caused by closure of hotels, restaurants and cafeterias (HoReCA segment) during the ongoing lockdown period, said R S Sodhi, the managing director of Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF).

Air passenger traffic is expected to log a 30 per cent negative growth during this fiscal from earlier estimate of a 20-25 per cent negative growth amid coronavirus pandemic, ratings agency CARE Ratings said on Tuesday. The agency also expects the airfare to rise in the wake of the social distancing norms.

All domestic and international commercial passenger flights are suspended since March 25 for the lockdown till May 3, as of now. "CARE Ratings earlier had given a call of negative 20-25 per cent growth during FY21 in terms of airlines passenger growth rate, but given the increase in cases, its rapid spread and with more undetected clusters getting converted into corona hotspots, the tenacity of the end of the pandemic is uncertain and is showing no signs of abating," the agency said in a note.

Noting that even as a vaccine is yet to be found, lockdowns remain the only way to slow its spread, CARE Ratings said, "we would be revising our earlier estimate and bringing it further down to a negative 30 per cent growth in air passenger traffic during FY21." The passenger volume growth stood at 13.7 per cent in the fiscal ended March 31, 2019, while it spiked 3.7 per cent during the April-February period of the last fiscal, it said.

Metros, which are the worst-affected and account for more than half of the passengers handled, the note stated, adding that Delhi Mumbai, Bangalore, Chennai, Kolkata and Hyderabad airports accounted for 63 per cent of the passengers handled in the April-January period of the previous fiscal. Airfares are also expected to increase as aircrafts may accommodate only one passenger per row in order to maintain social distancing, the note stated.

With the extension of the lockdown, the government has directed domestic airlines, most of whom had announced resumption of services in phased manner from May 4 and also started bookings, not to take any booking for domestic or international flights until further notice.

"The lockdown which is supposed to end by May 4, is most likely to get extended as the number of cases is on the rise and certain states are unable to flatten the curve of transmission. "Even post the lifting of lockdown, passenger growth will face a sharp contraction considering the inhibitions of travelling anywhere till the pandemic scare has been settled fully in the domestic regions and internationally especially on certain routes," CARE Ratings said in the note.

Moreover, with the containment of the virus in the near future, countries including India will not be issuing visas soon fearing the rise of any exigency with the entry of foreign nationals, it said, adding the Covid-19 has put a halt on major business operations which means there will be a considerable fall in income which will also discourage incurring of discretionary expenses like travelling for leisure and tourism.