General Awareness

BUSINESS AND ECONOMY - February 2017

Feb 2017

Jul 04, 2019

MSP for Kharif Crops

The Union cabinet approved increase in federally fixed minimum support prices (MSPs) of 16 kharif or summer-sown crops, setting these at a minimum of 1.5 times the cost of production so that farmers can hope to get 50% returns on their output.
The increase came as good news for farmers in the backdrop of a delayed monsoon and a potential shortfall in farm output in a country where half of the population depends directly or indirectly on agriculture for a livelihood.
MSP is a benchmark price that is meant to act as a floor rate, thereby helping avoid distress sales of farm produce.
MSP for paddy, the main summer crop sown during the four-month south-west monsoon, was raised by Rs. 65 per quintal, while that of jowar was increased by Rs. 120 per quintal. MSP for ragi was hiked by Rs. 253 per quintal.

Govt. Nod for Leasing out 3 Airports to Adani

The government approved leasing out of three State-owned airports — Ahmedabad, Lucknow and Mangaluru — to Adani Enterprises Limited through a public- private partnership.
In February 2019, Adani Enterprises emerged as the winning bidder for six airports bid out by the Airports Authority of India.
With the Union Cabinet approving leasing of only three of them, uncertainty hangs over the Guwahati, Thiruvananthapuram and Jaipur airports.
It is learnt that the Ministry of Civil Aviation had sent a proposal for all the six airports to the Cabinet.
The bids expires on July 30, 2019, though a senior AAI official said that their validity could be extended.

Tech Firms Plan to Shift Production Out of China

Several technology companies, including HP Inc, Dell Technologies and Microsoft Corp , are planning to shift substantial production capacity out of China.
HP and Dell are planning to reallocate up to 30% of their notebook production out of China.
Microsoft, Google, Amazon.com Inc, SonyCorp and Nintendo Co Ltd are also looking at moving some of their game console and smart speaker manufacturing out of the country.

Welspun India Receives Approval for Litigation Settlement

Textile firm Welspun India received preliminary court approval for settlement of its litigation in the US with regards to labelling and marketing of Egyptian cotton products.
In May, 2019 Welspun India had announced that company and its subsidiaries, which have been facing litigation in the US surrounding its premium cotton home textile products, have entered into a settlement agreement in the US.
The settlement agreement provides monetary payments to settlement class members not exceeding USD 36 million (about Rs. 250 crore).
The company received preliminary court approval for its settlement agreement, which is intended to resolve all pending legal claims in the United States concerning past marketing and labelling of the company's premium cotton home textile products.
The plaintiffs in other pending litigations involving these issues have also agreed not to object to the settlement agreement.

Jul 03, 2019

Infusion in Payments Bank

Bharti Airtel and Bharti Enterprises injected about Rs. 325 crore in Airtel Payments Bank, as per regulatory documents.
The fund infusion from Bharti Airtel stood at Rs. 260 crore, and that from Bharti Enterprises at Rs. 65 crore in the form of preference shares.
As per Airtel Payments Bank Managing Director and CEO, Anubrata Biswas, the company would continue to invest in ramping up operations to tap the enormous opportunity presenting itself.

Kalpataru Power to Sell Transmission Projects

Mumbai-based Kalpataru Power Transmission is in pact with CLP India Private to sell its stake in three power transmission assets for an enterprise value of Rs. 3,275 crore.
As a part of the deal, KPTL would sell three assets- Kalpataru Satpura Transco Private, Alipurduar Transmission and Kohima Mariani Transmission.
The sale of assets would lead to a significant reduction in KPTL's consolidated debt and will help focus on strategic diversification within the core business. KPTL would continue to focus on sustainable and profitable growth with the commitment to improve return ratios.
The transaction is subject to requisite approvals and compliances. The transaction for Alipurduar Transmission and Kohima Mariani Transmission, where Techno Electric & Engineering owns 26% stake, would be effective after the Commercial Operation Date and fulfilment of certain conditions.

OIL Wins Oil Blocks in Auction

State-owned Oil India Ltd. (OIL) won 12 out of 32 oil and gas exploration blocks offered in the latest auction while Vedanta Ltd. walked away with 10 and Oil and Natural Gas Corp. (ONGC) 8.
According to the list of winners of Open Acreage Licensing Policy (OALP) Round II and III put out by the Directorate General of Hydrocarbons (DGH), Reliance Industries and its British partner BP Plc. won a KG basin gas block. Indian Oil Corp. (IOC) also got one block.
The Reliance-BP combine outbid ONGC in one Krishna Godavari basin block in the Bay of Bengal.
This is an area that ONGC had previously relinquished and is said to hold natural gas prospects.

UAE Approves Full Foreign Ownership of Firms

The United Arab Emirates decided to lift a decades-old cap on foreign ownership and allow full foreign control of business ventures.
In a cabinet meeting, UAE Vice President and Prime Minister Sheikh Mohammed bin Rashed Al-Maktoum approved 100 per cent foreign ownership in 122 economic activities.
The decision abolishes a decades-old law that limited foreign ownership to just 49 per cent.
The move covers fields including agriculture, manufacturing, renewable energy, e-commerce, transportation, arts, construction and entertainment.

Convention to Curb Company Profit Shifting

The government announced that it ratified the international agreement to curb base erosion and profits shifting (BEPS), a bid to stop companies from moving their profits out of the country and depriving the government of tax revenue.
India ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (multilateral instruments (MLI)), which was signed by the Finance Minister in Paris on June 7, 2017 on behalf of India, along with representatives of more than 65 countries.
Base erosion and profit shifting refers to the phenomenon where companies shift their profits to other tax jurisdictions, which usually have lower rates, thereby eroding the tax base in India.
The MLI is a result of concerted work by the G20 countries to tackle the issue of base erosion and profit shifting, something that affects them all.
India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from the G20, Organisation for Economic Co-operation and Development (OECD), and other interested countries, which worked on finalising the text of the Multilateral Convention.
The MLI will modify India's tax treaties to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out.
The MLI will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures.
Out of 93 tax treaties notified by India, 22 countries have already ratified the MLI so far and the Double Taxation Avoidance Agreement (DTAA) with these countries will be modified by MLI.
For the remaining countries with tax treaties with India, the MLI will come into force when they ratify it. The MLI will come into force for India from October 1, 2019.

MG Motor and Fortum Tie-up

The Indian subsidiary of China's SAIC Motor Corp. Ltd announced tie-up with Finnish state-run utility Fortum Oyj to install 50 kilowatt (KW) fast-charging stations for electric vehicles.
The move by MG Motor India Ltd comes ahead of the introduction of the company's first electric vehicle by the end of December 2019.
The launch of the eZS electric sport-utility vehicle would make MG the second mass-market automaker in India after Hyundai to offer an electric SUV.
South Korea's Hyundai is set to introduce its Kona electric SUV on 9th July. 2019. The charging stations would be opened initially at MG dealerships in five cities.
The company became the youngest automaker to enter India with the launch of the Hector SUV on June 25, 2019.
The lack of charging stations was cited as a key factor hindering the adoption of electric mobility in India.
The move would allow MG and its parent SAIC to have an advantage over Japanese and European companies in India's emerging EV market, despite being a new entrant in the local auto market.
Under the partnership, Fortum would install 50KW DC fast public charging stations for electric vehicles at dealerships in the Delhi-National Capital Region, Hyderabad, Mumbai, Bengaluru, and Ahmedabad by September 2019.

Deterioration in Bank Fraud Cases

The incidence of bank fraud exceeding one lakh rupees declined to 6,735 in 2018-19, from 9,866 in the last financial year (2017-2018).
As per Finance Minister Nirmala Sitharaman, during the year 2018-19, 6,735 bank fraud cases of Rs. 2,836 crore were incurred, which was less than 9,866 rupees in comparison to Rs. 4,228 crore in 2018.
Prior to this, the credit culture and discipline in the financial system was quite low. The Finance Minister said that the role of bankers was not strictly examined as before and the auditor was not independently regulated.
Sitharaman said that the change in credit culture has been established through extensive reforms and discipline has been tightened for each stakeholder in the financial system, which has led to a decline in the incidence of fraud.

Jul 02, 2019

U.S. EB-5 Applications to Become Dearer

The United States decided to effect a steep increase in the application fee for its Immigrant Investor Visa Programme, EB-5.
Although a hike was under consideration since January 2017, the U.S. administration kept pushing the decision, at least half a dozen times, until the U.S. Office of Management and Budget (OMB) took a final call in June 2019 after it completed its review of the EB-5 modernisation regulations.
Under the revised scheme, the application fee for projects under Targeted Employment Areas, would go up to $1.35 million from the current $500,000. The standard minimum investment would also rise to $1.8 million from the existing $1 million.
The date of the new fee implementation and details of the final regulation would be known in the next 60 days through a publication in the Federal Register.
As of now, EB-5 could probably be the quickest legal route available for immigrants to get Green Card and permanent residency in the U.S.

OPEC Set to Extend Oil Supply Cut

OPEC and its allies look set to extend oil supply cuts at least until the end of 2019 as Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing a policy aimed at propping up the price of crude amid a weakening global economy.
OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has become the world's top producer in 2019 ahead of Russia and Saudi Arabia.
Fears about weaker global demand as a result of a U.S.-China trade spat have added to the challenges faced by the 14-nation Organisation of the Petroleum Exporting Countries in recent months.

Airbus India Spins off New Firm

An internal team of engineers working for Airbus India was allowed to form an independent company called UUO Innovation to commercialise napEazy, a unique comfort kit that was designed and developed by them for long-haul economy-class passengers.
This is the first time in the Indian aerospace sector that an internal team was encouraged by the parent company to spin off as an autonomous organisation.
The new company was accelerated at Airbus Bizlab India, which would support the market launch of the comfort kit.

Liberty Completed Acquisition

Liberty Steel, part of entrepreneur Sanjeev Gupta's global GFG Alliance, completed the acquisition of seven major steelworks and five service centres across seven European countries from ArcelorMittal.
The 740 million euro deal makes Liberty Steel one of the top ten producers globally, excluding China, with a total rolling capacity in excess of 18 million tonnes covering a wide range of finished products.
This is the largest single transaction undertaken by GFG and brings the Alliance's worldwide workforce to nearly 30,000 across 30 counties.
The seven sites employ over 14,000 people and include the major integrated steel works at Ostrava in the Czech Republic and Galaţi in Romania as well as rolling mills at Skopje (North Macedonia), Piombino (Italy), Dudelange (Luxembourg) and two plants near Liege in Belgium. The service centres are based in France and Italy.

Two Banks Slash Lending Rates

ICICI Bank reduced its one-year MCLR (marginal cost of funds based lending rate) by 10 basis points (bps) to 8.65%, while Punjab National Bank reduced it by 5 bps to 8.4%.
The new rate is effective from July 1, 2019. Most floating rate loans are linked to one-year MCLR.
More banks are expected to follow the suit. In June, the central bank reduced the repo rate by 25 bps to 5.75%. In 2019, the repo rate was reduced by a cumulative 75 bps.

Oil Companies Reduce Prices of ATF and LPG

State-owned oil marketing companies (OMCs) reduced the price of aviation turbine fuel (ATF) for both domestic and international airlines with effect from July 1, 2019.
For domestic airlines, price reduction is between Rs. 3200 and Rs. 3900 per kilolitre in the four metros.
The price of non-subsidised liquified petroleum gas (LPG) 14 kg cylinders was reduced by Rs. 100 with effect from July 1, 2019.
The price of subsidised LPG was reduced by Rs. 3 per cylinder.

CRI Group Invests in U.S. and Mexico

CRI Group, which is into fluid management solutions, invested Rs. 35 crore ($5 million), setting up facilities in the U.S. and Mexico.
As per G. Soundararajan, vice chairman, the plant in the U.S. would take up minor assembly works of units exported from here and supply borewell products, waste water pumps, pressure boosting and industrial pumps in the U.S., Canada, Mexico, Central America and Caribbean countries.
The CRI Group currently has facilities (wholly owned subsidiaries) in Spain, Italy, Brazil, Turkey, China, South Africa, and the UAE. Nearly 16 % of the group's Rs. 2,100 crore turnover is from overseas business.

Jul 01, 2019

First Tranche Payment to Pakistan

Qatar sent the first tranche of $3 billion to Pakistan that will help boost its dwindling foreign-exchange reserves.
The amount would be with Pakistan in the next few days. The gas-rich nation pledged the amount in deposits and investments to Pakistan after Qatar's Emir Sheikh Tamim Bin Hamad Al Thani visited Islamabad in June 2019.
The inflow follows Saudi Arabia and the United Arab Emirates sending $5 billion in aid packages.
Pakistan also received $2.1 billion loan from China in March 2019, after Pakistan's Prime Minister Imran Khan approached friendly countries to help it avert a balance of payments crisis.
Pakistan's foreign-exchange reserves have dropped by about 25% to $7.3 billion

BoB Buys Out Loans from DHFL

Bank of Baroda (BoB) entered into a transaction with Dewan Housing Finance Corp. Ltd (DHFL) to acquire loans worth Rs. 3,000 crore against its exposure to the non-bank lender, even as a lenders' consortium to the stressed non-bank lender is looking at a resolution plan.
BoB acquired the pool of loans made by DHFL and adjusted it against its loans to the non-bank lender. Since the acquired loans are higher-rated assets, the quality of BoB's loan book would improve.
Now DHFL would only act as a collection agent for the bank for these loans. The bank would keep around 85-90% of the repayments to itself and the rest will go to DHFL.

Money in Swiss Banks

As per data released by the central banking authority of the Alpine nation, India moved down one place to 74th rank in terms of money parked by its citizens and enterprises with Swiss banks, while the UK retained its top position.
India was ranked 73rd in 2018, after jumping 15 places from its 88th position a year ago (2017).
An analysis of the latest annual banking statistics released by the Swiss National Bank (SNB) showed that India remained ranked very low when it comes to money parked by Indian individuals and enterprises in Swiss banks, including through their India-based branches, while accounting for just about 0.07 per cent of the aggregate funds parked by all foreign clients of Switzerland-based banks.
In comparison, the top-ranked UK accounted for more than 26 per cent of the total foreign funds parked with Swiss banks at the end of 2018.
Among the top-ranked jurisdictions, the UK is followed by the US, West Indies, France and Hong Kong in the top five.

Jun 30, 2019

Pakistan Signs Syndicated Loan with UAE Banks

Pakistan signed a $375 million syndicated loan with banks in the United Arab Emirates, made up of conventional and Islamic banking tranches.
The tranches were fully subscribed by a syndicate of leading UAE banks.
Emirates NBD Capital Limited was global coordinator. The transaction was anchored and arranged by Commercial Bank of Dubai, Emirates NBD Bank, Noor Bank, Dubai Islamic Bank, Mashreqbank and Sharjah Islamic Bank.

Price Waterhouse Steps Down as Auditor

Price Waterhouse & Co. Chartered Accountants LLP (PwC) stepped down as auditor of Eveready Industries India Ltd. (EIIL)
In a letter dated June 28, 2019, PwC expressed its inability to continue as auditors of the B.M. Khaitan flagship company.
As per Eveready Industries, the decision was based on review of annual continuance process at EIIL.
EIIL board approved the appointment of Singhi & Co. Chartered Accountants in the place of PwC.
The company, which also suffered rating downgrades, also announced the sale of its tea packet brand to Madhu Jayanti International.

New GST Return Filing System

A new return filing mechanism — Goods and Service Tax 2.0 — would be rolled out from October, 2019, for big businessmen and from January, 2020 for small businessmen.
According to Bihar Deputy Chief Minister Sushil Modi, who chaired a Group of Ministers' meeting, the GST, which is entering the third year from July 1, 2019, would focus on simplification of procedures, compliance and crackdown on tax evasion.
It has registered an average monthly collection of Rs. 91,334 crore in the last 21 months.
Mr. Modi said that traders/businessmen having zero transactions or nil filers could now file returns through SMS.
For those dealing with business to consumer with an annual turnover of less than Rs. 5 crore a year would have a new format 'Sahaj' and they could file returns once in four months.
A new single return format called 'Sugam' is ready for traders dealing with business-to-consumer and business-to-business.
Businessmen having annual turnover of more than Rs. 5 crore will have to file returns every month.

HUL Sets up Council for Digital Transformation

FMCG major Hindustan Unilever Limited (HUL) set up a council for digital transformation.
It comprises a cross functional team of leaders, who are designing and landing the agenda of Reimagining HUL.
Currently, more than 80 experiments are under way in the business to accelerate HUL's journey in digital transformation.
Mr. Mehta spoke about how HUL had created a full-fledged, end-to-end, digital transformation programme that would redefine the ways of working, going forward.

Lenders Approve JSW's Bid for ACCIL

Lenders of Asian Colour Coated Ispat Ltd. (ACCIL) approved the JSW Group's Rs. 1,550-crore bid to acquire the debt-ridden steel firm.
ACCIL went into insolvency in July, 2018 after the National Company Law Tribunal (NCLT) admitted an application by State Bank of India (SBI) to initiate the Corporate Insolvency Resolution Process (CIRP) for the company.
The Resolution Professional (RP) appointed to carry out the insolvency process was Kuldip Bassi.
The total admitted debt in the resolution process was about Rs. 6,500 crore. The committee of creditors approved the bid of JSW Group, with nearly 80% of lenders voting in favour.
For approval, a resolution plan needs at least 66% votes in favour.
To acquire ACCIL, JSW offered Rs. 1,550 crore, almost all of which would go to financial creditors.
SBI, Bank of Baroda and IDBI Bank are the main lenders, along with some other banks and financial institutions.
ACCIL is a steel product manufacturing company and has plants near Delhi and Mumbai, with an annual capacity of one million tonnes.

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