General Awareness

BUSINESS AND ECONOMY - February 2017

Feb 2017

Jan 19, 2019

Price war: Jio will stick to tariffs, no relief seen for rivals

Reliance Jio Infocomm has told analysts that it sees no reason to raise tariffs now as it is generating strong revenue growth and robust customer additions at the prevailing levels, signalling that a revenue recovery for rivals Vodafone Idea (VIL) and Bharti AirtelNSE remains distant.
Several analysts from brokerages such as Goldman Sachs, Morgan Stanley and Citi Research, present at Jio's post fiscal third quarter earnings meet, quoted the mobile phone company's executives by saying that customer acquisition remains the focus, despite it having crossed 280 million subscribers, giving it a nearly 24% subscriber market share and over 26% revenue market share.

Fresh allegations singe Sun Pharma

Sun Pharmaceutical Industries Ltd.'s shares plunged to a nearly six-year low to 375.40, down 12.12%, following fresh allegations of corporate governance norms violation.
Shares of the pharma major declined 8.52% to close at 390.75 on the BSE on January 18.
A magazine had reported about a second whistleblower filing a complaint with SEBI against Sun Pharma's promoters, seeking to probe certain transactions.
The report claimed that Aditya Medisales Ltd., a key distributor of Sun Pharma products, had conducted transactions worth ₹5,800 crore with Suraksha Realty, a company owned by Sun Pharma executive director Sudhir Valia, between 2014 and 2017. Mr. Valia is also the brother-in-law of Sun Pharma promoter and managing director Dilip Shanghvi.
The contents of the reported complaint could not be verified as the document is not on public domain.

Farmer producer organisation from Gujarat makes first cotton deposit on MCX

A Farmer Producer Organisation (FPO) representing over 1,600 farmers from Somnath-Gir district, Gujarat has made a cotton deposit for the first time on Multi Commodity Exchange of India Ltd.
MCX is actively engaged in training farmers, handholding the Farmer Producer Organisations (FPOs) and connecting them with the Exchange platform in several states across the country.
It is already closely working with several FPOs or progressive farmers group in the producing region through institutions like Ambuja Cement Foundation, Reliance Foundation, CIMAP, NGOs and state agricultural and horticultural department officials.

India's debt up 50% to Rs 82 lakh crore in Modi era

Total liabilities of the government have increased 49 per cent to Rs 82 lakh crore in the last four-and-half years during the Narendra Modi government, as per the 8th Edition of the Status Paper on Government Debt released on 18th January, 2019.
Compared to the latest data available till September 2018 when the total debt of the Central government stood at Rs 82,03,253 crore, the corresponding amount till June 2014 was Rs 54,90,763 crore, the Finance Ministry's data on government borrowings shows.
The huge surge in government's debt has been propelled by 51.7 per cent growth in public debt from Rs 48 lakh crore to Rs 73 lakh crore in the four-and-half year period, which in turn was driven by 54 per cent rise in internal debt to about Rs 68 lakh crore.
Dependence on market loans shows a similar rise of 47.5 per cent to more than Rs 52 lakh crore during the period. While debt raised through gold bonds was nil at the end of June 2014, it stood at Rs 9,089 crore including the gold monetisation scheme.
While the country's debt has been on the rise, little help is expected from the fiscal deficit side in the current financial year. The fiscal deficit in the first eight months till November stands at Rs 7.17 lakh crore, or 114.8 per cent of the Rs 6.24 lakh crore full year's target.

Jan 18, 2019

India sees fastest app download

India's mobile internet economy is on fire. The country saw the fastest growth in app downloads among major countries between 2016 and 2018, led by a surge in downloads in food delivery and finance.
It also saw the fastest growth by far in the hours spent on video streaming apps.
The latest annual data from App Annie, an independent agency that collates data on apps, shows downloads in India (across Android and iOS) growing by 165% in this period.
In China, which accounts for almost 50% of all the downloads in the world, it grew by 70%. Indonesia followed at 55%.
In food delivery, India saw a dramatic 900% increase in downloads, way more than any other country.
The global average increase was 115%. While UberEats and Zomato were the two top apps globally, in India, Swiggy is likely to have led the increase. Swiggy and Zomato emerged as unicorns last year, with valuations above $1 billion.
India also saw an explosion of sessions growth in food and drink apps in 2018, up 120% from 2016, the report said.
Downloads of finance apps grew more than 200% in India, where countries like US and Germany did just over 50%.
Indonesia and Brazil also saw high growth rates. Indians are also checking their bank accounts and doing transactions more frequently on the mobile, from about three times a week in 2016, to over four times a week last year.
In Australia, users check their banking apps almost 10 times a week, and in the UK, about seven times a week.
In online shopping, India had the highest number of sessions — akin to foot traffic — among Android markets, way ahead of the US and South Korea. But China has about seven times as many sessions as India.
Hours spent on the top five video streaming apps in India soared by 185%. South Korea grew by 155% and Brazil by 130%.
Indians spent over 45 billion hours on video streaming apps. Among Android markets, Brazil followed at about 22 billion.
Out of every one hour spent consuming media in 2019, ten minutes will be video streaming via mobile.

Relief For NGOs That Get Foreign Funding

NGOs and associations registered under the Foreign Contributions (Regulation) Act, 2010, will no longer be required to mandatorily register with DARPAN portal to avail FCRA-related services like registration, prior permission, renewal and uploading of returns.
The relief comes after NGOs complained of difficulty in getting unique ID under the DARPAN portal, a NITI Aayog-operated platform, due to various reasons.

Niko Serves Arbitration Notice to RIL, BP

Niko Resources has served a notice of arbitration to Reliance Industries and BP Plc after they asked the Canadian oil and natural gas company to exit the KG-D6 block because it had defaulted on cash calls.
Niko owns 10% participating interest in the KG-D6 block off the eastern coast that has a bunch of depleting fields as well as some promising ones being currently developed.
RIL owns 60% interest in the block while BP holds 30%. During the October-December quarter, M/s Niko (NECO) defaulted on cash calls, which triggered a default notice.
Niko said that under the terms of the JOA, if the defaulting party does not cure a default within sixty days of the default notice, the non-defaulting parties have the option to require the defaulting party to withdraw from the KG-D6 contract and JOA.
This notice from RIL and BP will have a material adverse impact on Niko's stakeholders, particularly its shareholders.

BASF and Adani Group to Setup Petrochem Hub

BASF SE, the world's largest chemical producer, will set up a petrochemical production hub at a cost of Rs. 16,000 crore in Gujarat in a joint venture (JV) with the Ahmedabad-based Adani Group. The two companies signed a MoU.
The German company will hold the majority in the joint venture, which will invest in the "acrylics value chain". The designated site would be at Mundra port in Gujarat and a feasibility study will be completed by the end of 2019.
The investment will go into the development, construction and operation of production plants including propane dehydrogenation (PDH), oxo C4 complex (butanols and 2-ethylhexanol), glacial acrylic acid (GAA), butyl acrylate (BA) and potentially other downstream products.
The products are predominantly for the Indian market to serve a wide range of local industries, including construction, automotive and coatings, whose growing demand is currently supplied via imports.
In addition to the investment outlined in this MoU, BASF plans to co-invest as a minority partner in a wind and solar park.
The announcement comes on the eve of the Vibrant Gujarat Global Summit 2019 where top leaders from Adani group and BASF are going to attend.

Netflix, Hotstar, Jio, others Sign Self-censorship Code

Netflix, Hotstar, Jio, Voot, Zee5, Arre, SonyLIV, ALT Balaji and Eros Now signed a self-censorship code that prohibits the over-thetop (OTT) online video platforms from showing certain kinds of content and sets up a redressal mechanism for customer complaints.
The code bars signatories from showing content banned by Indian courts, "disrespects" the national emblem and flag, "outrages" religious sentiment, "promotes" terrorism or violence against the state and shows children in sexual acts.
Amazon, which runs streaming service Prime Video, is not part of the grouping that has signed the code.
The Internet and Mobile Association of India (IAMAI), which helped draft the code, said it establishes guiding principles for online curated content (OCC) providers to conduct themselves in a responsible and transparent manner and at the same time ensures that the consumer interest is protected.
The objective of the code is to empower consumers to make informed choices on age-appropriate content, protect the interest of users in choosing and accessing material they want to access and provide a complaint redressal mechanism.
The code safeguards and respects creative freedom of content creators and artists. It establishes an ecosystem that fosters innovation and abides by an individual's freedom of speech and expression.

Swiggy Most Trusted Food Tech Brand

Online food delivery startup Swiggy, run by Bundl Technologies Pvt. Ltd, emerged on top in trust and customer satisfaction in a food-tech survey by research firm RedSeer Management Consulting Pvt. Ltd.
According to the latest edition of the RedSeer FoodTech Leadership Index (FLI), Swiggy ranked no. 1 with a total score of 96, outscoring arch-rival Zomato, which came in second with a score of 82 in the fourth quarter of 2018.
Uber Eats and Foodpanda came in third and fourth at 73 and 70, respectively.
In December, Swiggy raised $1 billion in the biggest-ever funding round in the country's booming food-tech space, increasing pressure on Zomato to also raise fresh funds.
In the business of food delivery, top firms such as Swiggy and Zomato need to keep raising capital to win share in a cut-throat, hyper-competitive market.

Jan 17, 2019

FB Creates New Organisational Structure for India

Social media giant Facebook has created a new organisational structure for its India unit in which the functional heads will report to the country managing director instead of the regional heads.
The move is in line with Facebook's plan of delinking its India operations from the Asia-Pacific region.
In the new structure, the functional heads for public policy, global marketing solutions, communications, and the newly formed verticals of partnership, and strategy and operations will report to Facebook's India managing director Ajit Mohan, and not to their respective regional heads in Asia Pacific.
For the newly created roles of director of strategy and operations and director and head of partnership, the company has hired Prashanth Aluru and Manish Chopra, respectively.
Public policy is being headed by Ankhi Das, while Sandeep Bhushan is director of global marketing solutions.
Facebook has also hired Siddharth Banerjee as director of global sales organisation (customer partnerships and agencies) and Archana Vohra as director of small and medium businesses.
Both Banerjee and Vohra will report to Bhushan. Aluru, Chopra, Banerjee and Vohra have joined the company in the last six weeks. India is one of Facebook's largest and strategically important markets.

1 Crore Penalty on Bank of Maharashtra

The Reserve Bank of India (RBI) imposed a Rs 1-crore penalty on state-owned Bank of Maharashtra (BoM) for non-compliance of Know Your Customer guidelines and fraud-classification norms.
This penalty has been imposed taking into account the failure of the bank to adhere to directions issued by the RBI.
Last year, the RBI had imposed a penalty of Rs 1 crore on BoM on account of delay on the part of the bank to detect and report fraud in an account.

India Commits to Buy Gas and Oil from US

India has committed to purchase $5 billion worth of oil and gas from the United States per annum and $18 billion worth of defence equipment that are under implementation.
The US export to India has gone up by at least 30%.
The United States is India largest trading partner and India is among top 10 of US's trading partners.
Bilateral trade between the countries — goods and services — rose from $119 billion two years ago to end the year in 2018 at $140 billion.

PayU India Hiving off Lending Business as a Separate Entity

Digital payments company PayU India is hiving off its lending business as a separate entity.
The new entity will house Lazy-Pay, the 'buy now pay later' product that was run by PayU India managing director Jitendra Gupta.
Gupta will take over as the new chief executive officer of the lending company, which will be named PayU Finance India and will operate out of Mumbai.
About 100 employees from PayU Payments India will join the new company. PayU Payments India offers payment gateway services to more than 50% of the online merchants in the country.
PayU Payments has sent revised agreement documents to merchants offering LazyPay as a payment mode. LazyPay allows consumers to undertake multiple purchases online and make all payments at one go at a later assigned date.
To operate the lending business, the company had acquired nonbanking finance company Sidvik Leasing, which has been renamed PayU Finance India.
Naspers-backed PayU emerged as one of the largest online payment companies in India after it acquired Citrus Payments in 2016.
Citrus cofounders Gupta and Amrish Rau joined the PayU team. While Rau became the CEO of PayU India, Gupta started driving the lending business under LazyPay.

BHEL Wins Largest Order for Solar Photovoltaic Plants

Bharat Heavy Electricals Ltd (BHEL) has won an order for setting up 129 MW Solar Photovoltaic power plants (SPV) in Telangana from Singareni Collieries Company Ltd.
Valued at Rs. 565 crore, this is the largest SPV power plant order won by BHEL till date.
The plants are to be set up at four locations in Telangana- Ramagundam, Yellandu, Manuguru, and Pegadapally, on EPC basis.
With this order, BHEL's solar portfolio has risen to more than 710 MW.

RBI Eases ECB Policy

The Reserve Bank of India (RBI) came out with a new policy for overseas borrowings, allowing all eligible entities to raise foreign funding under the automatic route and removing sectoral curbs.
All eligible borrowers can now raise external commercial borrowings (ECB) up to $750 million or equivalent per financial year under the automatic route, replacing the existing sector wise limits.
The "liberalisation/rationalisation" in the new framework ECB and rupee denominated bonds has been done to further improve the ease of doing business.
Tracks I and II under the existing framework are merged as 'Foreign Currency denominated ECB' and Track III and Rupee Denominated Bonds framework are combined as 'Rupee Denominated ECB' to replace the current four-tiered structure.
The framework is instrument-neutral. Track I, II and III denotes amount and maturity of funds raised.
Further, all-in cost ceiling per annum has been pegged at "benchmark rate plus 450bps spread' (100 basis points = 1 percentage point).
The minimum average maturity period (MAMP) has been kept at three years for all ECBs, irrespective of the amount of borrowing in lieu of various layers of MAMPs as at present, except the borrowers specifically permitted in the circular to borrow for a shorter period.

Byju's Acquires Osmo

Bengaluru Online tutoring startup Byju's has acquired Osmo, a maker of educational games, for $120 million in its firstever purchase of a US company.
The acquisition will help Byju's offer learning solutions to children aged between three and eight by tapping into Osmo's physical-to-digital technology and content.
Byju's has aggressive plans for the international market and will continue to make big investments in technology to further personalize learning for students.

Govt Changes Angel Tax Rules

The government sought to clear the air on tax exemption for investment in startups by angel investors and specified a new mechanism to ensure that a decision on the benefits is taken by tax authorities within 45 days.
Under the new rules, a startup will first need to be recognised by the department of industrial policy and promotion (DIPP) to be eligible for concessions for shares that have been issued or are proposed to be issued.
The startups will then have to seek tax breaks, for which DIPP will approach the I-T department.
Earlier, there was a need for a certification by an interministerial board. The earlier requirement of startups to submit a report from a merchant banker specifying the fair market value of shares has also been done away with.
At the same time, cases where the tax department has issued an assessment will not be eligible for tax breaks.
These new norms are likely to encourage startups to seek exemptions, as many of them earlier refrained from seeking this benefit due to 'cumbersome' processes.
Since April 2018, only two startups have got these exemptions. Normally, 300-400 startups get angel funding every year.

Truecaller Hosts Entire Indian User Data

Truecaller's entire Indian user data is now hosted in India. This comes in the wake of Truecaller complying with the Reserve Bank of India's (RBI's) norms on localization of its payments data and makes it one of the first international technology companies to proactively store its Indian users' data in the country.
The move is user-centric and is aimed at safeguarding personal data.
Truecaller had already started storing its Indian users' payments data of its unified payment interface-based payment service in India when mandated by RBI.
Major payment firms had expressed concern over the new norms and sought a relaxation of rules on storing data on older transactions.

Jan 16, 2019

Bank of China offers Lanka $300m loan

Sri Lanka is considering an offer from Bank of China for a loan of $300 million, which could be raised to $1 billion, to help it meet repayments during coming months.
A series of credit rating downgrades and a political crisis have made it harder for Sri Lanka to borrow as it faces record high repayments of $5.9 billion this year, $2.6 billion of which fall due in the first three months.
As of the end of 2018, nearly a quarter of Sri Lanka's total foreign debt was owed to China, which has lent some $8 billion while building ports, highways and planning other major investments in the island state.

E-way Bill to be Integrated with FASTag

The GST e-way bill system is likely to be integrated with NHAI's FASTag mechanism from April to help track movement of goods and check GST evasion.
The revenue department has set up an officers committee to integrate e-way bill, FASTag and DMIC's Logistics Data Bank (LDB) services, after consultation with transporters.
Integration of e-way bill with FASTag would help find the location of the vehicle and when and how many times it has crossed NHAI's toll plazas.

Danone Re-Enters Indian Market

French foods giant Danone is re-entering the dairy market in India by leading a Rs 170-crore investment in homegrown premium yogurt maker Epigamia.
Other backers include Verlinvest, the Belgium-based investment holding company formed by the founding families of Anheuser-Busch In-Bev, Samina Vaziralli, executive vice-chairperson of Cipla, and existing investor DSG Consumer Partner.
In January last year, Danone had announced it was exiting the dairy products market. For the company's investment arm, Danone Manifesto Ventures, this is the first such investment in Asia. Verlinvest is one of the investors in education startup Byju's, a venture whose valuation zoomed to $3.6 billion last year.

25% Quota for Economically Weaker Sections in Universities

The HRD Ministry announced that it will implement 10 per cent reservation for economically weaker section of the General Category from the 2019 academic session and increase around 25 per cent seats in higher educational institutions and universities across the country.
The decision was taken at a meeting of officials from the ministry, University Grants Commission (UGC) and the All India Council of Technical Education (AICTE).
The reservation will be implemented from the 2019-2020 academic session itself.
Nearly 25 per cent seats will be added to ensure that the reservation does not disturb the existing quota for SC, ST and other categories.
The number of seats to be added are not specified.

India's trade deficit narrowed

India's trade deficit narrowed to the lowest level in 10 months as exports remained flat and imports contracted in December due to a fall in global crude oil prices.
Latest data released by the government showed that imports fell 2.3% to $41 billion in December. A contraction in imports is seen to be a negative for the economy as it provides the required inputs and raw materials to keep factories running.
The 0.3% rise in exports during December was the slowest pace of expansion in three months.
The slowdown in exports coincides with the surprise flat growth in industrial production in November, which grew 0.5%.
The fall in imports was attributed to a slowdown in oil imports, which were estimated to be 3.2% higher at $10.7 billion in December, with the government pointing out that Brent prices were lower by 12% last month compared to December 2017.
Non-oil imports too were just 4.3% higher at $30 in December. Import of gold contracted by 24% to 2.6 billion in December 2018, official data showed.

7th Pay Commission for Tech Teachers

The Ministry of Human Resource Development has approved extending the Seventh Pay Commission recommendations to the academic staff of government and aided technical institutions.
This will directly benefit 29,264 teachers and other academic staff government- funded institutes.
Besides, about 3.5 lakh teachers and other academic staff of private colleges or institutes within the purview of AICTE will also benefit.

Jan 15, 2019

Farm Crisis: Worst price slump in 18 yrs

This financial year, 2018-19 could end up being the worst year for farm incomes in almost two decades, government data indicates in a revelation that emphasises the gravity of the ongoing agrarian crisis and highlights a possible fault line for the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government ahead of the Lok Sabha elections.
According to Wholesale Price Index (WPI) data for the month of December released on Monday by the ministry of commerce and industry, the WPI sub-component for primary food articles has been negative for six consecutive months beginning July 2018. This means their prices are falling.
WPI for primary food articles is a good indicator of farm-gate prices as farmers sell their products in wholesale rather than retail markets.
Even the food subcomponent of the Consumer Price Index (CPI) basket has registered negative growth between October and December 2018.
The disinflation in wholesale prices is not visible in the non-farm economy though. The overall WPI has shown positive growth in all these months.
The last time WPI for primary food articles showed negative annual growth for two consecutive quarters was in 1990.

1 Crore Penalty on Bajaj Finance

The Reserve Bank of India has imposed a fine of Rs. 1 crore on Bajaj Finance, a nonbanking financial company (NBFC), citing violation of Fair Practices Code.
According to RBI, This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the NBFC with its customers.
Bajaj Finance is into businesses such as consumer finance, SME finance and commercial lending.

Pakistan to Shelve Major CPEC Power Project

The cash-strapped Pakistan government will shelve a major coal-based power plant project under the $60 billion China-Pakistan Economic Corridor, citing sufficient generation capacity already lined up for the next few years.
The CPEC, which connects Gwadar Port in Balochistan with China's Xinjiang province, is the flagship project of Chinese President Xi Jinping's ambitious Belt and Road Initiative (BRI).
The Pakistan Tehreek-i-Insaf (PTI) government of Prime Minister Imran Khan officially conveyed to Beijing that it was no more interested in the project in view of sufficient generation capacity already lined up for the next few years.
It has requested the China to formally delete the project from the CPEC list.

Sachin Bansal Invests in Ola

Flipkart co-founder Sachin Bansal has invested Rs 150 crore in Ola. Over the past two years, Bansal and Ola co-founder Bhavish Aggarwal had become close, with the two having led the fight against the influence of foreign capital in the domestic startup ecosystem.
Bansal has bought 70,588 preference shares valued at Rs21,250 each, according to regulatory documents sourced from business intelligence platform Paper.vc.
This is part of a bigger funding round for Ola, which values the firm at $5.7 billion.
As part of the same round, Ola recently raised around $74 million from Hong Kong-based hedge fund Steadview Capital.

Public Sectors Asked to Reduce Government Stake

In a bid to align with the best corporate practices, the Finance Ministry has asked the public sector banks to gradually bring down the government's equity to 52%.
Dilution of government stake will help banks to meet 25% public float norms of market regulator SEBI. Some of the public sector banks have government's holding beyond 75%.
Besides, it will encourage the banks to follow the prudential lending norms.
The country's largest lender State Bank of India (SBI) has already initiated step for Rs 20,000-crore share sale through qualified institutional placement (QIP). Post QIP, the government stake will be diluted from the existing 58.53%.
Some of the lenders like Syndicate Bank, Union Bank of India, PNB, and Oriental Bank of Commerce among others have already issued or in process of issuing Employee Share Purchase Scheme.

CapitaLand picks up stake in two Ascendas units

Singapore-based CapitaLand Ltd on Monday said it has agreed to acquire Ascendas-Singbridge (ASB) Group's stake in two of ASB's subsidiaries, in a cash and-stock deal worth S$6 billion ($4.4 billion).
The value of the transaction is around S$11 billion. The transaction, subject to approval by CapitaLand's independent shareholders, will create the largest diversified real estate group in Asia.
Singapore state investor Temasek fully owns Ascendas, and holds a 40.8% in CapitaLand. After the transaction closes, Temasek's ownership of CapitaLand will increase to about 51%.
The real estate trusts that are part of the deal include Ascendas Real Estate Investment Trust, Ascendas India Trust and Ascendas Hospitality Trust.

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