General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Jan 09, 2019

India Will Remain the Fastest Growing Economy

According to the World Bank, India's economy is forecast to expand by 7.5 per cent during the 2019-20 fiscal year and retain its position as the fastest growing major economy in a world of slowing growth.
The Bank`s Global Economic Prospects (GEP) latest report kept the forecasts made for India in its June report for the next fiscal year and the 7.3 per cent estimate for the current fiscal year, up from 6.7 per cent recorded in 2017-18.

Another Waiver from US Sanctions

Iran expressed hope that India will seek another waiver from US sanctions to continue buying its crude oil, noting that it is the world's fastest-growing major economy's most reliable energy provider.
India in November last year won a six-month waiver to buy crude oil from Iran after it agreed to cut imports and escrow rupee payments.
Under the 180-day exemption, India is allowed to import a maximum of 3,00,000 barrels a day of crude oil.

Additional Fund Infusion

As per a report, the government's decision to infuse Rs. 41,000 crore more capital into state-run banks is positive for these lenders as it will help them lower their losses on dud loans.
In December last year, the government had sought lawmakers' approval for infusion of an additional Rs. 41,000 crore, taking the total fund infusion to Rs. 1.06 trillion in FY19.
The current round of recapitalisation would enhance the lending capacity of these banks and help them come out of the Reserve Bank's prompt corrective action (PCA) framework.
As many as 11 of the total 21 state-run banks are under the PCA framework, which imposes lending restrictions on weak banks.
After the merger of Dena and Vijaya Bank with BoB, the number of public sector banks will come down to 19.
The 11 banks are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, Uco Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

Jan 08, 2019

Essar Global Repays Loans

Essar Global Fund Ltd. , the holding company for the Essar group of companies, repaid a debt of Rs. 12,000 crore to its various Indian and foreign lenders.
This is in addition to the Rs. 30,000 crore that it had repaid in August 2017 to various lenders.
Essar Global has now repaid approximately Rs. 6,300 crore to ICICI Bank, Axis Bank and Standard Chartered Bank.
With this, these banks have been repaid their entire facility of Rs. 31,500 crore. The loans had been provided to Essar Global to fund its capital expenditure programme between 2008 and 2014.
The only continuing lender to Essar Global now is VTB.

Lupin Got USFDA Nod

Drug maker Lupin received approval from the U.S. health regulator to market Lurasidone Hydrochloride tablets in the U.S.
The firm can sell its product, which is a generic version of Sunovion Pharmaceuticals Inc.'s Latuda tablets, in strengths of 20 mg, 40 mg, 60 mg, 80 mg and 120 mg.

Gruh Finance to Merge with Bandhan Bank

HDFC arm Gruh Finance will be merged with Bandhan Bank. The move would help the latter to cut promoter stake from 82.3% to 61%.
According to the deal, 568 equity shares of face value of Rs. 10 each of Bandhan Bank is to be issued for every 1,000 equity shares of a face value of Rs. 2 each of Gruh.
The deal is subject to regulatory approvals. The swap ratio implies a 2.05% premium to the shareholders of Gruh. The combined entity is valued at Rs. 84,000 crore.
Post the deal, HDFC will have 14.9% stake in Bandhan Bank. According to norms, any entity will need to take RBI approval for holding more than 10% stake in a bank.

Direct Tax Collections Up

According to the Finance Ministry, direct tax mop-up grew 14.1% to Rs. 8.74 lakh crore during April-December 2018.
Refunds amounting to Rs. 1.3 lakh crore have been issued from April to December, 2018, which is 17% higher than refunds issued in the year-earlier period.
The provisional figures of direct tax collections up to December, 2018 show that gross collections are at Rs. 8.74 lakh crore which is 14.1% higher than the gross collections for the corresponding period of last year.

IDBI Bank Ratings off CreditWatch

Global ratings agency S&P affirmed 'BB' long-term and 'B' short-term foreign currency issuer credit ratings on IDBI Bank, while removing them from CreditWatch, after the capital infusion from LIC.
The bank announced it had received Rs. 14,500 crore in fresh capital from LIC on December 28.
This is part payment for LIC's proposed acquisition of 5% controlling stake in the bank.
The total infusion is likely to be Rs. 17,000-20,230 crore, more than the bank's total capital of Rs. 13,860 crore as of September 30, 2018.

Jan 07, 2019

Aasaanjobs Acquired

Naspers-funded OLX Group has acquired Aasaanjobs, a move aimed at strengthening the classified player's position in the online job search segment.
With the acquisition of Aasaanjobs, a recruitment marketplace for blue and grey collar jobs in India, OLX will further strengthen its jobs vertical.
OLX said that its jobs category had been growing organically in the last two years.

Breather on Bad Loans

In the last five years, investors and depositors in India have become accustomed to banks springing unpleasant surprises on them every time they thought the worst was over on the bad loan crisis.
The Reserve Bank of India's half-yearly Financial Stability Reports, which take stock of the strength and stability of Indian banks, had turned into chronicles of gloom tracing the steady worsening of the crisis.
But the RBI's latest report for December 2018 breaks away from the trend to offer glimmers of hope to these stakeholders.
For the first time since the bad loan saga began to play out six years ago, Indian banks have reported a decline in the proportion of loans gone bad for the half-year ended September 2018.
Their aggregate Gross Non-Performing Asset (GNPA) ratio dipped from 11.5% in March 2018 to 10.8% in September 2018. The GNPA ratio captures the proportion of loans in a bank's books on which borrowers haven't repaid dues for more than 90 days.

Oil and Gas Blocks to be Auctioned

The Centre will launch the second auction of 14 blocks for prospecting of oil and gas in an attempt to raise domestic output to cut imports.
The Open Acreage Licensing Policy (OALP) bid round-II, with 14 blocks measuring 29,333 square kilometres in aggregate area on offer, will be launched by Oil Minister Dharmendra Pradhan.
India, had in July 2017, allowed companies to carve out blocks of their choice with a view to bring about 2.8 million sq km of unexplored area in the country under exploration.

Interest-free Loans for Women Self-help Groups

Odisha Chief Minister Naveen Patnaik announced interest-free loans of up to Rs. 3 lakh for women self-help groups (WSHGs) in the State.
Speaking at the 'Mission Shakti' convention, Mr. Patnaik said that the initiative would benefit about 70 lakh women.
There are around six lakh WSHGs in Odisha.

PSBs Rationalising Foreign Units

Public sector banks are in the process of closing or rationalising about 69 overseas operations in the next few months as part of their capital conservation exercise.
Planned rationalisation of operations and examination of a total of 216 overseas operations of the public sector banks (PSBs) was undertaken last year.
Following the review, 35 overseas operations were closed while 69 are under process or being considered for rationalisation.

Nepal Wrote to RBI

As per reports, Nepal has asked the Reserve Bank of India (RBI) to declare newly circulated Indian currency notes of denominations higher than Rs. 100 legal tender in the country.
The Nepal Rastra Bank, the country's central monetary authority, wrote a letter to RBI, asking it to make Rs. 200, Rs. 500 and Rs. 2,000 legal tender in Nepal.

Hydro Projects Stalled

A total of 37 hydro power projects of 12GW generation capacities are under construction in the country.
Out of these, 16 projects with a total generation capacity of 5,950 MW are either stalled or held up due to financial constraints and other reasons.
According to the Central Electricity Authority estimates, the annual loss of energy generation from these stalled hydro projects is about 18,761 million units.
As per reports, the government is working on a hydro policy that would provide for longer loan repayment period, lower interest rate and other incentives which would help bring down the tariff of these projects.

Jan 05, 2019

Indonesian Ship Brings Cargo

An Indonesian cargo vessel from Aceh, laden with 150 tonne commercial goods, docked at Port Blair in India's Andaman and Nicobar Islands, marking the first step in an effort to forge business connectivity between the two regions.
The voyage by the vessel is part of the implementation of the "Statement on Shared Vision of India-Indonesia Maritime Cooperation in the Indo-Pacific" by Prime Minister Narendra Modi and President Joko Widodo during the Indian leader's visit to Indonesia last May.

Customer Liability in Fraudulent PPI Transactions Limited

The Reserve Bank of India has decided to limit the liability of customers in case of unauthorised electronic payment transactions in Prepaid Payment Instruments (PPIs) issued by non-banks.
Under new norms on customer liability, frauds due to third-party breach where neither the customer nor the PPI issuer is at fault, there cannot be any liability for the customer, in case the incident is reported within three days.
If the fraud is reported between three and seven days, customer liability will amount to the transaction value or Rs. 10,000, whichever is lower.
For over seven days, the liability of the customer will be according to the board-approved policy of the PPI issuer.

Telcos Fined for Call Drops

Financial disincentives of about Rs. 58 lakh were imposed on telecom companies, including Idea and BSNL, for not complying with the benchmark to measure the drop call rate.
These penalties were imposed during the six-month period from January 2018 to June 2018.
As per the latest report of the Telecom Regulatory Authority of India for the quarter ending September 2018, all telecom services providers are complying with drop call rate (DCR) benchmarks despite rapid increase in traffic volume and more stringent benchmarks, except Idea in Assam, Jammu and Kashmir, Himachal Pradesh and North East; and Bharat Sanchar Nigam Limited (BSNL) in West Bengal.

Norms for Commodity Exchanges

Commodity derivatives exchanges will now have to disclose the quantum of trading done by farmers and other commodity market participants like millers and wholesalers on the exchange platform, as the capital market regulator has tweaked the disclosure norms for such bourses.
In a circular issued, the Securities and Exchange Board of India (SEBI) directed commodity bourses to disclose the open interest and turnover of various categories of participants like farmers, farmers producer organisations (FPOs), value chain participants, proprietary traders, foreign participants, and domestic financial institutional investors.
Value chain participants include processors, commercial users like dal and flour millers, importers, exporters, physical market traders, stockists, cash and carry participants, producers and wholesalers among others.

PMI Slipped in December

According to the Nikkei India Services Business Activity Index, service sector activity expanded strongly in December, albeit with a marginally lower reading than in the previous month.
Despite falling to 53.2 in December, from 53.7 mid-quarter, the seasonally adjusted Nikkei India Services Business Activity Index pointed to an expansion in sector output that was among the strongest recorded in the past two years.
The figure contributed to the highest quarterly average seen since Q4 FY 2015-16.

Jan 04, 2019

Sun Pharma Acquired Pola Pharma

Sun Pharma completed acquisition of Japan-based Pola Pharma to strengthen its presence in dermatology segment across the globe.
The acquisition of 100 per cent shares of Pola Pharma Inc Japan by the company's wholly owned subsidiary has been concluded.
Pola Pharma's portfolio mainly comprises dermatology products. It has two manufacturing facilities in Saitama with capabilities to manufacture topical products and injectables.
Sun Pharma had forayed into the Japanese prescription market in 2016 with the acquisition of 14 established prescription brands from Novartis.

CESC Wins Distribution Bid

CESC Ltd. has won the bid for distribution franchisee in the Malegaon Circle in Maharashtra.
India's oldest power utility has a 600 MW independent power plant in Chandrapur in Maharashtra, and is engaged in power distribution in Noida (through a subsidiary) and Kota,
Bikaner and Bharatpur in Rajasthan (as a franchisee), besides West Bengal where it has a 567 sq.km distribution area with 3.2 million customers. Its consumer base is more than 4.3 million.

Suit against Nestle Revived

The Supreme Court spelt trouble for the Indian branch of the Swiss food giant Nestle by resuscitating a Rs. 640-crore class-action suit filed by the government on behalf of thousands of consumers of the iconic Maggi noodles.
The suit was filed by the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution in the National Consumer Disputes Redressal Commission (NCDRC) in August 2015 against Nestle India Limited on grounds of unfair trade practices, sale of defective goods and sale of Maggi Oats Noodles to the public without product approval.
The suit was filed under Section 12(1)(d) of the Consumer Protection Act, 1986. This provision allows the Centre or a State, either in its individual capacity or as a representative of the interests of the consumers, to file a complaint in the consumer forum.
A bench led by Justice D.Y. Chandrachud revived the suit in the NCDRC, which would hear it on the basis of a report filed by the Mysuru-based Central Food Technological Research Institute in 2016.

Main Challenges for Start-ups

According to a report by citizens' engagement forum LocalCircles, a large number of start-ups, small and medium enterprises view corruption and bureaucratic inefficiencies, securing loans as well as funding as major challenges in 2019.
The report, based on responses from over 15,000 start-ups, SMEs and entrepreneurs found 45% respondents saying that corruption or bureaucratic inefficiencies are the top challenges, followed by securing loans and funding (37%), and business growth (18%).
Angel tax is one area that falls under corruption and bureaucratic inefficiencies as it takes the focus of entrepreneurs away from building a product or service to responding to tax notices and filing appeals, something that start-ups can clearly do without.

Printing of Rs. 2,000 Notes Reduced

As per reports, the printing of Rs. 2,000 banknotes, introduced post-demonetisation in November 2016, has been reduced to "minimum" by the Reserve Bank.
The Reserve Bank of India and the government, from time to time, decided on the quantum of currency to be printed on the basis of money in circulation.
According to RBI data, there were 3,285 million pieces of Rs. 2,000 notes in circulation at end-March 2017.
A year after (on March 31, 2018), there was only a marginal increase in the number at 3,363 million pieces.
Of the total currency in circulation amounting to Rs. 18,037 billion at end-March 2018, Rs. 2,000 notes accounted for 37.3%, down from 50.2% at end-March 2017.

Solar Power Projects in Leh and Kargil

Leh and Kargil districts of the Ladakh region will soon have solar power projects under the state-run Solar Energy Corporation of India (SECI).
As a part of its ambitious plan to build 23 GW solar power projects in Ladakh, SECI issued tenders for construction of 7.5 GW solar power projects in the first phase.
As per the tender document, two solar power projects will be built in Phase-1 -- a 2.5 GW capacity project in the Zangla region of Kargil and a 5 GW project in the Pang region of Leh.
SECI will sign a 35-year power purchase agreement with the project developers, who will get a maximum of 54 months to get the projects running.

Hyderabad Airport Stake Sale Pact with GMR Cancelled

Malaysia Airports Holding Berhad (MAHB) terminated the share purchasing agreement with GMR Group for selling its 11% stake to the latter, as the Indian infra major did not fulfil obligations before December 31.
GMR Airports Ltd. entered into a pact with MAHB and its subsidiary to acquire 11% of the stake the Malaysian firm holds in GMR Hyderabad International Airport, for $76 million.

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