Stan AF Posted July 16, 2019 Posted July 16, 2019 1.2 lakh employees in the lurch as BSNL sinks in debt. Where is the bailout? The delay in salary payments arose after BSNL accumulated over Rs 90,000 crore in losses. The only solution is a bailout – one that was not announced in the 2019 Budget. Mithun MK Wednesday, July 10, 2019 - 14:25 Share @Facebook Share @twitter Share @reddit BSNL employees and officers on protest march to Sanchar Bhavan in April,Delhi/ Credit: Janardanan Palot During the Kerala floods in August 2018, when parts of the state were cut off from mobile and landline communication, the rescue and relief operations of millions got severely affected. As power supply to cell towers could not be resumed and with the backup batteries draining out, the state was in darkness and the lives of many were at stake. Forty three-year-old G Murugan was one among the 6,000 odd Bharat Sanchar Nigam Limited (BSNL) technicians tasked with finding and repairing communication cables and restoring cell phone towers at the time. While it took days to restore even partial mobile connectivity, the first landline networks to come back online was that of the BSNL. "It was dangerous work but it had to be done, lives were at stake," says Murugan who was tasked with repairing the cut off cables at Munnar, Idukki district, most of which were underwater. The work by these BSNL technicians helped save many lives during the Kerala floods. For the past five months though, Murugan has not received his salary. Like him, 1.25 lakh contract workers across the country have not been paid by the Centre, because BSNL has accumulated severe losses. Many of them have been working as contract workers with BSNL for decades, doing cable laying and repair, tower maintenance, data entry. Some are also embedded in the marketing and sales division of the BSNL. The plight of BSNL contract workers across the five southern states – and in the rest of the country – is similar. ‘It's getting difficult to stay afloat’ The delay in salary payments arose after BSNL reportedly accumulated over Rs 90,000 crore in losses since 2009. The contract workers were the first to get affected, with salaries not being released since February this year. The Centre even mulled shutting down the PSU, but hesitated after realising that that task alone would cost the exchequer over Rs 1.2 lakh crore. The only route is a bailout – one that was not announced in the 2019 Budget, presented on July 5. In the meantime, the corporate office of the BSNL in Delhi has asked their Kerala circle to terminate some of the contract workers from service. In Tamil Nadu and Karnataka, the regular employees are helping the families of contract employees by pooling in a relief corpus funds. In Telangana and Andhra Pradesh, many of the contract workers are not even recorded in the BSNL work records. The government-run PSU is in violation of labour laws in the two Telugu states, allege their union leaders. For Murugan, with 23 years of service with BSNL, it's getting difficult to stay afloat as his job is to be axed soon if BSNL management has its way. "I am running the house with my wife's salary and I have begun part-time work at a sweet shop,” Murugan says. The crisis manager BSNL employees, regular or hired on contract, have all played major roles in restoring services during many climate-related crises that India has faced. At the time of cyclone Titli and Fani, the first network to come back online was that of BSNL. They were also the only network relied on by officials during the 2015 Chennai floods, and the 2004 Tsunami that left thousands dead in Tamil Nadu, assert BSNL employees. Palanichami, the General Secretary for Tamil Nadu division of the BSNL Casual & Contract Workers Federation says, "No private telecom companies would go and work in Naxal affected regions, but BSNL would, even though it's not profitable. The company is not designed to make a profit, it’s a service arm for the government.” TNM spoke to BSNL contract workers and their union leaders from Kerala, Tamil Nadu, Telangana, and Andhra Pradesh, the situation for them is turning grim with no solution in sight. The Karnataka division of the union is in Delhi trying to deliberate with senior BSNL management to find a way for the salaries to be released. The unions are planning a nationwide strike on July 16 in front of their circle offices. The unions had held a three-day relay strike and have also held agitations, but have little public support. K Mohanan, state president for the Kerala division of the BSNL Casual & Contract Workers Federation says, "All of a sudden, 6,778 workers have been asked to leave with no prior warning. The situation is pathetic. Adding to the misery of not paying salaries to them, the management is asking the other workers to take voluntary retirement, especially those who have crossed the age of 50." Forcing workers to ‘voluntarily retire’ In Kerala, BSNL has decided to terminate some of the contract workers and offer VRS to others. The contract workers in the state approached the Kerala High Court. "The court has given an order saying that any termination will be subject to the final result of the case. That verdict has been misinterpreted by the BSNL management – that the court has given them a free hand in terminating workers. We can only sit in front of the office and shout slogans. What else can we do?" Mohanan asks. “The regular employees in Chennai have pooled in some Rs 2.5 lakh so that the cleaning staff and other workers can withdraw for immediate relief. They are supportive – but for how long? The situation of workers in Karnataka and Tamil Nadu is similar,” Panalichami adds. A Babu Radhakrishnan, the state president for the union in Tamil Nadu, says BSNL's need to hire contract labourers arose after recruitment of regular employees was frozen in 1984. "Throughout India, 1.25 lakh contractor workers are working presently, these numbers have come down from over 2 lakh in 2009 as many had retired. Asking those with only a few years of service to take VRS is unwanted and we will go to court,” he says. “At the time of formation of BSNL in the year 2000, it was told that the retirement age will be the same as central government employees. Without changing the central employee retirement age, you cannot change it for BSNL alone. It's not even necessary to offer VRS – as many as 65,000 contract workers will retire in 2024," he reasons. The public apathy Earlier in March, the video of a BSNL employee – a single mother – crying over her financial distress due to non-payment of salaries had gone viral on social media. But the viral image has not really translated to public support for the 1.25 lakh BSNL workers, who face a bleak future. The non-payment of salary did not become an election issue. And for the public that views BSNL as a poor alternative to other telcos, this issue did not merit an outrage cycle. On the back of the public apathy, the company has been cracking down on unions to ensure there is no ‘trouble’. Unlike regular BSNL employee unions, the casual worker's unions are not recognised by the Centre, and hence have little or no bargaining power. The contract workers unions in the country are limited to just 15 of the 33 BSNL circles. "They terminate those who form or join a union, so there is no combined bargaining power," points out Palnichami. The unions lacking any bargaining power has led to gross labour violations in Andhra Pradesh and Telangana, says B Pari Purna Chary, General Secretary for the BSNL Casual, Contract Employees and Labour Union for Andhra Pradesh and Telangana Telecom Circles. "In both the states, there are over 2,000 benami (without name) contract workers who do works like cable joining, tower maintenance, ward duties, and computer work. During payment time every week, their names get changed on the work records – but the person will be the same,” he says. There have been no terminations in the two Telugu states so far. "We have held agitations and the contract workers have cooperation from regular employees," says Chary. TNM reached out to the Telangana and Andhra Pradesh circle offices of BSNL. The Telangana officials with the HR department say only the Delhi office is qualified to comment on the matter. The Andhra circle office was unresponsive. The task of overseeing the contract workers rests with the General Manager (Work Study & Inspection) Keshava Rao, who said, "The organisation will take a call on the contract workers issue, can't comment any further.” Bailout package To save from the BSNL and MTNL (that services Mumbai and Delhi) from the present financial crisis, the Centre since June has been working on a Rs 74,000 crore bailout package. The government also is planning on monetising the PSU’s assets, towers, land banks, and optical fibre networks. The proposed package involves a Rs 20,000 crore for 4G spectrum, and Rs 40,000 crore for VRS and early retirement benefits. BSNL had missed out porting to 4G due to a Supreme Court order that allowed spectrum allocation through auction only. Thus BSNL had to sit on the sidelines while the rest of the telecom companies upgraded to 4G. BSNL’s move to 4G comes at a time when all other telecom firms are expected to begin 5G trials in the next three months. The unions have little faith that the bailout package would do anything to help improve BSNL’s prospects unless the telecom sector is made a level playing field. The union leaders point fingers at the Telecom Regulatory Authority of India (TRAI) – the statutory body and regulator for the telecommunications sector in India – for relaxing rules and allegedly showing favouritism to Reliance Jio. Some additionally blame the policies adopted by both the NDA and the UPA while they were in power at the Centre. The contract employees now live with the hope that the Rs 14,000 crore cheque for clearing pending employee salaries would be approved soon from the Department of Telecommunications (DoT). "How can people manage 6 months with no salary? That is a question Prime Minister Narendra Modi should answer. A contract worker’s salary would maximum come up to Rs 12,000 a month. They can’t even give this?" Apart from delays salary payments, payments to contractors also have come to a halt. A Periyanna, a BSNL cable laying contractor for ten years says he has not yet received payments worth Rs 5 crore pending since 2017. "Most contractors have stopped taking new tenders from BSNL, the existing work is going on but no new work is happening on the ground," says Periyanna. https://www.thenewsminute.com/article/12-lakh-employees-lurch-bsnl-sinks-debt-where-bailout-105184
velu Posted July 16, 2019 Posted July 16, 2019 @Stan AF there is another solution , shut down the bsnl .. Looks like the author is an employee of bsnl
Stan AF Posted July 17, 2019 Posted July 17, 2019 NPA crisis: Loan write-offs by banks cross Rs 2 lakh crore By: Shritama Bose | Updated: July 17, 2019 7:04:11 AM In FY18, PSBs had written off loans worth Rs 1.28 lakh crore. Had banks not written off loans worth close to Rs 2.06 lakh crore in FY19, the value of non-performing assets (NPAs) in the system at the end of the year would have risen by an equivalent amount. The amount of loans written off in FY19 by PSBs could turn out to be even higher as the numbers for Dena Bank and Vijaya Bank, which now stand merged with Bank of Baroda (BoB), are unavailable. Write-offs made by 27 banks in FY19 crossed the Rs 2-lakh-crore mark, with 16 public sector banks (PSBs) alone accounting for Rs 1.77 lakh crore worth of written-off loans, according to data put out by banks and compiled by FE. In FY18, PSBs had written off loans worth Rs 1.28 lakh crore. Had banks not written off loans worth close to Rs 2.06 lakh crore in FY19, the value of non-performing assets (NPAs) in the system at the end of the year would have risen by an equivalent amount. The amount of loans written off in FY19 by PSBs could turn out to be even higher as the numbers for Dena Bank and Vijaya Bank, which now stand merged with Bank of Baroda (BoB), are unavailable. According to Reserve Bank of India (RBI) guidelines and policy approved by banks’ boards, non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheets of banks by way of write-offs. Write-offs are part of a regular exercise by banks to clean up their balance sheets and avail tax benefits. Borrowers of written-off loans continue to be liable for repayment and banks keep up efforts to recover them. If recoveries are made from written-off accounts, they get reflected in banks’ non-interest income. State Bank of India (SBI) made the largest amount of write-offs — worth Rs 61,663 crore, up 57.5% from FY18. It was followed by Canara Bank, whose written-off loans added up to Rs 14,267 crore, and BoB, which wrote off loans worth Rs 13,102 crore in FY19. The practice of writing of loans to reduce the value of gross NPAs has been quite prevalent in recent years. Write-offs made by 21 PSBs had risen 57% year-on-year (y-o-y) in FY18 and crossed the Rs 1- lakh-crore mark, according to a reply by minister of state for finance Shiv Pratap Shukla to a Rajya Sabha question last year. The reduction in non-performing assets (NPAs) due to write-offs stood at Rs 1.28 lakh crore as on March 31, 2018, up from Rs 81,684 crore as on March 31, 2017. The value of write-offs added up to over 14% of the aggregate gross NPAs of the 21 PSBs at the end of March 2018. https://www.financialexpress.com/industry/banking-finance/npa-clean-up-loan-write-offs-by-banks-cross-rs-2-lakh-crore-in-fy-19/1646343/
Stan AF Posted July 18, 2019 Posted July 18, 2019 (edited) Jalan panel proposes transfer of RBI reserves to govt in tranches over 3-5 years The Committee on Economic Capital Framework, which met on Wednesday for the final time, has reportedly recommended transferring of funds from both contingency and revaluation reserves to the government BusinessToday.In New Delhi Last Updated: July 18, 2019 | 11:00 IST Former RBI governor Bimal Jalan (Photo: Reuters) The Bimal Jalan Committee on Economic Capital Framework has suggested that surplus reserves of the Reserve Bank of India (RBI) should be transferred to the government in phases over three-five years. The final report on Committee on Economic Capital Framework, to be presented before RBI Governor Shaktikanta Das in 15 days, has proposed a formula for the 'nominal' transfer of the RBI surplus reserves. However, reports also suggest that the committee might not be unanimous on the issue and that Finance Secretary Subhash C Garg, one of the six committee members, has some divergent views on the matter. These objections will also be included in the final report. The Committee on Economic Capital Framework, which met on Wednesday for the final time, has reportedly recommended transferring of funds from both contingency and revaluation reserves to the government. However, the panel has also sought a 'period review' of the RBI capital framework. Though there's no clarity on the committee's suggestion on the amount of money to be transferred to the government, Finance Minister Nirmala Sitharaman had budgeted to receive dividends worth over Rs 1.6-lakh crore from the central bank this year. The central bank had the total surplus cash reserves of Rs 9.43 lakh crore on June 30, 2018. It has seen a manifold rise in its surplus funds after a surge in its revaluation reserves from Rs 1.99 lakh crore in FY09 to Rs 6.922 lakh crore in FY18. During the same period, its contingency fund rose to Rs 2.32 lakh crore. Right now, the central bank's assets development fund amounts to Rs 22,811 crore and its foreign exchange forward contracts value at 3,262 crores. The RBI's investment revaluation account is worth Rs 13,285 crore. Apart from Jalan and Garg, other members of the panel include former deputy governor Rakesh Mohan (vice-chairman of the panel), RBI deputy governor NS Vishwanathan, and RBI central board members Bharat Doshi and Sudhir Mankad. The transfer of RBI's reserves to the government has been a contentious issue between the two sides for a long time. The government and the RBI under the previous governor Urjit Patel were at loggerheads over the issue of the surplus capital with the central bank. The finance ministry was of the view that the buffer of 28 per cent of gross assets maintained by the RBI is well above the global norm of around 14 per cent. Following this, the RBI board in its meeting on November 19, 2018, decided to constitute a panel to examine ECF. In the past, the issue of the ideal size of RBI's reserves was examined by three committees -- V Subrahmanyam (1997), Usha Thorat (2004) and Y H Malegam (2013). While the Subrahmanyam committee recommended that contingency reserve should be built up to 12 per cent, the Thorat committee said the reserve adequacy should be maintained at 18 per cent of the total assets. The RBI board did not accept the recommendation of the Thorat committee and decided to continue with the recommendation of the Subrahmanyam panel. https://www.businesstoday.in/current/economy-politics/bimal-jalan-committee-rbi-transfer-surplus-reserves-govt-tranches/story/365383.html ET Article on the same is much more comprehensive https://economictimes.indiatimes.com/news/economy/policy/jalan-panel-finalises-report-on-rbi-capital-recommends-surplus-transfer-to-govt-in-3-5-years/articleshow/70258737.cms Edited July 18, 2019 by Stan AF
Stan AF Posted July 19, 2019 Posted July 19, 2019 Former CEA rubbishes government arguments, sticks to claim of India overestimating GDP growth PTI | Updated: Jul 18, 2019, 22:19 IST Highlights India's gross domestic product (GDP) growth rate between 2011-12 and 2016-17 should have been about 4.5 per cent instead of the official estimate of close to 7 per cent Subramanian rubbished productivity surge argument saying if that was so benefits accruing to firms in the form of higher profits would have been seen F Former chief economic adviser Arvind Subramanian (File photo) NEW DELHI: Sticking to his analysis that India's economic growth has been overestimated, Arvind Subramanian said he had raised doubts about the GDP numbers in 2015 when he was the chief economic adviser of the Modi government as he found inconsistency between projected growth and other macro indicators. In a new paper 'Validating India's GDP Growth Estimates', the former CEA said he had indicated his doubts on the growth numbers in the Economic Survey in 2015 as well as mid-year Economic Analysis. During 2011-2016, the period he deduced to have seen GDP growth being overestimated by 2.5 percentage points, the Indian economy was hit by a series of shocks - export collapse, twin balance sheet problem, drought, and demonetisation. "Growth in real credit to industry collapsed, falling from 16 per cent to minus-1 per cent, mirrored in the official figures for real investment growth, which declined from 13 per cent to 3 per cent; real exports fell from 15 per cent to 3 per cent; overall real credit slowed from 13 per cent to 3 per cent; and real imports slowed from 17 per cent to minus 1 per cent," he wrote. But the new GDP series, adopted in 2015, suggested that "despite all these large shocks, economic growth declined by very little, slipping from 7.7 per cent to 6.9 per cent. This situation invites a question: is it really possible that these five large adverse shocks had such little impact on GDP growth?" he asked. India's gross domestic product (GDP) growth rate between 2011-12 and 2016-17 should have been about 4.5 per cent instead of the official estimate of close to 7 per cent. "In January 2015, the CSO released new estimates using a new base year (2011-12 versus 2004-05), new data and new methodology. My team and I reviewed these estimates carefully - and immediately had questions about the new numbers. We consequently investigated the matter, but still could not find convincing answers, so we began to express our doubts internally and then externally," he said, pointing to a box he had put in the Economic Survey of 2015 raising doubts on the numbers. Countering the government arguments that had rubbished his June research on GDP numbers, Subramanian said the NDA government did bring reforms such as GST and new insolvency and bankruptcy law but these would "deliver growth benefits in the medium term". He rubbished productivity surge argument saying if that was so benefits accruing to firms in the form of higher profits would have been seen. He also rubbished the consumption surge argument advanced by the government to counter his claim, saying if India had suddenly developed a unique model of sustained consumption-led growth it would have reflected in consumer confidence being high but the RBI's monthly consumer confidence survey paints a different picture. On the government argument that India's tax-GDP ratio rose post-2011 period, he said revenues are affected by more than just economic growth - "they are also affected by changes in tax policies and administration. Amongst the latter were the spate of measures to unearth black money, including demonetisation which led to a spike in collections in 2016," he said. Stating that a variety of evidence suggests that it is likely that India's GDP growth is being overestimated by the new methodology, he said the country's sustained high measured GDP growth after 2011, despite large negative macro-economic shocks, is in contrast to the experience of other large emerging markets. Also, India clocked significantly higher measured GDP growth than all other countries in the post-1980 period, with the same export and investment growth rates, he said. "The evidence suggests that measurement changes likely caused India's GDP to be overestimated in the post-2011 period. Moreover, while it is not possible to say precisely what India's GDP would have been absent the measurement changes, the evidence suggests that the discrepancy in measured GDP growth post-2011 is likely to be significant," he added, suggesting the GDP methodology being re-visited. https://timesofindia.indiatimes.com/business/india-business/former-cea-rubbishes-govt-arguments-sticks-to-claim-of-india-overestimating-gdp-growth/articleshow/70281726.cms
G_B_ Posted July 19, 2019 Posted July 19, 2019 still has not really answered Bhullars rebuttal i see.
Stan AF Posted July 20, 2019 Posted July 20, 2019 More companies quitting FMCG business rather than entering; half of slowdown due to SME growth slump By: Prachi Gupta | Published: July 17, 2019 3:08:33 PM As small manufacturers quit the FMCG industry, the same has severely impacted the consumption story with over half of slowdown caused by the exits. Photographer: Dhiraj Singh/Bloomberg For an industry like FMCG which caters to customers across prosperity levels, it may come as a surprise to some that more players are exiting the ‘fast-moving consumer goods’ space rather than joining it, according to Nielsen. The same has also cast a long shadow on the Indian consumption story as from Q218 to Q219, the growth trajectory for small FMCG players has been on a continued downtrend. The impact has been severe, “with the degree of decline in growth for small manufacturers resulting in an overall contribution of 50% to India’s slowdown story”, Nielsen said in its India FMCG growth snapshot for April-June 2019 quarter. When asked whether small FMCG manufacturers or FMCG startups are eating into the share of big players, which is being seen as a slowdown, Nielsen said that on the contrary, small manufacturers are largely quitting and that has contributed heavily to the slowdown. Quick exit “In 2017, 7400 players got added into FMCG space. That went to 7900 in 2018 and went down to 6000 in 2019. You’ll see a lot of small players, especially in the food sector, entering after GST. However, post that, you see inflationary pressure pushing them into increasing their prices. For a consumer that means should I go for a brand that is known to me and very close to the price range compared to the new player that has just come up? So that’s also a factor at play here. Trade dynamics and complex Indian environment is also an active player,” Sunil Khiani, Head of Retail Measurement Services, Nielsen South India, told Financial Express Online. Further, change in pack price architecture, within the small players, has led to them losing out on price advantage over large players. The small players also witnessed a 57% slowdown in the food category which is otherwise a large driver of sales for them. These food items include salty snacks, packaged tea, biscuits, and spices, according to Nielsen’s findings. The North and West zone have promoted growth for small manufacturers but these zones have seen a steep fall in growth. While growth rate was at 33% in Q318, it fell to 12.6% in Q219 in the North zone and from 25.5% to 10.6% in the West zone. GST hurt more than demonetisation Even while the growth for small, medium and large enterprises did not hit a rock post demonetisation, the same was affected during July 2017 after GST roll-out and Nov 2017 after GST rates were redefined for few categories. The growth for small, medium and large enterprises picked up in Q318, according to the Nielsen findings, however, it saw unprecedented slump post that period. https://www.financialexpress.com/industry/more-companies-quitting-fmcg-business-rather-than-entering-half-of-slowdown-due-to-sme-growth-slump/1646908/
Stan AF Posted July 20, 2019 Posted July 20, 2019 (edited) DHFL demise imminent just like debt-ridden IL&FS: India’s regulators, raters failed to catch early signs of NBFC mess Dewan Housing Finance Ltd or DHFL—a well-known home loan lender in the country—fears that its days are numbered. The company has warned investors and clients that it may not survive as a going concern on account of failure to raise funds and meet payment obligations. That’s another way of telling investors that it is going bust and they (investors) should look for other ways to save money. These include banks, bondholders and even retail investors. DHFL has already defaulted on its payment obligations to the tune of Rs 2,858 crores that were due on 6 July and 8 July respectively. In the March quarter, losses to the tune of Rs 2,223 crore was reported as compared with a profit of Rs 134 crore in the year-ago period. On Monday, DHFL shares plummeted 31.77 percent to Rs 46.70, a 52-week low on the BSE in mid-session trade. On the NSE, shares plunged 32.62 percent to hit a one-year low of Rs 46.15. The bad news is that the DHFL mess isn’t happening in isolation. Nearly 165 mutual fund schemes have exposure to this company and banks hold about Rs 38,000 crore of debt. The failure of DHFL will leave painful memories for stakeholders, and investors in other NBFC stocks. A resolution to the DHFL crisis won’t be easy as there are a large set of investors, not just banks governed by the Reserve Bank of India. DHFL, the lender to builders and retail customers, would have got a breather had some large investor shown interest to pick up a majority stake in the company. This hasn’t happened so far since investors may likely find the firm a super-risk bet. In such a scenario, there aren’t many options available on the table. Representational image. Reuters. As things stand, post-March quarter numbers, DHFL gives no hopes of its survival to investors. DHFL’s near-death and the IL&FS crisis that preceded it exposes the weakness of India’s financial sector watchdogs who failed to foresee the mess brewing in the country's shadow banking system. In the case of both IL&FS and DHFL, rating agencies stepped in at the last minute to call out the nature of stress in these firms and warn investors about the impending defaults. Big raters such as India Ratings & Research, ICRA, and Credit Analysis and Research Ltd (CARE), had given IL&FS the highest rating of AAA, even when its subsidiary, IL&FS Transport Networks defaulted in June, as this Mint report reveals about Sebi investigation on raters. Raters slashed top rating of IL&FS entities to junk after the defaults occurred. It doesn’t require a rating agency to state a company is in trouble after it has defaulted on payments. In the case of DHFL too, agencies did not seem to have any clue till the last minute. One of the raters had even offered top ratings to DHFL instruments until a few months before it started defaulting on payments. Rating agencies came into existence to warn stakeholders in advance about likely problems a company may face. But in the cases of DHFL and IL&FS and in a few others, they failed to do their job at the right time. The same is the case with the regulators--in this case mainly the Reserve Bank of India (RBI) and market regulator, Securities and Exchange Board of India (Sebi). This was also pointed out by former chief economic advisor, Arvind Subramanian last week when he said RBI failed to identify the IL&FS crisis, referring to the RBI financial stability reports of the last four to five years. Repeated failures of rating agencies and sector regulators to identify the stress in shadow banks tell us there is a need to take a deeper look at the way regulators/raters operate. It goes without saying that the accountability of the regulator is key for any healthy functioning financial system. Secondly, a DHFL-like episode reiterates the need for tighter scrutiny of India’s shadow banks just like commercial banks were subjected to with an NPA clean-up process in 2015. In the Union Budget, the proposal to give more power to the RBI to regulate NBFCs and HFCs is interesting and important in the backdrop of a crisis-like situation in the NBFC sector. Such an exercise, as this writer has mentioned repeatedly, will help in a big way to dig out the stress remaining in the balance sheets of big and medium-sized shadow banks which are interlinked to rest of the financial system. DHFL’s collapse, just like IL&FS, exposes the gross inefficiency of India’s weak regulators, rating agencies. The question is, who will watch the watchdogs. https://www.firstpost.com/business/dhfl-demise-imminent-just-like-debt-ridden-ilfs-indias-regulators-raters-failed-to-catch-early-signs-of-nbfc-mess-6995751.html Edited July 20, 2019 by Stan AF
Stan AF Posted July 22, 2019 Posted July 22, 2019 (edited) As Modi 2.0 hits half-century mark, D-Street counts Rs 12,00,000 crore loss Investor sentiments soured in the first 50 days of Modi 2.0, with stock investors losing nearly Rs 12 lakh crore worth of wealth within a short period. Market value of the BSE-listed stocks have plunged by Rs 11.70 lakh crore, or 7.5 per cent, to Rs 144 lakh crore from the recent high of Rs 156 lakh crore hit on June 3. Nine of every 10 stocks (2,294 out of 2,664) that traded on BSE are in the red since then; over 60 per cent stocks (1,632) are down over 10 per cent, while one-third of them (903) have slipped over 20 per cent. Read more at: //economictimes.indiatimes.com/articleshow/70326346.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst Edited July 22, 2019 by Stan AF
Stan AF Posted July 22, 2019 Posted July 22, 2019 On 7/16/2019 at 1:24 PM, velu said: @Stan AF there is another solution , shut down the bsnl .. Looks like the author is an employee of bsnl https://www.financialexpress.com/industry/govt-readies-rs-74000-crore-revival-plan-for-bsnl/1651865/ BSNL revival: Govt readies Rs 74,000 crore plan for bleeding telco By: Rishi Ranjan Kala | Updated: July 22, 2019 7:12:36 AM It has also argued that strategic disinvestment of BSNL will not work out as there may not be any takers of it considering the current financial stress in the telecom industry. As opposed to it, a revival package of Rs 74,000 crore will cost less and by reducing its workforce and allocating it 4G spectrum will make the company competitive. The department of telecommunications is pushing for a Rs 74,000-crore revival package for the loss-making BSNL and MTNL on the ground that closing them down would cost higher — around Rs 95,000 crore. The assumption behind the revival package, which involves an attractive VRS package to BSNL’s 1.65 lakh employees, reducing the retirement age from the current 60 years to 58 years, will cut the wage bill of the company which in FY19 was 77% of its revenues. Further, if the company is provided 4G spectrum by the government as part of the package, then it would be able to compete in the market and start posting lower losses from FY21 onwards and become profitable from FY24 onwards, according to the DoT. The components of the revival package drawn up by the DoT are as follows: The VRS payout will entail a cost of Rs 29,182 crore, another Rs 10,993 crore will be the cost in terms of payout of retiral benefits by advancing the retirement age from 60 to 58 years. The allotment of 4G spectrum would cost Rs 20,410 crore and another Rs 13,202 crore will be the capex required to rollout the 4G services. The government’s logic is that closing down BSNL, which posted a net loss of Rs 13,804 crore on a revenue of Rs 18,865 crore in FY19, would require giving VRS to all its employees plus repayment of its total debts which would cost around Rs 95,000 crore. As opposed to it, a revival package of Rs 74,000 crore will cost less and by reducing its workforce and allocating it 4G spectrum will make the company competitive. It has also argued that strategic disinvestment of BSNL will not work out as there may not be any takers of it considering the current financial stress in the telecom industry. However, analysts are not convinced by the plan and the logic behind it. It’s true that BSNL’s has a large number of employees at aroud 1.65 lakh whose wage bill comprises 77% of its revenue. The wage bill to revenue cost for private operators like Bharti Airtel, Vodafone Idea or Reliance Jio is 3-4.5%. Further, while Bharti has a total workforce of around 16,000, Vodafone Idea employes around 9,000. But merely reducing BSNL’s workforce and therefore its wage bill will not make the company competitive as it lags far behind its private sector peers in terms of network coverage and efficiency. The optimistic projection underlying the revival blueprint is that BSNL, which posted a net loss of Rs 13,804 crore in FY19 will see it widen to Rs 18,231 crore in FY20, but thereon it will start narrowing and come down to a loss of Rs 5,432 crore in FY21. It will post a net loss of Rs 396 crore in FY23 and then break into a profit of Rs 2,235 crore in FY24. velu 1
velu Posted July 22, 2019 Posted July 22, 2019 @Stan AF loss making PSUs should be allowed to fail .. Wasting our money on dead weights like air India , bsnl , MTNL etc etc Jimmy Cliff 1
Stan AF Posted July 23, 2019 Posted July 23, 2019 (edited) Can't say when NBFC crisis will finish; trying to avoid contagion: RBI Guv "We have to only see our domestic demand continues to be robust and ensure that there is a domestic demand revival and that remains strong" Anirban Nag Siddhartha Singh & Unni Krishnan | Bloomberg Last Updated at July 22, 2019 21:56 IST Reserve Bank of India Governor Shaktikanta Das gave his first interview with media since taking office in December. Here’s an edited transcript of the topics he covered in the more than 50 minute interview. On the economic slowdown and the RBI’s response: "The accommodative stance will depend on incoming data. How inflation numbers look how the growth numbers look. Primarily how inflation looks. With regard to the slowdown, I would not give a particular timeline and it’s not possible. But overall if you see the trend, I think the fourth quarter of last year was partly a base effect and partly due to investment slowdown and demand contraction, which I had articulated in the monetary policy committee minutes. For that, so far as monetary authority is concerned, the law gives us a certain role and mandate and we have tried our best to play that role. We have reduced the policy rates by 75 basis points and we have shifted to accommodative. And shifting of the stance to accommodative itself means a rate cut of 25 basis points at least. So therefore effectively, the rate cuts has been 100 basis points if you take into account the change in stance." On providing liquidity: "Parallel to that we have also ensured surplus liquidity in the system. Liquidity was in deficit but at the moment for the past 1 1/2 months, the system is in liquidity surplus by more than 1 trillion rupees. “We will ensure the banks are provided adequate funds. While the system is in surplus mode, it is possible that one or two banks may have liquidity issues. Given the role the RBI is assigned, inflation is primary target, and given due weightage to the fact that growth momentum has slowed down. For the revival, various stakeholders have to play the role." On investment slowdown: "There have been sectoral problems, like in the auto sector. Our survey shows that additional insurance requirements has had an impact. So every sector has had its problem. But when the world is changing you also have to change. Then there was the credit squeeze; now availability is there. The banks were unable to lend significantly, burdened with NPAs and the focus of the banks was on recovery and consolidation and not on credit. The banks are now in a better position to lend. While banks were not lending, NBFC entered their space. But for a year or so, credit flow has been affected. Another thing I would like to address the crowding out effect. It’s a good thing that the fiscal deficit has been brought down and recapitalization has been announced. Every stakeholder, the government, the private sector and the RBI are playing their role and I think things are moving in the right direction. And things should improve now." On liquidity and NBFC problems: "We have to constantly monitor and remain alert as the regulator and as a monetary authority. We have to analyse and review the situation. Here at the RBI, we have broad medium and long-term goals. If some issue becomes critical, not a day passes without some internal high-level review. On NBFC, not a day passed in the last several months where we don’t have a discussion or a review internally. Either on the sector or individual NBFCs. And we are monitoring the top 50 NBFCs which we have identified in terms of balance sheet size, volume of operation and in terms of governance practices and credit behavior. Our supervision teams are closely monitoring them. We are in constant interaction with the banks and it’s our endeavor to ensure a collapse of another NBFC, especially a large one, doesn’t happen. Having said that, if NBFCs have undertaken certain governance practice and certain ways of function and they have to a price for it, they will have to pay a price for it." On banks being proactive: "We are in constant engagement with banks. After the June 7 circular, the banks are more enabled to resolve the crisis and stress in the individual NBFCs. Now inter-credit agreement is mandatory. Earlier it wasn’t. We have also given 30 days for review and another six months for restructuring and we are having constant engagement with the banks. So the banks, under the June 7 circular, have to play a proactive role. We are constantly in touch with large lenders to such NBFCs, including some housing finance, where we see some signs of fragility." Consolidation in NBFCs: "If somebody has diverted or there has been sort of ever-greening, there has been gold plating, if there has not been so diligent lending, so obviously they have to pay the price. Our effort is to segregate the way there have been lapses. Our focus is the overall system maintains stability. When I say system, it obviously includes all the major players. Therefore, our effort is to see that there is no repeat instances of systemically important large NBFC collapsing. And in the process some promoters have to make certain sacrifices, promoters have to accept haircut, the banks will have to deal with it appropriately within the parameters. One or two cases, the banks have signed inter-creditor agreements and they are resolving this crisis. The way I look at it, the responsibility is on the NBFCs themselves, to find market instruments to resolve their problems. Market instruments and the promoter has to bring in additional capital, he has to do a stake sale, he has to securitize his assets and mobilize liquidity, he has to meet debt obligations. And then the role of the lenders. We are in discussion with the lenders who have to protect their money also. They also have a parallel role to try and resolve this issue. That will also mean sacrifice on the part of the promoter also. The RBI will ensure adequate liquidity to banks." On refinancing: "This Refinance window or a liquidity window is a misnomer. We cannot lend money directly to one NBFC. Under the law, RBI is the lender of last resort, but we haven’t reached that situation where we invoke that particular legal provision. So RBI in today’s time cannot and would not be lending directly to NBFCs. We cannot give them clean money. It is up to the bank and depending on the collateral. We are backing up the banks. There is nothing called a liquidity window. Money is fungible, and when money is fungible having these windows, I think, is not relevant." When will the crisis be over? "Difficult to say when it finishes. It’s our effort to ensure there is no contagion. It is our endeavor to ensure there is no collapse of another systematically important NBFC." On cases of adventurism: "There have been instances where it has happened. Some of the NBFCs have diverted. It hasn’t happened in a large scale. That is not the case. In some cases, we have noticed this has happened. A large number have encountered business failures, encountered external factors, which has impacted business models. We are coming up with a new regulatory framework. We are a work in progress. Risk management guidelines are also there for NBFCs. Now HFCs are coming under RBI, we are constantly reviewing it internally. The RBI’s endeavor is a well functioning NBFC sector and a robust regulatory framework which prevent the kind of situation we have encountered in the past year." On the US-China trade war and what it means for India: "India is not part of the global value chain. So, U.S.-China trade tension does not impact India as much as several other economies which are part of the global value chain. Second thing is about trade tensions, it has a lowering of global growth and contraction of demand and that would in a way have a role on oil prices. Oil prices should remain low. These are the positives. In the long run, we cannot ignore lingering and prolonged tensions. It will definitely affect countries all over the world and definitely India, which is the sixth-largest economy. In the medium term also it will affect India. If it lingers, a contraction of global demand will have impact on our exports sector. We have large exports to Europe." On RBI policy options: “We have to only see our domestic demand continues to be robust and ensure that there is a domestic demand revival and that remains strong. We have to ensure that these opportunities arising out of the trade war, relocation of investment, India should utilize it. Irrespective of the trade war, India should become competitive both in the services and the manufacturing sector." On the risk of dollar depreciation: "If they depreciate their currencies, it means greater inflows. When the reversal happens we have to manage spillover effect. If excess inflow comes in, it becomes a problem to absorb excess liquidity. It’s an evolving challenge. We will continue to deal with it. We have to keep in mind, in several advanced economies, bonds yields are negative, inflation is zero. In fact in my interaction with other central bankers, they are concerned about zero or low inflation. They would like to have a slightly higher inflation. Zero interest rates prevailing for far too long, it becomes unsustainable and undermines investor sentiment. In the overall context, India is much better than most other economies." On structural reforms: "I don’t think the fiscal space is really the answer. If you have fiscal space any government can use. Long-term growth can be sustained by structural reforms, enhancing competitiveness, and focusing on an enabling business environment. So therefore, GST, IBC and the Niti Aayog’s committee on agriculture reforms, which will allow private investment in the farm sector and which will ensure better price to farmers for their produce, are crucial. The supply chain in the agricultural sector has to be addressed. The focus will have to be on structural reforms and improving competitiveness. Focus will have to be on continued ease of business and availability of credit at a reasonable price." On improving growth prospects: The RBI’s "essential role is to maintain price stability, which is defined in terms of inflation. Along with the objective of growth. Price stability is prime. It will depend on inflation, on incoming GDP. This year we have projected 7%. There was a lot of uncertainty, but now the monsoon is catching up in Tamil Nadu and Kerala. The western part had good rains and the monsoon outlook has improved compared to what it looked about three weeks ago and oil prices are remaining in the $65 range, but then you have extraneous factors like the trade tensions, sanctions on Iran, and then you have Brexit which creates uncertain sentiments and India has a lot presence in Britain in terms of investment and exports. I would not like to specify how long it (economic slowdown) will last. India is today in a far better place than most of the major economies and India has certain inherent resilience and the signs are looking good." On core inflation: "Core inflation coming down, at one level, can be seen as a positive development but at another level it is reflective of a slowdown in the demand, so therefore I don’t want to make a qualitative judgement on good or bad. Based on hard numbers, we will have to take a call." On global bond issuance: "RBI is the debt manager. There is a process of consulting between RBI and the government." On recapitalization funds: "The 700 billion rupees is adequate for capital requirement but also for growth. The true test of efficiency of a public sector bank is whether they are able to access capital markets to raise additional capital. Otherwise just continuous and prolonged dependence on government capital infusion -- it can breed inefficiency. Banks need to access capital markets. There has to be competition in the banking sector. How many competitors are there in the field that the market will decide." On interest-rate transmission: "There is a case for banks to show better monetary policy transmission. We have to keep in mind that banks have gone through a period of crisis and they are just recovering, they are just about recovering, so that aspect has also to be kept in mind. So if you drive and ask them to fix interest rates administratively, we cannot lose sight of the fact that banks will also have to recover and comeback to a level where they are out of the woods. If we see the PCA banks have fulfilled the conditions to come, they will come." On payments banks: "Some are doing well. It’s a new model. It’s about two years. We are studying. We should wait a little longer how they play out." On financial stability: "I would like to say our primary focus -- apart from price stability and keeping the objective of growth -- it is also to ensure the stability of the financial sector, which includes banks and NBFC. And in the long run, if India has to grow and show improved growth rates, it will need a well-functioning financial sector." https://www.business-standard.com/article/economy-policy/rbi-governor-s-take-on-economic-slowdown-rate-cuts-nbfcs-and-trade-war-119072200074_1.html Edited July 23, 2019 by Stan AF
Stan AF Posted July 23, 2019 Posted July 23, 2019 16 hours ago, velu said: @Stan AF loss making PSUs should be allowed to fail .. Wasting our money on dead weights like air India , bsnl , MTNL etc etc Make no mistake this is a bailout. And one in which the government is also to blame and not just bsnl/
gattaca Posted July 23, 2019 Posted July 23, 2019 (edited) BSNL was in profits a decade ago what happened. Is it because of 2G scam ? 2G allocation of bandwidth was given to private companies ? Edited July 23, 2019 by gattaca
Stan AF Posted July 24, 2019 Posted July 24, 2019 (edited) Money & Banking DHFL’s auditors raise several red flags Radhika Merwin Research Bureau | Updated on July 23, 2019 Published on July 23, 2019 Auditors have listed qualifications and disclaimers to the company’s March quarter results; says not been able to obtain sufficient evidence to provide a basis for an audit opinion Dewan Housing Finance Limited (DHFL), which took a sharp knock, post its March quarter results, owing to several unsettling commentary by the management in the notes to account, is likely to tank further, as auditors raise several red flags around the reported results. While stating that they were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion, the auditors put out several qualifications and disclaimers. Importantly, the auditors have raised concerns over the ability of the company to continue as a going concern. “All these developments raise a significant doubt on the ability of the company to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities including potential liabilities in the normal course of business”, the auditors- Chaturvedi & Shah LLP and Deloitte Haskins & Sells LLP stated. The company had declared its March quarter results on July 13 (after months of delay). It had reported a loss of Rs 2,223 crore in the March quarter. The board on Monday had approved the audited results; the auditors have put forth several qualifications that could have a material impact on the financial statements of the company, clouding its ability to monetize its assets, secure funding from bankers /rope in a strategic partner and restart its operations (disbursements). Also read: DHFL reports standalone net loss of Rs 2223 cr in Q4FY19 Qualification details In one of the notes to the March quarter results, significant documentation deficiencies with respect to grant or rollover of Inter-corporate deposits (ICDs) were mentioned and that the company was working to remedy them. The auditors have stated that they have not been provided sufficient evidence to support the management's assessment and “hence are unable to evaluate on the recoverability of the ICD and the consequential effect on the Statement”. As of March 2019, ICDs outstanding stood at ₹5,652 crore. Post the Cobrapost allegations, the report by Independent Chartered Accountants looking into the allegations, had highlighted certain procedural and documentation lapses (end use monitoring of the funds loaned not performed). The company’s actions in regard to such loans is pending. The auditors stated that they were unable to determine if these allegations would have an impact and whether any adjustments to the carrying value of the loans granted are required. In the notes to account of the March quarter results, DHFL had also stated that in respect of loans of about a) ₹16,487 crore, cheques received from the borrowers were initially recorded in certain customer accounts for receipts, despite the cheques not been deposited in the banks and were later reversed b)It had also flagged some lacunae in the documentation of project/mortgage loans amounting to ₹20,750 crore c) It had also marked down value of loans (wholesale) aggregating ₹34,818 crore. These were reclassified as Fair Value Through Profit or loss (FVTPl) under Ind AS 109; the resultant fair value loss of ₹3,190 crore was charged to P&L. In respect of all these, the auditors stated that they were unable to obtain sufficient evidence to support the values of the loans and determine if these would have an impact. The auditors were also not able to comment on the assumption made relating to expected credit loss (ECL) that had gone up sharply in the March quarter. The auditors were unable to determine if the observations made by the National Housing Bank (NHB) pertaining to DHFL's Capital Adequacy Ratio as at March 31, 2018 would have an impact. NHB had observed that the company’s capital adequacy should have been 10.24 per cent (against reported 15.3 per cent). Material uncertainty related to Going Concern Importantly, the auditors stated that the qualifications laid down by them may have an impact on the company's ability to continue as a going concern. “The ability of the company to continue as a going concern inter alia is dependent upon its ability to monetize its assets, secure funding from the bankers or investors, restructure its liabilities and recommence its operations, which are not wholly within control of the Company.” On Monday, the stocks of DHFL closed 1.41 per cent lower at ₹52.60. Shares in DHFL have slid 78 per cent this year. https://www.thehindubusinessline.com/money-and-banking/dhfls-auditors-raise-several-red-flags-stock-like-to-tank-further/article28667492.ece Edited July 24, 2019 by Stan AF
Stan AF Posted July 24, 2019 Posted July 24, 2019 Hindustan Unilever says consumer slowdown to continue; expect subdued demand in coming months By: Prachi Gupta | Published: July 23, 2019 6:04:20 PM Looking ahead, we expect near-term consumer demand to remain subdued; commodity and currency will continue to remain volatile, HUL said. The FMCG major posted an over 14 per cent rise in consolidated net profit to Rs 1,795 crore for the quarter ended June 30. The ongoing consumer slowdown dragging on Indian FMCG industry will likely continue to weigh in the coming months as well, a top executive at India’s largest FMCG maker Hindustan Unilever said on Tuesday. “Looking ahead, we expect near-term consumer demand to remain subdued; commodity and currency will continue to remain volatile,” HUL CFO Srinivas Phatak told reporters after the release of the company’s fiscal first-quarter results. The FMCG major posted an over 14 per cent rise in consolidated net profit to Rs 1,795 crore for the quarter ended June 30. The company also witnessed a domestic consumer growth at 7 per cent with underlying volume growth at 5 per cent, it announced in a BSE filing. “Against the backdrop of moderate market growth, HUL has delivered a resilient performance driven by the expansion of our consumer franchise, improvement in portfolio mix and sustained growth in margins,” HUL CMD Sanjiv Mehta said. Key takeaways from Q1 results Hindustan Unilever, the Indian subsidiary of British-Dutch Unilever earned a net profit of Rs 1,795 crore in April-June this financial year, versus Rs 1,569 crore in the April-June quarter of the last fiscal. The company’s net sales stood at Rs 10,197 crore as against Rs 9,616 crore in the corresponding period a year ago. This is a rise of 6.04 per cent. HUL’s total expenses for the quarter were Rs 7,896 crore. The same has also seen an increase of 3.84 per cent, compared to Rs 7,604 crore in the last comparable period. Meanwhile, another leading FMCG brand Dabur had also released its fiscal first-quarter results a few days back. The company said that it recorded double-digit profit growth in Q1 volumes despite slowdown and heavy competition. Major FMCG companies had borne the brunt of a consumer slowdown in the last quarter. In fact, it was HUL’s statement that brought the consumer demand slump to attention of analysts. HUL had said that “FMCG is recession resilient, not recession-proof.” A Kotak report had then said that for a company that is generally cautious with words, HUL’s nuanced statement could mean that the situation is worse than imagined. https://www.financialexpress.com/industry/hindustan-unilever-says-consumer-slowdown-to-continue-expect-subdued-demand-in-coming-months/1653871/
Stan AF Posted July 24, 2019 Posted July 24, 2019 (edited) https://www.bloombergquint.com/economy-finance/weak-logistics-indicators-reinforce-persistence-of-growth-slowdown Edited July 24, 2019 by Stan AF
Stan AF Posted July 25, 2019 Posted July 25, 2019 (edited) Industry body fears 10 lakh job losses, seeks govt intervention to stimulate growth in auto sector By: PTI | Updated: July 24, 2019 8:52:51 PM The government think tank NITI Aayog has proposed transition to electric vehicles (EVs) for three-wheelers by 2023 and two-wheelers by 2025. Besides, automobiles currently attract GST rate of 28 per cent with additional cess ranging from 1 per cent to 15 per cent, depending on the length, engine size and type. (Reuters) Industry body ACMA on Wednesday said around 10 lakh jobs could be on the line if the prolonged slowdown in the automobile industry continues, while seeking immediate government intervention such as slashing GST to stimulate demand. The Automotive Component Manufacturers Association of India (ACMA), which represents the auto component industry that alone employs around 50 lakh people, sought a uniform GST of 18 per cent for the entire automobile sector in order to revive the vertical which has now witnessed 10 months of continuous decline in sales. Terming the situation as “unprecedented”, ACMA President Ram Venkataramani said vehicle sales in all segments have continued to plummet for the last several months thus impacting the component segment as well. “Considering the fact that the auto component industry grows on the back of the vehicle industry, a current 15-20 per cent cut in vehicle production has led to a crisis-like situation,” he said, adding “if the trend continues, the layoffs are inevitable and an an estimated 10 lakh people could be laid off”. When asked if layoffs have started, Venkataramani replied in the affirmative. “In the components industry, nearly 70 per cent of the workforce is contract workers. So, whenever there is demand slump, there is reduction in workers,” he said. Subdued demand, recent investments made for transition from BS IV to BS VI emission norms, lack of clarity on electric vehicle (EV) policy has left the industry unsure of its future and has caused it to stop all future investments, he added. “The industry needs urgent government intervention… We strongly recommend that the government bring 18 per cent GST rate across the entire auto and auto component sector,” he added. Under the GST regime, already around 70 per cent of auto components have come under the 18 per cent GST slab. However, around 30 per cent remain in the 28 per cent bracket. Besides, automobiles currently attract GST rate of 28 per cent with additional cess ranging from 1 per cent to 15 per cent, depending on the length, engine size and type. He also sought for a long term clarity on government’s electrification policy while pitching for technology agnostic approach to deal with issues like air pollution and crude oil imports. Commenting on the need for a stable policy for electric mobility, Venkataramani said any further changes in targets for roll-out of EVs would increase the country’s import bill and damage the current components manufacturing ecosystem. “This will also result in significant job losses. Therefore, a stable technology-agnostic e-mobility policy is the need of the hour to ensure a smooth transition and creation of a string local supply base,” he added. ACMA Director General Vinnie Mehta also stressed on the need for a stable overall roadmap towards transition to EVs stating that Niti Aayog’s aggressive target to move to EVs has made the auto industry nervous, especially after taking part in thorough deliberations with Department of Heavy Industries for framing FAME II scheme. The government think tank NITI Aayog has proposed transition to electric vehicles (EVs) for three-wheelers by 2023 and two-wheelers by 2025. Commenting on sector’s performance in 2018-19, Mehta said the auto components business stood at 3.95 lakh crore (USD 57 billion), registering a growth of 14.5 per cent over the previous fiscal. Auto component exports grew by 17.1 per cent in 2018-19 to Rs 106,048 crore (USD 15.16 billion), he added. “The first-half of the fiscal 2018-19 witnessed a robust double digit growth, however, the second-half saw a significant slump in vehicles sales,” Mehta said. The automotive component industry contributes 2.3 per cent to country’s GDP providing employment to 50 lakh people. https://www.financialexpress.com/industry/industry-body-fears-10-lakh-job-losses-seeks-govt-intervention-to-stimulate-growth-in-auto-sector/1655234/ Edited July 25, 2019 by Stan AF
Stan AF Posted July 25, 2019 Posted July 25, 2019 Facebook just got clobbered with a record $5 billion penalty over the Cambridge Analytica data breach Isobel Asher Hamilton,Isobel Asher HamiltonJul 24, 2019, 18:17 IST APFacebook CEO Mark Zuckerberg.AP The Federal Trade Commission just slammed Facebook with a record $5 billion penalty over its handling of user data following the giant Cambridge Analytica breach last year. Facebook said last month that it had set aside $3 billion to $5 billion for the settlement. The Federal Trade Commission announced today that it has slapped Facebook with a $5 billion penalty over its handling of user data which came to light after the Cambridge Analytica scandal. The settlement is the result of Facebook violating a 2012 agreement with the FTC, in which it promised not to hand over user data to third parties without consent. It represents the biggest penalty the FTC has handed down to a technology company, with the regulator calling it "unprecedented." "The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers' privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide," the FTC said in a press statement. The penalty also includes a restructuring of Facebook's board of directors, mandating that it have an independent privacy committee. The FTC claims this committee will remove CEO Mark Zuckerberg's "unfettered control" over users' privacy, and will be responsible for appointing "compliance officers" to Facebook's privacy programme. Members of the new committee must be appointed by an "independent nominating committee," and can only be fired by a "supermajority" from Facebook's board of directors. Facebook said it was expecting the fine in its first-quarter earnings report last month, saying that it had set aside $3 billion to $5 billion in anticipation. The company is due to give its second-quarter earnings report later on Wednesday. Although the FTC fine has been long-anticipated, it has landed amid a flurry of regulatory activity. A source told the Wall Street Journal that the Securities and Exchange Commission is due to announce a settlement with Facebook to the tune of more than $100 million on Wednesday, and on Tuesday the Department of Justice announced a sweeping antitrust probe into the big tech giants. This story is developing... https://www.businessinsider.in/facebook-just-got-clobbered-with-a-record-5-billion-penalty-over-the-cambridge-analytica-data-breach/articleshow/70365249.cms
Stan AF Posted July 27, 2019 Posted July 27, 2019 Banking crises amid a global slowdown At one end, Deutsche Bank—Germany’s largest bank and a key player in all European recovery efforts—is facing many issues. Published: 27th July 2019 04:00 AM | Last Updated: 27th July 2019 08:37 AM | A+A A- Reserve Bank of India (File Photo | PTI) The world’s economy is growing at a slower pace and governments across the globe are building tariff barriers to protect their domestic industries, even as they snarl at each other demanding trade concession. No wonder India’s exports fell by a massive 9.7% last month, setting off alarm bells at Raisina Hill. Adding to those worries are the banking crises unfolding at two corners of the globe. At one end, Deutsche Bank—Germany’s largest bank and a key player in all European recovery efforts—is facing many issues. In China, Baoshang Bank has collapsed, an unheard-of occurrence in the country’s tightly-controlled economy. In Germany, the once-proud Deutsche Bank has remained fragile ever since the Wall Street crash of 2008. It has tried to regain a healthy balance sheet by aggressively breaking rules. But that has not helped it much. In a restructuring move now initiated, the bank is shedding staff worldwide and shifting some USD 83 billion of risk-weighted assets to a ‘bad bank’ to appear healthy, though with a lower capital base. If the bank still collapses, it can pull down dozens of European banks, negating all growth gains since the Lehman Brothers crisis of 2008. Meanwhile, Beijing borrowed trillions of dollars to support China’s growth since the 2008 crisis. So did local governments and corporates. The net result is that China’s state and private debt now total an astounding $34 trillion. Observers see the Baoshang moment as the tip of a crisis which might scar not only China but all nations that do business with it. All this does not bode well for global growth as well as India’s ability to export abroad. Under the circumstances, India would do well to concentrate more on growing its domestic market and taking stock of its own debt situation and avoid the mistakes other nations have already made. The Indian government’s debt-to-GDP ratio already stands at 69% of the GDP, while total state and private debt in India has grown at some 13.3% annually over the last five years to reach Rs 253 lakh crore. http://www.newindianexpress.com/opinions/editorials/2019/jul/27/banking-crises-amid-a-global-slowdown-2010021.html
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