Economy Current Affairs
Economy Current Affairs Jan 3rd Week 2018
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 1. Jammu and Kashmir Finance Minister Haseeb Drabu announces industrial development scheme.

 Jammu and Kashmir Finance Minister Haseeb Drabu today announced an exclusive industrial development scheme to expand and promote business activities in the state.

Winding up the discussion on the Budget for 2018-19 in the Assembly, Drabu said that under the scheme, to be rolled out soon, central capital investment subsidy of 30 per cent would be provided for plant and machinery and buildings for hotels.

He said it is for the first time that such benefits are being extended to the services sector.

He also announced three per cent interest subsidy for five years and 100 per cent insurance subsidy under the scheme.

"All new industrial units in manufacturing and services sector operational in the state will be eligible for various benefits under this scheme," he said.

The finance minister also made several other announcements to supplement the social security initiatives announced by him in the Budget 2018-19.

He also announced higher benefits for former and sitting legislators. Medical allowance to former legislators will be at par with the sitting MLAs. He announced an increase in car loan from Rs 5 lakh to Rs 10 lakh. Members not availing the car loan facility can utilise the amount for availing home loan up to Rs 20 lakh, he said.

He also informed that the government has already increased allowance for legislators from Rs 2000 to Rs 3000 per sitting.

To bring more beneficiaries under the ambit of various social security schemes, Drabu said additional funds to the tune of Rs 15 crore each would be added to the existing corpus for Old Age and Widow Pension schemes.

He also announced a provision of Rs 5 crore for interest subvention for business start-up ventures by SC and ST entrepreneurs.

For Ladakh region, Drabu announced a special duty allowance for employees on same lines as the Union Government -- 10 per cent of basic pay. This will apply to all who are posted in the region, he added. PTI TAS SMN


2. TCS bags over $690 million deal from M&G Prudential.

Tata Consultancy ServicesBSE 1.43 % signed a $690-million (Rs 4,400-crore), 10-year deal with M&G Prudential, the UK and European savings and investments business unit of Prudential. This is the third large insurance contract won by India`s top IT services company in the past four months, signalling a steady turnaround in the insurance platform. 

The agreement covers more than 4 million customer policies. TCSBSE 1.43 % said it will digitally transform M&G Prudential`s business and deliver enhanced service to its customers in the UK. 

"This kind of deal pipeline in the life &pension business will continue and there will be more opportunities that we will be looking at near future," said Suresh Muthuswami, president, TCS. "I cannot comment on whether we will be signing deals every quarter, but TCS will be aggressively going after this (opportunity in the insurance sector). We will be looking at this very seriously in all markets." 

He said its software product TCS BaNCS will now be servicing 35 million policies, becoming the largest single platform in the life and pension industry. 

Last week, TCS signed a $2-billionplus deal —its largest ever — with Transamerica, marking the Indian outsourcing leader`s entry into the highly specialised US third-party insurance administration business. In September, TCS signed a new 15-year business agreement with Scottish Widows, the life insurance and pensions business of the Llyods Banking Group. These three large deals totalled $4 billion in value. 

"Over the past three to four quarters, the company has been talking about a deal pipeline in the insurance side. It is now slowly seeing conversion," said Girish Pai, an analyst with Nirmal Bang. "All the deals have been platform deals. In the initial life of the platform, business is not as profitable as when the company adds more tenants." 

3. Bank of Baroda Partners with Invoicemart as a TReDS Partner.

Public lender Bank of Baroda has joined hands with digital invoice marketplace Invoicemart to enable digital invoices for Micro-Small and Medium Enterprises(MSMEs).

The collaboration will assist the buyers and sellers registered under the marketplace to access funding from the bank. Invoicemart a joint venture between Axis Bank and mjunction services ltd.

Further, the bank has announced shifting of its focus on supply chain financing, to offer loans to MSMEs linked with large corporate.

Trade Receivables Discounting System (TReDS) is an online platform set up to help MSMEs to decode working capital without the trouble of applying for loans.

“Financiers are an important part of the factoring ecosystem and they ensure the much needed working capital to MSMEs registered on our platform,” said Kalyan Basu, CEO & MD, Invoicemart.

“We are privileged to be associated with Bank of Baroda as one of our financers and we look forward to their invaluable support in our endeavour to strengthen our industry,” he added.

4. Yes Bank Ties up with Amplus Energy Solutions.

Amplus Energy Solutions has signed an MoU with India`s leading bank Yes Bank for a strategic tie-up to co-finance projects in the solar energy sector in India.

Yes Bank, which has been focussing on funding green energy projects in India, also announced that it will mobilise USD one billion by 2023 for financing solar energy projects in India and USD five billion till 2030.

The total projects capacity under the partnership of Amplus Energy Solutions and Yes Bank is expected to be up to 1,000 MW.

"Our partnership with Yes Bank is a perfect match for solar projects in India as we can provide installation, operational and maintenance expertise and Yes Bank can fund eligible projects, it provides a 360 degree offering for firms looking to install solar plants," said MD and CEO, Amplus Energy, Sanjeev Aggarwal.

The agreement was signed at International Solar Alliance pavilion at the World Future Energy Summit, Abu Dhabi.

World Future Energy summit, which is being held in Abu Dhabi, UAE from January 15 to 18, is focusing on renewable energy.

UAE has set a target to meet its 44 percent energy needs by renewable energy by 2050, majority of that by solar energy.

In December 2017, Yes Bank and European Investment Bank announced that they have created a fund of USD 400 million to fund solar and wind projects in India.

They have already identified eligible solar projects in Karnataka, Telangana, Maharashtra and Rajasthan.

The Gurgaon-based Amplus is also diversifying in new avenues such as battery storage, energy efficiencies, smart cities, and concentrated solar power technologies among others.

5. Maharashtra becomes first state to unveil Public Cloud Policy.

The Maharashtra government announced its State Innovation and Start-up Policy on Wednesday, aiming to generate five lakh jobs in the next five years.

It also revealed its public cloud policy, which targets $2 billion opportunity for the industry. For a start, it has asked its departments to shift its data storage onto the cloud.

“Today, we have unveiled our public cloud policy and this policy will allow all government departments to have access to the public cloud,” Chief Minister Devendra Fadnavis said at the Maharashtra Technology Summit.

He said the policy, which is a first by any State, will result in additional private sector investments as the government is one of the biggest creators and consumers of data.

A senior State government official said it would create a $2-billion opportunity for the industry as every single State government department uses data storage based on physical devices.

The Fadnavis government had formed a four-member committee to draft a policy framework on cloud usage two months ago, which submitted a policy document that’s being now adopted as the public cloud policy.

The policy is likely to be formally set in motion through a detailed government resolution. In the next 20 days, five to six top cloud service providers like Amazon or Microsoft will be empanelled, the official said.

The State Innovation and Start-up Policy was cleared by the State Cabinet on Wednesday. The policy will be applicable till 2022.

The objectives of the policy are to attract ?5,000 crore investment in the development of incubation and start-ups.

Provide ?2,500 crore for youth entrepreneurship activities (one per cent of State Budget). Establish on an average three incubators in each of the 12 designated sectors and develop at least 2,000 start-ups in next five years. The wants to develop at least 10 lakh sq ft of incubation space within the state over the next five years.

An establishment up to five years from the date of its registration shall be considered as a start-up. The annual turnover of the establishment should be up to ?25 crore. The establishment should be based on an innovative concept, innovative commercialisation of products and services or it could be based on innovative production methods and processes.


6. HDFC Bank Becomes 1st Indian Bank to Cross Rs5 trillion Market Capitalisation.


India’s most-valued lender HDFC Bank Ltd on Thursday crossed Rs5 trillion market capitalisation for the first time, making it only the third Indian company to achieve this milestone.

In intraday trade, the stock touched a fresh record high of Rs1,53.75 on the BSE, up 3.31% from its previous close. The scrip closed at Rs1,931.80, up 2.15% with a market cap of Rs5 trillion. The Sensex index closed higher by 0.51% to 35,260.29 points.

Tata Consultancy Services Ltd (TCS) and Reliance Industries Ltd (RIL) are the other two companies which crossed market capitalisation of Rs5 trillion. RIL remained the most-valued company with a market cap of Rs5.82 trillion, followed by TCS with a market cap of Rs5.57 trillion.

HDFC Bank’s steady 20% profit growth quarter-after-quarter as well as its immunity to the bad loans crises has helped the stock.

The bank also reports bad loan ratio below 1%, the lowest among Indian lenders. Thus, investors continued to buy the stocks despite high valuation of close to 4.8 times its expected book value for this fiscal.

The recent gains in the stock along with other banking shares was due to news report on government mulling 100% foreign direct investment in the banking sector.

Brokerage firm Jefferies India expects that the this is sentiment positive, but the magnitude of impact should be marginal as the gap between current foreign institutional investor (FII) shareholding and upper limit is wide for most banks barring HDFC Bank.

In the last 12 months, the stock has gained 42.34%, while the S&P Bankex, the broader gauge of banking stocks, advanced 36.62%.

The bank will report its December quarter earnings on 19 January. According to 16 Bloomberg analysts’ estimates, the bank may report a net profit of Rs4,652.90 crore.

“HDFC Bank’s earnings growth should get a boost from recovering loan demand as disruption from the 2017 implementation of India’s goods and services tax wanes,” said a 16 January Bloomberg Intelligence report.

“Strong exposure to retail should promote loan growth. Margin may struggle to expand further, but should stay above 4%. Credit costs could rise from last year’s low base, but will still stay under control, as HDFC Bank has lower exposure to stressed borrowers than other corporate lenders. Investors may closely monitor digital banking initiatives,” the report added.

Among the analysts covering the HDFC Bank stock, 50 have a “buy” rating, three have a “hold” rating, while two has a “sell” rating, according to Bloomberg data.

7. India Ratings Projects Economic Growth at 7.1 Next Fiscal.

India Ratings and Research today projected the country`s economic growth to improve to 7.1 per cent next fiscal from 6.5 per cent this year, buoyed by robust consumption demand and low commodity prices.

In its outlook for 2018-19, the agency said there will be a gradual pick up in growth momentum owing to structural reforms like GST and Insolvency and Bankruptcy Code (IBC) in place.

"While the implementation of GST is likely to benefit the economy over the medium to long term, the same cannot be said about the impact of demonetisation," India Ratings & Research (Ind-Ra), a subsidiary of Fitch Ratings, said.

Ind-Ra expects gross domestic product (GDP) to grow 7.1 per cent year-on-year in 2018-19, it said.

The projection is a tad lower than 7.4 per cent growth estimated by Asian Development Bank (ADB) and International Monetary Fund (IMF) for next fiscal.

Ind-Ra said but for demonetisation and Goods and Services Tax (GST) implementation, growth would not have decelerated to 7.1 per cent in 2016-17 and 6.5 per cent in 2017-18.

With the global crude prices firming up, Ind-Ra expects retail and wholesale inflation to come in at 4.6 per cent and 4.4 per cent, respectively in 2018-19, indicating an end to the current rate cut cycle.

There is still some fuzziness with respect to the intensity and the level of its future trajectory, it said, adding that the RBI "will remain in a pause mode for an extended period of time".

The agency said it expects fiscal deficit in 2017-18 to come in at 3.5 per cent, overshooting the budgeted estimate of 3.2 per cent.

"Despite 2018-19 being a pre-election year, Ind-Ra does not expect the Union Budget to be a populist budget. However, it expects some expenditure reallocation with an increased focus on the rural and agriculture sectors," it said.

The agency expects fiscal deficit in 2018-19 to be at 3.2 per cent, higher than 3 per cent stated in the medium-term fiscal policy statement.

A mix of global and domestic factors will keep the Indian rupee range bound at average Rs 66.06/USD in 2018-19, it said.


8. Google awarded 72 lakh for finding bugs in Pixel phone.

Google has paid big money to a security researcher that managed to uncover a nasty exploit in its Pixel smartphone last year. 

The company announced on Wednesday, that it paid a bug bounty hunter $112,500 (roughly Rs 72 lakh) for finding an exploit chain that could be used to hack into a Pixel device.

In August 2017, Guang Gong from Qihoo 360 Technology’s Alpha Team submitted a report to Google, detailing an exploit chain he had found, through the Android Security Rewards (ASR) program. Like many other tech companies, the rewards program offers money to security researchers that can uncover flaws in Google’s software, so they can patch vulnerabilities they may not otherwise have found.

Consisting of two separate bugs, they could together be used to remotely inject code into the Pixel, or any other Android’s, system_server process when the user clicks a malicious URL in Chrome. Once that happens, a hacker could take control to run additional malware, spy on them, or even hijack the smartphone entirely.

Google said it’s the first working remote exploit chain it’s received under the rewards program till date, and paid Gong $105,000 for his report, as well as a bonus $7500. The announcement was safe to make now as Google has already patched the bug in December’s security update, along with 41 others.

Google’s bug bounty program has so far awarded researchers over $1.5 million to date, with one team having earned the highest total of $300,000 so far for 118 different reports.


9. NPPA fixes retail price of 30 drug formulations.

National Pharmaceutical Pricing Authority (NPPA) on Wednesday said it has fixed the retail price for 30 drug formulations, including those used for treatment of diabetes, bacterial infections and high blood pressure.

NPPA has also revised the prices of three formulations, including that of anti cancer drug—Gemcitabine. “NPPA has fixed/revised ceiling prices/retail prices of 33 formulations under Drugs (Prices Control) Order, 2013,” NPPA said in a notification.

The NPPA is mandated to fix/revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

The regulator implements and enforces the provisions of the Drugs (Prices Control) Order. It is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers.


10. India to Set up $350 million Fund to Finance Solar Projects.

India will set up a $350 million fund to finance solar projects, Power Minister R.K. Singh said, as the country steps up efforts to achieve its ambitious target of adding 175 gigawatts (GW) in renewable energy by 2022.

India will need at least $125 billion to fund a plan to increase the share of renewable power supply in the country’s grid by 2022, underlining the immense financing challenge ahead.

The country, which receives twice as much sunshine as European nations, wants to make solar central to its renewable expansion. It expects renewable energy to make up 40% of installed power capacity by 2030, compared with 18.2% at the end of 2017. “The country would achieve its target of 175 GW of installed renewable energy capacity well before 2020,” Singh said on Wednesday at an event organised by the International Solar Alliance (ISA) in Abu Dhabi. Installed renewable power capacity is currently about 60 GW, and India plans to complete the bidding process by the end of 2019/20 to add a further 115 GW of installed renewable energy capacity by 2022.

India’s Yes Bank Ltd. has committed to financing solar projects worth $5 billion, while state-run NTPC Ltd. will contribute $1 million to an ISA fund, the power ministry said in a statement.

Foreign capital

India wants foreign capital to account for a bulk of its investments to meet its renewable energy target.

But industry experts said most of the financing for the country’s renewables drive so far has come from domestic banks and such banks have to account for the lion’s share of new renewable investments in the future.


11. WhatsApp Unveils Business App for Android.

Facebook-owned instant messaging platform WhatsApp has rolled out a feature that connects small businesses with customers, it said late on Thursday. Currently, only Android users can access the feature and they can avail of it through the latest update of the app.

The new feature will be available first in Indonesia, Italy, Mexico, UK and the US before being launched globally in the coming weeks.

“People all around the world use WhatsApp to connect with small businesses they care about — from online clothing companies in India to auto parts stores in Brazil. But WhatsApp was built for people and we want to improve the business experience,” the company said in a release.

With the new app, SMBs can build business profiles, access message statistics such as the number of messages sent, and provide quick replies to frequently asked questions.

The new business app will be available in web format just like the main WhatsApp app. Customers will know that they are talking to a business account as they will be listed separately.

“Over time, some businesses will have confirmed accounts once it’s been confirmed that the account phone number matches the business phone number,” the statement said.

According to the company, data collected from SMBs in India in partnership with a Morning Consult study shows that 84% of these small firms think that WhatsApp helps them communicate with customers, and 80% of such firms think that WhatsApp helps them grow their business. India is also one of the fastest growing ecosystems of startup companies globally.

Devesh Nichani, co-founder of Glassic, a fashion eyewear company that uses WhatsApp Business, said, “WhatsApp Business helps us develop stronger relationships with our customers. We’re able to respond faster to customers with features like away messages and quick replies, and offer a better overall experience.”

Interestingly, this will be the first time WhatsApp has initiated a plan to generate revenues. Last year, the company had said that it will not charge customers for using their app and will also keep it advertisement-free. However, the company has not disclosed any plans of charging the SMBs for their profiles.

The company is also reportedly looking to launch its UPI-integrated payments facility next month, The Economic Times had reported. The payments feature is said to be in beta phase and is being evaluated for security and data privacy before it is released. State Bank of India, Axis Bank, ICICI Bank and HDFC Bank are expected to be banking partners. The app has at least 200 million daily active users in the country.


12. India to offer Yoga classes at World Economic Forum.

 In a first, India will host yoga training sessions at the World Economic Forum (WEF) in Davos next week, a top government official said on Friday.

“We will showcase Indian heritage and culture in Davos. As part of this, yoga has been included in the main WEF programme for which we will be taking two acharyas to Davos to provide yoga classes during the five-day summit,” department of industrial policy and promotion (DIPP) secretary Ramesh Abhishek told reporters.

This will be Prime Minister Narendra Modi’s first Davos visit and also the first by an Indian Prime Minister since the one by H.D. Deve Gowda in 1997. Modi will deliver the keynote address at the plenary session.

Providing details of Indian engagement in Davos, Abhishek said we will offer yoga classes everyday. DIPP is also hosting a welcome reception for the WEF members on 22 January where 1,500 people are expected to come. “We will showcase India’s progress while also giving a taste of our exquisite cuisine and Indian culture and heritage,” Abhishek said.

“We will also set up an India lounge in Davos,” Abhishek added. Desi cuisine and yoga will mark the start of the five-day annual jamboree of the rich and powerful from across the world in the snow-laden Swiss ski resort town of Davos. This is the first time India will host the welcome reception at the summit.

The Indian presence is set to be the largest-ever with as many as six union ministers, two chief ministers, several top government officials and over 100 CEOs, figuring among the registered participants. The official sessions at the WEF will also have special India-focused discussions including one on “India’s role in the world”, how it is rethinking economics with the use of big data in policymaking and the country’s role in securing peace and stability in the Asian century.