Large borrowers fall in line after RBI’s one-day default norm

Source: LiveMint.com, Jan 16, 2019

Mumbai: A central bank rule mandating disclosure of loan default even if it is just by a day is putting the fear of god in big borrowers. Borrowers, who owe more than ₹5 crore, are gradually regularizing repayments following the Reserve Bank of India’s (RBI) 12 February circular asking banks to disclose any payment default, shows data accessed by Mint.

Responding to a Right to Information (RTI) query from Mint, RBI said the total outstanding loans of borrowers, who defaulted on bank loans (under the one-day default norm), has declined more than 60% to ₹55,070 crore on 30 September 2018 from ₹1.53 trillion on 30 June. To be sure, these are not soured assets, but loans where borrowers did not pay instalments on time. However, the data also shows that one-day defaults dipped to a low of ₹50,306 crore on 31 August from ₹91,280 crore on 31 July and rose 9% in September. Read the rest of this entry »

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High drug approvals to keep up pricing pressure for pharma firms

Source: LiveMint.com, Jan 16, 2019

December quarter earnings of pharmaceutical companies may see incremental improvement helped by a favourable base and steady domestic business. But if the drug approvals trend in the US is anything to go by, pricing pressure in the key market is unlikely to abate anytime soon.

As approval rates gathered pace and increased competition eroded prices, earnings of domestic pharmaceutical firms came under pressure, forcing reorganization of their US businesses. With new business lines yet to acquire scale, the generic drugs business still remains core to the companies’ earnings.

As the chart shows, the year ended September 2018 has seen a record 781 abbreviated new drug application (ANDA) approvals by the US Food and Drug Administration (FDA). Read the rest of this entry »

December trade deficit lowest in FY19 as imports shrink to three-month low

Source: Business Standard, Jan 16, 2019

New Delhi: The trade deficit in December last year fell to its lowest in the current fiscal year (2018-19 or FY19) as imports contracted for the first time. The effective trade deficit shrunk to $13.08 billion, lowest in FY19. It was $16.67 billion in November.

On the other hand, a high base effect and falling outbound trade of big exchange earners — such as gems and jewellery, engineering goods, and pharmaceuticals — nearly wiped out export growth in December, which fell to 0.3 per cent. Read the rest of this entry »

Govt to extend key manufacturing plan to promote battery industry

Source: Business Standard, Jan 16, 2019

New Delhi: The Centre is looking to extend its phased manufacturing plan (PMP) for promoting indigenous battery manufacturing in the country for supporting electric mobility.

PMP was initiated by the Ministry of Electronics & Information Technology for electronics and provided financial incentives, several duty exemptions, and countervailing duty on imports to boost domestic production.

At a recent meeting of the committee of secretaries on electric mobility, it was also proposed to provide financial assistance to the domestic battery sector. The committee recommended to the Department of Revenue that the goods and services tax (GST)/basic Customs duty on the raw materials imported for manufacturing components of electric vehicles (EVs) in India be reduced. It has also been asked to calibrate GST rates on EVs and their components at global rates. It is also proposed to provide accelerated depreciation to the EV sector. Read the rest of this entry »

Government looking to sell road assets worth Rs 2 lakh crore

Source: The Economic Times, Jan 15, 2019

Mumbai: There is a surfeit of road projects on sale in recent months, which is leaving investors spoiled for choice. While on the one hand there are corporate houses like IL&FS, Reliance Infra and Essel seeking to free up capital, on the other, the government is seeking to monetise existing toll roads with NHAI to raise funds for new projects.

The Centre is looking to sell road assets worth Rs 2 lakh crore under the toll-operate-transfer (TOT) model in the next five years — an average of Rs 40,000 crore a year. Essel projects is selling six projects worth over Rs 10,000 crore. Reliance Infrastructure is also understood to be in talks to sell its road assets portfolio. A Reliance Infa spokesperson did not respond to an emailed query on the sale.

Crisil Ratings senior director Sachin Gupta said, “A reduction in interest rates will improve the prospects for sale of projects. In these projects, debt servicing is the highest component of expenses.” The increase in interest cost could be one of the reasons for the decline in bid amounts for the government’s second TOT package, he added. Read the rest of this entry »

India among world’s leading exporters of creative goods: UN report

Source: The Economic Times, Jan 15, 2019

UNITED NATIONS: India’s creative goods exports nearly tripled from USD 7.4 billion in 2005 to USD 20.2 billion in 2014, making it one of the world’s leading exporters of such products in the top 10 developing economies, according to a UN report.

China is the biggest single exporter and importer of creative goods and services. China’s trade in creative goods between 2002 and 2015 has been exponential, with average annual growth rates of 14 per cent, the United Nations Conference on Trade and Development (UNCTAD) report said.

The second edition of the periodic Creative Economy Outlook: Trends in International Trade in Creative Industries examines the global picture and also features 130 country profiles with reported creative goods and services trade data. The data, which covers the period 2002 to 2015, shows the creative economy’s contribution to world trade. Read the rest of this entry »

MGNREGA gets additional Rs 6,000 crore; highest ever total allocation in a fiscal

Source: The Economic Times, Jan 15, 2019

NEW DELHI: The government Tuesday said it has made an additional allocation of over Rs 6,000 crore to rural employment scheme MGNREGA, taking the total allocation to Rs 61,084 crores, which is highest ever in a financial year.

The additional allocation comes after nearly 90 lawmakers, several prominent civil society members, activists, leaders of farmers’ movements and former bureaucrats wrote to Prime Minister Narendra Modi raising concerns over fund crunch.

“The government of India has allocated an additional Rs 6,084 crore to MGNREGA. This brings the total allocation to the scheme to Rs 61,084 crore in 2018-19, making it the highest ever allocation,” the Union Rural Development Ministry said. Read the rest of this entry »