QBiz: India’s Growth Forecast Up; Prabhu to Hold US Trade Talks
1. Fitch Ups India’s Economic Growth Forecast to 7.4% for FY’19
Fitch Ratings on Wednesday, 13 June, raised India’s economic growth forecast to 7.4 percent for 2018-19 but cited higher finance costs and rising oil prices as risks. It also said that the rupee has been among the worst performers vis-a-vis Asian currencies this year.
The global credit rating agency had earlier estimated the GDP growth at 7.3 percent for the current financial year. For 2019-20, it projected the growth at 7.5 percent. Fitch forecast global oil price to remain around USD 70 per barrel in 2018, up from USD 54.9 a barrel last year. It said it expects oil price to cool to USD 65 a barrel next year.
2. US Federal Reserve Raises Interest Rates Amid Stronger Inflation, Drops Crisis-Era Guidance
The Federal Reserve raised interest rates on Wednesday, 13 June, a move that was widely expected but still marked a milestone in the US central bank’s shift from policies used to battle the 2007-2009 financial crisis and recession.
In raising its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent, the Fed dropped its pledge to keep rates low enough to stimulate the economy “for some time” and signalled it would tolerate above-target inflation at least through 2020.
3. Pradhan Mantri Jan Dhan Yojana: Close to 65 Lakh Jan Dhan Accounts Opened in Haryana
As many as 64,95,997 bank accounts have so far been opened in Haryana under the Pradhan Mantri Jan Dhan Yojana up to 31 March 2018, out of which 58,33,365 accounts have been linked with Aadhaar. Jan Dhan Yojana aims to open bank accounts of each economically backward family on zero balance with Accidental Insurance Cover of Rs one lakh, an official spokesman said on Wednesday, 13 June in Chandigarh.
He said that as many as 28,56,587 people have been registered under the Pradhan Mantri Suraksha Bima Yojana in the state. Under the scheme, all the saving bank account holders of 18 to 70 years of age are being provided Accidental Death Risk Cover Insurance of Rs two lakh on annual premium of Rs 12 only.
4. Thyssenkrupp, Tata Are Said to Discuss Changing Steel Terms
Thyssenkrupp AG and Tata Steel Ltd are discussing changing the terms of their steel joint venture in a way that could give Thyssenkrupp a bigger share of earnings, according to people familiar with the matter.
While nothing has been decided yet, one possibility being considered is to increase Thyssenkrupp’s equity stake in the joint venture and keep the voting rights at a 50-50 split, said the people, who asked not to be identified because the talks are private. Thyssenkrupp is pushing for changes to the deal after profits plunged at Tata’s European steel business, said the people.
5. Dollar Mostly Firmer as Federal Reserve Sees More US Rate Hikes
The dollar ended steady to modestly higher on Wednesday, 13 June, hitting a three-week high against the yen, as Federal Reserve officials saw the likelihood of two more interest rate increases for a total of four in 2018 based on a solid economic outlook.
The greenback’s bounce tied to the Fed’s perceived hawkish stance faded as traders booked profits in advance of the European Central Bank’s meeting on Thursday, 14 June, where policy-makers may discuss the timing of winding down its 2.55-trillion-euro bond-purchase program. “It’s the nature of a volatile market we are facing now. Europe ultimately has a bit more to worry about than we do,” said Juan Perez, currency trader at Tempus Consulting in Washington.
6. Truecaller Buys Sequoia-Backed Payments Startup Chillr
Caller ID app Truecaller acquired payments startup Chillr for an undisclosed amount as it plans to strengthen its financial services business by offering loans, insurance and mutual funds to its 150 million users in India.
Chillr Co-Founder Sony Joy will join Truecaller as vice-president of Truecaller Pay, the firm’s digital payments service. The entire 45-member team of Chillr, backed by Sequoia Capital, will be absorbed by the company, Joy told BloombergQuint over the phone.
7. HDFC Bank Gets Nod from Cabinet for Rs 24,000 Crore FDI
The cabinet on Wednesday, 13 June, cleared one of the largest foreign direct investment (FDI) proposals before it – a plan by HDFC Bank Ltd to raise Rs 24,000 crore.
The capital infusion will not result in breaching the foreign equity holding cap of 74 percent in the private sector lender. “The current 72.62 percent foreign equity holding is being raised to 74 percent with this Rs 24,000 crore FDI,” said interim finance minister Piyush Goyal.
The bank’s management had made clear its intention to boost corporate lending at a time when other lenders are slowing down.
8. India, US to Soon Hold Talks on Trade Issues
Commerce and industry minister Suresh Prabhu has said India’s purchases of commercial aircraft and gas from the US would help bridge the trade deficit between the two countries even as they agreed to hold official talks soon to address trade and economic irritants between them.
In his interaction with business leaders during his just concluded visit to the US, the minister noted the encouraging growth in trade volumes through purchases of US-made civilian aircraft by Indian companies and enhanced cooperation in the area of energy, including procurement of petroleum and LNG by India from the US.
(Source: The Economic Times)
9. Illegal Cotton Seeds Sales Surge in Maharashtra, Other States
Regulatory failure has led to a surge in sales of unapproved herbicide tolerant (HT) genetically modified (GM) cotton seed packets in the ongoing Kharif planting season, putting thousands of farmers at risk across states such as Maharashtra, Telangana, Andhra Pradesh and Gujarat.
The regulatory failure has been precipitated by the fact that the genetic engineering approval committee (GEAC) of the environment ministry, the agency tasked to decide on commercialisation of GM crops, is awaiting the final report of an expert committee set up by the Prime Minister’s Office (PMO) in October last year.