QBiz: Cabinet Clears Law Allowing 24x7 Shops; Rajan Fights for RBI

The Quint brings to you a collection of important business stories from the previous day.

4 min read
India’s RBI Governor Raghuram Rajan. (Photo: Reuters)

1. Seventh Pay Commission: A Rs 1 Trillion Bonanza for Government Employees: Livemint

The Government on Wednesday approved pay and pension raises putting an additional Rs 1.02 trillion in the hands of 10 million central government employees and pensioners in the current fiscal year, delivering a potential boost to the consumer economy.

According to the new notification, basic pay at the entry level will now more than double to Rs 18,000 per month from Rs 7,000 and at the level of cabinet secretary, the top-most civil servant, will rise to Rs 2.5 lakh from Rs 90,000, reports Livemint.

2. Cabinet Clears Law Allowing Cinemas, Shops to Stay Open 24x7

People will soon be able to shop, eat and watch movies at their convenience even at the most odd hours as shops, restaurants and cinemas will be permitted to remain open 24x7.

The Model Shops and Establishment (Regulation of Employment and Condition of Services) Bill 2016 to give such establishments the flexibility to operate round the clock, was passed by the Cabinet on Wednesday.

Read The Quint’s report here.

3. D-Mart Parent Avenue Supermarts Working on Rs1,200 Crore IPO: Livemint

Avenue Supermarts Ltd, which owns and operates hypermarkets and supermarkets retail chain D-Mart, has started discussions with investment banks for an initial public offering (IPO), reports Livemint.

The company, one of India’s fastest growing modern retailers, could raise Rs1,000-1,200 crore through the IPO.

The company has been in discussions with various banks for the last three to four months. They are expected to appoint a lead banker soon to start working on the draft IPO prospectus

4. Raghuram Rajan Resists Plan to Fund Banks from RBI Coffers: Livemint

Days after Raghuram Rajan announced plans to a return to quit, he’s battling to preserve the Reserve Bank of India’s (RBI) independence.

The government this month revived a proposal to dip into the central bank’s emergency funds to recapitalise commercial lenders hurt by rising bad loans.

The plan involves shrinking the RBI’s balance sheet by as much as Rs 4 trillion rupees. The cash would then be injected into state-run banks, paring the RBI’s equity-to-asset ratio to 19 percent from 31.5 percent – still above the median of 11 percent – at three dozen major central banks, reports Livemint.

5. Big Salary and Pension Increases May Fuel Inflationary Pressures: ET

The government broadly accepted the recommendations of the Seventh Central Pay Commission, offering big salary and pension increases to employees and retirees. Demand is set to get a big boost with the government’s decision but that may fuel inflationary pressures and fiscal discipline could be threatened. This report published in The Economic Times takes a deeper look at the numbers.

6. Lift Diesel Vehicle Ban, Say Auto Companies to SC: ET

Carmakers such as Mercedes and Toyota on Wednesday urged the Supreme Court to lift the ban on fresh registration of diesel vehicles above 2000 cc in the NCR region and instead consider imposing a 1 percent or higher cess on all such registrations in the future.

The industry has suggested that 1 percent cess could be collected from the buyers. They are also open to sharing the burden of cess with the buyers in case a higher cess is imposed. Automakers have argued the ban was irrational as it kept older vehicles on the road while keeping new Euro IV ones off the road, reports The Economic Times.

7. India Telecom Market to Face ‘Massive’ Tariff Erosion Post Jio Entry, says Sunil Mittal: ET

Bharti Airtel’s chairman, Sunil Mittal, has said on Wednesday that he expects only four private carriers to remain in the market in the next two years as India’s highly competitive telecom industry will face “massive erosion of tariffs” with the entry of Mukesh Ambani-owned Reliance Jio Infocomm, reports The Economic Times.

What this industry has seen (so far) is only an erosion of tariffs. With Jio coming in, we expect massive erosion. It is going to add to pressure in the market
Sunil Mittal, Chairman, Bharti Airtel

8. Economy May Hit the Jackpot with Government Bet on Public Sector: ET

With the Seventh Central Pay Commission, the government has offered a bonanza to its 1 crore employees and pensioners, potentially boosting demand that can support the Indian economy amid global uncertainty arising out of ‘Brexit,’ although there are concerns it will stoke inflation and impact government finances.

However, higher salaries will boost an already strong urban consumption, with sectors such as automobiles, white goods, mobiles and FMCG being the biggest beneficiaries, argues a report published in The Economic Times.

When people get more money, it comes back in the system in the form of taxation. Savings will increase... spending will go up
Finance Minister, Arun Jaitley

9. It’s a Down-Cycle, Sector Will Bounce Back, Says Flipkart’s Bansal: BS

Flipkart, the country’s largest e-commerce company, said it was capitalised well and not looking to raise funds at the moment.

Speaking to the Business Standard, its chairman, Sachin Bansal, said investment cycles have bumps and internet-based sectors were undergoing one.

Overall, these are financial cycles that happen in the whole world. I think the internet sector itself is going through a down cycle, but as the positive cycles don’t last for ever, the down cycles also don’t last for ever.

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