QBiz: Govt for Old Disability Pension Regime; New NPA Policy
Here’s a look at the important business stories from the previous day.
1. Cabinet Approves New NPA Policy to Deal With Stressed Assets
The Union Cabinet, led by Prime Minister Narendra Modi, on Wednesday approved a new framework for dealing with Rs 6 lakh crore worth of non-performing assets (NPAs) in the banking system.
The framework includes the promulgation of an Ordinance to amend the Banking Regulation Act to give more teeth to the Reserve Bank of India (RBI) and its oversight committees to act on behalf of banks while deciding on NPAs. The proposals are now awaiting the President’s assent.
2. Disability Pension To Armed Forces: Government Reverts to Old Regime
Heeding to a major demand of armed forces personnel, the government on Wednesday decided to continue with an earlier system of disbursing disability pension and not to go ahead with a new regime recommended by the Seventh Pay Commission.
The armed forces have been pressing for reverting to the percentage-based regime for disability pension and were strongly opposed to the slab-based system conceived by the Seventh Central Pay Commission (CPC).
The decisions was taken at a meeting of the Union Cabinet presided over by Prime Minister Narendra Modi.
The government has also agreed in-principle to address three major grievances of the armed forces relating to their salary structure including providing pay protection to those getting promotion from the rank of brigadiers.
3. Fast-Moving Goods Move Faster in March Quarter
Consumer demand peaked in the March quarter, recording the highest sales growth in daily groceries, and home and personal products in the past two years, a Nielsen report indicated. The recovery followed a quarter of muted sales due to the currency swap in November that had curtailed the purchasing power of rural households using cash to buy shampoos, soaps, or packaged cookies.
The overall market grew 12.2% by value in the fourth quarter with 7.5% volume growth, according to executives citing Nielsen data.
“Consumption is clearly recovering and is expected to continue to strengthen across the balance of the year,” Ian Cook, chief executive of Colgate-Palmolive, said on an investor call last Friday, adding that India’s urban consumption is back to normal but the wholesale channel has not completely bounced back in rural areas due to a lag effect.
Unilever, the parent of consumer products company Hindustan UnileverBSE 0.59 %, said about two weeks ago that growth in India had recovered from the uncertainty experienced due to the currency swap.
(Source: The Economic TImes)
4. Reliance Jio’s Rivals May Have Stemmed the Tide
Reliance Jio Infocomm Ltd.’s rivals may have been able to counter its onslaught and stand to gain after the country’s newest telecom operator ended free services.
Bharti Airtel Ltd., Vodafone India Ltd. and Idea Cellular Ltd. have controlled the churn ratio as well as added new active subscribers, a report by Kotak Securities said. The churn ratio indicates the percentage of subscribers who discontinue their subscriptions, while active subscribers indicate customers using the network.
Customers lured by Jio’s free offerings continue to stay active on incumbents’ networks and those who have taken a Jio SIM continue to use the incumbent networks.Kotak Securities Report
Reliance Jio started in September last year by offering free services. The company has since gained more than 10 crore subscribers, but the number of active subscribers is still below the industry standards.
5. Facebook Profit Surges 76.6% as User Base Nears 2 Billion
Facebook Inc reported a 76.6 per cent surge in quarterly profit on Wednesday, fuelled by robust growth in its mobile ad business.
The company's shares were down slightly in choppy after-market trading.
Facebook said about 1.94 billion people were using its service monthly as of 31 March, up 17 per cent from a year earlier.
Analysts on average had expected monthly active users of 1.91 billion, according to financial data and analytics firm FactSet.
Mobile ad revenue accounted for about 85 per cent of the company's total advertising revenue of $7.86 billion in the first quarter ended 31 March, compared with about 82 per cent a year earlier.
6.Centre Clears Twin Star Technologies' Rs 9,000 Cr FDI Proposal
he government on Wednesday approved a proposal of Twin Star Technologies, promoted by billionaire Anil Agarwal’s family, envisaging investment of up to Rs 9,000 crore from a Mauritius-based company. The foreign investment is likely to generate direct and indirect employment opportunities for over 30,000 people.
The decision was taken by the Cabinet Committee on Economic Affairs headed by Prime Minister Narendra Modi. As per the proposal, Twin Star Technologies will get foreign investment up to Rs 9,000 crore (by on or before March 2025) from Twin Star Overseas, Mauritius.
7. Cognizant Unveils Separation Plan for Top Staff
US-based Cognizant Technology Solution has offered a ‘voluntary separation incentive’ to its top-rung staff.
The voluntary separation incentive of the Nasdaq-listed software company, which employs over 2.6 lakh people, of whom over 75 per cent are in India, represents a ‘very small percentage of our total workforce’, said a company source. A voluntary separation incentive, also referred to as a buyout, is a lumpsum payment made to eligible employees who separate through resignation, optional retirement, or early retirement.
This voluntary initiative is being communicated to management-level associates – from director-level to senior vice-president – and eligibility is at the discretion of Cognizant leadership. “Details of the incentive are not being disclosed,” he said.
(Source: The Hindu BusinessLine)
8. Snapchat Keeps Unique Daily Audience Against Instagram Challenge
Snap Inc., the newly public corporate parent of Snapchat, makes its money by telling advertisers that it has a base of young, obsessed users who can’t be reached as easily anywhere else. That claim has met more skepticism lately as Facebook Inc.’s applications rush to copy Snapchat’s most popular feature – a tool called stories that allows people to upload video snippets of their day, which disappear after 24 hours.
The stories feature has been most popular on Facebook’s Instagram, where it’s used by 200 million people daily, more than Snapchat’s entire app.
But Snapchat can still say it has a unique offering, according to App Annie. The app data firm measured user behavior during the fourth quarter and said that on an average day, 35 percent of Snapchat’s daily users in the U.S. aren’t reachable on Facebook that same day, and 46 percent can’t be found on Instagram. About 61 percent of Snapchat’s fans aren’t watching YouTube on a given day, either. Snap said it had 60 million daily active users in the fourth quarter in the U.S. and Canada.
9. Brexit Unplugs M&M's UK Dreams
Less than a year after Anand Mahindra took the stage in London to announce Mahindra and Mahindra’s foray into the UK with its electric car e2o, the company is pulling the plug on the British operations after sales failed to pick up.
When contacted by BusinessLine, an M&M spokesperson acknowledged that sales in the UK were far below the company’s expectations and said the company would rather focus on the Indian market
“The Indian EV market is poised for a take-off and given that scenario, we are primarily focussing on the Indian market. We'll reconsider the UK market at an opportune time,” the spokesperson said.
At the time of the launch in April last year, Mahindra had said that the UK will act as a gateway to Europe for the auto major.
(Source: The Hindu BsuinessLine)
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