QBiz: June Core Sector Growth Flat; CCD Appoints Interim Chairman

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Published01 Aug 2019, 01:27 AM IST
Business
5 min read

1. Core Sector Growth Flat in June, Q1 Fiscal Deficit at 61.4% of Full-Year Target

The economy received more bad news on Wednesday, 31 July, with eight infrastructure sectors, which constitute 40.27 percent of the index of industrial production (IIP) almost remaining flat (0.2 percent) in June. This may pave the way for another round of rate cuts when the monetary policy committee of the Reserve Bank of India meets on 7 August.

During June, output of refinery products with the highest weight of 28 percent within the core sector contracted by 9.3 percent. This is apart from declines in production of natural gas (-2.1 percent) and cement (-1.5 percent). The only sector that continues to grow at a robust pace is electricity generation (7.3 percent).

(Source: LiveMint)

2. Coffee Day Appoints Interim Chairman, Plans to Sell Assets to Reduce Debt

The board of Coffee Day Enterprises Ltd (CDEL) is planning to selectively sell assets of the VG Siddhartha-founded company to pare debt incurred by the group’s 52 units, said two people, including a director at the company, with direct knowledge of the plans.

“The group has good valuable assets and the best thing for all stakeholders at this stage is to monetize assets," said one of the two people.

Following the demise of Siddhartha, the CDEL board held an emergency meeting on Wednesday, 31 July, to decide on the company’s immediate course of action and appoint a new interim chairman to replace the founder.

At the meeting, the board named non-executive director SV Ranganath as the interim chairman. Ranganath is a retired IAS officer and served as Karnataka’s chief secretary between 2009 and 2013.

(Source: LiveMint)

3. Parliament Clears the Bill That Will Change the Way India Drives

The Rajya Sabha on Wednesday, 31 July, passed a bill to tighten road traffic regulations such as issuance of driving licence and imposed stricter penalties for violations in an attempt to improve road safety.

The Upper House passed the Motor Vehicles (Amendment) Bill, 2019 with 108 votes in favour and 13 against it, with three amendments moved by Road Transport and Highways Minister Nitin Gadkari.

The legislation was passed by the Lok Sabha on 23 July but the Bill will be sent to Lok Sabha again because of a typo.

Replying to a debate on the Bill, Gadkari allayed concerns of states, saying the Centre was not encroaching on any of their rights including the right to levy vehicle registration charge and permit fee, besides posting of officials.

(Source: The Economic Times)

4. Sensex, Nifty Log Worst July in 17 Years Amid Worries of a Further Slowdown

Indian equities were under severe selling pressure in July because of worries over a slew of budget proposals and a further slowdown in the economy. The benchmark index Sensex was down 4.86 percent and the Nifty slipped 5.69 percent in July, the sharpest monthly decline since October last year.

This is worst performance of stock markets in July in 17 years. In July 2002, the Sensex had fallen 7.92 percent.

It was worse for smaller companies—BSE Midcap and BSE Smallcap indices were down 7.87 percent and 10.87 percent respectively in July.

Analysts are worried about market weakness because of tightening credit supply, weakening business sentiments, weaker investment cycle, and slowing global growth.

(Source: LiveMint)

5. Govt, Exporters Discuss Strategy to Increase Exports to US, China

To help India maximise the benefits from the on-going tariff war between the US and China, Commerce and Industry Minister Piyush Goyal has asked exporters to flag concerns related to availability of land and labour, setting up of common effluent treatment plants, cluster development and necessary logistics support in ports, airports and customs.

“The Ministry will then be able to iron out the issues impeding India’s exports and facilitate the exporters to take maximum benefit from the tariff escalation between the US and China,” Goyal said addressing an interactive session was organised in New Delhi on Wednesday, 31 July, by the Commerce & Industry Ministry on emerging opportunities to enlarge India’s exports to US and China.

(Source: The Hindu Business Line)

6. A Renewed India Focus Gets Apple India Back on Growth Path

Apple India revenues are finally seeing some growth after a gap of over a year.

Apple on Tuesday night reported its fiscal third quarter 2019 earnings, earning $53.8 billion in revenue and earnings per share of $2.18, a mere 1 per cent jump year-on-year, but India contributing a fair bit to that.

“India bounced back during the quarter. We returned to growth there. We are very happy with that,” said Tim Cook, CEO at Apple during an Analyst call.

“In emerging markets, we returned to growth in Mainland China, grew strong double digits in India and in Brazil, and we set new Q3 records in Thailand, Vietnam, and the Philippines,” he said.

(Source: The Hindu Business Line)

7. Govt Softens Stance on Time Frame for Transition to Electronic Vehicles

The Ministry of Heavy Industries, the Ministry of Road Transport and Highways, the power ministry, and the NITI Aayog — tasked with the policymaking and implementation of the government’s e-mobility plan — have extended an olive branch to the beleaguered automobile industry by agreeing to a “softer, pragmatic, phase-wise approach”. Under the revised plan, highly-polluted urban cities will be targeted first.

The change in stance follows a strong opposition by automakers of the proposed government plan to ban two-wheelers (below 150cc) and three-wheelers by 2023 and 2025, respectively, and replace them with battery-operated EVs.

“We are awaiting a road map that the industry is supposed to submit. We are clear about our goals and targets. We want to do this in partnership with the private sector,” Amitabh Kant, CEO, NITI Aayog, told Business Standard.

(Source: Business Standard)

8. Fiscal Deficit Crosses 61% of Budgeted Target in First 3 Months of 2019-20

The government's fiscal deficit touched Rs 4.32 lakh crore for the June quarter, which is 61.4 percent of the budget estimate for 2019-20 fiscal.

In absolute terms, the fiscal deficit or gap between expenditure and revenue was Rs 4.32 lakh crore during at June-end, as per the data released by the Controller General of Accounts (CGA) on Wednesday, 31 July.

The fiscal deficit was 68.7 percent of 2018-19 budget estimate in the year-ago period.

The government estimates the fiscal deficit to be at Rs 7.03 lakh crore during 2019-20.

The government aims to restrict the fiscal deficit at 3.4 percent of the GDP in the current fiscal, same as the last financial year.

(Source: The Economic Times)

9. US Fed Cuts Interest Rate by 25 Basis Points; First Cut Since December 2008

The Federal Reserve cut interest rates on Wednesday, 31 July, for the first time since 2008, citing concerns about the global economy and muted US inflation, and signaled a readiness to lower borrowing costs further if needed.

Financial markets had widely expected the quarter-percentage-point rate cut, which lowered the US central bank's benchmark overnight lending rate to a target range of 2.00 percent to 2.25 percent.

In a statement at the end of its latest two-day policy meeting, the Fed said it had decided to cut rates "in light of the implications of global developments for the economic outlook as well as muted inflation pressures."

(Source: Business Standard)

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