QBiz: Rajan on Rexit, Ruias to Give Up Essar Oil Control and More

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

4 min read
India’s RBI Governor Raghuram Rajan has added to the debate around him leaving the RBI top job. (Photo: Reuters)

1. Raghuram Rajan Revives the Debate Over His Exit: Livemint

According to a report published in the Livemint, outgoing Reserve bank of India (RBI) governor Raghuram Rajan has revived the debate over his exit, telling a parliamentary committee that a three-year tenure for the central bank chief is insufficient.

Rajan’s remark came a little under two weeks after he announced that he will be demitting office at the end of his three-year term in September and returning to academics.

RBI declined to comment on his remarks at Thursday’s hearings.

2. Late Showers Shrink Rainfall Deficit to 11 Percent in June: Livemint

After arriving late and then making halting progress across the country, the monsoon has ended the first month with a rainfall deficit.

Rainfall in June was 11 percent less than normal, according to the India Meteorological Department (IMD). This comes after IMD forecast above-normal monsoon rainfall this year at 106 percent of the long-period average, reports Livemint.

After two years of failed monsoon, a good spell of rains would have cheered not only farmers and policymakers over the prospect of a revival of rural consumption, but also the wider economy.

3. India’s Fiscal Deficit Reaches Nearly 43 Percent of Budget Target in May: Livemint

India’s deficit in the first two months of the current fiscal was Rs 2.28 trillion or 42.9 percent of budget estimates for 2016-17, higher than the year-ago period. The fiscal deficit situation during April-May of the last fiscal was 37.5 percent of the budget estimates. The gap between expenditure and revenue for the entire current fiscal has been pegged at Rs 5.33 trillion, reports Livemint.

Total expenditure of the government during April-May was Rs 2.98 trillion or 15.1 percent of the entire year estimates. Of the total expenditure, plan spending was Rs 90,570 crore and non-plan was over Rs 2.1 trillion.

4. Brexit Has ‘Unleashed’ a Financial-Markets Crisis –George Soros: Livemint

Britain’s decision to leave the European Union has “unleashed” a crisis in financial markets similar to the global financial crisis of 2007 and 2008, business magnate George Soros told the European Parliament in Brussels.

A report published in the Livemint revealed that Soros urged the EU not to “penalise” British voters while ignoring their legitimate concerns about the shortcomings of the bloc. “European leaders should recognise their own mistakes and acknowledge the democratic deficit in the current institutional arrangements,” he said.

5. Invoking Personal Guarantees on Loans May Dampen Entrepreneurial Spirit: Banks

Bankers have been warned that forcing promoters to make personal guarantees and then invoking them in all cases of default could kill off the entrepreneurial instinct.

The bank executives raised this concern at a meeting of the committee set up by the finance ministry to look into non-performing assets (NPAs) in the sector.

Some bankers argued that the difference between an individual and a business has to be respected. If the business has failed for extraneous reasons the promoter cannot be blamed for the same.
Government Official to The Economic Times

6. Flipkart’s New Centralised Procurement Process Aims to Cut Costs: ET

After years of burning cash to win customers in a bid to become one of India’s biggest ecommerce marketplaces, Flipkart is now looking to cut costs by as much as 30 percent by merging departments, keeping hiring to a minimum and centralising purchases to steer the company toward profitability.

The overhaul will also see the engineering departments of logistics arm Ekart and the advertising and ecommerce units unified into one, reports The Economic Times.

7. Petrol Price Cut by 89 Paise Per litre, Diesel by 49 Paise a Litre

The price of petrol was slashed on Thursday by 89 paise a litre, diesel by 49 paise a litre, the first decrease in rates in two months.

Petrol price was last hiked by 5 paise a litre on 16 June and diesel by Rs1.26 a litre. Petrol prices in the four hikes since 1 May had been raised by Rs 4.52 a litre, while diesel rates had gone up by Rs 7.72 per litre.

Read more here.

8. Ruias to Give up Essar Oil Control: BS

Months after striking a deal to sell 49 percent stake to Russia’s Rosneft, the Ruia family has initiated talks to sell another 25 percent to an oil trader or a strategic investor, leaving the family with only 24 percent stake.

The new owners would induct their own nominees on the board, which has only one director, Prashant Ruia, from the family that currently owns 98 percent stake in Essar Oil. Two percent of Essar Oil is owned by minority shareholders, who did not participate in the delisting offer made by the promoters in December last year, reports the Business Standard.

9. Brexit Hurdle Crossed? Nifty, Silver at 2016 High: BS

Nothing seems to be stopping the bull run of Indian markets, not even the Brexit vote which pushed global equities in a volatile territory, as the Nifty on Thursday closed at its highest level in 2016, argues a report a published in the Business Standard.

After losing 180 points last Friday, when the surprise outcome of Brexit vote led to panic globally, the Nifty seems to have moved on. Indian stock markets have rallied in four consecutive trading sessions since Friday, erasing the losses after Brexit, as market participants are confident about the prospects of the Indian economy.

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