QBiz: Moody’s Slashes Growth Estimate to 0.2%; Traders Seek Relief

Your daily lowdown of all the top business news for the day.

Published
India
5 min read
India’s GDP projection has taken a significant hit due to the coronavirus outbreak.
i

1. Moody's Slashes India's Growth Estimate to 0.2% for 2020 From 2.5%

Moody's Investors Service has cut India's growth forecast to 0.2 percent for 2020 from its earlier projection of 2.5 percent. The rating agency had earlier slashed growth estimate from 5.2 percent to 2.5 percent after the government ordered a nationwide lockdown for 21 days to contain the coronavirus.

Moody's expected India's economic growth to recover to 6.2 percent in 2021. Nomura has predicted India's economy to contract 0.5 percent, while Confederation of Indian Industry (CII) pegged the economy may contract by 0.9 percent in the worst-case scenario and India Ratings believed that contraction may be far steeper at 2.1 percent if lockdown persists.

However, India has lost the tag of fastest-growing large economy in 2019 when it grew 5.3 percent against China's 6.1 percent.

(Source: Business Standard)

2. 7 Crore Traders Exhort FM Sitharaman for COVID Relief Package; Says Domestic Trade May Collapse

Traders’ body Confederation of All India Traders (CAIT), which represents 7 crore traders, has made a “strong demand” to provide an economic relief package for the trading community with Finance Minister Nirmala Sitharaman. In a communication to the minister, CAIT said that it is high time for the government to provide relief to the business community “which is worst sufferer of COVID-19.” “If an adequate package is not given to traders, the domestic trade in the country is likely to be collapsed to a large extent,” the body said.

“The traders were expecting that a package by the Government will be given to traders around 14th April but almost 14 more days have gone and as of now there is no word about the package which is worrying the traders and disturbing them a  lot for their future,” Praveen Khandelwal, Secretary General, CAIT said.

(Source: Financial Express)

3. Air India Sale: Government Extends Bidding Deadline By Two Months to 30 June

The government has extended by two months the bidding deadline for Air India Ltd., citing coronavirus' impact on the global economy. This is the second extension in the deadline since the government restarted the Air India stake sale process on Jan. 27, 2020. The government is offloading its entire shareholding in the national flag carrier.

The move also comes nearly a month after the government extended the bidding deadline for Bharat Petroleum Corp. Ltd. to June 13. The Centre is looking to exit the state-run oil marketing company by selling its 52.98 percent stake.

Issuing a corrigendum to the Expression of Interest for Air India’s sale, the Department of Investment and Public Asset Management said the deadline has been extended in view of the "request received from the IBs (interested bidders) in view of the prevailing situation arising out of Covid-19".

(Source: BloombergQuint)

4. Reliance Industries Plans Its First Rights Issue in Three Decades

Reliance Industries Ltd., India’s largest company by market value, plans to sell shares to existing investors for the first time in about 30 years as the energy-to-technology conglomerate steps up efforts to pare debt.

The board of the Mumbai-based company will consider a proposal for the rights issue on April 30, when it announces its earnings for the quarter ended March 31, it said in a statement late Monday. The shares fell 1.8% as of 11:49 a.m. in Mumbai trading. The proposal would be the third fund-raising announced by Reliance Industries in recent weeks, underscoring Chairman Mukesh Ambani’s confidence despite a pandemic that’s slammed the oil industry.

(Source: BloombergQuint)

5. Nitin Gadkari Asks States to Release Land Acquisition Dues Worth Rs 25,000 Crore

Union road transport and highways minister Nitin Gadkari on Tuesday asked state governments to release Rs 25,000 crore earmarked for land acquisition to inject liquidity into the markets and speed up highway projects in the country.

“An amount of Rs 25,000 crore is pending with land acquisition officers across the country for distribution,” an official aware of the matter said. “The minister has asked state governments to release this money on a priority basis.”

States, including Maharashtra and Uttar Pradesh, have pending dues of over Rs 4,500 crore each that needs to be disbursed, officials aware of the matter told ET

(Source: The Economic Times)

6. Rs 90,000 Crore Scheme in Offing for Power Companies

The government is looking to arrange low-cost finance for its Rs 90,000 crore liquidity infusion plan to prevent blackouts as troubled power generation plants are running out of cash amid a nationwide lockout. The power ministry has sought bonds under special window to the sector besides funds from multi-lateral agencies and institutions like LIC, EPFO and NSSF for the scheme.

The loans are sought to be made available to Power Finance Corp (PFC) and REC LtdNSE 0.34 %, the two sectoral lending institutions in Indian power sector, for onward concessional lending to state electricity distribution utilities to help them clear bills of power generating companies.

The power ministry has also sought relaxation of exposure norms for banks and financial institutions to lend to state-run PFC and its subsidiary REC Ltd

(Source: The Economic Times)

7. Small MFIs Turn Vulnerable to Default, Seek Relief Package

Banks and non-bank lenders are staring at around Rs 3000 crore of default by smaller microfinance firms, which are fighting to stay afloat without the access to the liquidity support provided by Reserve Bank of India and its intermediaries.

In a desperate cry to the finance minister, a group of about 100 small microfinance firms with less than Rs 200 crore loan portfolio each has sought conversion of their outstanding bank loans into equities as their fund dried up.

Every microfinance lender including the bigger ones is facing the stress since business stalled during lockdown while the smaller ones are always more vulnerable.

(Source: The Economic Times)

8. Coronavirus Pandemic Hits Industries Hard, but 77% Organisations May Not Opt for Pay Cut, Finds Survey

Industries across the world have been dealt a serious blow due to the Coronavirus pandemic which has wreaked havoc in over 200 countries. At the time of writing this article, the deadly COVID-19 infection has affected over 35 lakh people and killed nearly 2.11 lakh. Struggling to survive amid the crisis, companies all over have gone for salary cut of their employees. In India too, firms have announced pay cuts which they say would continue for the next few months.

However, in some solace amid the gloom, a survey has found that a majority of companies may not be going with any kind of salary cut.

The Willis Towers Watson Covid-19 India Readiness Survey 2020 revealed that about 77 percent of organisations are unlikely to go reduction in salaries

(Source: Financial Express)

9. Waking Up ‘Sleeping Giant’: PM Modi Urges India’s States to Woo Global Cos Leaving China

While the spread of coronavirus and the lockdown takes a toll on the economy and kills businesses and jobs, there is one area where India could take advantage of this situation, if states heed Prime Minister Narendra Modi’s call. Narendra Modi has asked Chief Ministers to prepare well to attract investments from the global companies as they might want to exit China after a long trade war with the US and the uncertainty caused by the origination of pandemic from the country. Stating the sufficient manpower and improved infrastructure, PM Modi said that the country can become a potential alternative to China.

However, this is not the first time when a government in India is mulling attracting the companies exiting from China

(Source: Financial Express)

Liked this story? We'll send you more. Subscribe to The Quint's newsletter and get selected stories delivered to your inbox every day. Click to get started.

The Quint is available on Telegram & WhatsApp too, click to join.

Stay Updated

Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.

Join over 120,000 subscribers!