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End To Delhi’s Power Tussle?

Rs 200

What is it? The increase in minimum support prices (MSPs) for paddy (per quintal), the crop most planted by farmers, in the 2018-19 rain-fed kharif season, from Rs 1,550 in the previous season.

Why is it important?On Wednesday, the Cabinet Committee on Economic Affairs approved a hike in MSP—the price at which the government buys from farmers— of all kharif crops for the 2018-19 season. This comes at a time when farmers have been demanding better prices for their produce, after a sharp fall in prices affected their income last year. The announcement comes ahead of state elections in agrarian states such as Madhya Pradesh, Chhattisgarh and Rajasthan, besides the general elections that is less than a year away.

Tell me more:The impact of the MSP hike, according to some analysts, could result in an increase in inflation rates, add to fiscal deficit and likely to bring on steeper hikes of interest rates than anticipated.

5

What is it? The number of judges on the constitution bench, headed by Chief Justice of India Dipak Misra, that unanimously ruled on Wednesday that the Delhi Lieutenant Governor does not have independent powers to make decisions and is bound by the aid and advice of the council of ministers.

Why is it important?This is a landmark verdict that sets a new framework for the power tussle between the Delhi government and the LG appointed by the central government. The court ruled the Delhi government has the power to legislate and govern in all matters except for three areas: police, land and bureaucracy. It said the LG cannot obstruct or stall the decisions of the council of ministers, and that the LG can refer issues where there is a difference of opinion to the President only in exceptional matters.

Tell me more:Delhi chief minister Arvind Kejriwal called the verdict a “victory for democracy”. Puducherry chief minister V Narayanasamy, who is locked in a similar power struggle with LG Kiran Bedi, has demanded for the top court’s ruling for Delhi to be applied to his union territory as well.

1

What is it? Number of units of the Nano car manufactured by Tata Motors in June 2018, against 275 in June 2017.

Why is it important? That production number has raised the question of whether Tata Motors is close to pulling the plug on its ambitious low-cost car that never became the best-seller it was intended to be. Back in August 2017, Satish B Borwankar, chief operating officer of Tata Motors, had said the company did not want to phase out the Nano car, and that it was working on alternative plans for it, including testing an electric version.

Tell me more:Sales of Nano have fallen nearly 90% to 7,591 units in 2016-17 from 74,521 in 2011-12. The company stopped exports earlier this year.

70

What is it?The number of large accounts with loans worth Rs 3,80,000 crore that will require resolution by September 1, 2018, according to credit ratings agency ICRA.

Why is it important? Over 90% of these accounts have already been classified as non-performing assets (NPAs) by banks. However, under the Reserve Bank of India’s new stressed asset resolution framework, if a resolution plan is not in place within the 180-day deadline, they have to be referred for insolvency proceedings. Going by the limited recovery in some of the cases that have been resolved so far (except for in the steel sector) and given the high share of power sector in the 70 accounts, there is uncertainty regarding the haircuts banks may need to take upon resolution.

Tell me more:ICRA said though the pace of addition of NPAs would be slower (likely at 3%) for the banking system in 2018-19, compared with 7.3% in 2017-18, public sector banks could continue the trend of reporting losses in the current financial year too.

112

What is it?The number of balls West Indies took to bowl out Bangladesh in the first test match of their ongoing bilateral series in North Sound, Antigua.

Why is it important? Bangladesh were dismissed for just 43 runs, which was their lowest score ever and the 11thlowest completed innings score over the history of 2,310 test matches. This was also the lowest completed innings score since 1974, when England dismissed India for 42 runs at Lord’s.

Tell me more:Kemar Roach took five wickets, all in the space of 12 balls, which is the fewest for a five-wicket haul, along with Monty Noble in 1902 and Jacques Kallis in 2002.

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A Break-up in J&K

25

What is it?The number of legislators BJP had in the 89-strong Jammu and Kashmir assembly. The People’s Democratic Party (PDP) had 28.

Why is it important? On Tuesday, BJP pulled out from its alliance with PDP, saying it had become impossible to continue with the growing radicalism and the worsening security situation in the state. It has asked the state to be put under the governor’s rule and if done, this would be the eighth time in the last four decades. The split, which happened mainly due to ideological differences, is reportedly due to BJP losing ground in Jammu and Ladakh, a year before the General Elections in 2019.

Tell me more:Chief minister Mehbooba Mufti has tendered her resignation and said her party would not seek the support of other parties to restore majority.

2

What is it? The number of approaches the central government would adopt to improve the functioning of public sector banks (PSBs) – by addressing the issues of consortium-based lending and by identifying good and genuine borrowers.

Why is it important? The state-run lenders would assess the borrowing needs of around 4,500 stressed accounts that have borrowings between Rs 200 crore and Rs 2,000 crore over the next 3-4 weeks, after which accounts with loan exposure up to Rs 200 crore would be studied. This would enable PSBs that have lending restrictions due to weak financials, to identify stressed MSMEs with genuine needs of working capital, which otherwise find it difficult to access further loans as those would carry higher risks.

Tell me more: The decision taken by 66% percent lenders in a consortium would be followed by banks, in line with the Insolvency and Bankruptcy Code. Interim Finance Minister Piyush Goyal said the government is open to giving more powers to the central bank.

20 lakh

What is it? The number of healthcare professionals and facilities that would be mapped in a government census, which is expected to be completed by September.

Why is it important? The census would not only pinpoint their geographical locations of hospitals, doctors, clinics, diagnostic laboratories, pharmacies and nursing homes but also, measure their performance. This would include over 1,400 variables such as infrastructure. This exercise aims to provide real-time information to the government and data collection/updation is the first step in improving healthcare facilities in a country that ranks poorly in healthcare quality and access.

Tell me more:The government has already undertaken pilot projects in a few states including Sikkim, Rajasthan and Kerala between December 2017 and January 2018 and will begin the exercise in Manipur, Odisha and Rajasthan.

9 days

What is it? The duration of the dharna led by Delhi Chief Minister Arvind Kejriwal at the residence of Anil Baijal, lieutenant governor of Delhi.

Why is it important? The sit-in-protest was called off on Monday after the Delhi government claimed IAS officials have started attended meetings called by ministers. Six officers including the Chief Secretary Anshu Prakash, who alleged that he was assaulted by Aam Aadmi Party legislators in a midnight meeting called by Arvind Kejriwal in February, attended the meetings called by ministers, according to Manish Sisodia, deputy chief minister of Delhi.

Tell me more:The other demand asking the LG to approve the doorstep delivery of rations was not met. Four chief ministers of non-BJP ruled states expressed their support to the protest.

52 

What is it? The number of votes cast in favour of legalising the recreational use of cannabis in the Canadian senate. 29 votes were against the proposal.

Why is it important? Canada became the first G7 – a group of seven developed nations – to legalize the recreational use of cannabis. Canadians spent $4.5 billion on cannabis in 2015. Government says law against cannabis use was ineffective and this move will help manage the use.

Tell me more:Adults, those above 18 years, will be able to possess 30 grams of cannabis (dry) in public.

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Less smoke in the kitchen

9.10%

What is it? The new base rate of the State Bank of India (SBI) .

Why is it important? The largest Indian bank cut its base rate from the previous 9.25%. This would let earlier borrowers benefit from an easing of bank rates seen over the last few months. Borrowers who had taken out loans before April 1, 2016, were unable to benefit from cuts in the marginal cost-based lending rate (MCLR) (the new system of lending rate for customers) levied since then.

Tell me more: On January 1, 2017, SBI had cut its MCLR but it was not changed in yesterday’s cut.

 

52.5

What is it? The manufacturing purchasing managers’ index (PMI) in March.

Why is it important? The factory activity index rose for the third month, after contracting in December (as it had in December, 2015, as well). But the rate of expansion was the fastest in five months since October, 2016, with production and new orders growing.

Tell me more: It has helped that inflation rates eased since February. The private index, by Markit, recorded a rise in additional employment generated to cope with increasing orders in the pivotal sector.

 

$300 million

What is it? The deal value of the Ruias-led Essar Group’s sale of its BPO unit, Aegis, to Singapore-based private equity firm Capital Square Partners.

Why is it important? The move would help the group retire 2.2% of its debt. The group is in the middle of paring the large debt on its books, worth Rs 88,000 crore. Before Aegis was sold, the Essar Group had lined up two more businesses — its oil refinery arm (Essar Oil) and its steel business (Essar Steel) — but both missed their March targets of a stake sale.

Tell me more: The Aegis sale marks the group’s exit from business process outsourcing. The slated Essar Oil sale, of $12.9 billion, would be India’s largest FDI.

 

Rs 3.42 crore

What is it? Legal bill raised by lawyer Ram Jethmalani for his services to Delhi Chief Minister Arvind Kejriwal so far.

Why is it important? These costs will have to be borne by the Delhi government, and not by Arvind Kejriwal, according to a report. This has led to a furore. Arun Jaitley had sued Arvind Kejriwal defamation last year. Delhi government reasoned that Kejriwal made the statements that led to the suit in his capacity as a chief minister. However, some analysts point out he didn’t invoke Section 80 of civil procedure code, and therefore, it should be considered that he is fighting it in his personal capacity.

Tell me more: Ram Jethmalani, one of the most expensive lawyers in the country, had earlier said that he is charging just Re 1 from Kejriwal, because ‘his government itself is so poor.’

 

3.25 crore

What is it? The number of LPG connections released by oil marketing companies during FY 2016-17.

Why is it important? This is highest ever in a financial year. It includes over 2 crore connections given under Pradhan Mantri Ujjwala Yojana, which aims to provide LPG connections in rural areas, as a replacement for the unhealthy wood-based fire in the kitchens.

Tell me more: The numbers indicate the broader strategy of the government. Look for efficiency and cost savings in one section using Aadhaar and other policy initiatives (in this case LPG subsidies, which mostly went to well-to-do middle class households) and, at the same time, expand government services to more deserving sections.

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News in numbers, Oct 7, 2015: Proposed hike in Delhi MLA salary, deposit vs lending rate cuts

7,500 km

What it is: The length of highways at risk of remaining incomplete or being abandoned due to losses, according to ratings firm Crisil. It pertains to build-operate-transfer (BOT) highway projects awarded to private developers between 2009-10 and 2011-12.  

Why is it important: This highlights the issues that plague the sector: land acquisition issues, weak financial health of the sponsors, aggressive bidding and lower toll revenue growth. Infrastructure woes would only make it more difficult as India tries revive its economy. This also puts an additional stress on banks that have significant exposure to the road sector. Remember, banks are already struggling with rising bad loans.

Tell me more: The National Highways Authority of India (NHAI) has awarded 210 BOT projects covering 20,000 km, of which 38 projects covering nearly a fourth of the total length have been terminated. Only 80 projects spanning over 6,050 km are currently operational. Between April 1 and July 31 this year, the NHAI has awarded BOT projects spanning 873 km and EPC (engineering, procurement construction) projects covering 627 km.

 

4

What it is: The number of times the salaries of Delhi legislators is to go up, according to an independent committee set up by the Delhi Assembly Speaker. In absolute terms it would increase from Rs 82,000 to Rs 3.2 lakh a month.

Why is it important: If the committee’s recommendations are accepted by Delhi’s chief minister Arvind Kejriwal, the state’s MLAs could be counted among the richest in India. Assam’s legislators get paid the highest – Rs 60,000 basic salary a month. It would be interesting to see what Kejriwal does given the party calls itself the “common person’s” party and the moral high ground it takes on various issues.  

Tell me more: The recommendations include: an increase in constituency allowance from Rs 18,000 per month to Rs 50,000, communication allowance from Rs 8,000 to Rs 10,000, conveyance allowance from Rs 6,000 to Rs 30,000, daily allowance of Rs 1,000-2,000 a day when the assembly is in session, a Rs 70,000 allowance for office assistants and a one-time furnishing office allowance of Rs 1 lakh.

 

Rs 450 crore

What it is: The amount Infibeam wants to raise to expand its business through an IPO.

Why is it important: The first e-commerce firm to be cleared by the market regulator for public listing in India. Some experts and investors have asked if there is an e-commerce bubble in India? Skyrocketing valuations, the ease with which e-commerce companies have been able to raise money, absence of a proper business model, high cash burn rates and no profitability are worrying. This would be a good test to gauge the broader investor appetite for this sector.

Tell me more: Infibeam, which runs infibeam.com and BuildaBazaar.com, wants to set up a cloud data unit and 75 logistics centres. Unlike its peers such as Flipkart or Snapdeal, Infibeam has not gone on the typical private equity investment route.

 

211

What it is: The number of new species discovered by scientists from various organisations in the Eastern Himalayas between 2009 and 2014, according to conservation group WWF.

Why is it important: The volume and variety of species discovered (133 plants, 39 invertebrates, 26 fish, 10 amphibians, one each of reptile, bird and mammal) highlight the fact that this region is one of the most biologically diverse regions in the world. The region includes Bhutan, north-east India, Nepal, the far north of Myanmar and southern parts of Tibet.

Tell me more: Some of the striking discoveries include a sneezing monkey during rains because it has an upturned nose and a blue ‘dwarf’ walking snakehead fish, which can survive on land for up to four days breathing atmospheric air. However, due to development and inadequate measures towards the protection of environment, only 25% of the “original habitats remain intact” and hundreds of species living in the region fall under the category of globally-threatened species.

 

130 bps versus 50 bps

What it is: Deposit rate cuts versus lending rate cuts. The average cut in one -year deposit rates by banks since January 2015 compared to the cut in lending rates, according to India Ratings. This is when the central bank has cut policy rates by a cumulative 125 basis points (bps).

Why is it important: Shows banks give importance to self-interest. Banks can make more money when it reduces deposit rates – and pay less to depositors – without proportionally cutting the lending rates.

Tell me more: India Ratings says from a 10-year study of the policy cycle and the banks, it appears that in most cases when policy rates are reduced, deposit rates have come down quicker than lending rates and the quantum of the former has also been higher.

 

 

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