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 24, 2016: The power of Five

Ink_marking_after_Vote_(India)

This February is likely to see a lot of action: the Union Budget is expected to be announced and five states likely to go for polls. The situation in each of the five states seems interesting: in Punjab, the ruling BJP-SAD alliance is looking to retain power even as Congress and new entrant AAP are looking to dethrone the alliance after two successive terms. Goa has a similar situation: BJP wanting to be back in power and up against the same two parties. In Uttarakhand, the Congress, which reclaimed power after a brief President’s rule, is all set to battle it out with the BJP. In Manipur, BJP is looking to strengthen its northeastern presence while the Congress is trying to hold on to its authority. The battle in Uttar Pradesh is getting more and more interesting by the day: the BJP is trying to re-create the magic it weaved during the 2014 Lok Sabha elections (it won 71 of the 80 seats), SP is dealing with its own set of problems while BSP is trying to get the better of both. Here’s to interesting times ahead.

 

 

5

What is it? The number of states – Uttar Pradesh, Goa, Uttarakhand, Manipur and Punjab – likely to go on polls simultaneously in February-March.

Why is it important? The results in the five states would be an indicator of BJP’s popularity (which swept the 2014 Lok Sabha elections) and how people perceive its performance at the Centre whereas for the Congress, it would be a way to gauge if the party can see a revival as just 6% of India’s population live in Congress-ruled states – the lowest since Independence. For Aam Aadmi Party, it would indicate the progress it has made outside Delhi even as it nurtures ambitions to grow into a national party.

Tell me more: The Indian government has reportedly approached the Election Commission to seek its permission to present the General Budget in the Lok Sabha on February 1 in order to avoid violating themodel code of conduct that would kick in from the day the election schedule is announced until the results are declared.

 

Rs 1.25-1.5 lakh crore

What is it? The quantum of stressed assets Indian banks are reportedly looking to recover in the next few months.

Why is it important? After having identified the extent of bad loans and having provided capital for them, banks are now progressing to the next step of recovery. Last week, Essar Group sold 98% stake in its oil unit and other assets (largest debt reduction exercise by an Indian business) and three banks – ICICI Bank, Axis Bank and StanChart – got back an estimated $2.5 billion (around Rs 16,750 crore) as part of the first payment for their loans to the group. This is expected to give a boost to the recovery process initiated by the banks.

Tell me more: The lenders are hoping to recover the loans through resolution methods such as sale of assets, transfer to asset reconstruction companies and strategic debt restructuring (allows creditors to convert debt into equity and take over the management of defaulting companies).

 

Rs 3,050 crore

What is it? The penalty recommended to be imposed by the Telecom Regulatory Authority of India (TRAI) on Bharti Airtel, Vodafone and Idea Cellular for not providing sufficient interconnect points to Reliance Jio.

Why is it important? This brings an end to the three-month long dispute between the three incumbents and the new entrant Reliance Jio. The telecom regulator ruled that the three firms deliberately blocked the calls made from Reliance Jio’s network, a move considered to have been done with the intention of stifling competition. This was in response to Reliance Jio’s complaint that 75% of the calls made on its network were failing as the incumbents were not providing it with adequate points of interconnection necessary to complete the calls.

Tell me more: For Airtel and Vodafone, the regulator has recommended a penalty of Rs 50 crore per circle for 21 service areas while for Idea Cellular, it is Rs 50 crore for 19 service areas. The regulator has floated a consultation paper that aims to review the existing provisions for interconnection. Interconnection is thearrangement under which telecom firms connect their networks, equipment and services to enable their subscribers to get access to the subscribers, services and networks of other telecom firms

 

$85.4 billion

What is it? The deal size of US telecom giant AT&T buying out entertainment group Time Warner.

Why is it important? If approved by the regulators, this would be the biggest deal in the world this year. The deal would help the third largest cable TV provider in the US (owns mobile phone, broadband and cable TV networks) to transform itself into a full service media provider – owning content would help provide a competitive advantage over the others. This is likely to spark industry consolidation and bring in changes in the way people consume content.

Tell me more: However, it remains to be seen if the deal is allowed to happen as US lawmakers and both the presidential candidates have raised questions about it – the acquisition is considered to be anti-competitive by some. A Senate sub-committee, which is responsible for competition, will hold a hearing in November.

 

$1.7 billion

What is it? The amount Chinese consumers spent on Apple-sanctioned apps in the July-September quarter this year, according to a report.

Why is it important? With this, they have exceeded the spend by Americans (nearly $1.45 billion) by 15% in this period. Chinese consumers spent five times more on Apple apps in the third quarter of 2016 than what they spent two years ago. The report noted that China is likely to drive the largest absolute revenue growth for any country by 2020. Apple recently announced the opening of its research and development centre in China even as it saw its year-on-year revenues fall by 33% in Greater China in its fiscal third quarter.

Tell me more: In terms of market share, domestic firms – Huawei, Oppo, Vivo and Xiaomi – command a 56% market share in China, pushing Apple to the fifth position (8% market share), according to research firm IDC.

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