A costly waiver

Rs 30,500 crore

What is it? The amount Maharashtra government was set to waive off in farm loans, according to its chief minister last week.

Why is it important? The government has now said it would waive off all farm loans, in response to farmers’ unrest.  The final amount is yet to be confirmed, but the amount the government was willing to waive off represents over 98% of the state’s planned capital expenditure of Rs 31,006 crore. The promise of the waiver of all outstanding loan payments saw farmers end their strike of over a week.

Tell me more: The strike had seen destruction of farm and dairy produce, leading to a rise in prices in the state.

 

17.79 million-tonne

What is it? India’s fuel consumption in May, 2017.

Why is it important? The country’s fuel demand rose 5.4%, the most in the last six months. It had suffered a setback in January-March, when demand fell following demonetisation. The pickup began last month.

Tell me more: Diesel, which comprises 40% of the sales, rose 8% to 7.5 million-tonne, while petrol 15% to 2.4 million-tonne, in May, 2017 over last year.

 

4

What is it? The number of days of listing time for initial public offerings (IPOs), the markets regulator, Securities and Exchange Board of India (Sebi) is considering.

Why is it important? It would be less than the present norm of six days taken to list a company on the stock exchanges from the end of bidding in an IPO. The reduction aims to cut the time for which investors’ money is locked in, a move Sebi had been mulling for a few years.

Tell me more: In 2015, the applications supported by blocked amount (Asba), a mandatory service for retail investors, was introduced cutting down listing times. It made banks debit the investment only after the stock allotment. By January, 2016, the time gap came down to six days from the earlier 12 days.

 

66

What is it? The number of items for which GST (Goods and Services Tax) Council has reduced tax rates.

Why is it important? The council was facing demands to reduce tax rates for 133 goods and services, and it’s an indicator of intense pressure it is facing as the government prepares to roll out GST from 1st July. The council also relaxed rules for more number of small and medium businesses – by increasing the the upper limit for the ‘composition scheme’ to Rs 75 lakh. Composition scheme exempts small businesses with a certain turnover from GST, and lets some of them pay GST at a concessional rate.

Tell me more: The items with reduced rates include some cinema tickets, insulin, instant food mixes and printers. GST council will meet again to clear the remaining issues – including e-way bills and lotteries – on June 18th.

 

$2.68 million

What is it? The amount an anonymous bidder will donate to a San Francisco charity to have lunch with billionaire Warren Buffett.

Why is it important? The bid amount is down from $3.46 million in 2016, also from an anonymous donor. Auctioned on ebay, Power Lunch with Warren Buffett has been garnering over a million dollars every year in the last ten years. The annual auctions began in 2000.

Tell me more: Glide, the charity, helps the homeless, homeless women and drug users  in San Francisco. Buffett has raised over 25 million for Glide in the 18 auctions so far.

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News in Numbers, June 8, 2016: India closer to its NSG aspirations, Amazon’s India push…

$21.3 billion

What is it? The estimated cost of delay and additional fuel consumption due to freight vehicles being stopped at check posts and/or state borders, long queues at check posts, poor road conditions etc., according to a study.

Why is it important? Underscores the need for Goods and Services Tax – which would bring in a single tax rate in place of the myriad existing ones, and reduce paperwork at checkposts and state borders. This would cut some costs. However, it would also need better infrastructure – wider roads and focus on multi-modal transportation – and action against unnecessary police intervention.

Tell me more: The study by IIM-Calcutta and logistics firm Transport Corporation of India gave the break up of the cost incurred due to delays and cost of fuel consumption due to such delays: $6.6 billion and $14.7 billion respectively.

 

35

What is it? The total number of member-nations of the Missile Technology Control Regime, an international anti-proliferation grouping, with the latest addition being India.

Why is it important? This would help India to buy high-end missile technology and also bring it closer to becoming a member of the Nuclear Suppliers Group (NSG), a body that controls global nuclear trade. Though India has received support from the US for India’s entry into this coveted group, China has been against this and favouring Pakistan’s membership.

Tell me more: India has the capabilities of exporting nuclear fuel such as thorium and supply nuclear technology in the future but it cannot do so until it is a member of the NSG. India’s entry into this group will also give it a strategic victory over Pakistan as it can block it from joining the NSG.

 

6.5%

What is it? The present Repo rate – the rate at which the central bank lends to the banks.  It was kept unchanged by the Reserve Bank of India (RBI) on Tuesday.

Why is it important?  RBI holding the rates was expected, but it comes at time when there is debate – fuelled primarily by Rajya Sabha member Subramanian Swamy – on whether the central bank is too reluctant to bring down rates, which might help small and medium industries.

Tell me more: The RBI has cited concerns about an upside in inflation risks mainly due to increase in international commodity prices, especially oil, and the implementation of the Seventh Central Pay Commission. The central bank may not go for any interest rate cuts this year as RBI’s survey of professional forecasters have assigned the highest probability of 49% for average inflation to be 5-5.9% in 2016-17 against its target of containing it within 5%. The RBI also left the cash reserve ratio, the portion of their deposits that banks have to keep with the central bank, at 4%.

 

Rs 404

What is it? The amount a passenger would have typically got as refund, if they had cancelled a Delhi-Mumbai ticket costing Rs 2,419 (base fare: Rs 1,559) booked on June 7.

Why is it important? Highlights how cancellation charges can sometimes exceed the base fare amount (in this case, it is 1.29 times the base fare). India’s aviation regulator will reportedly announce new rules barring airliners from levying cancellation charges exceeding the base fares.

Tell me more: A couple of months ago, airlines in India offered discounts and brought down airfares but increased the cancellation charges up by 50-100%.

 

$3 billion

What is it? Additional investment commitment by Amazon in India.

Why is it important? This is likely hit Indian e-commerce firms such as Flipkart and Snapdeal, which have been struggling to raise funds to keep up in the race as competition intensifies. It also shows how badly Amazon needs to win in India, after losing out to Alibaba Group Holding in China. In July 2014, the company had announced a $2 billion investment in the country, which it spent in less than two years.

Tell me more: With the additional funds coming in, Amazon’s total pledged amount would exceed $5 billion (over Rs 33,000 crore) in India.

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