Of bad loans and insolvency

7.2%

 

What is it? The projected growth rate of the Indian economy in current financial year 2017-18, according to International Monetary Fund (IMF).

Why is it important? This represents reversal in growth slowdown following demonetisation introduced in November- December last year. World’s sixth largest economy grew at 8% in 2015-16, before slowing down to 7.1% in 2016-17. IMF has attributed growth revival to revision in national income accounting and government spending.

Tell me more: Global economy is expected to grow at 3.5% this year, as compared to 3.2% in 2016.

 

 

1.24%

 

What is it? The gross non-performing assets of HDFC Bank, India’s largest private sector bank in market capitalisation, for the three months ended June 2017.

Why is it important? This is the highest in seven years, and bad loans increased by 23% in one quarter. And 60% of the increase was from farm loans portfolio. Slew of farm loan waivers announced by state governments like Uttar Pradesh and Maharashtra is likely to impact farm loan repayment, and increase bad loans for banks.

Tell me more: Banks have disclosed weakening of microfinance asset quality following demonetisation during January- March 2017. HDFC Bank says microfinance loans have not deteriorated further.

 

 

56

 

What is it? The number of applications filed by debtors to declare insolvency.

Why is it important? This is more than a third of cases approved by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 in the last one year. It also shows companies are seeing insolvency proceedings as a chance to reset their business in a time bound manner.

Tell me more: Under the new bankruptcy code, cases have to be resolved within 6 months, with an extension for another 3 months. Alternatively, NCLT appoints an interim administrator who will try to sell the assets of the company to a new owner within 18 months.

 

 

770 mm

 

What is it? Rainfall received at Mount Abu, a hill station in Rajasthan, in 24 hours.

Why is it important? This is the highest ever rainfall received by Mount Abu ever since rainfall data was collected. Extreme rainfall events like these in a desert state is attributed to increase in temperature and its impact on monsoon.

Tell me more: Mumbai received 944 mm of rainfall in July 26, 2005 that killed 1,094 people. In 2015, Chennai and two adjoining districts received 1,049 mm of rainfall.

 

 

24

 

What is it? The number of protected monuments that have disappeared due to encroachment.

Why is it important? Shows laxity in protecting the historical monuments. Archaeological Survey of India is empowered to issue show cause notice to encroachers, and can also direct district authorities to remove encroachments.

Tell me more: 11 out of 24 lost monuments were from Uttar Pradesh. Government has spent Rs 301.7 crore in protecting monuments in 2016-17.

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News in Numbers, Feb 01, 2017: Notes-ban drag down GDP

0.25-0.5%

What is it? The effect of the notes-ban on GDP growth in FY17, as estimated in the Economic Survey presented to the Parliament on Tuesday.

Why is it important? The first official acknowledgement of demonetisation’s impact on the economy revises a baseline growth of 7% down to 6.5-6.75%. The Central Statistics Office had not figured in the cash-crunch when giving out its estimate of 7.1% earlier this month. The government took potshots at and challenged unofficial estimates, as most have factored in a larger impact of demonetisation on GDP. It included the IMF, which forecast the withdrawal of 86% of the currency value in November would result in a growth of 6.6%, down a full percentage from its October estimate.

Tell me more: GDP growth in FY18 is expected to be between 6.75 and 7.5%, still lower than FY16’s 7.6%. The government also admitted the GDP estimate would not capture the effect of the cash shortage on the informal sector, the largest employer in the country.

 

>$130,000

What is it? The salary level an H1B visa-dependent employer will have to meet if the High-Skilled Integrity and Fairness Act of 2017 in the US House of Representatives goes through.

Why is it important? It has sent shivers down stocks of Indian IT companies, who send employees for onsite work using the visa. By removing the H1B minimum wage of $60,000, constant since 1989, and more than doubling it for the employer to be exempt from non-displacement and recruitment assessment requirements, the act could strain the coffers of US-based IT clients. It would lead to not just a rethinking of how many local employees to replace with onsite Indian staff, but also see IT companies mull more expensive US hires or digital delivery from India. Major IT stocks including the big four, fell by 2-4.5% while the Sensex dropped 2.96%.

Tell me more: The act would also reserve 20% of the annual H1B visas for small and start-up employers, while removing the ‘per country’ limit for employment-based immigrant visas.

 

5%

What is it? Rise in the share price of US’ Iconix Brand Group, on news of its plans to sell majority stake in the beloved franchise Peanuts Worldwide, which includes cartoon strip characters such as Snoopy and Charlie Brown.

Why is it important? Even though the iconic characters generate around $30 million, licensed in over 100 countries, Iconix’s decision to sell could be the result of a large customer — US insurance company Metlife —  dropping them after 30 years of use as mascots. This could be a major opening into the over-$-144-billion US licenced merchandise market (the biggest in the world) for keen investors. Peanuts, created by Charles Schulz, still counts Nestle, Zara and Hallmark as its licensees.

Tell me more: The deal could ease the debt burden on Iconix which bought its 80% stake in Peanuts in 2010, while the remaining 20% is owned by Charles M. Schulz Creative Associates, controlled by the creator’s family.

 

18 lakhs

What is it? The number of people whose cash deposits after demonetization do not match their taxpayer profiles as identified by the Income Tax department

Why is it important? Indian government hopes that the exercise, a follow up on large scale currency reform in November, will result in a higher tax collection rate. Economic Survey pointed out that India is among the countries that perform poorly on this metric – just seven direct tax payers for every 100 voters. The Income Tax department has identified over 10 million accounts with deposits exceeding Rs 2 lakh, and would start by scrutinizing those who have deposited over Rs 5 lakh.

Tell me more:  The queries by income tax department can be answered via its online portal.

 

78.3 million

What is it? The number of iPhones sold by Apple in the last quarter.

Why is it important? This is the largest number of phones sold by Apple in a quarter since the launch of iPhone in 2007, and comes after three consecutive quarters of decline in sales, defying industry expectations. The sales helped push Apple’s total revenue by 3% to $78.4 billion. It will also restore some faith in its CEO Tim Cook, who has been losing sheen following the decline of iPhone sales and the absence of any other product in its stable to match iPhone’s success.

Tell me more: iPhones accounts for two-thirds of Apple’s sales. The boost comes after the launch of iPhone 7 / 7 Plus in September 2016. While the lower priced iPhone 7 is the best selling model, the bigger ‘Plus’ version performed better than the previous larger sized models launched by the company.

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News in Numbers – June 13, 2016

50

What is it? The number of people shot dead in a gay nightclub in Orlando, Florida by a lone gunman.

Why is it important? The latest mass shooting, the worst in US history, brings to fore the easy availability of guns. There have been at least 1,001 mass shootings in the US resulting in 1,141 deaths since December 2012, according to Gun Violence Archive data. 

Tell me more: The identity of the gunman, a New York born muslim with parents from Afghanistan, is likely to become an election issue where Donald Trump, the presumptive republican nominee, had openly advocated ban of muslims entering US.

133

What is it? The rank of Riya Singh, who topped among the girls in the Joint Entrance Examination (JEE) Advanced conducted for entry into the Indian Institute of Technology (IITs).

Why is it important? Only 13% of 36,566 candidates qualified were female students in the results announced on Sunday. The numbers underscore the barriers to entry for nearly half the student population in cracking admissions to India’s top engineering colleges.

Tell me more: 23 IITs admit 10,575 students in academic year 2016-17. The biggest chunk is IIT, Kharagpur with intake of 1,341 students.  

Rs 600 crore

What is it? Fine levied on five private run hospitals by the Delhi government for not treating poor patients.

Why is it important? Hospitals were allotted land at subsidised rate with a condition that 25% of in-patient and 10% of out-patient capacity to treat poor patients free of cost. The action by government follows a public interest litigation by Social Jurist in 2007 that private hospitals be fined for not giving free treatment to poor patients.

Tell me more: The land were allotted between 1960 and 1990, and the fine amount is calculated till 2007 from the time the hospital became operational.

145%

What is it? China’s corporate debt to GDP ratio.

Why is it important? A top International Monetary Fund official has called it a “key fault line in the Chinese economy”. The huge debt, which was once seen as essential to drive growth, could have adverse impact on China, and owing to the size of its economy, on the world, if it’s left unchecked.

Tell me more: Meanwhile, India is trying hard to tackle its corporate debt that have gone bad. Arundhati Bhattacharya, chairman of India’s largest lender State Bank of India, said the banks should have had more tools and resolution mechanisms to deal with bad loans.

Rs 6,700 crore

What is it? The amount I Squared Capital, a private equity firm, is looking to invest in India over years through its ISQ Global Infrastructure Fund.

Why is it important? It could provide a boost to India’s rooftop solar energy aspirations, a key focus of the fund. It plans to invest about Rs 2000 crore on roof top solar. Indian government is targeting 100GW of solar capacity by 2022, and hopes to pull it off even earlier – by end of 2017.

Tell me more: I Squared Capital was founded by former Morgan Stanley executives, Sadek Wahba, Gautam Bhandari and Adil Rahmathulla all specialising in infrastructure. Its Global Infrastructure Fund has a corpus of 3.8 billion.

 

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News in numbers, Apr 13, 2016: Use of children in suicide attacks, Uber’s transparency report…

4.83%

What is it? Consumer price inflation in March 2016.

Why is it important? At a six month-low, it decreased from 5.26% in February 2016 and 5.25% from a year-ago period (March 2015). This, along with an above normal rainfall prediction, is likely to prompt the central bank to cut key interest rates further (it cut policy rates by 25 basis points earlier this month).

Tell me more: The fall in retail inflation was aided by smaller increases in food prices, which slowed down to 5.21% in March from 5.3% the previous month. The difference between the retail inflation rates in urban (3.95% in March 2016) and rural areas (5.7%) is pretty stark.

3.2%

What is it? The estimated global economic growth in 2016, as per the International Monetary Fund (IMF).

Why is it important? This is a downward revision from its January prediction of 3.4%, indicating a worsening scenario. The IMF cited Britain’s likely exit from the European Union, political discord, China’s economic slowdown, impact of low oil prices and recession in some countries as the reasons for the gloomy picture. This is likely to affect India in terms of foreign investment and exports.

Tell me more: The global economy is expected to grow at 3.5% in 2017, a 0.1% reduction from IMF’s January estimate. India retained its GDP estimates for 2016-17 and also, the tag of ‘bright spot’. IMF says other countries such as Indonesia, Malaysia, Philippines, Thailand and Vietnam continue to do well.

12.2 million

What is it? The number of riders and drivers whose information were shared by ride-sharing company Uber Technologies with US law enforcement agencies and regulators.

Why is it important? This is Uber’s first transparency report. Though such information-sharing helps law enforcement agencies in speeding up cases and potentially preventing harm to someone, it also has the risks of misuse, as Uber admits that it doesn’t always know the purpose for which regulators require the information and that they may share it with third parties.

Tell me more: Uber hopes to disclose requests received from outside of the US in the future. The queries included information about trips, trip requests, pickup and dropoff areas, fares, vehicles and drivers. Other technology companies such as Google, Facebook and Twitter publish their transparency reports periodically.

$1 trillion

What is it? The cost of depression and anxiety disorders to global economy every year, according to a World Health Organization (WHO) study.

Why is it important? The financial returns are over four times the investment made in treating depression and anxiety disorders. It provides an economic reason for countries to spend more on mental health.

Tell me more: Governments, on an average, spend 3% of their health budgets on mental health, with low-income countries spending less than 1% to high-income ones spending 5%.

44

What is it? The number of children the terror group Boko Haram has used in suicide attacks in Nigeria, Cameroon, Chad and Niger in 2015.

Why is it important? The number has increased from 4 in 2014 and over the last two years, one out of every five suicide bombers was a child. Three-fourths of these children were girls. Terror groups such as ISIS and Pakistani Taliban have increasingly started using children for carrying out their activities, as they are easy to train, can be expected to be more loyal and not suspect their motives.

Tell me more: Cameroon recorded the highest number of suicide attacks involving children, accounting for nearly half of such attacks. Violence by Boko Haram has caused nearly 1.3 million children to be displaced in the four countries, 1,800 schools closed down and over 5,000 children separated from their parents.

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