News in Numbers, Nov 16, 2016: Productivity to be hit?

Even as the government announced a few measures to deal with the aftermath of the announcement of the withdrawal of Rs 500 and Rs 1,000 currency notes, the opposition parties have upped their decibel levels against this move. And, the Winter Session of the Parliament commences today. After a highly productive Monsoon Session, which also saw the passing of the GST Bill, it remains to be seen how the current session is going to pan out. Let’s hope some sense prevails amidst all the noise.

9

What is it? The number of new bills that are in line to be listed, considered and passed during the Winter Session of the Parliament, which begins today.

Why is it important? With opposition parties uniting against the government on its recent demonetisation move, this session could be a disruptive one, impeding productivity. The opposition is likely to demand a discussion on the decision to scrap old currency notes in Rs 500 and Rs 1,000 denominations and seek a Joint Parliamentary Committee probe into the allegation that some, notably officials of the ruling BJP, knew about the move beforehand.

Tell me more: The nine new bills include three related to the Goods and Services Tax, one that declares the Indian Institutes of Management to be institutions of national importance and another for surrogacy regulation. This session’s agenda also lists 10 bills that have already been introduced, but are yet to be considered and passed.

 

4.2%

What is it? Retail inflation rate in October, down from 4.39% in September.

Why is it important? The rate has eased for the third straight month, to a 14-month low in October, mainly due to smaller increases in food prices. Wholesale price inflation too eased to a four-month low of 3.39% in October, compared to 3.57% in September. This easing increases the chances of the central bank’s monetary policy committee cutting interest rates again next month. The government’s recent demonetisation move is likely to reduce cash transactions, easing inflation further.

Tell me more: Last month, the monetary policy committee cut the repo rate (the rate at which the central bank lends to banks) by 25 basis points to 6.25%, which was near a six-year low.

 

2.41

What is it? The debt-equity ratio of the smallest firms (by market capitalisation) among 305 non-financial BSE-500 companies in 2015-16.

Why is it important? The debt-equity ratio is a measure of a company’s financial leverage. This study, which divided the 305 companies into four quartiles, showed this ratio was the highest (2.41) for the bottom quartile (77 firms with the smallest market cap) and lowest (0.83) for the top quartile (76 firms with the highest market cap). This goes against the popular perception that debt problems plague larger firms only. In another indicator that points to this, the average debt of the least-valuable firms is 2.3 times their market cap, against 0.32 for the most-valuable ones.

Tell me more: For both sets, their ability to meet interest expenses hit a 10-year low in 2015-16. For the least-valuable firms, the interest coverage ratio fell below 1, indicating their operating income was insufficient to meet interest costs.

 

10%

What is it? The projected salary hike to be offered by Indian companies to employees in 2017, according to Willis Towers Watson, an advisory, broking and business solutions company.

Why is it important? This is the highest among key emerging and developed markets in Asia. However, the expected rise in 2017 is marginally lower than the projected salary growth of 10.8% each in 2015 and 2016. Also, in the last two years, the actual salary growth has been below the projected figures: 10.45% in 2015 and 10% in 2016.

Tell me more: The Willis Towers Watson report says about 38% of the budget earmarked for salary increases is for top performers, against 34% for above-average and 28% for average performers.

 

20

What is it? The number of countries that have signed a framework agreement on the International Solar Alliance (ISA), a coalition-in-making of solar-resource rich countries.

Why is it important? The initiative, launched by Prime Minister Narendra Modi at COP21, Paris Climate Summit last year, has taken its first major step forward. More countries are expected to join the ISA in the coming weeks and the agreement will come into force when at least 15 nations ratify it. The ISA seeks to boost global demand for solar energy to reduce solar energy deployment prices, standardise processes and equipment for solar generation to lower hardware costs, and promote research and development.

Tell me more: The ISA would be headquartered in India, which has promised to contribute $27 million towards creating infrastructure and recurring expenditure over five years.

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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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News in Numbers, May 17, 2016: Buffett’s stake in Apple, RBS to shut down India operations…

0.34%

What is it? The increase in wholesale price inflation (WPI) in April against -0.85% in March.

Why is it important? It increased after 17 months of deceleration. Retail inflation also went up to 5.39% in April from 4.83% in March, bringing back worries about its persistence. This could dampen hopes of interest rate cuts by Reserve Bank in June.

Tell me more: The WPI’s increase was mainly due to an increase in prices of food and manufactured items. Wholesale food prices rose 4.23% on a year-on-year basis due to a sharp increase in the prices of pulses and potato. Prices of manufactured items rose 0.71% last month year-on-year.

 

2.5%

What is it? The minimum share of apprentices profitable public sector units must have as a percentage of their total workforce with the maximum being 10%.

Why is it important? This will help Indian government’s Skills India programme (launched last year), which has a target of skilling 40.2 crore workers by 2022. India, which has the world’s largest youth population, is estimated to require 120 million more workers by 2022 and their skilling is imperative for economic growth.

Tell me more: The estimated share of India’s workforce that undergoes formal training (2.3%) compares very poorly with that in other countries – 68% in the UK, 75% in Germany, 52% in the US, 80% in Japan and 96% in South Korea.

 

9.81 million

What is it? The number of shares investor Warren Buffett’s Berkshire Hathaway has in Apple (as of March 31) valued at $1.07 billion.

Why is it important? This is Berkshire Hathaway’s second investment in a technology company – after IBM. Buffett buys companies with strong cash flows, decent dividends and a good management – and had avoided investments in high-growth tech firms because their future is harder to predict. His investment in Apple is an indication that the iPhone maker is transitioning/has moved from being a high-growth star to a low-growth but stable company.

Tell me more: Apple’s shares rose 3.7% to $93.88 on Monday after Berkshire’s announcement. The value of Berkshire Hathaway’s holding in the firm has dropped to $921 million since March 31.

 

10

What is it? The number of retail branches Royal Bank of Scotland (RBS) will shut down in India.

Why is it important? With this, RBS will wind up all its banking operations in India – as part of its global restructuring plans to reduce its presence from 38 countries to 13. Around 400650 employees are set to lose their jobs. The UK bank, which sold off its offshore loan book in India to UAE-based National Bank of Abu Dhabi and private banking business to Sanctum Wealth Management, failed to find any buyers for the rest of its India assets.

Tell me more: The bank will retain its back-office operations, which supports its global businesses and employs over 10,000 people.

 

62%

What is it? The percentage of children who attended a government primary school in 2014, down from 72.6% in 2007-08, according to an analysis by data journalism platform, IndiaSpend based on an NSSO survey.

Why is it important? Indicates an increasing preference for private schools and underlines the concerns about quality of education in government schools. Despite this and the fact that India has spent nearly Rs 5.9 lakh crore on primary education in the last 10 years, there has been a decline in learning outcomes, according to NGO Pratham’s 2014 report.

Tell me more: The data also confirms a popular perception that a higher percentage of children in urban areas prefer private schools over the government ones. Less than a third of children attended government primary schools in urban areas compared to 72.3% in rural areas in 2014.

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News In Numbers – August 5

News In Numbers: August 5

 

$2 billion

The amount that Foxconn, the world’s biggest contract manufacturer, plans to spend in India to set up 10-12 facilities over the next 5-10 years. With plans to set up an electronics manufacturing ecosystem to produce televisions, routers, switches and batteries, the Taiwanese-based firm is also looking to invest in areas such as hardware and software integration, application software and testing and energy efficiency. It is already working with some Indian companies, including Snapdeal, Adani Enterprises and Micromax, and had announced last month it was looking to set up an India-focussed venture fund to invest in startups. Foxconn entered India in 2006 with investment plans of Rs 485 crore, when it tagged along with Nokia Corporation as its vendor. But, it had to shut down its factory after the Finnish company stopped operations, the result of being embroiled in legal wrangles.

 

Rs 7,500 crore

Amount of funds that real estate company DLF is planning to raise by pledging more than 50% of its stake in three subsidiaries: DLF Cyber City Developers, Caraf Builders and Constructions and DLF Assets. This move is aimed at paring its debt, which stood at Rs 20,695 crore in March 2015. In 2014, the capital market regulator barred DLF from accessing the capital markets for three years. Although a tribunal set aside this order, the regulator has challenged this decision in the Supreme Court. The promoters of as many as 359 BSE-listed companies have pledged half their stakes, an indicator of stressed corporate finances in an economy that struggling to get back on track.

 

19.9%

The percentage of food adulterated samples in 2014-15, an increase from the 14.8% in 2012-13 and 18.8% in 2013-14. The issue of food safety and testing came to light after excessive quantities of lead were found in certain samples of Nestle India’s popular noodles brand Maggi. However, a few days ago, the Central Food Technological Research Institute, a laboratory approved by the food regulator, had found Maggi Noodles to be in compliance with India’s food safety standards. Even as the fate of Maggi lies in balance, Nestle India posted a quarterly loss in the April-June quarter, its first in 15 years.

 

9%

Percentage of project proposals decided after making a site visit by the coastal zone management authorities (CZMAs) of nine states. Of the 4,033 projects assessed, mostly between 1999 and 2014 for most states, the respective CZMAs made site visits in only 367. This is just one of the many shortcomings or lapses in coastal regulation highlighted in a recent report by New Delhi-based thinktank Centre of Policy Research. Other points include inadequate monitoring, inappropriate staffing, lack of financial resources and inordinate amount of time spent in project proposals.

 

90.9

Percentage of respondents who believe prices will increase in the next one year, in general, according to the ‘Inflation Expectations Survey of Households’ conducted by the Reserve Bank of India (RBI) in June. This percentage has increased from that recorded in June 2014 when 83.6% of the respondents felt this way. The equivalent numbers across all categories such as food prices, non-food prices, housing prices and cost of services have seen an increase in June 2015 from last year. The Consumer Confidence Survey by the RBI shows that the perception on economic conditions has marginally increased for the next one year, though negative perceptions have also registered an increase. Yesterday, the RBI left the key interest rate unchanged, as it was not confident about inflation levels being in a comfort zone yet.

 

 

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