What is it? The maximum a mutual funds can allot from its net assets to debt issued by a single company, according to new rules introduced by the market regulator. It was 15% earlier.
Why is it important? Mutual funds will have to expand the pool of companies to invest in. The new rule was introduced when investment by an Indian unit of JP Morgan in debt by Amtek Auto turned bad after credit rating agencies downgraded the auto parts maker. A JP Morgan fund held 20% in Amtek Auto’s debt. These restrictions would force mutual funds to invest in companies, which they would not have previously considered and this could prove to be riskier, according to Murthy Nagarajan, head of fixed income at Quantum Asset Management.
Tell me more: Mutual funds can now hold up to 20% of their net assets in companies belonging to the same corporate group while exposure to a single sector is now limited to 25% of their net assets.
Rs 11,000 crore
What is it? The amount Indian government plans to spend over the next five years to curb road accidents in the country, mainly by fixing 700 odd accident prone locations.
Why is it important? This is part of the national plan to reduce number of deaths due to road accidents by half in the next five years. On an average, 51 people road accidents took place every one hour in 2014 wherein 16 were killed, as per data from the National Crime Records Bureau. A total of 4.5 lakh road accidents were recorded in 2014, leaving 4.8 lakh people injured and causing the deaths of 1.41 lakh people. And, according to Nitin Gadkari, Union Minister of Road, Transport and Highways, road accidents cause an annual loss of Rs 55,000-60,000 crore, about 3% of India’s GDP.
Tell me more: The government has already started working on 10 black spots, or accident prone areas (such as Sarai Kale Khan and Shahdara Flyover) in Delhi.
What is it? The number of cars sold in December in India.
Why is it important? The highest number of cars sold in a December season. December is considered a slow month for car sales as buyers tend to postpone purchase during the new year – for sentimental and resale price reasons. However this December, discounts and lower loan rates – average loan rates of nationalised banks are down to 10.2% from 11.1% in December 2014 – seem to have worked.
Tell me more: However, two-wheeler sales declined by 3.1% in December, reflecting poor demand, according to Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM). The overall industry sales including passenger vehicles, three-wheelers, buses, trucks and two-wheelers fell by 0.17%.
What is it? The number of students in the 100th percentile in the Common Admission Test (CAT), the entrance examination for business schools including the prestigious IIMs (Indian Institutes of Management) in 2015.
Why is it important? All the 17 toppers have an engineering degree, underscoring the importance of quantitative skills in MBA entrance exam. Around 75-90% of students at the IIMs are from engineering backgrounds. Recently the test format was changed to include descriptive questions to appeal to students with non-engineering backgrounds, besides conducting tests in more centres/cities to attract a broader set of candidates. The impact of these changes are yet to be known.
Tell me more: Of the top 17 students, one is a woman. A total of 1.8 lakh students took the test, of which nearly a third were women.
What is it? Likely increase in consumer prices in December from a year ago period, according to a Reuters poll of economists.
Why is it important? This is higher than November’s consumer inflation at 5.41%, which was the highest in 14 months. If this happens, this would be the fifth consecutive increase on a monthly basis. A deficient rainfall in 2015 and poor crop output has led to the increase in food prices, especially those of pulses, which increased 46% in November compared to a year ago. This is likely to prevent the Reserve Bank of India from effecting any downward revision of interest rates. It also increases the central bank’s challenges of keeping retail inflation under 6% this month and 5% by March 2017.
Tell me more: India has revised its economic growth target to 7% from 7.5% due to low farm production and declining exports.