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Is There A Link Between Spiking Onion Prices And Elections?

Difficult to conclude, one way or the other. We took data on monthly retail prices for Delhi for the period between 2008 and 2017, and charted it. On this, we overlaid dates of state elections. In the visualisation below, the orange bars represent months when state elections were held, while the blue bars represent months that did not see elections.

Of the 17 election blocks here, there are two blocks where onion prices do surge unusually in the lead up—in November 2013 and November 2015. But otherwise, they don’t. They move in a narrower band most of the time, rising occasionally in months that are draw away election ones.

What do you think? Is there any other factor at play here?

Data sources: National Horticulture Board (onion prices), Election Commission of India (election dates)

 

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In The Onion World: India’s Loss Could Be Another’s Gain

 

Philanthropy is in the air. After Infosys’ chairman Nandan Nilekani, its Sunil Bharti Mittal pledging a tenth of his total wealth. Onion prices have shot up. They have some strange connection with elections. Indian railways has saved a ton of money on its power bills. HUL will cut down prices on several of its offerings post GST cuts on them. 

 

Rs 7,000 crore

What is it? The amount founder and chairman of Bharti Enterprises Sunil Bharti Mittal and his family have pledged for philanthropic activities, which is a tenth of their total wealth.

Why is it important? Mittal is among the growing list of billionaires in India who are committing a significant share of their wealth towards philanthropy. Recently, Infosys chairman Nandan Nilekani and Rohini Nilekani signed the Giving Pledge initiative, sponsored by American investor Warren Buffett and Microsoft co-founder Bill Gates, to give away half their wealth for charity. Other Indians who have signed this pledge include Wipro chairman Azim Premji, Biocon MD Kiran Mazumdar-Shaw and Founder Chairman of Sobha Group PNC Menon.

Tell me more: Most of Bharti family’s wealth would go towards setting up a university in an effort to offer free education to youth from economically weaker sections of society.

 

$850 per tonne

What is it? The price at which Indian exporters can sell onions in international markets until the end of the year.

Why is it important? The Indian government has applied this restriction as onion prices in domestic markets shot up. At Lasalgaon, the country’s largest wholesale onion market, prices increased to Rs 3,211 per 100 kg last week, which is its highest in two years. On Thursday, the modal price went up even higher to Rs 3,600 per quintal, according to government data. Onions are said to have a curious connection with Indian elections, where a rise in their prices is a politically sensitive topic.

Tell me more: Some traders say onion exports are not possible at $850 a tonne, and that this might result in an increase in key importing countries such as Bangladesh, UAE and Sri Lanka.

 

Rs 5,636 crore

What is it? The amount the Indian Railways says it has saved in power bills between April 2015 and October 2017.

Why is it important? This has been possible due to the Open Access Policy under the Electricity Act, 2003, which allows consumers with an electricity load of above 1 MW to procure power directly from markets. Over half of the total requirement of 2,000 MW for electric traction power has been accessed through this route. This has resulted in the decrease in the average cost of power to Rs 5 from Rs 7 in states from where electricity is procured via the open access route. The Indian Railways has seen a decline in passenger and freight traffic revenues in the last few years even as the central government’s financial support has largely remained at similar levels.

Tell me more: The Indian Railways says the cumulative figure can go up to Rs 6,927 crore, about Rs 1,000 crore higher than the stipulated target, and has projected total savings of Rs 41,000 crore over the next decade.

 

7-10%

What is it? The average cut in product prices across categories that Hindustan Unilever will effect in about 600 stock keeping units (SKUs), post the recent rationalisation of tax rates under the goods and services tax (GST).

Why is it important? This Hindustan Unilever action follows similar announcements by FMCG majors like Dabur, Godrej Consumer and ITC, and comes in the backdrop of the scathing critique from the government that it had done its bit to lower tax rates for many items of everyday use, but companies and service providers had not extended these tax cuts to consumers. It even threatened companies with action, and asked them to take corrective and informative steps.

Tell me more: On November 10, the government took out 178 item headings from the 28% category, leaving 50 items in that GST bracket.

 

23

What is it? The points margin that Valtteri Bottas of Mercedes needs over Sebastian Vettel of Ferrari in the last race of the 2017 Formula 1 season this weekend to finish second in the driver’s championship. Effectively, Bottas would have to win and Vettel would have to score no points.

Why is it important? If Bottas does manage to overtake Vettel, this will be the 4th consecutive season in which Mercedes would have finished one and two in the F1 driver’s championship. It would also be a blow to Ferrari, who were leading the driver’s title race till seven races ago, but saw their prospects implode after a series of driver and team errors.

Tell me more: Lewis Hamilton clinched the championship two races ago, in Mexico, for the fourth title of his career. The last time a Ferrari driver finished in the top two was Fernando Alonso in the 2013 season.

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News in numbers, Nov 17, 2015: Indian students’ contribution to US economy, prices of pulses…

5

What is it? The number of times, in nine auction rounds, the bids per oil and gas block on offer by India has averaged below 2, according to research by The Oxford Institute for Energy Studies. The same research cited the US average between 1954 and 1999 to be between 2.66 and 3.96.

Why is it important? The interest of global players in Indian oil and gas exploration has ranged from tepid to poor. One reason has been the policy construct that revolved around cost-recovery, as opposed to revenue-sharing. A draft paper released by the petroleum ministry on Monday recommended a move to revenue-sharing, as well as output pricing freedom.

Tell me more: In the last round of auctions, held in 2010, the government received 74 bids for 34 blocks, with 8 foreign and 29 Indian companies either bidding by themselves or in partnership.

 

 

 

Rs 5,500 cr

What is it? The reported drop in valuations of unlisted ICICI Prudential Life Insurance in the past 12 months or so. On Monday, its parent ICICI Bank announced the sale of 6% of its shareholding in the life insurer to Premji Invest and Temasek in a deal that valued the entire company at Rs 32,500 crore. Back in December 2014, the same was reportedly valued at Rs 38,000 crore.

Why is it important? It is a measure of the business environment for life insurance companies in India becoming tougher. After three consecutive years of decline in premiums collected, ICICI Prudential registered a 23% increase in premiums collected in 2014-15.

Tell me more: ICICI Prudential is India’s second-largest insurer and the largest among private players.

 

$ 3.6 billion

What is it? The estimated contribution to the economy of the US in academic year 2014-15 by students from India pursuing some form of higher education there, according to the US Department of Commerce.

Why is it important? India is the second largest source of foreign students in the US, after China. In 2014-15, 132,888 students from India were studying in the US, an increase of 29.4% over the previous year, which follows three years of decline, shows data released on Monday.

Tell me more: The 2014-15 breakup of Indian students in the US is: 12.4% undergraduate, 64% graduate, 1.4% other and 22.1% optional practical training.

 

Rs 15

What is it? The price of a 70 gm packet of Baba Ramdev’s Patanjali atta noodles, launched on Monday, undercutting the erstwhile market leader by about 30%.

Why is it important? Ramdev’s latest FMCG product launch comes on the same day the Indian food regulator moved the Supreme Court against the dismissal of its order by a lower court to ban Nestle’s popular Maggi instant noodles for allegedly containing lead beyond permissible limits. It also comes just a week after Nestle reintroduced Maggi noodles after a five-month ban; its atta variant was selling online at Rs 20 per 80 gm packet.

Tell me more: Besides its existing facility in Haridwar in Uttarakhand, Patanjali Ayurved plans to set up six more manufacturing plants to make these noodles, which carry the tag line ‘jhatpat banao’ (make it quickly).

 

53%

What is it? The increase in wholesale prices of pulses in October over the corresponding month of 2014, the second-highest among all commodities, after onion.

Why is it important? Unlike onion, which is cooling off, prices of pulses are showing no sign of abating. In the months from May to October, the year-on-year increase in prices of pulses has ranged from 23% to 53%, due to declining production and higher global prices. According to a recent Crisil research report, pulses are the second-most important part of an Indian food palette, after cereals, with an average Indian household spending 5% of their monthly budget on it.

Tell me more: Pulses apart, prices at the wholesale level fell in October on a year-on-year basis by 3.8%, for the 12th straight month.

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News In Numbers – August 21

News In Numbers: August 20

 

24

The number of additional days banks in India will be closed, beginning September 1. The government yesterday issued a notification, announcing that banks would remain closed on second and fourth Saturdays as against the current norm of working half-day. This February, the Indian Banks’ Association signed a pact with bank unions agreeing to increase employee wages by 15% and increasing the number of holidays by two every month. With this, the number of holidays in a year for bank employees will almost double (excluding Sundays), considering that banks have 25 public holidays in 2015.

 

1.85%

Low-cost airline SpiceJet on Thursday announced an offer of sale of 1 lakh tickets at rates ranging between Rs 799-2,699 one way, excluding taxes, for travel dates between 25 August 2015 to 26 March 2016. This is just 1.85% of the total passengers the airline carried between September 2014 and March 2015. After the airline changed hands and Ajay Singh returned to take over, it returned to profitability after seven quarters and recorded a net profit of Rs 22.5 crore in the fourth quarter of 2014-15. This February, the airline had put on offer 4 lakh tickets in a sale it called ‘cheaper than train fares’.

 

72.9%

The share of public sector banks in aggregate deposits as on March 31, 2015. With the Reserve Bank of India (RBI) giving an in-principle approval to 11 entities for payment banks, there could be a case of these affecting the small and medium public sector banks, especially in terms of deposits. Overall, during 2014-15, banks have showed a decline in both deposit and credit growth. For instance, India Post, which is one of the 11 entities that can set up a payment bank, has 139,000 post offices, which is more than three times the number of bank branches in rural areas. Payment banks could offer deposit rates of 6-7% to attract customers, against the average of 4% that public sector banks offer, according to a report by Ambit Capital.

 

59

The number of companies the market regulator has barred from accessing capital markets for misusing stock options to allegedly evade taxes. The Securities and Exchange Board of India (Sebi) is yet to find out the exact reason for the misuse of stock options and has referred this case to the income tax department, Financial Intelligence Unit and the Enforcement Directorate to further investigate the matter and take appropriate action. In the last few months, there have been quite a few instances of companies getting barred from the capital markets or being suspended from trading. For example, this February, Sebi suspended trading in Kamalakshi Finance Corporation, and imposed trading restrictions on 33 entities for making undue gains of Rs 1,800 crore.

 

Rs 80

Wholesale prices of onions touched a two-year high at Rs 4,900 a quintal (100 kg) in Lasalgaon, Nashik (Maharashtra), India’s largest bulb wholesale market. It jumped by 8.9% in just a day. According to the National Horticultural Research and Development Foundation’s director, prices have increased mainly due to a decline in supplies: harvesting has been delayed and there might be a fall in production of kharif onion. A few months ago, India had a stock of about 40 lakh MT, which has since reduced to about 16-18 lakh MT, mainly due to consumption and storage loss. Retail prices of onions are currently in the range of Rs 50-60 per kg in many parts of the country and have hit Rs 80 in the national capital.

 

 

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