Now, pay for dirtying Ganga 🌊

Rs 50,000 

What is it? The penalty that will be imposed for dumping waste into the Ganga river between Haridwar in Uttarakhand and Unnao in Uttar Pradesh, one among a slew of directions passed by the National Green Tribunal (NGT) on Thursday to rejuvenate the water body.

Why is it important? A pet project of Prime Minister Narendra Modi, the ‘Clean Ganga’ project has progressed slowly with only $205 million spent till now as compared to the total commitment of $3.06 billion till 2020.

Tell me more: The environment regulator has declared a no-development zone 100 metres from the river’s edge (between Haridwar and Unnao) and dumping of waste within 500 metres from the river has been prohibited.

 

Rs 5,945

What is it? The net profit of Tata Consultancy Services (TCS), India’s largest software services exporter, in the first quarter of 2017-18, 5.8% lower on a year-on-year basis.

Why is it important? This is the 11th consecutive month when the firm has either under-performed or failed to meet analysts’ estimates. A survey of 20 analysts by Bloomberg had estimated TCS’ net profit to be Rs 6,203.5 crore. This is the biggest drop in profits in two years. A stronger rupee impacted TCS’ results even as concerns over US President Donald Trump’s order for a review of a visa program for skilled workers remain.

Tell me more: The company’s headcount was lesser by 1,414 people to 385,809 at the end of June 2017 compared to the previous quarter – a net decline in its employee strength for the first time since 2010.

 

80

What is it? The number of people who have died due to floods and landslides in three north-eastern states – Assam, Manipur and Arunachal Pradesh – so far this season.

Why is it important? As many as 58 districts have been affected in the three states. In Assam, around 2,500 villages have been submerged and over 17 lakh people have been affected. Many district headquarters in Arunachal Pradesh have been cut off from the rest of the country while its capital Itanagar is cut off from its main connecting road (NH-415).

Tell me more: Jitendra Singh, the minister for the Development of North Eastern Region said that his team has approached the Ministry of Health to take steps to prevent the outbreak of epidemics and also, with the telecom ministry for the restoration of communication lines.

 

Rs 10 lakh

What is it? The money McDonald’s Corp will have to pay Vikram Bakshi, managing director of Connaught Plaza Restaurants, its estranged joint-venture partner for North and East India, according to a National Company Laws Tribunal (NCLT) ruling on Thursday.

Why is it important? The long-brewing dispute between the JV partners had seen Bakshi being ousted as the chief in 2013. The ruling reinstates Bakshi as the MD, restoring all the powers of an administrator to him.

Tell me more: The ruling reiterated allegations made by Bakshi, including violation of JV terms and an attempt to buy him out at a low valuation. In the kerfuffle, Connaught Plaza Restaurants recently shut 43 of its restaurants in Delhi, citing failure to renew requisite licences.

 

Rs 70,000 crore

What is it? The monthly value of card payments at point-of-sale (PoS) terminals, according to a State Bank of India (SBI) research report.

Why is it important? The report claims this average (both debit and credit cards) would have taken another three years at 25% growth in card transactions at PoS terminals if not for demonetisation.

Tell me more: The greater focus on digital payments after demonetisation, which happened in November 2016, was supplemented by the addition of 1.18 million PoS terminals. The lack of PoS terminals had held back card usage earlier.

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PoS-itive additions 💳📊

1.4 billion

What is it? The amount e-commerce firm Flipkart raised from eBay, Microsoft and Tencent

Why is it important? It’s the biggest amount raised in a single funding round by an Indian start-up. It came at a pre-money valuation of $10.2 billion, signalling the confidence investors have showed in the company that saw a series of markdowns in the last couple of years. The funding – and acquisition of eBay India, that was a part of the deal – will strengthen Flipkart as it fights its aggressive and better endowed competitor Amazon.

Tell me more: There have also been talks that Snapdeal, the third largest commerce player in the country will be merged with Flipkart, along with additional funding from SoftBank.

 

21%

What is it? The share of the Europe, Middle East, India and Africa (EMEIA) region in the global IPOs (initial public offerings) in first three months of 2017.

Why is it important? India with 26 IPOs accounted for nearly 34% of the region’s activity that ranked it second to Asia-Pacific in IPO numbers. EMEIA ranked third with 15% share in global proceeds, behind Asia-Pacific and the Americas.

Tell me more: The EMEIA region had 77 IPOs, raising $5.2 billion in all in Jan-Mar, 2017.

 

>2.5 million

What is it? The number of point-of-sale (PoS) machines at merchant establishments/shops.

Why is it important? PoS machine availability in India trails that of BRIC nations such as Brazil and China where per capita PoS availability for swiping plastic money is higher. Demonetisation had brought the scarcity into focus as people had to do less cash transactions. The numbers inched from 1.5 million swipe machines in October, 2016, to 1.7 million in December, 2.2 million in February, 2017, to over 2.5 million now. SBI has led with installation of 124,000 machines.

Tell me more: The count, shared by a National Payments Corporation of India official, is a little less than Niti Aayog’s estimate of 2.8 million PoS machines in February.

 

17 days

What is it? The time the UK-to-China freight train would take to reach its destination in Zhejiang, travelling along the ancient ‘Silk Road’ route.

Why is it important? The time taken by the train between the two countries, spanning a route along seven other countries, is still half the duration at sea. It is also cheaper than sending goods by air. While the train had brought household items, clothes, and consumer fashion goods from China, it is transporting soft drinks, baby products and pharmaceuticals on the maiden return journey.

Tell me more: Chinese premier, Xi Jinping’s 2013 “One Belt, One Road” policy to revive land-routes for trading with the West, has made London the 15th European city with a direct rail connection.

 

$50.9 billion

What is it? Tesla’s market cap at the end of trading on Monday

Why is it important? It is now the most valued car company in the US, beating General Motors, the 108 year old giant, by 64 million dollars. Tesla’s position is seen more as a reflection of investors’ faith in Elon Musk’s vision for the future of electric cars, than the present financials of the companies. GM earned $9 billion in 2016, and Teslalost $674 million. GM sold nearly 10 million vehicles, and Tesla sold 80,000 globally.

Tell me more: Toyota, with its  $172 billion market cap, is the biggest carmaker by market value at present. Volkswagen, with a sale of 10.31 million vehicles in 2016, is the largest carmaker by sales volume, closely followed by Toyota.

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GST: The population factor

The tug of war over the Goods and Services Tax (GST) between the central government and state governments has raised questions on when this system of taxation—which collapses a multitude of taxes into one—will be implemented. When it does, it will change many things, one of which will be how much a state collects by way of taxing goods and services, something that is especially of concern to states with larger industrial bases but smaller populations.

That’s because the basis of GST is different from the basis of the two main taxes it will replace. The first main tax in the present system is excise levied by the Centre: a tax on production, it benefits states with larger industrial bases. The second is VAT (value added tax): a tax on sales levied by states, it benefits states with larger population and consumption.

However, since a company cannot set off the excise paid by it against VAT, states with a higher share of manufacturing collect and retain more taxes than states with a large population and consumption. Basically, the two taxes don’t talk to each other.

GST will change that as it will be levied at the point of consumption, and not production. Thus, prima facie, it will tilt the balance in favour of states with higher population and consumption, even if they don’t have a large industrial base.

So, with GST, which states stand to gain and which stand to lose? This realignment will play out at two levels. Graph 1 below maps three variables at the state level: population (red line), area (blue circle) and tax revenue (green line). The first two are also determinants to calculate a state’s share in GST.

Thus, at the first level, a downward sloping line is indicative of high population states (Uttar Pradesh, Bihar and West Bengal), and they are likely to benefit from GST. An upward sloping line is indicative of states with large industrial bases (Tamil Nadu, Maharashtra and Gujarat), and they could be impacted by the point of sale becoming the point of taxation.

But it’s also true that several states in India with the largest industrial bases (notably, Maharashtra and Tamil Nadu) also have a large population and are leaders in per capita income. So, what these states lose in the first-level shift from manufacturing basis to consumption basis might be offset by their own consumption quotient.

The scatter diagram in Graph 2 below plots similar variables as Graph 1 (with the added nuance of tax per capita). So, for example, while a state like Tamil Nadu might lose revenues because of consumption-based taxation, its high tax per capita, an indicator of higher consumption, would offset this.

The net impact of both factors will determine how much a state loses or gains when GST is implemented.

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