GM drives away

1,211

What is it? The number of items of goods and services for which taxation rates have been fixed by the Goods and Services Tax (GST) Council – a forum for finance ministers from the states and the centre.

Why is it important? The agreement on taxation rates is a step forward to implementing the GST, which brings most taxes under a single tax, from July 1. The central government claims the rates would not fuel inflation, as overall incidence of taxation would be lower compared to current rates. Food items like cereals will not attract GST.

Tell me more: There are five rates of taxation (zero, 5%, 12%, 18% and 28%) and more than three-fifths of the goods and services will be taxed at 18% and 28%.

 

 

$1.4 billion

What is it? The amount of money raised by One97 Communications Ltd, the parent company of Paytm, from Japan-based SoftBank Group Corp.

Why is it important? The funding is the largest funding round by a single investor in India. The investment will help Paytm to build its payments bank, which will be launched later this month. Paytm plans to invest Rs 10,000 crore over the next three to five years, and acquire 500 million customers.

Tell me more: The latest investment values One97 at $7 billion, an increase of $1 billion in less than two months. In March this year, three existing investors sold 4.3% equity stake at a valuation of $6 billion.

 

 

17 million

What is it? The number of user records of Zomato, a food technology start-up, stolen by hackers and put up on sale online.

Why is it important? The breach reflects weak protection of consumer data by Zomato, which claims to have 120 million monthly user visits. Email addresses and hashed passwords (not the actual ones entered by users) were stolen by hackers. Zomato has reset passwords for all affected accounts.

Tell me more: Zomato has agreed to start a bug bounty programme, where people receive recognition and money for reporting bugs and security gaps, at Hackerone — a digital platform for bounty programmes.

 

 

20 years

What is it? General Motors will stop selling of cars in India by this year-end, after entering India almost 20 years back.

Why is it important? GM has 5,000 employees in India. In addition, there are 150 dealerships and 200 service centres. Each showroom and service service centre employs around 50 people. The resale value of Chevrolet cars is likely to decline sharply after this announcement.

Tell me more: The American company says it will continue the technical centre in Bengaluru and the Talegaon plant in Maharashtra, which will be used to export cars from India.

 

 

Rs 15.06 crore

What is it? The amount spent by the Akhilesh Yadav government in Uttar Pradesh in organising functions to distribute Rs 20.58 crore worth of unemployment assistance, between 2012 and 2013.

Why is it important? The amount has to be deposited directly into the beneficiaries accounts as per the rules of the scheme. The disproportionate expenses in organising the functions were revealed in an audit report by the Comptroller and Auditor General of India.

Tell me more: Unemployed people in the age group of 30-40 years with family income less than Rs 36,000 were eligible to receive Rs 1,000 per month under this scheme.

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When start-up investors became wary

This piece originally appeared on Livemint.com

 

In April 2015, the Indian unicorn club—start-ups with a valuation over a billion dollars—got two new members: Paytm and Zomato. They joined the earlier elite of Flipkart, Snapdeal, Ola, Mu Sigma and InMobi, among others.

2016 turned out to be different, as international competitors, especially Amazon and Uber, got more aggressive in India. Amazon recently launched Prime Video and Uber CEO Travis Kalanick joked that he would apply for Indian citizenship, even as Indian entrepreneurs complained about capital dumping from their competitors abroad. Zomato, a restaurant search service with global ambitions, and Flipkart, one of India’s earliest to breach the $1 billion club, saw investors such as Morgan Stanley and HSBC Securities lower their valuations (see charts 1 and 2).

The concern about a low ratio of online shoppers/spenders to Internet users loomed large, and demand for online services were not picking up pace the way fund houses had hoped. Of course, Indian companies were not the only ones drawing flak. Global companies also saw markdowns. Investors’ wariness reflected in their average investments in 2016 (see chart 3).

 

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News in Numbers, May 26, 2016: Capital goods policy, SEBI’s push to delist 4,200 firms…

Rs 7.5 lakh crore

What is it? The expected value of capital goods made in India in 2025 from Rs 2.3 lakh crore in 2014-15.

Why is it important? The government, which on Wednesday approved a policy on capital goods, hopes to generate more jobs in this sector: 30 million by 2025 from 8.4 million now. It’s in line with the government’s  ‘Make in India’ programme, which aims to increase the share of manufacturing sector as a percentage of GDP from around the current 17% to 25% by 2020.

Tell me more: The policy seeks to increase exports from 27% to 40% of production and to up the share of domestic production in India’s capital goods demand from 60% to 80% by 2025, which would make India a net exporter of capital goods. Capital goods production, which is 8.8% of the Index of Industrial Production and is a proxy for industrial and investment demand, contracted for the fifth straight month (as of March) year-on-year.

 

4,200

What is it? The number of companies the markets regulator is pushing for delisting from the stock exchanges.

Why is it important? This is to prevent price manipulation through firms that are not actively traded, which would improve governance of public markets and the listed companies. It would also help in reducing regulatory burden. However, firms could misuse this to become non-compliant in order to delist themselves instead of following the proper delisting norms.

Tell me more: Of the 4,200, there are 1,200 companies that have been suspended from trading for seven years (typically, for non-compliance of rules) and 3,000 that are only listed on regional exchanges, some of which cease to exist. The Securities and Exchange Board of India has also warned strict action against auditors if they are found to play a role in market manipulation.

 

54%

What is it? The percentage of ICICI Bank’s bad loans on the account of the Reserve Bank of India’s (RBI) asset quality review in the last six months of 2015-16.

Why is it important? Shows the extent to which banks have been under-reporting their bad loans. ICICI Bank is not the only one. For Punjab National Bank, Bank of Baroda, Axis Bank and Yes Bank, the equivalent numbers are: 45%, 41%, 30% and 24%. Of the large banks that have declared their results so far, about 44% of their bad loans is due to the central bank’s asset quality review.

Tell me more: The gross bad loans of 39 listed banks was Rs 4.3 lakh crore at the end of December 2015. In April, it was reported that over Rs 3 lakh crore were classified under a category where repayments were overdue by 30-60 days while another Rs 3.17 lakh crore had repayments overdue by 60-90 days, and a portion of this may turn into bad loans during the year.

 

Rs 184.96 crore

What is it? Online restaurant discovery/food ordering service firm Zomato Media’s revenue in 2015-16 from Rs 96.73 crore the previous year.

Why is it important? Despite almost doubling its revenue from last year, it recorded loss before tax of Rs 492.27 crore in the year ended March 2016. Food startups have been facing problems including slowdown in funding, with many of the firms either closing down, getting acquired or reducing their operations.

Tell me more: Last month, HSBC Securities and Capital Markets reduced Zomato’s valuation by $500 million, about half the valuation at which it had raised its last round of funding in September 2015.

 

$50

What is it? Price of Brent crude oil per barrel, an increase of 79% from a 12-year-low of $27.88 a barrel in January.

Why is it important? This is the first time oil has breached the $50-mark. This means higher fuel prices for motorists and reduction in savings for the Indian government due to a likely increase in oil subsidies. In Delhi, fuel prices have increased by over 7% this year. India’s crude oil import bill has almost halved to $64 billion in 2015-16.

Tell me more: The basket of crude oil India imports averaged $105.5 per barrel in 2013-14, $84.2 a barrel in 2014-15 and $46.2 per barrel in 2015-16.

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News in Numbers, May 9, 2016: Unequal access to education, Haryana’s land allotment case…

23%

What is it? The percentage of the poorest (the bottom 20%) who go to higher secondary schools in urban areas, compared with 66% for the richest fifth of the population.

Why is it important? An indicator of unequal access to education and increase in disparities between rich and power as we go higher up the ladder of education. Underlines the need for better-focussed government spending in education. India spent 3.8% of its GDP (gross domestic product) in 2012, which is lower than the spend (as a percentage of GDP) in some poorer countries such as Nepal (4.7% in 2014) and Vietnam (6.3% in 2012).

Tell me more: This percentage is expressed as net attendance ratio – the number of students attending a particular class-group divided by the total number of people in that age group.

 

~ $500 million

What is it? Restaurants listings company Zomato Media’s valuation, according to brokerage HSBC Securities and Capital Markets India – slashed by half since its last round of funding in September.

Why is it important? Though the reduction is not by its investors, it keeps alive the concerns about overvaluation of Indian unicorns (startups valued at over $1 billion). Flipkart’s major investors – Morgan Stanley and T Rowe Price – cut the value of their stakes by 27% and 15% respectively while two minor investors slashed it by around 30-40%.

Tell me more: HSBC’s reasons for the marking down include: Zomato being non-profitable in any of the 23 markets it operates in, increasing competition and the firm’s heavy reliance on advertisements as an intrinsic part of its business model.  Zomato, which has raised $224 million since its inception in 2008, has disagreed with HSBC’s estimates terming them “valuations markdown speculations of third parties” and said it is on course to becoming profitable soon. Zomato laid off 10% of its 3,000-strong workforce last year.

 

121%

What is it? Lok Sabha’s productivity in the second half of the ongoing budget session (up to May 5) while that of Rajya Sabha is 98%.

Why is it important? This is despite the NDA and Congress training their guns on each other with issues (especially in the Rajya Sabha) such as Uttarakhand political crisis, Panama Papers and the AgustaWestland deal. The Lok Sabha has passed six bills while the Upper House has passed seven.

Tell me more: The ones passed by the Lok Sabha include: the Compensatory Afforestation Fund Bill, 2015 and the Insolvency and Bankruptcy Code, 2015 while those passed by the Rajya Sabha include: The Industries (Development and Regulation) Amendment Bill, 2015 and the Constitution (Scheduled Castes) Order (Amendment) Bill 2016.

 

10%

What is it? The share of women candidates contesting in four state elections – West Bengal, Kerala, Tamil Nadu and Assam.

Why is it important? Except for Tamil Nadu, which has seen an almost doubling of share of women contestants since 2011, the share has remained almost the same in the other three states. Only 9% of the seats won in these four states in 2011 were by women. A women’s reservation bill that would set aside 33% of seats in the Parliament and state assemblies is pending.

Tell me more: The national average of women legislators in state assemblies is just 9% with states such as Bihar, Haryana and Rajasthan having 14% representation while some other states such as Nagaland and Puducherry have no women MLAs. In the Lok Sabha, just 12% of the members are women.

 

Rs 62 lakh

What is it? The alleged loss to Haryana state government in a land allotment case connected to National Herald.

Why is it important? This is the first FIR filed in the land deal and is likely to have a bearing on the case filed by BJP leader Subramanian Swamy against Sonia Gandhi, Rahul Gandhi and others for allegedly acquiring AJL (Associated Journals Limited promoters of National Herald) and its assets reportedly worth Rs 5,000 crore through a private firm. This adds further trouble to Congress, which finds itself embroiled in the AgustaWestland scam, as it readies to face elections in five states/UTs this year.

Tell me more: Haryana State Vigilance Bureau has filed a case against former Haryana chief minister Bhupinder Singh Hooda, senior Haryana Urban Development Authority officials and trustees and directors of AJL, on charges of criminal breach of trust, cheating, conspiracy and violation of the Prevention of Corruption Act. The officials reportedly re-allotted the plot measuring 3,360 square metres to AJL at 1982 rates instead of selling it through an open auction. The current market value of the plot is estimated to be about Rs 100 crore.

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