The First Forum is an initiative which focuses on covering the latest happenings going around in the world in a brief format. This is in lieu with the importance of catching up with these events in this fast changing world.
In this Thirty First Edition of The First Forum we would be covering the following:
1. Business
2. Economics
3. Finance

(By Ankita Punjani, Mehak Gupta and Divyansh Gupta)

Business

IndiGo’s pay cuts for senior employees to remain effective through FY21
The country’s largest domestic airlines had on Friday announced pay cut ranging between 5 and 25 per cent, in addition to its leave-without-pay programme for May, June and July, for senior employees. The aviation sector has been hit hard due to the suspension of all commercial passenger flights during the coronavirus-induced lockdown in the country which began on March 25. Read MoreBookings for flights have been cancelled till further orders. The announcement came after a series of flip-flops on the matter as India’s largest domestic airline struggled to stay afloat amid grounding of all commercial passenger flights due to the coronavirus-triggered lockdown. The airline had first announced its decision to cut salaries on March 19 when the economic fallout of the Covid-19 pandemic was apparent, but rescinded the move on April 23 in deference to the “government’s wishes”.

Vista Equity Partners to invest Rs 11,367 crore in Jio Platforms
Reliance Industries (RIL) has targeted the unlocking of value of over Rs 87,148 crore, which translates into over 19 per cent of its stake in Jio Platforms (JPL), as part of its plan to become a debt-free group. To achieve this goal, the company announced its third deal in which Vista Equity Partners will invest Rs 11,367 crore in JPL in return for a 2.3 per cent stake in it. Read MoreAfter the two earlier deals with Facebook and Silver Lake and now the deal with Vista, RIL has already raised Rs 60,596 crore for a total 13.37 per cent stake in JPL. The JPL value unlocking, together with the proposed right issue and the JV deal with British Petroleum on fuel retailing, will be enough for the group to come pretty close to its aim to become net debt free (currently it has a debt of Rs 161,000 crore).

Chinese drugmaker in talks to test virus vaccine globally
China’s most promising most drugmaker firm is proposing to conduct late-stage trials of the vaccine globally. Beijing-based Sinovac Biotech Ltd. is in discussions with regulatory bodies in other countries, and the WHO, to launch phase 3 trials of the vaccine in regions where the virus is still spreading rapidly. Read MoreCEO Yin asked that the vaccine is ready. Once any country approves the clinical trial, we will launch it immediately. With China having largely curbed the spread of infection, its drugmakers will need to seek international cooperation to test their vaccine candidates in other countries that may be complicated by tensions between China and some nations, especially the US.

MoD inks ₹1,200-cr deal with Tata Power SED to upgrade 37 airbases
Tata Power SED has won a contract worth Rs 1,200 crore for the modernization of air field infrastructure (MAFI) from the defence ministry. It involves the modernization of 37 airfields for Indian Air Force (IAF), Indian Navy (IN) and Indian Coast Guard (ICG) in the second phase of the MAFI. In the first phase, 30 airfields of IAF were upgraded. Read MoreThis contract would aid in infusing much-needed capital into the market and boost employment generation in fields such as communications, avionics, information technology apart from civil and electrical equipment and construction. It will give a boost to Micro, Small and Medium Enterprises which will be directly benefited from being involved in execution of various activities of this project.

Economics

US unemployment rate jumps to 14.7% as economy loses 20.5 million jobs
The U.S. unemployment rate jumped to 14.7% in April, the highest level since the Great Depression, as many businesses shut down or severely curtailed operations to try to limit the spread of the deadly coronavirus in the world’s largest economy. An unprecedented 20.5 million American abruptly lost their jobs, wiping out a decade of employment gains in a single month as the pandemic curtailed. Read MoreThe speed and magnitude of the loss defies comparison. It is roughly double what the nation experienced during the entire financial crisis from 2007 to 2009, the labour Department informed.

India’s Fuel Consumption Falls 46% To Lowest Since 2007
India’s fuel demand dipped 45.8% in April from a year earlier, as a nationwide lockdown and travel curbs to combat the spread of COVID-19 eroded economic activity. Consumption of fuel, a proxy for oil demand, totalled 9.93 million tonnes – its lowest since 2007, government data. Read MoreThe International Energy Agency (IEA) in its latest report said the country’s annual fuel consumption will decline 5.6% in 2020 compared with growth of 2.4% forecast in its March report. Sales of petrol dropped by 60.6 % from a year earlier to 0.97 million tonnes.

Government Hikes Taxes on Petrol, Diesel; Says Consumers Will Be Unaffected
The government increased taxes and duties on petrol and diesel instead of passing on the benefit of lower crude oil prices to consumers, as it moves to raise revenues in an economy that ground to a halt in the coronavirus crisis. Taxes and duties on petrol and diesel were increased by Rs 10/litre and Rs 13/litre respectively, but the government said that local pump prices would not be affected. Read MoreHowever, the retail prices of petrol and diesel had already gone up in a few states after a hike in VAT such as Haryana, Delhi and Tamil Nadu.

 Tamil Nadu forms high level committee to assess Covid-19 impact on economy
The Tamil Nadu government has set up a high-level committee headed by former RBI Governor and former Chairman of the Prime Minister’s Economic Advisory Council, C Rangarajan. The committee, which is comprised of economists and industry experts, will assess the overall immediate and medium-term impact of the Covid-19 pandemic on different sectors of the State’s economy and identify possible sources of financing and funding. Read MoreThe committee will submit its final report to the state government within three months, apart from submitting an interim report. Its members include A Vellayan, former Murugappa Group chairman, N Srinivasan, vice chairman and MD of India Cements, Venu Srinivasan, TVS Motors chairman, Padmaja Chunduru, managing director of Indian Bank, P N Vasudevan, managing director and CEO of Equitas Bank, apart from bureaucrats and academicians. The committee will assess opportunities and threats in the short- and medium-term, along with measures required to help key sectors overcome the impact of the pandemic. It will also identify specific reform measures to be taken by the State to support and promote the growth of these sectors, and identify possible sources of financing and funding for infrastructure projects, small businesses and other enterprises.

Government disbursed Rs 18,253 cr to 90 mn farmers under PM-KISAN
Finance Minister Nirmala Sitharaman on Saturday said Rs 18,253 crore has been disbursed to 91.3 million farmers under the PM-KISAN scheme during the ongoing nationwide lockdown. Under the PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) scheme, each farmer gets Rs 6,000 in a year, in three equal installments, and directly into the bank account. Read MoreFront-loading the release of the first installment under the PM-KISAN scheme was part of the Rs 1.70 trillion Pradhan Mantri Garib Kalyan Package (PMGKP) announced on March 26 to protect the poor from the impact of the coronavirus lockdown. With regard to further assistance to farmers, the finance minister said that 3 crore farm loan borrowers have opted for a three-month moratorium.

Finance

YES Bank auditor red-flags multiple breaches of RBI’s norms in FY20
The auditor of YES Bank has pointed out multiple breaches of the Reserve Bank of India’s (RBI’s) norms and loan covenants by the private bank in the financial year ended March 2020, warning that these may impact the bank’s ability to continue as a going concern. The auditor, BSR & Co, also said that as the fate of the bank’s additional tier-1 (AT-1) bonds remained uncertain — as the matter is pending in court — any adverse judgment would affect it adversely. Read MoreThe bank has breached the regulatory requirements of the RBI regarding maintaining the minimum common equity tier-1 (CET-1) and tier-1 capital ratios, which indicates the position of capital adequacy of a bank. The auditor said the bank had made an additional provision of Rs 15,422 crore for the period ended December 31, 2019 on a prudent evaluation of the status of NPAs based on discussion with regulator over and above the RBI norms relating to the minimum provision to be made by banks on their loans and advances.

Public sector banks sanctioned Rs 5.66 trillion in loans during March-April
Finance Minister Nirmala Sitharaman said on Thursday that public sector banks have sanctioned loans worth Rs 5.66 trillion during March-April and the disbursement will start soon after the lockdown is lifted, leading to economic recovery. Read MoreDuring March-April 2020, PSBs sanctioned loans worth Rs 5.66 trillion for more than 4.18 mn accounts. These borrowers are from MSME, retail, agriculture & corporate sectors, waiting for disbursal soon after lockdown lifts. She further said that state-owned banks implemented the moratorium announced by the RBI on repayment of loans.

Government Hikes Market Borrowing Limit to Rs 12 Lakh Crore for FY 20-21
The government has raised its gross market borrowing target for the current financial year to Rs 12 lakh crore, attributing the increase of more than 50% to the coronavirus outbreak that’s stalled the economy. The government resorts to market borrowing to make up for the mismatch between its revenue and expenditure. Read MoreFM Nirmala Sitharaman in her Budget for 2020-21 had pegged gross borrowing in the new financial year at Rs 7.8 lakh crore, higher than Rs 7.1 lakh crore estimated for 2019-20. With the increase in the borrowing estimate, the government would have to revise upwards its fiscal deficit target from 3.5 per cent pegged for the current fiscal.

AIIB approves $500 million loan for India’s response to COVID-19
Beijing-backed Asian Infrastructure Investment Bank (AIIB) has approved a $500 million loan to India to help the country navigate the coronavirus pandemic. The loan is part of a $10 billion funding Crisis Recovery Facility the AIIB has announced to help public and private sector entities deal with the pandemic. Read MoreAIIB’s assistance will help the Government in strengthening pandemic research and multi-sector, national institutions and Platforms for One Health, community engagement and risk communication and implementation management, capacity building, monitoring and evaluation of the COVID-19 response program.

Get The Connectere directly in your E-mail inbox !

Enter your email address to subscribe to The Connectere and receive notifications of our new content on your E-Mail