Indian Economy: News and Discussion

JBH22

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Haldilal

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Ya’ll Nibbiars

The Navi Mumbai with its strong fundamentals is the new IT hub of the country that is leading to generation of employment for lakhs of people and hence making the city the first choice for residence says Since the beginning of the IT boom in the country, in 2000, the city has increasingly been taken over by top IT companies that are setting up base especially in the Thane Belapur industrial belt, that was once known for its chemical industries. The Thane Belapur belt was full of chemical and other industrial units with big names like Nocil, Rallis India etc operating from here. That has gradually changed over the years. These units have now been replaced by multi-storey corporate buildings that are centres of a host of IT and IT related work.

The it all started in Airoli with Patni Computers setting up base in the belt and sending out a message that this can be a very good destination. As several industrial units shut down due to various factors, the owners of such units were left with white elephants. The IT companies then came into the picture and got the developers to dismantle the existing units and replace them with posh complexes and offices according to their needs. The Availability of land is not an issue in this belt. Even rentals are very feasible and affordable at a fraction of cost when compared to other prime IT areas in nearby cities and even India. The Now multinational reputed software service providers, consultants, data centres individually and in business parks have their development and technology centres here in the 15 km Thane Belapur stretch spread over 27 sq km. These include top names like Reliance, L&T, Accenture, Tech Mahindra, Wipro, Capgemini, Cognizant etc. IT companies not just from Maharashtra but from all over India and in fact from worldwide are flocking here.

The MIDC has offered several incentives including land at concessional rate, additional FSI and also infrastructure facilities. It has given various hassle free permissions like laying of fibre optic cables to the service providers which has helped in high speed uninterrupted internet facility being present here, that these companies require. The There is full power back up available to the IT parks and feeder lines for high tension power has been made available. There are also tax, power and other incentives being given to the IT companies that start operations here. Setting up base here in TB belt is definitely much cheaper than in IT hubs across the country. The As of today, these IT companies have provided 2 lakh jobs in the region and this is just the beginning. IT parks are being set up in several nodes of the city including in Ghansoli, Jui Nagar, Turbhe, Nerul etc. There are IT zones in Vashi apart from the Vashi and Belapur railway stations that have been designated as IT parks. There is so much more to come. There are also new projects coming up in Navi Mumbai which will attract these IT companies. There is the Corporate Park in Kharghar and of course the Reliance SEZ.

The potential for employment in IT and IT related services in the region is mind blowing. People getting jobs here will naturally want to live close too. With Navi Mumbai high on infrastructural development and connectivity, the IT professionals are increasingly shifting here by taking up residences as apart from their workplace, the connectivity is excellent and their requirements of educational institutions and quality life are met here. This will provide a huge boost to the reality sector. The Navi Mumbai is the next IT hub of the country. It has the right fundamental to be so. The mega projects like airport, sealink, metro etc. The will facilitate it further. There is no stopping Navi Mumbai from becoming amongst the premier IT hub of the world.
 

Haldilal

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Haldilal

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@Haldilal

Hospitality firm OYO is raising a strategic round of investment from global technology giant Microsoft at a valuation of $9 billion, according to sources privy to the development
Ya'll Nibbiars However, questionable tactics cast doubt on the health of the oyo. This debt funding is the the last resort by a startup to stay afloat. And despite having 19 million downloads and being the third most downloaded app after Airbnb and Booking.com, OYO is not a high frequency technology app. However marred by negative consumer feedback and incessant protests by hotel partners.
 

Haldilal

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Ya'll Nibbiars the Akasa Air will get the CAAG license along with the 80 order of the 737Max placed by the Jet Airways. They have already got the ex Senior managment from the jet Airways and are going to lease some airliner from a leasing company to start the initials operations.
 

Haldilal

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Haldilal

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Ya'll Nibbiars The recently-exposed fraud at the Karuvannur Cooperative Service Bank near Irinjalakuda is an eye-opener to larger threats facing the cooperative sector, a prominent pillar of the state’s economy and lifeline of major political parties. Until recently, LDF controlled 60% of cooperative institutions in the state while UDF held sway over the rest. Of late, BJP has also been trying to make inroads into the sector. Though preliminary estimates indicate that the rip-off at Karuvannur bank involved Rs 104 crore, the scale of misappropriation could be much higher. According to reports, apart from the siphoning of the bank funds through illegal lending, the bank was used as a cover for benami operations running into over Rs 500 crore in tourism and real estate sectors.

There is a general awareness about the cooperative sector’s significance in Kerala but its specific dimensions are not well known. The state’s cooperative sector holds deposits worth a whopping Rs 2.5 lakh crore, accounting for over 50% of the deposits in the sector in the country as a whole. Even Karuvannur bank holds deposits to the tune of Rs 400 crore, and their assets could well be around Rs 500 crore. In fact, there are a large number of cooperative banks in Kerala holding deposits of over Rs 500 crore. With about 1,600 cooperative societies, the state accounts for about 17% of the institutions in the sector in the country, according to Philip Sabu, former director of MBA agri-business management, College of Cooperation, Banking & Management of Kerala Agricultural University KAU Unfortunately, the fraud at Karuvannur bank was exposed at a time when the cooperative sector has been facing multiple threats. The financial sector, as a whole, has been going through a period of stress globally in the wake of the pandemic. The challenges of credit disbursal and repayment could be acute in the cooperative sector, as they operate at microlevel.

The Central intervention is another major threat looming over the sector though cooperative societies are in State List. Attempts were made to transfer cooperative societies from the State List to Concurrent List through the 97th Constitutional amendment. The Supreme Court recently struck down parts of those amendments saying that the majority of the states have not ratified them. However, the Act could still be re-promulgated. The RBI has issued circulars stating that Primary Agricultural Cooperative Societies PACS cannot engage in any form of banking activities or use the word ‘bank’ with their names unless they are registered as banking institutions with the RBI. They cannot even issue cheques as per those circulars. Competition from micro-finance institutions is another challenge the cooperative institutions face. Many commercial banks have launched verticals in the micro-lending sector. They have found lending to the poor is very profitable, compared to corporate lending, which entails tough bargaining. However, the lending rates of the micro-finance institutions are still high and the cooperative sector has a competitive advantage.

The cooperative institutions can weather these storms only if they put their houses in order and evolve innovative strategies to adapt to the changing financial ecosystem. Much of the systems and approaches in the sector appear to remain the same as they were 30 years back. Their recruitment, managerial competence, capacitybuilding, outlook, risk-mitigation mechanisms, all these need be changed. The concurrent auditing is a prerequisite for eliminating corruption and malpractices in cooperative institutions.

The cooperative sector is yet to have a common banking software system. Kerala has an economy, where there is a lot of money in circulation. Availability of funds can create conditions amenable for manipulations unless effectively supervised. The crisis in Karuvannur bank should also be an opportunity to persuade the cooperative institutions to return to their founding ideals, which include supporting the local development. They have to contribute in input provision, marketing, and value-addition of agriculture produces.

Membership restrictions and perpetuation of the same leadership create conditions conducive for penetration and entrenchment of vested interests. The crisis in Karuvannur is not a standalone fraud. Cooperatives are handling enormous funds. Employees often lack expertise and managing committees's lending decisions are not based on prudent norms. The USPs of the cooperative institutions are their local flavour, accessibility, flexibility, and attractive interest rates. But efforts are on to wipe out their heterogeneity and impose a homogeneity. Digitization and professionalization are important prerequisites for equipping them with changing conditions. But the most critical requirement is to retain customers's trust by ensuring integrity and honesty in operations.
 

Haldilal

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Ya'll Nibbiars Birla Gifting VI to the GOI.

 

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India's merchandise exports shot up to $35.17 billion in July representing an increase of 47.91% over the same period of 2020-21 ($23.78 billion) and up by 34.06% over same period of 2019-20 ($26.23 billion).

Merchandise exports had grown by 48.3% to $32.5 billion in June and were nearly 30% higher than June 2019.

Non-oil exports rose sharply by 34.39% over same period of 2020-21 and up by 30.01% over same period of 2019-20.

Non-petroleum exports stood at $29.57 billion in July representing a 34.39% growth over same period of 2020-21 and 30.01% growth over same period of 2019-20.

Exports of engineering good in July 2021 grew by over 42.14% over the same period last year while export of gems and jewellery increased by over 130%

The import in July stood at $46.40 billion, an increase of 59.38% over the same period of 2020-21 ($29.11 billion) and up by 14.75% over same period of 2019-20 ($40.43 billion). Imports excluding Petroleum has increased in this period by 48.46% over same period of 2020-21 and up by 9.19% over same period of 2019-20.
 

Haldilal

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Ya'll Nibbiars

VI, in many ways, represents what is wrong with infrastructure policy and public discourse in India. For starters, the three key decision-making stakeholders in this drama the government that makes policy and regulates the sector, the markets that invest and operate these projects, and the judiciary that adjudicates its disputes and litigation have had little understanding of the nature of the infrastructure beast. Irrational exuberance, unrealistic expectations, maximisation of fiscal interests overriding public policy, deep suspicion, and poor institutional understanding or respect for each other’s roles and boundaries besides the ubiquitous rent-seeking that plagues India’s political economy have wreaked havoc in investments and confidence across its sectors. Two, in particular, telecom and power, stand out. The and But before diving into its troubles, a quick review of what makes infrastructure so different. Infrastructure, by definition, is a foundation asset that helps create productive capital assets and facilitates economic activity and growth Power for factories and lighting for education, roads for transport of goods and commuting, telecom for business and personal communication/ data/ information etc. It is characterised by spatial networks interlinked highways, telecom towers, power lines etc. and, often, as a result, involves large and lumpy capital investments with monopoly and pre-emptive aspects to its projects. They are also public goods, with significant public interaction and interest, and are therefore highly regulated across economies. The And Most infrastructure policy, however, is a legacy from an earlier stable Keynesian era when technology was not a key disruptor of the sector. This stability and technological non-disruption of these foundation sectors enabled planned, large-scale private investment projects with adequate regulation and assurance of capital recovery and reasonable returns, over long frameworks of time the estimated economic life of the infrastructure project.

This stability has however been turned on its head, with successive waves of technological disruption buffeting key infrastructure sectors in the span of less than a decade. In energy, there has been large-scale disruption by first, wind, and now solar and its multiple variants. In telecom, first the battle between GSM and CDMA, and subsequently between various next-generation G technologies. Each of these has involved huge outlays for each commercial-scale wave of sector technology, and enormous destruction of capital which has sent shockwaves into the financial sector and economy, even as the market battles have raged. The India’s liberalisation in the 1990s, after years of stifling socialist policy, saw an almost fervent belief in the theory of markets as the panacea to all economic ailments. Competition, lower prices, raising and more efficient allocation of capital have held true for the most—or some—part of their promise. Except to a lesser extent in infrastructure.

The In telecom, the exuberance of liberalisation combined with cynical expectations of the workings of the political economy saw unrealistic projections and bids by market players for the multiple rounds of the spectrum a public good being auctioned. A key determinant parameter of which was based on the percentage of revenue sharing with the government. The story of what followed in the telecom sector is too well known to repeat. What however stood out was the government’s insistence on immediate receipt of both its revenue share and dogged and litigated interpretation of contract, even as the technology rapidly changed and the battle was largely lost by the earlier players, of which VI was an amalgam, and the sector hurtled towards crisis. This even as a new entrant with superior 4G technology undertook a large scale roll out and undercut pricing in a market share bloodbath. By the time the government realised its larger, public policy role of the orderly long term development of the sector and the need to prevent concentration of duopoly market power and also that a higher revenue share of a dead horse would still be dead it was too late. Its belated attempt to defer recovery of its earlier litigated revenue sharing based on a dying technology, to give breathing space to VI as the third player, was dashed by the judiciary. Which brings us to the present. An ailing VI, among the last of the early risk-takers in the telecom revolution, now stands at a crossroads. Its funding requirements are huge, by some accounts requiring fresh investments of Rs.70,000 crore. Its subscriber base is based mostly on old technology, and is deserting in droves. Half measures and band-aids won’t help. A decision has to be taken by the government as the custodian of public policy, based on what it perceives as public interest. A dead market horse serves neither the fiscal interests of a government seeking fulfilment of contractual obligations of what may soon be a non-existent higher revenue share, nor the public interest obligations of a widely perceived to be overstepping into executive policy domain – deeply-suspicious-of-rescue-attempts judiciary.

It is important here to distinguish the company and the purpose of its existence and economic activity, from its shareholders. The shareholders took the risk, they lost, and therefore their financial interests as owners can be extinguished. Again, if there are any doubts or suspicions against previous management, a forensic audit can be undertaken. But the company is a distinct entity serving multiple stakeholders, including a critical one of public policy in a critical sector. One possible option may be for the company to be taken over by a new set of investors at a price at which a reasonable return can be expected on their fresh investment to help upgrade technology and sustain in the marketplace, and with a level of debt that can be serviced. The balance can be converted into subordinated obligations that would be paid over time as and when the hopefully improved cash flows of the firm as a now renewed going entity, permit. The sacrifice would be required both on past AGR dues, as perhaps also by its lenders. A less than ideal outcome. But perhaps significantly better than allowing the problem to endlessly fester even as the market’s horse and everybody’s stakeholder value bleeds to death. The and Public policy in infrastructure in an emerging economy like India cannot continue to be outsourced to a blind belief in the overarching sole wisdom of markets or their ability to single handedly absorb large and disrupted costs, as wreckage across sectors shows. It is critical that all key stakeholders in infrastructure understand its unique characteristics and their respective responsibilities and self circumscribed powers to enable its development in public interest. A holistic approach with deeper understanding and clearly demarcated roles would go a long way in ensuring continued private investment in this key determinant sector of future economic growth in these turbulently disruptive times.
 

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Haldilal

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What the F is going on? GOI is ready to sell BSNL then why will it buy VI :rofl:
Ya'll Nibbiars as they are the largest debater to the VI in the form of the Spectrum fees. Birla is telling written off the Spectrum fees or i will gift the share at no extra cost at a symbolic price of 2 rupees.
 

Haldilal

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Ya'll Nibbiars largest Telecom Operator by the active user base.

1 . Airtel 35 crores.

2 . Jio 33 crores.

3 . VI 25 crores.

4 . BSNL 7 crores .
 

warriorextreme

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Ya'll Nibbiars Birla Gifting VI to the GOI.

In 2020, the apex court gave 10 years' time to telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.

However, in their plea, the telecoms majors raised the issue of alleged errors in the calculation in the figure of AGR-related dues demanded by the Department of Telecommunication (DoT).

Burdened with the claim from the DoT, the telcos appealed to the Supreme Court to provide the option of staggered payments over either 20 years or 10 years. Vodafone-Idea argued that the only way to repay such a huge sum would be to ‘earn and pay’.

____________________

I don't think this is a bad idea as long as there is good interest rate associated with this staggered payment.
 

Haldilal

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In 2020, the apex court gave 10 years' time to telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.

However, in their plea, the telecoms majors raised the issue of alleged errors in the calculation in the figure of AGR-related dues demanded by the Department of Telecommunication (DoT).

Burdened with the claim from the DoT, the telcos appealed to the Supreme Court to provide the option of staggered payments over either 20 years or 10 years. Vodafone-Idea argued that the only way to repay such a huge sum would be to ‘earn and pay’.

____________________

I don't think this is a bad idea as long as there is good interest rate associated with this staggered payment.
Ya'll Nibbiars with Interest not possible. Better Birla will offload share to the creditors than operating the VI. The GOI policies has made this situation. Even the Jio is it not that much profitable if the competition is out get ready to pay the to five times the rate you are paying now.
 

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