Tuesday, March 31, 2020

Rupee ends flat at 75.60 against US dollar even after heavy equity buy

The Indian rupee settled for the day on a flat note at 75.60 (provisional) against the US dollar on Tuesday, even as the domestic equities witnessed heavy buying on the last day of trading of the 2019-20 fiscal.

Forex traders said market participants remained cautious as currency markets will remain shut for the next couple of sessions.

Forex markets will remain shut on April 1 for the annual closing of banks and on April 2 on account of Ram Navami.

The rupee, which opened on a positive note at 75.52, settled for the day down 1 paise at 75.60 against the American currency.

During the day, the domestic unit touched a high of 75.31 and a low of 75.66.

On Monday, rupee had settled at 75.59 against the US dollar.

The rupee has witnessed a sharp decline of over 9 per cent in fiscal year 2019-20. The local unit has depreciated by 646 paise or 9.34 per cent in FY20. On March 29, 2019, the rupee was quoted at 69.14 to the dollar.

Besides, the domestic unit suffered significant loss in the January-March quarter.

"The rupee marked the biggest quarterly loss amid foreign fund outflows, weaker domestic economic data and Coronavirus outbreak. Foreigners have withdrawn more than USD 14.5 billion this quarter," HDFC Securities Head PCG & Capital Markets Strategy V K Sharma said.

"Going ahead, the trend in Asian currencies and foreign fund flows will decide the action in rupee. Spot USD/INR is having near-term support at 74.70 and resistance at 76.30," Sharma added.

Covid-19 lockdown: Vegetable, grain mandis coming back on track gradually


Agricultural mandis in many parts of the country have started going operational a week after the nationwide lockdown was implemented, but the process is gradual and disruption persists in some centres. Most mandis are arranging for the safety of their workers, including mathadis (Load-bearers). Arrivals and supplies are also being regulated in many centres to maintain flow and avoid crowding.

In several areas, especially distant regions, there are reports of farmers either dumping vegetables that could not be delivered to the mandis or using them as animal feed. The scene in Gujarat is worrying. In MP and Rajasthan ,oilseed suppplies have been disrupted and crushing units are asking for permission to buy directly from farmers.

The Vashi vegetable mandi, which caters to Mumbai and surrounding areas, is now functioning but has adopted a system to keep crowds away, with different timing for arrivals and dispatches. The grain mandi has reduced crowds by a fifth with its novel strategy of supply keeping the arrivals of goods and supply to the city on alternative days, without disturbing the feed.

"At least 15,000 people enter the market yard everyday which is impossible to handle. We have therefore decided to limit the entry," Sushil Singatkar, Director, APMC Vashi. The vegetable APMC has started issuing permits to control arrivals as per demand.

The Agricultural Produce Market Committee (APMC) at Wardha is planning to open trading for food grains on Friday. It is open for farmers, traders, mathadis and arhatiyas (agents), but arrivals have remained dramatically lower now than in the same period in previous years.

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"To maintain social distancing, we are going to book sell orders in a lot of ten farmers at a stretch, while ten buyers will attend the sale auction to control crowd," said Shyam Bhimraoji Karlekar, Chairman, APMC Wardha, the mandi handling large quantities of foodgrains, pulses, fruits and vegetables.

The onion APMC in Maharashtra's Lasalgaon had been shut earlier due to holidays. It shut again after a coronavirus patient was identified in a nearby village, forcing farmers to sell in other mandis.

"The administration has asked us to comply with the lockdown as all villages near the mandi have been quarantined. Since the lockdown of the mandi coincides with the financial year end, followed by a few holidays, the market yard will remain closed till the next order from the government," said Narendra Wadhvane, secretary, APMC Lasalgaon, Asia's largest onion selling mandi.

Gujarat

In Gujarat, fresh vegetables and fruits have been relatively stable and the impact is more on grains, pulses and edible oil. Hover in the big vegetable mandis in Saurashtra, farmers come to sell but traders are hardly seen.

"We are seeing daily arrivals which have been minimally impacted. For instance, as against a daily 17,000 quintals of arrivals, we now get 15,000 quintals of fresh vegetables," says Dipak Patel, secretary, Ahmedabad APMC.

However, grains and pulses have been impacted since inventory is falling and new arrivals will take some time to reach markets.

"Auction of grains and pulses at APMCs is closed. The harvest is ready in the fields but workers are not available. Supply line has also been affected because transport has been moving slow due to the lockdown. There was some supply from MP and Rajasthan, but that has also stopped due to interstate lockdown. However, there is no scarcity so far. For instance, wheat is available in government's FCI warehouses but private warehouses are empty since new arrivals are yet to come," says Ramesh Saraf, president of All Gujarat Roller Flour Mill Association.

On the other hand, in Saurashtra, cities like Rajkot have seen groundnut oil prices shoot up to Rs 2,270 per 15 kg tin. According to APMC sources, oil crushing has all but closed and so has the APMC, due to which groundnut arrivals have stopped. Government's NAFED has also discontinued auctions and currently has 600,000 tonnes of groundnut stock.

Tamil Nadu

During the past few days, when the Tami Nadu permitted the resumption of agriculture, vegetable arrivals had doubled at the Koyambedu wholesale market in Chennai, the state’s largest vegetable and fruits wholesale platform. Now, some 6,000 tonnes of vegetables arrive daily, twice the quantity seen a day before.

The problem is onward supply from market to retail trade, as farmers continue to send vegetables in bulk. Chandran, president, Koyambedu Market Licensed Merchants’ Association, said that once the lockdown was announced, the outflow came down drastically.

Only 30 per cent of the arrivals are being sold now. The rest goes waste and both farmers and traders suffer loss. Almost 60 per cent of the products come from Karnataka and Andhra Pradesh, while onion and other vegetables come from Nashik, Sholapur and other centres. Labour is another issue with the workforce down from 10,000 to just 1,000, while labour costs have rised 4x.

Items like onion, potato, ginger, green piece, beans are sold below Rs 10 per kg in wholesale.

Bihar

Perhaps for the first time since 2007 when the state suspended the APMC act, farmers are facing a crisis of a different kind where there is a produce, there is demand, but there is no centralised place to manage distribution amid several bottlenecks. Farmers in many places are dumping vegetables or using them as animal feed. Wheat procurement is delayed and mills are not able to produce or supply aata (wheat flour), causing scarcity in retail ad spiking prices. The government has now intervened to normalise the scene.

Telangana

With the agriculture market yards remaining shut across the state in the light of the lockdown, the government has made alternate arrangements to buy rice, maize and other produce in the current Rabi season directly from farmers at their villages or at designated government purchase centres.

The government has extended loan guarantees worth Rs 25,000 crore for the procurement of paddy and another Rs 3,000 crore for purchase of maize from farmers in the next few months. This has helped maintain supplies of essentials.

All the dedicated vegetable and fruit markets in the city were kept opened allowing farmers to directly bring their produce from neighbouring districts without hindrance. Vegetable prices also remained under check due to good supplies. Farmers in Telangana produced more than 3 million tonnes of vegetables.

North India

The lockdown has hit supply of fruits and vegetables to consuming areas from the Asia’s biggest agro market, Azadpur Mandi, in the national capital. Although the central and state government agencies have taken steps to ease intra and interstate movement of agricultural and horticultural produce, the situation is still far from normal. Arrivals from nearby areas are happening but have been impacted from remote locations.

“Business in Azadpur Mandi is down by more than 50 per cent. The bulk of our supplies come from Maharashtra and over the past week there has been a significant drop in the number of trucks from the state following the restrictions imposed on their movement,” Rohit Chawla of Chawla Fresh Vegetables, Azadpur, told Business Standard.

However, the situation was more or less similar in the agro mandis of neighbouring states of Punjab and Haryana.

“The arrival of agricultural produce from UP has also come down while demand was already fallen,” Gyanchand of Gyanchand & Sons, Azadpur.

West Bengal

At one of the biggest commodity markets in eastern India, at Posta Bazar in Kolkata, shops are opening on rotational basis as planned by the mandi. While there is no fresh supply of food grains and pulses and other essential food items from outside the state, according to Chandan Chakraborti, president of the Posta Bazar Merchants' Association, the market has enough stocks to cater for the next 15 days. He said availability of labourers is a big proble.

Meanwhile potato and vegetable supplies are less impacted as they are being locally transported in trucks to different districts the state.

Covid-19 lockdown: MF equity flows could see a 10-15% dip in March


The Rs 27-trillion mutual fund (MF) industry could see some slowdown in March, with estimates (up to March 27 for 80 per cent industry assets) suggesting a dip of 10-15 per cent to Rs 9,100-9,700 crore in the equity segment. Industry players say flows have shown resilience in a highly-volatile month that also saw closure of MFs’ branch offices due to Coronavirus-induced lockdown.

Compared to the last 12-month average of Rs 6,984 crore, the estimated equity flows are still 30-38 per cent higher.

The monthly flows for industry are typically released with lag of 7-10 days.

“The flows have been robust, even though there is some decline. The current sell-off has also given fund managers an opportune time to deploy cash in markets with several stocks in mid- and small-cap segment trading at attractive valuations,” said a fund manager.

Further, industry participants suggest that flows have stayed strong even during the lockdown period even though offline channels were suddenly shut due to country-wide lockdown.

According to industry estimates, equity schemes garnered net flows of Rs 1,150 crore in last week, when the three-week lockdown was made effective by the government.

“The digital channels have allowed the flows to continue despite the challenges. Distributors as well as individual investors have efficiently used digital channels to make the investments,” said another fund manager.

Digital platforms have also seen increased traction. “We have seen lump sum flows increase. Existing investors have increased allocations in systematic investment plans (SIPs) on our platform. While section of new investors coming from offline to online is limited, there has been a pick-up in do-it-yourself investors, who want to track and take quick decisions online,” said Harsh Jain, co-founder, Groww, Bengaluru-based digital platform.

Experts say high-networth investors could have heavily contributed to redemption requests to book losses in the year-end period for some relief on taxation.

Equity-linked saving schemes or ELSS -- which are used by investors for tax-related savings -- saw sizeable flows of Rs 1,075 crore in March, rising 23.4 per cent over previous month. Experts say ELSS could continue to see decent flows as government has extended deadline to complete investments till June 30 from March 31, 2020.

However, arbitrage funds could see Rs 25,000 crore- Rs 30,000 crore of net outflows so far in March. Experts say this can be attributed to futures starting to trade at discount to cash market prices due to higher market volatility.

“This temporary dislocation in markets had weighed onto the returns of arbitrage schemes,” said executive of a fund house.

Meanwhile debt schemes are likely to have seen much higher redemptions with corporates looking to dip into their investments to deal with payment obligations as daily operations have been disrupted amid lockdown.

Redemption pressures had spiked in debt schemes with close to Rs 1 trillion of investments getting pulled in the week prior to the announcement of the lockdown.

The fear of redemption pressures in debt schemes was compounded due to anticipation of flows in quarter-end and year-end period.

This had prompted MF industry to write to Reserve Bank of India (RBI) to provide liquidity support. RBI last week announced Rs 3.74 trillion of liquidity enhancement measures, which entailed that banks would also need to absorb the supply pressures coming into the corporate bond market by mutual funds and non-bank financial companies.

“This move should help fund houses to deal with redemptions. Debt market are now seeing improved liquidity following RBI's intervention,” said a debt fund manager.

Best of BS Opinion: Unemployment rate, coronavirus outbreak, and more

The government has said that the Covid-19 pandemic is in the “local transmission” stage.

The total number of cases went up to over 1,100 on Monday. Business Standard opinion pieces for the day talk about various aspects of the pandemic.

Without more universal and rigorous testing, it is difficult to gauge the next step: Whether to extend the lockdown, tighten it or end it, argues our lead editorial.

The vital measure required in the current situation is to universalise benefits— access to cooked food for those who have no access to a kitchen, places to hunker down if landlords have thrown someone out, telecom facilities to make calls in case people can't recharge, and free medical testing and protective equipment like masks, notes our second editorial.

The path ahead remains uncertain, but the central case for India and other economies must be a very sharp contraction in economic activity for the coming few weeks as the lockdown bites, followed by a slow recovery as we transition out of lockdown to less strict social distancing, writes Akash Prakash

Hypothetically, if this situation were to continue for the entire month of April, what would the unemployment rate in April be? Zero, or close to that. Because no one who did not have a job will be actively looking for one, writes Mahesh Vyas.

RBI notifies special series of G-Secs under 'fully accessible route'


The Reserve Bank of India (RBI) on Monday said it will issue certain series of government securities (G-secs) under the “fully accessible route”. These special securities will attract no foreign portfolio investor (FPI) limits until maturity and are the first step towards Indian G-Secs being listed on global bond indices as the Centre looks to attract access cheap liquidity in the overseas markets.
The RBI also raised upwards the FPI limits for corporate bonds to 15 per cent, from 9 per cent, for 2020-21. However, the overall FPI limit in G-secs of 6 per cent has not been changed as yet. “The revised limits for FPI investment in G-Secs and state development loans for 2020-21 (FY21) will be advised separately,” the RBI said. “The RBI shall notify the G-secs that shall be eligible for investment under the fully accessible route for non-resident investors. These securities will continue to be eligible for investment by residents,” the central bank said in a circular.
The ministry tweeted: “This will substantially ease access of non-residents to the Indian government securities markets and facilitate inclusion in global bond indices. This would facilitate the inflow of stable foreign investment in Indian bonds.”
The RBI did not say what percentage of the Rs 8-trillion gross borrowing for FY21 will be through the special securities, but sources said it could be anything between 15 per cent and 20 per cent. This means anything between Rs 1.2 trillion and Rs 1.6 trillion could be borrowed through these bonds without FPI restrictions.

chartThe RBI notification follows a Budget announcement by Finance Minister Nirmala Sitharaman regarding the same. “Certain specified categories of G-secs would be opened fully for non-resident investors, apart from being available to domestic investors as well,” Sitharaman had in her FY21 Budget speech.
The RBI said all new issuances of G-secs of 5-year, 10-year, and 30-year tenors from FY21 will be eligible for investment as “specified securities”.
Some of the global bond indices that could embrace Indian G-secs, if all the conditions are met, include the Bloomberg Barclays Global Aggregate Index, FTSE Russel Asia Pacific Government Bond Index, and JPMorgan Government Bond Index-Emerging Markets. These indices have conditions which favour scale and size. For example, according to the criteria of some of these indices, each issuance should be $400 million at least, and the total quantum of the bonds should be at least $5 billion.
Ministry officials have had several meetings with the RBI, as well as the administrators of the global bond indices. They have also met banks which may act as potential market makers for the bonds.
Government officials as well as bond market analysts said being part of the global bond indices would help Indian G-secs attract large funds from major global investors, including pension funds.

Coronavirus impact: Nomura lowers 2020 GDP growth forecast to -0.5%

With nearly 75 per cent of the Indian economy in lockdown, Nomura has lowered 2020 GDP growth forecast to -0.5 per cent YoY from 4.5 per cent. “We expect growth to slide from 4.7 per cent YoY in Q4CY19 to 3.1 per cent in Q1CY20 and fall to -6.1 per cent in Q2CY20,” said Sonal Varma, MD and chief India economist at Nomura.
Ind-Ra cuts FY21 growth forecast to 3.6%
India Ratings (Ind-Ra) on Monday cut its FY21 growth forecast to 3.6 per cent amid Covid-related worries. It has assumed that a full or partial lockdown will continue till end of April and economic activities will be restored only after May. It expects India to clock a 2.3 per cent growth for Q1FY21, down from 4.7 per cent forecast in Q4FY20.
Fitch cuts GDP growth forecast to 4.6%
Fitch Solutions on Monday slashed its estimate for India's GDP growth in 2020-21 to 4.6 per cent due to weaker private consumption and contraction in investment amid coronavirus outbreak.
The growth estimate for FY compares with a 4.9 per cent forecast in the current 2019-20 that ends on Tuesday.

Coronavirus: G20 ministers meet by video to tackle supply chain disruptions

Trade ministers from the Group of 20 major economies convened an extraordinary video conference on Monday to come to grips with the blow to global trade from the coronavirus pandemic and weigh how to overcome supply chain disruptions.

G20 leaders pledged last week to inject over $5 trillion into the global economy to limit job and income losses. They said they would ensure the flow of goods including vital medical supplies and resolve disruptions caused by border closures by national governments anxious to limit transmissions of the virus.

But they stopped short of calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies. Lack of protective gear is putting doctors and nurses at risk.

Many countries rely on China, the source of the outbreak, for drug ingredients, and are now struggling to avoid shortages after lockdown measures prompted by the epidemic held up supplies and delayed shipments.

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Supply chains are backing up as air freight capacity plunges and companies struggle to find truck drivers and shipping crews. Europe and the United States are short tens of thousands of freight containers. Shippers struggle with crew shortages and quarantines at ports. Agriculture also faces disruption.

A statement was expected after the ministerial gathering, which representatives from the World Health Organization, World Trade Organization and Organization for Economic Cooperation and Development were invited to attend.

For their part, G20 finance ministers and central bankers will meet virtually on Tuesday for the second time in just over a week to continue coordinating their response, including debt relief to poorer countries, three sources told Reuters.

Japan's trade minister told counterparts at Monday's meeting that the public and private sectors should try to avoid shutting supply networks to enable an early resumption of economic activities.

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"It is extremely important to keep supplying medical and daily necessities internationally to overcome the crisis as well as to restore economic activities when the coronavirus outbreak comes to an end," Hiroshi Kajiyama said in a statement.

Yousef Al-Benyan, chair of the Saudi Business 20 which engages the global business community, told Reuters cross-border trade would be vital to economic recovery.

Each G20 state must "address their local requirements, but that should not compromise the good state of free trade globally which will benefit everybody", he added.

The coronavirus has infected nearly 738,500 people worldwide and killed some 35,000, and is expected to inflict a global recession. 

Covid-19: G20 nations agree to keep markets open, tackle supply disruptions

Trade ministers from the Group of 20 major economies agreed on Monday to keep their markets open and ensure the continued flow of vital medical supplies, equipment and other essential goods as the world battles the deadly coronavirus pandemic.

G20 leaders pledged last week to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus outbreak, while working to ease supply disruptions caused by border closures by national governments anxious to limit transmission of the virus.

In a joint statement issued after a videoconference, the trade ministers pledged to take "immediate necessary measures" to facilitate trade, incentivize additional production of equipment and drugs, and minimize supply chain disruptions.

They agreed that all emergency measures should be "targeted, proportionate, transparent, and temporary," while sticking to World Trade Organization (WTO) rules and not creating "unnecessary barriers" to trade.

They also vowed to work to prevent profiteering and unjustified price increases, and keep supplies flowing on an affordable and equitable basis.

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"As we fight the pandemic both individually and collectively and seek to mitigate its impacts on international trade and investment, we will continue to work together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open," the ministers said.

They agreed to notify the WTO about any trade-related measures taken to keep global supply chains running and said they would convene again as necessary.

The ministers, however, stopped short of explicitly calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies. A key adviser to U.S. President Donald Trump is working on new rules to expand "Buy America" mandates to the medical equipment and pharmaceutical sectors, something that dozens of business groups said could worsen shortages.

The joint statement included the phrase "consistent with national requirements" already used by G20 leaders, which experts say could provide a loophole for protectionist barriers.

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SHORTAGES AND BOTTLENECKS

Lack of protective medical gear is putting doctors and nurses at risk. Many countries rely on China, the source of the outbreak, for drug ingredients and are struggling to avoid shortages after lockdown measures prompted by the epidemic held up supplies and delayed shipments.

Supply chains are backing up as air freight capacity plunges and companies struggle to find truck drivers and shipping crews. Europe and the United States are short of tens of thousands of freight containers. Shippers struggle with crew shortages and quarantines at ports. Agriculture is also being disrupted.

The ministerial video conference was attended by representatives from the WTO, World Health Organization and Organization for Economic Cooperation and Development.

A senior World Bank official urged G20 members to agree to refrain from imposing new export restrictions on critical medical supplies, food or other key products, and to eliminate or reduce tariffs on imports of key products.

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U.S. Trade Representative Robert Lighthizer told the ministers during the meeting that the pandemic had revealed vulnerabilities in the U.S. economy caused by over-dependence on cheap medical supplies from other countries. He did not reference the "Buy America" rule specifically, but said Washington was encouraging diversification and wanted to promote more domestic manufacturing to produce more suppliers for the United States and others.

G20 finance ministers and central bankers will also meet virtually, on Tuesday, for the second time in just over a week to continue coordinating their response, the Saudi G20 secretariat said, as worries grow about the debt crisis looming over poorer countries.

Japanese Trade Minister Hiroshi Kajiyama told counterparts that both the public and private sectors should try to avoid shutting supply networks to enable an early resumption of economic activities.

The coronavirus has infected nearly 738,500 people worldwide and killed some 35,000, and has plunged the world into a global recession, according to International Monetary Fund chief Kristalina Georgieva.

China's growth could come to a halt, raising poverty, World Bank warns

The coronavirus pandemic's economic fallout could cause China's growth to come to a virtual standstill and drive 11 million more people in East Asia into poverty, the World Bank has warned.

The pandemic is causing "an unprecedented global shock, which could bring growth to a halt and could increase poverty across the region," said Aaditya Mattoo, World Bank chief economist for East Asia and the Pacific on Monday.

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Even in the best-case scenario, the region will see a sharp slowdown, with China's growth slowing to 2.3 per cent from 6.1 per cent in 2019, according to a report on the pandemic's impact on the region.

Coronavirus: Labourers' exodus throws supply chain, production out of gear

As grocery stores, across the country, are grappling with panic buying and dwindling supplies of fresh stocks, the exodus of labourers have added more fuel to the fire by affecting the entire supply chain of essential commodities, ranging from wheat flour to pulses and biscuits to edible oils.

Majority of grain markets are shut, oil and rice mills are operating with minimum workforce, and truck operators are finding it difficult to move fast moving consumer products (FMCG) across the cities, mostly sealed during the nationwide 21-day lockdown. If the situation aggravates, the country might witness hoarding of goods and price rise of several items.

Despite the efforts of Central as well as state governments to ensure proper supply of FMCG and other essential goods, the fear of COVID-19 pandemic is keeping away the labourers and workers from working in the mills and factories.

"The coronavirus fear has affected the production. Nearly 80 per cent of dal mills are inoperative due to unavailability of labour and supply of raw material. Though the government has now allowed plying of trucks, still issues with transportation remains," says Suresh Agarwal, of All India Dal Mills Association adding, "even as authorities have allowed truckers to operate, the police of different states, particularly on the borders creates hindrance in transporting goods."

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Obviously in weeks to come, supply of different varieties of pulses, an essential part of the diet, could be crippled. "But if labour gets back to work, and transport issues are quickly sorted out, the supplies could be smoothen, thus maintaining a balance between supply and demand," hopes Suresh Agarwal. Some varieties of Arhar was quick to disappear from shelves of local grocery stores in Delhi.

"There was a panic buying on the eve of the lockdown on 25 March. I somehow managed to procure stock of Arhar and atta (flour) through a local trader. But things are getting difficult now," said owner of the Sanjay Stores in Vasant Kunj, a large residential area close to Delhi Airport.

Indian kitchens, particularly in the country's cow belt, cannot be run without atta (wheat flour) required to make roti (bread). Atta, comes through hundreds of flour mills located in the National Capital Region (NCR) of Delhi and its neighbouring states of Haryana and Uttar Pradesh.

"My flour mill is open. I had managed a few labourers too. But the problem is I am not able to procure wheat as nearby grain markets are shut," Rajat Gupta a flour Mill owner told IANS.

According to him, once the flour mills starts getting adequate supply of wheat from the traders, the mills will work to its optimum capacity. Subsequently due to a shortfall in supply, prices of Atta have increased. Bhanu, a grocery shop owner of Greater Noida said that he used to sell a 5 kg packet of Ashirwad Atta at Rs 180 but now it is available at Rs 220.

In fact the entire operation of grain markets, flour mills, rice mills including production and supply of FMCG remained affected due to transport and labour issues said millers, distributors and industry bodies.

Om Prakash Garg, a prominent FMCG distributor of Delhi said that since past week, he has been facing problems in transporting goods to wholesalers and retailers.

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"Stocks of biscuits, chocolates, milk powder and other items are available at depots but due to disruption in transportation, supply of these food items and dry fruits have been affected," said Garg.

Another distributor, Rajesh Gupta, dealing in spices in dry fruits was of the view that fresh stock of spices is not reaching him from production units. According to him, a famous brand of biscuits, manufactured in Delhi by prestigious company is reportedly running its their factory at its half strength, thus creating a shortage in supply of biscuits and rusks.

However, Industry bodies expect after intervention of the Centre, restoration of supply chain of the essential goods would be seen resulting in a delivery of FMCG and other essential items to the retailers.

Atul Chaturvedi, President, Solvent Extractors Association of India, said that restoration in the supply chain of edible oil, sugar and other food items has started. He said, around 40-50 per cent of the supply chain of edible oil, sugar and other food items has been reinstated.

Laxmichand Agarwal, President, Central Organisation for Oil Industry Trade (COOIT) said expellers producing mustard oil are in operation and its supply will be uninterrupted.

However, he accepted that prices of mustard oil have edged up amid supply disruption of food products but ruled out any expectation of further spikes in mustard oil as arrival season of new crop is going on and farmers are directly selling their crops to the expeller,

Similarly Jitu Bheda, Chairman, India Pulses and Grains Association (IPGA) also expect restoration in supply chain of food items soon. He said, "In fact, labourers are back to their home which is a major hurdle in restoration of supply and things will improve in the next 5-6 days."

Covid-19: Recession for world economy; India, China likely exceptions: UN


The world economy will go into recession this year with a predicted loss of trillions of dollars of global income due to the coronavirus pandemic, spelling serious trouble for developing countries with the likely exception of India and China, according to a latest UN trade report.

With two-thirds of the world's population living in developing countries facing unprecedented economic damage from the COVID-19 crisis, the UN is calling for a $2.5 trillion rescue package for these nations.

According to the new analysis from United Nations Conference on Trade and Development (UNCTAD), the UN trade and development body titled 'The COVID-19 Shock to Developing Countries: Towards a 'whatever it takes' programme for the two-thirds of the world's population being left behind', commodity-rich exporting countries will face a $2 trillion to $3 trillion drop in investments from overseas in the next two years.

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The UNCTAD said that in recent days, advanced economies and China have put together massive government packages which, according to the Group of 20 leading economies (G20), will extend a $5 trillion lifeline to their economies.

"This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically," it said.

It added that while the full details of these stimulus packages are yet to be unpacked, an initial assessment by the UNCTAD estimates that they will translate to a $1 trillion to $2 trillion injection of demand into the major G20 economies and a two percentage point turnaround in global output.

"Even so, the world economy will go into recession this year with a predicted loss of global income in trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India," the UNCTAD said.

The report, however, did not give a detailed explanation as to why and how India and China will be the exceptions as the world faces a recession and loss in global income that will impact developing countries.

Further, given the deteriorating global conditions, fiscal and foreign exchange constraints are bound to tighten further over the course of the year.

The UNCTAD estimates a $2 trillion to $3 trillion financing gap facing developing countries over the next two years.

In the face of a looming financial tsunami this year, the UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action.

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This includes a $1 trillion liquidity injection for those being left behind through reallocating existing special drawing rights at the International Monetary Fund; a debt jubilee for distressed economies under which another one trillion dollars of debts owed by developing countries should be cancelled this year and a 500 billion dollars Marshall Plan for a health recovery funded from some of the missing official development assistance (ODA) long promised but not delivered by development partners.

The speed at which the economic shockwaves from the pandemic has hit developing countries is dramatic, even in comparison to the 2008 global financial crisis, the UNCTAD said.

"The economic fallout from the shock is ongoing and increasingly difficult to predict, but there are clear indications that things will get much worse for developing economies before they get better," UNCTAD Secretary-General Mukhisa Kituyi said.

The report shows that in two months since the virus began spreading beyond China, developing countries have taken an enormous hit in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings, including from falling commodity prices and declining tourist revenues.

Lacking the monetary, fiscal and administrative capacity to respond to this crisis, the consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt their progress towards the Sustainable Development Goals.

Even as advanced economies are discovering the challenges of dealing with a growing informal workforce, this remains the norm for developing countries, amplifying their difficulties in responding to the crisis.

"Advanced economies have promised to do 'whatever it takes' to stop their firms and households from taking a heavy loss of income," said Richard Kozul-Wright, UNCTAD's director of globalisation and development strategies.

He added: "But if G20 leaders are to stick to their commitment of 'a global response in the spirit of solidarity', there must be commensurate action for the six billion people living outside the core G20 economies".

According to reports, the death toll from the coronavirus pandemic has soared past 35,000 while the number of confirmed cases topped 750,000 globally.

Sonnagar-Dankuni freight corridor section likely to get aid from World Bank

The Eastern Dedicated Freight Corridor (EDFC) between Sonnagar in Bihar to Dankuni in West Bengal is likely to get World Bank backing, even if the project is implemented under the public-private partnership (PPP).

The 538-km stretch is estimated to cost Rs 15,000 crore. This is in addition to the 1192-Km Ludhiana (Punjab) to Mughalsarai (Uttar Pradesh) stretch that has been funded by the World Bank. Out of Rs 30,358 crore, the World Bank is giving Rs 13,625 crore for the project.

The Dedicated Freight Corridor Corporation (DFCCIL) will be inviting private participation for the Sonnagar-Dankuni stretch.

“The Railway Board is finalising the PPP model and a RFQ (request for qualification) is likely to be out soon. We have already acquired 89 per cent of the land required for this stretch,” said an official. Even if the planned PPP section -- covering 282.22 Km from Dankuni to Gomoh as Phase-I and 256.58 Km from Gomoh to Sonnagar as Phase-II – does not get enough interest from private players, DFCCIL is in talks with state-run Coal India Ltd to execute the project. The Dankuni to Gomoh phase is likely to cost Rs 7,527.22 crore.

The official added the World Bank is likely to finance it, even if a private player shows interest in the tendering stage.

DFCCIL has conducted roadshows in various cities in which both domestic and global private sector majors showed interest for the project. This includes Russian Railways, Reliance Industries (RIL), Tata Projects, Adani Ports and Logistics, GMR Infrastructure, Mitsui, Siemens, and KEC International.

On the other hand, the Western DFC (WDFC) is being partly funded through a loan of Rs 38,722 crore from Japan International Cooperation Agency (JICA) out of the project cost of Rs 51,101 crore. The remaining part of the project cost for both the corridors is funded through gross budgetary support from the government of India as an equity contribution.

The government has increased the pace of work on DFCC. As against the total award of contracts of Rs 12,749 crore between 2009-2014, contracts worth Rs 39,638 crore have been awarded in the 2014-2019 period.

Earlier, DFCCIL has come out with an annuity model, based on which the private partner will get a minimum yearly return of around Rs 2,140 crore for the private players, irrespective of the traffic handled by the EDFC. According to government estimates, EDFC will carry around 264 million tonnes of traffic and WDFC another 284 MT over a period of 20 years. The eastern section is also projected to handle 100 rakes per day in both directions by FY 2045.

ON FAST TRACK

1856 Km: Eastern Dedicated Freight Corridor from Ludhiana to Dankuni
1504 km: Western Dedicated Freight Corridor from Dadri to Jawaharlal Nehru Port Trust
Rs 81,400 crore: Total project cost

Covid-19: InvITs may find it hard to meet 90% dividends distribution rule

Dividends from Infrastructure Investments Trusts (InvITs) may be one of the early ones to reflect the Covid-19 impact. InvITs distribute 90 per cent of the net cash flow to investors on a quarterly basis. Those with toll roads as assets, may feel the heat due to low collections.

“Surplus generation will remain limited in the first quarter, so dividend will get curtailed accordingly. National Highways Authority of India (NHAI) compensation may take time, so till then, the liquidity buffer will be used for operating expenditure and debt servicing,” said Shubham Jain, vice president and group head, Icra.

The road ministry on March 25 announced a toll exemption for all vehicles across the country for a period of 21 days. The measure was taken to owing to the Covid-19 outbreak in the country. In a separate statement on Saturday, the power ministry placed a moratorium on payments from distribution companies to generation and transmission companies up to June end.

ALSO READ: Coronavirus LIVE: SC orders food, religious counselling for migrant workers

Regulatory mandates require InvITs to redistribute 90 per cent of the net distributable income it has received from its various special purpose vehicles (SPV)s. There are two InvITs in the listed space- Sterlite’s India Grid Trust and IRB Infrastructure Developers. India Grid’s SPVs are transmission assets, while for IRB these are road assets.

For IRB InvIT fund, the recently announced toll exemption for national highways may impact yield. “Dividend distribution process will not be impacted. Toll revenues were normal upto 18th -19th of this month, as mandated 90 per cent of that cash flow will be distributed,” said Virendra Mhaiskar, chairman and managing director for IRB Infrastructure. He added, the shortfall in toll collection for the last ten days of March will reflect on the yield of the InvIT.

IRB InvIT in a statement to BSE on Thursday also added, “We state that the prevailing condition may be treated as Force Majeure of Concession Agreement and Project SPVs are entitled for relief as per terms of the Concession Agreement.”

Executives from India Grid added collection for March is complete. “We have already earned the cash for Q4 in line with our expectations,” said Harsh Shah, chief executive officer for India Grid Trust. The executive refused to make any further forward looking statements.

ALSO READ: These techies are 3D printing ventilator splitters for Covid-19 patients

IRB InvIT last announced a distribution payout in February of Rs 2.70 per unit, the third one in the current financial year. India Grid Trust in January announced a distribution of Rs 3.00 per unit for the third quarter of financial year 2019-20.

Covid-19 induced lock-down to dampen investment scenario: Study

A countrywide lockdown imposed till April 14 to counter the impact of the deadly Coronavirus is slated to dampen the investment scenario. Adding to the woes of a slump in domestic GDP growth, the recent outbreak of Covid-19 and its snowballing into a major global health crisis is bound to have ramifications on India’s future investments, a study noted.

India is already in the throes of a bleak investment scene. Four out of the six parameters- investment rate, bank credit offtake, industrial production of capital goods and new investment projects are pointers to deteriorating investment scenario even though investment intentions and market borrowings have shown some signs of resilience.

“It needs to be kept in mind that the last two months of FY20 have been marked with Coronavirus related shutdown in economic activities which will add to the existing investment stagnation. Thus, these parameters are likely to see a downward revision”, the report by CARE Ratings noted.

ALSO READ: Coronavirus LIVE: SC orders food, religious counselling for migrant workers

Quoting figures from the Ministry of Statistics & Programme Implementation (MoSPI), the study observed that the investment rate measured as Gross Fixed Capital Formation (GFCF) as a percentage of GDP, a barometer of investment demand, tumbled to nearly two-decade low. As per the second advance estimates, it is seen at 27.5 per cent of the GDP. Compared with a year-ago period, the investment rate was 1.5 per cent lower than 29 per cent of GDP in FY19.

Bank credit offtake, too, remained subdued in FY20. Incremental bank credit until the middle of March stood at 3.8 per cent, nearly a third of 10.8 per cent in the comparable period of last financial year. The year-on-year (y-0-y) growth in bank credit (as on March 13) was 6.1 per cent, less than half of 14.5 per cent growth in the period under review. Bank credit disbursements have remained muted in FY20 due to overhang of NPA (Non-Performing Assets) issue in the banking system, liquidity crisis in the NBFC (Non Banking Financial Companies) segment and increased deleveraging activities by corporate.

Between April and February of this financial year, the industrial sector has seen contraction in incremental bank credit growth by 2.4 per cent as against the 1.9 per cent growth noticed in the corresponding period of 2018-19.

ALSO READ: Covid-19: Govt bailout must to salvage airlines and hotels, say analysts

For the first time in five years, capital goods registered a contraction in production of capital goods. Capital goods index fell sharply by 11.6 per cent during April-January of FY20 compared to 5.7 per cent growth registered in the same period of last fiscal. Deceleration in capital goods was led by dip in commercial vehicles segment. In the backdrop of auto sector slowdown, production of commercial vehicles contracted by 26 per cent during April-January, also exerting pressure on production of auto ancillaries.

Reviewing the macro investment ambience, the study said that new investments in various projects fell by 10 per cent to Rs 9.1 trillion between April and December of FY20 compared with Rs 10.1 trillion logged in the year ago period. Services sector accounting for 40 per cent share in new projects contracted four per cent y-o-y.

In its prognosis, the study commented, “Recovery of investment in the short term is not likely. Since mid-January 2020, Novel Coronavirus pandemic has led to disruptions in the economic activities globally. Domestic activities were already constrained on account of disruptions in the global supply chain and were further impacted post announcement of lockdown in the country. This could dampen investment scenario in FY20”.

Mistry group seeks to raise up to $1 billion pledging Tata Sons stake


The Shapoorji Pallonji Group, controlled by billionaire Pallonji Mistry and his family, is in preliminary discussions to borrow as much as $1 billion to repay maturing debt using part of its stake in Tata Sons as collateral, said people with knowledge of the matter.
Mistry, whose son Cyrus was ousted as chairman of Tata Sons in 2016, is the biggest single shareholder in India's largest conglomerate, and is seeking a loan as the coronavirus outbreak delays a plan to sell assets, the people said, asking not to be identified.
Mistry is trying to use his 18 per cent stake in Tata Sons, which is estimated to be worth as much as $14 billion, as the Covid-19 pandemic stalls economic activity across the world. However, he may face a hurdle: the shares in the unlisted Tata holding company are closely held and illiquid. A legal battle between Tata Sons and Cyrus Mistry following his ouster may also deter potential creditors.
A representative for Shapoorji Pallonji Group declined to comment.
Mistry's Shapoorji Pallonji & Co had Rs 9020 crore ($1.2 billion) of debt as of September 30, according to rating assessor ICRA. The company planned asset sales, including solar power plants and road assets, in a bid to reduce debt by as much as Rs 4,000 crore, a person with direct knowledge of the matter said in August.
Founded in 1865, the Shapoorji Pallonji group, which has built some of Mumbai's landmarks, including the RBI building, is still better placed than most of its corporate peers, with total revenue of $7 billion for the year ended March 2019.

Reliance Industries to consider fundraising proposal on Thursday


Reliance Industries (RIL) on Monday said a board meeting has been scheduled to consider fundraising by issuing listed, secured/unsecured and redeemable non-convertible debentures on a private placement basis in one or more tranches.
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The fundraising proposal is to be considered at board meeting on Thursday.

Reliance Industries' board to meet on April 2 for fundraising through NCDs

Reliance Industries Limited (RIL) will hold a board meeting on April 2 in a fund raising exercise through issuance of non-convertible debentures (NCDs) on private placement basis.

RIL said in an intimation to stock exchange that a meeting of the board of directors is scheduled to be held on April 2 to consider raising of funds by way of issuance of listed, secured/unsecured, redeemable non-convertible debentures on private placement basis on one or more tranches/series.

The quantum of funds to be raised or the purpose of fund raising has not been disclosed in the intimation. RIL regularly raises funds through NCDs on a private placement basis to institutional investors.

AI-powered Microsoft 365 with new productivity tools to replace Office 365

Microsoft on Tuesday introduced a refresh version of Office 365. Built on the foundation of Office 365, the Microsoft 365 gets artificial intelligence (AI), rich content and templates, and cloud-powered experiences to empower people in various ways. The Microsoft 365 is a subscription-based service, available for personal and family usage. The Microsoft 365 Personal and Family plans will be available from April 21, at starting price of Rs 4,199 a year.

For the best value, a family of up to six people can use Microsoft 365 Family for Rs 5,299 a year, the company said in a statement.

The new Microsoft 365 Personal and Family plans will include access to Outlook and the Office desktop apps for Windows and macOS, 1 Terabyte of OneDrive storage per person and 50 Gigabytes of Outlook.com email storage, Skype call recording and 60 minutes of Skype landline and mobile phone calls.

In addition, Microsoft also introduced two new Microsoft 365 experiences that will be available for preview in the coming months.

A new 'Family Safety' app is designed to keep families safe across the digital and physical worlds.

Microsoft is previewing new home features for Teams that are now part of Microsoft 365 subscriptions designed to let friends and family connect in a group chat or through video calls.

Microsoft is also adding a lot of Office-related features with transition to Microsoft 365.

AI-powered Microsoft 365 with new productivity features replaces Office 365Users will soon be able to access the existing Editor feature of Word, which is more of an advanced proofing service than the regular grammar and spellcheck features.
PowerPoint is also getting some exclusive features for Microsoft 365 consumers.

Microsoft also launched a presentation coach for PowerPoint. This AI-driven feature helps you avoid filler words and other presentation no-nos.

AI-powered Microsoft 365 with new productivity features replaces Office 365In partnership with Plaid, one can now link their bank accounts to Excel and import all of their expenses into your spreadsheets.
This feature, dubbed "Money in Excel," will launch in the US in the coming months.

AI-powered Microsoft 365 with new productivity features replaces Office 365Outlook is getting the ability to link your work and personal calendars on the web.
Additionally, Microsoft 365 subscribers also get exclusive access to more than 200 new templates and thousands of images and videos from Getty Images.

Microsoft has also introduced a new Password Monitor feature for its Edge browser.

The Password Monitor will let users know if any passwords have been compromised in database breaches so you can change them easily.

To help people get connected even faster, Microsoft recently introduced a new feature in Skype called 'Meet Now' that allows users to easily create video meetings in as little as three clicks for free, with no sign ups or downloads required.

Tech giant is also working with Adobe, Experian, Bark, Blinklist, and others to offer limited-time access to other premium consumer subscriptions.

Amazon staff join US gig workers strike, 'speak up' against work conditions

Warehouse, delivery and retail gig workers in the United States went on strike on Monday to call attention to safety and wage concerns for people laboring through the coronavirus crisis.

Among the strikers were some of the roughly 200,000 workers at U.S. online grocery delivery company Instacart, according to strike organizer Gig Workers Collective, founded earlier this year by Instacart worker Vanessa Bain.

Fifteen workers at an Amazon.com Inc warehouse in Staten Island, New York, also walked off the job on Monday following reports of COVID-19 among the facility's staff.

Amazon said later it fired an employee who helped organize the action for alleged violations of his employment, including leaving a paid quarantine to participate in the demonstration. New York's attorney general said her office was "considering all legal options" in response to the firing, citing the right to organize in the state.

Workers have also protested in other countries. Dozens of Amazon workers at a facility near Florence, Italy, went on strike on Monday.

ALSO READ: Coronavirus LIVE; No migrants on road, govt to SC; Global cases at 786,973

French Finance Minister Bruno Le Maire said last week that pressure on Amazon employees to work despite inadequate protections was "unacceptable."

From delivery drivers to grocery store clerks, shelf stockers and fast-food employees, workers have kept food and essential goods flowing to people who have been told by their governments to stay home to stop the spread of coronavirus.

More than 738,500 people have been infected across the world and about 35,000 have died, according to a Reuters tally.

Amazon, the world's largest online retailer, said it has taken "extreme measures" to clean buildings and obtain safety gear and that "the vast majority of employees continue to show up and do the heroic work of delivering for customers every day." Less than half a percent of its more than 5,000-person workforce at the Staten Island site protested, it said.

In statements on Monday, Amazon disputed comments from one of the striking Staten Island employees, Christian Smalls, who had accused the company of mishandling warehouse operations after a confirmed case of coronavirus.

Amazon said Smalls was on a paid quarantine after having close contact with a diagnosed worker, and had "received multiple warnings for violating social distancing guidelines," leading to his dismissal.

Smalls responded in a statement distributed by Athena, a labor and activist coalition.

"I'm going to keep speaking up. My colleagues in New York and all around the country are going to keep speaking up. We won't stop until Amazon provides real protections for our health and safety," he said.

Letitia James, the New York Attorney General, issued a statement calling the firing "disgraceful" and also asked the National Labor Relations Board to investigate. Amazon did not immediately return a request for comment on the attorney general's statement.

Hazard pay, sanitizer

San Francisco-based Instacart - which lets customers place online orders from grocers, retailers like Costco Wholesale Corp and CVS Health Corp's CVS Pharmacy - said in a statement that the strike of its contractors had "absolutely no impact to Instacart's operations."

On Monday, Instacart said it had 40% more shoppers on the platform than on the same day last week and sold more groceries in the last 72 hours than ever before.

ALSO READ: How Indian companies are contributing to the war against coronavirus

"The health and safety of our entire community - shoppers, customers, and employees - is our first priority," it said in a statement.

It was not clear how many Instacart workers were participating in the strike, Bain told Reuters. Bain has created a Facebook group with 15,000 members. She said hundreds more have reached out to her in light of Monday's campaign.

In posts on social media, people who said they were Instacart workers demanded hazard pay to account for the dangers of working while most people stay home to comply with state, local and federal government guidance.

They also asked for the company to provide hand sanitizer, disinfectant wipes and soap to clean their cell phones, cars and shopping carts.

"We don't have to have 100 percent participation to ... force Instacart to maneuver on these issues," Bain said in a phone interview.

Instacart said on March 23 that it wanted to hire another 300,000 gig workers because of a surge in demand.

Staff in one supermarket of French retailer Carrefour will receive protective masks after some walked out over health risks, a union said on Monday.

Employees of McDonald's Corp, as well as people who said they worked at Walmart Inc, supermarket chain Harris Teeter, Waffle House, Family Dollar and Food Lion, boycotted work at North Carolina locations on Friday.

These techies are 3D printing ventilator splitters for Covid-19 patients

At a time when there is a spurt in the number of Covid-19 cases in India, most hospitals are also running short of ventilators which are absolutely necessary to help the infected continue breathing. According to several estimates, the country has only around 50,000 ventilators for a population of around 1.3 billion people.

A Bengaluru-based deep-tech start-up, Ethereal Machines, is addressing the problem to some extent by enabling the existing ventilators to cater to the different requirements of multiple patients, depending upon their criticality. The Blume Ventures-backed firm, which specialises in technologies associated with computerised numerical control (CNC) machining and 3D printing, has come up with an innovation to augment the capacities of existing ventilators, in dire circumstances. Simple 3D printed splitters that divide the supply of oxygen into two halves have been tried out successfully in Europe.
“India is seeing a massive shortage of ventilators and manufacturing them is going to take time,” says Kaushik Mudda, co-founder and CEO of Ethereal Machines. “We need to rapidly expand ventilator capacity and ensure that in the worst of circumstances, they can be used on more than one patient, differentially.”

Till Monday night, some 745,308 people worldwide had been infected by Covid-19, and around 35,305 had died, according to data by Johns Hopkins University. About 156,841 people had recovered. In India, 1,071 people had been infected by Covid-19, of which 29 had succumbed.

Ethereal has come up with ‘differential ventilation’ which is required in cases where the split ratio between two patients from a splitter has to be different. For example, the 30-70 split ratio is used in cases where one patient is healthy and another's condition is deteriorating. “This got us thinking as to how a ventilator can be utilised in such a circumstance. We have been working on this with a team of doctors headed by Sonal Asthana from Aster Hospitals, Bengaluru,” says Mudda, an alumnus of RV College of Engineering. Mudda co-founded Ethereal along with his batchmate Navin Jain in 2014.

The start-up is looking at sending these ‘differential splitters’ across the world to frontline medical staff so that they can utilise it in the event that there's a surge of patients that require ventilators. “We need to save as many lives as possible and do every bit in that direction,” says Mudda. “We have directed a significant amount of our resources and will continue to do so in order to help build our nation's strengths in the fight against Covid-19.”

Another start-up, Aerobiosys, which has been incubated at IIT Hyderabad, is building solutions to address problems of conventional ventilators for patients in critical and acute care, and also for patients in emergency who require preferential ventilation. There is a significant chance of a patient in a ventilator to develop alveolar damage and oxygen toxicity due to conventional modes of the ventilator. To solve this problem, the firm has come up with an idea to develop a smart, hybrid duo-vent for patients in the critical care unit with acute and chronic respiratory illness.

This device will be essential for low-resource settings and developing countries like India. It can provide preferential ventilation of appropriate quantity targeting both emergency and critically-ill patients, by ventilating both their lungs individually, with different pressure and oxygen concentration.

Covid-19: Cyient gets nod for production of critical medical equipment

IT and Engineering services company Cyient has received clearance for its Mysore facility to run its Medtech manufacturing lines for the production of critical medial equipment in the fight against Covid-19, the company announced on Tuesday.

Cyient is producing assemblies used in X-ray generators from GE Healthcare and units from Molbio Diagnostics to enable rapid disease testing in India, according to Cyient,

"We We will continue to do everything we can to help reduce the impact of this crisis on our customers' operations as they focus on delivering the technology needed to fight Covid-19 at a national and global level," Rajendra Velagapudi, senior vice president and CEO, Cyient DLM said.

Cyient's factory in Mysore is dedicated to electronic manufacturing process, including printed circuit board assemblies, cable harnesses, and box-builds, according to Rajendra Velagapudi.

SpiceJet announces 10-30% cut in March salary for all employees

Budget carrier SpiceJet has decided to cut 10-30 per cent salary of all its employees in March, with Chairman Ajay Singh opting for highest 30 per cent trimming in compensation, the airline said in an e-mail communication to the staff on Tuesday.

"SpiceJet management has decided to implement a pay cut between 10-30 per cent in March across our employee base. Our Chairman and Managing Director (Ajay singh), in fact, has opted for the highest cut of 30 per cent in compensation," the airline said in the communication.

Other budget carriers IndiGo and GoAir have already announced similar move earlier.

ALSO READ: IndiGo, SpiceJet hit lower circuit after govt suspends domestic flights

"These are extremely tough time and call for appropriate and exceptional measures to sale through the exceptional challenge," it said.

As tough as it seems, most Indian carriers have already announced a pay cut for their employees, SpiceJet said.

"Unfortunately SpiceJet is not too immune to the situation which has unquestionably affected the airlines in the most severe form across the globe.

"Therefore in our bid to stay lean, and under absolutely unavoidable circumstances, we have been forced to take certain bold decisions, which will help the SpiceJet family surmount these difficult times," the letter said.

ALSO READ: CRISIL downgrades ratings for SpiceJet to 'B' as business takes hit

SpiceJet to suspend most international flights till April-end

SpiceJet has announced that it was "forced" to suspend majority of its international flight operations from Saturday till the end of the next month due to the "unprecedented situation" arising over the novel coronavirus pandemic.

"Our Chennai-Colombo flight will restart from the 25th March, 2020, while our Delhi-Dubai and Mumbai-Dubai flights will resume from 16th April, 2020," the official added.

Digital lenders use tech to improve SME loan repayments amid lockdown


Given the likelihood of repayment delays by small and medium enterprises following the 21-day lockdown implemented to contain the spread of coronavirus, digital lending start-ups in the country have begun upgrading their technological capabilities to enable borrowers to service their loans on time without any physical interface.

"Due to the disruption caused by the current lockdown, we do see some of our clients facing temporary difficulties in repaying their loans," said Alok Mittal, managing director and CEO of Indifi. The start-up may validate such cases based on data points such as past payment behaviour, current transaction trends and other information, he added.

The number of digital lenders providing working capital loans to SMEs in the country has risen in recent years. Though the total amount disbursed by such lenders is not more than Rs 10,000 crore as of now, their existence has given many small entrepreneurs access to loans that were otherwise not available to them from traditional financial institutions.

However, the 21-day lockdown announced by the government has put these small businesses in a spot, as they face severe cash-flow issues with their operations coming to a standstill. "The cash flow and businesses have literally halted," said Manish Lunia, co-founder to FlexiLoans.com.

MSMEs, which are seen as the backbone of the Indian economy, account for 29.80 per cent of GDP, according to the latest annual report of Ministry of Micro, Small and Medium Enterprises.

"The travel and hospitality business will go through its own stress cycle, but there is likely to be a boom in pharmaceutical and diagnostic labs," said Harshvardhan Lunia, co-founder and CEO, Lendingkart. He also said, it has been a ‘struggle’ to reach out to customers in tier-I and large towns ever since the 21-day lockdown kicked in last Tuesday.

However, these new-age lenders are ramping up their technological prowess to reach out to clients and improve the collection process. "This involves targeting relatively low-hanging fruit like using a dialer to handle the increase in expected collection volumes, to using sophisticated data analytics to determine the most appropriate day of the week to collect the loan installment," Mittal of Indifi said. Indifi has over 25,000 borrowers across the country.

FlexiLoans.com has been working on a customer communication programme that involves informing borrowers about the the options available to them, such as the three-month moratorium or other arrangements. "We are sprucing our digital collection ecosystem for smart and digital recoveries in these times," Lunia of FlexiLoans.com said.

Lunia of Lendingkart, whose company has disbursed over Rs 5,000 crore loans till date, said around 90 per cent his firm's customers are in the 23- to 45-year age bracket. They are generally tech-savvy and communicate through phones regularly. "So, by design, digital lenders are in a better position during these times (of the pandemic) than a lender who operates through a legacy branch model," he says.

The Reserve Bank of India last week announced a moratorium of three months on payment of installments with respect to all term loans, outstanding as of March 1, 2020.

Monday, March 30, 2020

Credit score to be in line with RBI moratorium guidelines: Transunion Cibil

Credit information company Transunion Cibil on Monday assured borrowers that data reporting will be aligned to RBI's moratorium announcement and there will not be any dent to credit histories as a result of it.

The move came after the RBI announcement of a 3-month moratorium for servicing all the term loans as a measure to contain the economic fallout due to the lockdown to contain coronavirus spread.

"We would work closely with our member banks and credit institutions to define the data reporting framework basis (after) the announcements made by the RBI Governor, so that during the moratorium period there is no adverse impact on the credit histories and CIBIL Score of borrowers," the company said in a statement.

The RBI announcement came as a relief to the borrowers and affirmed commitment to provide a comprehensive picture of each person so they can be reliably and safely represented in the marketplace.

The company, the biggest among three players in the CIC (credit information companies) market, said it is also working with members to ensure more frequent and near real-time data reporting during these unprecedented times.

"Reporting and monitoring daily nuances of consumer behaviour trends will yield deep insights for the industry to adjust policy and lending. This will ensure support to consumers and enable the lending bodies to transact with confidence," it said.

Why large taxpayers may soon get a call from I-T officers working from home


A three-month extension in deadlines for tax payment and filing of returns notwithstanding, the Income-Tax Department has asked field formations to contact large taxpayers over phone or email to follow up on pending collections.

Rakesh Gupta, Commissioner of Income Tax (Coordination & Systems), Central Board of Direct Tax (CBDT), last week asked field formations to submit a daily report on follow-ups on pending tax collections from large taxpayers.


While most tax officers working from home in view of the lockdown announced to check the spread of Covid-19, it is possible to continue working in today's connected world, the message to officials said.


"While the ITBA (Income Tax Business Application) platform is not available to the officers for discharging statutory functions, it is still possible to follow up the pending collection matters by contacting large taxpayers telephonically/electronically," Gupta wrote.


The message came within days of Finance Minister Nirmala Sitharaman announcing three months extension in the deadline for filing of income tax returns as well as payment of delayed advanced tax, self-assessment tax, regular tax, tax deducted at source, tax collected source, and securities transaction tax.
ALSO READ: Coronavirus LIVE: Tamil Nadu records 17 new Covid-19 cases, tally now 67

The directive from CIT (C&S) has not gone down well with officers with their association writing to CBDT Chairman against it.

The joint body of Income Tax Employees Federation & Income Tax Gazetted Officers' Association in the letter expressed surprise at the direction "to pressurize the assesses/defaulters to pay taxes when the Finance Minister has recently announced various extensions of the statutory compliances including the extension of the last date for the (dispute resolution scheme) Vivad se Vishvash scheme and also reduced the penal interest rates."

"The people's backlash in the wake of such pressures to pay taxes in the present scenario is very much evident," the convenor Ravi Shankar wrote.


The association said it was not possible for assessing officers (AOs) to furnish a daily report for daily collection of current/arrear demand or applications received under the Vivad se Vishvash Scheme as the contact information of assessees/defaulters was not available at homes of the officers.Also, the officers did not have access to the ITBA platform.


It asked the chairman to direct the authorities below him "to remain positive, sensitive towards the present situation, adopt a humane approach and avoid pressing the panic button within the department".


The Finance Minister had on March 24 announced an extension in last for filing income tax returns for 2018-19 fiscal to June 30 as well as linking of income tax PAN with biometric ID Aadhaar by a similar three months.


Also, a three-month extension in the deadline was announced for those opting for the tax dispute resolution scheme 'Vivad se Vishwas' scheme by paying the principal amount. Previously the deadline for payment of such amount was March 31 and any payment after that was to be charged with an additional 10 per cent. Now, no additional 10 per cent amount requires to be paid if payment made by June 30, 2020.


Similarly, "due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for rollover benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between March 20, 2020, to June 29, 2020, shall be extended to June 30, 2020," an official statement issued on March 24 had said.


For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between March 20, 2020 and June 30, 2020, the reduced interest rate at 9 per cent instead of 12/18 per cent per annum will be charged for this period, it had said adding no late fee/penalty would be charged for the delay.

Govt directs banks to remain operational during 21-day lockdown: Report

The government has directed all its banks to remain operational during the three-week coronavirus lockdown as part of essential services and to ensure welfare cash schemes that are part of a $22.6 billion government stimulus reach the poor.

"It is very crucial and critical to keep banking channels open and make sure that branches and banking correspondents function throughout the lockdown period, so that people do not face any hassles or problems in their financial transactions," said a March 27 government order seen by Reuters.

Last week, India announced a $22.6 billion economic stimulus plan that provides direct cash transfers and food security measures, offering relief to millions of poor people hit by a lockdown ordered by Prime Minister Narendra Modi to stem the coronavirus pandemic.

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On Sunday night, State Level Bankers' Committee (SLBC) of West Bengal issued an advisory to all the banks in the state to remain operational on all working days.


In light of the orders, we have "decided to lift the earlier advisory on cluster approach in urban area & alternative day approach in rural areas for opening of bank branches," the SLBC notice said.


A similar notice has been issued in the state of Bihar, according to two sources. After the finance ministry directive, various state governments have been in talks with the bankers' committee dissuading them from keeping branches temporarily closed.


However, in some states such as Punjab, banking hours would be curtailed with minimum staffing, bank officials said.

Reuters reported last week that some banks were considering a cluster-based approach across major cities and also mulling that rural bank branches work alternate days to protect employees from the fast-spreading coronavirus and due to a fall in customer presence at bank branches.


India now has over 1,000 cases of the coronavirus of whom 29 have died, the health ministry said on Monday.

Slowdown impact: UP industrial output falls 12.39% in December 2019


Uttar Pradesh’s industrial output dipped sharply by 12.39 per cent in December 2019 over the corresponding month during the last financial year 2018-19.

This is a significant contraction in the state’s industrial production considering comparatively lower dips of 9.6 per cent and 3.8 per cent in October and November 2019, respectively.

Given the fact that the Adityanath government wants UP to become a trillion-dollar economy, this contraction calls for proactive steps to boost the industrial sector.

In comparison, India’s aggregate industrial output had contracted by 0.3 per cent in December 2019 after logging growth of 1.8 per cent in November 2019 according to the Index of Industrial Production (IIP) data released by the Central Statistics Office (CSO).

According to the Quick Estimates of IIP on base year 2011-12 released by the Economics and Statistical Division of the UP Planning Institute, the state’s general industrial index of December 2019 with base year 2011-12 (=100) stood at 119.18, which is (-) 12.39 per cent compared to December 2018.

Meanwhile, the indices of industrial production for the mining, manufacturing and electricity sectors stood at 64.92, manufacturing sector 127.72 and electricity sector 112.80, with corresponding growth rates of (-) 61.07 per cent, (-) 3.72 per cent and (-) 8.38 per cent respectively for December 2019 compared to December 2018.

‘Quick Estimates’ are based on the methodology of Central Statistical Office, Government of India and by using the data provided by various factories and departmental head offices.

Meanwhile, 8 out of 23 industry groups in the manufacturing sector have returned positive growth during December 2019 compared to the corresponding month of the previous fiscal year.

The industry group ‘manufacture of electrical equipment’ has shown the highest positive growth of 55.17 per cent, followed by 29.02 per cent in ‘printing and reproduction of recorded media’.

On the other hand, the industry group ‘manufacture of coke and refined petroleum products’ has shown the negative growth of (-) 88.94 per cent, followed by (-) 33.47 per cent in ‘manufacture of fabricated metal products, except machinery and equipment’.

Meanwhile, in the category of manufacture of wood/products of wood and cork except furniture, manufacture of articles of straw and plaiting materials showed negative growth of 31.8 per cent followed by (-) 30.3 per cent in manufacture of motor vehicles, trailers and semi-trailers.

The index also makes user based classification, index of primary goods, capital goods, intermediate goods, infrastructure/construction goods, consumer durable goods and consumer non-durable goods.

The month-on-month growth rates in December 2019 stood at (-) 44.26 per cent in primary goods, 60.69 per cent in capital goods, (-) 8.71 per cent in intermediate goods and 8.06 per cent in infrastructure/construction goods.

The consumer durable and consumer non-durable clocked growth of (-) 20.51per cent and (-) 0.96 per cent respectively.

Global oil prices fall to 2002 low; petrol, diesel rates unchanged in India

International oil prices on Monday plunged to a 17-year low but retail petrol and diesel prices in India remained on freeze as oil companies continued to set off gains against the excise duty hiked by the government.

Brent crude futures dropped to around USD 23 per barrel - the lowest since November 2002, while US crude briefly dipped below USD 20 as coronavirus lockdowns dried up demand while the crude surplus ballooned.

Petrol and diesel prices in India, however, remained on freeze for the 14th day in a row. Rates were last revised on March 16 and since then oil firms continue to adjust the fall against the Rs 3 per litre hike in excise duty on two fuels done by the government.

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In Delhi, petrol is priced at Rs 69.59 per litre while in Mumbai it comes for Rs 75.30. Diesel is priced at Rs 62.29 per litre in Delhi and Rs 65.21 in Mumbai.

The excise duty hike, which would give the government Rs 39,000 crore additional revenue, could have led to an increase in retail prices by Rs 3 per litre each, but the oil companies did not pass on the increase. Instead, they kept adjusting it against the fall in international crude prices.
 

Petrol pumpA closed petrol pump during janata curfew, in the wake of coronavirus pandemic, in Prayagraj on Sunday. photo:pti
Soon after the excise duty hike, the government took authorisation from Parliament to raise excise duty on petrol and diesel by Rs 8 per litre each in future.

After the March 14 increase in taxes, the total incidence of excise duty on petrol has risen to Rs 22.98 per litre and that on diesel to Rs 18.83.

The tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.

The BJP-led government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

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In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped the government's excise mop-up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But, it raised excise duty by Rs 2 per litre in July 2019.

The Saudi-Russia oil price war, combined with the destruction of demand by the coronavirus pandemic, has led to the slump in international rates.

Globally, 100 million barrels of oil is normally consumed daily, but forecasters predict as much as a quarter of that has disappeared in just a few weeks.

GI Council urges IRDAI for easier MTM rules to take on Covid-19 disruption


With Covid-19 severely impacting the operations of non-life insurers, the General Insurance Council (GIC), the representative body of firms in this space, has urged the Insurance Regulatory and Development Authority of India (IRDAI) to relax certain regulatory requirements, particularly those related to solvency ratio.

In a letter to the insurance regulator, GIC has said that given the huge mark-to-market loss in equity investments in the current month, IRDAI should allow companies not to account for diminution in value in equity investments while finalising the accounts for the year ending March 31, 2020.

While insurance companies ignore mark to-market-gains, they are required to recognise mark-to-market losses as an expense in their profit and loss accounts.

“Though the virus made a relatively delayed entry into India, the scare, the preventive shutdowns and economic fall are unprecedented and the adverse impact on financial markets is quite telling. Without exception, the non-life insurance sector is severely burdened and we are afraid we will have difficulty in meeting certain regulatory requirement,” M N Sarma, general secretary, GIC, wrote in the letter.

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GIC has also said that companies might be allowed to consider mark-to market position as on February 29, 2020 as the basis of computing solvency.

“Alternatively, the IRDAI may relax the minimum solvency requirement of 1.5 times for the time being on the same lines as the regulator had relaxed at the time of dismantling motor third party pool,” the letter said.

Many companies may see their solvency ratio fall below 1.5 due to the ongoing crisis.

Rating agency Icra in its note on the impact of Covid-19 on the insurance sector had said non-life insurers with a large share of health covers in their portfolio will see hospitalisation claims rise substantially if the rate at which the infection is spreading accelerates. “If the claims ratio for the health segment increases by about 30-40 percentage points in the event to a net loss ratio of 130-140 per cent (net loss ratio at 97 per cent as of FY19), the total increase in claims could be Rs 6,000-8,000 crore higher claims compared to March 2019 in the health segment”, Icra said.

Apart from that, non-life insurance companies will also be impacted by mark-to-market (MTM) losses on its equity investment portfolio, and may need to reflect that in the solvency parameters in case the MTM is negative. The four state-owned non-life insurers will see a greater impact on their capitalisation, as they are using a part of the fair value gain on the equity portfolio for solvency requirements, said the rating agency.

While equity investments of general insurers have taken a hit, their businesses have nosedived as operations in sectors such as marine cargo, aviation and travel and tourism have come to a halt. According to a senior official one one such firm, many companies are likely to default on their premium obligation on April 1, 2020. Also, factories and other establishments are unlikely to renew non-mandatory insurance cover.

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The GIC has asked the regulator to relax the period of determining solvency disallowance to 90 days for outstanding balance of agents and intermediaries, among others, against the present 30 days.

Also, in the present year, the industry needs to provide for stressed debt investments as the same is not allowed for income tax assessment till the account is written off.

“In view of the huge provisions made by the industry and the same disallowed for the purpose of income tax purpose, DTA (Deferred Tax Assets) created for such differences need to be allowed for solvency computation,” GIC has said.

On March 23, 2020, IRDAI extended the deadline in filing monthly and quarterly returns by 15 days and one month, respectively. The insurers have asked for a relaxation of another 60 days from the respective due dates and 90 days from annual requirement.

Further, GIC has also sought forbearance in the compliance requirement of limits on rural and social sector obligations.

Insurers also have asked the regulator for easier dealing room guidelines and allow insurance companies to continue to work from home till normalcy.