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Overseas Fans Go Ga-ga Over Modi

The Union government’s gross government securities (G-Sec) borrowing for the first half of 2018-19 will be Rs 2,88,000 crore, which is only 47.5 per cent of the budgeted gross borrowing plan

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Singapore recently hosted the inaugural Money20/20 Asia - an event with a mission to bring together companies and individuals who build, disrupt and challenge the way consumers and businesses manage, spend and borrow money.  The three-day event was jam-packed and attended by corporate honchos from domains as varied as banking, finance and technology startups. They all concurred on two issues – the dynamism and prospects of the Indian fintech market and the dynamism of  India’s Prime Minister, Narendra Modi.

The Money 20/20 Asia delegates were unanimous in their views that India’s fintech market is dynamic, exciting and promising. The gathering that had drawn participants from the United States, Europe, Japan, India and of course, Singapore, described the Indian Prime Minister as the ‘Man of  the moment’, ‘Warrior on a mission’, ‘Transformative force’, ‘Visionary Leader’ and  a ‘forward-looking statesman’. The acclaims for Narendra Modi persisted on the sidelines of  the conference and in private conversations.

Most were of  the view that structural changes that India was going through, like demonetisation and rolling out of  the GST,  should have happened a long time ago.  
— Avishek Banerjee

Maharashtra To Ban Plastics
The Environment Department of  the state government of Maharashtra recently issued the Maharashtra Plastic and Thermocol Products (Manufacture, Usage, Sale, Transport, Handling and Storage) Notification 2018. The “Plastic Ban Notification” bars manufacture, transport, distribution, wholesale and retail sale, usage, storage and import of some plastic products.

Maharashtra is the eighteenth state to ban plastics. Maharashtra’s decision was prompted by a need to save the state’s environment from the impact of leaching of chemicals from plastic. The state now prohibits products that contain high polymers like plastic bags and pouches, disposable cutlery, plates and containers made of plastic and thermocol, non-woven polypropylene bags, plastic wraps, plastic and thermocol decorative items and plastic packaging for food items. The notification excludes some forms of plastic in use, like plastic used for packing medicines.  
—  Anurit Kanti

The Government Borrows Less
The Union government’s gross government securities (G-Sec) borrowing for the first half of 2018-19 will be Rs 2,88,000 crore, which is only 47.5 per cent of the budgeted gross borrowing plan. Typically, the government borrows over 60 per cent of its total plan in the first half of the year.

The state-owned banks, which are the largest buyers of the government papers, have not found this portfolio very lucrative in the last few years. The lower borrowing plan will help cool off the 10-year benchmark G-sec yields, which had touched a high of 7.78 per cent, says an ICRA statement.

This will also reduce the treasury losses for banks, with 30 per cent of their deposits invested in government bonds for the fourth quarter of 2017-18. Besides, this could also push returns on small savings schemes that are linked to the 10-year G-sec yields
— Mahua Venkatesh

Fences Pop Up At The WTO
On March 19 the United States circulated its request to World Trade Organisation (WTO) members, for “consultations with India” on export subsidies provided through five programmes. The United States claims that the measures appear to be inconsistent with Article 3.1(a) of the WTO’s Agreement on Subsidies and Countervailing Measures (SCM Agreement). It says India seems to have acted inconsistently with Article 3.2 of the SCM Agreement.

The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without resorting to litigation. Fences were evident in the world market at the WTO’s December 17 meeting in Buenos Aires too, when it appealed to member countries to take a fresh look at their farm subsidies.Subsidies in food exports, obviously will entail many “consultations” between food exporters and importers. Jason Hafemeister, Trade Counsel, US Department of Agriculture,  said in a report, “It’s time for WTO members to reflect, reset, and reinvigorate the agriculture negotiations to tackle the real-world international trade concerns ...”  
– Prabodh Krishna

Interest Galore!
The divestment of debt-laden Air India could have been done and dusted in less than eight   months. To begin with, the Expression of Interest (EOI) for divesting the government’s stake in Air India would have been out by the time you read this. Announcement of EOI will kickstart the disinvestment process. The government is expected to offer 74 per cent stake to any domestic or foreign companies/consortium that becomes eligible, based on the criteria listed in the EOI.
Reportedly, the net worth of the applicant interested in the Maharaja could be kept to at least Rs 5,000 crore. The market is abuzz with speculation about the possible contenders for Air India.  The list includes Jet Airways, Vistara, IndiGo, SpiceJet from India and a clutch of foreign airlines, including Air France and KLM Royal Dutch Airlines.
—  Ashish Sinha

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