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Jottings: All Shook Up

IL&FS debt crisis may have that snowball effect ; Spare the men in uniform; and more

Photo Credit : Shutterstock

One default can race across the credit world. We’ve seen this before. Ten years ago to the day, Lehman Brothers defaulted. The contagion that rippled across the financial world will never be forgotten.  
 
Now, the systemically-important IL&FS has defaulted on debt obligations to SIDBI and other financial houses, igniting another credit crisis - this time on domestic shores.  
 
Reactions across the credit world were sharp and severe. Some credit paper debt yields shot through the roof with some triple-A NCDs trading at 12 per cent -13 per cent yield. Stock markets tumbled six per cent, even as a few financials plummeted a shocking 50 per cent.
 
Now the big players are coming together, offering a lifeline to the beleaguered financier. The Life Insurance Corporation (LIC) is looking at subscribing to a Rs 4,500 crore rights issue that would help the IL&FS honour its debt obligations.

 If credit markets have to breathe easy, we need an asset-quality review of financial institutions too.  — Clifford Alvares
 
The Way It Should Be
The Narendra Modi government is going to town, tom-tomming the anniversary of the surgical strikes. Admittedly, the entire country takes pride in our Armed Forces, and their valour.
 But questions are being raised over the way the achievements and accomplishments of the forces have been politicised. Officers of the Armed Forces, including those who have retired from the defence services, are not amused one bit by the step taken by the government.

Incidentally, universities have been asked to commemorate the anniversary of the surgical strikes, too. The Armed Forces here stand out and take pride in being outside the influence of politics.
 That is the way it should be. That is the way they should be remembered and commemorated.
 — Suman K. Jha
 
 A Ripe Harvest 
 Higher yields are expected from the Kharif crop in oilseeds, just when a depreciating rupee makes oilseeds and vegetable oil imports dear. Vegetable oil imports are dearer still because of a stiff import duty.  

The Global Agriculture Information Network (GAIN) assesses soyabean production to be just a wee bit higher than in the previous year. The yield from 11.2 million hectares of sown area is estimated to be 11.5 million metric tonne (MMT) in the 2018-19 marketing year.

Peanut production in Gujarat is expected to be a little lower this year because of a prolonged dry spell. The yield from 4.4 million hectares is expected to be six million tonne, or 12 per cent lower than in the previous year. Government estimates point to a 31.42 per cent jump in Sunflower seed production this year, though. All in all, cooking oil prices will certainly not deter the festive fervour of the season of fasting and feasting round the corner.  

 —    Prabodh Dubey


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jottings magazine 29 september 2018