Daily Financial News Analysis – 12th Dec’19 – Free PDF Download

Ease of Doing Business

• GoI wants to further improve India’s  position in World Bank’s ease of doing  business rankings.

• Extent of investment is influenced by  the ease with which businesses can be  begun and run.
• Ironically, investment has been  lacklustre in the period India’s ease of  doing business ranking improved.
• Ranking is not the only factor influencing investment decisions.

•  World Bank: approximately two-third  of the data embedded in doing business  indicators are based on a reading of  the law.
• The statute book therefore is critical  in influencing the ranking.
  1. For example: IBC had originally fixed  upon 270 days to finish the process.
  2. By September end 1,497 insolvency cases  were underway – but about 36% of them  were in process for more than 270 days.
• Investment climate improves when contract enforcement is not only backed bycarefully thought out statutes but is also realised in a timely  manner.
• A vacancy level of 40% is a key reason  why the judicial system is clogged with  pending cases.
• GST refunds needs improvement.

India-France

• For France, as for India, the Indo- Pacific is a threefold reality.
• Geographical reality: as civilisational and commercial ties have linked Africa  and Asia through the Indian Ocean for
• National reality: as France, like India, is an Indo-Pacific rim nation and an  actor in the region.

• Strategic reality: security, economic  and environmental dimensions.

• The French vision of the Indo-Pacific  has 3 pillars.
• Security
  1. Collectively ensuring the security and  stability of this region
  2. Carrying out surveillance missions
  3. Strengthening the capacities of the  region’s countries
  4. Sharing analyses of the maritime  situation
• Environment

1. Blue economy
2. Sustainable development of marine economy
3. Protecting marine biodiversity

• Connectivity

1. Infrastructure
2. Harmonisation of standards
3. Strengthening transport and digital links

• Joint Indo-French strategic vision on the  Indo-Pacific since March 2018.

1. information exchange through our bilateral  white shipping agreement
2. analysis sharing
3. joint military exercises e.g. Varun Naval  Exercise

• France is ready to work with India on  preserving marine biodiversity, port-led  development, and scientific research for  the sustainable governance of oceans.
• France, the European Union and India can together  promote high standards for connectivity in the Indo-  Pacific.
• Multilateralism and regional integration in the Indo-  Pacific is of paramount importance.
• Given our shared principles and values, our mutual  strategic trust, our excellent cooperation already  underway in several domains, France and India are  ready to build and develop their Indo-Pacific agenda  together for the coming years.

Chain Base Mechanism

• Calculating GROSS DOMESTIC  PRODUCT: government is considering  moving to the chain base method.
• What is Chain Base Method?
• National account statistics  or GDP  estimates are compared with those of  the previous period, instead of a  fixed base revised every 5 years.
• The chain base method will capture structural change in the economy faster by allowing new activity and items to be added every year.
• Current GDP estimates are based on data for 2011-  12 and are due for an update.
• The advantage is that new items and factories which  are producing can be introduced.
• In a five-year revision, it takes 7-8 years to get  reflected.

• The statistics office junked the idea of shifting to  2017-18 as base year as it was not considered a  normal year.
• No time-frame has been set for a shift.
• With 60% of India’s GDP coming from services, a  chain based index will capture the changes faster and  reflect the realities better than a fixed base.
• The US shifted to the chain base or chain-weighted  index in 1996 and other  developed countries  followed.

Huawei wins 5G contract in Germany

• China’s Huawei Technologies Co. just  got a seal of approval from one of  Germany’s biggest telecom  companies.
• Telefonica SA’s German unit, which  operates the country’s second-largest  wireless network, picked Huawei and  Finland’s Nokia Oyj to take an equal  role supplying its  fifth-generation  mobile phone network upgrade.
• The deal is subject to the firms getting  certified by German authorities, it  said.
• The announcement is a boon to  Huawei after Deutsche Telekom AG  said last week it has stopped ordering  new 5G equipment because of political  uncertainty over Chinese suppliers.
• Huawei has repeatedly denied  allegations its equipment could be used  for espionage.
• Chancellor Angela Merkel has said in  the past she doesn’t want to bar the  Chinese firm as long as it abides by  certain security standards.

IBC to ring-fence successful bidders

• Cabinet amendmended to the Insolvency and Bankruptcy Code.
• Ring-fence  successful bidders of  stressed assets from criminal proceedings against offences committed by previous management prometers
• The amendments to ibc are likely to be presented in the current session of parliament for approval.

Data Protection Bill

• Ravi Shankar Prasad introduced ‘The  Personal Data Protection Bill, 2019’ in  the Lok Sabha.
• The Bill was widely expected to be sent to the parliamentary standing committee on it
• However, MPs were taken by surprise when the IT Minister moved a  resolution to hand it over to a joint  select committee
• While the Standing Committee on IT is  chaired by Congress MP Shashi  Tharoor, the joint select committee  will be headed by a ruling party  member.

Q1 Highlight 4 main reasons that are blamed for slowdown in Indian economy in September quarter to 4.5%
Q2 Kerala government has recently signed  an expression of interest with which  company to set up Li-ion manufacturing  and technology transfer?

1. Panasonic
2. Toshiba
3. Tesla
4. Huawei

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