Daily Financial News Analysis – 18th Feb’20

Table of Contents

Boosting farm exports

The Finance Commission has appointed ITC Chairman and Managing Director (CMD) Sanjiv Puri as head of an eight-member high level expert group on agriculture exports.
The committee will assess export and import substitution opportunities for Indian agricultural products (commodities, semi processed and processed) in the changing international trade scenario suggest ways to step up exports while reducing import dependence
The expert group will also recommend strategies and measures to

increase farm productivity,
enable higher value addition,
ensure waste reduction,
strengthen logistics infrastructure etc.

All related to Indian agriculture, to improve the sector’s global competitiveness.
It will identify the impediments for private sector investments along the agricultural value chain and suggest policy measures and reforms that would help attract the required investments.
It will also have to suggest performance-based incentives to the state governments for 2021-26 to accelerate reforms in the agriculture sector as well as implement other policy measures in this regard.
The Committee will submit its recommendations within three months for further consideration of the Commission.

Facebook

For years, Facebook Inc. lobbied governments against imposing tough regulations, warning in some cases that they could harm the company’s business model.
Now, it’s pleading for new rules for the good of its business.
Facebook detailed its push for internet regulation, calling on lawmakers to devise rules around harmful content, a different model for platforms’ legal liability and a “new type of regulator” to oversee enforcement.
“If we don’t create standards that people feel are legitimate, they won’t trust institutions or technology,” Facebook’s chief executive officer Mark Zuckerberg said in an op-ed in the Financial Times on Monday.
That and the publication of the white paper coincided with a visit to Brussels, home of the European Union institutions that have crafted some of the toughest rules in recent years.
Silicon Valley firms have suffered from what’s been dubbed as a “tech lash,” with users frustrated over how web platforms profit from their data.
In the op-ed, Zuckerberg said Facebook was hoping for clarity around what constitutes a political ad – especially if paid for a group not directly affiliated with a political party, such as a non-governmental organization.
Companies also need clearer lines around data ownership to enable users to move their information between services, he said.
In addition, the company would look into opening up its content moderation systems for external audit to help governments design regulation in areas like hate speech, he said.

Structural Reforms

Reserve Bank of India (RBI) governor Shaktikanta Das: structural reforms need to be continued to revive demand and support the economy.
Green shoots are now visible and need to be sustained to pull India out of its current slowdown.
Das said the fallout of the outbreak of novel coronavirus in China needs to be closely monitored by “every policymaker” to tailor a swift response.
For the slowdown of the economy: global trade and business uncertainties together with sluggish domestic demand + twin balance sheet crisis

Moody’s on India

Amid growing concerns over the economic fallout of the novel coronavirus outbreak, Moody’s Investors Service on Monday slashed its 2020 growth projection for India from 6.6% earlier to 5.4%.
India’s economy is expected to grow at its lowest pace in 11 years at 5% in 2019-20.
The Economic Survey has pegged gross domestic product (GDP) growth at 6-6.5% for 2020-21.
For India, Moody’s said, the key to stronger economic momentum will be the revival of both rural and urban demand.

Power transmission project in Ladakh

Anand Kumar, secretary in the Union ministry of new and renewable energy: The government plans to set up a 900-km power transmission link that will help large solar and wind energy projects in Ladakh supply electricity across the country.
The move is part of India’s strategy to develop the Union territory of Ladakh.
The ₹11,000-crore marque project seeks to resolve grid connectivity problems faced by the region.
This is also expected to attract investments for setting up green energy projects in the cold desert region.
The power link will initially transfer around 2,500 megawatts (MW) and will be developed in the third phase of the green energy corridors to help tap Ladakh’s solar energy potential of 40 gigawatts (GW).
The strategic project assumes significance as it will help supply power to the people of Leh and Kargil districts, besides defence establishments, during harsh winters and also help transmit surplus power to the rest of the country in summers.
However, its construction will be a logistical challenge, considering the region remains snow covered for nearly six months with very low temperature and oxygen levels.
Ladakh, Thar, Rann of Kutch, Lahaul and Spiti have the potential to generate 315.7 gigawatts (GW) of solar and wind power, and will require investments of ₹43.7 trillion over the next 30 years to 2050, according to a study conducted by the state-owned Power Grid Corporation of India Ltd.
The government is also exploring the feasibility of setting up storage projects in Leh-Ladakh.
“Bhutan is praised in the entire world for its carbon-neutral image and other environmental initiatives. Let us all make sure that we develop Ladakh as a carbon-neutral entity,” Prime Minister Narendra Modi said in Parliament recently.

Sebi decision

The markets regulator on Monday barred investment advisers from simultaneously selling financial products and advisory services.
SEBI capped the fees they can charge their clients
From now on, an entity can provide either advisory services or distribute financial products to a client.
The regulator also cleared norms for so-called regulatory sandboxes at its board meeting.
Sebi chairman Ajay Tyagi clarified that the regulator is okay with having two corporate entities under the same parent providing advisory and distribution services.