Daily Financial News Analysis – 29th Nov’19

Table of Contents

WhatsApp snooping

Government has issued notice to Israeli technology firm NSO Group, which created Pegasus.
GoI is seeking details about the malware and its impact in the WhatsApp snooping case.
Government was yet to receive the names of people targeted by unnamed entities using Pegasus spyware from WhatsApp.
When reports about the breach were reported in the media, CERT-IN (Computer Emergency Response Team) on September 9 sought submissions from WhatsApp, including a need to conduct an audit and inspection of WhatsApp security system and process.
Prasad reiterated that the government is committed to ensure safety and security of online platforms such as WhatsApp.

RIL hit Rs 10L-crore m-cap mark

The market capitalisation of Reliance Industries crossed Rs 10 lakh crore on Thursday.
This is yet another milestone for the country’s most valuable company as it is the first time that an Indian company’s market cap has gone past this number.
The company now ranked the sixth largest energy in the world.

Bharat Craft

GoI is in talks with SBI.
To jointly run an e-commerce portal for marketing of products manufactured by MSMEs in the country.
Bharat Craft will take Indian MSMEs to the global platform.
Gadhkari said that China was able to progress because of e-commerce portal Alibaba, referring to India’s MSMEs as the growth engine for the country.
Gadkari added that the government is promoting village and cottage industries, and skill development in rural areas, which will lead to reverse migration from cities.
Gadkari said that the government’s policies are focussed on import-substitue and export-oriented products.
“We recently levied a 30% duty on bamboo products that were being imported to China,” Gadkari said.

e-invoicing for MSMEs

The proposed e-invoicing system under the goods and services tax (GST).
e-invoicing would help small businesses secure instant loans without furnishing a plethora of documents as banks can rate them on the basis of these invoices.
Compliance burden, which is often most arduous for MSMEs, will also reduce.
The GST system would pre-populate the returns on the basis of information received from e-invoices.
The government would roll out the e-invoicing system on a trial basis from January 1, 2020, for businesses with turnover of more than Rs 500 crore.
Same facility would be made available for taxpayers with a turnover of more than Rs 100 crore from the subsequent month.
However, e-invoicing will be mandatory for both these taxpayer categories from April 1.
For businesses having a turnover less than Rs 100 crore, it would remain voluntary from April 1, 2020.
Under the system, the GST taxpayers would report their invoices to Invoice Registration Portal (IRP).
This portal will generate a unique Invoice Reference Number (IRN) and digitally sign the e-invoice while generating QR code.
The IRP will also send the signed e-invoice to the recipient of the document on the email provided in the e-invoice.
Another official said e-invoicing would help to generate invoice in a standard format, which can be read by any system and reporting of e-invoice to a central system becomes possible.

ANALYISIS: New Industrial Relations Code

Industrial Relations Code tabled in Lok Sabha on Thursday turned out to be doing much less than expected to reform the country’s labour laws
1. improve the ease of doing business
2. reducing the cost of labour
In its attempt to please all, the government seems to have lost a precious opportunity to position India as an alternative to China in manufacturing, analysts feel.
The most important proposal contained in the 2015 draft version of the Code to allow factories, mines and plantations employing up to 300 people — against 100 now — to retrench/lay off workers and/or shut shop without government approval has been removed in the final Bill.
Though states will have a window to change the employee strength threshold for retrenchment purpose via the notification route.
The code is not going to be a game-changer,” said KR Shyam Sundar, professor at XLRI Jamshedpur and labour law expert.
The world’s third largest economy has failed to catch the fancy of the global manufacturing biggies mainly because of its archaic labour laws that barely allows enough flexibility to businesses.

More troubles for Google in EU

Axel Springer’s (SPRGn.DE) price-comparison shopping service Idealo and 40 other European peers have accused Alphabet Inc’s Google (GOOGL.O) of tilting the playing field in its favor and urged EU antitrust regulators to enforce a ruling against the company.
The joint call by the group ratchets up pressure on European Competition Commissioner Margrethe Vestager to take further action against Google.
The largest group to take a stand against Google to date, in a joint letter to Vestager said that the U.S. web giant had yet to comply with the 2017 order.
Google was also fined 2.4 billion euros ($2.65 billion) at the time.
The signatories to the letter are from 21 EU countries.

Govt-RBI-Stressed Assets of NBFCs

India’s finance ministry wants the Reserve Bank of India to set up a fund to buy out stressed assets of the country’s top 25 shadow lenders.
The government has also asked the central bank to consider a one time waiver to banks from classifying some real estate loans as bad loans.
The RBI has opposed the idea of opening its balance sheet to buy toxic assets of the non-banking finance companies

Rebasing GDP to 2020-21

Minister of State (Independent Charge) of Ministry of Statistics and Programme Implementation Rao Inderjit Singh told Rajya Sabha in a written reply.
A panel on national statistics has recommended 2020-21 as the new base year for GDP and other national accounts.
The Advisory Committee on National Accounts Statistics had revisited its earlier recommendation of GDP rebasing to 2017-18 on grounds of structural economic reforms.
This recommendation was later changed, though.
Earlier this month, the ACNAS had said that 2017-18 was not the best base year for GDP as it saw turbulence from GST and demonetisation.
As per the United Nations System of National Accounts (UN SNA)-2008, the member countries are required to revise the base year of their macro-economic indicators like Gross Domestic Product (GDP), Gross Value Added (GVA), Index of Industrial Production (IIP), Consumer Price Index (CPI) etc. from time to time to better capture the structural changes in the economy.
In India, the exercise of base year revision of National Accounts is guided by ACNAS.
The panel comprises of experts from the Centre and state governments, academia, Reserve Bank of India (RBI), along with other domain-specific experts.
While selecting a new base year, several activities, including new surveys, are to be planned and carried out to have the latest data for use in the revised base year.

Q1 What is a Merchant Discount Rate?

Discount offered by a merchant to its customers for using digital transaction
A fee paid by a merchant to a bank for providing for digital transaction services
Discount offered by e-commerce companies to its customers
None of the above

Q2 As per a recent order by Supreme Court of India, how much incentive amount will be given to farmers to prevent them from stubble burning?