Daily Financial News Analysis – 30th Dec’19

Table of Contents

Year of protests

Sluggish pace of global economic growth that has led to
1. Rising income inequality
2. Low entry-level salaries
3. Diminishing permanency of jobs
This in turn has created frustrations among young people who see their dreams crashing before their eyes.
And those frustrations are funnelling into the issue-specific protests that we see.
Governments are failing to deliver solutions to fundamental economic, social and ecological problems of our time.
As more and more women join the labour force and break into the top echelons of politics, business and academia institutions are under pressure to reform in favour of gender justice.
Given these fundamental sentiments driving the 2019 protests, 2020 could see more people hitting the streets.

The key lesson is that government must eschew a short-term fix like piling on debt to boost the economy.
The World Bank has observed that debt in emerging economies at the end of an eight-year surge was a record $55 trillion by end 2018.
The consequence could be what RBI has termed the ‘cobra effect’, where solutions worsen the problem.
RBI’s biannual financial stability report.
Bad loans, which were 9.3% of total lending in September, may increase to 9.9% in a year on account of the fragile macroeconomic scenario and weak credit growth.
Despite loose monetary policy for a year, growth in credit offtake from banks slowed down between March and September.
Animal spirits are unleashed when investors are optimistic about the future.
The Centre’s focus must now shift to implementing a full package of factor market reforms.
If the Centre doesn’t act and states don’t co-operate then India is in for another lost decade, worse than the 2010s which was already worse than the go-go 2000s.

Bihar deputy chief minister Sushil Kumar Modi is the convener of the Group of Ministers on Integrated GST.
Goods and Services Tax Council will reject requests by telcos for a refund of input tax credit of ₹36,000 crore.
Telecom service providers have been urging the government to refund the input tax credit or adjust the amount against their statutory dues.
They have sent several requests to the finance ministry.
Only in one case has exemption on GST been given – on the langar at Swarn Mandir of Amritsar – and ₹300 crore refunded, where the Central government reimbursed it, otherwise there has been no case of exemption or refund, Modi explained.
The telcos have been asking the telecom department to push their case with the finance ministry and the GST Council.
Licence fees and spectrum usage charges that have been pending for more than 15 years because of a legal dispute over the definition of AGR need to be paid by January, as per a Supreme Court order.

The ministry of statistics and programme implementation (MoSPI) is developing a digital repository of all official statistics — on employment, industry, National Health Mission, GST and import-export called NIIP.
This is in line with the government’s plan to put out timely, credible and userfriendly data via a single window.
This is expected to improve transparency and make access to such data easier.
The move comes after questions were raised about the credibility of official data.
At present, data is available on the websites of respective ministries and are not always updated on time.
The portal will provide a highend platform for data analytics and to interpret socio-economic data to the Centre, states and general public, the officials said.
3 phases: integrating all statistical activities of MoSPI, followed by the key data sets available with other departments & data available in states will be onboarded.

Conducted by The Economic Times.
Around 37% of those surveyed say troubles at Masayoshi Son-led Soft-Bank, a leading investor in technology firms globally, has negatively affected India’s startup ecosystem since the group began plowing billions of dollars into the country’s emerging sector.

More than 42% of the respondents say there could not be a better time to build a company.
The survey revealed that consumer internet, food delivery and financial services will continue to be the most hotly contested categories.
Many respondents see consolidation next year, with a few highlighting that these mergers and acquisitions will primarily be investor-led.

Defence Ministry: Chief of Defence Staff to serve up to a maximum age limit of 65 years.
In a landmark decision, the Cabinet Committee on Security on Tuesday approved the creation of the CDS who will act as the principal military adviser to the defence minister on all matters relating to triservices.

President Ram Nath Kovind on Sunday presented megastar Amitabh Bachchan with the Dadasaheb Phalke Award.
Indian cinema’s highest honour
Bachchan was earlier supposed to receive the honour at the National Film Awards ceremony last Monday, but the actor was unable to attend the event due to ill health.
The award, named after Dhundiraj Govind Phalke who is revered as the Father of Indian cinema, was instituted in 1969, the year Bachchan made his debut in Hindi film industry with “Saat Hindustani”.
The Dadasaheb Phalke Award comprises a Swarna Kamal (Golden Lotus) medallion, a shawl, and a cash prize of ₹10,00,000.