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QBiz: GDP Growth at 6-Year Low; Fiscal Deficit Exceeds FY20 Target

1. GDP Growth Slows to 4.5% in Q2 as Manufacturing, Services Disappoint

The economy posted its weakest growth in more than six years as manufacturing activity contracted by 1 percent in the September quarter. Gross domestic product (GDP) rose 4.5 percent from a year ago, down from 5 percent in the previous quarter, the data released by the National Statistical Office on Friday showed.

Two successive quarters of below 5 percent growth have cast a shadow on the economy’s performance in the fiscal year, analysts said.

Worse, nominal GDP growth slipped to 6.1 percent, the lowest in nearly two decades. Growth in government revenues and middle-class salaries is largely in line with nominal GDP growth.

(Source: Business Standard)

2. Fiscal Deficit for April-Oct Touches Rs 7.2 Trillion, Exceeds FY20 Target

The Centre’s fiscal deficit for the April-October period had touched Rs 7.2 trillion, exceeding the 2019-20 (FY20) budgeted target of Rs 7.04 trillion, official data showed on Friday. This was 102.4 per cent of the full-year target, compared with 103.9 percent for the same period last year (2018-19 or FY19).

A boost in non-tax revenue, keeping revenue and capital expenditure at the same level as last year, had helped control the deficit.

Also, with the July-September gross domestic product data released on Friday, it can now be calculated that for the first half of 2019-20 (April-September), fiscal deficit as a percentage of nominal gross domestic product (GDP) was 6.6 percent. This compares to the budgeted target of 3.3 percent of GDP, which Finance Minister Nirmala Sitharaman stated in her maiden Budget speech on 5 July.

(Source: Business Standard)

Also Read: Manufacturing downturn, subdued consumption shrink GDP growth to 4.5%

3. YES Bank Expands Equity Offer to $2 Billion; Board to Meet on 10 December

Private sector lender YES Bank has increased the size of its equity capital offer to $2 billion from the earlier guidance of $1.2 billion on “strong interest” shown by NRI investors, including a $1.2 billion offer by Erwin Singh Braich and SPGP Holdings, and $500 million by Citax Holdings and Citax Investment Group, according to the bank.

Other prominent suitors are the Aditya Birla Family Office ($25 million), GMR Group and Associates ($50 million), and Rekha Jhunjhunwala ($25 million). Besides, a top-tier US fund house has evinced Interest to invest $120 million. Its name will be disclosed early next week. Discovery Capital will take $50 million and Ward Ferry will take $30 million.

(Source: Business Standard)

4. In a First, RBI Moves NCLT Seeking Insolvency Proceeding Against DHFL

The Reserve Bank of India (RBI) on Friday said it had initiated insolvency proceedings against troubled mortgage lender Dewan Housing Finance (DHFL) and filed an application in the bankruptcy tribunal for the resolution of its liabilities to the tune of Rs 83,873 crore.

DHFL is the first financial services firm that has been referred to the National Company Law Tribunal (NCLT) after the Union government notified the financial services insolvency rules on 15 November.

(Source: Business Standard)

Also Read: Economy in coma, says Congress as GDP growth falls to 4.5%

5. Decide on Karvy Relief by Monday, SAT Tells Sebi

The Securities Appellate Tribunal (SAT) on Friday asked the Securities and Exchange Board of India (Sebi) to decide on interim relief for Karvy Stock Broking Ltd and allow limited use of its rights under power of attorney by Monday.

In its 22 November order, Sebi had barred Karvy from using power of attorney after the broker allegedly transferred clients’ money for other purposes and indulged in trade not authorized by them.

A power of attorney in trading is given by clients to a broking firm to trade on their behalf.

(Source: Livemint)

6. Japan Won’t Sign China-Backed RCEP If India Doesn’t Join

Japan is not considering signing a Chinese-backed regional trade pact without India, the top Japanese negotiator said Friday, ahead of a series of diplomatic exchanges in the coming weeks that include a visit to Delhi by Prime Minister Shinzo Abe.

India announced this month it was withdrawing from the Regional Comprehensive Economic Partnership, citing the deal’s potential impact on the livelihoods of its most vulnerable citizens. China said that the 15 remaining countries decided to move forward first and India was welcome to join RCEP whenever it’s ready.

(Source: Livemint)

Also Read: On track to making India $5 trillion economy: PMO official

7. Paytm Parent’s Loss Doubles to Rs 3,960 Crore in Fiscal 2019

One97 Communications India Ltd, the parent company of digital payments startup Paytm, on Friday reported more than a twofold rise in loss for the financial year ended March 2019 on account of higher expenses and lower revenue growth, according to documents sourced from business information platform Paper.vc.

In FY19, One97 Communications’ loss stood at Rs 3,960 crore, compared with a loss of Rs 1,491.23 crore reported a year ago.

The payments startup, however, was able to increase its revenue by a marginal 2 percent year-on-year (YoY) to Rs 3,050 crore in FY19, compared with Rs 2,987.41 crore a year ago.

(Source: Livemint)

8. Pilots Revving Engines Too Hard Led to Indigo’s Airbus Woes, Believes DGCA

IndiGo and Go Airlines India Ltd use the same type of engine made by Pratt & Whitney that’s susceptible to mid-flight shutdowns. Yet IndiGo, one of Airbus SE’s biggest customers, is the only one to encounter turbine failures this year, drawing heavy scrutiny from the aviation regulator.

The reason could be linked to how the budget airline flies. India’s Directorate General of Civil Aviation told IndiGo’s operator, InterGlobe Aviation Ltd, that its practice of revving A320neo jets at full thrust right after takeoff could wear down the engines, people familiar with the matter said. By contrast, Go Air — India’s fourth-largest carrier by market share — typically uses a so-called alt-climb approach that applies less thrust, the people said, asking not to be identified discussing a private matter.

(Source: Livemint)

9. Future Retail Surges as Competition Regulator Approves Amazon Investment

Shares in Future Retail Ltd surged 13 percent on Friday, after the antitrust body approved a deal that would give Amazon.com Inc a minority stake in one of the country's top retail groups.

Future Retail in August announced the deal that would result in the US online retail giant acquiring a 3.58 percent stake in the company, which runs over 1,500 stores in the country and owns budget department store chain Big Bazaar.

The companies had not disclosed the value of the deal, which would help Amazon push deeper into India's booming retail market.

(Source: NDTV)

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