Translate

Post Your Self

Hello Dearest Gameforumer.com readers

Its your chance to get your news, articles, reviews on board, just use the link: PYS

Thanks and Regards

Saturday, January 25, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Inside the frantic race for answers to the shadow bank crisis

Posted:

Last quarter, two large Indian companies looking to raise funds appeared to have been met with very different responses. L&T Finance Holdings comfortably raised Rs 10,000 crore through a combination of instruments (term loans, non-convertible debentures, external commercial borrowings and a preference share issue). Sajjan Jindal's JSW Steel, which is looking to raise funds to invest in trebling capacity by 2030 (from 18 million tonnes today to 45 million tonnes, at roughly Rs 3,500 crore per million tonne), has been bemoaning the reluctance of banks to lend long term. India needs development finance institutions (DFIs) to boost long-term lending, Chairman & Managing Director Sajjan Jindal told ET in early January. In some ways, their experience encapsulates the fund availability faced by Indian companies today. While there is liquidity available with banks, they are not lending to long-gestation projects directly. The traditional pathways of credit routing through shadow banks have become largely defunct in the aftermath of the crisis in the sector. This means critical long-gestation projects in infrastructure and allied industries, such as steel and cement, are starved for funds. Among leaders of banking institutions and industry, a search is on for solutions. There is continued interest in commercial paper of Indian companies in bond markets overseas. Indian companies in fact borrowed a record amount — $30 billion — in 2019. But unless the domestic credit situation is quickly revived, there will be cascading delays and capacity deficit in vital infrastructure that India will need in the years ahead. 73617633 Shailesh Haribhakti, the veteran auditor and taxation professional who chairs the L&T Finance board,says what is underway is a thorough clean-up of India's financial services sector. He sees the current flux lasting another six months before Indian banks start lending to large, long-gestation projects again. Clean reputations and sound balance sheets would be the only criteria for funding in the future, he adds. 73617659 The distress in the realty and shadow banking sectors is so acute that industry bodies such as NAREDCO and CII have been urging the government to take measures to inject liquidity, such as permitting shadow banks to borrow from overseas as well as directly from the central bank, a facility available only to scheduled banks. The Indian economy, currently growing at the slowest clip in a decade, perhaps needs nothing more urgently than a revival in construction and infra projects activity, a job creator across the country directly and in ancillary sectors. The national infrastructure pipeline (NIP), which aims to execute projects worth Rs 102 trillion (1 trillion is 1 lakh crore) by 2025, is meant to be a booster shot for the economy that will also reignite the investment cycle. 73617674 According to estimates provided to ET Magazine by a debt advisory firm working closely with the government, investments of around Rs 70 trillion will be needed in the next five years, out of which at least half will be debt. Supporting industries such as steel and cement will need to invest Rs 2 trillion for capacity expansion. In comparison, India's GDP in 2018-19 was Rs 140 trillion. Over the last decade or so, shadow banks became the pathways of India's credit circuitry. Banks lent to shadow banks, which in turn lent to projects and large borrowers, assuming greater risk (and charging greater interest) than the banks. After the collapse of IL&FS in 2018 and the troubles at DHFL in 2019, this system has come to a virtual standstill. The loan taps at most of some 19,000 shadow banks were closed. The question now is how to contain the risks while keeping credit availability going. Seshagiri Rao, joint MD and CFO at JSW Group, says while he can raise half the money the group needs for the next 10 years (more than Rs 50,000 crore) overseas, the remaining will have to be raised in India. Rao strongly bats for a new DFI, to be backed by the government. "The role of the DFI cannot be undermined because of some bad lending decisions of the past," he says. Crisil's senior director for ratings, Somasekhar Vemuri, also says there is a clear role for a DFI here that can assess the risk of a new project, co-lend and possibly give a degree of comfort to banks when backing a long-gestation project in either infrastructure or a heavy industry such as steel. Not everyone thinks DFIs are the solution. 73617680 A senior banker-turned-entrepreneur, who was associated with a DFI turned into a bank, said there is need for fresh thinking. He asked not to be named in order to avoid association with his current venture. He pointed out that the model of shadow banks borrowing large sums from banks and making smaller ticket loans is a broken model prone to asset-liability mismatches. He also says the DFIs of the nineties often got their funds through government-backed bonds, subscribed by state-owned banks. It is unlikely the government would be able to do that today, he said. 73617684 Veteran banker Kalpana Morparia, chairman, South and South East Asia, JP Morgan, says India does not need another DFI. "What India now needs is a hybrid model, where banks will fund a project in the construction and implementation phase. They can benefit from multiple revenue streams from the project during this stage — like setting up of escrow accounts etc. After about a year from the completion of the project, as cash flows starts, players like sovereign funds and pension funds looking for longterm and stable income can take out 90% of the bank loans by subscribing to bonds." But for that, a deep and vibrant market in corporate bonds — instruments that allow investors to lend to institutions — is necessary. Bonds will be a key instrument going forward. Infra sector sources indicate that railways, ports and power sectors are likely to corner 75% of all infrastructurerelated investments in the future. And these sectors tend to raise half their debt funding through bonds. Another problem is the Indian government's own relatively attractive bond programme that diminishes the pricing power of the private sector. Domestic bonds come cheaper than bank loans. Kumar Subbiah, the CFO of Ceat Ltd, has successfully raised around Rs 2,500 crore worth of debt from PSU banks recently for expanding capacity. Subbiah points out that if he is able to raise non-convertible debentures from the public, the cost of finance could go down by almost 2 percentage points. 73617694 Another factor critical to the deepening of the bond market is the success of the Insolvency and Bankruptcy Code (IBC). "Globally, investors' appetite in bond market has witnessed a surge with the emergence of legal reforms such as the IBC and the same is expected in India. I also expect improved liquidity in the bond market in the backdrop of improved investor confidence," says Sandeep Upadhyay, MD of Centrum Infrastructure Advisory. Shailesh Haribhakti concurs that a successful insolvency process would be the biggest boost for credit flow. He points out that the quick resolution of DHFL insolvency would provide comfort to international investors that their money is secure in the Indian market. "A bigger benefit will be when the money starts flowing back into banks through the IBC process. Banks recapitalised through IBC will be able to lend with much greater confidence, as they will not be dependent on the government anymore," he adds. So will the government announce a new DFI during the budget? Nasser Munjee, a veteran finance professional who headed IDFC at its inception, has suggested the government set up a National Infrastructure Commission along with reviving the development finance culture, possibly with a separate DFI. The government has already set up the National Investment and Infrastructure Fund in 2015 as a sovereign fund. The NIIF has infra-focused funds. There is also the India Infrastructure Finance Company Ltd (IIFCL) that was started in 2006 and has been recapitalised in 2019. A new DFI will also have its limits — project wise as well as sector wise — and the prudent course of action would be to let many sources of funding to thrive instead of searching for one large financier. The latter approach would involve regulatory tweaks to ease flow of credit capital into India. 73617699 Vemuri of Crisil said a separate rating scale for infrastructure bonds, which measures "expected loss" (EL) and "probability of default" (PD), is required. "While there is demand for AA- and AAA-rated bonds, when it comes to A-rated bonds, there are no takers. One of the ways is to use the new credit rating scale for infrastructure projects. Regulatory acceptance of EL-scale ratings, along with the traditional PD-based ratings, can also help channelise investments from pension funds and insurance companies into the A-category bonds of infrastructure projects," Vemuri said. Interest in specific Indian sectors such as renewable energy, ports, transmission and airports continues to be robust among international debt investors, says Chetan Joshi, head of debt capital markets for HSBC in India. Renew Power, for instance, has raised capital abroad many times, including a $450 million round through a sevenyear green bond last week. Joshi points out that India raised an all-time high of around $20 billion overseas through bonds, of which $7 billion was for infrastructure. "There continues to be huge demand for Indian paper internationally, as global yields remain low, optimism surfaces around a resolution of the trade war and institutions want to diversify into an undersupplied country like India. Given domestic credit market challenges, issuers should try to max out this window." Bonds and loans together, India raised $30 billion from overseas in 2019 — a record high. There have been several suggestions about what the government can do to help facilitate funds flow from overseas. One suggestion is to reduce the minimum maturity requirement for external commercial borrowings to refinance rupee loans from seven years to five years. The pricing cap for external commercial borrowings (currently at London Inter-bank Exchange Rate plus 450 basis points) may be relaxed to allow more pricing freedom. Another is to allow multinational insurance companies, who typically look at investing long term, a foreign direct investment limit of 74% instead of the current 49%. All eyes are now on what the finance minister will announce come Budget day.

Modi will soon have a new worry in the east

Posted:

"Paukphaw", which literally means born together, implying not only a shared destiny but racial kinship, was reinforced through strong political and economic bonds between Myanmar and China last week. Xi Jinping became the first Chinese leader to visit Nay Pyi Taw on a hugely significant state visit ( January 17-18) since Jiang Zemin back in 2001. The event received not more than a modicum of interest here, but it could have a serious geopolitical impact on India.If India is concerned about the China-Pakistan Economic Corridor, it now has more reason to worry about CMEC (China-Myanmar Economic Corridor) that just moved from being a concept to reality. The CMEC is less about oil and gas — there are pipelines running through Myanmar already — and more about reducing dependence on the Malacca Straits and access to the Bay of Bengal and Indian Ocean. The CMEC includes the Kyaukphyu deep-sea port in the troubled Rakhine state along with a special economic zone (SEZ), the China-Myanmar border economic zone (the two countries share a 2,200 km-long border) and the newly announced Yangon urban development project (which is still at MoU stage).Kyaukphyu is literally a stone's throw from Sittwe port that is being developed by India, not to speak of the fact that India's Myanmar has conceded the "shared future" to China. The joint statement talked about "…promoting comprehensive strategic cooperation and building a Myanmar-China Community with a Shared Future based on the aims of mutual benefits, equality and win-win cooperation"."Win-win" is China-speak for you-followus-you-win-we-win, or, in other words, an acceptance that Myanmar would find its place in the Chinese sphere of influence. China gave Myanmar huge diplomatic space that had been robbed by the West, saying it "firmly supports Myanmar in its aim to adopt a development path that is in line with its national conditions, the safeguarding of its legitimate rights and interests, as well as national dignity, on the international stage, and to maintain the momentum of development and stability."Translated, it means China will block multilateral attempts to isolate or sanction Myanmar on human rights violations and other issues. Myanmar needs this protection from a P-5 member to escape international sanctions particularly in 2020, which is an election year in the country, and when Gambia has taken Myanmar to the International Court of Justice on the Rohingya crisis.To be fair to Myanmar, this hasn't been easy, but despite having virtually the entire deck stacked against it, Myanmar has stood up to its biggest trading partner and benefactor. Kyaukphyu port has been downgraded from a $7.2 billion project to a $1.3 billion one, due to Myanmar's fears of a debt trap. China has not been able to convince Myanmar yet about resurrecting the Myitsone Dam, which Myanmar stopped under local pressure. Neither of these issues made an appearance during Xi's visit, which signals Myanmar's determination.Myanmar's defence chief, General Min Aung Hlaing, even got Xi to commit to not supplying weapons to ethnic armies that continue to fight the Myanmar state — a huge cache of weapons seized from the Ta'ang National Liberation Army (TNLA), operating on the Chinese border, a couple of months ago were found to be Chinese. China is also accused of arming the Wa army as well as the Myanmar National Democratic Alliance Army (MNDA). China denies all of these, but evidence on the ground shows otherwise.India has been watching closely, acutely aware that Myanmar's moving deeper into the Chinese sphere would put paid to its Indo-Pacific strategy as well as its regional connectivity initiatives. It is aggravated by the relentless campaign against Myanmar and Aung San Suu Kyi by the West and the Islamic world on the Rohingya issue.India, along with Japan and China, are Myanmar's steady allies, but with India and Japan on one side and China on the other. The balance currently is skewed in favour of Beijing, but both Japan and India are helping to prevent Myanmar from becoming a pushover. Japan is not only playing a strong role in the peace process with the ethnic groups but, as the only power with deep pockets and ability to create infrastructure, is building an SEZ in Thilawa outside Yangon as well as a Yangon-Mandalay railway project. India is working more quietly, given other regional considerations, both with China and Bangladesh.From assistance to the Rakhine State, aid to Rohingya refugees as well as training of the Myanmar army, India is nurturing this important eastern neighbour. But India's equity as a balancing power comes from both its economic and political heft. Economically, India's leverage is modest. Politically, India can do more.Myanmar's Independent Commission of Enquiry (ICOE), headed by former Philippine foreign minister Rosario Manalo, on January 21, acknowledged crimes and killings by security forces in Rakhine in 2017, but stopped short of accusing them of "genocidal intent". Japan has openly endorsed the ICOE findings. India's support will be very important.The ICJ's provisional ruling on January 23 was tough, asking Myanmar to implement "all measures within its power to prevent genocide". ICJ, as Bertil Lintner, a Myanmar expert, observes, cannot enforce its ruling except through the UNSC, where it will be blocked by China and Russia. The final ruling is years away. In the meantime, Myanmar, he says, will feel pressured further and won't be able to build a meaningful relationship with the West. Nor will Myanmar feel the need to repatriate any Rohingya refugee from Bangladesh.Indian officials have tried to impress upon their US counterparts the importance of cutting Nay Pyi Taw some slack for the larger goals of rehabilitating the Rohingya refugees or keeping Myanmar out of China's ambit.None of this is pretty but hard geopolitics rarely is.

The forgotten founders of the Indian Republic

Posted:

By Vikram Raghavan Our republic, which turns 70 today, has many founders. Some are national icons — Rajendra Prasad, Sardar Vallabhbhai Patel, Jawaharlal Nehru, BR Ambedkar, and Maulana Azad. They were vitally involved in the debates and decisions of the Constituent Assembly. Govind Ballabh Pant, Alladi Krishnaswamy and KM Munshi are also well known for their role in framing the Constitution. Beyond this inner circle, however, there are hundreds of unsung men and women who made important contributions to the republic's creation.In recent years, as popular interest in the Constitution has surged, a few previously overlooked founders have come to light. They include Hansa Mehta, the gender-equality champion and educationist; Dakshayani Velayudhan, the young Dalit who fought untouchability; and Jaspal Singh, the Olympic gold medalist who was a passionate advocate for India's tribal communities. Yet, many others continue to remain obscure, despite having roads and buildings named after them or being featured on postage stamps.In his magisterial book, The Indian Constitution: Cornerstone of a Nation, Granville Austin lists 21 important figures in the Assembly whose total membership exceeded 300. Besides the wellknown founders already mentioned, the list includes a number of persons who have either receded from public memory or whose founding contributions are overlooked. 73618132 Durgabai Deshmukh is one such figure. She was among the Assembly's 15 women but the only one to make it to Austin's list. A close associate of Gandhi, Deshmukh enthusiastically joined the Mahatma's quixotic quest to spread Hindustani in South India. Surprisingly, however, Deshmukh railed in the Assembly against imposition of Hindi and supported the formation of linguistic provinces.She enjoyed near perfect attendance and was a regular participant in the meetings of the Congress Assembly Party at which many contentious issues were discussed and resolved.Deshmukh belonged to the so-called "Canning Lane Group" that took its name from the street on which members stayed when in Delhi. Participants from this informal group were particularly vocal at Assembly sessions and moved many amendments to the draft Constitution. In her autobiography, Durgabai claimed she was involved with close to 750 amendments! A patron of many charitable causes, Deshmukh subsequently revealed that Rajaji and Patel wanted to nominate her as a Supreme Court judge. Nehru, she alleges, scuttled the proposal. This meant the Supreme Court had to wait several decades to get its first woman justice.A Muslim Leaguer, Saiyid Mohammed Saadulla was Assam's provincial prime minister and joined the Constituent Assembly only after Partition. He served on the drafting committee but maintained a fiercely independent position on most issues.Among other things, Saadulla supported the inclusion of due-process rights, championed state autonomy, and canvassed for separate electorates. 73618148 Jairamdas Daulatram was a Congressman from Sind. During Partition, he lost his seat, and was appointed Bihar's governor on Independence Day. But he quickly got into a bitter quarrel with the chief minister over gubernatorial privileges. He resigned and returned to Delhi and was reelected to the Constituent Assembly from East Punjab. A member of three major committees, Daulatram proposed a special court to handle complaints from minorities regarding unfair treatment.A Gandhian, Shankarrao Deo began his political career by participating in the Champaran Satyagraha. He rose steadily through the Congress ranks to become the party's general secretary and eventually joined the working committee. In the Assembly, Deo suggested entrenching the Constitution's fundamental rights to render them immune from amendments.During the divisive language debate, Deo made a strong plea for India's cultural diversity. As a Marathi speaker, he declared that he was opposed to Hindi as a single language for the whole country. Deo later played an important role in the formation of the Maharashtra state. 73618160 A mathematician-turned-lawyer, Ananthasayanam Ayyangar represented Madras in the Assembly. He was active on a number of issues, including due process rights, the rights of arrested persons, and the Supreme Court's powers. Distrustful of universal adult franchise, Ayyangar was convinced that village panchayats ought to be the cornerstone of India's constitutional edifice. He also advocated a special tribunal for the removal of judges rather than impeachment by Parliament. After the first general elections, Ayyangar became the Lok Sabha's deputy speaker and later took over as speaker.A graduate of London School of Economics, KT Shah was a rare economist in the Assembly. His exposure to Constitutionmaking began with the Second Round Table Conference, which he attended as an adviser. Shah was a member of the Congress Experts Committee, which made important recommendations, notably on fundamental rights, before the Assembly opened in December 1946.During the debates, Shah insisted on a time-bound plan to implement the Directive Principles. Otherwise, he feared, they would be mere "pious superfluities." He was a strong advocate for state control over natural resources and industry, which led Austin to describe him as the Assembly's most doctrinaire socialist. At the same time, Shah also held some rather progressive views. He argued, for instance, that housewives' work should be covered by the equal-pay-for-equalwork principle and properly reflected in national accounts.HC Mookerjee was an English professor at Calcutta University. While teaching, he dabbled in politics and became an MLA in Bengal. Elected to the Assembly on a Congress ticket, Mookerjee was one of the house's two vicepresidents. He often took the chair when Rajendra Prasad wasn't present. The professor was a member of several committees and chaired the minority rights sub-committee.A prominent Christian leader, he was in two minds about whether legislative seats should be reserved for minorities. Ultimately, Patel and Munshi persuaded him to oppose the proposal.An officer of the Mysore civil service, N Madhava Rau rose to become the princely state's dewan. He attended the Second Round Table Conference and later joined the viceroy's executive council (on which Ambedkar also served). In July 1947, Rau was elected to the Assembly to represent Orissa's princely states. He participated in the drafting committee and spoke up for village panchayats and federalism.Hailing from Bihar, Satya Narayan Sinha was an agriculturalist and a zamindar who later became a politician. As chief whip for the Congress Assembly Party, Sinha was responsible for corralling his colleagues to vote on specific issues or motions. As Austin tells us, the whip was rarely enforced. After the Assembly, Sinha held several cabinet posts and became Madhya Pradesh's governor in 1971. 73618203 N Gopalaswami Ayyangar or "NGA" began his career in Madras as a civil servant. In 1937, he was appointed Jammu & Kashmir's prime minister and oversaw significant reforms in the state. Elected to the Assembly from his home province, NGA was a member of five important committees. He made significant interventions on many issues ¡X free speech; compensation for land acquisition; and the need for a second legislative chamb er. He was an emphatic advocate for a strong central government. In August 1947, NGA relinquished several honours conferred on him by the British Raj, including a knighthood.NGA told Governor-General Louis Mountbatten that the Assembly wanted Indians to refrain from accepting foreign titles and that he fully agreed with that expectation.NGA co-authored with KM Munshi the famous Munshi-Ayyangar formula to end the bitter impasse in the Assembly over language. Under the formula, Hindi was selected as an official language while English would continue for an interim period. NGA was also closely involved in negotiating Kashmir's constitutional status with Sheikh Abdullah. He was responsible for the drafting and adoption of Article 370 in the Assembly. 73618261 Not on Austin's list is Jagjivan Ram, whose contributions to constitution-making are often overlooked. Besides Ambedkar, there were several Dalit members in the Assembly, many of whom were associated with the All India Depressed Classes League, of which Ram was president.Ram was a member of several Assembly committees, including the sub-committee on fundamental rights.Also missing from Austin's list is Jerome D'Souza, the Jesuit principal of Loyola College, Madras. Impressed by the priest's oratorical eloquence, Rajaji had D'Souza nominated to the Assembly. Fr. Jerome's primary concern was to speak up for minority interests and religious freedoms.Somewhat controversially, D'Souza opposed the proposal to reserve legislative seats for minorities to further national integration. Impressed with D'Souza's sincerity, Nehru included him in the early Indian delegations to the UN.Not all our founders were Assembly members.A prominent example is BN Rau, who was closely involved in the framing process, although he was never actually elected to the house. 73618228 Another such person is Mridula Sarabhai. As the first woman general secretary of the Congress, she was an unrelenting champion for greater women representation in the Assembly. Although she did not join the Assembly herself, Sarabhai and other prominent Indian women participated in the house's flag presentation committee. There is still much we don't know about the Assembly members and others associated with it. Private papers don't exist for many. Few have left behind memoirs or oral histories.And decent biographies on these neglected founders are hard to come by. Despite these challenges, research about the founders is critical to deepening our understanding of India's republican and democratic foundations.Studying the founders is, however, not an exercise in hero worship. No one in the Assembly was perfect or claimed to be infallible. Rather, understanding the founders' lives and deeds might help us better appreciate how this diverse group of men and women functioned as a cohesive team of rivals in the Assembly. They displayed a remarkable unity of purpose in drafting, debating, and adopting an inclusive and enduring constitution.It is this founding legacy that we commemorate on January 26 when we renew our shared constitutional faith as citizens. After all, to paraphrase Benjamin Franklin, it is the day that the founders gave us a republic, ¡§if we can keep it. 73618315 73618344 Vikram Raghavan studied law in India and retains an abiding interest in constitutional history. His views are personal

PIO figures in Europe’s biggest tax heist

Posted:

It has been described as the "robbery of the century" and "the biggest tax theft in the history of Europe". Behind it are two investment bankers, Britisher Martin Shields and Kiwi Paul Mora, who, along with hundreds of bankers, lawyers and investors, made off with a staggering $60 billion, all of it siphoned from the state coffers of European countries between 2006 and 2011.The two met while working out of the Merrill Lynch's London office and devised a scheme called "cum-ex trading" (from the Latin for "with-without"). It is a monetary manoeuvre to avoid double taxation of investment profits that plays out like high finance's answer to a David Copperfield stage illusion. Through careful timing and the coordination of a dozen different transactions, cum-ex trades produced two refunds for dividend tax paid on one basket of stocks.The process was repeated over and over, as word of cum-ex spread like a quiet contagion. Germany was hardest hit, with an estimated $30 billion in losses, followed by France, taken for about $17 billion. Smaller sums were drained away from Spain, Italy, Belgium, Austria, Norway, Finland, Poland and others. 73621893 A third man, Dubai-based British citizen Sanjay Shah, is alleged to have copied their methods to defraud the Danish treasury of $2 billion. Shah denies wrongdoing but has never been shy about the source of his wealth. When he bought a $1.3 million yacht a few years ago, he found the perfect name: Cum-Ex.Shah was raised in London by parents of Indian ancestry who had immigrated from Kenya. He dropped out of college in 1992, citing a lack of motivation, and worked at a number of large financial firms. In 2007, he landed a job at the London office of Rabobank, a Dutch company, on the dividend arbitrage desk where he learned about cum-ex trades.According to his Twitter page, he is currently based in Dubai and dubs himself an entrepreneur and philanthropist who raises money for autism research.No criminal charges have been filed against Shah. However, German prosecutors have charged Shields, a 41-year-old Oxford-educated math whiz, and Mora, a 52-year-old New Zealander with a fondness for Hawaiian shirts, with "aggravated tax evasion" that cost the German treasury close to $500 million.Last month, the presiding judge issued a preliminary ruling that, for the first time, declared cum-ex a felony, calling it a "collective grab in the treasury." German prosecutors say they will pursue 400 other suspects, unearthed in 56 investigations.Precisely who invented cum-ex trading, and when, are mysteries, but ground zero for this scandal may have been the London branch of Merrill Lynch.At Merrill, Shields' job was to identify "tax-attractive trades", as he put it in his testimony. He had joined one of the least visible sectors of the financial world looking for ways to reduce clients' tax bills. Many of these were variations of a strategy called "dividend arbitrage", and right before Shields left Merrill in 2004, he learned about a new one, cum-ex.Academics have struggled for years to explain the trade but suffice it to say, the goal was to fool the financial system so that two investors could claim refunds for dividend taxes that were paid just once.With the financial crisis in full swing, cum-ex was one of the few reliable moneymakers, and the trade boosted careers throughout the City of London. Prosecutors have reportedly opened investigations into transactions handled by Bank of America, JPMorgan Chase, Morgan Stanley and many others. Dozens of German banks participated in cum-ex deals, too, gobbling up German taxpayer money at the same time they received a rescue package worth more than $500 billion.American banks conducted cum-ex trades overseas, rather than at home, out of fear, a whistleblower said. Specifically, he mentioned a 2008 Senate investigation into "dividend tax abuse" that found it was depriving the US treasury of $100 billion annually. The report led to a ban on dividend arbitrage tied to stock in US corporations. But nothing prevented American bankers from conducting such trades with foreign companies on foreign soil.Eventually, American investors joined in, too. German efforts to stamp out cum-ex with legislation, in 2007 and 2009, left holes through which certain types of financial players could still crawl. This included private pension plans in the US, a niche financial product for wealthy people who want the kind of privacy, and exotic investment options, that Fidelity doesn't offer."These US pension plans became the holy grail for cum-ex trading," said Niels Fastrup, a co-author with Thomas Svaneborg of "The Great Tax Robbery". "They were perceived by tax authorities as very trustworthy, and all European countries had agreements with the US, so these plans could claim 100% of withheld taxes."But in 2011, a clerk in the Bonn Federal Central Tax Office, who was interviewed by the German media team and has remained anonymous, came across tax refund applications that looked dubious. They were from a single American pension fund that had bought, then quickly sold, $7 billion in German stock. Now it wanted a tax refund of $60 million. The fund had just one beneficiary.Instead of paying the refund, the clerk made inquiries. She soon received a peppery letter from a German law firm that threatened to hold her "PERSONALLY" accountable "under criminal, disciplinary and liability law". The clerk reported all of this to prosecutors, which ultimately led to the trial in Bonn.The cum-ex reckoning has already begun. Several banks have been fined (Deutsche Bank, UniCredit), one has apologised (Macquarie), others have pledged cooperation with investigators (Santander, Deutsche Bank) and two are insolvent. If the Bonn trial ends in convictions, stiff penalties are expected."They won't even have to prove that the banks were complicit or that the banks were trying to evade taxes," said Dierk Brandenburg of Scope, a credit-rating agency in London. "The fact that they benefited means they have to give the money back."

TVS drives into e-scooter market with iQube Electric

Posted:

BENGALURU: Two-wheeler manufacturer TVS Motor unveiled its electric scooter iQube Electric in Bengaluru on Saturday, another big-ticket entry into a growing market occupied by Bajaj, Hero Electric and a clutch of new firms heralding the electric transition.The iQube boasts a 4.4 kW electric motor. It can accelerate up to 40 kmph within 4.2 seconds; its top speed has been pegged at 78 kmph and can cross 75 km in full charge.Technologically, the iQube Electric comes with parking assistance, range indications, battery charge status, smart-ride statistics, geo-fencing and so on. TVS has announced that the iQube, indigenously designed and built, has been priced at Rs 1.15 lakh on road. The scooter will be available in Bengaluru beginning Monday.TVS Motor Chairman Venu Srinivasan, a Deming Distinguished Services Award winner, said the move towards electric was in line with the aspirations of the country's youngsters: go digital, be connected and adopt sustainable modes of transportation. Srinivasan said the company has setup a manufacturing capacity of 1,000 units a month, and hopes to close monthly sales in January at 100 units sold in Bengaluru. TVS Motor has partnered with Bescom to create charging infrastructure in Bengaluru.TVS also unveiled home charging and public charging Infrastructural support plans along with the launch of iQube Electric. The electric scooter was launched by Nitin Gadkari, Union Minister for Road Transport and Highways. Gadkari said the government has initiated work on setting charging stations near traditional fuel bunks in the country. TVS Motor, which sells two-wheelers across consumer segments from commuters to racers, had on Friday teased Twitter with short videos featuring the words Charge. It triggered speculation of an all-electric offering from the southern automaker.The iCube is the first pure electric offering from TVS Motor.TVS Motor Company had earlier invested in electric two-wheeler start-up Ultraviolette Automotive, getting into the performance segment of the new technology industry. Ultraviolette sells the F77, sporting a 3x modular Lithium-Ion battery packs with 4.2 kWh maximum capacity.The Centre had announced a few weeks back that 2636 electric charging stations would be set up across the country, expressing hope that Original Equipment Manufacturers will launch eVs to leverage the infrastructure development.Globally, automotive companies have been spelling out future strategies that have encompassed electrification.Bajaj has launched an electric version of its iconic scooter brand Chetak on January 14, pricing its versions at Rs 1-1.15 lakh.Bengaluru-based Ather, incubated in IIT-Madras and backed by Flipkart Co-founder Sachin Bansal, has said its new Ather 450x will be unveiled on January 28. On Saturday, Kia Motors, a Korean carmaker and affiliate of Hyundai, had unveiled a mid-to long-term strategy to release 11 eVs and a target of 6.6% market share by 2025.Providers of charging solutions say the entry of large players such as TVS clear the pitch for an accelerated shift towards electric vehicles. Wybren van der Vaart, co-founder and CEO of charging solutions startup BrightBlu, said: "With TVS going the electric way, it is clear that the global wave of electrification has well and truly reached India's shores and is here to stay. Depending on how well the automotive industry is capable or riding this wave will determine the fortune of this industry for decades to come."Automotive industry executives say TVS' timing of entry presents an opportunity for the industry to boost sentiments, strained by a sustained slowing of sales in recent quarters. "The customer would also have a wider choice of good quality eV bikes at various performance and price levels. Established brands like Hero Electric, Bajaj and TVS would certainly give confidence and trust to the prospective customers leading to increased adoption. B2B segment is also showing keen interest in adopting cost effective mobility solutions," Sohinder Gill, Director-General, Society of Manufacturers of Electric Vehicles (SMEV). According to SMEV, a total of 1.2 lakh electric two wheelers were sold in India in 2018-19, a market slated for high growth rates. Recently, there have been some concerns about the eligibility of certain electric two-wheeler models for incentives under the Centre's FAME 2 scheme. Gill said "a thorough re-look" into the FAME 2 was necessary. "It (the re-look) will catalyse a substantial growth in the electric two wheelers in line with the nations target of having atleast 30% two wheelers as electric in 5 years," he said. TVS Motor, flagship of the $8.5 billion TVS Group, has already begun roll out of BS-VI two wheelers, starting the release of the vehicles with the new emission norms with the TVS Apache RTR 4V series of vehicles. (This correspondent was in Bengaluru at the invitation of TVS Motor Company)

University of Houston signs MoU with Himachal based-Shoolini University

Posted:

NEW DELHI: Himachal Pradesh-based Shoolini University has signed a memorandum of understanding (MoU) with the University of Houston, Texas, through which five of the former's graduate students will get admission to the latter's mathematics PhD program.The US based University of Houston, a leading public research university in Houston, Texas, has signed a Memorandum of Understanding (MoU) with Himachal based Shoolini University for collaboration in research and academic partnership.The students recommended by Shoolini University will be evaluated and tentatively approved by the University of Houston a year in advance. They will spend a year in the Solan campu in Himachal and then complete their programme at the Texas campus. The selected students will be entitled to a stipend for the first year and will be eligible fellowships subject to rules.Shoolini University vice-chancellor P. K. Khosla said it was a "golden" opportunity for students, "The University, which already has tie ups with over 200 universities across the globe, has initiated steps to open more such avenues for its students."Houston University is nearly a century old. Jiwen He, Professor and Chair, Department of Mathematics at University of Houston said, "At the University of Houston, we prepare students to envision their future, emerge as leaders and launch careers that transform the world."

We had worse slowdowns in 2012-13, 2013-14: Panagariya

Posted:

Arvind Panagariya, Former VC, Niti Aayog, says in FY20-21, we should get to above 6% growth rate and then we could jump back to about 8% or so. Excerpts from an interview with Tamanna Inamdar of ETNOW.What is your assessment of the economic slowdown and the worrying signs that are now emerging?Let me give a little bit of background. This is the third slowdown that we have experienced since 1991. Soon after the reforms began, there was an eight-year period during which we grew at about 6.7% or 6.8% on average annually and then starting from 2000-2001, the economy slowed down and for the three years that followed, we had a growth rate of about 4% or so. But then the economy took off. We grew for nine years at 8.2% per year and we even weathered the global financial crisis during that period. But again we began to slow down for three years -- 2011-12, 2012-13 and 2013-14, especially in the last two years. After that, for five years we have grown at 7.5% and now we are slowing down again. It is not the first time that we are slowing down. If you look at the past commentaries, they become so gloomy that it seems the doom's day is here, but then it is forgotten. Are you hoping this is one of those because if we are looking at historical perspective, what changed then that can change now? We are currently in a situation where the world's economy is facing several tremors. India, even though relatively insulted, has its own set of problems where there is a credit crunch, slacking investment, slowing consumption and not a promising employment scenario. Is this a recipe for a perfect storm and is it comparable to all the other instances that you are talking about?In fact, if you compare the last month that we have had in 2012-13, 2013-14, I would say that was a lot worse because there was policy paralysis, one-go clearances were not happening, a lot of policy initiatives that were being taken were anti-growth. In the current slowdown, on the other hand, the key factor is the weaknesses in the financial sector. The financial sector is in a bit of a turmoil and we know the reasons for that. The financial sector is facing a massive NPA problem and this is a world-wide experience. We are not the only ones facing it. After the global financial crisis, we saw in the US that recovery tends to be slower. And also the recognition of the problem was delayed. It was the same case in our country too. Those of us who knew, as early as 2013 we tried to push. Actually I was there in the government and I tried to push very hard to get the action going but it was difficult. The action began only in 2017. So, the process was slow and that spilled over into the non-finance banking companies (NBFCs). That might take another six months to a year to at least get to a reasonable kind of level where the financial markets and then growth will resume. I also think that we have bottomed out now. Recovery will be a bit slow. It is not going to be a massive increase in growth rate in the second half of the current fiscal year. but we will see a small turnaround. In FY20-21, we should get above 6% and then I would not be surprised at all if we jump back to about 8% or so. Sticking to the fiscal deficit target of 3.3% in this year's budget, it is almost being spoken about as a given that this target will be breached because the government will have to ramp up spending and some measures to pull us out of this slowdown. Are you comfortable with that?I have written and I will stand by what I have said that the fact that the economy has slowed down should not lead to increased profligacy because our combined deficit of the public sector -- once we also take into account the states and the off budget borrowings, is easily 8%. In some states, it touches about 9% and so it is very large. It is about as much as households are putting through the financial markets, meaning household financial savings are about 8% to 9%. If the government borrows even more by increasing the deficit for next year, it will in effect leave nothing for the private sector to borrow from the household savings and that is a highly productive investment. So, it is not a good idea to crowd out what is your most productive investment. For those reasons, I support staying with the current fiscal deficit even if we choose not to kind of reduce it further. There are alternative sources of revenue which would be more efficiency enhancing that the government can resort to. Former Economic Secretary SC Garg has said recently that the actual fiscal deficit even last year was about a percentage higher. There have been some estimates, one of them from Mr Arvind Subramanian that the actual GDP growth is perhaps 2% lower. Credibility of data has become a huge talk point. How important is it for India to restore the credibility of the data we put out.This lack of credibility is bouncing around in specific chambers. I do not see the investors buying that at all. Investors do not trust their data and look at the foreign investment. Even in the slowdown phase which is the first half of the current fiscal year, foreign investment was up about 15% over the corresponding period in the preceding year. I do not think your investors are paying much attention to what all of you are saying about the credibility of the data and particularly this kind of nonsensical claim of growth rate being 2 or 3 percentage points lower. Where was the economic advisor when he was writing all these economic surveys saying that we were in a sweet spot? I do not understand those claims at all when I see this in the light of what was written in those days in the Economic Survey. So that part of it, I disagree with. Even the official data shows slowdown as does everything else. For the particular quarter. when you grow at 4.5%, clearly the growth rate of all the variables like consumption, investment, etc, will slow down and that has happened. We see that. But the government has responded with a number of different actions. There is always a lag in response and so I am not so worried. The government has responded in the way it should have responded so I would patiently wait a little bit more. Wait how long and what more would you like to see from Budget 2020?I have suggested that the reform that was done in the corporate tax area should also be done in case of personal income tax. I have said bring the personal income tax rate to 22% over a three-year period and upfront in this year by bringing it down by 3 percentage points and the remaining 5% can be divided between the following two years. All the other exemptions can be done away with. There are so many tax disputes happening, so much uncertainty arising on account of these things. We can just put an end to all that. Tax payer's mind will be at rest also and their incentive to do productive work will rise too. What can be the priority over here? If you were to list the top two-three things that Nirmala Sitharaman needs to do, especially in terms of messaging to corporate India, what would you advise?Instead of short-term measures, I would say, go for structural reformswhich will send a fantastic signal. It is a signalling which you need to give to the private sector and on that front, there are a number of things that the finance minister could do. We already talked about cutting income tax rates, simplification and improving the administration of taxes. At the same time, the government ought to go on a very aggressive programme of privatisation and there are two ways to do it. One, is the privatisation of public sector enterprises. A lot of these enterprises are already listed. All you have to do is sell the stocks on the stock market. That is not so hard but let the stake come below 50% and let private boards run these companies. Second, asset monetisation is very important. Roads, bridges, ports, airports, etc, have already been built, including even the electric transmission lines. That should be given to the private sector on a long-term lease. That can generate a lot of revenue upfront for the government and also will help raise the efficiency. The Budget should give the signal that the government is going to be very bold; that the public sector banks will be put up for privatisation. They need not put out at this stage how they plan to do it but at least put it on the table, so that a committee is appointed with the mandate to come back and report within three months some approximate roadmap to proceed in that area. At the end, the government does not need 12 banks and history has shown that year after year or time and again, we see NPAs accumulating in the public sector banks. It is not just public sector banks right now though.No, in fact, it is the public sector banks. If you look at the history of 25 years, the government has not spent a single rupee on bailing out or on recapitalising the private sector banks. There have been recapitalisations in the past alsom but even in the current one, Rs 2.1 trillion has been given to the public sector banks to recapitalisation, which is more than the amount spent on the Food Security Act. If you look at the history of the credit slowdown, that impacts a lot more public sector banks than private sector banks. The credit expansion in private sector banks has held up a lot better.

Vivo to launch iQOO premium phone in Feb in India

Posted:

Chinese handset maker Vivo is set to introduce a premium smartphone under the iQOO sub-brand in India next month.The brand, which has focused on the Chinese market, is planning to expand presence to more markets. The global expansion would begin next month, when it would launch its first flagship phone in India, Android Central reported on Friday.Meanwhile, the smartphone player created history by grabbing the second spot in the Indian smartphone market in the fourth quarter of 2019.Vivo captured 21 per cent market share to reach the second spot as Samsung slipped to third place with 19 per cent market share. Xiaomi topped with 27 per cent market share, according to Counterpoint Research.OPPO and Realme were other players in the top 5, with 12 per cent and 8 per cent market share, respectively.Vivo grew 76 per cent (year-on-year) in 2019 and 134 per cent in Q4, driven by good performance of its budget segment series.

Gameforumer QR Scan

Gameforumer QR Scan
Gameforumer QR Scan