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Sunday, March 22, 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


FMCG firms rush to fill shelves stripped bare in virus panic

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Kolkata | Mumbai: India's biggest consumer goods companies are ramping up production to meet the steep rise in demand with people rushing to stock up on essentials and groceries in bulk amid fears of a lockdown due to the coronavirus outbreak as several states imposed stringent curbs on movement.This marks a reversal of last year's fortunes when companies cut production because of weak consumption across segments. Still, companies and experts said the surge may be temporary and not make up for slowing sales in the past two months in this quarter.Fast-moving consumer goods (FMCG) companies including Hindustan Unilever, ITC, Parle, Amul and Godrej said production has been hiked to ensure there are no shortages amid panic buying. Hindustan Unilever has slashed prices of hygiene products.Sharp Slowdown in Jan, FebThe Centre as well as many states have asked companies to shut manufacturing units to curb the spread of Covid-19. Manufacturers of groceries and essential products, especially in the food, hygiene and pharmaceutical segments, are exempted but will have to stagger shifts besides adopting other safety protocols. 74766004 Godrej Consumer Products is stepping up production of soaps, hand washes and sanitisers. Managing director Vivek Gambhir said soap production is up 30% and hand washes by 3.5 times. Soap prices have been kept unchanged."It's a combination of our own plant and third-party manufacturers with spare capacities, which will come up into effect by April. The situation is pretty dynamic right now," he said.ITC has intensified efforts to ensure adequate supply of all food products and staples including atta and noodles, said Hemant Malik, divisional chief executive, foods.Consumer goods sales slowed sharply in January and February from the year earlier with expansion even decelerating for categories such as soaps, shampoo and skincare products, executives said, citing market tracker Nielsen's data."We are seeing a surge in demand for two weeks and don't want any unnecessary panic with supply shortages and prices going up. We want to ensure we don't go out of stock at any point of time," said Mayank Shah, category head at Parle Products, which has raised production 10-15% and will review this on a weekly basis depending on demand."For the past two months, the market growth halved and such bulk buying will still not compensate and bring up the growth level to the year ago number," Shah said. "Moreover, there is expected to be a lull in the following months once the crisis is over."This is despite the low base of 2019, when the market expanded at one of the slowest rates in a decade, leading to a fall in production. An analysis of 101 consumer companies revealed that most items of food products and consumer goods saw such a slump in output in the October-December quarter, according to a Care Ratings report.While supermarkets can't strictly enforce rationing of food and household staples to prevent shortages, many retailers have posted notices assuring buyers that stocks of groceries and other essential items are adequate, asking them not to hoard goods and shop only for what they need.India's largest dairy company Amul India said the company has increased production by 15-20% for its biggest-selling products such as tetrapak milk, paneer, cheese and butter."This is to ensure supplies considering there are shortages," said Amul managing director RS Sodhi. "We would review the production level once every trade partner is stocked again. However, products for hotels and restaurants have taken a beating, so we have enough capacities."Sodhi took to Twitter and other social media platforms to ask consumers not to hoard stock and said supplies were ample.

India may get some Covid relief today

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New Delhi: Finance minister Nirmala Sitharaman could announce measures to deal with the economic impact of Covid-19 in her reply to the Finance Bill on Monday.She could also propose a threshold of Rs 15 lakh for the taxation of the income of nonresidents who don't pay tax in other jurisdictions, taking the sting out of the contentious budget proposal.The government is also seeking to raise special additional excise duty on petrol to Rs 18 per litre and on diesel to Rs 12 per litre, raising revenue for relief measures. Special additional excise duty had been raised by Rs 2 each on these commodities on March 14. The sharp decline in global crude prices has created room for a reduction in prices but instead of passing on all the benefits of this to the consumer, the government may use some of the room to raise taxes to generate funds.A Rs 1 per litre rise in duty on petrol and diesel yields Rs 13,000 crore annually, based on back-of-the-envelope calculations. The actual realisation may be lower, given the decline in demand. The government has to raise the bound tariff rate on a commodity by amendments to the Finance Bill to get the flexibility to increase it by way of notifications during the year. The latest enabling provision will give the government room to raise duties further on petrol and diesel as global crude prices touch new lows."There have been several set of meetings to assess what needs to be done," said an official. "The government is working on the measures." 74766171 Sitharaman has already made a broad assessment of the impact on select sectors such as financial services, tourism, hotels, trade and micro, small and medium enterprises (MSMEs) from interactions with ministerial colleagues and companies. Industry has sought a fiscal stimulus of up to 1% of the GDP of Rs 2 lakh crore, including direct cash transfers of up to Rs 5,000 for those out of the income tax bracket. Some states have already taken the lead and announced steps to provide cash to daily wagers as also food supplies free of cost. Measures including relaxation of various tax compliances could be announced in a staggered manner. Prime Minister Narendra Modi has already formed a task force under Sitharaman to assess the economic impact of Covid-19 and formulate economic measures.OTHER CHANGESA host of other changes are likely in the taxation of online companies, including a possible widening of the equalisation levy. The Finance Bill could make it mandatory for them to pay their taxes quarterly. The rate of tax deduction at source for dividend payouts to foreign companies could be pegged at 20%.

Your quarantine is hurting telecom firms

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Kolkata | Mumbai: Phone companies have sought the joint intervention of the telecom department and the home ministry to coax some 12-odd video streaming platforms/broadcasters such as Amazon, Netflix, YouTube and Hotstar to expedite steps to ease pressure on telco networks infrastructure amid a surge in video services consumption as vast swathes of India Inc work from home amid the Covid-19 outbreak.The telcos have called on the video streaming/broadcasting service providers to temporarily migrate from HD (hi-definition) to SD (standard definition) streaming, and even dispense with heavy bandwidth-consuming advertisements and pop-ups to ease network load. Such a move, they said, would enable video streaming platforms to continue providing a suitable level of service but at appropriate bit-rates, easing pressure on networks.Video streaming service providers like Netflix and MX Player said they have started taking steps aimed at using less internet capacity without compromising on quality of streaming."We've written to DoT (Department of Telecommunications) and the home ministry that it's absolutely essential for the video streaming service providers/broadcasters to cooperate with phone companies and manage their traffic distribution patterns to ensure they don't strain telco network infrastructure...," Rajan Mathews, COAI director general told ET.

Crisis may fast-forward IT’s work-from-home adoption

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PUNE: As many employees, especially in the software services sector, are forced to work from home due to the Covid-19 pandemic, the move could turn out to be an inflection point for the Indian IT industry, experts said.Nearly half of India's technology workers – estimated at 3 million – have already begun to work from home as social distancing becomes key to contain the spread of the outbreak. If employees continue to work from home for a few more months, IT companies are likely to conclude that 20-30% of their workforce can operate remotely, said Sridhar Mitta, founder of NextWealth Entrepreneurs, a firm that has more than 2,000 people offering services remotely."The first wave was when companies started outsourcing work to India because of the huge cost differential, followed by Y2K when they needed more people to solve a problem within a short period," said Mitta, a former CTO of Wipro and among its earliest employees. "Over the next few months, IT companies will gain experience and realise what processes can and cannot be done remotely. Clients too, will gain comfort," he said. Over time, even if 20% of the work can be done from home, it would mean over one million people not needing to commute to an office daily, with the option of working from any city they choose to, Mitta said.Indian technology and back office firms have already moved a significant amount of work to homes of staff as a short-term measure to tide over the crisis.Tata Consultancy Services has asked more than 40% of its employees to work from home, its CEO Rajesh Gopinathan said in an email to staff on Friday. Accenture has moved over 60% of its employees to work from home in India and the Philippines.Pramod Bhasin, chairman of Clix Capital said, the concept could have a profound impact on the kind of people who become part of the workforce. It would be easier for parents, especially women, to get back to work if they can work remotely, and for others for whom fixed timings are an issue. "This will help break many myths about what can or can't be done from home," he said.Just as there were questions over what could be done out of India when the outsourcing industry took off initially, Bhasin expects work from home to break stereotypes.

Covid-19 in India: Only basic payment, transfer operations at banks

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Mumbai: Indian banking services, apart from basic payment and transfer operations, are likely to come to a halt as lenders impose restrictions on the movement of employees and their interaction with customers to protect them from Covid-19. Although banking is an essential service — key staff will be allowed to attend work during state-imposed curbs — new loans, project appraisals, negotiations for fresh terms for existing loans will have to wait."We request all our customers to bear with us as other non-essential services during this period may be suspended," the Indian Banks' Association (IBA) said in a note. "We will continue providing banking services to our valued customers. However, we appeal to everyone to visit branch premises only in case of absolute necessity. Our employees are also facing the same challenges that you are and so we are asking for your help too." The Reserve Bank of India (RBI) and lenders have activated business continuity plans that were put in place to cope with such emergency situations. While staff have been asked to work from home, essential bank workers are being split into various groups after identifying key areas."Working spaces are split and people are also working from home," said Romesh Sobti, outgoing CEO of IndusInd Bank. "Our business continuity plans have been triggered — we are working out of three spaces and also working out of home. All linkages have been developed in the last week or so. Departments and functions have been split already.''The RBI has directed all lenders to make banking facilities available on their respective mobile applications to prevent any disruption in service. "Public can use these modes of digital payment from the convenience of their homes through online channels and avoid using cash, which may require going to crowded places for sending money or paying bills," the central bank said in a statement last week.The regulator itself has made changes to its functioning.Under the new minimum staffing norms — both for the RBI and service providers — two batches have been formed, with the second one kept on standby to take over when required. A backup replacement pool has also been drawn up. A team of 37 RBI officials was formed comprising key personnel from important functions such as debt management, reserve management, monetary operations etc.The central bank is said to have rented a hotel near its primary data centre in downtown Mumbai to accommodate about 150 people. It also isolated about 69 hotel staff to serve the employees, all of whom will remain in isolation. They can leave in case of an emergency.Lenders such as HDFC Bank, Kotak Mahindra Bank, Axis Bank, Bank of Baroda and State Bank of India said they have been sending advisories to customers to use mobile banking facilities as much as possible.Banks called upon senior managers to ensure uninterrupted services across the country."We have an appropriate BCP (business continuity plan) in place in case of any eventuality. We will ask our employees engaged in administrative jobs to work from home if the situation warrants," said Bandhan Bank managing director Chandra Shekhar Ghosh.Meanwhile, the National Payments Corporation of India (NCPI) has embarked on a social media campaign to push for digital payments as a safer option than cash transactions. Banks sent advisories to customers to move to digital channels for their banking needs.Until Saturday, branch employees were under pressure with an increase in the number of customers amid fears of increasing curbs."March sees a sharp rise in footfall at branches as there is a rush for investments to manage tax liabilities besides tax payments to meet the year-end deadline," said an executive at a south Mumbai SBI branch. "Many account holders still prefer doing their investments manually. There is talk that banks may seek extension of the March 31 deadline (for tax-related investments)."

Coronavirus effect: State curbs choke ecommerce supplies

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Bengaluru: Ecommerce operators were forced to cancel or reschedule lakhs of orders for essential goods such as food, groceries and medicines across several cities on Sunday as local authorities and the police ordered them to shut warehouses, blocked trucks carrying supplies and dissuaded delivery agents from moving around on the streets.The action against grocery e-tailers such as Grofers, BigBasket and e-pharmacy player 1mg and their on-ground staff, apart from larger firms Flipkart and Amazon, comes despite ecommerce being exempt from Section 144-type restrictions that have been imposed by several states in the country. "There was some confusion on the ground as the message from central government was not clear to local authorities as to what needed to be allowed. Better communication (is needed) to let services like Grofers, BigBasket or 1mg be allowed to operate will help make sure the flow of essential items to a self-quarantined India doesn't stop," Albinder Dhindsa, CEO, Grofers told ET.The egrocer cancelled or rescheduled as many as 170,000 orders on Sunday. Dhindsa said his field staff reported trucks bringing supplies to its warehouses being stopped in Uttar Pradesh, Maharashtra, Karnataka and Telangana. 74766208 'Ensuring Minimal Disruption'Apart from this, the company also said authorities in Maharashtra and Haryana had forced its warehouses to shut down in view of the Janata Curfew on Sunday.BigBasket, the country's largest online grocery, also complained of facing similar issues, which has been leading to delayed deliveries and an inability to accept any new orders in several locations across the country. "We felt very let down by how the local authorities in almost all cities executed stopping deliveries and even beating up people," a BigBasket spokesperson told ET.A senior government official confirmed to ET that he had received several complaints from ecommerce firms and industry bodies with regard to trouble they were facing from local authorities who were forcing them to shut down their operations. "We are coordinating and communicating all instances of trouble these companies are facing with secretaries at the state level to take action and ensure there is minimal disruption," the official added.The action against ecommerce players on Sunday comes on the back of a few warehouses being shuttered by local authorities since the last one week, another person aware of the matter told ET. This despite the ministry of consumer affairs on Friday notifying that ecommerce firms, their warehouses and logistics facilities, wholesalers, vendors and delivery partners be exempt from any type of prohibitory orders. The move was aimed at ensuring supply of essentials to consumer doorsteps did not stop or face any hurdles.Even medicine deliveries and other at-home medical services were disrupted across several cities. 1mg, an e-pharmacy and online diagnostics provider, said some of its Pre Analytical Centres, that run diagnostics on samples picked up at home were asked to shut in Delhi, Patna and Mumbai. The company added that delivery agents were stopped by the police in south Delhi, Hyderabad, Lucknow, Faridabad and Gurgaon."It seems that there is a need for clear guidance and notification for the police teams on ground, telling them that essential services should not face any issues during this phase. As of now, it seems there is lack of clarity and they are stopping all activity, including essential services," said Prashant Tandon, CEO of 1mg.Grocery deliverers are seeing as much as a five-fold increase in order volumes as many large format stores remain shut and people stayed indoors. The average order value for e-grocers has increased by 20-25%, executives at these companies said. On Thursday, both Grofers and BigBasket faced brief outages amid panic buying, as reported by ET last week. The demand is expected to get further amplified as many states declare Section 144 to stop the spread of Covid-19.

Banks, commodity & discretionary stocks among the worst hit

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Only a handful of stocks are left standing in Mumbai after relentless waves of price destruction battered Indian equities through the past few weeks.The worst hit among the Nifty companies are banking & finance, commodity and discretionary stocks, as these companies remain more vulnerable due to falling demand and increasing debt.Seven out of the 10 biggest losing stocks on the Nifty are from these sectors, with IndusInd Bank losing the highest (61 per cent) given its high exposure to vulnerable sectors including real estate, gems and jewellery and telecom.Tata Motors (down 51 per cent) is the next biggest loser, as the company's JLR business is unexpectedly down globally — retail sales in February in China, its biggest market, were down 85 per cent and the demand is expected to remain weak for some time. It heavy debt of nearly Rs 50,000 crore is a concern too.UPL's leveraged balance sheet and a sharp drop in earnings are a major concern. UPL's debt to EBIDTA is more than 3 times and the Street expects a further drop in earnings. Vedanta and Hindalco were hit due to sharp falls in commodity prices including crude, aluminum, zinc, silver and copper. Both the stocks are down 48 per cent and 44 per cent, respectively. 74766404 The Nifty is down 28 per cent in the past one month. But FMCG and pharma stocks are expected to be the least affected and offer higher earnings stability in the Nifty 50 pack. None of the 8 pharma and consumer stocks have lost more than 20 per cent. Asian Paints remains the best performing stock losing only 7 per cent as the company will benefit sharply from the fall in crude prices (used as raw material).Yes Bank is the only stock to have given positive returns — up 30 per cent in one month.

10-times India’s GDP wiped out; IL&FS-2 and 3 in the making

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NEW DELHI: It was another week of bloodshed in the domestic stock market, as the benchmark indices logged their biggest weekly fall since the 2008 Global Financial Crisis. By the end of the week, most of the stocks were trading at levels seen many years ago.With the coronavirus scourge now rearing its ugly head in India, what could be in store in the weeks and months ahead? Amid so much uncertainty, with stocks at multi-year lows, market veterans see an opportunity for investors. They shared tips on how to best navigate this crisis.Here's a look at what some of the leading voices of Dalal Street tweeted during the week gone by:State of the marketGiven the acceleration and quantum of market fall, equity portfolio manager Ravi Dharamshi tweeted that 2020 is a fast-track course than the 2008 GFC. 2020 is a fast track course on 2008 #MarketSlump #markets— Ravi Dharamshi (@ravidharamshi77) 1584551255000 Independent market expert Sandip Sabharwal shared an interesting fact: the total world market capital lost so far is now 10-times India's GDP.World Market Capitalization has collapsed from $ 90 Trillion at the end of 2019 to $ 55 Trillion now To measure th… https://t.co/h7qUd6K0EN— sandip sabharwal (@sandipsabharwal) 1584762870000 Morgan Housel, Partner at The Collaborative Fund, shared two insights about stock market crashes; a) they tend to go too far but b) they recover before the real economy.The two most important parts of market crashes: - In hindsight they always go too far. - They always rebound wel… https://t.co/pGoLwqbFub— Morgan Housel (@morganhousel) 1584362245000 Given the massive fall in the indices, Housel says a 5% move in the market either way is now called "unchanged".If the market closes up or down less than 5% it's now called "unchanged."— Morgan Housel (@morganhousel) 1584635540000 Market veteran Shankar Sharma expect NBFCs to get hurt badly in this selloff. His next question: Are we staring at IL&FS - 2, 3 & 4?Looking at the price action of several NBFCs last few days, it's abundantly clear that the market is saying many wo… https://t.co/GzJTCUvduo— Shankar Sharma (@1shankarsharma) 1584676000000 Call for actionLack of concrete government action on the economic front has left a few investors frustrated.Sabharwal, quoting examples of other developed economies and their responses to fight the virus, said lack of government action is creating a lot of hardships.UK Chancellor of Exchequer @RishiSunak has announce a huge No of steps already to alleviate economic stress. #BOE h… https://t.co/cQJX6NNjW0— sandip sabharwal (@sandipsabharwal) 1584786278000 Sabharwal advises the government to raise the fiscal deficit target by 1%.Sir, @narendramodi it is time to think big on the Economy Just minor tinkering of MSME dues, NPA recognition defer… https://t.co/kDkIaaMFKz— sandip sabharwal (@sandipsabharwal) 1584706686000 Meanwhile, Kotak AMC's Managing Director Nilesh Shah had a few other suggestions to improve investor confidence amid the meltdown in the stock market. Support Investor Confidence in crisis time by - Restore tax exemption on LTCG. Any way there will be no collectio… https://t.co/KtSSJLjB53— Nilesh Shah (@NileshShah68) 1584622213000 What should investors do?iThought co-founder Shyam Sekhar is of the view that a bad market is the best time to begin better investment habits.A bad market is the best time to begin better investment habits.— Shyam Sekhar (@shyamsek) 1584458946000 Sabharwal says good quality stocks have corrected 40-50% from highs and for the brave-hearted and those thinking long term, this is an investment opportunity that they must not miss. He believes this is the best time for value investors.A high quality, low or no debt company's stock falls 40-50% from the top due to the entire #Covid19 issue For thos… https://t.co/bpoQnZPy82— sandip sabharwal (@sandipsabharwal) 1584611882000 #CBOE #VIX collapse is the first indication that markets are close to bottoming The next couple of weeks will still… https://t.co/fXdkQBBeKZ— sandip sabharwal (@sandipsabharwal) 1584716242000 Dharamshi echoed Sabharwal's views and said "only patient, long-term capital will trump '' from market mayhem.There is paucity of people who can think beyond next 1-2 months, beyond the current panic, beyond corona virus. Mar… https://t.co/YvSQtbCPyB— Ravi Dharamshi (@ravidharamshi77) 1584419936000

Fake Covid-19 apps fish in the troubled waters

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Mumbai | Pune: Web and mobile applications that track the spread of the Covid-19 virus outbreak are also loading ransomware trojans and trackers to snoop on users, according to cyber security firms. For instance, some map-based applications that trace the path of the virus across the globe could end up infecting a user's phone with a virus, the digital kind that is. Spam documents that offer information about the virus through emails and message attachments are also increasing, the firms said.Information security provider ZScaler said that hackers were now floating applications on the internet that claim to notify a user as soon as anyone infected with the virus is nearby. What such apps do instead is lock out the user and ask for ransoms to unlock their device."There are also apps that tell you where you can go and buy an N-95 mask. These are all hoaxes – the moment a user downloads such an app it will corrupt your smartphone or laptop and may ask for a ransom to unlock it," said Sudip Banerjee, director, Transformation Strategy – Asia Pacific and Japan at Zscaler.IT security company Lookout also found a 'Corona live 1.1' Android application which is a Trojanised version of the legitimate "corona live" app that allows users to get updated with data found on Johns Hopkins University's coronavirus tracker."Upon first launch, the app informs the user it does not require special access, but subsequently proceeds to request access to photos, media, files, device location," said Security Research Engineer Kristin Del Rosso of Lookout.

COVID-19 to delay job interviews; impact hiring: Experts

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MUMBAI: The overall hiring sentiment in the country is likely to witness an adverse impact in the short term with 60-65 per cent interviews getting delayed, especially in the services sector, following the slowdown across industries triggered by the coronavirus pandemic, industry experts said."Since the outbreak of COVID-19, companies have been cancelling interviews. We expect 60-65 per cent interviews getting dropped or delayed as there is lockdown in many parts of the country and people are encouraged to stay at home to curtail the spread of the virus," TeamLease Services Business Head รข€"BFSI and government vertical, Amit Vadera told PTI.This will also lead to delay in joining dates if the current situation continues, he said.Sectors including banking, financial services and insurance (BFSI), retail, logistics (delivery) where a lot of frontline-hiring takes place are likely to witness this delay, he pointed out.More and more companies will now depend on technology as an alternate channel to continue with the same pace of productivity, he opined."It will be a big learning for many organisations, who will see this as a medium to improve their productivity," he added.He said that in the short term, this will also impact the overall hiring scenario as many sectors will witness slowdown following the spread of COVID-19, however, it is too early to quantify it.Echoing a similar view, staffing firm CIEL HR Services chief executive officer Aditya Narayan Mishra said that COVID-19 has emerged as a global challenge and "this is going to push many critical projects to slow track and impact revenues and profitability. As a result, companies will delay their hiring plans".The results are hard to predict but are certainly disquieting and it will result in a slowdown in hiring, which is likely to be 10-15 per cent in the next quarter across all sectors especially the services industry, he said."We are already witnessing cancellation of personal interviews and putting backfill numbers in abeyance. These are early signs that companies are worried about the revenues and meeting their forecasts. We see a slowdown as a result of this crisis," he noted.Job search platform Shine.com CEO Zairus Master, however, said there will be some sectors that are likely to witness an uptick in hiring due to COVID-19.Healthcare, of course, will lead but as people are staying indoors, e-commerce and online delivery portals should also see a gradual increase in demand. This is also an opportune time for people to upskill themselves as they have more time and fewer entertainment options, he said.He further noted that, though tourism sector will be affected in the short run but "we have seen in the past also, aviation and tourism has bounced back quickly and hiring resumed, he added.Michael Page India Managing Director Nicolas Dumoulin said there will be a slowdown in hiring in retail, hospitality, travel among others.The impact on hiring will be minimal, but if this situation continues due to the spread of the virus it might be large.However, Dumoulin said that technology-driven sectors are hiring and are conducting interviews through alternative channels like online, Skype.'In fact, this has made interviews faster and convenient. Hiring of mid-level and freshers are going on. The joining of executives hired through campus recruitment may get delayed," he added.

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