Thursday, December 6, 2018

What is the US bond yield curve saying? Is recession ahead? - economic news of india - world economic news - economics news for students - indian economy news

What is the US bond yield curve saying? Is recession ahead? - economic news of india - world economic news - economics news for students - indian economy news
What is the US bond yield curve saying? Is recession ahead?
Macromania explains: It’s well-known that in the US, recessions are often preceded by an inversion of the yield curve. Is there any economic rationale for why this should be the case?Most yield curve analyses make reference to nominal interest rates. Economic theory, however, stresses the relevance of real (inflation-adjusted) interest rates. (The distinction does not matter much for the US in recent decades, as inflation has remained low and stable). According to standard asset-pricing theory (which, unfortunately for present purposes, abstracts from liquidity premia), the real interest rate measures the rate at which consumption (a broad measure of material living standards) is expected to grow over a given horizon. A high 1-year yield signals that growth is expected to be high over a one-year horizon. A high 10-year yield signals that annual growth is expected, on average, to be high over a ten-year horizon. If the difference in the 10-year and 1-year yield is positive, then growth is expected to accelerate. If the difference is negative--i.e., if the real yield curve inverts--then growth is expected to decelerate.(Only 12bps to go. US 2s/10s yield curve drops to 12bps, lowest since 2007.) 66965572 What is the economic intuition for these claims? One way to think about this is in terms of Friedman’s Permanent Income Hypothesis, which states that an individual’s desired consumption expenditure today should depend not only on current income, but the likely path of his/her income over the foreseeable future. The logic of this argument follows from the assumption that people are willing and able to smooth their consumption over time, given their expectations over how their incomes are likely to evolve over time. For example, if people expect their incomes to be higher in the future, then they will want to consume more today in order to smooth out their consumption. They can attempt to do so by saving less (or borrowing more). If a community is collectively “bullish” in this sense, desired consumer spending should rise in the aggregate, and desired saving should fall, leading to upward pressure on the real interest rate.Alternatively, suppose that firms suddenly turn bullish on the likely returns to capital spending. Then the resulting increase in the demand for investment financing should drive real interest rates upward. In this case as well, a higher real interest rate signals the expectation of a higher rate of economic growth. If individual expectations over future prospects are correct more often than they are incorrect, then higher real interest rates today should be correlated with higher future growth rates.So, in theory at least, an inverted yield curve does not forecast recessions--it forecasts growth slowdowns. Nevertheless, there is a sense in which an inverted (or even flat) yield curve can, in some circumstances, suggest that recession is more likely. Here's the basic idea.Consider an economy that grows over time, but where growth occurs unevenly (i.e., the economy alternates between high- and low-growth regimes). Imagine, as well, that the economy is occasionally buffeted by negative "shocks”—adverse events that occur at unpredictable moments in time (an oil price spike, a stock market collapse, etc.). It seems clear enough that in such an economy, recessions are more likely to occur when a shock of a given size occurs in a low-growth state as opposed to a high-growth state.Now, as explained above, suppose that an inverted yield curve forecasts a deceleration in growth. Then the deceleration will entail moving from a higher growth state to lower growth state. Suppose this lower growth state is near zero. In this state, growth is now more likely to turn negative in the event of a shock. In this way, an inverted yield curve does not forecast recession; instead, it forecasts the economic conditions that make recession more likely.My two centsI think something is triggered when yield curves invert, or some recessionary force triggers an inverted yield curve,or maybe the answer is so simple as central banks will raise rates until they cause a recession. The graph above suggests US Federal Reserve would do well to stop raising rates now and see what happens. They seem on course to repeat the previous cycles. The elephant in the room this time is US fiscal deficit which is set to touch a trillion in a year and if US were to attract worlds saving to fund this deficit then they need higher rates and that complicates the picture. 66964771
Source: ET

Indian android apps seek more of your data than global counterparts - economic news of india - world economic news - economics news for students - indian economy news

Indian android apps seek more of your data than global counterparts - economic news of india - world economic news - economics news for students - indian economy news
Indian android apps seek more of your data than global counterparts
BENGALURU: Some top Indian Android apps across categories seek as much as 45% higher permissions from users compared to their global counterparts. Access to SMSes, microphone and contact book were some permissions accessed by a significantly higher number of Indian apps compared to global peers.According to an annual study by enterprise cyber security and data privacy platform Arrka Consulting, about a third of the permissions sought weren’t required for core functionality of those apps. Interestingly, most data that these apps and websites share with third parties end up going to two of the largest global tech firms — Google and Facebook. The key privacy metrics were assessed on 100 Indian apps with each having at least a million downloads across Google Play, Apple’s App Store and websites. About 50 global Android apps were assessed on privacy and technical parameters to draw a parallel to Indian ones and their permission settings. In some categories such as travel, shopping and wallets, homegrown apps end up taking 1.5 to 3 times higher permissions than global peers. 66962875 With rising number of smartphones and data becoming cheaper, internet companies are witnessing many unique visitors to their platforms and seeking permissions helps companies gather more information about usage behaviour, shopping patterns, bank transactions and use of a host of services. Essentially, these permissions help build user profiles which third-party vendors can then use for targeted selling. On an average, Indian apps take about 8 permissions when a user installs a certain app.When an app seeks more permissions, it collects additional information about a user that’s seen as invasion of privacy, especially when the user has unknowingly granted access to certain apps.Global tech firms like Facebook have come under scrutiny for mishandling customer data. Most recently, Google said it’s bringing in new controls that allow user users the rights to share data while installing third-party apps from Google Play Store.The study puts the spotlight on lack of discipline in collecting user data and privacy concerns during data collection as some reasons why Indian apps access excess user information. “App development could be done by a vendor and no justification is asked by organization on permissions taken during the process,” the study added. It said 99% of apps send data to one or more third parties for advertising, analytics, etc. “On an average, an app/website sends data to more than five third parties and many had the same parent organisation. Google was observed in 30%-58% instances and was clearly the leader while Facebook was second,” the report said.
Source: ET

Degrees of desperation for traffic brigade job - economic news of india - world economic news - economics news for students - indian economy news

Degrees of desperation for traffic brigade job - economic news of india - world economic news - economics news for students - indian economy news
Degrees of desperation for traffic brigade job
AHMEDABAD: The jobless growth of the economy was very apparent at the children’s park in Lal Darwaja and the traffic police headquarters in Mithakhali, where forms for jobs in the traffic regulation brigade (TRB) were being distributed. On first day of the the forms being available, which will continue till December 8, as many as 12,300 aspirants bought forms, including people holding double master’s degrees, lawyers, teachers and computer engineers.Many of those buying forms were LRD (Lok Rakshak Dal) aspirants, who recently had their exam cancelled due to a paper leak. 66962484 TRB jawans have to assist cops in regulating traffic, for which they are paid a daily wage of Rs 300 and they may work a maximum of 27 days a month. Thus, a contracted TRB jawan gets a meagre monthly pay of Rs 8100 from the state government, for which he or she has to stand at a traffic point for at least eight hours.Tejas Patel, DCP Traffic (admin), told TOI, “Some 12,300 forms were distributed on the first day, Wednesday, and the applications form will be distributed till December 8.”About the educational qualification required for a post which is seeing multiple degree holders apply, Patel said, “The minimum educational qualification for this exam is just class IX-pass.”DCP Traffic (West) Sanjay Kharat said traffic police are holding a recruitment drive to fill 1,400 posts of TRB jawans.At both the form-distribution centres in the city, long queues were seen since Wednesday morning. Some 7,000 forms were distributed till Wednesday afternoon. The rush was so great that the forms got over by the afternoon.
Source: ET

Tuesday, December 4, 2018

The other GDP debate: Did India do that bad under Muslim rule? - economic news of india - world economic news - economics news for students - indian economy news

The other GDP debate: Did India do that bad under Muslim rule? - economic news of india - world economic news - economics news for students - indian economy news
The other GDP debate: Did India do that bad under Muslim rule?
ET will periodically analyse debatable or dubious claims that catch public attention and try to bring clarity and order in what often become fact-free free-for-alls.CLAIMIndia used to be the world’s largest economy back in ancient times, and that happened in the era of ‘Hindu kingdoms’, that is, before the ‘Muslim rulers’ invasion.WHO MAKES IT?Various figures on the Hindu Right.IS IT A FACTNot entirely wrong and not entirely right, and the causality is wrong.WHY?Tonnes of research by economic historians come to these broad conclusions, although debate over specifics continue. ET summarises the research.ARGUMENTS1. Starting from 1 AD and for a long time after that, India and China were the world’s largest and second largest economies. But that was mostly because, in the absence of technology-led productivity jumps, population determined total GDP. India and China were the most populated countries. Note also, per capita income in ancient times was low everywhere, because output was basically a function of the size of the labour force.2. In 1500, China and India were still the largest economies. Some historians say China was slightly ahead. Both are estimated to have GDP of around $100 billion, PPP terms, with US dollar taken at its 2015 value. Around this time, the Delhi Sultanate was in its last period of reign, there were Hindu kingdoms too, and Vasco Da Gama had visited India, an early indication of European colonialism to come later.3. In 1700, India, most of it under Mughal rule, is said to have pulled ahead of China again.4. But China was making better use of agricultural technology and by early 19th century, India was the second-largest, but its GDP was just over half of China’s.5. India never resumed lead position again. Industrial revolution made the West pull ahead. The US became the largest economy in 1890, and remains till today. And British colonialism took its toll on India’s economy. So, although for much of the time India was under British rule, its GDP was larger than Britain’s, but Britain had far larger per capita income. In 1870, for example, Britain’s per capita income was 6 times higher than India’s.6. Tragically, post-Independence, India made it worse for itself by choosing state socialism. And China went Communist. The socialist/communist period saw both countries slipping down the ranks. India’s was the ninth-largest economy in 1980, followed by Communist China’s at 10th.7. But then Deng Xiaoping yanked China out of collectivism. China raced ahead of India, and remains far ahead even now. India’s catch-up started in 1991.8. Now, in PPP terms, India’s GDP ranks behind China’s and the US’. But in per capita income, India ranks much more poorly.CONCLUSIONIt’s historically meaningless to ascribe India’s ancient, Middle Ages and pre-industrial revolution periods’ top GDP rankings to either ‘Hindu’ or ‘Muslim’ rule. It was a function of India’s high population. And, note that it will have taken 550 years (1500 to 2050) for China and India to lead the world in GDP terms again. But it’s very unlikely India will assume number one position in foreseeable future.
Source: ET

This is how far Airtel is ready to go to beat Jio - economic news of india - world economic news - economics news for students - indian economy news

This is how far Airtel is ready to go to beat Jio - economic news of india - world economic news - economics news for students - indian economy news
This is how far Airtel is ready to go to beat Jio
NEW DELHI: Bharti Airtel is open to creating a company with rival Vodafone Idea to jointly own their fibre networks, which could be monetised to raise funds to drive growth as it seeks to regain revenue leadership by Marchend, senior company executives said.“We will be delighted to share and create one company. We have already built a lot of fibre with Vodafone Idea and over the past two years, a lot of sharing has happened between the two companies,” a top company official said.Although the fibre network company offers an opportunity for monetisation, the official said the plan is essentially to co-own it with the competition, along the lines of Indus Towers, India’s largest telecom tower company that is jointly owned by Bharti Infratel and Vodafone Idea.A Bharti Airtel spokesperson declined to comment on the matter. 66929920 Both Vodafone Idea and Airtel are seeking funds for expansion as they recover from intense competition that has eroded earnings and revenue over the past two years in a sector that has now consolidated into three private operators.Telecom market leader Vodafone Idea, which was formed in August with the merger of Vodafone India and Idea Cellular, recently spun off its fibre assets to a wholly owned unit with the intent to monetise it.Airtel has been selling stakes in tower unit Bharti Infratel and placing shares privately in its Africa business ahead of an initial public offering. The company plans a rights issue of up to Rs 15,000 crore, as reported by ET last month.Airtel reckons the worst of the competitive pressure — unleashed with the entry of Reliance Jio Infocomm in September 2016 — is behind it. The telco has been able to increase tariffs by small margins in some plans without denting demand.Airtel increased the price of its Rs 99 plan by Rs 20. “No problem at all – every customer has taken it,” the official said.The telco has also lured subscribers to higher tariff plans by dangling incentives such as free subscriptions to Netflix and Amazon and both factors will help it increase revenue from the current quarter.Airtel’s focus is to regain its top slot by revenue market share (RMS) from Vodafone Idea by the end of this financial year.Vodafone Idea led with an RMS of 32.8%, followed by Bharti at 30.9% and Reliance Jio at 26.1% in the September quarter, according to an ICICI Securities report based on data from the telecom regulator.Airtel officials said only three rounds of price increases every six months are needed to reach an average revenue per user (ARPU) of ?200 a month and recover from the fall triggered with Jio’s entry.
Source: ET

India's record energy feat that went unnoticed - economic news of india - world economic news - economics news for students - indian economy news

India's record energy feat that went unnoticed - economic news of india - world economic news - economics news for students - indian economy news
India's record energy feat that went unnoticed
NEW DELHI: Nine out of 10 Indian homes now use cleaner cooking gas, a record improvement over just about five in 10 homes four years ago, as a result of the Modi government’s relentless effort at popularising cleaner fuel and subsidising subscription to poor families.State oil companies, pushed by the oil ministry, have added record 10 crore consumers since April 2015, expanding the active consumer base by two-thirds. This has increased access to cooking gas, or liquefied petroleum gas (LPG), to 89% of the country’s households by October end, a sharp jump from 56.2% on April 1, 2015.The increased LPG coverage has primarily been driven by the government’s determination to take cleaner fuel to more and more homes, which forced state oil companies to reach out to potential customers and simplify subscription process. A subsidy for fresh LPG connection to poor families helped fuel demand.Rural areas still have untapped potential with more than half of all consumers, or about 13.6 crore, residing in urban areas. India has a total of 24.9 crore active customers, of which 22.9 crore receive subsidy. Those with double cylinders comprise barely half of the consumer universe—one reason why new customers do not entirely give up polluting fuels as they are forced to fall back on their traditional fuel while refill is on way.Companies are beefing up distribution infrastructure, which has been slow to expand compared with the consumer base, becoming another hurdle in smooth delivery of services.Northern states have the highest 99.9% LPG coverage ratio, with Punjab (136%) and Delhi (126%) leading the table. Chandigarh, Haryana, Himachal Pradesh, J&K, and Uttarakhand have recorded more than 100% subscription while Uttar Pradesh (89.7%) and Rajasthan(95.4%) have lower coverage. 66930102 The government calculates LPG coverage ratio by factoring in the number of subscribers and the current population, which is estimated by adding certain growth rate to 2011 census figures. Due to increased migration, some of the states like Delhi and Punjab end up having population that’s higher than the estimates, resulting in an LPG coverage ratio of more than 100%, an official said.Overall, Goa has the highest coverage ratio of 139%. Telangana, Puducherry, Kerala and Mizoram are other states with higher than 100% coverage. Southern states together have a coverage of 99.7% while western states have 81.9%.With 74.6% coverage, the eastern states are at the bottom of the pile although they have come a long way from their traditionally poor access to clean energy.The worst among major states are Jharkhand (65.4%), Bihar (67%) and Odisha (66.9%). In Gujarat too, the LPG coverage ratio is 66.6% but that’s more because the state is already well connected to the alternative piped natural gas. Most north-eastern states have less than 80% coverage.
Source: ET

Family office gains ground among India’s super rich - economic news of india - world economic news - economics news for students - indian economy news

Family office gains ground among India’s super rich - economic news of india - world economic news - economics news for students - indian economy news
Family office gains ground among India’s super rich
The concept of a family office to manage, preserve and grow wealth is gaining ground among the country’s super rich. In India, 45 business families have already created such structures, which manage an average of $318 million (Rs 2,226 crore).Family offices have a much wider role than that of financial advisers, or even wealth advisers, whose services are used by high net worth individuals (HNWIs), a term used to describe those with liquid assets over $1 million (Rs 7 crore). This is an advisory firm that looks after wealth, which includes assets like properties (real estate), paintings, yachts and other investments for the super rich (with over $100 million). It also provides counselling and concierge services to family members, and enables a smooth transition of wealth from one generation to another.Amit Patni, part of the family that had founded Patni Computer Systems, was one of the first to take the family office route to manage wealth. The family office was founded after General Atlantic invested $100 million in the company in 2002. It came in useful when Patni Computer Systems was sold to iGate in 2011 for $1.22 billion. Impressed with the structure, Patni partnered with UK’s Campden Wealth Connect to set up RAAY Investments, which advises families.The first ever study in India has been done by Edelweiss Private Wealth Management, and Campden. According to Campden Wealth CEO Dominic Samuelson, there was a need for such a firm that would provide advice across generations as less than 3% families have successfully transitioned wealth beyond the third generation, and less than 30% have transitioned from first generation to the second.Anshu Kapoor, private wealth management head at Edelweiss, said India has 1.5 lakh high net worth families with $2 trillion.
Source: ET

Solar Projects: Tariffs drop lower in UP auction - economic news of india - world economic news - economics news for students - indian economy news

Solar Projects: Tariffs drop lower in UP auction - economic news of india - world economic news - economics news for students - indian economy news
Solar Projects: Tariffs drop lower in UP auction
BENGALURU: A generous commissioning deadline for solar projects provided by the Uttar Pradesh government in its latest auction has resulted in surprisingly low winning tariffs.The offer of 550 MW of projects by the UP New and Renewable Energy Development Agency on Monday attracted bids between Rs 3.04 and Rs 3.08 per unit. NTPC, the lowest bidder, quoted Rs 3.04 per unit to win 85 MW.The bids were lower than the winning tariff of Rs 3.17 a unit at the auction in October, which itself was fairly low, considering that UP’s power distribution companies are in poor financial health. Solar radiation in UP is also low compared with that in Rajasthan, Gujarat and Andhra Pradesh.Solar tariffs have been rising ever since the finance ministry imposed safeguard duty of 25% on imported solar panels and modules for a year from end-July in an effort to support local manufacturing. The duty will be lowered to 20% for the next six months and to 15% for another six months. More than 90% of the solar panels used in Indian projects are imported because local manufacturers cannot match those in China and Malaysia on price.The UP agency has set a project commissioning deadline of 21 months from the date of signing of the power purchase agreement. Most such deadlines vary between 13 and 21 months.“With the signing of PPAs usually taking around three months, it gives developers time till December 2020,” said Vinay Rustagi, managing director of solar consultancy Bridge to India. “They are probably hoping they can import their requirements after July 2020 and still complete their projects in time, in which case safeguard duty will not apply.”Other winners of Monday’s auction included Adani Green Energy and Tata Power Renewable Energy.Rustagi maintained there were other reasons for the lowered rates.“Module prices have been coming down globally,” he said. “Besides, there are half a dozen winners, each of whom has won a fairly small-sized project. Indian developers are typically more aggressive, particularly when the project sizes are small. They would have been less inclined to do so if these were large projects connected to the inter-state transmission service where stakes are higher.”UP’s July auction of 1,000 MW at the height of the confusion over impending safeguard duty had seen winning tariffs of Rs 3.48-3.55 per unit. The auction was later cancelled, without any official reason assigned.
Source: ET

LPG cylinder now used by 89% households - economic news of india - world economic news - economics news for students - indian economy news

LPG cylinder now used by 89% households - economic news of india - world economic news - economics news for students - indian economy news
LPG cylinder now used by 89% households
NEW DELHI: Nine out of 10 Indian homes now use cleaner cooking gas, a record improvement over just about five in 10 homes four years ago, as a result of the Modi government’s relentless effort at popularising cleaner fuel and subsidising subscription to poor families.State oil companies, pushed by the oil ministry, have added record 10 crore consumers since April 2015, expanding the active consumer base by two-thirds. This has increased access to cooking gas, or liquefied petroleum gas (LPG), to 89% of the country’s households by October end, a sharp jump from 56.2% on April 1, 2015.The increased LPG coverage has primarily been driven by the government’s determination to take cleaner fuel to more and more homes, which forced state oil companies to reach out to potential customers and simplify subscription process. A subsidy for fresh LPG connection to poor families helped fuel demand.Rural areas still have untapped potential with more than half of all consumers, or about 13.6 crore, residing in urban areas. India has a total of 24.9 crore active customers, of which 22.9 crore receive subsidy. Those with double cylinders comprise barely half of the consumer universe—one reason why new customers do not entirely give up polluting fuels as they are forced to fall back on their traditional fuel while refill is on way.Companies are beefing up distribution infrastructure, which has been slow to expand compared with the consumer base, becoming another hurdle in smooth delivery of services.Northern states have the highest 99.9% LPG coverage ratio, with Punjab (136%) and Delhi (126%) leading the table. Chandigarh, Haryana, Himachal Pradesh, J&K, and Uttarakhand have recorded more than 100% subscription while Uttar Pradesh (89.7%) and Rajasthan(95.4%) have lower coverage. 66930102 The government calculates LPG coverage ratio by factoring in the number of subscribers and the current population, which is estimated by adding certain growth rate to 2011 census figures. Due to increased migration, some of the states like Delhi and Punjab end up having population that’s higher than the estimates, resulting in an LPG coverage ratio of more than 100%, an official said.Overall, Goa has the highest coverage ratio of 139%. Telangana, Puducherry, Kerala and Mizoram are other states with higher than 100% coverage. Southern states together have a coverage of 99.7% while western states have 81.9%.With 74.6% coverage, the eastern states are at the bottom of the pile although they have come a long way from their traditionally poor access to clean energy.The worst among major states are Jharkhand (65.4%), Bihar (67%) and Odisha (66.9%). In Gujarat too, the LPG coverage ratio is 66.6% but that’s more because the state is already well connected to the alternative piped natural gas. Most north-eastern states have less than 80% coverage.
Source: ET

Anil Agarwal: India can't be import dependent for aluminium, oil - economic news of india - world economic news - economics news for students - indian economy news

Anil Agarwal: India can't be import dependent for aluminium, oil - economic news of india - world economic news - economics news for students - indian economy news
Anil Agarwal: India can't be import dependent for aluminium, oil
India can't be the dumping ground for aluminium scrap. We have to produce more and more aluminium in India because we 66920405 66921301 66918507 have huge bauxite and huge coal deposits, Anil Agarwal, Chairman, Vedanta, tells Nayantara Rai of ET Now.Edited excerpts:A 90-day ceasefire has been declared in US-China trade wars. Metal prices have rebounded the world over. What does mean for companies like Vedanta? The world is getting wiser. Leaders want to sit down and sort out things across the table. The 90-day cooling off period to think through is good. I am a very positive person. I believe whatever happens will be for good. As far as India is concerned, I am concerned about increasing imports. We have nearly 2 billion people and we are completely dependent on imports for crude, aluminium, iron ore as well as coal. But we have huge capabilities. Do you fear that the markets may have run ahead of themselves? The Trump-Xi truce is a temporary one. it is not as if the higher tariffs are being rolled back. They are being rolled back for maybe auto and not for metals or steel. Is that not an area of concern?No it is not. The bounce back is not big. Percentage-wise, it is about 4-5% which is not that great but it is a a positive development. As far as India is concerned, we were very concerned about the import of aluminium scrap. We have never before seen 60% rise in the import of scrap. Whole world was dumping in India. When we import scrap, it is all-dollar payment and when we produce aluminium or aluminium scrap in India, it is 100% domestic. We have our own coal. We have our own bauxite. It is a great advantage for us to produce more in India than import this scrap. So, this was definitely a concern. As metal prices go up globally, India will no longer be a dumping ground.You, Hindalco, the Aluminium Association have all asked for imposition of import duties. There has been a series of meetings. Finance Minister Arun Jaitley on the other hand has talked about breaking down trade tariffs. Crude prices have started rebounding after falling 40%. Brent is back above $60. What is it going to mean for your oil and gas business? Are you looking at realigning any of your businesses?I have always said crude price is going to be around $60-70 and that is what we should be hovering around. When the Prime Minister had a meeting with the Aramco chairman. I was present there. The Prime Minister told him, "Opec is in your hand, production is also in your hand. A country like India cannot afford more than $50-60 price." The Saudi Aramco chairman said their cost was $40-50. I got up and said Cairn produces oil for $6. India has a huge capability to produce oil. ONGC, Cairn and other companies can come forward. You were in Houston. Cairn has won more than 40 oil and gas fields. You are looking for partners. Give us an update on India’s crude production. We are looking for a partner. I have taken a huge risk to take on 41 blocks and we are going to start the work. I was personally in Houston where I have spoken to companies. They could not believe that India can open up like this. I am putting in as much as effort as possible. Thank's to technology, what used to be done in 10 days can be done in 5 days now. I am very hopeful on these blocks and I am looking forward to see whether we can produce 50% oil in this country.You had taken a personal stake in Anglo American and there was a lot of speculation on whether it could ever be merged with Vedanta. Today when things are looking brighter for metals, could a merger of Anglo American with Vedanta be back on the table?I am very pleased with a close to 22% shareholding which makes us the largest shareholder in Anglo. Anglo American is the largest player in iron ore, coal, diamond and we have all these opportunities in India. I am persuading them to come to India. There will be lowest cost of production and there is no red-tapism today. The government is welcoming. We have come up on the ease of doing business index from 177 to 70. So, I will try to make them come to India and open up some of the projects. The company is doing extremely well after we have come in. India can't be the dumping ground for aluminium scrap. We have to produce more and more aluminium in India because we have huge bauxite and huge coal deposits.
Source: ET

Jet is for trading, not investing: Jagannadham Thunuguntla - economic news of india - world economic news - economics news for students - indian economy news

Jet is for trading, not investing: Jagannadham Thunuguntla - economic news of india - world economic news - economics news for students - indian economy news
Jet is for trading, not investing: Jagannadham Thunuguntla
Even though one should not be gung ho, one can keep the overall real estate space in radar, focus on brand strength of some 66931941 66921301 66918507 of these companies, Jagannadham Thunuguntla, Senior V-P and head of research, Centrum Wealth Management. Edited excerpts: What is your view on HUL, is it a buy post the acquisition? Absolutely. Horlicks is a very strong household brand. There is reason to believe that under Unilever or HUL camp, it will be more successful because of their sheer distribution reach in comparison with GSK Consumer Healthcare. It is a good deal and even in terms of valuation, HUL has got fairly decent valuation because of the PE multiple differential between the HUL and GSK Consumer Healthcare.HUL can now focus more on the food segment. It has got both marquee brands and household brands. We can expect much higher performance from HUL in future. On top of that, because of the swap ratio adjustment, even GSK Consumer Healthcare will keep performing along with HUL. But HUL has a history of successful acquisitions as well as not-so successful acquisitions. We have to see Horlicks belongs to which camp. I tend to believe that it will be a successful investment. Jet Airways has been scaling up its integration with Etihad and trying to be more active in transferring more executives there. This could be in the realms of speculation. What is the story ahead for Jet? Considering the recent correction in the overall market, there are umpteen opportunities. I am not sure why one has to look at an aviation stock with its own set of challenges. I understand if there a new investor -- be it local or international -- and the government is also trying to give them a little bit of relief in terms of duties on ATF. But keeping all that aside, barring at best a trading move surrounding this deal specific development, I do not see why Jet Airways has to be in anybody’s portfolio. There are so many opportunities available now. Investors will be lot better off focussing there. Is the entire affordable housing and utility segment overstretched now? Would you hunt at this level or would you continue to avoid them? In bull markets, risks are ignored, in bear markets opportunities are ignored. This is a classic case of that. When the IPO bull market was going on. many risks even though they were absolutely in the face, were completely ignored and denied. That is a classic sign of the bull market. If the real estate sector is not doing well and if the affordable housing is not doing well, the home building products will have lower demand. Having said that, after these corrections, almost 40-50% kind of corrections in most of these names and the valuations have started coming into at a range where it started making little sense. One should keep them in radar and in many of the pockets, we should remember that there is a duopoly or oligopoly kind of market. There are at best two, three, four popular brands. When the going gets good -- maybe in a year or two -- the brand strength of some of these home building product companies will come back. Even though one should not be gung ho, one can keep the overall space in radar, focus on brand strength of some of these companies, look at the companies who do not have high debt which is very important because if they have high debt, they will get crushed in the next one-two years of slowdown. One should keep on radar companies which are light on debt and high on cash with good brand strength. One can get into a staggered buying format.
Source: ET

Customers spending more in data analytics to mitigate risks, improve engagement: Infosys - economic news of india - world economic news - economics news for students - indian economy news

Customers spending more in data analytics to mitigate risks, improve engagement: Infosys - economic news of india - world economic news - economics news for students - indian economy news
Customers spending more in data analytics to mitigate risks, improve engagement: Infosys
Infosys sees sharp rise in opportunities in data analytics with more global companies choosing to invest in customer experience enhancement, risk mitigation using data analytics. In a study released today (which reached out to more than 1000 senior executives in the US, Europe and other markets) ‘Endless possibilities with data: Navigate from now to your next’, the company found out that nearly one-third of them ready to invest in customer experience improvement using various data analytics solutions. According to the study, 28% respondents were interested in leveraging analytics for risk mitigation activities such as predicting risk to enable better decision making, and detecting anomalies that could disrupt business effectiveness or in some cases help companies prevent losing customers. The company said it is also working data analytics based solution that can improve customer experience of energy utilities in the UK to help them improve services at a time when the government is starting easy switching for the consumers. “Today, most of our clients or prospects are investing in how are they continuously listening and how do they service the customers in the micro moment (right time). It is very important to make sense of the data in the moment of truth,” said Satish H C, Head Global Services - Data and Analytics, Infosys. Infosys said its research, conducted by Infosys Knowledge Institute, has made an assessment of enterprise expectations in a world of endless possibilities with data: while it explored a range of challenges, opportunities, and the role of new technologies in the analytics world.Satish recalled how in today's world product design was influenced by conversation between customers or prospective customers and their brand ambassadors for one of its clients. Infosys said it developed solutions and platforms ahead of time keeping mind the disruption in the world of data analytics and trained people. “We foresaw a need for democratisation because the world will never have data scientists to the extent that we all need. You have to start making them more productive,” said Satish.
Source: ET

Rise of the machines: When bots take over the workplace - economic news of india - world economic news - economics news for students - indian economy news

Rise of the machines: When bots take over the workplace - economic news of india - world economic news - economics news for students - indian economy news
Rise of the machines: When bots take over the workplace
At makemytrip.com, Myra and Gia were godsend.If tourists start booking Shimla holidays to enjoy the snow and traffic outstrips the number of rooms, the duo sends alerts to hotel chains in the region to increase online inventory. They forecast demand, answer customer queries and can even update on flight delays.The duo has been at the travel portal’s headquarters in Cyber City, Gurgaon, for just a year but has already moved on to solving more difficult tasks such as managing loyalty programmes.Whether cancellations or refunds from 12,000-15,000 customer interactions every day, about 60% are resolved by the duo and some of their other techsavvy mates. And after all that, they take time out to share the workload of senior colleagues.Superhuman, you would say. We wholeheartedly agree. For Myra and Gia are not flesh and blood white-collar executives. They are bots.It’s the Year of the Bots. They are efficient, can handle scale, accuracy and, most importantly, work tirelessly without a lunch break.Inspired by SoftBank-backed Ping An Good Doctor of China, insurance aggregator PolicyBazaar.com started a healthcare venture, docprime.com, with an investment of around $50 million in April. It would help users book doctor and lab appointments. Chief executive Anish Gupta says it couldn’t have started without bots!At Ping An Good Doctor, bots enable 700,000 consultancies, with 1,000 bots working alongside human agents. “Such scale is possible only with bots.” adds Gupta, who is also the chief technology officer of PolicyBazaar. Without them, the 10-year old insurance aggregator would have needed three to five times more people to do tasks such as selling motor or health insurance. About half the motor covers are sold by bots, a number Gupta expects will increase to 75% in the next couple of years.Thousands of bots will work alongside humans to book appointments with doctors, schedule meetings, deliver customer support, help access records, assist in work and so on. EY predicts a five-fold increase in their numbers at the workplace in the next year.The largest temp staffing company in India, TeamLease Services, has calculated that 0.1% of industrial jobs have been lost to robots, while 37% of the jobs that currently exist will change in some way. That change is coming about faster now, driven by bots or software applications that perform automated tasks such as searching online, paying bills, answering queries, fixing an appointment with a doctor or a plumber, helping in research, driving marketing campaigns, filing tax returns or checking for errors in documents without human intervention.Bots and robots both do the same thing. But bots are software and robots are mechanical. Yet both excel at repetitive tasks – ones we call the daily grind, or tedious chores.Robots have mechanised manufacturing somewhat in the last few years but in their new avatar, bots are altering services companies. A car manufacturer such as Ford could be using robots on the factory floors to make cars just like they do at their Gujarat export plant, but in the corporate offices, bots can be devising multi-platform campaigns to sell those sedans or SUVs.The scope is wider. That is why L&T is using them for payable and contract management; Airtel for billing and customer services; TataSky for finance and supply chain functions. Bajaj Electricals has Paddy taking employee complaints and booking technician visits and EY has deployed 1,500 bots for clients across functions — finance, HR, IT or any activity that has a set procedure (rule-based processing). At HDFC Bank, job applications from humans are screened by bots and the first videoconferenced interview is also with one.Wherever there is a highly templatised, predictable, non-cognitive assignment, bots are taking over. At the same time, they are constantly upgrading. Like HDFC Bank’s Eva is helping users decide between recurring or fixed deposits. In some financial services firms, bots are advisors, cherry-picking bespoke investment and savings products for clients after mapping their age, risk profile, time horizon and several other parameters.Depending on the complexity, a single bot can cost from Rs 40 lakh to Rs 1.5 crore to develop.“Earlier there were no alternatives but to throw bodies at mundane jobs. Now, bots are taking over while humans move to better quality, higherthinking jobs,” says Rituparna Chakraborty, co-founder, TeamLease.Bengaluru-based tech services provider Mindtree has gone a step further to make it official. It reported the addition of 426 bots to its workforce as of June 30 and 484 in its second quarter results. The mid-tier firm started declaring quarterly bot numbers along with human employees added from early this year. “We wanted to signal to the world that our industry is changing,” says Rostow Ravanan, chief executive, Mindtree. “Bots are a rising trend.”Transformers: The Next GenBots or software programs for specific tasks have been around for many years, with 40% of customer queries being the FAQ type — ideal for bot-level intelligence. Some like Vaibhav Gawde, head, solutions consulting, Oracle India, have seen at least three generations at play.The first gen are single skill, single task bots. The second generation, in use at present, can handle multiple tasks such as employee self-service, IT help desk or customer queries. The third gen will be powered by artificial intelligence (AI) and use self-learning to improve their own knowledge to help human users.Similarly, activity bots that Mindtree has built can decide who the best person (human) is to do a job. As machines do more tasks, humans can perhaps utilise free time to upskill themselves, argues Ravanan. 66930292 “Bots will save human workers four hours in an eight-hour shift. By 2022, one-third of all customer services will be done by bots,” feels Arup Roy, vice-president, research at Gartner, a tech advisory firm. Early evolvers are finding ways to blend human and intelligent bot workers that complement each other’s strengths and weaknesses. “We are elevating these ‘systems that do’ bots with ‘think and learn’ bots to drive intelligent automation,” says Sumithra Gomatam, president, digital operations, Cognizant.At lingerie brand Clovia, customer interactions are handled by bots. Pankaj Vermani, founder and chief executive, says, “The next phase of bots will see customers being guided on product selection and size discovery assistance.”A large ecommerce company is using bots to pay suppliers. “If you are doing 10 million transactions daily, accuracy is important and so is time and compliance. This is where bots score,” says Milan Sheth, lead, intelligent automation, EY India. “We are trying to create bots to pick out anomalies in non-disclosure agreements and memoranda of understanding. The progression is: use bots to assist, then assign them tasks and eventually leave it all for bots to do,” predicts Nitin Chugh, country head, digital banking, HDFC Bank.I Robot: Where’s My Paycheque?There can be much fiery debate over bots snatching away humans’ jobs. But while each bot is as good as, or better, than 2.5 human workers, it needs at least 5-7 people to develop, deploy and maintain it. Ergo, at least coders can rest easy.But in a billion-plus country where only 10-12% of the 480 million workers are in the organised sector, intelligent automation — though inevitable — is bound to face backlash. In election season, farm distress and youth unemployment is already political ammunition.Yogendra Yadav, national president, Swaraj India, feels it’s a “fundamental error in believing there’s something called advanced technology.” The US and Europe have deficient labour and excess capital, he argues, making bots relevant there. “In India, the situation is the opposite. Advanced, cutting edge technology should create jobs with least amount of capital.”Chakraborty of TeamLease has a counterargument. “Any innovation comes with side effects. That’s no argument against innovation. Use of bots is mankind’s statement to move to higher order jobs,” she says.For technology apologists, bots crumble if there are multiple intents and can only be designed, created, developed and even maintained by humans. “Historically, market expansion and job creation are because of use of technology. I can empathise with people’s fears,” says Ravanan. However, “getting humans and intelligent bots to collaborate and feed off each other’s insights will be key to evolution,” feels Gomatam.As per EY estimates, 40% of any job component is digital and increasing. “If the economy doesn’t grow, even bots will be unemployed. If the economy expands, as is expected, there will be jobs for both humans and bots,” argues Sheth. Of the 15 names mentioned in this story, three are of bots. It’s possible that a story written five years from now will be based mostly on conversations with chatbots. In some global newsrooms, baby steps have already been carried out.There is, however, a dark side. Bots are being employed to spread misinformation or propaganda in political and corporate warfare. Canny algorithms invade our space with targeted messaging. In today’s Orwellian world, everything — from personal photographs to financial records — are vulnerable to the prying eyes of bots.Facing unprecedented global backlash, Facebook and Twitter have purged millions of bots who have been spamming humans while promoting hate, misogyny, terror, sexual abuse and pornography or just plain falsehoods.“We now stop more than one million accounts per day at the time of upload,” points out Monika Bickert, vice-president, product policy and counter-terrorism, Facebook. About 1.3 billion fake accounts have been brought down in May-October.Of course, it is unlikely that the need for humans —to write a story, run factories or companies and work at the bank — will disappear. Still, dystopian though it may seem, the post of a bot manager who has been trained by bot teachers and hired by bots may be a coveted job sooner than you think.
Source: ET

Monday, December 3, 2018

Vital tax shield gone, life suddenly changes for thousands of cos - economic news of india - world economic news - economics news for students - indian economy news

Vital tax shield gone, life suddenly changes for thousands of cos - economic news of india - world economic news - economics news for students - indian economy news
Vital tax shield gone, life suddenly changes for thousands of cos
MUMBAI: A new tax ruling threatens to challenge a strategy that allowed thousands of businesses and professionals to reorganise themselves and attract foreign investors.This involved converting closely held companies into limited liability partnerships (LLPs) — a structure that was introduced a decade ago. While LLP was intended to help businesses to scale up, many were also allured by its ability to freely distribute profits to partners as dividend without deducting any dividend distribution tax.The new ruling would force many companies to change tack.In mid-November, a Mumbai bench of the Income Tax Appellate Tribunal said conversion of a company into LLP is covered by the definition of ‘transfer’ and therefore liable to capital gains tax.The decision puts a question mark on an earlier Bombay High Court decision that the conversion of a partnership firm into company does not amount to ‘transfer’ and involves no ‘consideration.’“This decision will have far-reaching implications,” said senior chartered accountant Dilip Lakhani. “It will apply to all pending proceedings, could lead to re-assessment and revision of orders passed by tax assessing officers (AO). Future planning of conversion will also be impacted as in many cases, huge liability will arise on the com-pany when assets are transferred at higher than the book value… as the conversion into LLP is considered as ‘transfer’, the ruling lifts the primary shield that was offered by the Bombay High Court in the case of Texspin.”There would be no capital gains tax, as per the tribunal, as long as such a transfer happened at book value. However, many businesses used to convert by valuing the assets higher than book value to strengthen balance sheet of the LLP, borrow funds, attract foreign capital, as well as increase the net worth of the partners in the LLP.Another significant aspect of the Tribunal ruling is that any tax that had escaped in the hands of the company would now be levied on the limited liability partnership, which is construed as the successor. “This could make life difficult for many LLPs,” said Lakhani. 66913658 The ruling involved Celerity Power, a private limited company that acquired LLP status in September 2010. The tax office did not buy the company’s argument that the conversion of M/s Celerity Power Pvt Ltd into M/s Celerity Power LLP did not involve any transfer of property, assets or liabilities, among others.The ruling could also draw the attention of the indirect tax authorities, as it challenges an earlier Madras High Court ruling that no stamp duty is levied in case of conversion of a firm into a company.Smaller companies with less than Rs 60 lakh earnings are exempted from the definition of transfer (and thus, from capital gains tax).However, even companies with income above the threshold are currently in a position to avoid tax on the back of the Texspin verdict of the Bombay High Court, which said the conversion was not a transfer. The Income Tax Appellate Tribunal’s ruling on Celerity Power partly takes away that protection that companies enjoyed.Post ruling, tax can be avoided only as long as ‘transfer’ from a company to an LLP happens at not higher than the book value.
Source: ET

How your view on yourself can make you poor - economic news of india - world economic news - economics news for students - indian economy news

How your view on yourself can make you poor - economic news of india - world economic news - economics news for students - indian economy news
How your view on yourself can make you poor
By Dhirendra KumarWhether you are a spender or a saver, a saver or an investor or an investor or a gambler, could all depend on how rich or poor you feel. Note that I said ‘feel’, not ‘are’. What’s even more interesting is that the impact may actually be the reverse of what looks likely, that is, feeling poorer may lead to riskier behaviour. However, this is not about poverty or wealth on an absolute scale, but relative to others that you compare yourself to. Some time back, I read about some research on the psychological aspects of poverty and inequality which seems to jibe with something I have observed for a long time in the behaviour of savers and investors. A group of economists in the US set up an experiment for which they made a select set of government employees aware that they could find out their colleagues’ salaries through an online facility. Later, they surveyed both sets of people —those who knew their co-workers’ salaries, and those who did not know.As it happened, before the study, the researchers had two opposing theories on how people would react to knowing others’ financial situation. Some of them thought that when employees came to know that they were being paid less than others, they would be unhappy. The other theory was that when employees came to know that others had higher salaries, they would see it as an opportunity for themselves to earn more and therefore, be pleased about earning less than their peers. I know the second idea sounds like a really stupid theory to a normal person, but what can you do, this is the kind of stuff that economists believe in, apparently.The study obviously showed that people who discovered they were paid less were unhappy about it. However, there was a surprise. It turned out that those who were paid more than their peers were not happy about it either, but rather, were just indifferent. They just didn’t care that they were getting more money—it did not make them happy or unhappy. The study concluded that knowing about salaries had “negative effect on workers paid below the median for their unit and occupation” but had “no effect on workers paid above the median”.This happens because people’s behaviour is driven by who, or how many, are above them. No one feels prosperous because there are others who are poorer than them. So how is this important to saving and investing? People who feel they are not prosperous tend to make make bad decisions about investing. The original article talks about ‘the poor’ being prone to gambling and things like that. However, that’s not the kind of thing I am talking about here. Relatively prosperous people, with stable incomes, often don’t have any discretionary savings because they feel that only the rich can have savings and they are not rich. Often, I find that they have some vague notion that some sort of a bonanza will happen in the future, some landmark event, which might make them prosperous and then they will invest all that money. These attitudes are not a result of the absolute amount of money they have. To take just one comparison that I have personally dealt with, a couple with a Rs 14 lakh annual income felt they were not prosperous enough to save like ‘rich’ people do and someone who earned about half of that was steadily putting away Rs 10,000 a month in a balanced fund. I must point out that all these people define investing as any investing that involves taking a risk and getting good returns. They feel that since they are not prosperous, they can only keep their money in banks or in the PPF or such instruments that pose no risk, but no provide no real chance of earning any meaningful returns. This is often seen as an ‘investor education’ issue but really isn’t. It’s a cultural and psychological issue that can be solved only by self-awareness about what one is doing.(The author is CEO, Value Research)
Source: ET

Where & how to find tomorrow's multibaggers - economic news of india - world economic news - economics news for students - indian economy news

Where & how to find tomorrow's multibaggers - economic news of india - world economic news - economics news for students - indian economy news
Where & how to find tomorrow's multibaggers
Unlike the fern, which starts growing right from the first day, a bamboo tree shows little growth for the first five years. But then, in just three months, it grows to more than 80 feet. In hindsight, all those years were spent in strengthening the roots to achieve the eventual rapid growth. Just like the bamboo tree, great businesses take time to build the momentum. We present some of the companies that look poised for such a growth given their efforts in the past to build a sustainable business model.Oberoi Realty Vikas Oberoi is known among his friends as an avid and responsible aviator. He runs his business of developing medium and high-end real estate not much differently. He does all the required checks before investing in a project, takes a calculated approach to risks and believes in contingency planning. This approach has helped him not only grow in the tough business environment but also run the only debt-free company in a sector saddled with borrowed money. It all started with the purchase of an 80-acre land parcel for Rs200 crore in Goregaon East, a suburb of Mumbai. The company has developed not more than 40 acres of this and its market capitalisation has reached Rs15,000 crore. Apart from residential projects, the commercial space built over 10 acres generates rental income of Rs350 crore a year. With this cash flow, it purchased a land parcel in Borivali East (25 acres for Rs 1,155 crore) and in Thane (60 acres for Rs 555 crore). By 2021, the management expects to earn an annual rental income of over Rs 1,200 crore with the commissioning of two more malls, one at Borivali and the other at Worli, one more commercial project in Goregaon, in addition to two existing commercial projects, and three more hotels — one each in Worli, Goregaon and Borivali. Revenue visibility amid a zero-debt profile gives an idea of the kind of money Oberoi Realty will be left with to purchase land parcels in future while several other developers are likely to be hard-pressed for cash owing to stretched balance sheets. But Oberoi has bigger plans. He plans to float a real estate investment trust (REIT) of fixed income assets, which will generate even more cash that can be used for larger investments. According to experts, only a handful of realty companies will have a viable business amid regulatory measures such as Real Estate (Regulation and Development) Act and Goods and Services Tax. Scaling up is not a problem said Oberoi. “We are mere owners of the knowledge, brand and customer interface. Rest everything is outsourced,” he said.In the first half of 2018-19, the company’s net profit was Rs 523 crore, 20per cent higher than the profit for entire previous fiscal. This was higher than any of its peers.Trent Favourable demographics, rising per capita income and increasing consumerism are expected to help India’s retail industry grow 16.7per cent from 2014-15 to 2020-21, according to a Boston Consulting Group report. Tata Group-promoted Trent, which operates retail chain Westside and has a 49:51 joint venture (JV) with Spain’s Zara, the world’s most successful fashion retailer, seems to be well-placed to benefit from this growth. Zara has taken several decades to get the business model right and create a retail entity which is now worth 80 billion euros. For Trent, the learning curve has been quite sharp, thanks to the JV. Having closely watched its partner set up stores in India since 2010, Trent has made several fundamental changes to Westside over the past few years. According to the management, this includes consistency in strong product offerings, effective pricing, inventory discipline and, most important, focus on the speed of “concept to market”, something which has played a major role in Zara’s success. It has guided for 20per cent capacity expansion — 25 new stores this fiscal compared with the addition of 18 stores in 2017-18 and 14 in 2016-17. Its revenue rose 20per cent to Rs 2,000 crore in 2017-18 while sales per square foot at Rs 10,000 was the best in the industry. Operating profit before tax (EBITDA) at 11per cent and gross margin at 60per cent were also the highest in the industry. As stores mature, a strong operating leverage can play out in the coming years. Zara India’s revenue has grown 12 times in the past seven years. In the previous fiscal, revenue increased 21per cent to Rs 1,220 crore while operating margin before depreciation (EBITDA margin) expanded 410 bps or 4.1 percentage points to 13.8per cent year-on-year. Trent has also other retail chains under the names Zudio and Star Bazaar, although their contribution to the overall financials is small. Analysts expect Trent’s revenue to grow 25-27per cent and EBITDA at 31-33per cent in the next three years. The company’s enterprise value was 35 times EBITDA and four times sales (including JV with Zara).HDFC Asset Management Company While HDFC Bank and HDFC have been the two best performing finance companies, HDFC Asset Management Company (AMC), another group company, was recently listed. After the bumper listing, the euphoria has fizzled out — the stock is down 30per cent from the peak amid the weak broader market. The AMC sector will be a major beneficiary of the shift in household savings from physical to financial assets. More than half the country’s savings are still held in physical assets, which is a growth opportunity for AMCs. Besides, India’s mutual fund penetration at 11per cent of GDP is lower than the world average of 62per cent of GDP. Mutual fund assets under management (AUM) now are 20per cent of financial savings compared with 10per cent five years ago.HDFC with its strong brand and parentage is well placed to benefit from this momentum. The company is among the top two in AUM, the other being ICICI Prudential AMC. In 2017-18, HDFC AMC’s earnings at Rs 722 crore were the highest in the sector. Its earnings have grown 20per cent annually in the past four years, the highest among peers.
Source: ET

US brings in new norm on L-1 visa, provides leeway - economic news of india - world economic news - economics news for students - indian economy news

US brings in new norm on L-1 visa, provides leeway - economic news of india - world economic news - economics news for students - indian economy news
US brings in new norm on L-1 visa, provides leeway
The US Immigration and Citizenship Services (USCIS) clarified last week that an L-1 beneficiary (employee for whom the application is filed by the sponsoring company) must be employed outside the US by the company for one continuous year, within three years before filing of the visa application.However, a leeway has been built in for the employees already working for the sponsoring company on an H-1B visa, as they may be able to adjust the time requirement.“The new L-I policy guidance clarifies ambiguities between the provisions of the Immigration and Nationality Act and the implementing regulations. It confirms what a cautious immigration attorney has always been advising clients,” says Cyrus D Mehta, founder of a New York-based law firm.“Now it is clear that eligibility must be met at the time of filing. This may require some employers to delay their application for L-1 visas until the full one year is met, but having a clear policy at least puts employers on notice so that they can comply and avoid unnecessary denial,” Emily Neumann, immigration advocate and partner at Reddy & Neumann told media.The L-1A visa is for intra-company transferees who work in managerial or executive positions in a company located outside US, whereas the L-1B visa applies for those employees who work in positions that require specialised knowledge. Companies like TCS, Infosys and Tech Mahindra are among the top applicants for L-1 visas.
Source: ET

L&T Construction wins orders worth Rs 1,127 crore - economic news of india - world economic news - economics news for students - indian economy news

L&T Construction wins orders worth Rs 1,127 crore - economic news of india - world economic news - economics news for students - indian economy news
L&T Construction wins orders worth Rs 1,127 crore
NEW DELHI: Larsen & Toubro (L&T) Monday said its construction arm has won orders worth Rs 1,127 crore across two of its business segments.In the metallurgical and material handling business, the company bagged contracts worth Rs 755 crore."An order has been secured from Hindustan Zinc for the construction of an 1.5 MTPA (million tonne per annum) lead-zinc beneficiation plant at R D Mines, Rajasthan...," the company said in a statement.In the buildings and factories business, the firm said an order worth Rs 372 crore has been secured.The factories business unit of the buildings and factories vertical has secured a prestigious order for the brownfield expansion of Viscose Staple Fibre manufacturing facility from Grasim Industries (cellulosic division) at Vilayat, Bharuch, Gujarat, the company said.The scope includes civil, structural, architectural and external development works. The business has earlier executed a green-field project at the same location for Grasim industries, it added.Shares of Larsen and Toubro (L&T) were trading 0.68 percent down at Rs 1,419.95 apiece on BSE.
Source: ET

Tata Power welcomes Gujarat government's decision to pass through imported coal cost - economic news of india - world economic news - economics news for students - indian economy news

Tata Power welcomes Gujarat government's decision to pass through imported coal cost - economic news of india - world economic news - economics news for students - indian economy news
Tata Power welcomes Gujarat government's decision to pass through imported coal cost
NEW DELHI: Tata Power has welcomed the resolution by the government of Gujarat to accept the recommendations of the high power committee in giving relief to Mundra Ultra Mega Power Project that meets nearly 15% of the state’s requirement.“Though the coal cost is now a pass through, the Company would continue to make losses due to rebate on financing cost and coal mines profit is being passed on to the beneficiary states,” the company said in a statement.The company said the move will help Coastal Gujarat Power Ltd to continue its operations to meet its obligations to all five states. “We expect to get the consent of other four procurer States based on the recommendations of the High Power Committee’s and thereafter amendment to the PPAs so as to seek necessary approvals from CERC as per the directions of the Hon’ble Supreme Court,” it said.“This positive step is in the interest of all stakeholders, including the end consumers, who get 24/7 reliable electricity supply from CGPL power plant. In case these projects were shut down, replacing such huge capacity with alternate sources from the market would not be feasible as the short-term market prices are not only much higher and volatile, the availability of power is uncertain. Also, establishing new imported/indigenous coal-based power plants would have significantly higher fixed and variable costs and high gestation period and hence, would not offer any solution to immediate power requirement,” the statement said.ET on Monday reported that the Gujarat government has directed its power distribution company to raise tariffs of the three imported coal-based power plants owned by Tata Power, Adani Power and Essar Power by amending their power purchase agreements (PPAs) and approaching the power regulators for approval.Gujarat Urja Vikas Nigam Ltd (GUVNL), the main power procurer from the three plants, has been directed to immediately amend the pacts and approach regulators for tariff adoption and approval. The directive was issued late on Saturday night by the state. The amended PPAs will soon be circulated among other states for cabinet approvals.
Source: ET

Why Vivek Mavani is bullish on these three sectors - economic news of india - world economic news - economics news for students - indian economy news

Why Vivek Mavani is bullish on these three sectors - economic news of india - world economic news - economics news for students - indian economy news
Why Vivek Mavani is bullish on these three sectors
Paper, city gas distribution companies and auto are the three sectors Vivek Mavani, independent investment advisor, is 66880650 66915745 66882843 betting on. Mavani was talking to ET Now.Edited excerpts: What are the top two-three ideas that you are recommending because the market seems to be crawling back and we are talking 11,000 once again on the Nifty. Is it time to buy? Certain sectors selectively give valuation support as growth tailwinds are in their favour. Certain sectors are secular growth stories. Paper sector is something which has the tailwind of a cyclical uptrend. We are buyers in JK Paper and international paper APPM. These are the two leading paper companies on our radar where we have an interest on behalf of clients. The other secular growth story which only gets better is the city gas distribution companies, namely Mahanagar Gas, Indraprastha Gas and the recently listed Adani Gas, which has been spun off from Adani Enterprises. For Adani Gas, it is still early days because they are yet to start operating in a meaningful manner, relative to growth opportunity. They have bagged a large number of licenses in the recent round of bidding but a huge amount of capital expenditure will go on ground before they see that growth in form of revenues and earnings. But Mahanagar Gas and Indraprastha Gas remain quite interesting stories. The third sector that we are positive on though the news flow is not very positive is the auto sector. The auto numbers especially on passenger cars in Maruti and two-wheelers Hero and Bajaj Auto do not appear to have created excitement in the market.From a valuation point of view, if we were to look at the multiples, then Maruti at less than Rs 7,000, trades at about 16-17 times forward earnings; Hero and Bajaj Auto trade at about 12 to 14 times earnings which are cyclical lows. They used to trade at that level during the global financial crisis in 2008-09. On any whiff of numbers turning positive, the auto sector could outperform.What would you avoid in this kind of market? Would it be metals? Despite the 90-day ceasefire between China and US, one does not know what is going to be the eventual outcome after these three months and how then metals would react to that eventual outcome. We have a limited understanding of what could happen after 90 days. It is best to just avoid that sector altogether. There are enough domestic-focused sectors that one can focus on to find investment opportunities. But coming back your question about what to avoid – it is a much easier question to answer. Avoid all companies which either have been misguiding on growth or not delivering on the promised growth, number one. Avoid all companies which have either governance or balance sheet issues and that pretty much takes up a large number of stocks away from your focus list. Also avoid companies which have either management issues, ethical issues or regulatory issues. There is a saying that the sins of the bull market come out in the bear market and what we have been seeing over the last six to eight months that not a single week goes without one company delivering some sort of surprise in terms of some wrongdoing or other in the last five years. What is your perspective on IT? I am positive on the tier I companies, especially TCS, Infosys and Tech Mahindra. They have been in a corrective mode post a stellar rally in the early part of this year on back of weakness in the currency. But these are terrific businesses which would give you long-term compounding with mid teens kind of earnings growth rate that can be sustainable over the next three to four years.The stock price should be able to comfortably give you a very significant cash generation, free cash flow especially from TCS and Infosys and much of that 80-90% is being returned back to investors in form of generous dividends and buybacks. I think that will continue. They are in a corrective mode because of the strength in INR but from a long-term perspective, they continue to be accumulate on declines from a two-four year view.
Source: ET