BSNL, MTNL asset sale worth INR37,500cr hits roadblock. Services PMI slows down for the second consecutive month in October to 49.2. India will not join RCEP. What do the critics say? Startup funding in India likely to grow merely 4% in 2020. Infosys lays off mid, senior level executives. Uber exceeds revenue expectations but reports $1.16bn in net losses, aims profitability in 2021. Facebook India's revenue and net profit jump by 71% and 84%.
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Vendors of state-run telco firms BSNL and MTNL may consider approaching National Company Law Tribunal (NCLT) for liquidation on the back of outstanding payment dues worth INR20,000cr.
The pending payments are against the supply of telecom gear and other goods to BSNL and MTNL as well as INR45,000cr rural poadband project BharatNet.
MTNL Chairman and Managing Director Sunil Kumar meanwhile said that the vendor payment due on MTNL is not very high. Not more than INR400cr and that they were well placed to clear the the dues very soon.
Previously: The Cabinet had last month approved a INR69,000cr revival plan for BSNL and MTNL but dues of many vendors still remain unpaid. Moneycontrol
Asset sale of BSNL, MTNL worth INR37,500cr is likely to take longer than planned as their buildings registered before 1988 are owned by the Department of Telecommunications (DoT).
What Does This Mean: The telecom companies will now have to buy these properties from the Centre before monetising them. Even if the sale happens for no amount, the transaction has to be registered with a sale deed. BS
So it is settled. After over six years of negotiations, India has decided to not join the Regional Comprehensive Economic Partnership (RCEP) while the other 15 countries in the bloc have decided to move ahead with the pact. In the end, negotiating RCEP was always going to be complicated business.
A Tiger and A Dragon Walk Into A Bar: ...And neither of them agreed with the other on anything, ever. India felt there were “significant outstanding issues, which remain unresolved” (ie, that armada of Chinese imports waiting impatiently to cross the Bay of Bengal) and that the deal finally drafted did not adhere to “the basic spirit and the agreed guiding principles of RCEP”. Prime Minister Narendra Modi declared India's departure at the 3rd RCEP Summit in Bangkok on Monday.
There are both supporters and critics of the government's decision. Supporters of the pull-out argue that being party to RCEP would have led to a flood of cheap, mass-produced Chinese imports in the Indian market. Such an import surge would have, besides increasing India's $50bn+ trade deficit with China, hurt local small businesses and traders. Moreover, the reluctance of other countries to move the base year from 2014, inadequate commitment to the services sector, and requirement to do away with agricultural tariffs would have negatively impacted the Indian economy, which is already in a fragile state, this side opines. ToI
The opposite side decries Delhi's decision. Staying out of RCEP, they say, would hurt India's chances to strike deals or secure concessions with individual countries in the RCEP tent. It would also mean that India would miss out on a huge trade bloc that includes every major economy in the region, isolating it in the global supply chain - that too, even as China secures the leading position, trade-wise and strategic implications-wise. This side also laments what they characterise as India's suspicions of free trade deals whilst failing to reform and increase its own economy's competitiveness. CFR
No Rescue: India’s services PMI declined for the second consecutive month in October to 49.2 on the back of muted demand.
This is the first back-to-back reduction since August 2017, following the implementation of GST regime.
Good to Know: Although the Nikkei/IHS Markit Services Purchasing Managers' Index rose to 49.2 last month from 48.7 in September, it remained below the 50-mark threshold separating contraction from growth on a monthly basis. ET Indicators
We Are Sad To Let You Go: is laying off around 10% (c. 2,200 people) of the workforce in the mid and senior rung.
The IT giant has meanwhile clarified that as a high-performance organisation, involuntary attrition is integral to normal course of business and it should not be interpreted as any mass trimming across any level.
Only last week, global IT services company Cognizant said that it would be laying off 10,000-12,000 mid-to-senior employees from their current roles. It also said that it would reskill and redeploy about 5000 of those impacted by this move. ToI
As per 2020 predictions for startup ecosystem by American market research company, Forrester, startup funding is likely to grow merely at 4% YoY in 2020 as venture capital (VC) investors would opt for increased scrutiny of startups with high valuations, source of funds for new investors and fewer new businesses coming up in various markets. Financial Express
In a bid to encourage the startup ecosystem in the country, the Ministry of Corporate Affairs is planing to allow startups to issue 50% of their paid-up capital as sweat equity and extend the period of exemptions from other regulatory filings for up to 10 years instead of five now.
They will be exempted for 10 years from a rule that bars private companies from raising deposits exceeding 100% of their paid-up share capital. ET Tech
Uber's Q3 earnings beat analyst estimates - revenue stood at $3.81bn vs the $3.69bn expected. But the stock fell by c. 5% on news that the ride-hailing company's reported net losses totalled $1.16bn, topping its $986mn loss during the same time last year.
CEO Dara Khosrowshahi said Uber is targetting adjusted EBITDA profitability in 2021. “The focus really is to drive lower rates based on the best technology out there rather than driving the growth through discounting,” he added. CNBC
Facebook India has more than one reason to hit the "love" react. As per documents it filed with the Registrar of Companies, its revenues and net profit have jumped by 71% and 84% respectively in the fiscal year ended 30 March 2019 when compared to the last.
The social media giant's reported revenues stand at INR892cr while net profit is INR105cr. The bulk of its revenue comes from the company's primary business, which it referred to as the IT enabled business process outsourcing service agreement. The rest comes from its advertising reseller business segment. ET Earnings
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