Chandrayaan-2 successfully launched into orbit. Govt planning to amend IBC to facilitate mediation for individual creditors. Supreme Court puts Essar Steel sale to ArcelorMittal on hold. Shinzo Abe’s coalition celebrated victory in Japan’s election; Abe is poised to become the longest-serving Japanese PM in history. In his first media interaction since taking office, the RBI governor answered queries on an array of topics. Some highlights below. A trade war flares up between Japan and South Korea. NASA announces that Orion is ready to prep for its mission, which aims to take humans back to the moon.
Moving on to the top Business news of the day.
RBI GUV'S INTERVIEW
In his first media interaction since taking office, the RBI governor answered queries on an array of topics. Some highlights below.
Shaktikanta Speaks: In his first interview to media outlets since he took office as RBI Governor, Shaktikanta Das answered questions on a wide range of topics from bad loans and inflation to rate cuts and fiscal policy. Some highlights of his interview are listed below:
Govt planning to amend IBC to facilitate mediation for individual creditors. Supreme Court puts Essar Steel sale to ArcelorMittal on hold.
Meet Me “Out-of-Court”: The government is planning to amend the Insolvency and Bankruptcy Code (IBC) to facilitate “out-of-court” waiver of debt up to INR35,000 for individual creditorsthrough mediation.
The move is likely to help individual creditors, including small farmers escape from the rigorous and expensive insolvency process.
The government is also considering allowing a separate set of low-cost resolution professionals for individual insolvency cases by relaxing the eligibility criteria.
Please Hold the Line: The Supreme Court has temporarily put on hold Essar Steel’s sale to ArcelorMittal following protests by a consortium of lenders led by SBI who sought an immediate stay on a National Company Law Appellate Tribunal’s ruling in the Essar Steel sale case which said that money has to be shared proportionately among the lenders, i.e., while financial lenders would get 60.7% of their claims, operational creditors, or suppliers to the plants, will also get around 60% on a pro-rata basis.
The case will be heard on 7th August.
POLICY & REGULATONS
MCA wants antitrust probe into practices of Big Four auditing companies. Govt proposes Metrolite transport system for small cities. 50 days of Modi 2.0 – an overview.
Showdown: The Ministry of Corporate Affairs reportedly wants the Competition Commission of India to probe the Big Four auditing firms for possible antitrust violations.
The Big Four – PwC, EY, Deloitte, KPMG – account for the auditing work of almost 60% of the top 500 companies on the NSE. A government official told reporters that they are “totally dominant” and “seem to be sharing the work”, before pointing to entry barriers in the market.
The government is yet to send a formal request to the CCI.
Metrolite - Like Metro, but Light: The government has proposed a new intra-city transport system called “Metrolite”. This will involve light urban rail transit systems and could be set up in small cities where ridership is not very high. The Metrolite trains would have three coaches, have passenger capacity of 300, and run at 25kmph. The new system would also be cheaper to develop than the high-capacity, high-speed Metros in big cities.
50 Days of Modi 2.0: Labour reforms, actions against J&K Bank, amendments to the IBC, hiking MSP for kharif crops and more – here are the major moves undertaken by Modi government 2.0 in its first 50 days.
Shinzo Abe’s coalition celebrated victory in Japan’s election; Abe is poised to become the longest-serving Japanese PM in history. A trade war flares up between Japan and South Korea.
Japanese Juggernaut: Japan’s ruling coalition retained its majority in elections for the upper house of Parliament. This all but ensures that PM Shinzo Abe will become the country’s longest-serving leader (he’s four months short of that distinction).
While the results were a success for Abe’s Liberal Democratic Party and coalition partner Komeito (who are also in majority in the lower house), they fell short of securing the two-thirds “super-majority” required to amend Japan’s pacifist constitution – a long-cherished goal of the premier.
Abe has two years left in his term, and he has said he won’t seek another stint in power, although some supporters wouldn’t mind rules being rewritten so that he can run again. For now, he has a lot on his plate – mainly, dealing with Japan’s rapidly ageing population and finalising a trade deal with his American counterpart.
Trade is a Multi-Edged Sword: Meanwhile, Japan became the latest country to weaponise trade. Tokyo restricted exports to South Korea. The products? Chemicals essential to the latter’s vast and vital semiconductor industry. The lightning rod? A reparations dispute between the two countries dating to the Second World War.
South Korea has vowed retaliation and a tightly-knit economic partnership is at risk of unravelling, threatening the prices of everything from memory chips to iPhones.
Japan is not the first country to turn trade into a crossbow. He’s following the examples set by his peers in Washington and Beijing. Unfortunately, punitive protectionism doesn’t only hurt the countries sparring: it also affects the highly-integrated, highly-globalised international economic system.
Chandrayaan-2 successfully launched into orbit. NASA announces that Orion is ready to prep for its mission, which aims to take humans back to the moon.
The S in ISRO Stands for Success: Chandrayaan-2 was launched successfully from Satish Dhawan Space Centre in Sriharikota today. The spacecraft was placed in Earth’s orbit from where it will head to land on our lunar neighbour.
The descent on the moon (“the most terrifying 15 minutes of the mission”) is scheduled for September 7. A successful soft-landing would make India the first country to achieve this feat on the moon’s South Pole.
Moondance: NASA marked the 50th anniversary of the Apollo 11 mission by confirming that the Orion crew capsule that will deliver astronauts to the moon again is ready for its first trip to lunar orbit.
This trip, scheduled for sometime after June 2020, will be unmanned and a preparatory flight mainly to demonstrate Orion’s thermal-shielding ability during re-entry into Earth’s atmosphere.
Artemis Growl: During this journey, Orion will be ferried as part of Artemis 1, which will be the first mission of NASA’s Artemis programme. In 2022, Artemis 2 will take astronauts in Orion to lunar orbit, making it the first crewed spacecraft to leave low Earth orbit since 1972. The second moonlanding is scheduled to take place in 2024, as part of Artemis 3.