Facing revenue shortfall, Government might seek another interim dividend from the RBI. 2019 was the worst year on record for auto sales, SIAM says. Industrial output rebounds as IIP rises by 1.8%. India could double US oil imports to cut dependence on Middle East. Yes Bank's audit committee chairman resigns citing governance concerns. Policy changes, JioMart pose risks to global e-commerce players in India, says Fitch. In one week, four SoftBank-backed firms have laid off a combined 2,600 employees. OYO lets go of hundreds of employees in India and China. After healthy jobs report, US Federal Reserve might continue to keep interest rates steady. What's at stake in Taiwan's election?
Table of Contents
The Sequel's Already Here: As the economic slowdown, below-the-mark tax revenue and unmet disinvestment targets bite into state revenues, the government is reportedly considering turning once again to the RBI to seek an interim dividend to prevent the fiscal deficit from going haywire.
The likelihood of this happening again increased after the recent National Statistical Office report that pegged the expected nominal GDP at ?204.6trn ($2.88trn), lower than the ?211trn ($2.97trn). This alone could widen the fiscal deficit to 3.44% of GDP against the 3.34% target.
Not Long Ago: Earlier this fiscal, the Central Bank had transferred ?1.48trn ($20.83bn) - the biggest-ever annual transfer of such a kind. The RBI paid ?28,000cr ($3.9bn) as interim dividend from its 2018-19 fiscal accounts (July-June) in February, which helped the government contain the deficit at 3.4% in the last fiscal. Financial Express
And Way Down We Go: 13.77%. That's how overall wholesale of vehicles plummeted by in 2019.
As per data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday, the automobile industry suffered its worst-ever decline in sales in 2019 (sales data began being recorded in 1997).
All vehicle segments reported de-growth last year as low consumer sentiments, weak rural demand and economic slowdown took toll on demand. Read details here.
Good News: As per the Index of Industrial Production (IIP) data released by the Government on January 10th, the country's industrial output grew by 1.8%, rebounding to the positive zone after October's 3.8% contraction. Manufacturing output, which accounts for more than 75% of the entire index, grew 2.7% in November, against a contraction of 2.1% in October. Moneycontrol
Hindi-Cali Bhai Bhai: According to reports, India is planning to double its crude oil imports from the US as it seeks to reduce its reliance on Middle Eastern imports, given the region's volatility and unpredictability. India is also keen on inking long-term oil supply contracts with Russia and petrostates in Africa.
Fact Box: As a net oil importer (8.38 of every 10 litres of crude consumed in the country is imported), India is heavily dependent on the Middle East. In 2018-19, it imported 226.5 million tonnes (MT) of oil worth ?7.83trn ($111.9bn). 51% of this came from just three sources - Iraq (46.6 MT), Saudi Arabia (40.3 MT) and the UAE (17.5 MT).
Oil purchases from the US, meanwhile, have crossed 6 MT. This number, officials opine, can "easily" be doubled to 12 MT a year. HT
Stepping Down: Uttam Prakash Agarwal, Yes Bank's audit committee chairman, resigned as independent director yesterday, citing concerns about the standard of corporate governance at the private lender.
In a letter to the regulators, Agarwal said, “There are serious concerns as regards deteriorating standards of the corporate governance, failure of compliance, management practices and the manner in which the state of affairs of the company are being conducted by Ravneet Gill, MD & CEO, Rajeev Uberoi, senior group president governance & controls, Sanjay Nambiar, legal head and board of directors." Livemint
New Rules: International e-commerce firms in India face the risk of increasingly coming under pressure in the current year due to key policy changes and Reliance Retail venturing into the digital marketing space, Fitch Solutions has said in a statement. Click here to read more.
Is 2020 Over Yet?: 2019 was a rough year for SoftBank, with the WeWork IPO fiasco and decreased expectations from Vision Fund 2. But the new year isn't proving to be any better for the Japanese behemoth. In the first full week of 2020, four SoftBank-backed companies - OYO, Rappi, Getaround and Zume - laid off a combined 2,600 employees. In the last two months, others including Uber, Wag, Fair and WeWork cut their ranks too as they struggle to find paths to profitability. Business Insider
Oh-No: Trouble might be brewing at OYO Hotels, one of the largest hospitality chains in the world and India's second-largest unicorn. The company has let go of 5% of its 12,000 employees in China partly due to non-performance and is dismissing 12% of its 10,000 staff in India. It also plans to shed another 1,200 employees in India over the next three to four months. ET Rise
Keep the Rate: The US economy added 145,000 jobs in December, 100,000 fewer than in November but still a healthy number, which can keep up with new workers joining the labour force, according to economists. The unemployment rate, meanwhile, remained steady at 3.5%, a historic low.
These numbers could encourage the US Federal Reserve to keep interest rates steady for the next few months as long as the economic outlook doesn't darken significantly. WSJ
FYI: Taiwan votes in presidential and parliamentary elections on Saturday. The results will be closely watched as they will set the course for relations between the island and China, its giant neighbour that claims it as its territory and routinely threatens to use military might to "reunite" it with the mainland. As a increasingly alarmed work looks at an assertive China's clampdown in Hong Kong and Xinjiang and its increasing geopolitical footprint around the world, Taiwan has become a centre of the Sino-West divide. What's at stake in Taiwan's election? Here's an explainer.
Hand-curated Business News from Top Publishers & Platforms, Richly Crafted to Fit into One Wholesome Email. Subscribe Now to receive a nuanced 360 Degree account of key events from the World of Business and Finance every day.