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India GDP Growth Falls to 5-Quarter Low, Govt to Clear INR10,000cr Scheme for EV Promotion, Spotify Launches in India, ED Raids Premises of and Questions the Kochhars, Dhoot et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Mar 3, 2019 11:50 AM 5 min read


Government releases draft e-commerce policy. India GDP growth slumps to 5-quarter low of 6.6%. Cabinet likely to clear INR10,000cr scheme for promotion of EV and hybrid vehicles. RBI extends KYC compliance norms for e-wallet companies. Spotify officially launches In India.


Moving on to the top Business stories of the week.



Government releases draft e-commerce policy. RBI extends KYC compliance norms for e-wallet companies.


New Plan: The government recently released a draft e-commerce policy.


The policy addresses six broad issues including data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion.


Breaking it Down:


  • The draft proposes setting up a legal and technological framework for restrictions on cross-border data flow. Implementation unclear.
  • The framework pushes for a three year data localization requirement 
  • Standing Group of Secretaries on Ecommerce (SGoS) to regulate 


Going Green: The Union Cabinet is likely to clear a INR10,000cr program under the FAME-II scheme for the promotion of electric and hybrid vehicles. 

The funds from the program will be used for subsidies on electric busses, passenger cars to be used by taxi aggregators, three-wheelers and two-wheelers.

The incentives will also cover setting up of charging infrastructure for EVs. 


Sigh of Relief: RBI has extended the deadline for compliance with Know Your Customer (KYC) norms, for prepaid payment instrument (PPI) issuers by six months.

The move has come as a relief for e-wallets which were struggling to complete Aadhaar e-KYC and put in place alternative systems for completing the KYC process before the earlier stipulated deadline of 28 February.



India GDP growth slumps to 5-quarter low of 6.6%. Manufacturing PMI climbs to 14-month high. Cabinet approves transfer of Air India's INR29,464cr loans to a Special Purpose Vehicle. 


Slowing Down: India’s GDP growth in Q3 slumped to 6.6% vs 7% in the previous quarter and 7.7% growth in Q3 FY17-18. The drop comes on the back of poor performance of farm, mining and manufacturing sectors.

Remap: The Central Statistics Office has revised downwards the growth estimates for the current fiscal year to 7% from the earlier estimated 7.2%. 


Silver Lining: India’s manufacturing sector performance strengthened in February and touched a 14-month high at 54.3 vs 53.9 last month, primarily driven by strong inflow of new business, technological progress, beneficial public policies, and positive market conditions.

Chart: View India's Manufacturing PMI Trend here.

Go Ahead: The Union Cabinet on Thursday gave its approval for the creation of a Special Purpose Vehicle (SPV) - Air India Assets Holding - for the disinvestment of Air India and its subsidiaries and joint ventures.


Air India’s debt amounting to INR29,464cr will be transferred to the SPV.

The four subsidiaries which have been transferred to the SPV are Air India Air Transport Services (AIATSL), Airline Allied Services (AASL), Air India Engineering Services (AIESL) and Hotel Corporation of India (HCI). Non-core assets - painting and artefacts, and other non-operational assets of the national carrier too will be transferred to the SPV.


Early Planning: The SPV was set up on January 22 last year as part of a financial restructuring of the debt-laden national carrier. The government has decided to allocate INR1,300cr for the SPV this fiscal, and INR2,600cr would be provided in the next financial. 



AT&T’s Time Warner deal overcomes final hurdle. Spotify officially launches In India. Barrick Gold bids $18bn for Newmont Mining.


Clear Skies: US appeals court has rejected the Justice Department’s antitrust pleas against AT&T’s $80bn plus deal for Time Warner, citing that AT&T-Time Warner combination was unlikely to harm competition.


Fears: The government had earlier argued that even though AT&T and Time Warner weren’t direct rivals, their combination would form an integrated giant with the power to force higher pay-television prices.


New Market: Spotify, the world’s largest music streaming service, has launched its operations in India where it will compete against the likes of Gaana, JioSaavn, Airtel’s Wynk music and Apple Music in a bid to tap into the increasing number of online users in India.


While Spotify can be used for streaming music for free, the company also offers a premium (ad-free) subscription for INR119 per month.


It’s Raining Gold: Canada-based Barrick Gold has made a $17.85bn bid for US rival Newmont Mining in an all-share deal that would combine the world’s biggest gold miners, valuing the merged entity at c. $42bn.


Perspective: The announcement comes months after Barrick Gold bought Randgold Resources in a $5.4bn deal and Newmont announced plans to buy Canada-based gold production company Goldcorp in a $10bn all-stock deal.


Caveat: Barrick's acquisition of Newmont will be contingent upon the company scrapping its agreement with Goldcorp, Barrick said, adding that its offer was a "significantly superior" option for Newmont shareholders.



ED questions Chanda Kochhar, Deepak Kochhar and Venugopal Dhoot. Naresh Goyal to step down as Jet Chairman; son Nivaan Goyal likely to join Board of Directors. 


Face-Off: Former ICICI Bank MD and CEO Chanda Kochhar, her husband Deepak Kochhar and Videocon promoter Venugopal Dhoot appeared before the Enforcement Directorate yesterday for questioning in ICICI Bank-Videocon loan case.

The news comes a day after the ED carried out searches in at least five offices and residential premises of the Kochhars and Dhoot in connection with the INR1,875cr Videocon loan fraud case.


Earlier: The agency had registered a criminal case under the Prevention of Money Laundering Act (PMLA) earlier this month against Kochhar, her husband Deepak Kochhar, Dhoot and others to probe alleged irregularities and corrupt practices in sanctioning of INR1,875cr loans by ICICI Bank to the corporate group.


Dawn of a New Era: Naresh Goyal's son Nivaan Goyal likely to be named Executive Director of Jet, backed by its lenders and shareholder Etihad Airways, to steer the beleaguered airline through its bailout plan. 

The news comes days after Naresh Goyal, Founder of Jet Airways stepped down as the Chairman, to allow the Board to move ahead with a debt recast plan for rescuing the carrier.



Cabinet likely to clear INR10,000cr scheme for promotion of EV and hybrid vehicles. Mahindra launches its new app-based e-mobility service Glyd. Ola Electric Mobility raises INR292cr.


Gliding All The Way: Mahindra & Mahindra ventures into app-based taxi market to rival established players like Ola and Uber with the launch of its e-mobility service, Glyd.

Glyd will run 10 e-Veritos on select routes in Mumbai.

This is the second foray by the Mumbai-based SUV specialist into the aggregator play after having entered into app-based cargo aggregator business in 2015 through the brand SmartShift.

True Blood: Glyd will have only Mahindra branded vehicles in its fleet. 

See For Yourself: Glyd will offer a premium in-commute experience to office going executives, powered by several connected car features such as web-conferencing, curated entertainment and music content from selective partners.


New Backers: Ola Electric Mobility, a subsidiary of ANI Technologies that owns Ola, has raised c. INR292cr from global investment firms Tiger Global Management, Matrix Partners, and Sarin Family.

Baby Steps: This is the first instance where Ola Electric Mobility has tapped external funding, independent of its parent.

Ola Electric Mobility has issued and allotted 1993 Series A compulsory convertible preference shares of face value of INR10 each of the company, at an issue price of INR14,61,523, to the above investors.


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