Railways considering rationalising freight rates and passenger fares. Government planning subsidised healthcare facilities for gig economy workers. SBI to introduce OTP-based ATM cash withdrawals. As RBI announces next phase of its "Operation Twist", Indian bonds rally and yields drop. LIC's investment portfolio touches ?29.3Lcr in FY19. RBI asks banks to reduce stakes in insurance companies to 30%. Global markets brace for another bumper sugar harvest in India. Government will protect sugar subsidies at all costs despite WTO fight, official says. Amazon says the 2019 holiday season was record-breaking for the company. Jeff Bezos is betting big on technology.
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Train Reset: The Railways is considering cutting freight rates and "rationalising" passenger fares in a bid to boost the economy.
"We are going to rationalise the fares and freight rates. Something is being thought about. I cannot divulge more as this is a sensitive subject. While freight fares are already high, our target is to draw more traffic from road to railways in this regard," Railway Board Chairman VK Yadav said on Thursday.
The economic slowdown has acutely hurt the Railways. Earnings from passenger fares in April-December of this year stood at ?40,415cr while for the same period last year it was ?51,066cr. BS
Good News: The government is reportedly planning to offer subsidised healthcare facilities for gig economy workers. The subsidised rates will be billed under the Central Government Health Scheme and would be provided at the Employees' State Insurance Corporation (ESIC) hospitals and dispensaries across the country. Business Today
New Rules: Beginning 1 January 2020, the State Bank of India will introduce an OTP-based cash withdrawal system at all its ATMs "to help protect [users] from unauthorised transactions".
This facility will be applicable for transactions above ?10,000. The OTP will be sent once cash withdrawal is requested. After the customer receives the OTP, they would have to input the same on the ATM screen to withdraw the money. Livemint
The Sequel is Already Here: The next step in the RBI's Fed-styled Operation Twist will be conducted as early as Monday. This operation involves the Central Bank buying long-end debt while selling short-end bonds. The first such move was held earlier this week.
The pace of this unconventional policy to lower borrowing costs enabled Indian bonds to rally. The 10-year yield slid 7 basis points to 6.51%, taking this week's drop to 9 basis points. ET Markets
FYI: Life Insurance Corporation of India's (LIC) investment portfolio in FY19 touched ?29.3Lcr. In 2014, it was ?16Lcr, reflecting a CAGR of 12.8%.
LIC's yield on its investment portfolio, meanwhile, stood at 7.59% in FY19, an eight-year low. On a Y-o-Y basis, this percentage is 12 basis points lower from the previous year. Read more here.
And Now, This: The RBI has asked banks to cap their stakes in insurance companies at 30%. The move is aimed at shielding lenders from risks arising out of their non-banking businesses and steer resources towards credit growth in a slowing economy. The move is expected to have significant implications - not only on banks, which derive sizeable income from their insurance units, but also on insurers since banks are major capital providers. Livemint
Cane is King: This year's more-than-average rainfall has led to more-than-full reservoirs. And this will likely lead to more-than-enough sugarcane plantation.
As India looks ahead to more bumper cane crop, global markets are not pleased. For the past two years, sugar prices have been stuck in a glut, and this has been blamed on India's bumper harvests and export subsidies. A group of countries even approached the WTO to resolve the issue.
And now, with the country set to return to record outputs, sentiments will likely sour again and the sugar markets will be roiled. BBG Quint
Brazilian Ire: Of all countries, Brazil is likely to be particularly peeved. Along with India, it is among the largest sugar-producing nations in the world, and it fears Indian exports will undercut its prices. Which is why, along with Guatemala and Australia, it had approached the WTO to take action against India's oversupply.
But the Indian government is reportedly willing to protect its cane subsidies "at all costs" and is confident of fending off Brazil's attacks at the WTO. More details here.
Recap: Need a refresher on the controversy surrounding India's sugar exports that has been raging for months? Read this article.
Ending the Year with a Bang: The 2019 holiday season have been evidently generous to Amazon. The e-commerce giant said some of its best-selling products during this period were the Echo Dot, Fire TV Stick with Alexa Voice Remote and the Echo Show 5. It also reported that more than 5m new customers started free trials or became paid members of its Prime programme, and independent third-party sellers surpassed a billion items sold worldwide.
While it didn't provide concrete and comparable data points, Amazon's shares gained 4%. WSJ
Jeff Bezos and His Rabbits: Amazon initially disrupted retail with its e-commerce services. Now, it is using tech to disrupt retail - and other sectors including medicine, banking, logistics, robotics, agriculture and more. Here's a look at the tech rabbits Jeff Bezos can't wait to pull out of his hat.
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