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Govt to Amend IT Act to Curb Fake News, Fed to Hold Interest Rates Steady, Personal Data Protection Bill Delayed et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 6, 2019 7:39 AM 4 min read
Editorial

Apple lowers quarterly revenue forecast for the first time in more than 15 years. Govt to amend IT Act. Personal Data Protection Bill put on hold. ‘Unrealised Gains’ to remain untouched, states RBI. 

 

Now to the week's Top Business Stories through our End Of Week Wrap Up:

Govt to Amend IT Act to Curb Fake News, Fed to Hold Interest Rates Steady, Personal Data Protection Bill Delayed et al. 

 

COMPANIES

Apple lowers quarterly revenue forecast for the first time in more than 15 years. 

Apple: Lower than anticipated iPhone revenue, primarily in Greater China has pushed Apple to lower its quarterly revenue forecast for the first time in more than 15 years bringing it to $84bn (vs. $91.5bn as per consensus). 

 

Why though?: China accounts for nearly 20% of Apple’s sales. In light of the ongoing trade war with US and a weakening consumer sentiment, it is likely that China would have turned away from expensive iPhones and towards cheaper models. Apple’s shares dropped 7% during the day on back of the announcement.

 

Read CEO Tim Cook’s letter to Apple investors here.

 

MARKETS

Fed unlikely to raise interest rates in 2019, as per popular sentiment.

The What: As per a WSJ article, investors increasingly believe that another rate hike is unlikely in 2019 as the Federal Reserve expects US growth to moderate this year on back of slower growth abroad and waning government stimulus measures.

Zoom Out: Fed ticked up short-term interest rates by 25bps with the benchmark federal-funds rate ranging between 2.25% to 2.50% when they met on December 19. As such, this was the fourth such rate hike last year.

 

DATA

Personal Data Protection Bill likely to be tabled after General Elections 2019.

 

The Bill: The Personal Data Protection Bill which was initially supposed to be tabled in the ongoing winter session is now likely to be introduced in the Parliament after the General Elections 2019.

 

Perspective: The Bill sets out how the personal data of individuals is processed by the government and private entities incorporated in India and abroad.

 

Ten Key Takeaways from the draft here.

 

POLICY

Interim Budget 2019-20 expected to push for fiscal consolidation. Govt weighing multiple options to ease farm woes. ‘Unrealised Gains’ to remain untouched, states RBI. Restructuring scheme for MSMEs announced.

 

Vision 2020: As per a Business Standard report, 2019-20 Interim Budget is likely to continue the theme of fiscal consolidation. However, the government is unlikely to strongly commit to any medium-term fiscal forecast with the 15th Finance Commission report expected in October. Also expected is a focus on rural and agriculture sector post the govt's recent defeat in agri-dominated states.

 

Agrarian Distress: The same newspaper claimed that the government is weighing options to address agriculture distress including a monthly income support program for farmers, a cash handout plan for the shortfall between the actual sale price and state-set procurement rate and a revamped crop insurance program. The final program could be one of these or a combination of all three.

 

Do not touch: As per an Economic Times report, the Central Bank will not touch “Unrealised Gain” in its balance sheet for dividend distribution to the government. "Unrealised Gain" is the valuation gain in currency and gold. Shaktikanta Das reportedly has excluded any distribution unless the gain is realised via a market sale.

 

Perspective: The development comes in the backdrop of a 6-member panel being set up under ex-RBI governor Bimal Jalan to evaluate RBI’s Capital Framework issue.

 

What a relief: RBI announces scheme to recast loans up to INR25cr of Micro, Small and Medium Enterprises (MSMEs) that are under stress but are not yet classified as bad loans.

 

Bigger Picture: SMEs were the worst hit following demonetization and implementation of GST. Availability of credit to MSMEs was further affected by the IL&FS crisis, which reduced bank lending to NBFCs, in turn resulting in shortage of funds for MSMEs which were funded by these NBFCs. 

 

Govt to Amend IT Act to Curb Fake News, Fed to Hold Interest Rates Steady, Personal Data Protection Bill Delayed et al. 

INTERNET

Govt to amend IT Act to curb fake news and child pornography.

 

The What: The Ministry of Electronics and Information Technology (MeitY) meets to discuss potential amendments to the IT Act which seeks to regulate social media giants, curb the spread of fake news, child pornography and more.

 

Up Close: Proposed changes to include imposition of steeper penalties. Non-compliance with the guidelines may also result in the shutdown of a website.

 

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