Latest News Today: Boris Johnson to Become British PM, Official Committee Recommends Banning Cryptocurrencies, Viral Acharya Stirs Controversy

Indian economy risks ‘crowding out’ of private borrowings due to high government borrowings, warns Deputy RBI Governor, Viral Acharya. SC cancels registration of all Amrapali Group companies under RERA, NBCC to take over projects. National Housing Bank asks HFCs to refrain from offering loans that involve servicing by builders on behalf of borrowers. India should ease norms for hiring and firing workers, says Arvind Panagariya. Code on Wages Bill, 2019 to be tabled in the Lok Sabha today. Inter-Ministerial Committee (IMC) recommends ban on private cryptocurrencies in India, pushes for introduction of an official digital currency. Boris Johnson named next British PM. The rise and rise of social media echo chambers.

 

Moving on to the top Business news of the day.

 

 CENTRAL BANKING 

 

Indian economy risks ‘crowding out’ of private borrowings due to high government borrowings, warns Deputy RBI Governor, Viral Acharya. 

 

Viral Goes “Viral”: Deputy Governor of the Reserve Bank of India, Viral Acharya, who ends his stint at the Central Bank today, has warned the Indian economy of the risks "crowding out" of private borrowings due to high government borrowings

 

Acharya, who leaves office 6 months ahead of the end of his term, also added that the government should cut back on subsidies and schemes that will be unable to impart long-term growth. Moreover, he said the Centre should divest from public sector units, paving way for private sector investment, which can bring in more efficiency.

 

Here’s a look at a study undertaken by Viral Acharya and three others that attempts to estimate how large the quantity and price effects of crowding out might be for India.

 

 REAL ESTATE 

 

SC cancels registration of all Amrapali Group companies under RERA, NBCC to take over projects. National Housing Bank asks HFCs to refrain from offering loans that involve servicing by builders on behalf of borrowers.

 

The What: In a relief to over 42,000 home buyers, the Supreme Court has cancelled RERA registration of the Amrapali Group and asked the National Buildings Construction Corporation (NBCC) to complete all the pending projects of the group.

 

The court accused Amrapali Group of serious frauds in connivance with Noida, Greater Noida authorities, and banks.

 

The apex court has also directed the Enforcement Directorate to investigate money laundering by officials and Directors of the Group.

 

Lingering Grief: In what is likely to burden the already troubled real estate sector in India and increase the cost of financing, the National Housing Bank (NHB) has asked housing finance companies to desist from offering loans that involve servicing by builders on behalf of borrowers.

 

The diktat is likely to impact the Mumbai Metropolitan Market (MMR) the most, as per industry experts.  

 

 LABOUR 

 

India should ease norms for hiring and firing workers, says Arvind Panagariya. Code on Wages Bill, 2019 to be tabled in the Lok Sabha today. 

 

Easy Come Easy Go, That's Just How You Live Oh: Pushing for consistency across labour laws, former adviser to the Prime Minister Arvind Panagariya has said that India should ease norms for hiring and firing workers to make it easier for companies to do business in the country. 

 

My Way or The Highway: Panagariya opined that while Finance Minister Nirmala Sitharaman in her maiden budget has proposed combining multiple laws governing workers to form four sets of labor codes to improve the ease of doing business, the real need of the hour is the reformation of labor laws and not just streamlining of existing ones.

 

He also added that the government’s plan to introduce a single minimum wage may hurt businesses in smaller towns, especially small exporters considering the wide differences in costs across urban and rural India.

 

The Devil's in the Details: The Code on Wages Bill, 2019, which seeks to subsume prevalent laws pertaining to workers' remuneration and proposes to fix a mandatory national wage floor (minimum wage) for the entire country, is scheduled to be tabled in the Lok Sabha today.

 

However, the Bill been a sticking point between the Centre, States and the Unions alike. Read more to understand why. 

 

 CRYPTOCURRENCIES 

 

Inter-Ministerial Committee (IMC) recommends ban on private cryptocurrencies in India, pushes for introduction of an official digital currency. 

 

An inter-ministerial committee (IMC) comprising the Secretary of Economic Affairs, Secretary, Ministry of Electronics and Information Technology, SEBI Chairman and the Deputy Governor of RBI has recommended putting a ban on private cryptocurrencies except the ones issued by the state

 

Make it Official: Meanwhile, it is pushing for the introduction of an official digital currency or ODC which can be provided the status of a legal tender regulated by the RBI. 

 

The Committee has also pushed for declaration of any activities related to virtual currencies as a criminal act.

 

Blast From the Past: The RBI had early-last-year indirectly and brazenly announced a ban on cryptocurrency in India, restricting any regulated entity from conducting business with its proponents.

 

“Rightly Banned”: Subhash Chandra Garg (Secretary, DEA, also the Chairman of the IMC) says, “private crypto currencies are of no real value.”

 

 BREXIT 

 

Boris Johnson named next British PM. The rise and rise of social media echo chambers.

 

Boris May Trump May: Three months before it is scheduled to leave the EU, the UK will be getting a new PM. Boris Johnson and Jeremy Hunt both sought to succeed Theresa May. But the odds were aggressively in Johnson’s favour, and he won the race today.

 

PM Johnson will have a long and unenvied to-do list waiting for him at 10 Downing Street. If he survives the no-confidence motion that the opposition Labour Party is threatening to move on Thursday and (if the motion passes) if his Conservative Party sails through the general election that could follow, his administration will have to tackle the Brexit beast that has already devoured two premiers and dangerously split a nation.

 

London vs Brussels, Round 859: The Brexit bedlam is staggering. Most MPs want to leave the EU with a deal, but Johnson wants May’s deal renegotiated, but this will have to be done before October 31, and the EU is in no mood to give more extensions (or to compromise).

 

The most extreme outcome – a no-deal Brexit – is more probable than ever before, and Johnson thinks it’d be “vanishingly inexpensive” (though Parliamentary committees, economists, and his colleagues across the English Channel might disagree with him).

 

Social Media, Ye Ol’ Polariser: The internet is becoming a conglomeration of echo chambers, a tedious charade of homogenised opinion-givers with big mouths and broken ears. How these factories of self-affirmation are damaging public awareness and discourse.

 

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