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RBI Keeps Repo Rate Unchanged, Reliance Jio Announces New All-in-One Plans, Saudi Aramco IPO and More

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 8, 2019 3:32 PM 7 min read

RBI keeps repo rate unchanged at 5.15% - maintains accommodative stance. GST rates expected to witness major revamp. Reliance Jio announces new all-in-one plans effective from December 6. Begins billing new customers, asks existing one to select home broadband plans. Google CEO Sundar Pichai to take over as CEO of Alphabet.



RBI keeps repo rate unchanged at 5.15%. 

Caught By Surprise: In a rather unexpected move, the Monetary Policy Committee of the Reserve Bank of India (RBI) has decided to keep repo rate unchanged at 5.15% and said that it will maintain an “accommodative stance as long as it is necessary" while ensuring that inflation remains within the target. The six members of the monetary policy committee (MPC) were unanimous in their decision to hold rates.


FYI: The RBI has cut policy rates by 135 basis points so far in 2019. Livemint


Read RBI's official press release here

Reduces growth forecast for 2019-20 to 5% from 6.1%

RBI also sharply reduced its growth forecast for 2019-20 to 5% from 6.1%, with the committee noting that a delay in revival of domestic demand, further slowdown in global economic activity and geo-political tensions could pose downside risks to growth. ET Policy


For Some Perspective: India’s economy grew at 4.5% in July-September, the weakest pace in more than 6 years. 

GST rates expected to witness major revamp.

Change is the Only Constant: Nearly two and a half years after its implementation, GST rates are set to witness a major restructuring in a bid to shore up muted collections and increase revenue.


The GST council is expected to discuss raising the base slab from 5% to 9-10%, while doing away with the 12% rate and moving 243 items in this segment to the 18% band. In addition to this, several items currently exempted from tax - from treatment in “expensive” private hospitals to hotel accommodation under INR1,000 and high-value company home leases may also be brought under the ambit of GST.


These changes are expected to generate close to INR1L cr of additional revenue for the government. ET Policy


Your Opinion Matters: Finance Minister Nirmala Sitharaman has invited those who are interested in providing suggestions on simplifying and easing the GST filing process.


"A gentle reminder: Today, 7 December, all GST offices will be ready to receive suggestions on simplifying/easing the filing process. Invite those interested in providing suggestions to kindly approach the nearest office," Sitharaman tweeted. Livemint


Extra Crunch: In an attempt to promote digital transactions, the RBI has announced that round-the-clock transactions will be allowed under the National Electronic Funds Transfer (NEFT) system from December 16. The 24X7 NEFT system will be available on all days of the year, including holidays, it added. Financial Express 



Cabinet approves launch of India’s first bond exchange-traded fund - Bharat Bond ETF.

Go-Ahead: The Cabinet today approved the launch of India's first bond exchange-traded fund - Bharat Bond ETF, which is expected to create a new window for fundraising by state-owned firms, and give affordable entry to retail investors in the bond market.


The Bharat Bond ETF will be a basket of bonds issued by public sector firms or any government organisation, and will be tradeable on the exchanges. The unit size will be Rs 1,000, allowing even small investors to invest.


All you need to know about Bharat Bond ETF here.

Govt orders e-pharmacies to halt sales.

In a rather strong blow to e-pharmacies, the government today has ordered a halt to online drug sales. The development comes after an order by the Drugs Controller General of India (DGCI) directed all states and Union territories to prohibit the sale of medicines through unlicensed online platforms. The DGCI order made it clear that the ban will prevail until draft rules to regulate e-pharmacies are finalised. 


On The Other End: E-pharmacies have always claimed that their business model is well covered by the Information Technology Act, 2000 under the concept of intermediaries, and the pharmacy retail operations are covered by the Drugs and Cosmetics Act. CNBC TV18

Cabinet clears Personal Data Protection Bill.

Govt On A Roll: The Union Cabinet has approved the Personal Data Protection Bill, which shall contain broad guidelines on collection, storage and processing of personal data, consent of individuals, penalties and compensation, code of conduct and an enforcement model.


Information and Broadcasting Minister Prakash Javadekar said the Bill would be introduced in Parliament during the ongoing Winter Session. Business Today



Reliance Jio begins billing new customers and asks existing ones to select home broadband plans.

The Golden Days: In a move that is expected to open up revenue streams and boost profitability for the telco giant, Reliance Jio has begun billing its new customers and asked existing ones to select home broadband plans.


Jio has begun onboarding some 500,000-odd users who had signed up for JioFiber trials well before the September commercial launch to specific tariff plans. Alongside this, existing customers who had opted for the trials are being told that free home broadband services will be discontinued shortly and they need to migrate to specific JioFiber plans to stay connected.



FYI: JioFiber’s tariff plans range from Rs. 699 to Rs. 8,499 a month, with speeds from 100 Mbps to 1Gbps. The plans are bundled with services such as gaming, home network sharing, TV video calling and conferencing, device security and access to a content platform. ET Telecom News


Have you been delaying that credit card payment? Think could now face criminal charges for not paying your credit card bill. More on this here.

Reliance Jio announces new all-in-one plans effective from December 6.

New Plans In: Telecom operator Reliance Jio has announced its new all-in-one plans effective from December 6 in line with recent tariff hikes in the telecom industry. However, Jio’s revised tariffs remain at a meaningful discount to the tariffs announced by Vodafone Idea and Airtel. Unlimited plans in the one-month category are priced about 16-20% lower, and about 7-14% lower in the three-month category. The cheapest plan costs Rs 199, whereas the costliest plan has been priced at Rs 2,199. Livemint


All you need to know bout Jio's new plans here.



Google CEO Sundar Pichai to take over as CEO of Alphabet.

Acing the Game: Google CEO Sundar Pichai is set to take over as the CEO of parent Alphabet as current CEO Larry Page is stepping down. 


In addition to this, Brin is stepping down from his role as Alphabet’s president.



"...Alphabet and Google no longer need two CEOs and a President. Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet's investment in our portfolio of Other Bets," said Page and Brin. TechCrunch



Saudi Aramco raises $25.6bn in the world's biggest IPO ever.

Raising A Fortune: Energy giant Saudi Aramco has raised a record $25.6bn in its initial public offering in Riyadh. 


The share sale was the biggest to date, surpassing that of China's Alibaba which raised $25bn in 2014 in New York. The IPO will value it at $1.7tn when trading begins - short of its $2tn target, but making it the most valuable listed company in the world. Aramco’s shares are scheduled to start trading Dec 11 on Saudi Arabia’s Tadawul stock exchange. 


Hit Refresh: Aramco - the world’s most profitable company - has found the journey to its public offering rather testing. Aramco had initially sought to raise $100bn on two exchanges - with a first listing on the kingdom's Tadawul bourse, and then another on an overseas exchange such as the London Stock Exchange. But it scaled back its plans after foreign investors raised questions over the valuation, venue for an international listing, political risk and a lack of corporate transparency, among other things. WSJ


However, bigger challenges await the giant. Analysts believe the biggest challenge for the company will be if it decides to list on an international stock exchange in the future to expand its investor pool. Demand for crude has been falling, which could make it difficult for the company to grow in the long term. The climate crisis and geopolitical risks are also key factors that could deter potential investors. BBC News

Shinzo Abe launches $121bn stimulus package for Japan.

Abe At Play: Japan's Prime minister Shinzo Abe has unveiled a $121bn (¥13.2tn) stimulus package to repair the recent typhoon damage, upgrade infrastructure and invest in new technologies. 


Described as a “15-month budget”, the spending package is one of the largest since the 2008-09 financial crisis as Japan seeks to fend off weakness in the global economy, drag from a recent rise in consumption tax and the risk of a slowdown after next summer’s Tokyo Olympics.


The headline figure amounts to approximately 1.9% of Japan’s gross domestic product over 15 months, significantly more than last year’s supplementary budget of ¥3tn, and is expected to boost growth in the economy by about 1.4%. FT


The move comes amid a global move towards looser fiscal policy as governments seek to counter sluggish private demand, taking advantage of their ability to borrow at ultra-low or even negative interest rates. 


More on the three-pillared package here.


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