Indian stock market falls, Sensex sinks 560 pts, Nifty drops to 11,400. Former CEA Arvind Subramanian discredits govt arguments; defends claim of India overestimating GDP growth. Jio overtakes Airtel to become second-largest mobile network operator. PMO instructs IT Ministry to keep an eye on TikTok. Favoured ratings were falsely engineered by IFIN officials, reveals Grant Thornton India report. Harley-Davidson unveils first electric motorcycle.
Moving on to the top Business news of the day.
Former CEA Arvind Subramanian discredits govt arguments; defends claim of India overestimating GDP growth. Stock Market falls, Sensex sinks 560 pts, Nifty drops to 11,400.
Things are Getting Interesting: In a new paper 'Validating India's GDP Growth Estimates', former CEA Arvind Subramanian has argued that in the period between 2011 and 2016, the Indian economy was hit by a series of shocks, including collapse in exports, demonetisation, over-leveraged corporate sector and bruised bank balance sheets, all of which should have negatively impacted economic activity.
However, as per the new GDP series adopted in 2015, the GDP only slipped from 7.7% to 6.9%, raising the question – Is it possible that such adverse shocks had such little impact on GDP growth?
Subramanian goes on to say that he had indicated his doubts on the growth numbers in the Economic Survey in 2015 as well as mid-year Economic Analysis.
Subramanian in a recent report in The Indian Express had concluded that methodological changes had led to overestimating of the India GDP growth rate by 2.5 percentage points per year between 2011-12 and 2016-17, while the actual growth was around 4.5%.
A deep dive into Subramanian’s counter arguments here.
And They All Fall Down: Sensex and Nifty ended at two-month lows. The BSE Sensex was down 560.45 points (1.44%) at 38,337.01 and the Nifty50 plunged 177.60 points (1.53%) to 11,419.30. Nifty Bank lost 660 points.
The slump comes a day after Finance Minister Nirmala Sitharaman stuck to her Budget proposal and declined to relent to demands by FPIs structured as trusts that they be exempted from the higher income-tax surcharge.
Top losers included Bajaj Finance, Tata Motors, IndusInd Bank, RBL Bank and Reliance Infrastructure.
Jio overtakes Airtel to become second-largest mobile network operator. PMO instructs IT Ministry to keep an eye on TikTok.
Telecom Turf Tussles: Reliance Jio has overtaken Bharti Airtel to become the second-largest operator in India according to mobile subscriber base, TRAI’s data showed.
As of May end, Jio had 322.98 million users while Airtel had 320.38 million.
Meanwhile, Vodafone Idea continues to lead the list with 387.55 million users.
TikTok in the Dock: Last week, the Ministry of Electronics & IT had submitted a report to the PMO saying TikTok was in compliance with legal requirements including traceability of messages, user data security and safety of underage users. TikTok itself had submitted a report to the government affirming its compliance to regulations.
But the popular Chinese app has caught the Prime Minister’s eye. Considering the complaints against the app across the world (in fact, the app was temporarily banned by the Madras High Court earlier this year), the PMO has reportedly asked the nodal ministry to closely monitor and keep an eye on it.
Favoured ratings were falsely engineered by IFIN officials, reveals Grant Thornton India report.
Auditors with Benefits: An investigation report by Grant Thornton India has revealed that credit agencies such as Brickwork Ratings and Fitch Ratings had given positive ratings to IL&FS Financial Services (IFIN) after receiving favours from the company.
A Donation, A Match, A House: As per the report, these favours included an invitation to an official of Brickworks to a Real Madrid match in Europe, helping a senior in Fitch Ratings in negotiating a property deal, and hefty contributions to Sameeksha Trust – to which former ICRA Chairman DN Ghosh was associated.
The audit firm also found instances where the ratings were allegedly ‘prepared’ by the erstwhile directors of the company.
The Usual Suspects: ICRA, CARE, India Ratings and Brickwork Ratings were the companies involved in rating various instruments of IFIN during 2013-2018.
The news comes over a year after the IL&FS scam worth INR91,000cr surfaced.
Offbeat: “When people stand to heavily profit from engaging in dishonest behaviour, the desire to cheat increases but so do the psychological costs of viewing oneself as a thief - and sometimes the latter will dominate the former.”
What does the wallet "drop" experiment tell you about your honesty? Read on…
Netflix is relying on India for growth – but competition from local rivals could dismantle its grand ambitions. Smartphones and laptops are responsible for more greenhouses gases than airplanes.
13 Reasons Why Netflix is Headed for Dire Straits: Netflix lost 130,000 users in the US last quarter, its shares have plunged the most in three years, and its two most-streamed shows are soon going back to their parent platforms. It is safe to say the streaming giant has seen better days.
To offset its troubles in its home territory, Netflix is now banking on India.
Stream Wars: Netflix’s ambition to dominate Indian streaming takes the form of reaching 100 million customers – 25 times its current subscriber base. But there are some things an INR250/month mobile-only app simply cannot discount.
The same way that Netflix faces increasing competition in the US, it has many local rivals in India – from Amazon Prime and Hotstar to Zee5, Voot and JioTV.
Will Netflix be able to cope with an increasingly cluttered market filled with players offering aggressively dirt-cheap prices? This remains to be seen. Meanwhile, brace yourself: the Stream Wars are beginning.
Mobiles are Melting Ice Caps: Digital technology (smartphones, TVs, computers, data centres etc.) emits 4% of the world’s greenhouse gases – that’s two times the emissions from the airline industry – and this number is slated to increase to 14% by 2040. With Video-on-Demand – already the major component of online data flow – slated to continue growing exponentially in coming years, streaming, pornography and video-calling’s share of carbon-dioxide emissions will only worsen. Read more here.
50 years after man walked on the moon, space is becoming a frontier for war and conflict. Harley-Davidson unveils first electric motorcycle.
Star Wars: 50 years after the Apollo 11 mission landed men on the moon, space is again a major topic of debate and discussion – this time not merely as a means to prove a country’s might, but also as a probable frontier for conflict.
What used to be a space dominated by the US and the Soviet Union is now more diverse and competitive. America’s edge is thinning, especially as China moves rapidly to prove its otherworldly prowess. Then there are the emerging players - mainly India, Israel, Japan and South Korea (and a host of private companies).
Things Are Getting Sirius: Space selfies and moon walks are not the only agendas on these countries’ checklists. Besides rockets and satellites, they are also investing in anti-missile and anti-satellite technology. And they are also dispersing funds on building separate branches in their armed forces dedicated solely to space warfare.
The bottom line is that space is no longer only a vast, unknown, unexplored wilderness. It is also a battlefield for great powers to vent their earthly frustration on.
Video: American bike-maker Harley-Davidson has finally unveiled its first full-EV electric motorcycle, the LiveWire.
(Don't want to miss out on these End Of Day Wrap Ups? Subscribe Now to our WhatsApp Feed and get the day's Top Business stories straight on your favourite messaging app.)