General Affairs
PM Narendra Modi Meet President Pranab Mukherjee Amid Currency Ban Chaos
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NEW DELHI: Prime Minister Narendra Modi today called on President Pranab Mukherjee against the backdrop of continuing chaos and criticism over the demonetisation exercise undertaken by his government.
The meeting lasted for 45 minutes, Rashtrapati Bhavan officials said without divulging the issues that were discussed between them. However, the Prime Minister was believed to have briefed Mr Mukherjee on the developments that have taken place in the aftermath of the launch of the demonetisation drive.
The meeting came on a day when proceedings in Parliament were washed out for the second consecutive day, with the ruling side causing pandemonium in Rajya Sabha over certain remarks by Congress leader Ghulam Nabi Azad and opposition creating ruckus over demonetisation in Lok Sabha.
No business could be transacted in either the Rajya Sabha or the Lok Sabha due to the uproar and both the Houses had to be adjourned for the day prematurely.
The day also saw anxious moments for the government in the Supreme Court when it refused stop high courts from entertaining any petition challenging the Centre's November 8 demonetisation notification.
While fixing November 25 as the next date of hearing, the Supreme Court observed that people are seriously affected and doors of courts cannot be shut in a situation which "may lead to riots".
The meeting lasted for 45 minutes, Rashtrapati Bhavan officials said without divulging the issues that were discussed between them. However, the Prime Minister was believed to have briefed Mr Mukherjee on the developments that have taken place in the aftermath of the launch of the demonetisation drive.
The meeting came on a day when proceedings in Parliament were washed out for the second consecutive day, with the ruling side causing pandemonium in Rajya Sabha over certain remarks by Congress leader Ghulam Nabi Azad and opposition creating ruckus over demonetisation in Lok Sabha.
No business could be transacted in either the Rajya Sabha or the Lok Sabha due to the uproar and both the Houses had to be adjourned for the day prematurely.
The day also saw anxious moments for the government in the Supreme Court when it refused stop high courts from entertaining any petition challenging the Centre's November 8 demonetisation notification.
While fixing November 25 as the next date of hearing, the Supreme Court observed that people are seriously affected and doors of courts cannot be shut in a situation which "may lead to riots".
Disclosure Of Big Defaulters' Names Will Not Lead Anywhere: Supreme Court
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NEW DELHI: The Supreme Court today said that disclosure of names of debtors, who owe Rs.500 crore and more to banks, will not lead "anywhere" as the important issue is to address "root cause" of accumulation of non-performing assets (NPAs).
"The disclosure of names with over Rs. 500 cr bad loans will not lead anywhere. Root of the malice is accumulation of NPAs. The real cause is to address the root cause of NPAs and how to solve it," a bench comprising Chief Justice T S Thakur and Justices A M Khanwilkar and D Y Chandrachud said.
The observations assume significance as the top court, time and again, has been asking the Reserve Bank of India (RBI) and the Centre about the possibility of disclosing names of those who have defaulted in repaying bad loans to banks to the tune of Rs. 500 crore and more.
Stressing the need to find "some solution" and reason as to why bad loans are accumulating, the bench asked Solicitor General (SG) Ranjit Kumar, appearing for the Centre and RBI, to file an affidavit within four weeks detailing steps taken to overhaul debt recovery system and laws dealing with quasi- judicial bodies like the Debt Recovery Tribunal (DRT) and the Debt Recovery Appellate Tribunal (DRAT).
During the hearing, the SG informed the bench that a committee, set up to deal with various issues including the NPAs, would give its report shortly and moreover, the banks are and will keep trying to recover bad loans.
Earlier, the apex court was informed that only 57 borrowers have defaulted on bank loans amounting to a whopping Rs. 85,000 crore.
The court, after perusing an RBI report on people who have taken loan worth over Rs. 500 crore and defaulted, had asked the central bank as to why their names should not be made public.
"Who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to the public," the bench had asked.
Advocate Prashant Bhushan, appearing for NGO Centre for Public Interest Litigation (CPIL), had favoured disclosure of the outstanding loan amount and cited an apex court verdict of December 2015 to claim that RBI has to provide all information.
"The disclosure of names with over Rs. 500 cr bad loans will not lead anywhere. Root of the malice is accumulation of NPAs. The real cause is to address the root cause of NPAs and how to solve it," a bench comprising Chief Justice T S Thakur and Justices A M Khanwilkar and D Y Chandrachud said.
The observations assume significance as the top court, time and again, has been asking the Reserve Bank of India (RBI) and the Centre about the possibility of disclosing names of those who have defaulted in repaying bad loans to banks to the tune of Rs. 500 crore and more.
During the hearing, the SG informed the bench that a committee, set up to deal with various issues including the NPAs, would give its report shortly and moreover, the banks are and will keep trying to recover bad loans.
Earlier, the apex court was informed that only 57 borrowers have defaulted on bank loans amounting to a whopping Rs. 85,000 crore.
The court, after perusing an RBI report on people who have taken loan worth over Rs. 500 crore and defaulted, had asked the central bank as to why their names should not be made public.
"Who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to the public," the bench had asked.
Advocate Prashant Bhushan, appearing for NGO Centre for Public Interest Litigation (CPIL), had favoured disclosure of the outstanding loan amount and cited an apex court verdict of December 2015 to claim that RBI has to provide all information.
Railways Should Transform With Change Of Century: PM Narendra Modi
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NEW DELHI: Amid efforts to introduce high speed trains, Prime Minister Narendra Modi today said the Indian Railways should transform with the change of the century and focus on "new speeds, progress and new capacity" along with gaining financial strength.
PM Modi, whose government has decided to scrap the 92-year- old practice of presenting a separate Railway Budget, also asserted that the annual ritual was never an exercise of "political agenda" for him and that he had taken the "courageous" decision of keeping himself "free from the love for political gains (from railways)".
The Prime Minister, who is stated to have sold tea at railway stations in his childhood, said he had special affection for the railways considering that he had spent so much of his early days at railway platforms and had seen the largest public transporter from close quarters.
"The century has changed, so the railways should also change. There should be new speed, progress and new capacity," he said addressing railway employees via video conferencing at the 'Rail Vikas Shivir' (rail development camp) being held in Surajkund on the outskirts of Delhi. He will be visiting the camp on Sunday, the concluding day of the event.
Noting that the current century is technology driven, PM Modi pitched for innovation to make the railways strong. His comments came against the backdrop of efforts to introduce high speed trains in the country, for which technology and monetary assistance is being taken from Japan whose bullet train is world class.
The first high speed corridor is to be built between Ahmedabad and Mumbai, construction for which will begin in 2018.
PM Modi underlined the need for making the railways financially strong, which he said would bring benefits for the country and particularly those working for the transporter. He expressed confidence in the railway workforce but emphasised that they should work together and think about the railways can be strengthened.
Referring to the Railway Budget whose separate presentation has been scrapped now, the Prime Minister said it used to be an exercise focussed on ensuring which MP got which train and who got stoppages.
"There used to clapping on such announcements (in Parliament). When I took over, I noticed that 1500 announcements (regarding railways) had been made previously which had remained confined only to clapping," he said. "I could have done the same thing and collected claps and praise. But I remained "free from the love for political gains. I showed courage," PM Modi said, while asserting that he has "no political agenda" to pursue through the railways.
Departing from the earlier practice, the Modi government in the last two Railway Budgets has not announced launch of any new train.
PM Modi, whose government has decided to scrap the 92-year- old practice of presenting a separate Railway Budget, also asserted that the annual ritual was never an exercise of "political agenda" for him and that he had taken the "courageous" decision of keeping himself "free from the love for political gains (from railways)".
The Prime Minister, who is stated to have sold tea at railway stations in his childhood, said he had special affection for the railways considering that he had spent so much of his early days at railway platforms and had seen the largest public transporter from close quarters.
Noting that the current century is technology driven, PM Modi pitched for innovation to make the railways strong. His comments came against the backdrop of efforts to introduce high speed trains in the country, for which technology and monetary assistance is being taken from Japan whose bullet train is world class.
PM Modi underlined the need for making the railways financially strong, which he said would bring benefits for the country and particularly those working for the transporter. He expressed confidence in the railway workforce but emphasised that they should work together and think about the railways can be strengthened.
Referring to the Railway Budget whose separate presentation has been scrapped now, the Prime Minister said it used to be an exercise focussed on ensuring which MP got which train and who got stoppages.
"There used to clapping on such announcements (in Parliament). When I took over, I noticed that 1500 announcements (regarding railways) had been made previously which had remained confined only to clapping," he said. "I could have done the same thing and collected claps and praise. But I remained "free from the love for political gains. I showed courage," PM Modi said, while asserting that he has "no political agenda" to pursue through the railways.
Departing from the earlier practice, the Modi government in the last two Railway Budgets has not announced launch of any new train.
Rs. 2,000 Note Bleeds If Wet, Supreme Court Told. What Chief Justice Said
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NEW DELHI: Why would you do that was the Supreme Court's withering response today to a lawyer who complained that the new Rs. 2,000 note bleeds colour when it's wet.
"Well, don't put notes in water," was Chief Justice TS Thakur's advice to the lawyer, ML Sharma, who is among a group of petitioners who have asked the top court to cancel the ban on Rs. 500 and Rs. 1,000 notes announced a little over a week ago by Prime Minister Narendra Modi.
The sudden outlawing of the old notes has forged an enormous cash crunch and people have been waiting in line at banks to collect limited amounts of the new 500 and 2,000 rupee notes. The latter is magenta in colour and officials have confirmed that if it makes contact with enough water, the colour will run. A video of the note being put through a washing machine went viral.
The Supreme Court has refused to intervene with the government's decision, but has asked to see a plan on how the lines at banks and other inconveniences will be urgently mitigated.
The government has said the ban on old notes, a move generally praised by experts, will help combat black money, corruption and counterfeiting.
"Well, don't put notes in water," was Chief Justice TS Thakur's advice to the lawyer, ML Sharma, who is among a group of petitioners who have asked the top court to cancel the ban on Rs. 500 and Rs. 1,000 notes announced a little over a week ago by Prime Minister Narendra Modi.
The Supreme Court has refused to intervene with the government's decision, but has asked to see a plan on how the lines at banks and other inconveniences will be urgently mitigated.
The government has said the ban on old notes, a move generally praised by experts, will help combat black money, corruption and counterfeiting.
ATMs Ready, Notes Printed, Back To Normal By Month End: Government Sources
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NEW DELHI: Normal banking operations should resume by the end of the month, say top government sources, with the printing of Rs. 2,000 notes almost over and the recalibration of all the two lakh-odd ATMs in the country expected to be done by then, easing the cash crunch.
The government, the sources said, is contemplating doing away completely with the exchange of the 500 and 1,000 rupee notes banned last week and allowing only bank deposits for these once banks are operating regularly again and the recalibrated ATMs start dispensing the new 2,000 rupees notes.
It has already scaled down the amount that a person can exchange for new notes from 4,500 to 2,000 rupees. Only a one-time exchange is allowed across the counter of a bank or post office, but the old notes can be deposited in banks till December 30.
Since November 8, when Prime Minister Narendra Modi made a sudden announcement abolishing 500 and 1,000 rupees notes, people have waited for hours in long queues at banks, mostly to exchange the banned notes for new currency. Regular banking operations have been hit.
The government, criticised for the inconvenience caused to people, has rejected the allegation of opposition parties that the demonetisation move was ill-planned. It has said that the announcement had to be sudden to ensure that people with black or untaxed money were caught off guard.
The decision to print Rs. 2,000 notes first and not Rs. 500 or Rs. 1,000 notes to replace the currency that was abolished was taken because this was the quickest way to replace the money with the whole operation being kept secret, sources said.
The government has also launched new 500 rupees notes.
The banned notes made up 86 per cent of the money in circulation and the banking system has been under tremendous pressure to replace it. The Reserve Bank of India reiterated on Thursday that there is sufficient supply of notes "consequent upon increased production which started nearly two months ago".
The government, the sources said, is contemplating doing away completely with the exchange of the 500 and 1,000 rupee notes banned last week and allowing only bank deposits for these once banks are operating regularly again and the recalibrated ATMs start dispensing the new 2,000 rupees notes.
Since November 8, when Prime Minister Narendra Modi made a sudden announcement abolishing 500 and 1,000 rupees notes, people have waited for hours in long queues at banks, mostly to exchange the banned notes for new currency. Regular banking operations have been hit.
The government, criticised for the inconvenience caused to people, has rejected the allegation of opposition parties that the demonetisation move was ill-planned. It has said that the announcement had to be sudden to ensure that people with black or untaxed money were caught off guard.
The decision to print Rs. 2,000 notes first and not Rs. 500 or Rs. 1,000 notes to replace the currency that was abolished was taken because this was the quickest way to replace the money with the whole operation being kept secret, sources said.
The government has also launched new 500 rupees notes.
The banned notes made up 86 per cent of the money in circulation and the banking system has been under tremendous pressure to replace it. The Reserve Bank of India reiterated on Thursday that there is sufficient supply of notes "consequent upon increased production which started nearly two months ago".
Business Affairs
Demonetisation: No over-the-counter exchange of Rs 500, Rs 1000 notes tomorrow
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Banks will not exchange demonetised notes of Rs 500 and Rs 1000 of non-bank customers on November 19.
Only senior citizens will be allowed to exchange their old notes tomorrow.
Speaking to CNBC, Indian Bank Association President Rajeev Rishi said that they have informed the government about the move.
"We have been telling the government about the problems our customers are facing. Tomorrow (November 19) we will clear other pending works of the customers," Rishi said.
On Sunday, banks will remain shut.
Banks will not exchange demonetised notes of Rs 500 and Rs 1000 of non-bank customers on November 19.
Only senior citizens will be allowed to exchange their old notes tomorrow.
Speaking to CNBC, Indian Bank Association President Rajeev Rishi said that they have informed the government about the move.
"We have been telling the government about the problems our customers are facing. Tomorrow (November 19) we will clear other pending works of the customers," Rishi said.
On Sunday, banks will remain shut.
What gives Narendra Modi the legal right to scrap Rs 500, Rs 1,000 notes
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While uncertainty is central to the human condition, it takes on a whole different meaning when you find your hard earned wealth go up in a puff of demonetised smoke! Life is doubtless an illusion, but does that really include cash in hand? I am afraid it does.
Article 246, Union List, Entry 36 to 38 of our Constitution vests power on the Union of India to regulate currency and prescribe what is 'legal tender'. Legal tender is a holy cow. If I owe you money and I offer you legal tender, you can't say I won't take the currency notes, but would rather be paid in, say, cartons of cigarettes! The legislature has in turn given to RBI the sole right to issue paper currency in India. Section 26(2) of RBI Act also empowers the Central government to notify that from any particular date, any series of bank notes of any denomination will cease to be legal tender. Legally speaking, what the RBI prints, the government can take away, no questions asked.
This action does raise two interesting questions, though. First, the old notes are demonetised; they are not counterfeit. You are not obliged to accept old notes any longer, but if you decide to do so, what grievance can the government have? We are a country starved of liquidity. So long as banks accept and exchange old notes, it makes sense to keep passing them around in payment. This is why many small businesses are still accepting them, including especially the succession of upwardly mobile dhabas-turned-hep in the market below my office. For them, it's a choice between accepting old notes and shutting down. Will the tax boys have a problem with these restaurants? I would expect not. So long as they bank the money and pass it through their account, where is the tax evasion?
Which takes us to the second question: Where is the law that prevents you from handling, doling out, wearing, rolling joints in or making toilet paper of old demonetised notes? Maybe you are an old currency note collector! If the police catch you on the Haryana border with a stash of old cash, what law have you broken? Yes they can ask you where you got these pretty pieces of paper from but surely, that is only an invitation to you to come up with an inventive story about going around your colony collecting one Rs 500 note from everyone till it added up to… well, 20 crores! Perhaps it's worthwhile to suffer the short-term police harassment so that you may enjoy the long-term celebrity you will doubtless eventually come to have. By the same logic, what prevents you from making a wallpaper of your old financial vanities and papering over a whole room in your penthouse with old Rs 1,000 notes?
There is, too, a larger question to deal with. If you can't store your wealth in cash, how should you store it? Does gold do it? The good news is that our Constitution does not have anything to say about Parliament's power to mess around with your cache of gold under your bed. The bad news is that this Constitutional void did not stop Morarji Desai from bringing the Gold Control Act in 1968. How did he do it? Believe it or not, Parliament exercised powers granted by the Constitution under entry 52 of the Union list (Industries), entry 27 of the state list (trade and commerce) and entry 33 of the concurrent list (products of any industries)! It was a law ripe for constitution challenge and goldsmiths rose to the occasion. In Harakchand Ratanchand Banthia v. Union of India [(1970) 1 SCR 479), a five judge bench of the Supreme Court ruled that ornament making was a "process of systematic production" and so, was properly an "industry"! The court did strike down some of the more draconian 'inspector raj' powers assumed by the government, but this only encouraged Parliament to amend the Gold Control Act, which in turn was challenged with less success. Eventually, the law was withdrawn, but this does not mean the government will not carry out the Prime Minister's veiled threats and bring it back next year. Gold may be a great hedge against financial collapse, but it exists only because, and for so long as, the government lets it exist.
How then are we to store our wealth? Real estate is usually touted as the metaphorical third leg of the black money grease ball stool, but is it everything it is cranked up to be? Regrettably, no. To begin with, we need to accept that Indians do not have a fundamental right to property anymore. As enacted, the Constitution did have it but this led to acrimonious exchanges between Parliament and the Judiciary. Most of these controversies centred on the government's power to acquire private land and be compelled to pay for it. Parliament amended the Constitution at least six times to nullify the effect of Supreme Court judgements, and eventually repealed the fundamental right in 1978. As the position now stands, such rights as a citizen possesses to his property are contained in Article 300A, which merely provides that no man can be deprived of his property except by authority of law.
The state of the art in 'authority of law' is the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This limits the government's ability to acquire private land, and forces it to pay for what it acquires almost immediately. You can argue that a growing economy can never build infrastructure when hobbled with laws such as this. The scale will doubtless tip the other way sooner rather than later, but at least you will receive some money for the land that is snatched from you.
The bottom line is that any government determined to beggar you will always have the authority of law to do so. Still, wealth is better stored one way than another. Any value embedded in currency notes can disappear in a flash. Gold will not disappear so to speak, but government can force you to cough it up and flush it down the tubes into the bottomless pits of government coffers, leaving you with worthless receipts too tasteless to eat. Besides, they will still ask you to explain where you got your gold from. This puts real estate in the best possible place of all three. Government can take it away, but it has to pay something for it even if it's not everything you paid for it. Real estate may be maya like everything else, but even in the face of the most determined government, it is unique in its ability of being fungible into other kinds of maya!
Article 246, Union List, Entry 36 to 38 of our Constitution vests power on the Union of India to regulate currency and prescribe what is 'legal tender'. Legal tender is a holy cow. If I owe you money and I offer you legal tender, you can't say I won't take the currency notes, but would rather be paid in, say, cartons of cigarettes! The legislature has in turn given to RBI the sole right to issue paper currency in India. Section 26(2) of RBI Act also empowers the Central government to notify that from any particular date, any series of bank notes of any denomination will cease to be legal tender. Legally speaking, what the RBI prints, the government can take away, no questions asked.
This action does raise two interesting questions, though. First, the old notes are demonetised; they are not counterfeit. You are not obliged to accept old notes any longer, but if you decide to do so, what grievance can the government have? We are a country starved of liquidity. So long as banks accept and exchange old notes, it makes sense to keep passing them around in payment. This is why many small businesses are still accepting them, including especially the succession of upwardly mobile dhabas-turned-hep in the market below my office. For them, it's a choice between accepting old notes and shutting down. Will the tax boys have a problem with these restaurants? I would expect not. So long as they bank the money and pass it through their account, where is the tax evasion?
Which takes us to the second question: Where is the law that prevents you from handling, doling out, wearing, rolling joints in or making toilet paper of old demonetised notes? Maybe you are an old currency note collector! If the police catch you on the Haryana border with a stash of old cash, what law have you broken? Yes they can ask you where you got these pretty pieces of paper from but surely, that is only an invitation to you to come up with an inventive story about going around your colony collecting one Rs 500 note from everyone till it added up to… well, 20 crores! Perhaps it's worthwhile to suffer the short-term police harassment so that you may enjoy the long-term celebrity you will doubtless eventually come to have. By the same logic, what prevents you from making a wallpaper of your old financial vanities and papering over a whole room in your penthouse with old Rs 1,000 notes?
There is, too, a larger question to deal with. If you can't store your wealth in cash, how should you store it? Does gold do it? The good news is that our Constitution does not have anything to say about Parliament's power to mess around with your cache of gold under your bed. The bad news is that this Constitutional void did not stop Morarji Desai from bringing the Gold Control Act in 1968. How did he do it? Believe it or not, Parliament exercised powers granted by the Constitution under entry 52 of the Union list (Industries), entry 27 of the state list (trade and commerce) and entry 33 of the concurrent list (products of any industries)! It was a law ripe for constitution challenge and goldsmiths rose to the occasion. In Harakchand Ratanchand Banthia v. Union of India [(1970) 1 SCR 479), a five judge bench of the Supreme Court ruled that ornament making was a "process of systematic production" and so, was properly an "industry"! The court did strike down some of the more draconian 'inspector raj' powers assumed by the government, but this only encouraged Parliament to amend the Gold Control Act, which in turn was challenged with less success. Eventually, the law was withdrawn, but this does not mean the government will not carry out the Prime Minister's veiled threats and bring it back next year. Gold may be a great hedge against financial collapse, but it exists only because, and for so long as, the government lets it exist.
How then are we to store our wealth? Real estate is usually touted as the metaphorical third leg of the black money grease ball stool, but is it everything it is cranked up to be? Regrettably, no. To begin with, we need to accept that Indians do not have a fundamental right to property anymore. As enacted, the Constitution did have it but this led to acrimonious exchanges between Parliament and the Judiciary. Most of these controversies centred on the government's power to acquire private land and be compelled to pay for it. Parliament amended the Constitution at least six times to nullify the effect of Supreme Court judgements, and eventually repealed the fundamental right in 1978. As the position now stands, such rights as a citizen possesses to his property are contained in Article 300A, which merely provides that no man can be deprived of his property except by authority of law.
The state of the art in 'authority of law' is the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This limits the government's ability to acquire private land, and forces it to pay for what it acquires almost immediately. You can argue that a growing economy can never build infrastructure when hobbled with laws such as this. The scale will doubtless tip the other way sooner rather than later, but at least you will receive some money for the land that is snatched from you.
The bottom line is that any government determined to beggar you will always have the authority of law to do so. Still, wealth is better stored one way than another. Any value embedded in currency notes can disappear in a flash. Gold will not disappear so to speak, but government can force you to cough it up and flush it down the tubes into the bottomless pits of government coffers, leaving you with worthless receipts too tasteless to eat. Besides, they will still ask you to explain where you got your gold from. This puts real estate in the best possible place of all three. Government can take it away, but it has to pay something for it even if it's not everything you paid for it. Real estate may be maya like everything else, but even in the face of the most determined government, it is unique in its ability of being fungible into other kinds of maya!
Demonetisation to drag down FY18 GDP growth at 5.8%: Report
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The cash crunch arising out of demonetisation is expected to paralyse economic activity in the short-term, and the 2017-18 GDP growth is likely to be 5.8 per cent, says a report.
According to Ambit Capital, GDP growth is likely to decelerate from 6.4 per cent in first half of this fiscal to 0.5 per cent in the second half with a distinct possibility of GDP growth contracting in third quarter of this fiscal.
From October-December 2016 until October-December 2019, Ambit Capital expects a strong 'formalisation effect' to play out as nearly half of the non-tax paying businesses in the informal sector (40 per cent share in GDP) become unviable and cede market share to their organised sector counterparts.
"We expect this dynamic to crimp GDP growth in India in FY18 as well and hence we cut our FY18 GDP growth estimate to 5.8 per cent (from 7.3 per cent)," the report said.
The demonetisation move is expected to disrupt economic activity in the short term, especially those segments where cash-based transactions are the norm like real estate, unsecured lending, real estate construction services and building materials.
"Whilst in the near-term, we expect these businesses to suffer, over the next couple of years the strongest players in these sectors will gain market share as competition from unscrupulous/unorganised players reduces," the report added.
The report said that in the light of negative effects of the recent steps taken by the NDA Government and with just four months to go before this fiscal year comes to a close, Ambit Capital scraped its current March 2017 Sensex target of 29,500 and has set a March 2018 Sensex target of 29,000.
"We also scrap our March 2017 Sensex target of 29,500 and unveil our March 2018 Sensex target of 29,000," it added.
Regarding the Reserve Bank's monetary policy stance, the report said that the dampening of economic activity is likely to lead to an accomodative policy stance.
"As a response to the slowing GDP growth, we expect the RBI to consider rate cuts of 25-50 bps over 2HFY17 itself," the report said.
The Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 per cent to 6.25 per cent. The next RBI policy review is on December 7.
The cash crunch arising out of demonetisation is expected to paralyse economic activity in the short-term, and the 2017-18 GDP growth is likely to be 5.8 per cent, says a report.
According to Ambit Capital, GDP growth is likely to decelerate from 6.4 per cent in first half of this fiscal to 0.5 per cent in the second half with a distinct possibility of GDP growth contracting in third quarter of this fiscal.
From October-December 2016 until October-December 2019, Ambit Capital expects a strong 'formalisation effect' to play out as nearly half of the non-tax paying businesses in the informal sector (40 per cent share in GDP) become unviable and cede market share to their organised sector counterparts.
"We expect this dynamic to crimp GDP growth in India in FY18 as well and hence we cut our FY18 GDP growth estimate to 5.8 per cent (from 7.3 per cent)," the report said.
The demonetisation move is expected to disrupt economic activity in the short term, especially those segments where cash-based transactions are the norm like real estate, unsecured lending, real estate construction services and building materials.
"Whilst in the near-term, we expect these businesses to suffer, over the next couple of years the strongest players in these sectors will gain market share as competition from unscrupulous/unorganised players reduces," the report added.
The report said that in the light of negative effects of the recent steps taken by the NDA Government and with just four months to go before this fiscal year comes to a close, Ambit Capital scraped its current March 2017 Sensex target of 29,500 and has set a March 2018 Sensex target of 29,000.
"We also scrap our March 2017 Sensex target of 29,500 and unveil our March 2018 Sensex target of 29,000," it added.
Regarding the Reserve Bank's monetary policy stance, the report said that the dampening of economic activity is likely to lead to an accomodative policy stance.
"As a response to the slowing GDP growth, we expect the RBI to consider rate cuts of 25-50 bps over 2HFY17 itself," the report said.
The Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 per cent to 6.25 per cent. The next RBI policy review is on December 7.
20 registrations so far under UDAN bidding: Govt
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With the domestic aviation sector on the "upswing", the government today said the regional connectivity scheme has got off to a very strong start and the bidding under UDAN has already seen as many as 20 registrations from operators.
Besides, the government is working on ways to increase capacity at airports to cater to rising demand as the domestic aviation sector has been growing at over 20 per cent for the past many months.
For providing air connectivity to unserved and underserved airports as well as to make more affordable to the masses, UDAN (Ude Desh Ka Aam Naagrik) was launched recently.
Under the scheme, fares would be capped at Rs 2,500 for one-hour flights while various incentives would also be provided to the airline operators.
The bidding under UDAN has started and already there have been 20 registrations from air operator permit holders, Civil Aviation Secretary R N Choubey said.
"Pleasant surprise is awaiting us in December... when you find suddenly that dozens of smaller airports which have never seen an aircraft landing for Civil aviation purposes has now scheduled commercial flights," he noted.
He was speaking at the inaugural of the Aero Expo India organised by industry body PHD Chamber.
Civil Aviation Minister Ashok Gajapathi Raju said the domestic aviation sector is on the "upswing" and is at an inflection point.
He emphasised the need to increase capacity at airports, as many of them are choking at the seams, even as around 30 airports are non-operational.
Speaking on the occasion, Minister of State for Civil Aviation Minister Jayant Sinha said UDAN is "off to a very strong start".
Regional air connectivity, ensuring air travel is comfortable and convenient, and expanding airports' capacity are the priorities, he added.
Domestic aviation sector is expected to see more than 20 per cent growth in the next three years which also poses challenges, Choubey said.
"We have to be ahead of the growth curve," he added.
According to him, the 23 per cent growth seen in the domestic aviation sector, which is also highest in the world, is "not a flash in the pan".
With the domestic aviation sector on the "upswing", the government today said the regional connectivity scheme has got off to a very strong start and the bidding under UDAN has already seen as many as 20 registrations from operators.
Besides, the government is working on ways to increase capacity at airports to cater to rising demand as the domestic aviation sector has been growing at over 20 per cent for the past many months.
For providing air connectivity to unserved and underserved airports as well as to make more affordable to the masses, UDAN (Ude Desh Ka Aam Naagrik) was launched recently.
Under the scheme, fares would be capped at Rs 2,500 for one-hour flights while various incentives would also be provided to the airline operators.
The bidding under UDAN has started and already there have been 20 registrations from air operator permit holders, Civil Aviation Secretary R N Choubey said.
"Pleasant surprise is awaiting us in December... when you find suddenly that dozens of smaller airports which have never seen an aircraft landing for Civil aviation purposes has now scheduled commercial flights," he noted.
He was speaking at the inaugural of the Aero Expo India organised by industry body PHD Chamber.
Civil Aviation Minister Ashok Gajapathi Raju said the domestic aviation sector is on the "upswing" and is at an inflection point.
He emphasised the need to increase capacity at airports, as many of them are choking at the seams, even as around 30 airports are non-operational.
Speaking on the occasion, Minister of State for Civil Aviation Minister Jayant Sinha said UDAN is "off to a very strong start".
Regional air connectivity, ensuring air travel is comfortable and convenient, and expanding airports' capacity are the priorities, he added.
Domestic aviation sector is expected to see more than 20 per cent growth in the next three years which also poses challenges, Choubey said.
"We have to be ahead of the growth curve," he added.
According to him, the 23 per cent growth seen in the domestic aviation sector, which is also highest in the world, is "not a flash in the pan".
ITC, Reliance Industries among top stocks buzzing in trade today
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The S&P BSE Sensex on Thursday was trading flat, down 50 points, while the broader Nifty50 held above its 8,000 level.
Here are the top 5 stocks buzzing in trade today:
- Astral Poly Technik: Shares of Astral rose 4.4 per cent after the company on Thursday posted a consolidated net profit of Rs 30.10 crore for the quarter ended September 2016.
- Petronet LNG: The shares of Petronet spiked 7.4 per cent after the company reported its highest ever quarterly net profit at Rs 460 crore for the record volumes of gas handled. The net profit of Rs 460 crore earned in July-September period is 82 per cent higher than the same period a year ago.
- Reliance Industries: Reliance Industries and GE after market hours on Thursday announced a global partnership to built digital solutions to the tune of $25 billion worth industrial internet of things business. The scrip rose nearly 0.70 per cent in early trade on Friday.
- ITC: Shares of ITC fell 1.44 per cent on the BSE following the announcement to bourses that King Maker Marketing Inc. has terminated to be a subsidiary of the company w.e.f.
- Inox Wind: The company bagged a repeat order for a 40 MW wind power project to be deployed in Gujarat from Roha Dyechem Private Ltd. The shares of Inox Wind gained as much as 0.84 per cent on Friday's trade.
The S&P BSE Sensex on Thursday was trading flat, down 50 points, while the broader Nifty50 held above its 8,000 level.
Here are the top 5 stocks buzzing in trade today:
- Astral Poly Technik: Shares of Astral rose 4.4 per cent after the company on Thursday posted a consolidated net profit of Rs 30.10 crore for the quarter ended September 2016.
- Petronet LNG: The shares of Petronet spiked 7.4 per cent after the company reported its highest ever quarterly net profit at Rs 460 crore for the record volumes of gas handled. The net profit of Rs 460 crore earned in July-September period is 82 per cent higher than the same period a year ago.
- Reliance Industries: Reliance Industries and GE after market hours on Thursday announced a global partnership to built digital solutions to the tune of $25 billion worth industrial internet of things business. The scrip rose nearly 0.70 per cent in early trade on Friday.
- ITC: Shares of ITC fell 1.44 per cent on the BSE following the announcement to bourses that King Maker Marketing Inc. has terminated to be a subsidiary of the company w.e.f.
- Inox Wind: The company bagged a repeat order for a 40 MW wind power project to be deployed in Gujarat from Roha Dyechem Private Ltd. The shares of Inox Wind gained as much as 0.84 per cent on Friday's trade.
General Awareness
Chhattisgarh Becomes First State To Adopt Resolution Supporting Demonetization Move.
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To strengthen the national economy and make it more transparent and efficient by way of eradicating black money, restricting the financial resources of terrorists and curb the circulation of fake currency the Union Government has decided to ban the old notes of Rs 500 and Rs 1000 denomination.
- Chhattisgarh has become the first state in the country to adopt a resolutionof supporting the demonetization of high-value currency notes decision of the central government.
- This decision to adopt a resolution was taken in the state legislative assembly headed by the Chief Minister Raman Singh on November 16, 2016.The resolution was passed with 41 votes in favor and 25 against the decision.
Steps taken by the Chhattisgarh Government
Chhattisgarh government has expressed support to the decision, to flush out black money from the system and promote institutional mechanism for clean monetary transactions.
- The state government will take effective steps to encourage people in small business to switch over to the e-payment system.
- The state has also exempted swipe-machines from value added tax (VAT) to encourage e-transactions.
- The government will procure paddy at the minimum support price (MSP) from the farmers of the state from November 16, 2016 onwards and for that e-payment will be made. Government has made all arrangements for the farmers of the state at 1,986 procurement centers.
Govt announces new measures to tackle demonetisation problems
Union government, on November 17, 2016, has adopted new measures to tackle the problems faced by the people regarding the demonetization of 500 and 1000 rupees notes.
Key measures adopted
Famers have been allowed to withdraw up to Rs 25,000 per week from bank account, against crop loan and kisan credit card to ensure sowing in the rabi season. Farmers will also get credit fertilizers.
- Rabi Season crops: Crops which are grown during the winter season (October-March) are called Rabi crop. Seeds of these crops are sown in the beginning of the winter season and harvested at the end of the winter season (April-May). Example: Wheat, Gram, Mustard
- Payment should be made by Cheque at Agriculture Produce Market Committee (APMC) mandi and for Kharif crops. Traders can withdraw Rs. 25,000 per week according to KYC norms.
- Kharif Season Crops: Crops which are grown during the monsoon season (Rainy Season) are called Rabi crop. Seeds of these crops are sown in the beginning of the monsoon season and harvested at the end of the monsoon season (October-November). Example: Paddy, Maize, Millets and Cotton Crops.
All traders registered at the Agriculture Produce Market Committee (APMC) mandi have been permitted to withdraw Rs 50,000 per week.
- Business entities have also been allowed to withdraw Rs 50,000 per week.
- The time limit for payment of crop loan insurance premium has been extended by 15 days.
- In case of Wedding Ceremony, Families having marriage at home can withdraw Rs 2, 50,000 per person from bank account. The person who withdraws from bank account should be father, mother or the one getting married.
- The limit to exchange old notes of Rs. 500 and Rs. 1000 with new note has been reduced to Rs 2,000 per person from the current Rs 4,500, from 18thNovember onwards.
- Central government employees of group C grade like Defence, Railways etc. can withdraw advance salary up to Rs 10,000 that will be adjusted in their November salaries.
To strengthen the national economy and make it more transparent and efficient by way of eradicating black money, restricting the financial resources of terrorists and curb the circulation of fake currency the Union Government has decided to ban the old notes of Rs 500 and Rs 1000 denomination.
- Chhattisgarh has become the first state in the country to adopt a resolutionof supporting the demonetization of high-value currency notes decision of the central government.
- This decision to adopt a resolution was taken in the state legislative assembly headed by the Chief Minister Raman Singh on November 16, 2016.The resolution was passed with 41 votes in favor and 25 against the decision.
Steps taken by the Chhattisgarh Government
Chhattisgarh government has expressed support to the decision, to flush out black money from the system and promote institutional mechanism for clean monetary transactions.
- The state government will take effective steps to encourage people in small business to switch over to the e-payment system.
- The state has also exempted swipe-machines from value added tax (VAT) to encourage e-transactions.
- The government will procure paddy at the minimum support price (MSP) from the farmers of the state from November 16, 2016 onwards and for that e-payment will be made. Government has made all arrangements for the farmers of the state at 1,986 procurement centers.
Govt announces new measures to tackle demonetisation problems
Union government, on November 17, 2016, has adopted new measures to tackle the problems faced by the people regarding the demonetization of 500 and 1000 rupees notes.
Key measures adopted
Famers have been allowed to withdraw up to Rs 25,000 per week from bank account, against crop loan and kisan credit card to ensure sowing in the rabi season. Farmers will also get credit fertilizers.
- Rabi Season crops: Crops which are grown during the winter season (October-March) are called Rabi crop. Seeds of these crops are sown in the beginning of the winter season and harvested at the end of the winter season (April-May). Example: Wheat, Gram, Mustard
- Payment should be made by Cheque at Agriculture Produce Market Committee (APMC) mandi and for Kharif crops. Traders can withdraw Rs. 25,000 per week according to KYC norms.
- Kharif Season Crops: Crops which are grown during the monsoon season (Rainy Season) are called Rabi crop. Seeds of these crops are sown in the beginning of the monsoon season and harvested at the end of the monsoon season (October-November). Example: Paddy, Maize, Millets and Cotton Crops.
All traders registered at the Agriculture Produce Market Committee (APMC) mandi have been permitted to withdraw Rs 50,000 per week.
- Business entities have also been allowed to withdraw Rs 50,000 per week.
- The time limit for payment of crop loan insurance premium has been extended by 15 days.
- In case of Wedding Ceremony, Families having marriage at home can withdraw Rs 2, 50,000 per person from bank account. The person who withdraws from bank account should be father, mother or the one getting married.
- The limit to exchange old notes of Rs. 500 and Rs. 1000 with new note has been reduced to Rs 2,000 per person from the current Rs 4,500, from 18thNovember onwards.
- Central government employees of group C grade like Defence, Railways etc. can withdraw advance salary up to Rs 10,000 that will be adjusted in their November salaries.
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