Category Archives: Business

India seen staying fastest growing major economy in Jan-March quarter: Reuters Poll

India remained the fastest growing major economy in the world last quarter, with growth buoyed by an improved performance in manufacturing and services, a Reuters poll of economists found.

Prime Minister Narendra Modi‘s ban of high-value currency notes last year had a major short-term impact on demand but private and public consumption has recovered.

The median forecast from a poll of 35 economists showed the economy grew 7.1 per cent annually in the first three months of this year. Forecasts ranged from 6.5 to 7.8 per cent. Annual growth was 7.0 per cent in the quarter ending December, and 7.9 per cent in the January-March quarter last year.

“The demonetization drive barely impacted the economic momentum in the second half of FY’17. Most of the high-frequency indicators showed only a marginal slowdown and were quick to recover,” said Tushar Arora, senior economist at HDFC Bank.

India’s industrial output rose 2.7 per cent in March from a year earlier, beating the median consensus of 1.5 per cent growth in a Reuters poll.

Factory and services activity expanded for most of the first quarter of 2017, rising to a five-month high in March, indicating the effects from demonetization were short lived.

This acceleration in economic growth was partly driven by favourable domestic factors, including a significant improvement in the transmission of past central bank policy rate reductions into banks’ lending rates, encouraging investment.

In addition, infrastructure spending is expected to support growth, as will higher agricultural output if the monsoon rains prove favourable.

The economy is also expected to benefit from the introduction of a nationwide goods and sales tax (GST), elminating multiple state sales taxes, making it far easier to do business in India. The GST is expected to come into effect from July 1.

“The GST will boost Indian GDP at least by 100-150 basis points. It won’t happen right after July 1, but probably by the end of FY18,” said Karan Mehrishi, lead economist at SMERA Ratings Limited.

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IT to remain net recruiter, automation to watch out for : Report

NEW DELHI: Recent layoffs in Indian IT companies are not different from the past and the sector will remain a net recruiter, but the numbers will be “calibrated” and automation impact will be crucial, says a report.

“We believe that these adjustments in staff strength are not materially different from earlier years. The IT industry will continue to be a net recruiter with numbers prudently and continuously calibrated by industry revenue growth,” Kotak Institutional Equities said in a research note.

Indian IT companies generally let go of 1-3 per cent employees after annual performance measurement and this year, there could be a slightly higher proportion of layoffs – around 2-4 per cent – it added.

Some of the key factors slamming brakes on IT hiring include slowdown in company growth, decline in attrition rates, acceleration in localisation programme, employee reskilling and changes in the market place.

“Industry headcount addition in 2017-18 would be similar to 2016-17 figures or marginally higher, assuming 8 per cent revenue growth,” the report said, adding that this positive will be partly offset by higher local hiring in the US.

The engineering and R&D services are expected to see 7-9 per cent headcount addition while domestic IT and BPO would log a 5-7 per cent rise. In IT services, there is likely to be 6-8 per cent growth and headcount increase will be 2-3 per cent lower than revenue growth.

However, BPO is where the real challenge is, as nearly 38 per cent of BPO export revenues are from customer interaction services, something that will be automated and taken over by chatbots over time.

“The industry will continue to be a net recruiter. However, it will continue to witness supply of talent and this might have negative implications for the engineering,” the report said, adding “we expect automation to have significant bearing on headcount addition in the medium term”

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Iraq may consider hedging crude production

LARNACA: Iraq may look at hedging part of its crude oil production, the head of the OPEC member’s oil marketer SOMO said, as a way to protect government revenue against the risk of oil price volatility.

“It is in our strategy in the future that maybe we will consider hedging part of Iraqi crude … SOMO is floating an idea now and this is yet to be studied,” Falah Al-Amri, who is also Iraq’s OPEC governor, told Reuters in an interview.

It is not clear what type of hedging might be considered by SOMO. Some organisations, such as Mexican oil monopoly Pemex, seek to ensure oil is sold at a guaranteed fixed price throughout the year, while others, such as Shell and BP, hedge their sales against short term oil price volatility.

Short term hedging helps to smooth price fluctuations between the signing of an oil sales contract and when the oil is delivered and paid for.

“There are a lot of requirements that should be taken first: we need to study hedging carefully and train people, we need to know the best companies involved in hedging … we still don’t understand the hedging process completely,” Al Amri said, adding there was no certainty that Iraq would adopt hedging practices.

Al Amri also said SOMO aimed to use methods such as auctions and joint ventures to promote Iraq’s oil interests and reduce imports of oil products.

SOMO and Russia‘s Litasco have set up a joint trading company in Dubai to market crude, joining other Middle Eastern producers that buy and sell oil to boost their incomes.

Last month, SOMO sold its first cargo of Basra Light crude via an auction on the Dubai Mercantile Exchange (DME), which could become a platform for price discovery. DME is now the marketplace for most Omani crude sold in Asia.

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Govt to announce electoral bonds scheme soon: Arun Jaitley

BENGALURU: Finance Minister Arun Jaitley on Monday, said the Centre would shortly announce the nature of the electoral bonds scheme.

“This year, before the budget was being prepared, the prime minister had told us to take some steps in the budget to cleanse the political parties, and out of that the electoral bonds scheme was born,” he said addressing BJP workers here. “We are in the process of shortly announcing the nature of the scheme,” he said.

In the budget 2017-18, the government had proposed amendment to the RBI Act to enable issuance of electoral bonds.

Lauding Prime Minister Narendra Modi for his decisiveness, Jaitley said unlike the previous prime minister (Manmohan Singh), Modi has been decisive in taking steps with regard to demonetisation, surgical strike against Pakistan and the Goods and Services Tax (GST).

On GST, he said from July 1 onwards India will become a uniform market, where goods and services will flow freely across the country and curb evasions.

Jaitley said in the last three years, not even a single allegation of corruption has been levelled against the Modi government, for it has divested itself from discretionary power and allowed the system to decide all matters. “Why is it that, in the last three years, not a single allegation of corruption has been made against the government? The reason is simple … The government has divested itself from all discretionary powers, and left everything to be decided by the system,” he said.

“We have allocated spectrum and coal blocks, but nobody comes to meet us … the system, the market mechanism decide it, and hence there is no scope for misuse of power and corruption,” he said.

On Karnataka politics, Jaitley hoped that the party would put its heart and soul to bring it back to power under the leadership of B S Yeddyurappa.

“Yeddyurappaji is in the driver’s seat. Under his leadership, everybody will unitedly put his heart and soul and bring BJP back to power. Karnataka will become part of an aspirational India which does not believe in caste and dynastic politics, but performance of the government,” he said.

Jaitley added that neither caste nor dynastic politics will be enough to win elections.

Stay updated on the go with Times of India News App. Click here to download it for your device.

Govt to announce electoral bonds scheme soon: Arun Jaitley

BENGALURU: Finance Minister Arun Jaitley on Monday, said the Centre would shortly announce the nature of the electoral bonds scheme.

“This year, before the budget was being prepared, the prime minister had told us to take some steps in the budget to cleanse the political parties, and out of that the electoral bonds scheme was born,” he said addressing BJP workers here. “We are in the process of shortly announcing the nature of the scheme,” he said.

In the budget 2017-18, the government had proposed amendment to the RBI Act to enable issuance of electoral bonds.

Lauding Prime Minister Narendra Modi for his decisiveness, Jaitley said unlike the previous prime minister (Manmohan Singh), Modi has been decisive in taking steps with regard to demonetisation, surgical strike against Pakistan and the Goods and Services Tax (GST).

On GST, he said from July 1 onwards India will become a uniform market, where goods and services will flow freely across the country and curb evasions.

Jaitley said in the last three years, not even a single allegation of corruption has been levelled against the Modi government, for it has divested itself from discretionary power and allowed the system to decide all matters. “Why is it that, in the last three years, not a single allegation of corruption has been made against the government? The reason is simple … The government has divested itself from all discretionary powers, and left everything to be decided by the system,” he said.

“We have allocated spectrum and coal blocks, but nobody comes to meet us … the system, the market mechanism decide it, and hence there is no scope for misuse of power and corruption,” he said.

On Karnataka politics, Jaitley hoped that the party would put its heart and soul to bring it back to power under the leadership of B S Yeddyurappa.

“Yeddyurappaji is in the driver’s seat. Under his leadership, everybody will unitedly put his heart and soul and bring BJP back to power. Karnataka will become part of an aspirational India which does not believe in caste and dynastic politics, but performance of the government,” he said.

Jaitley added that neither caste nor dynastic politics will be enough to win elections.

Stay updated on the go with Times of India News App. Click here to download it for your device.

Govt to announce electoral bonds scheme soon: Arun Jaitley

BENGALURU: Finance Minister Arun Jaitley on Monday, said the Centre would shortly announce the nature of the electoral bonds scheme.

“This year, before the budget was being prepared, the prime minister had told us to take some steps in the budget to cleanse the political parties, and out of that the electoral bonds scheme was born,” he said addressing BJP workers here. “We are in the process of shortly announcing the nature of the scheme,” he said.

In the budget 2017-18, the government had proposed amendment to the RBI Act to enable issuance of electoral bonds.

Lauding Prime Minister Narendra Modi for his decisiveness, Jaitley said unlike the previous prime minister (Manmohan Singh), Modi has been decisive in taking steps with regard to demonetisation, surgical strike against Pakistan and the Goods and Services Tax (GST).

On GST, he said from July 1 onwards India will become a uniform market, where goods and services will flow freely across the country and curb evasions.

Jaitley said in the last three years, not even a single allegation of corruption has been levelled against the Modi government, for it has divested itself from discretionary power and allowed the system to decide all matters. “Why is it that, in the last three years, not a single allegation of corruption has been made against the government? The reason is simple … The government has divested itself from all discretionary powers, and left everything to be decided by the system,” he said.

“We have allocated spectrum and coal blocks, but nobody comes to meet us … the system, the market mechanism decide it, and hence there is no scope for misuse of power and corruption,” he said.

On Karnataka politics, Jaitley hoped that the party would put its heart and soul to bring it back to power under the leadership of B S Yeddyurappa.

“Yeddyurappaji is in the driver’s seat. Under his leadership, everybody will unitedly put his heart and soul and bring BJP back to power. Karnataka will become part of an aspirational India which does not believe in caste and dynastic politics, but performance of the government,” he said.

Jaitley added that neither caste nor dynastic politics will be enough to win elections.

Stay updated on the go with Times of India News App. Click here to download it for your device.

Govt to announce electoral bonds scheme soon: Arun Jaitley

BENGALURU: Finance Minister Arun Jaitley on Monday, said the Centre would shortly announce the nature of the electoral bonds scheme.

“This year, before the budget was being prepared, the prime minister had told us to take some steps in the budget to cleanse the political parties, and out of that the electoral bonds scheme was born,” he said addressing BJP workers here. “We are in the process of shortly announcing the nature of the scheme,” he said.

In the budget 2017-18, the government had proposed amendment to the RBI Act to enable issuance of electoral bonds.

Lauding Prime Minister Narendra Modi for his decisiveness, Jaitley said unlike the previous prime minister (Manmohan Singh), Modi has been decisive in taking steps with regard to demonetisation, surgical strike against Pakistan and the Goods and Services Tax (GST).

On GST, he said from July 1 onwards India will become a uniform market, where goods and services will flow freely across the country and curb evasions.

Jaitley said in the last three years, not even a single allegation of corruption has been levelled against the Modi government, for it has divested itself from discretionary power and allowed the system to decide all matters. “Why is it that, in the last three years, not a single allegation of corruption has been made against the government? The reason is simple … The government has divested itself from all discretionary powers, and left everything to be decided by the system,” he said.

“We have allocated spectrum and coal blocks, but nobody comes to meet us … the system, the market mechanism decide it, and hence there is no scope for misuse of power and corruption,” he said.

On Karnataka politics, Jaitley hoped that the party would put its heart and soul to bring it back to power under the leadership of B S Yeddyurappa.

“Yeddyurappaji is in the driver’s seat. Under his leadership, everybody will unitedly put his heart and soul and bring BJP back to power. Karnataka will become part of an aspirational India which does not believe in caste and dynastic politics, but performance of the government,” he said.

Jaitley added that neither caste nor dynastic politics will be enough to win elections.

Stay updated on the go with Times of India News App. Click here to download it for your device.

Finance Ministry initiates process for finding new SBI chief

NEW DELHI: The finance ministry has initiated the process for finding new chief of the country’s largest lender State Bank of India (SBI) as Arundhati Bhattacharya‘s extended term comes to an end on October 6.

“Department of Financial Services has communicated to Banks Board Bureau the emerging vacancies at the top level of PSU banks which will have to be filled during course of the year,” a senior finance ministry official said.

This also includes chairman and one managing director of the SBI, which alone has market share of more than 20 per cent.

Bhattacharya will complete her four-year term as chairperson of SBI on October 6.

Besides chairman, SBI has four managing directors looking after different departments.

The post assumes significance as the bank has recently merged five associates and the Bharatiya Mahila Bank (BMB) pushing SBI into the league of top 50 banks globally in terms of assets.

State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides BMB, merged with SBI with effect from April 1. The process of integration would at least take a year.

The government had in February approved the merger of these five associate banks with SBI. Later in March, the Cabinet approved merger of BMB as well. SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.

For the fourth quarter ended March 2017, the bank reported more than doubling of its net profit on the back of increased lending and reduction in provisioning for bad loans. Net profit of the bank on standalone basis rose to Rs 2,814.82 crore for the March quarter as against Rs 1,263.81 crore in the same period of previous fiscal 2015-16.

For the entire fiscal ended March 2017, the net profit of the bank improved by 5.36 per cent to Rs 10,484 crore as against Rs 9,951 crore in the previous fiscal. With stock prices inching up, SBI has lined up share sale through which it intends to raise Rs 15,000 crore during the current fiscal.

It is in the process of appointing six merchant bankers for managing its proposed share sale. The central government holds 62.22 per cent stake in the bank as of March 2017.

Stay updated on the go with Times of India News App. Click here to download it for your device.

Finance Ministry initiates process for finding new SBI chief

NEW DELHI: The finance ministry has initiated the process for finding new chief of the country’s largest lender State Bank of India (SBI) as Arundhati Bhattacharya‘s extended term comes to an end on October 6.

“Department of Financial Services has communicated to Banks Board Bureau the emerging vacancies at the top level of PSU banks which will have to be filled during course of the year,” a senior finance ministry official said.

This also includes chairman and one managing director of the SBI, which alone has market share of more than 20 per cent.

Bhattacharya will complete her four-year term as chairperson of SBI on October 6.

Besides chairman, SBI has four managing directors looking after different departments.

The post assumes significance as the bank has recently merged five associates and the Bharatiya Mahila Bank (BMB) pushing SBI into the league of top 50 banks globally in terms of assets.

State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides BMB, merged with SBI with effect from April 1. The process of integration would at least take a year.

The government had in February approved the merger of these five associate banks with SBI. Later in March, the Cabinet approved merger of BMB as well. SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.

For the fourth quarter ended March 2017, the bank reported more than doubling of its net profit on the back of increased lending and reduction in provisioning for bad loans. Net profit of the bank on standalone basis rose to Rs 2,814.82 crore for the March quarter as against Rs 1,263.81 crore in the same period of previous fiscal 2015-16.

For the entire fiscal ended March 2017, the net profit of the bank improved by 5.36 per cent to Rs 10,484 crore as against Rs 9,951 crore in the previous fiscal. With stock prices inching up, SBI has lined up share sale through which it intends to raise Rs 15,000 crore during the current fiscal.

It is in the process of appointing six merchant bankers for managing its proposed share sale. The central government holds 62.22 per cent stake in the bank as of March 2017.

Stay updated on the go with Times of India News App. Click here to download it for your device.

Banks red flag Anil Ambani's RCom over missed loan payments

MUMBAI | NEW DELHI: The plight of Reliance Communications is more serious than what credit rating agencies believe. The Anil Ambani-owned mobile phone operator has defaulted on its loan servicing obligations with more than 10 local banks, some of whom have categorised the exposure as “special mention account” in their asset books.

SMA assets are loans where the interest payment from a borrower is overdue: if a loan isn’t serviced within 30 days after falling due, it’s marked as SMA 1and if unpaid for 60 days or more, it’s classified as SMA 2. The loan becomes non-performing asset (NPA) – which requires a bank to provide for the loan and take a knock on profitability – if interest is unpaid for 90 days.

Also read: RCom plunges 7% on mounting debt woes, Q4 loss

Loans to the telco have been redflagged as either SMA1 or SMA2 by at least 10 lenders in India, a bank official told ET.

A few banks will have to treat the account as an NPA after a fortnight, said another banker.

Shares of RCom have fallen 20% in the past two weeks after CARE and ICRA downgraded ratings of the telecom operator’s bonds due to the pressure the telco faces in Indian telecom market and its debt obligation. Rating agencies, however, do not have access to the information on SMA loans which banks share among themselves and the Reserve Bank of India. CARE in its report said the downgrade was the result of Mukesh Ambani-owned Reliance Jio‘s impact on operational risk profile of RCom. Knowledge of an actual default could prompt any agency to take a sterner view of the rating.

Responding to ET’s query about RCom defaulting on loan servicing with several banks, a company spokesperson said: “Post signing of binding documents for the Aircel and Brookfield transactions, RCom has formally advised all its lenders that it will be making repayment of an aggregate amount of Rs 25,000 crore from the proceeds of these two transactions, on or before Sept 30, 2017. The said amount will cover not only all scheduled repayments, but also include substantial pre-payments to all lenders on a pro-rata basis.” He also said that “RCom is presently engaged in discussions with its lenders to obtain their requisite consents for the two transactions and to refinance scheduled instalments falling due in the interim period up to Sept 30, to facilitate expeditious closing of both transactions in the best interests of all stakeholders.”

“Based on the large number of approvals already received for the two transactions and continuing good progress for the balance, RCom expects to meet its all debt repayment obligations in line with these plans, and substantially reduce its overall debt,” the official added.

The company suffered a loss of Rs 966 crore in the January-March quarter – its second straight quarterly net loss leading to its first full fiscal net loss. The telco had a debt of around Rs 42,000 crore as on March 31, which it intends to reduce through its deals with Aircel and Brookfield, to whom RCom is selling 51% stake in its tower unit Reliance Infratel for Rs 11,000 crore. Besides intense competition, RCom’s fourth quarter earnings were hurt by a rise in finance costs.

ICRA, which downgraded RCom Group from ‘BBB’ to ‘BB’, fears competition from Jio could impact profitability and revenue generating capacity of the telecom firm. RCom Group here includes RCom’s units Reliance Telecom and Reliance Infratel.

Announcing its quarterly performance, RCom on Saturday blamed the hyper-competition in the industry post Jio’s entry, the new entrant’s free offers and disruptive pricing for its net loss — compared with a net profit of Rs 90 crore a year back.

“For the first time in over 20 years, the telecom sector registered de-growth in revenues, leading to a reduction in the government’s share in revenues, sharp drop in operating margins, accompanied by increased interest costs arising from a staggering industry debt burden, and higher depreciation and amortisation charges as a result of higher spectrum purchase costs,” said the company in its earnings statement.

ET reported on May 26 that India’s top bankers have warned the government that failure in the debt-bruised telecom sector could result in defaults in the industry whose total borrowings amount to Rs 8 lakh crore.

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