The centre is planning to infuse a sum of Rs.7577 crore into 6 weak PSU banks towards bolstering their capital base. This is part of the Indradhanush commitment of the government of India, wherein a total of Rs.70,000 crore has been pledged to be infused into Indian banks by March 2019. Bank of India, UCO Bank and IDBI Bank will be among the banks to receive this tranche of bank recapitalization. BOI and IDBI Bank will get the lion’s share of this tranche. This time around, the government has also laid down stringent conditions in terms of loss recovery and operational performance for these funds.
The government has modified the Model Concession Agreement (MCA) for PPP projects involved in port projects with a view to making the rules more user-friendly. The revised MCA will provide a 100% exit route to developers after completing 2 years from the projection operations date. This will put port projects at par with the highway projects in terms of exit route. The government also envisages a dispute resolution mechanism for the ports sector, exactly on the same lines as for the highways sector. The method of royalty calculation is also being tweaked to make it more meaningful for developers.
The board of Centrum Capital has approved plans to raise a massive Rs.18,000 crore through various sources of funding. While the amount of money may look quite large for a financial services company, Centrum is trying to position itself as a financial powerhouse. Over the last many years, Centrum has been trying hard to establish a presence in the financial services business but has not been too successful. Recently, the former CEO of Standard Chartered, Jaspal Bindra, had joined the board of Centrum and he is pushing this aggressive strategy to foray into financial services in a big way.
Crude oil touched the highest level since mid-2015 as US stockpiles have started dwindling rapidly. The WTI Crude was quoting above the $61/bbl mark while the Brent Crude was quoting above the $67/bbl mark on Wednesday. Oil has had a phenomenal run since November 2016 when the OPEC and Russia for the first time decided to cooperate in cutting oil supplies by 1.8 million barrels per day. With growth picking up across Europe and Japan, the demand for oil is likely to remain buoyant. The US tax cuts will only help this trend further. Experts are already expecting Brent above $70/bbl this year.
Most economists and analysts are now warning that India’s full year GDP growth for the fiscal 2017-18 could actually dip below the 7% mark. The economy had grown at 8% in the fiscal year 2016 and 7.1% in the fiscal year 2017. Economists are of the view that even assuming that growth does pick up in the last 2 quarters, the momentum will just not be sufficient to prop the GDP beyond the 7% mark. In fact, experts like Montek Singh Ahluwaliah have pegged the full year GDP growth for fiscal year 2017-18 at just about 6.2%, which will mean that India may grow full 60 basis points lower than China. The worry is that while the lag effect of demonetization has begun to fade, the downstream effect of GST will continue to haunt India’s growth story for this fiscal year.
A day after the fresh US visa curbs, the NASSCOM has alleged that these measures were entirely intended at India. Under the fresh regulations, Indian companies will have to give an undertaking that any US visa issued to their employees does not impact employment in the US in the next 5 years. This will be an uncomfortable commitment for the Indian companies. This will mean that such personnel cannot live in the US when their applications for green card or permanent residential status are pending. One of the big issues for Trump was that India was cornering 70% of the H1-B visas issued by the US.
