- Eight Core Industries have recorded growth of 5.2 % in June’16, a rebound from 2.8% growth in May. Its cumulative growth for Q1’FY17 stands at 5.4%, much higher than the growth of 2.5% in Q1’FY16. The growth remains constrained by performance of crude oil and natural gas which continue to record decline in production. The core sectors are the building blocks and provide input to the rest of the industrial sector and its improved growth indicates expected improvement in the performance of other segments also.
- In a major overhaul of the laws governing debt recovery procedure, Lok Sabha passed a bill giving power to banks to take possession of a pledged asset in case of a default by the borrower. The law does away with the need to go through the legal processes for recovery and empowers District Magistrate to assist Banks in taking over the assets. However, the law will apply only if the assets registered with the Central Registry. The bill will now be placed before the Rajya Sabha.
- In a landmark legislation, Rajya Sabha passes bill to amend tax regime paving the way for implementation of Goods & Service Tax (GST). The bill still has to go through a few legislative procedure and the most crucial decision on fixing the rate. (Read more on this -http://indiaeconomyandbusiness.com/2016/08/03/gst-towards-a-national-market-part-i/).
- Close on the heels of SBI tying up with a global major, ICICI bank announced its collaboration with Apollo Global Management to set up Asset Reconstruction Company. The ARC market in India has not been able to pick up so far and the entry of these players should certainly give a fillip to the sector. (More on this, later).
- In a major reform in banking sector, RBI issues guidelines for issue of “on-tap” banking license. (For more – http://indiaeconomyandbusiness.com/2016/08/04/on-tap-banking-license-what-does-it-mean/)
- In an important development in Highways sector, government has allowed National Highways Authority of India (NHAI) to monetize (sell the right to collect toll) national highways which are generating toll revenues. The decision is important as it helps NHAI generate upfront cash to be invested in other projects providing momentum to the sector. It also provides fresh business opportunity to private players who had burnt their fingers in BOOT model and shall now have established revenue stream to work with.
- International – In a major upset in the taxi aggregator market, Uber announces the merger of its China business with rival, Didi Chuxing. The deal was quite unexpected and Uber seems to have given up the fight too soon since it had been operating in China for only about two years. Recent changes in the law prohibiting excessive discounting would have helped both the players to build and sustain the business. The merger now leaves open the market for another player with deep pocket to enter. Could it be a precursor to its exit from India too, another tough, competitive market like China??!
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