Business Today 2-Jun-19

THE INDIAN corporate bond market is jittery. Debt mutual fund managers are also feeling the heat. And the commercial paper market has almost dried up. The general nervousness is because of a chain of events that started with the first Infrastructure Leasing & Financial Systems (IL&FS) debt default that took place in June last year. Nobody knows which is the next nonbanking financial sector (NBFC) company or Housing Finance Company (HFC) that will find it difficult to repay its debt. And what kind of chain reaction that will set off. Initially, it seemed that the swift action of the government in replacing the board of IL&FS would solve the crisis. IL&FS had over ₹91,000 crore debt, but it was apparent that not all of it would be unpayable. After all,…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES Nobody Is Batting for “Dirty” Diesel Anymore Today, diesel is dying a slow death, and from policymakers to manufacturers to consumers, nobody is rooting for it businesstoday.in/diesel-demand Bold & Beautiful! TV Shows, Movies Are Now About Good Content Content-focussed films and unconventional originals are finally feeling the need to tell good and hard-hitting stories businesstoday.in/shows.films-content NBFC Bubble: Bursting in Phases? An increasing number of NBFCs face liquidity crunch after a sharp rise in interest cost hit their repayment ability businesstoday.in/nbfc-liquiditycrunch Why Ola’s Electric Leap of Faith Could Be a Boon for Auto Sector With a plan of introducing one million electric vehicles across all categories by 2021, Ola Electric has raised close to ₹400 crore from investors, among others businesstoday.in/olaelectric-investors NEWS Coming Soon:…

THE ODISHA GOVERNMENT’S disaster management during the recent Cyclone Fani has been lauded the world over. Despite a wind speed of close to 200 kilometres per hour, Cyclone Fani led to 35-odd casualties as opposed to over 10,000 deaths in the 1999 Super Cyclone, thanks to timely warning from the meteorological department. Over 1.2 million people were shifted to safety. However, with natural disasters becoming increasingly common, it’s time the government focuses on building disaster resilient infrastructure. While Odisha has been successful in minimising human casualties, it’s still struggling to have power and telecommunication networks up and running. “The cost of rebuilding the electricity infrastructure alone runs into several hundred crores after each cyclone. We have to rebuild it pole by pole. We have to explore setting up transformers underground…

THE UNION GOVERNMENT is staring at a tax revenue shortfall of almost ₹1 lakh crore if not more. Of the ₹14.8 lakh crore tax revenue it had expected to collect, it could manage only ₹11 lakh crore till end-February, leaving a gap that is too wide to be covered in March. This could have a ripple effect on the economy in the next financial year as experts believe the fiscal deficit number for the last financial year may not look good despite the government’s efforts to dress up its books. The fiscal deficit in absolute terms was already ₹8.5 lakh crore against the ₹6.3 lakh crore revised estimate. This revised estimate was arrived at by factoring in tax revenues of ₹14.8 lakh crore. With the government having already revised its…

SEBI’S ORDER on NSE’s colocation (colo) case has put the spotlight on regulations around colo facilities and algorithm (algo) trading and the fact that it is hard to prove fraud in such cases. Although Sebi asked the NSE to disgorge ₹1,100 crore, it could not establish if the exchange has violated regulations. The penalty pertains to lax corporate governance and is only half the ₹2,000 crore it earned from colo between September 2016 and December 2018. At a time when artificial intelligence (AI)-based software programmes are able to exploit millisecond changes in stock prices, it is only obvious that the quantum of high-frequency trades (HFTs) will swell. Colo, dark fibre and AI are the future. Meanwhile, issues around unfair access, information asymmetry and possibility of flash crash linger on. Last…

IT IS JUST the second year but the largest trade infrastructure in the history of mankind, a signature project of Xi Jinping, seems to lose steam. European nations, the US, Russia, Japan and India didn’t turn up for the three-day second Belt and Road Forum for International Cooperation. Those who came lamented that BRI projects continue to impact freedom and openness in the region. Also, the stringent Chinese debt conditions and size of the projects make sustainability questionable. Xi has agreed to recalibrate projects and discuss issues of exclusivity, sustainability and standards. But these players are pushing further to convince Beijing to make the BRI more inclusive by partnering with other countries and organisations, including development banks. Xi has shown the first signs of accommodating, but its impact on the…