Business Today 3-May-20

From here on, the world history will probably be quoted in pre-coronavirus and post-coronavirus eon stamps. For it is not just a healthcare shock to humanity. It’s an economic shock, humanitarian and livelihood shock, a consumption shock, a stock market shock, fractured supply chain shock – all rolled into one. UNCTAD believes that India and China are among the few world economies least likely to fall into recession. But don’t be surprised if it chooses to revise India outlook. World Bank already has – to the most pessimistic outlook yet – a near flat growth of 1.5 per cent for FY21. Even though India has a host of positives going for itself. First, whether it is the Modi government’s precocious, pre-emptive lockdown (now sealing), the warm weather, the universal BCG…

FOREX RESERVES DIP $12 BN Foreign investors panicked and withdrew money in week ended March 20. Gold reserves fell $1.6 billion to $27.9 billion ($ billion) FOREIGN EXCHANGE RESERVES FOREIGN CURRENCY ASSETS GOLD SPECIAL DRAWING RIGHTS RUPEE LOSES The rupee weakened against the dollar as more cases of coronavirus were reported EXPORTS REFUSE TO PICK UP… Three of the top five exports in terms of value saw negative growth in the April-February period INDIA’S MAJOR EXPORTS ($ BN): APRIL-FEBRUARY …THOUGH IMPORTS TOO CRASH Imports fell at a higher rate of 7.3 per cent; this was due to lower crude oil prices towards the end of the period and decline in domestic demand INDIA’S MAJOR IMPORTS ($ BN): APRIL-FEBRUARY $10.3bn Fall in foreign currency assets, a major component of the overall…

*MCLR: Marginal Cost of Funds Based Lending Rate. Average of scheduled commercial banks considered; Source: Care Rating, RBI 4.4% The current rate, after a reduction of 75 basis points, is the lowest since 2001 6 Number of times the central bank has reduced repo rate since January 2019 59 BASIS POINTS Fall in average MCLR* since January 2019; much lesser than the fall in repo rate. So, retail loan interest rates have not reduced much…

Q What keeps you going? What makes you wake up every morning thinking about helping others? Trust me, it gives me immense satisfaction when I extend a helping hand to the needy. I believe one should find a little time to help make life better for one’s fellow citizens. That’s why we’re called human beings. It’s in my DNA to serve society in whatever way possible. My grandfather, the late Chiranjilal Murarka, was a well-known philanthropist of his times and, then, my father, Kashi Murarka, who now continues to do a lot in terms of public service and social betterment. I have long learned that live life as if there is no tomorrow, end of our journey on Earth is inevitable, why not do what’s best possible for others.” Q…

As the coronavirus pandemic continues to disrupt the economy, companies across the board are facing the heat. The CEO of a large consumer products company says though some of his production lines are operating – producing sanitisers, soaps – nearly 70 per cent of the business has stopped completely. “It’s a question of survival more than future investment. We are partially shielded because of the nature of our business, but activities in infrastructure, construction, transportation and entertainment sectors have come to a halt. Supply-side issues are affecting businesses that are still operating. We don’t expect things to normalise in the next three-six months,” he says. Most of his views are echoed in the latest Business Confidence Index (BCI) survey for the January-March period. A total of 67 per cent respondents…

The only way to control the raging global coronavirus pandemic, the biggest health crisis of our times, is to switch off the global economic engines through a complete lockdown and social isolation. The resultant economic pandemonium, though, is the last thing that governments want – or can afford. The dilemma leaves nations performing a balancing act, of finding answers to a very complex problem that needs health, social and economic solutions, all at the same time. Business Today brings together five renowned names in macroeconomics, public administration and public finance for their views on how to re-start India’s post-lockdown economy when restrictions are lifted, even as the country continues to fight the disease outbreak. Here are their prescriptions. “GIVE CREDIT, WORKING CAPITAL, EXPORT SOPS, FISCAL INCENTIVES. NOT SEQUENTIALLY, BUT SIMULTANEOUSLY”The minimum…