Covid-19: Helping rural Bihar and UP get free vouchers to buy green power

What does a town shopper drawing power from decentralized vitality frameworks (DES) do when the Covid-19 incited lockdown hits his paying limit? State governments, similar to Maharashtra, Uttar Pradesh and Haryana, have taken activities of not charging fixed bit of intensity levy from large clients however those associated with DES think that its difficult to purchase power bundles when their pay stream has definitely diminished.
To beat this issue and forestall long haul request demolition for vitality gracefully organizations brought forth by it, Smart Power India (SPI), an activity of Rockefeller Foundation, has started a voucher framework for power customers in 32 towns of Bihar and Uttar Pradesh. In addition, SPI is taking a gander at a different credit extension through smaller scale account establishments (MFIs) for altered advance of up to Rs 20,000 for country clients.
For the principal month beginning June 1, SPI is giving force buy vouchers to clients of ESCOs that work DES. These vouchers will pay 75 percent of their month to month power bill in June, 50 percent in July and another 25 percent in August. "Assortments were dropping, so we did a gathering of all smaller than normal matrix administrators. We said they should proceed with administration whether installment is made or not and be in contact with clients telephonically," Jaideep Mukherjee, CEO, SPI, revealed to Business Standard.
He said they needed to comprehend two things; the reasons buyers need to proceed with purchasing power from DES was dependability of gracefully and furthermore their prerequisite past power.
SPI directed review alongside its five ESCOs in towns of eastern Uttar Pradesh and Bihar. "We perceive what has befallen the country economy. While family request proceeded, organizations were gravely affected and didn't have a lot of money close by," he said. The overview secured three clients sections - family, shops and business foundations to comprehend the effect of Covid-19 lockdown.

Mukherjee said power request from family units and public venues proceeded. Despite the fact that schools and public venues were closed, near 10-12 of them out of in excess of 50 that get power from SPI's five ESCOs are being utilized as isolate offices. These offices can suit around 100 individuals at any one given point in time. Town locals moving back from urban areas are housed in these communities for isolate.

PSBs sanctioned loans worth Rs 6.45 trn in lockdown between Mar 1-May 15

State-owned banks have sanctioned about Rs 6.45 trillion worth loans to various sectors including Micro Small and Medium Enterprises (MSME), agriculture and retail between March 1 and May 15 when businesses were reeling under the impact of the Covid-19 crisis.
Loans sanctioned at the end of May 8 stood at Rs 5.95 trillion.
"Loans worth over Rs 6.45 trillion were sanctioned by PSBs during March 1 May 15 for 54.96 lakh accounts from MSME, Retail, Agriculture & Corporate sectors; A notable increase compared to the Rs 5.95 trillion sanctioned as of May 8," Finance Minister Nirmala Sitharaman said in a tweet.
"Public Sector Banks sanctioned over Rs 1.03 trillion as emergency credit lines & working capital enhancements in the period March 20 to May 15, which is a substantial increase over the Rs 65,879 crore that had been sanctioned up to May 8," she said.
State-owned banks launched an emergency credit line to provide funds to its existing MSME and corporate borrowers in the last week of March, soon after the lockdown was announced.

Under the scheme, the banks provide an additional line of credit of 10 per cent of the existing fund based on working capital limits, subject to a maximum of Rs 200 crore.

Unsure whether India gains if businesses shift from China: Abhijit Banerjee

Nobel laureate Abhijit Banerjee has said that there is no certainty that India will gain from shifting of businesses from China in the wake of the coronavirus pandemic.
Speaking to a Bengali news channel ABP Ananda on Monday evening, Banerjee said that everyone is blaming China for the Covid-19 outbreak as it has origin there. "China is being blamed now for the coronavirus outbreak. Even people are saying that India stands to benefit as businesses will shift from China and come to India. But that may not be true," the economist said.
Banerjee, who is also a member of the Global Advisory Board formed by the West Bengal government to prepare a roadmap for Covid-19 response in the state, said, "What happens if China depreciates its currency. In that case, Chinese products will be cheaper and people will continue to buy their products".
Talking about the proportion of Gross Domestic Product (GDP) planned to be spent by the Centre for a relief package, Banerjee said countries like the US, UK and Japan are spending a high share of their respective GDPs. "India plans to spend less than one per cent of its GDP at Rs 1.70 trillion. We should spend a much-increased proportion of GDP," he said.

The Centre had announced a more than Rs 1.70 trillion package to alleviate the hardship of the poor hit by economic disruption due to coronavirus outbreak. The Economics Nobel Prize winner said that the main problem is that people of the country do not have high purchasing power.

Best of BS Opinion: Covid-19 outbreak, India's MF industry, and more

From the reasons Sebi should revisit the liability side of MFs and why it is absolutely imperative to address the fiscal challenge, both at the Central and the state levels, immediately to how it might be better for governments to bear losses upfront than after the damage is done, here's a selection of Business Standard Opinion pieces for the day.
The debate must now move beyond the binaries of whether we can incur a deficit or not, to how much is necessary without creating macroeconomic instability, writes Neelkanth Mishra, co-head of APAC Strategy and India Strategist for Credit Suisse. Click here to read…
The lack of funds at the state level could weaken their response to the virus, says our top edit. Read on…
India is not in a position to remain in lockdown mode for an extended period, says our second edit. Click here to read…
Nurturing ambition and setting high targets are important attributes of planning and governance. But when planners in the government lose touch with reality, such ambitions become a burden on the whole system, writes A K Bhattacharya. Read on…
Rajendra Chitale, managing partner, M. P. Chitale & Co, & Mahesh Vyas, MD & CEO, CMIE, put together the design of "an impactful, fiscally responsible programme" that removes the bottlenecks in credit decision making. Click here to read…

It’s true that fund managers can’t control stock markets but it’s time they stopped succumbing to investors’ greed, writes Joydeep Ghosh.

Lockdown drags mfg PMI to record low of 27.4 in April as units remain shut

The nationwide lockdown in April, coupled with a crash in export orders led to unprecedented contraction in manufacturing output, said the monthly Nikkei India Manufacturing Purchasing Managers’ Index (PMI) survey released on Monday.
On a worrying note, the survey pointed out that reduced demand led to new businesses collapsing at a record pace in April, while firms sharply pared their staff numbers.
Manufacturing PMI stood at just 27.4 in April, showing the sharpest deterioration in business conditions across the sector since data collection began over 15 years ago. In PMI parlance, a figure above 50 means expansion, while a score below that denotes contraction. PMI had already been on a downward curve, registering 51.8 in March, much below the eight-year high of 55.3 in January.
Despite industrial activity being partially opened after April 20, manufacturing activity could not resume fully as lack of labour and raw materials remained widespread while supply chains could not be established, industry bodies said. “After making it through March relatively unscathed, the Indian manufacturing sector felt the full force of the coronavirus pandemic in April,” said Elliot Kerr, economist at IHS Markit.
Tough situation
India’s overall industrial production rebounded in February to a seven-month high of 4.5 per cent, up from January’s 2 per cent. Figures for March, set to be released next week are expected to be slightly hit since lockdown began late in the month, on March 25. But it can take a bad turn given how the output of the 8-core sectors of the economy saw a record contraction of 6.5 per cent in March.

However in April, the PMI survey pointed out widespread business closures amid demand conditions remaining severely hampered. New orders fell for the first time in two-and-a-half years and at the sharpest rate in the survey's history, far outpacing that seen during the global financial crisis.

Insurance brokers call for securing coverage of properties in lockdown

A group representing insurance brokers has written to the regulator expressing its concern about the companies likely withdrawing coverage for properties due to the nationwide lockdown to contain the coronavirus.

Property insurance policies usually have a condition that says if an insured property remains unoccupied for a period exceeding 15 days or 30 days then the coverage ceases to exist unless the insurer’s consent is obtained in advance.

“Policyholders are concerned that since they are simply complying with the government imposed lockdown and not willfully keeping properties unoccupied, the withdrawal of cover or imposition of new onerous conditions and warranties for continuity of coverage is unwarranted,” said the Insurance Brokers association of India (IBAI) to the Insurance Regulatory and Development Authority (Irdai)

The letter said that insurers, based on the guidance note received from the GIC Re, the largest reinsurer in the country, have advised policyholders that continuity of cover is subject to compliance of specified conditions during the lockdown and prior written approval of insurer needs to be taken for continuity of cover.

GIC Re, in a letter to the General Insurance Council (GI Council), has said retail or small businesses with an insured assured up to Rs 5 crore can be shown leniency and allowed continuity of cover for unoccupied premises up to May 3 or till such time as the lockdown is extended without insurer’s consent.

Pakistan receives $1.39 bn loan from IMF to deal with coronavirus crisis

Cash-strapped Pakistan has received an emergency loan of $1.39 billion from the International Monetary Fund (IMF) to boost its foreign exchange reserves in the wake of the coronavirus crisis.
The $1.39 billion loan is in addition to the $6 billion bailout package that Pakistan had signed with the IMF in July last year to stave off a balance of payment crisis. "SBP (State Bank of Pakistan) has received $1.39 billion under the Rapid Financing Instrument (RFI) from the IMF," the central bank said in a tweet on Wednesday.
Pakistan in March had requested the global moneylender for a low-cost, fast-disbursing loan under its Rapid Financing Instrument (RFI) to deal with the adverse economic impact of the pandemic. The RFI is used to provide financial assistance to IMF member countries facing an urgent balance of payments need without requiring them to put a full-fledged programme in place.
According to a report in The Express Tribune, the loan will push Pakistan's foreign currency reserves apparently to a one-month high above $12 billion. The IMF executive board approved the low-cost emergency loan last week to help Pakistan meet the urgent balance of the international payment needs in the face of the COVID-19 pandemic, according to a recent IMF statement.
With the latest recovery of Rs 0.76 in the inter-bank market on Wednesday, the rupee has cumulatively regained Rs 7.53, or 4.5 per cent, in the past two weeks to a one-month high at Rs 160.36 to the US dollar, the SBP said in a statement.
Earlier, the foreign currency reserves had dropped to a four-month low at $10.97 billion on April 10, 2020, according to the central bank's weekly update on Thursday last week.
The reserves had partly depleted due to capital pullout worth around $2.69 billion by short-term foreign investors from Pakistan's debt market over the past five to six weeks. Many of them sold premature treasury bills and long-term Pakistan Investment Bonds in panic following the fast spread of the coronavirus across the world.

Foreign debt repayments also consumed the foreign currency reserves in the past four months.

Indian IT firms unlikely to lay off employees amid coronavirus lockdown

Despite the grim business outlook owing to the global spread of coronavirus (Covid-19), Indian information technology (IT) services firms are unlikely to resort to any major staff retrenchment, given the sensitivity of the issue.
Though this approach is in line with big US firms such as Salesforce and Morgan Stanley, whose chief executive officers have taken the public stand of not laying off employees, Indian IT firms, however, are not expected to take such a pledge publicly. This is primarily because unlike many US firms, Indian IT firms never had any layoff policy owing to its political sensitivities though employee retrenchment due to “under performance” is common.
Globally, the chief executive officers of prominent companies such as Salesforce, Visa, Morgan Stanley, Citigroup, Bank of America, and FedEx have taken the pledge not to pursue any significant layoffs in 2020.
Even Cognizant, which has Indian roots with 65 per cent of its employees in India, has announced paying an additional 25 per cent of the basic pay to most of its staffers in India.
“Indian IT services firms are not likely to take any public stand on layoffs like many US firms. But firing staffers owing to business disruption and consequent demand slowdown is not likely to happen in big way,” said a source familiar with the thought process. “Increments, bonuses, and variable payouts are going to be on hold for the middle and senior managements.”
Many large corporations, including Bajaj Auto, the Vedanta group, and the Essar group have stated not to reduce their headcount.

As far as Indian IT services firms are concerned, 55-60 per cent of their operating expenses comprise wages. So, any decision not to reduce the staff base can adversely impact their cost structure.

Modi govt adopts flexible approach towards coronavirus epidemic

Current Affairs
After different rounds of gatherings with exporters, merchants, businesses, and different partners, the Narendra Modi government has solidified its reaction to the coronavirus pandemic.
The Center has ruled against a wide based drew nearer and will handle the issue on a case-to-case premise. Authorities have likewise precluded any rollback of import obligation climbs reported in the Union Budget. In the quick term, the Central Board of Indirect Tax and Customs (CBIC) is chipping away at facilitating clearances of products which show up without legitimate documentation.
Banks have been advised by the Center to give connect advances to organizations which have just paid to their providers in China yet lack conveyances yet. Henceforth, they are experiencing a working capital crunch, authorities said. As long as possible, the CBIC and the transportation service have been advised to anticipate times when the stockpile resumes. There is a gigantic inundation of deferred shipments coming into Indian ports.
"Our technique will be to watch and react rapidly, as we don't have the foggiest idea to what extent this emergency will last. An adaptable reaction is increasingly significant. We are persistently observing this intently," head monetary consultant Sanjeev Sanyal revealed to Business Standard.
Modi govt embraces adaptable methodology towards coronavirus plague

On Wednesday, money serve Nirmala Sitharaman said the administration was intently checking effect of the coronavirus on the economy. Sanyal said the Center was ensuring that its reaction to explicit cases was not held up by bureaucratic hurdles.These might be identifying with confirmation or leeway at ports...READ MORE