TOI Newsletter for May 23, 2020

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5 THINGS FIRST

Today: IMD’s heatwave warning for areas in Rajasthan, MP, Telangana, Andhra and UP; Air India’s repatriation flights from Male, Dubai; Czech, Hungarian soccer championships resume. Tomorrow: Israeli PM Benjamin Netanyahu’s corruption trial to start; Heavy rainfall doubtless in elements of West Bengal, Sikkim, Assam, Meghalaya and Arunachal Pradesh

1. Surge continues however Centre says lockdown has helped
  • The outbreak: India marked one other single-day file with 6,339 new confirmed Covid-19 instances reported on Friday, of which 2,940 had been reported in Maharashtra, by far the worst-hit state. The surge took the entire instances but to 123,081, practically a 3rd of that are lively instances declared previously 4 days alone. 140 fatalities had been recorded on the day, principally in Maharashtra (63), Gujarat (29) and Delhi (14), including to over 3,700 fatalities until date.
  • The central authorities, nevertheless, cited a couple of projections — unbiased and in-house — to reiterate that the lockdown has helped in limiting the injury. Niti Aayog member (well being) Dr V Okay Paul, who additionally heads the nationwide Covid-19 taskforce, stated as per the Public Health Foundation of India, the lockdown has helped keep away from 78,000 deaths, whereas the Boston Consulting Group (BCG) stated India could have averted 120,000 to 210,000 deaths. The statistics ministry and ISI put that determine at 54,000 averted deaths. Nevertheless, Paul stated: “The fight against Covid-19 is going to be a long haul and its progress in India will depend not just on the behaviour of the virus but also containment measures at the government, community and individual level.”
  • 22 opposition events, after a gathering convened by Congress chief Sonia Gandhi, has issued an 11-point constitution, which, amongst different issues, calls for the Centre to pay a month-to-month quantity of Rs 7,500 for six months to households exterior the earnings tax bracket, distribution of 10kg of foodgrains for an identical interval to needy households and “reversal of all unilateral policy decisions, particularly the annulment of labour laws”.
  • The Indian Railways, in the meantime, has determined to reconvert round 3,200 coaches — or 60% of complete — that had been remodelled into isolation coaches for common use in Shramik Special trains to repatriate India’s inner migrants. The isolation coaches have up to now not been used or had been used solely sparingly; round Rs 2 lakh was spent to transform every coach for Covid-care, railway officers stated.
  • Overseas residents: The residence ministry on Friday restored the fitting of multiple-entry, life-long visa facility to sure classes of Overseas Citizens of India (OCIs) to facilitate their journey to the nation, making them eligible for boarding the particular Vande Bharat flights and ships repatriating Indians from overseas.
2. India’s financial system hasn’t been ‘officially’ this unhealthy in 40 years
  • Sudden transfer: “GDP growth in 2020-21 is estimated to remain in negative territory” — with these phrases RBI Governor Shaktikanta Das lastly admitted to what has been projected all alongside by numerous ranking businesses and funding banks, that removed from attaining a 5.5% actual GDP development in 2020-21, as forecast in RBI’s financial coverage committee (MPC) report in April, the Indian financial system is about to contract, diving proper into adverse territory. However, India’s central financial institution nonetheless shied away from placing a quantity to that “negative territory”. The final time the Indian financial system contracted — by 5.2% — was in 1979-80, or over 40 years again.
    Just how negative can we get (1)
    When India went negative
  • Another lower: The RBI Governor’s announcement, two weeks forward of the scheduled MPC assembly, about India’s GDP development was prefaced by a second price lower in as many months — the repo and the reverse repo price had been lower by 0.40% to 4% and three.35% respectively. The lower is predicted to result in a fall in retail mortgage (for automobiles, homes and so forth) charges (the nation’s largest personal sector financial institution, HDFC Bank has already introduced a lower in its base price by 0.55%, to eight.10% — base price being the minimal price under which banks can’t lend).
  • Cut-to-cut: The final time the RBI introduced a repo price lower — the speed at which it lends to banks — was on March 27, when it lower charges by 0.75%, whereas the reverse repo price — the speed that banks earn once they park their surplus funds with RBI — was lower by 0.90%. If the RBI’s hope was that it might result in higher lending by banks, that was just about dashed as banks deposited a mean of Rs 7 lakh crore day by day with the RBI in April, which went as much as Rs 8.5 lakh crore in May. Another lower, this time solely within the reverse repo price, was finished on April 17, bringing it down to three.75%. However, none of those measures have enthused the banks, who proceed to stay risk-averse in lending — not that folks or firms are lining up with mortgage functions. Will the newest price lower do the trick? If in any respect a touch was wanted, it got here from the inventory markets, the place the benchmark Bank Nifty fell greater than 800 factors in intra-day commerce, to shut with a lack of 2.57%.
3. The good, not-so-good and the ugly of RBI’s price lower
  • The good: Well, the great half is that your own home mortgage charges will come down, if the banks resolve to go on the repo price lower of 40 foundation factors — 0.40% — to you. Depending in your mortgage quantity and the tenure, as additionally the speed of curiosity charged, you could possibly find yourself saving a couple of hundred to a couple thousand rupees per thirty days in your EMI. However, how quickly your EMIs scale back will depend upon whether or not your own home mortgage is linked to exterior benchmarks just like the repo price or to the marginal value of funds based mostly lending price (MCLR), by which case the discount in EMI could take time.
    loan
  • The not-so-good: While the RBI’s extension of the moratorium on mortgage repayments by one other three months — taking the entire moratorium interval to 6 months — appears to be like engaging on paper, it really pinches the debtors extra, ought to they decide for it, when it comes to greater curiosity outgo or a rise within the mortgage tenure. That might additionally clarify why nearly 20% of SBI’s debtors have availed of the moratorium facility. For those that avail of the moratorium within the early phases of the mortgage tenure, the gathered curiosity outgo on the finish of six months on August 31 will likely be an enormous quantity — since within the preliminary years, the curiosity element of the EMI might be as excessive as nearly 90%. See calculations right here
  • The ugly: The unkindest lower of all of them, will maybe be felt by India’s senior residents, lots of whom are largely dependent for their monetary wants on the curiosity earnings from their financial institution deposits. The nation’s largest financial institution, SBI, for occasion, which had lower its financial savings account charges to 2.75% after the final repo price lower, has diminished its time period deposit charges of between 2 to three years for senior residents from 6.40% to start with of March to 6% in May. These charges are sure to return down even additional after Friday’s price lower. Moreover, the chance that the RBI will likely be extra amenable to one other price lower can’t be dominated out, on condition that boosting the financial development stays high precedence for now
4. Taking inventory of Amphan, both aspect of the Sundarbans
  • The Sundarbans as soon as once more proved to be the important thing saviour for Bangladesh in occasions of pure calamities because the thick mangrove forest — shared collectively with India, with practically three-fifths (6,017 sq km) in Bangladesh — absorbed the fury of Cyclone Amphan. “If the Sundarbans were not there, the entire Khulna Division would be like a desert without any tree or human habitation, because the cyclone would bring salty sea water and destroy all vegetation,” eminent Bangladeshi wildlife and forest ecology knowledgeable Dr Reza Khan advised The Daily Star.
  • The Sundarbans had additionally shielded Bangladesh throughout Cyclone Sidr and Cyclone Aila — in 2007 and 2009, respectively — vastly limiting the variety of casualties. “The mangroves do not just help reduce wind speed drastically when the storm moves through the delta but even helps break the waves and the surge triggered,” Md Moinuddin Khan, forest conservator of the Khulna area, advised Dhaka Tribune. It couldn’t be instantly ascertained how a lot injury the forest itself had sustained.
  • The image is grimmer although on the Indian aspect. Take Sundarbans’ Gosaba, an administrative space of the river delta that juts into the ocean. Amphan’s fully destroyed round 26,000 properties and broken one other 14,000 there, knowledgeable native catastrophe administration official Pradip Kumar Dalui. It additionally broken some 19 km of embankments round Gosaba, inflicting 13 breaches that led salty water to inundate swathes of land, he added. If the embankments aren’t mounted, “we won’t be able to save the Sundarbans”, Dalui told Reuters by phone.
  • Rising salinity in water will put tens of thousands of people out of work — think water unfit for irrigation. And the affected people can’t migrate to Kolkata or other cities in search of work because of the Covid-19 pandemic. For the tens of thousands who have returned to the Sundarbans as part of the reverse migration, Amphan is “like a death knell”, The Telegraph quoted Sankar Halder, the founder of an NGO that works in several blocks of the Sundarbans. A survey by the NGO in five of the 29 blocks had revealed that close to 5,000 families were staring at starvation during the lockdown.
  • Meanwhile, PM Narendra Modi announced an advance financial assistance of Rs 500 crore for Odisha and an advance interim assistance of Rs 1,000 crore for West Bengal on Friday. He also announced ex gratia of Rs 2 lakh to the families of the deceased and Rs 50,000 to the injured from the PM’s Relief Fund. The death toll from Amphan stood at 86 for India, and 31 for Bangladesh.
6. Pak plane crashes, over 80 feared useless
  • An Airbus A320 passenger plane operated by the state-run Pakistan International Airlines, with 99 people on board, crashed in a crowded neighbourhood near the Karachi airport on Friday. At least 80 people are feared dead, though as of midnight airline CEO Arshad Malik said 41 were confirmed dead. The Pakistan civil aviation ministry said two passengers have survived. Karachi mayor Wasim Akhtar said at least five or six houses were destroyed.
  • Among the passengers were military officers, a former parliamentarian, an executive of a major television news channel and several prominent bankers from national and international banks, officials said. Pak publication Dawn reported that one of the two survivors was the president of Bank of Punjab, Zafar Masood.
  • A transmission of the pilot’s final exchange with air traffic control, posted on the website LiveATC.net, suggested some technical difficulty minutes before the crash, “We are proceeding direct, sir — we have lost engine,” a pilot said. “Confirm your attempt on belly,” the air traffic controller said, offering a runway. “Sir – mayday, mayday, mayday, mayday Pakistan 8303,” the pilot said before the transmission ended. “Our plane [an Airbus] A320 which was coming from Lahore to Karachi was on final approach,” said airline chief Arshad Malik. “The last words we heard from our pilot were that there is a technical problem and he was told on final approach that he has both runways available to him to land on. But the pilot decided that he wanted to go around.”
  • The last passenger air crash in Pakistan was on December 7, 2016, when a PIA ATR-42 crashed en route from Chitral to Islamabad, killing all 48 passengers and crew.
7. Khashoggi household ‘forgives’ his killers
  • The household of Jamal Khashoggi has launched a press release saying they have forgiven the Saudi journalist’s murderers. Published by Khashoggi’s son Salah — he lives in Saudi Arabia and had earlier obtained monetary compensation from the royal courtroom for his father’s killing — on Friday on Twitter, the Arabic translation reads: “In this blessed night time of the blessed month [of Ramadan] we bear in mind God’s’ saying: ‘If an individual forgives and makes reconciliation, his reward is due from Allah.’ Therefore, we the sons of the Martyr Jamal Khashoggi announce that we pardon those that killed our father, searching for reward from the God almighty.”
  • A prominent critic of the Saudi government, Khashoggi had been writing for the Washington Post newspaper and living in the US before he was killed inside the kingdom’s consulate in the Turkish capital of Istanbul in October 2018. And while Saudi officials maintain his death was a result of a “rogue operation” and was not state sanctioned, their account of events has been doubted internationally, including by some intelligence agencies and the UN.
  • After offering changing accounts of his disappearance, Saudi authorities eventually submitted he was killed in a botched operation by a team tasked with getting him to return to the country. Last December, a court sentenced five people to death and three to jail for their role in his killing after a secretive trial in Riyadh. A UN special rapporteur, Agnes Callamard, labelled the Saudi trial the “antithesis of justice” and urged an independent investigation.
  • However, Salah said of the December verdict that “it has been honest to us and that justice has been achieved”. Experts believe Friday’s act of reconciliation may have a political motive — the country’s rulers might be attempting to deal with the issue of Khashoggi’s killing in order to more easily engage with democratic nations. Death sentences can be commuted in light of a pardon by the victim’s family under Islamic law, but it is not clear whether that will apply in this case.
8. Pandemic prompts a radical change in Facebook
Facebook campus at Menlo Park, California

Social distance: Facebook, the social media giant, plans to allow many of its employees, including future recruits, to work from home forever, Mark Zuckerberg, its founder and CEO, said Thursday, a radical shift from the Silicon Valley office culture of enabling dining, bathing, sports, gym and other activities, and the inactivity of a nap all within their premises. In a video chat with employees, he said the company would start “aggressively opening up remote hiring”, and about half its workforce would work remotely over the next five to 10 years. “We’re going to be the most forward-leaning company on remote work at our scale,” Zuckerberg said later in an interview.

Why it matters:

  • Work from home has gained traction as companies look to overcome the social distancing mandate forced upon by the pandemic. But most of these are temporary measures. Facebook is going further. “We’re going to let people request to work permanently remotely. We’re going to focus on experienced employees rather than new college grads,” Zuckerberg said. Twitter CEO Jack Dorsey had announced similar plans a few days earlier.
  • Gentrification: Counties in the US to Europe have complained of technology companies causing a spike in the rental market when they move-in to a locality — demand from high-earning employees pushes up home rentals, which then become unaffordable to the others. And large tech companies often cause a network effect by attracting similar companies keen to tap the talent pool, resulting in the gentrification of the locality.
  • Such criticism prompted Microsoft early this year to committee $250 million to affordable housing in Seattle, Washington, adding to the $500 million it already had. Apple last year pledged $2.5 billion for affordable housing and mortgage assistance in the Bay Area, California. A permanent remote working policy could ease the burden on host counties.
  • Pushing boundaries: An aggressive extension of remote working could also free overseas recruits from the hassle of immigration — which is increasingly getting stringent. Of course, there are several legal and labour challenges to truly this as we speak. But remember, tech companies often have short-term overseas postings. Also, perhaps countries that contribute the workforce would fancy the idea if the job market is under stress? Big Tech has mastered the unencumbered flow of capital across borders and would be tempted to push the boundaries on human capital. Move fast and break things?
9. Jio Platforms grabs a ‘five-for’
  • American private equity giant KKR & Co became the latest global firm to buy a piece of Jio Platforms. KKR is forking out Rs 11,367 crore for a 2.32% stake in Jio, becoming its fifth investor in a month, said Reliance Industries (RIL) in a statement on Friday. The deal is also KKR’s largest investment in Asia.
  • So far Ambani has raised a combined Rs 78,562 crore in a month from selling roughly 17% in Jio. (The Jio investments started with a bang exactly one month ago, on April 22, with social networking giant Facebook’s stake purchase in the venture. Since then, three US private equity firms — Silver Lake Partners, Vista Equity Partners and General Atlantic — have also invested in Jio.) As of Friday, Ambani had a net worth of about $53 billion, making him the richest person in Asia. The deals are all part of the plan to make RIL net debt-free before Mar. 31, 2021.

Jio graphic

  • KKR’s investment valued Jio at an equity value of Rs 4.91 lakh crore — the same amount as the previous General Atlantic deal and a 12.5% premium to the first investment, by Facebook. (Jio’s enterprise value was Rs 5.16 lakh crore.)
  • KKR, which has been investing in India since 2006, manages multiple alternative asset classes, including private equity, energy, infrastructure and real estate, among others. The firm has invested more than $30 billion across over 20 tech companies, including ByteDance, the Chinese owner of the popular short-video app TikTok. KKR will invest in Jio through its Asia private equity and growth technology funds.
BEFORE YOU GO
10. A quiet Jamat-ul-Vida in Srinagar

Streets of Nowhatta, Srinagar, wore a deserted look as no prayers were offered at the historic Jamia Masjid on Friday. The last Friday of the holy month of Ramzan, called the Jamat-ul-Vida, is usually marked with special prayers and charity. Lockdown restrictions were, however, eased in Srinagar’s Lal Chowk so that people could do shopping ahead of Eid al-Fitr. Eid al-Fitr or the “festival of breaking the fast” is observed after the sighting of the crescent moon. Religious leaders of Kerala have, however, said Eid will be marked on Sunday in the state (same as Saudi and UAE). Photo: TOI/Bilal Bahadur

Answer to NEWS IN CLUES
NIC

Sourav Ganguly. The BCCI has moved the Supreme Court seeking important changes in its constitution that would allow the board president and secretary Jay Shah to complete their three-year terms by ducking the three-year cooling-off period prescribed by the Justice Lodha panel and approved by the apex court, applicable to both from July and June, respectively. In the application filed by treasurer Arun Singh Dhumal, the board said these changes were approved at the AGM on December 1 last year and it was seeking leave of the SC, as per its Aug. 9, 2018 order, to implement them by changing the board’s constitution.

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