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Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

September 22, 2022 / 08:03 AM IST

#1. Liquidity in negative zone for the first time in over three years

Liquidity in the Indian banking system, as measured by the Reserve Bank’s daily operations, has slipped into a deficit mode for the first time in over three years. The central bank infused net liquidity worth Rs 21,873.43 crore into the banking system on September 20, the most since May 2019, according to its daily data on money market operations. It means commercial banks, which were parking their excess funds, are now borrowing from RBI through the marginal standing facility window a rate of 5.65 percent.

Why it’s important: As surplus cash in the system dries up, banks are expected to launch initiatives to garner fresh deposits. A sharp rise in credit growth has added to the stress on liquidity.

#2. Market regulator working on new payment system for secondary trades

The Securities and Exchange Board of India is working on a new payment system for the secondary market, which could prevent brokers from accessing their client funds. It will be on the lines of the Application Supported by Blocked Amount process used for subscribing to IPOs, where funds move out of an investor’s bank account only after the trade is confirmed.

Why it’s important: The proposed system could be disruptive for the broking industry as several brokerages earn a float on the funds parked. It could even push up the cost of trading as brokerages could look for alternative sources of income.

#3. Government to infuse additional Rs 19,500 crore to boost solar manufacturing

The cabinet has approved an additional Rs 19,500 crore funding for the production-linked incentive scheme for manufacture of solar modules. The government expects this support to catalyze investment worth Rs 94,000 crore in a sector highly dependent on imports, creating domestic capacity of about 65 GW of fully and partially integrated solar photovoltaic modules.

Why it’s important: The incentive program is expected to create direct employment for 195,000 people and for 780,000 indirectly, besides replacing Rs 1.37 lakh crore of imports, according to government projections.

#4. Wipro terminates services of 300 staff for moonlighting for others

IT company Wipro fired 300 employees after finding out that they were working concurrently for rival technology services companies, including Infosys and Tech Mahindra. All 300 employees had fewer than three years’ work experience and joined the company during the past two years.

Why it’s important: IT firms are toughening their stance against moonlighting, as seen by the latest action by Wipro. It’s an industry wide issue that is difficult to contain.

#5. Government working to streamline approvals at all ports within an hour

The government is working on streamlining approvals to ensure goods for import and export are cleared within an hour of their arrival at seaports and airports to help catapult India’s share in global trade to 10 percent by 2047. Currently, goods take anywhere between 24 and 48 hours for air cargo clearances, and up to 72 hours for sea cargo, according to customs data.

Why it’s important: The new plan is part of the India@2047 blueprint, which aims to make the country one of the world’s top three economies and achieve developed nation status by 2047.

#6. India to be fastest growing economy for next 10 years, says JPMorgan chase chief

India has built an enviable digital infrastructure that will help it achieve the distinction of being the fastest-growing economy in the world for the next 10 years, Jamie Dimon, chief executive officer of JPMorgan Chase, said an interview The springboard for this could be the rerouting of the global supply chain so that companies are not as dependent on China, he said.

Why it’s important: Since the pandemic started, the shifting of the global supply chain solely dependent on China to other locations has opened up an opportunity for India to build its manufacturing capabilities. The country should make the most of it.

#7. Government makes semiconductor chip manufacturing scheme more attractive

The cabinet has sweetened the financial incentives scheme for semiconductor and display manufacturing, aiming to boost investments in these segments. It approved fiscal support of 50 percent of project cost for semiconductor fabs across all technology nodes and display manufacturing, and raised the fiscal support for compound semiconductors, packaging, and other semiconductor facilities to 50 percent from 30 percent. The Rs 76,000 crore scheme for chip and display facilities was first announced in December 2021.

Why it’s important: The incentives offered to all chip and display manufacturers could make India a more attractive destination. They could also further open up the addressable market for chips made locally for mass and niche products.

#8. Sale of land of state-owned pharma firms yet to gain momentum

There are no early takers for land parcels of pharmaceutical public sector undertakings after the process was set into motion in 2016. The bidding was initially restricted to government agencies, and several tenders issued by state-owned companies for sale of surplus land did not find any takers.

Why it’s important: Since the companies have now done independent valuation of the land parcels, it is expected that the process of sale may gather momentum in the months to come.

#9. India plan building a strategic reserve for natural gas as prices head north

India is hastening a plan to set up a strategic gas reserve on the lines of its strategic petroleum reserve amid a global energy crisis triggered by the Ukraine war that has sent fuel prices soaring. Existing liquefied natural gas tunnels and exhausted oil wells are likely to be utilized for the reserve, along with the construction of new underground infrastructure such as large salt caverns.

Why it’s important: India is the fourth-largest LNG importer in the world and demand is only expected to increase. GAIL recently have had to buy gas at exorbitant prices in spot markets, which has pushed the plans for the strategic reserve.

#10. Aviation regulator to hire more personnel as fleets grow in India

India’s civil aviation regulator will hire more than 400 employees in different capacities to bolster its surveillance capability. The recruitments will be for positions in flight safety, air worthiness, training, and the standards department.

Why it’s important: Indian airlines have increased their fleet size to match the pickup in demand for air travel amid the easing of pandemic restrictions. This would naturally lead to increased workload of the regulator.
Moneycontrol News
first published: Sep 22, 2022 08:03 am