India’s exports fall and imports shrink in the month of June. Motor Vehicles Act amendments will not be binding on states, Gadkari says. DuckDuckGo to take on Google Search Engine. Quantum computing has astronomical benefits – but a snag might slow progress. Government will keep sugar export subsidies in place despite complaints at the WTO. Consumer spends on telecom services stabilize, but volume growth falls. 33% Y-o-Y fall in postpaid revenue reported. Consortium of lenders led by SBI oppose NCLT’s ruling in Essar Steel sale. Government will soon issue its first sovereign bonds in foreign currency. Electric airplanes take off. US Congress will hold two days of hearings on Facebook’s Libra cryptocurrency.
Lack of All Trades: June may not have been a very juicy month for India. Exports shrank (-9.71%) for the first time in nine months while imports fell (-9.06%) for the first time in four months.
Two Factors are Chiefly to Blame for this “Tradepression”: One, the US-China trade war, which shows no sign of abetting despite talks restarting. And two, the temporary shutdown of two refineries in Mangalore and Jamnagar, which particularly hit petroleum exports (-33%).
Sweet Talkin’ the WTO: After years of bumper cane harvests, the government began providing incentives to sugar mills to alleviate rising inventories by boosting exports.
But these export subsidies hurt global sugar prices, which rebounded by a mere 2.1% this year after plunging more than 20% in 2018. In retaliation, countries like Brazil and Australia approached the WTO.
Now it is being reported that, despite the complaints at the WTO, the government will keep these export subsidies, but change the way these incentives are provided “without violating the WTO framework”.
Consumer spends on telecom services stabilize, but volume growth falls. 33% Y-o-Y fall in postpaid revenue reported. Consortium of lenders led by SBI oppose NCLT’s ruling in Essar Steel sale.
The Balancing Act: As per Telecom Regulatory Authority of India’s (TRAI’s) latest performance indicator report, consumer spends on telecom services, which had been falling for several quarters, have stabilised recently.
Aggregate consumer spends on mobile services stood at c. INR35,000cr in the quarter ended March, translating to an annual spend of INR1.4L cr, 5% higher than INR1.34L cr in the September 2018 quarter.
The development comes on back of stable pricing and implementation of minimum recharge plans by telecom operators.
More Hurdles En Route Victory: Now while the revenues seem to have stabilized, the telecom industry has reported a decline in voice volumes, which grew at merely 18%. Further, 4G data usage per subscriber grew a modest 1.6% sequentially in the March 2019 quarter.
Additionally, the postpaid segment continues to witness a sharp decline in average revenue per user (Arpu). Consumers have been downgrading their usage plans, reflective in the 33% year-on-year (YoY) fall in postpaid revenue.
We Object, My Lord: A consortium of lenders led by SBI is seeking an immediate stay on a National Company Law Appellate Tribunal’s ruling in the Essar Steel sale case. The ruling said that money has to be shared proportionately among the lenders, i.e., while financial lenders would get 60.7% of their claims, operational creditors, or suppliers to the plants, will also get around 60% on a pro-rata basis.
The lenders claim that the ruling would place secured creditors like banks at par with unsecured ones such as vendors. This would lead to a “severe plunge” in the rate of recoveries and expose the banks to “grave financial distress”.
Government will soon issue its first sovereign bonds in foreign currency. Motor Vehicles Act amendments will not be binding on states, Gadkari says.
Venturing Overseas: For the first time, the Indian government is set to issue sovereign bonds in foreign currency. This is being done in a bid to diversify government borrowing.
According to reports, the release of these sovereign bonds will be in phases, with the first batch to be $3-4bn in value and with a duration of 20 years. The bonds are likely to be launched simultaneously from different financial hubs including London, Singapore, Hong Kong and New York. The launch will be preceded by “roadshows” by top officials (including the FM and RBI Governor) to drum up investments.
Favouring Federalism: On Monday, the government again introduced a Bill to amend the Motor Vehicles Act to provide for steeper penalties for violations, protections for good Samaritans and simplified insurance provisions.
However, some aspects of the Bill came under fire by some Parliamentarians who said it infringes on states’ rights and would hurt rural connectivity. Transport Minister Nitin Gadkari has now said that the Bill isn’t binding on states and it would be up to them implement the amendments.
The duck that’s taking on Silicon Valley giants. Electric airplanes take off.
A Duck With A Dream: When it comes to search engines, “Google” and “internet search” are synonymous. There are over a hundred search engines, but Google is king.
How do you beat a Goliath? Yes, with a David. But how do you beat a Goliath so huge his market share is a ridiculous 92.62%?
One rival search engine is attempting this near-unimaginable task. DuckDuckGo began in 2008 but really took off after 2013 when the Snowden affair brought surveillance and privacy into mainstream debate.
Why Did This Help DuckDuckGo?: Because DuckDuckGo projects itself as Google with a conscience. Its main selling point is that it does everything Google search does but without tracking you (something the Mountain View company is very, very proficient at).
The growing concerns over online privacy helped DuckDuckGo, which tripled over the past two years and now handles 40 million searches a day. But its share of the search engine market is still below 1% – a tiny drop in an ocean the size of Google.
Electric Skies: Meanwhile, airplanes are going electric. A five-passenger plane fitted with an electric motor took flight in Los Angeles recently while Uber is planning electric aerial transportation services for launch in 2023.
US Congress will hold two days of hearings on Facebook’s Libra cryptocurrency. Quantum computing has astronomical benefits – but a snag might slow progress.
That Zucks: There’s an ancient saying that as long as the sun rises in the east and sets in the west, not a day can pass without Facebook floundering into more controversy.
This time, what’s gotten the social media behemoth in dire straits is not its numerous privacy violations or its anti-competitive behavior (those investigations are still ongoing, but separate). Instead, it’s the plan to disrupt global finance with a new digital currency, Libra.
After President Trump, the Treasury Secretary and the Head of the Federal Reserve, now Congress has raised concerns over Facebook’s new pet project. The Senate Banking Committee will engage in two days of hearings on Libra beginning Tuesday.
The Quantum Menace: Not enough people have the knowledge required to be employed in quantum computing research. Companies looking to invest in this futuristic tech are struggling to fill vacancies because of the sheer lack of people trained in fields like quantum mechanics, cryogenics or materials science. Andrew Fursman, for example, said it took his quantum software startup five years to employ just 100 people.
This has the potential to seriously stall progress in one of science’s most promising avenues – indeed the future of technology. This is harmful not just from a research standpoint but also from a practical one – quantum computing could help us everywhere from drug development and clinical care to climate change action, cybersecurity and market analysis.
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