Recapitalisation Plan In Motion

Last week, the government announced infusion of over Rs 88,130 crore into 20 starved public sector banks by the end of 2018-19. This is part of its Rs 2.1 lakh-crore recapitalisation programme announced in October 2017.

The move will help banks increase credit, crucial for reviving economic growth. However, the state-owned banks, which were reeling under the pressure of non-performing assets or the NPAs – loans that do not fetch returns – must now focus on developing a more robust credit assessment and evaluation process much like their private sector peers. The government  has said that loans above Rs 250 crore will have to go through a special monitoring system. There is need to ensure more transparency in the loan approval system and their performance needs to be monitored regularly.

Finance minister Arun Jaitley said an institutional mechanism will be put in place so that the problems of the past do not resurface in the future. A lot will depend on the timely completion of the recapitalisation exercise to reboot these banks.

Further, banks now need to hit the markets to raise resources and monetise their non-core assets.

The government also needs to push the consolidation process to bring in more efficiency in these banks. This must be taken up on a priority basis.  
— Mahua Venkatesh

India’s Talent Scorecard 
The environment for fostering talent in the country has improved. According to the Global Talent Competitive Index 2018, India jumped 11 ranks – from rank 92 in 2017 to 81 – this year. The report was released at the 48th World Economic Forum annual meeting at Davos, Switzerland. As per the judgement parameters, India’s strengths were talent growth and global knowledge of the talent pool.

Despite India improving its overall ranking, it remains at serious risk of continuing to lose its best talent. While it ranks high on the global knowledge skills, India has a low rating in ‘Talent Retention and Attraction’ rank, ranking 99 and 98, respectively out of 119 countries surveyed. Mumbai and Delhi ranked at the bottom of the ‘Global City Talent Competitiveness Index’, with a ranking of 89 and 90 respectively. The cities were identified on the basis of their reputation and growing footprint in attracting global talent rather than as a function of their size or national-capital status.  
— Himani Chandna

Compliance Begins At Home
According to a new study released during the World Economic Forum event in Davos, India ranks 177th out of 180 countries in terms of efforts towards environment protection. This is in the backdrop of Prime Minister Narendra Modi taking a moral high ground about climate change in Davos.

China, on the other hand, ranks 120th, 57 places above India. According to the biennial report released by the WEF along with Yale University and Columbia University, India has plummeted 36 places in the ranking, in the past two years.

It is high time the central government and environment ministry are cognizant of the many issues that revolve around pollution and climate change, and strive to take action to curb environmental degradation. The biennial study attributes the causes of the low ranking to India’s poor showing in the environmental health policy category, poor air quality (accentuated by the Delhi smog) and a number of deaths due to air pollution. Congo, Bangladesh and Burundi are the only countries that have a lower ranking than India.  
— Anurit Kanti  

Plug-in EV Gets A Push
It seems after a series of parleys with global auto biggies, the government has softened its stance and is planning to do away with 15 per cent additional surcharge levied on specific hybrid vehicles like the plug-in ones.  However, there may not be any duty cuts on such vehicles, which currently attract 28 per cent GST.  Further, traditional hybrid electric vehicles (EV) and micro-hybrids will continue to attract the same duty structure, which is imposed currently.

“While India needs to promote both hybrid and electric vehicles, one will lead to better utilisation of the other. The more hybrids are sold, greater the chances of electric succeeding, and vice versa,” says N. Raja, Deputy MD, Toyota Kirloskar Motor. Strong hybrids are, in fact, electric vehicles fitted with an internal combustion engine. But hybrid is fuel-efficient and low on emissions,” says Raja.

It is to be noted that the government of India is working on an EV policy, which would outline the government’s intent for mid- to long-term policies on electrified vehicles. Even though there was an announcement to move towards all-electric car fleet by 2030, there is no official mandate by the government on the subject. The auto industry has requisitioned for 2047 as the timeline for 100 per cent e-mobility as they are currently moving towards BS-VI emission norms by 2020.
— Avishek Banerjee

Numbers, Indeed, Tell The Real Story
Despite the Modi government’s continued focus on reforms, deal flow in India depicts a rather tepid environment. Even as 2017 witnessed total deal tally of $60.5 billion across 1,147 M&A and PE transactions, recording the highest yearly value so far, the numbers in terms of values represent only a marginal increase of about 5 per cent, a report by Grant Thornton shows. Deal volumes, on the other hand, showed a drop of 23 per cent when compared to the 2016 calendar year. Now, what does this mean? 2017 witnessed 411 M&A deals valued at $40 billion, continuing the declining trend after peaking in 2015. This is mainly due to the absence of multi-billion-dollar deals – last year, there were only three such deals compared to nine recorded in 2016. PE transactions, however, continued to show an upward trend when it comes to value. Going forward, this year will be crucial as all eyes are on the reform measures taken by the government so far. Whether it will reap any benefit is yet to be seen.
—  Paramita Chatterjee