Bank strike this week: Services to take hit on January 31, February 1
SBI and other PSU banks have notified their customers that services are likely to be affected due to the proposed two-day nationwide strike starting from January 31. Bank unions across the country have threatened to go strike from January 31 in order to press for wage revision. The United Forum of Bank Unions (UFBU) has given the call for the January 31 bank employees strike. The UFBU is an umbrella organisation that includes 9 bank unions such as All India Bank Officers' Confederation (AIBOC), All India Bank Employees Association (AIBEA) and National Organisation of Bank Workers.
According to a statement issued by the AIBEA General Secretary CH Venkatachalam, wage revision for public sector bank employees is pending since 2017, and there's a lack of clear commitment from the Indian Banks' Association on the unions' demands. The statement made by Venkatachalam read, "IBA's rigid approach has left us with no option than to go on strike. We appeal to the banking customers to bear with us for this disruption in services due to the strike but the same has been forced on us by the bank managements and IBA."
Many public sector banks such as SBI have informed their customers that the services could be affected owing to the strike. In case the proposed strike happens then it will coincide with the beginning of the Budget 2020 session and its presentation. The UFBU also alleged that the approach of the Indian Banks' Association on demands for wage revision settlements was rigid. The UFBU circular read, "In this background, the meeting of UFBU held at Mumbai on January 13 came to the unanimous and inescapable conclusion that intensified agitational actions have to be resorted to press our demands for reasonable resolution and satisfactory settlement."
The unions are demanding 20 per cent hike on pay slip components with adequate loading. The past wage settlement happened in 2017 wherein the employees got a 15 per cent hike for the period November 1, 2012 to October 31, 2017. Earlier in January, several bank employees had gone on strike in support of ten trade unions against the "anti-people policies of the government".
Ather Energy launches its second e-scooter 450X at Rs 1.5 lakh, enters Delhi market in July
The Pawan Munjal-backed electric vehicle start-up Ather Energy, which has fast garnered a reputation for making high-end performance electric scooters, on Tuesday launched its second product, the 450X, at Rs 1.49-1.59 lakh. The company, which is so far present in just two cities - Bangalore and Chennai - also said it was entering four more cities - Delhi, Mumbai, Pune and Hyderabad - with the launch of this scooter in July.
Ather had launched its first product, the 450, in 2018 and has a 30,000 unit production facility in Whitefield in Bangalore. The firm said it has signed an MoU with the Tamil Nadu government to set up another bigger factory in Hosur with an annual capacity of 100,000 units which would be operational later this year.
The company said it has completely upgraded the new scooter over the existing 450 with better battery, more powerful electric motor along with 4G and bluetooth connectivity. It has a 2.9 Kwh lithium ion battery pack against 450's 2.7 Kwh, and a 6 kilowatt motor against the incumbent's 5.4 kilowatt. The bigger motor has improved the scooter's peak torque by 30 per cent to 26 NM against 20.5 NM while offering a higher range on full charge at 116 kilometers from 107 kilometers. It has a top speed of 80 kmph and can do a 0-40 kph sprint in 3.3 seconds against 450's 3.84 seconds.
"The electric vehicle adoption will not happen just because you want to save the world because frankly there are not enough of us who want to do that. It will happen because it offers a better experience to the customers. That is what our scooters do," said Tarun Mehta, CEO and co-founder, Ather Energy. "When we started the company in 2013, the electric scooters on offer in the market were archaic, low speed and powered by lead acid batteries that did not give a good customer experience."
"We wanted to change that and knew customer is willing to pay a premium for a better experience. Over the last two years we can say we have been vindicated as every new player that is entering the market today such as Bajaj and TVS is following our footsteps," he added. "With 450 we set the benchmark. With the 450X we are just raising it a notch."
To allay fears of longevity of the battery, something Ather has learnt is a key worry for the customers over the years, it is also offering subscription-based models with lifetime guarantee on the battery. A customer can pay an upfront amount of Rs 99,000 for this and choose a monthly subscription pack of either Rs 1,699 for Plus or Rs 1,999 for Pro.
Like Chennai and Bengaluru, Ather will also equip the new cities it is entering in with multiple fast charging Ather Grid points and Ather experience centres. Ather Grid under which the company sets up public charging stations will be available in locations such as malls, cafes, supermarkets and tech parks.
It also comes equipped with a 4G SIM card and Wi-Fi along with Bluetooth connectivity, allowing riders to manage phone calls and music on the touchscreen dashboard. The touchscreen dashboard is bigger at 7" and has been upgraded with a color depth of 16M and a Snapdragon Quad Core processor.
Ather was founded by IIT graduates Tarun Mehta and Swapnil Jain in 2013 and Hero MotoCorp, India's largest two wheeler manufacturer, had invested Rs 130 crore in the start-up in 2018. Last year, it had increased its stake to 35.1 per cent.
Oil Drops Below $60 As China Virus Drives Demand Concern
Crude prices extended declines on Monday, dropping below $60 for the first time in nearly three months as the death toll from China's coronavirus rose and more businesses were forced to shut down, stoking expectations of slowing oil demand.
Brent crude fell by $1.79 a barrel, or 2.95%, to $58.90 by 0903 GMT, its lowest since late October. Oil prices last fell below $60 on Nov. 1.
U.S. crude was down by $1.63, or 3 per cent, at $52.55.
Global stock exchanges also fell as investors grew increasingly anxious about the widening crisis. Demand spiked for safe-haven assets, such as the Japanese yen and Treasury notes.
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman Al-Saud said on Monday that OPEC and allied global producers led by Russia can help to balance the oil markets in response to any demand changes.
He also said the Kingdom, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), was watching developments in China and that he felt confident the new virus would be contained.
Markets are being "primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite (the virus') very limited impact on global oil demand," the minister said.
Prince Abdulaziz added that the outbreak of the SARS virus in 2002-2003 did not lead to a significant reduction in oil demand.
OPEC and its allies, known as OPEC+, have been withholding supply to support oil prices for nearly three years and on January 1 increased their agreed output reduction by 500,000 barrels per day (bpd) to 1.7 million bpd through March.
Prince Abdulaziz said on Friday the aim of OPEC+ was to cut seasonal inventory builds that typically occur in the first half of the year. All options would be open when OPEC+ meets in Vienna in March, he said.
Brent crude oil prices dropped by nearly 14% since a spike in tensions between the United States and Iran took prices to a closing high above $68 a barrel on Jan. 6.
The losses since are in spite of a fall in production from Libya by 75% to less than 300,000 barrels per day because of an ongoing blockade on oilfields.
"Investor fears on oil demand have risen considerably, driven by unfavorable U.S. inventories and ... concerns on impact from the coronavirus outbreak," Goldman Sachs said in a note.
Adani Group aims to become world's largest solar power player by 2025
Billionaire Gautam Adani on Wednesday said his group is aiming to become the world's largest solar power company by 2025 and the biggest renewable energy firm by 2030.
In a post, the Adani Group chairman said the age of renewable energy has dawned upon the world faster than most could have anticipated.
"Our vision is to become the world's largest solar power company by 2025 and the largest renewable power company by 2030," he wrote.
In 2019, the Adani Group was ranked as the sixth largest solar player globally and as a part of this journey, "we are well within reach to be India's largest renewable energy company by 2020 and one of the top three global solar energy companies by 2021."
"Our existing portfolio of renewable power generating assets stands today at over 2.5 GW. This is expected to more than double by 2020, with the implementation of 2.9 GW under construction capacity and further record three-fold growth touching 18 GW by 2025. To make this happen we have committed to investing over 70 per cent of our budgeted capex of the energy vertical into clean energy and energy-efficient systems," he said.
GDP to grow at 5.5% in FY21 but downside risks persist
Expecting a marginal improvement over the gross domestic product (GDP) growth of 5 per cent estimated by National Statistical Office for FY20, India Ratings and Research estimates GDP to grow at 5.5 per cent year-on-year in fiscal year 2020-21, however, the downside risks persist. The slowdown, in the agency's view, is a combination of several factors including an abrupt and significant fall in lending by non-banking financial companies, reduced income growth of households coupled with a fall in savings and higher leverage, and inability of the dispute resolution or judicial systems to quickly unlock the stuck capital.
Although some improvement in FY21 is expected, these risks are going to persist. As a result, the Indian economy is stuck in a phase of low consumption as well as low investment demand. Ind-Ra believes a strong policy push coupled with some heavy-lifting (even if this requires using the escape clause as suggested by the FRBM Review Committee headed by N K Singh) by the government is required to revive the domestic demand cycle and catapult the economy back into a high growth phase.
The government has announced a slew of measures recently to prop-up the economy, but Ind-Ra believes they will come to aid only in the medium term. Therefore, all eyes are on the forthcoming union budget, to be presented on February 1, 2020. It expects the shortfall in the tax plus non-tax revenue to result in the fiscal deficit slipping to 3.6 per cent of GDP (budgeted 3.3 per cent) in FY20, even after accounting for the surplus transferred by the RBI. A continuance of low GDP growth even in FY21 means subdued tax revenue and limited room for stepping-up expenditure. "The government will have to construct the FY21 budget in a way that expenditure is rationalised and prioritised and all avenues of revenue generation are tapped. While rationalising, the focus of expenditure has to be on creating direct employment and putting more money in the pockets of the people at the bottom of the pyramid," the agency added.
Gross fixed capital formation (GFCF) has become government dependent, as incremental private capex has been down and out. Despite the fiscal constraints, the government has not shied away from infrastructure spending in the past and even resorted to fund them through extra budgetary resources. Ind-Ra, therefore, believes the government will continue to focus on infrastructure spending and leverage all possible options - budget, off budget including National Infrastructure Investment Fund. Also, since a larger part of the government capex now takes place at the state government level, it will be important to keep a tab on the state government capex as well.
Notably, the higher award recommended by the 14th Finance Commission to the states was mostly spent on capex. Ind-Ra thus expects GFCF and government final consumption expenditure to grow at 5.3 per cent and 9 per cent, respectively, in FY21 (FY20: 1.0 per cent and 10.5 per cent). Further, it expects private final consumption expenditure (PFCE) to grow at 6 per cent in FY21. The key support to PFCE could come from rural demand, which may see an uptick due to a higher rabi output.
Food and crude oil prices are the key drivers of inflation in India. Though oil prices are stable, retail food inflation after remaining subdued and in single digit for 70 months since January 2014, entered into double digits in November 2019 and accelerated to 14.12 per cent in December 2019. This means, in the near term, further monetary easing is ruled out and we may have to brace for an extended pause on the policy rate, it added. However, the minor improvement in FY21 fiscal deficit from FY20's coupled with moderate inflation may keep 10-year G-sec rate in the 6.8-6.9 per cent range by end-March 2021.
Ind-Ra expects external environment to improve somewhat in FY21. This is likely to help India's exports of goods and services to grow by 7.2 per cent and the current account deficit to decline marginally to $32.7 billion, 1.1 per cent of GDP in FY21