Congress to hold 10-day protest against Modi govt over economic slowdown
The Congress will hold nationwide protests against the Narendra Modi government over economic slowdown in the country from November 5 to November 15. "The party will raise issues surrounding the Regional Comprehensive Economic Partnership (RCEP), current economic crisis, mounting unemployment, spiralling price rise, bank frauds, job losses in public and private sectors, and farm distress," Congress General Secretary KC Venugopal said in a statement.
The protests will first be held across state capitals and will culminate in a massive protest in Delhi in November-end. All state-level party workers, PCC presidents, CLP leaders and senior AICC functionaries will take part in the agitation.
"Congress party workers and its volunteers will raise the voice of the people and try to make this insensitive Central government accountable for the countless miseries and sufferings that it is causing," the statement said.
In this regard, Congress President Sonia Gandhi will chair a meeting of AICC general secretaries, state in-charges, heads of frontal organisations and departments on November 2. The party has deputed a total of 31 senior Congress leaders and observers across states/UTs to monitor the agitation.
Ahead of the party's mega protest against the Modi government, former Congress chief Rahul Gandhi has left for a foreign trip. However, Gandhi will return to India in first week of November, reported ANI. Recently, BJP chief Amit Shah had also taken a jibe at Rahul Gandhi for being on "holiday" during Assembly elections.
7th Pay Commission: Modi govt makes big announcement for J&K, Ladakh; 4.5 lakh employees to benefit
In a big announcement, the Modi government has said all government employees of the Union Territories of Jammu and Kashmir and Ladakh will get financial facilities as per the 7th Pay Commission's recommendations from October 31. The decision will help over 4.5 lakh government employees of these UTs. The government will bear around Rs 4,800 crore worth of cost due to the implementation of the 7th Pay Commission in the UTs.
"Union Home Ministry has issued orders in this regard. The move will benefit 4.5 lakh government employees, who are working in the existing state of Jammu & Kashmir, and will become the employees of UT of Jammu & Kashmir and UT of Ladakh from 31st October 2019," a government statement said.
Union Home Minister Amit Shah has also approved the proposal to pay all other allowances, including children education allowance, transport allowance, LTC, fixed medical allowance, to these employees, the government stated.
"The annual financial implication of 7th CPC allowances like children education allowance, hostel allowance, transport allowance, LTC, fixed medical allowance etc. in respect of 4.5 lakh Government employees of existing State of Jammu & Kashmir shall be Rs 4800 crore tentatively," said the statement.
The Modi government had passed the Jammu and Kashmir Reorganisation Bill, 2019, in Parliament in August, and had announced that all the financial facilities that are being given to the employees of other UTs -- as per the recommendations of 7th Central Pay Commission -- will soon be extended to the employees of Jammu & Kashmir and Ladakh.
"Reduce Centre's Equity": Abhijit Banerjee's Solution To Banking Crisis
Nobel laureate Abhijit Banerjee said today that the government's equity in public sector banks should be reduced to below 50 per cent in order to end fear psychosis among bankers.
"The banking crisis is frightening. We should worry about it. We should be more vigilant...One day the bank is fine and then suddenly it is in crisis...We should be able to stop the crisis much ahead before it happens," the renowned US-based economist said, addressing a press conference.
"We need some important and aggressive changes," he asserted.
The fear of investigation by the Central Vigilance Commission (CVC) in default cases had paralysed the banking system and bankers do not want to lend.
"Reducing government equity in public sector banks to under 51 per cent will take them out of the CVC's purview," he said.
Refusing to get into questions on the economy or any controversial topic, Dr Banerjee said in a meeting earlier in the morning, Prime Minister Narendra Modi had "cracked a joke" that the media was trying to trap him and "get him to say anti-Modi things".
Dr Banerjee shares the Nobel with Esther Duflo - they are married - and Michael Kremer.
His criticism of the state of the economy and the government's policies fueled a debate with BJP leaders like Union Minister Piyush Goyal hitting back sharply, calling him a "left-leaning" economist.
Against this backdrop, his meeting with the Prime Minister generated much interest.
SBI Savings Accounts To Fetch Lesser Interest From November 1
State Bank of India (SBI), the country's largest lender, will reduce the interest rates on deposits in retail savings accounts from November 1, 2019. In a statement last week, the bank said that "in view of the adequate liquidity in the system", interest rates on savings accounts with balances up to Rs. 1 lakh would be lowered by 25 basis points (bps) or 0.25 percentage points. The cut in SBI interest rate follows reduction in the repo rate - the key interest rate at which it lends short-term funds to commercial banks - by the Reserve Bank of India (RBI).
On savings deposits, SBI has announced a revision from 3.50 per cent to 3.25 per cent on balances up to Rs. 1 lakh from November 1, 2019, according to its statement. The interest rates on savings account deposits above Rs. 1 lakh has been kept unchanged.
Earlier this month, the RBI lowered the repo rate by 0.25 percentage point to 5.15 per cent, marking the fifth straight bi-monthly reduction in the key interest rate so far this year. The RBI has cumulatively lowered the interest rate by 135 basis points this year.
In May this year, SBI had linked its large savings deposits rates to the RBI's repo rate, offering an interest rate of 275 basis points lower the repo rate on savings account deposits with balance of over Rs. 1 lakh.
SBI has also reduced fixed deposit (FD) interest rates across select maturities. The SBI FD rates have been lowered by 10 basis points (or 0.10 percentage point) across a select tenor in the retail segment. In bulk segment, SBI FD interest rates have been reduced by 30 basis points (or 0.30 percentage point).
For retail domestic fixed deposits up to Rs. 2 crore, SBI currently pays interest rates to the tune of 4.50-6.40 per cent to the general public over a maturity period of seven days to 10 years, according to the bank's website - sbi.co.in.
Festive cheer limited to e-commerce players this year
Contrary to expectations, the ongoing festive season has failed to bring cheer to most consumer industries, be it consumer durables or travel. The deepening economic slowdown that has gripped the country has clearly caused households to tighten their purse strings - while sales typically spiked 15-20 per cent over the September to January period in the past, growth this year has been largely lacklustre at around 3-9 per cent across these consumer segments.
According to stakeholders, although business is not shrinking, it is growing painstakingly. Much now rides on how the Diwali week pans out followed by the Christmas to New Year run up, but consumer companies and mall owners are a skeptical lot. The general pessimism of the consumers is similarly weighing heavily on the tourism sector where the bookings have gone down sharply over the past two months.
The e-commerce sector is the only one that is bucking the trend to post strong growth despite the downturn. According to a RedSeer report, the whole festive month till end-October is expected to generate up to Rs 39,000 crore in sales. Significantly, e-tail festive sales are largely a two-player market with Flipkart and Amazon dominating over 90 per cent of the market share during this period.
Here's a detailed look at how these three segments are faring:
The festive season generates close to 50 per cent of revenues of most mall operators, but low consumption appetite coupled with prolonged monsoons and the Shradh period, which ended on September 28, impacted footfalls. At most malls and lifestyle retail outlets, footfalls had reduced to low single digits, ranging between 2-6 per cent in the July-September period.
However, the first half of October has been comparatively more optimistic. The Dusherra week saw footfalls increasing anywhere between 6-10 per cent for the likes of Palladium High Street Phoenix and Oberoi Mall in Mumbai, while Nexus Malls claims to have seen a 14-15% spike year-on-year. Consumer durable retailer, Croma, reported an impressive like-to-like sales growth of 26 per cent this Dusherra while footfalls jumped 10 per cent.
The demand for apparel, too, has also been muted of late. Cantabil Retail, a homegrown apparel manufacturer, reported that footfalls at its stores have not grown this festive season, although sales have been able to match moderate expectations. "Customers are moderately spending towards fashion and not aggressively for last few months," the company added.
Retailers are now pinning their hopes on decent Diwali sales - the festival typically accounts for 60 per cent of festive sales in malls. While consumption mood may have improved thanks to government incentives such as the corporate tax rate cut as well as increasing willingness among banks to offer loans, mall owners don't expect overall festival season revenues to exceed 10-12 per cent.
"I expect Diwali sales to be good," says Nandi, Business Head, Godrej Appliances, coming on the heels of tepid Dussehra sales for the company. According to him, Dusherra sales are good only if it comes in the second week of the month, especially since bonuses are typically disbursed just before Diwali. This year, the festival fell in the first week of the month, when most people were yet to receive their salaries and hence sales took a hit, especially in the budget category.
Travel and tourism
The beginning of the peak season for this sector - October to March - has come at the most inopportune time. Growth in air passenger traffic has plummetted to 3.24 per cent in the January to August period this year, down from 21.2 per cent in the year-ago period. Similarly, growth in hotel room nights has halved to 6 per cent between July and September as opposed to 12 per cent in the first six months of 2019. This is based on data for the top three hotel chains, which control 40 per cent of the total inventory.
Given the sentiment, both personal and business-related travel has taken a hit, and the outlook for October is even more dismal. Experts predict that hotels, particularly business hotels in cities like Mumbai, Delhi, Bangalore, and Chennai, will record their worst sales of the year in the current month.
According to research firm RedSeer, e-tailers led by Amazon and Flipkart achieved Rs 19,000 crore of gross merchandise value (GMV) during the six days of the recently concluded festive sales. That's a 30 per cent increase over last year, with significant share coming from customers in Tier 2+ cities. This is about 80 per cent of RedSeer's forecast of $3.7 billion sales in the first phase of festive sale this year.
According to RedSeer Consulting founder and CEO Anil Kumar, the numbers indicate that consumer sentiment on online shopping remains bullish despite the challenging macroeconomic environment.
Walmart-backed Flipkart's Big Billion Days event this year saw a 50 per cent growth in the number of new customers as well as the seller count as compared to 2018. Arch rival Amazon's Great Indian Festival also made waves this year. "The first wave of the Great Indian Festival was our biggest celebration ever with Amazon.in - witnessing highest share of transacting customers and purchases across all marketplaces in India; orders from 99.4% pincodes; over 65,000 sellers from 500+ cities receiving orders in just five days and customers from over 15,000 pin codes joining Prime," Amit Agarwal, Senior Vice President and Country Head, Amazon India, said last week.
A big trend in the online festive sales was the increasing preserence to pay for purchases in installments. The share of transactions via options such as EMIs, Flipkart Pay Later and Cardless Credit has increased by 70 per cent during The Big Billion Days 2019 against last year's event. Similarly, Amazon reported that the number of customers shopping using EMIs saw a 1.5X uptick compared to of Great Indian Festival 2018. Moreover, customers from over 15,000 pin codes joined Prime with a 69 per cent increase in signups from small towns.
The Confederation of All India Traders (CAIT) has once again accused online sales of snatching festival trade courtesy predatory pricing and deep discounting offered by the etailers. "There is a lot of disappointment in all the markets of Delhi as there is no glimmer of festive sales and despite the festivals, all the major retail and wholesale markets are completely deserted," says the body's National General Secretary Praveen Khandelwal. He added that as the the festive season of Diwali draws to a close, the hope of the traders in the capital to notch up good business is getting bleak because the market is very low in the subscriptions and traders have ample stock of goods.