An emerging water crisis is hurting India's growth numbers India's water crisis is showing up in different parts of the country as droughts, crop failure, unclean water, widespread water contamination. The Economic Times writes today that water shortages are affecting factory production across India, threatening Make In India and the country's growth plans. But it is not just factories that are reeling: every urban Indian resident who is buying an RO system or water filter knows that the struggle for clean, easily available water is now everywhere. It is affecting Indians across demographics, cities and income classes, and is set to worsen - the Water Resources Institute predicts that in ten years, India's available water will be 50% below demand. Areas like Maharashtra, Gujarat, Rajasthan and Punjab are already deeply stressed - affecting crop production and poverty levels. In the south, Andhra Pradesh, Karnataka and Tamil Nadu are scrambling for water. In Bangalore, the water shortage has resulted in predictions that the city will become 'unlivable' in five years, due to droughts. The fight for water today is between India's farms, factories, and ordinary people. It is a thirst that is becoming harder to quench every year as monsoons have grown unreliable. The dependence on groundwater is drying up wells - over half of these are now severely stressed. Water shortages of the kind India is facing cannot be addressed by short-term solutions: we are at the point where it impacts GDP growth, and incumbent politicians are paying the price during re-elections due to droughts and farmer suicides - the issue of drought now hits news headlines every week. Local bandaids and river linking projects do not address the basic issue of shortage and contaminated supply. Governments will have to put in systems that halt the abuse of groundwater, water wastage, and the dumping of sewage in rivers and lakes: something that has been ongoing for the last few decades. Image source: Water Resources Institute
Best companies to work for survey, Taxi apps set for big growth in 2016, India's GDP is 'overstated', Facebook betting on streaming video for global growth The best companies to work for survey is out. Google India scores number 1 - employees evidently love both the massage chairs and quality of work. American Express comes in second, and Ujjivan Financial Services scores third place. ET The online taxi aggregator space, where Uber and Ola are lugging it out, is set to cross Rs 11,400 crores in booking value in 2016. Competition and lower prices are encouraging customers, and spurring growth across cities. BS Morgan Stanley's chief global strategist, Ruchir Sharma says that India's GDP growth of 7.9% looks overstated, and said private investment needs to improve. Inflation needs to be lower and below 5% for sustained growth, he added. IE Facebook is betting on live streaming videos for growth, and has signed up big content publishers including Buzzfeed and Huffington Post to stream videos exclusively on Facebook. This strategy will be replicated globally. SeekingAlpha Photo of the day: France ends Iceland's dream run IE
Bangladesh minister says Dhaka attack was not ISIS, foreign investor money rides high on hopes for a good monsoon, RBI governor tenure lowest among central banks, China dominating Bitcoin Bangladeshi Home Minister says that the attackers in the Dhaka restaurant were not ISIS but a homegrown group called the Jameytul Mujahdeen, which has no connections with ISIS. The group has been banned in the country for over a decade. IE The RBI governor's term is the lowest of all central bank governors globally. In the US, the central bank governors have served consecutive renewable terms, with Alan Greenspan serving for over 20 years. BS Foreign investors have brought in over Rs 3700 crore into the stock markets, riding on hopes of a good monsoon. ET The digital currency Bitcoin has become a multibillion dollar industry, one that is increasingly dominated by China. Chinese exchanges account for 42% of worldwide Bitcoin transactions, and Baidu has invested alongside Chinese banks in the Bitcoin company Circle. NYT Photo: A Nepali youth plays in a paddy field during National Paddy Day . Source: Atlantic
Attack on Dhaka restaurant ends, India-US reach arms deal, TN students corner over 80% SRCC seats, boost for regional airline connectivity ISIS siege on a Dhaka restaurant popular with foreigners, finally ends with militants killed. Soldiers moved in at 7:40 am Saturday to rescue hostages held by armed men inside the restaurant. IE, NYT PM Modi has cleared the purchase of a $1 billion deal with the US, for four Poseidon longrange, surveillance aircraft. These aircraft can detect submarine intrusions in the sea, and are aimed at detecting Chinese submarines in the Indian Ocean. The aircraft specialize in finding and repelling such threats. ET The Central govt has proposed a scheme to improve underserved air routes in India, capping fares on these routes at Rs 2,500. The reduced fares would be subsidized by flyers on existing routes. BS Students from the Tamil Nadu state board exams had an advantage in SRCC admissions, whose cutoff for UG programs was at 98.25% and 98%. Delhi University does not have a process for rationalizing marks from various state boards. Over 80% of SRCC seats have been allotted to TN students. ET Photo of the Day: Fireflies, with the central Milky Way in the background. NASA
FridayList: Uncertainty for the world, but some positive notes for Indian markets this July Anxiety is up in global markets - the chart above shows the Policy Uncertainty Index, which indicates a spike in uncertainty across the world with Brexit. Analysts suggest that India however, looks better placed to weather the storm. 1) IT up for grabs: Nifty IT is at a three month low, driven by anxieties over Brexit. This is a good time to pick up IT heavyweights with good fundamentals. 2) Auto results: Auto stocks are likely to outperform expectations on the heels of a normal monsoon and also from government pay hikes announced this week. Stocks like Bajaj Auto have seen exports hit by struggling African demand, but still seeing bullish BUY recommendations. 3) Manufacturing: China's manufacturing index has hit a four month low, but India's manufacturing activity is at a three month high, driven by domestic demand. Thie optimism is likely to continue for India as international investors look the country as an option in the face of China's slump. 4) New accounting standards have kicked in for Indian firms in April, and will boost companies like L&T, hiking up the company's net worth estimates.
Careful about passing off old black money as new white, warns IT department; Banks worried about loan recovery; Ruias to sell 25% stake in Essar Oil; Ultratech-Jaiprakash deal hits a snag; Flipkart gets marked down again in valuation The Ruias are selling an additional 25% stake in Essar Oil, months after selling 49 per cent stake to Russia's Rosneft. This move will make the Ruias minority shareholders in the company, giving up their role in its management. ET The Income Tax department took on a stern tone in a new set of FAQs, saying that black money holders should not try to pass the money off as current income. Disclose it in the one time compliance window, no questions asked, the department said. NDTV Bankers say that compelling entrepreneurs to make personal guarantees for company loans, as in the case of Vijay Mallya, is unfortunate, and there should be a distinction between the individual and the company in the case of debt. ET UltraTech's Rs 15,900 crore deal to buy the cement divisions of Jaiprakash Associates has run into rough waters, with JA failing to meet terms of the deal including providing working capital for the cement plants and cutting debt. Livemint US mutual fund Vanguard has marked down the valuation of its Flipkart shares, the sixth markdown in a row that the firm has received. Flipkart was valued approximately $15 bn In July '15, a valuation that has now based on markdowns declined to around $10 bn. BS Photo of the day: Tejas, India's new single and twin seat fighter jet, takes to the skies. IE Photo source: tejas.gov.in
Online retailers take fight with offline to FM, DMart eyeing an IPO, pay hike for govt employees to boost spending, cutoffs at DU for admissions cross 99% Flipkart is working to bring e-tailers together, to battle political influence of offline retailers like Future Group. Flipkart Chairman Sachin Bansal noted that offline players work to influence government policy in their favor through groups like the Retailers Association of India. ET Pay hikes for 4.8 million employees and 5.5 million pensioners in the government is likely to drive increased spending in sectors like housing and FMCG. Hikes in staff salaries averaged 23.5%, with maximum salary capped at Rs. 2.5 lakh/month. BS Delhi University's first cutoff list has steep requirements - cutoffs at Ramjas College for BCom stands at 99.25%, for Electronics in Khalsa at 99%. IE Avenue Supermarts, parent of DMart, is eyeing a Rs. 1200 crore IPO in 2017. Dmart had reported a profit of Rs 211 crore in FY15, and is one of the fastest growing in the food and grocery segment, beating out Reliance Retail and Future Retail. LiveMint Facebook is changing its newsfeed to focus more on friends and family. This will affect news publishers with pages on Facebook, who are likely to see a fall in visits and traffic as FB prioritizes pictures of vacations, pets, and babies. NYT Photo of the day: Ocean sinkhole, called Thor's Well in Oregon, USA. NatGeo Photo: College cutoffs this year. Source: Indian Express
India's income tax net has too many holes Chart of the Day: Indians are paying the price for a porous income tax net, as governments have shifted to indirect taxes such as the Krishi Kalyan Cess to collect money. India has among the worst coverage in the world when it comes to income tax payees. Less than 2% of the population actually ends up paying income tax, and the bulk of these are salaried professionals. Comparable countries like Brazil and China have much higher income tax coverage - in Brazil over 50% of the population pays income taxes, while in China thanks to recent reforms, such income taxes are paid by over 20% of the country's people. Just a little over 18,000 people in the country have filed tax returns stating they have incomes over Rs. 1 crore. This is hard to fathom especially when looking at the number of luxury car sales in India, which has not just been growing, but stood at over 31,000 cars sold last year from just the big three - BMW, Audi, and Mercedes. Without reforms indirect taxes will only continue to ramp up, the kind of taxes that hit the middle class the hardest.
Attack in Istanbul, Africa's dollar crunch affecting Indian firms, tax norms for NRI companies relaxed, India's role in financial markets to increase post-Brexit Terror attacks on civilians continue to be the new norm in the Middle East, as suicide attackers with assault rifles in Istanbul airport leave 36 people dead. Turkey, once a stable country in the Middle East and an important European and NATO ally, is being increasingly consumed by the chaos of ISIS in Syria and spreading terror attacks. NYT The slowdown in prices of oil and minerals has affected mineral-dependent African countries like Nigeria. This is impacting bottomlines of Bajaj, Airtel, Godrej and other Indian firms with active African operations. Nigeria, Egypt and Angola have all depreciated their currencies and limited imports. Livemint NRI investors without a PAN number will no longer have to pay higher TDS under new rules. ET Mark Mobius points out that Indian markets have shown resilience post-Brexit and India is likely to emerge as a more powerful player in the current turmoil. ET RBI says that 30 out of 50 Indian banks may not be able to meet capital adequacy norms, and that NPAs are likely to rise. Public sector banks are a particular concern. BS Tweet of the day - Warsan Shire. Twitter
Britain wants in on EU common market. Ola-Uber hostilities, China's Google clone Baidu copies Google cars Post Brexit poll, some British leaders are calling for a second referendum, while pro-Leave leaders say they would like to stay in the EU common market. Standard & Poor’s, the ratings agency, downgrades Britain’s credit rating. NYT Ola says that Uber in India "is flouting regulations...is in the country only for profit". Ola has taken an aggregator license under Karnataka's new rules, a move that Uber has yet to make. ET A few stocks look newly attractive in today's highly volatile market. ET Also some tech companies like TCS, Infosys, and Wipro are having a bumpy ride post Brexit - these tech firms have 20% of sales coming in from EU and uncertainty has hit their prices. This may be a time to buy some big names with strong fundamentals. ET China's search giant Baidu takes yet another card from Google, and plans to test its driverless cars in China's cities in five years' time. IE Subramanian Swamy is not a popular man in the BJP right now. PM Modi criticised his remarks against Rajan in Arnab Goswami interview, and Jaitley wants action against him for his remarks against BJP appointments BS Cartoon of the day Igram
