Morning Brief: SBI Reports Biggest Ever Loss Of Rs 7,718 Crore; Kumaraswamy To Take Oath As Karnataka CM Today
Good morning, dear reader! Here’s your morning news and views brief for today.
SBI Reports Biggest Ever Loss Of Rs 7,718 Crore
State Bank of India (SBI) reported a loss of Rs 7,718 crore ($1.1 billion) – its biggest ever – in the January-March quarter, as the country's biggest lender set aside more provisions for bad loans after a change in banking regulation. SBI had posted a net profit of Rs 2,815 crore in the same period last year. The loss for the three months to 31 March was deeper than what the market had expected. Analysts on average had expected SBI to report a loss of Rs 1,285 crore, according to Thomson Reuters data. In the December quarter, SBI had posted a loss of Rs 2,416 crore. Overall provisioning and contingencies were raised to Rs 28,096 crore for the fourth quarter compared to Rs 11,740 crore in the year-ago period. However, shares rallied to close nearly 4 per cent higher after the bank said that it expects a key bad loan metric to fall sharply in two years.
Kumaraswamy To Take Oath As Chief Minister Of Karnataka
Janata Dal (Secular) leader H D Kumaraswamy will be sworn in as Chief Minister of Karnataka today, and in a first, the state will get its first Dalit Deputy Chief Minister in G Parameshwara. Parameshwara has been Karnataka Pradesh Congress Committee president for eight years and is an MLA for the fourth term now. K R Ramesh Kumar, a six-term member of the assembly from Congress, will be the speaker. The deputy speaker’s post will go to JD(S). The announcement came on Tuesday evening after coalition partners JD(S) and Congress met to discuss the distribution of portfolios. The final formula arrived at was 11 berths for JD(S) and 21 for Congress, excluding the CM and Deputy CM. The Karnataka cabinet’s sanctioned strength is 34. Kumaraswamy said he will seek the trust vote on Friday. This will be preceded by the speaker’s election. Sources said the full council of ministers will be sworn in on 29 May.
Fuel Prices May Finally Be Slashed
The government may finally be cutting transport fuel prices after they touched an all-time high. Finance Ministry officials said that petrol and diesel prices are likely to be slashed by Rs 2 to Rs 4 in the next few days and a decision will be made after discussions involving the Prime Minister’s Office, the finance and oil ministries and state-owned oil marketing companies such as Indian Oil and BPCL. The officials said a part of the cut would come from a reduction in state or central government duties on fuel and a part from dealers taking a cut in their commissions and being reimbursed by the oil marketing firms. Taxes account for between 37 per cent and 47 per cent of the retail price of fuel and dealer commissions between 3.8 per cent and 4.8 per cent. For every rupee cut in excise duty on petrol and diesel, there is a Rs 13,000-14000 crore hit to the exchequer.
Government May Not Sell Air India If It Doesn’t Get Adequate Price: Aviation Secretary
The government may call off the sale of Air India if bids do not meet expectations. Civil Aviation Secretary R N Choubey said that 160 queries have so far been received for the proposed sale of 76 per cent in Air India Limited, along with 100 per cent stake in low-cost international carrier Air India Express Limited and 50 per cent in Air India SATS Airport Services Private Limited. “The government has the right to sell or not to sell Air India if the bid price is found to be inadequate,” Choubey said. However, it expressed confidence that the sale will fetch the price the government expects. While the deadline for submission of expression of interest ends on 31 May, the secretary said the request for proposal could be issued after 15 June. He said the highest bidder for the airline would be known by the end of August. Choubey said the government intends to complete the disinvestment process by this year end.
Sterlite Protest: 11 Die In Thoothukudi Police Firing
The 100-day-old peaceful protests against expansion of Sterlite Copper plant turned fatal on Tuesday when police opened fire at agitators killing 11 of them and injuring dozens of people in the southern port city of Thoothukudi. Chief Minister K Palaniswami confirmed that nine people have been killed in police action at Thoothukudi, while sources say the toll has gone up to 11. Palaniswami has ordered a judicial inquiry into the violence while also announcing a compensation of Rs 10 lakh and jobs for the next of kin of the deceased. Injured persons would also be given a compensation of Rs 3 lakh each. The CM also promised government jobs to one member of the families of those killed in the firing. Locals have been protesting for quite some time now against the expansion activities of the Sterlite plant and also demanding its closure. Protesters have alleged that the plant is polluting ground water in the area.
Nearly 40 Lakh New Jobs Created In Seven Months: EPFO
India created nearly 40 lakh new jobs during the seven-month period ending in March 2018. As many as 6.13 lakh new jobs were created in the month of March this year, higher than 5.89 lakh payrolls in February, data released by the Employment Provident Fund Organisation (EPFO) showed. The data also indicates that over half of the jobs created in organised sector were in Maharashtra, Tamil Nadu and Gujarat during the seven-month period till March this year. Half of the payrolls were created in the expert service segment across all age groups. Electric, mechanical or general engineering products, building and construction industry, trading and commercial industry and textiles were some of the few segments where job creation was notable. The first set of payroll data was released by the EPFO last month. Some experts had raised doubts over construing job creation from payroll statistics.
Government Unveils Model Contract Farming Law
In a move to ensure better prices for farmers, the Union government on Tuesday unveiled a model law on contract farming and services not only for crops, but also for livestock, dairy and poultry products. Among other key features, the model law provides for setting up of a state-level board and constitution of a committee or officer at district/block/taluk level for online registration and recording of the contracts to ensure effective implementation. The draft Agricultural Produce and Livestock Contract Farming and Services (promotion and facilitation) Act, 2018, also seeks to keep contract farming/services contracts outside the ambit of the respective Agricultural Produce Marketing Committee (APMC) Act of states, which will help buyers save 5-10 per cent on transaction cost. It also provides for setting up of a dispute-settlement authority and penalty for breach of contract.
Reliance Jio Going Global
Mukesh Ambani's Reliance Jio is planning to go global. According to sources, the company is going to set up a subsidiary in Estonia, a small north European country that has, in recent times, become a favourite investment destination for startups owing to its business-friendly policies. Reliance Industrial Investments and Holdings, an investment holding company and a wholly-owned subsidiary of Reliance Industries, will give a loan of Rs 12.20 crore to the Estonian unit to begin operations, one of the sources said. “Thanks to its sophisticated e-solutions, over the last decade, Estonia has transformed itself into one of Europe’s business success stories. Indian companies would certainly wish to collaborate and imbibe e-governance solutions in this regard and Jio is no exception,” said the second source.
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