BQuick On Sept. 27: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. Pay Up, Sitharaman Tells Government Departments

The union finance ministry has asked government departments to share their capital expenditure plans for the next four quarters, Finance Minister Nirmala Sitharaman said on Friday.

• These departments have been asked to share their capex plans and how much money is expected to be spent on the ground, Sitharaman said, adding that this will help the government in ensuring that its expenditure plan is on track.
• The government’s total expenditure for financial year 2019-20 through the budget is Rs 27.86 lakh crore. Of this, capital expenditure is budgeted at Rs 3.38 lakh crore.
• About Rs 2.07 lakh crore has been given to ministries and departments as grant-in-aid for creation of capital assets.
• Out of this 5.45 lakh crore, till August, around 2.18 lakh crore has been spent, said a statement by the Finance Ministry.

The finance minister will meet public sector enterprises on Saturday to review their capex plans.

2. PMC Bank Breached Exposure Limits For These Two Borrowers

Punjab And Maharashtra Cooperative Bank, a lender that was recently put under restrictions by the Reserve Bank of India, breached exposure norms while dealing with some of its large corporate borrowers, the bank’s former managing director K Joy Thomas said on Friday.

• Thomas admitted that the lender had suppressed information regarding PMC Bank’s loan exposures to entities linked to Housing Development And Infrastructure Ltd. and its promoters.
• The cooperative bank’s total exposure to HDIL stood at around Rs 2,500 crore, Thomas said.
• These loans have been extended over a 5-6 year period.
• The exposure to entities linked to the HDIL Group accounts for about a third of the bank’s total loan book.

Here are the entities that PMC gave loans to, and what happened when it approached the RBI.

3. Petition Seeking Probe Against Indiabulls Accepted

The Delhi High Court has agreed to hear a plea seeking probe against Indiabulls Housing Finance Ltd. for allegedly advancing dubious loans, misappropriation and diversion of funds to the promoters of Indiabulls.

• The Indiabulls Housing Finance stock reacted adversely to the development, falling as much as 7.34 percent intraday, before closing 6.11 percent lower at Rs 389.45.
• The petition alleged that Indiabulls Housing gave “dubious loans” worth billions of rupees to shell companies through firms owned by the group’s founders “to increase their personal wealth.”
• The company denies the allegations and Indiabulls Housing’s lawyer Mukul Rohatgi said the alleged loans were secured and most of them stand repaid.

The next date of hearing has been fixed for Dec. 15.

4. Nifty Closes Record Week In Red; U.S. Stocks Rise

Indian equity indices resumed declines after a one-day rally.

• S&P BSE Sensex ended 0.43 percent lower at 38,822.57.
• NSE Nifty 50 closed 0.51 percent lower at 11,512.40.
• The 31-stock index and the 50-share gauge registered their best weekly gains in four months.

Follow the day’s trading action here.

U.S. stocks fluctuated as technology shares weighed on indexes, while Treasuries erased early losses as investors digested a mixed bag of economic data.

• The S&P 500 headed for it second weekly drop as Micron Technologies lead decliners after it cut its profit forecast, citing the U.S.-China trade war.
• The dollar pared its weekly advance.
• West Texas Intermediate crude declined 2 percent to $55.30 a barrel.

Get your daily fix of global markets here.

5. To Buy Or Not To Buy?

Corporate-focused banks and infrastructure-construction companies will be among the first beneficiaries as India’s mid-year tax bonanza is expected to nudge private investments, according to Nomura.

• The reduction in corporate tax rate by Finance Minister Nirmala Sitharaman will aid Nifty 50 earnings by 7 percent to 16.5 percent, according to Saion Mukherjee, managing director and head of research, Nomura.
• But the brokerage is a “bit more conservative” on the index target at 12,500 for this fiscal, factoring in a somewhat slower pace of recovery in the earnings growth, he told BloombergQuint on a special series—Navigating Through Uncertainty.
• What will have a much bigger impact is the reduced 17 percent tax on new manufacturing units, according to Mukherjee.

Here is Mukherjee’s take on key sectors.

6. Another Slowdown Signal

Bank credit growth continues to remain muted despite attempts to kick-start lending by ensuring surplus liquidity and infusing more capital into public sector banks.

• Fortnightly data released by the Reserve Bank of India showed that gross bank credit growth fell to 10.26 percent for the fortnight ended Sept. 13.
• Credit growth in the first fortnight of the month remained at the same level as in August and well below the peak of 15.1 percent in December 2018.
• At current levels, credit growth is at its lowest since about March 2018.

What’s behind the fall?

7. Fourth Tranche Of Bharat-22 ETF

The government will launch fourth tranche of Bharat-22 ETF on Oct. 3, which will help garner up to Rs 8,000 crore from investors.

• The issue will open for anchor investors on Oct. 3 and for other institutional and retail investors, the next day.
• All investors will get a 3 percent discount over the issue price on the government divested shares.
• The decision has been taken after receiving robust response for earlier stake sale by the government in the product.
• The government has so far raised around Rs 35,900 crore through the Bharat-22 Exchange Traded Fund -- Rs 14,500 crore was garnered in November 2017, another Rs 8,400 crore was mopped up in June 2018 and Rs 13,000 crore in February this year.

Proceeds from the ETF will help the government move closer to its disinvestment target.

8. Modi Seeks Anti-Terror Consensus At UN, Skips Kashmir Mention

Prime Minister Narendra Modi called for countries to unite against terrorism but avoided directly discussing the situation in Kashmir or rival Pakistan during his speech at the United Nations General Assembly.

• “For the sake of humanity, I believe it’s absolutely imperative that the world unites against terrorism,” Modi said during his Friday speech.
• Modi renewed his call for adoption of the Comprehensive Convention on International Terrorism, which seeks to criminalize all forms of terrorism and deny terrorists, their financiers and supporters access to funds, arms and safe havens.
• Modi’s address came ahead of one by Pakistani Prime Minister Imran Khan’s at the UN.

9. Supreme Court Collegium’s Baffling Turn On Justice Kureshi

Unless we think seriously about mending the prevailing system governing appointments and transfers of judges the very idea of an independent judiciary, which is today threatened, will wither away beyond redemption, writes Suhrith Parthasarathy.

• The Collegium’s secretive functioning means that we simply aren’t aware of what factors serve to balance its powers.
• The independence of the judiciary, much like principles of natural justice, requires not only the existence, in fact, of autonomy but also an appearance of such autonomy.
• When the Collegium reneges on a decision based on purported materials supplied by the executive the appearance of independence suffers a cruel blow.

10. World Tourism Day: No Cheer For India

India has 38 monuments listed as world heritage sites⁠—the fifth highest number in the world. The country’s rank on the Travel And Tourism Competitiveness Index for 2019 rose to 34 from 40—the biggest jump by any country on the index this year.

• India is also now the only lower-middle income country in the top 35 tourism destinations, according to the World Economic Forum.
• Yet, it attracts under 1 percent of foreign travelers every year. In fact, growth in foreign tourist arrivals has been slowly moderating.
• Foreign tourist arrivals stood at 7.98 lakh in August 2019, rising 1.6 percent over a year ago.
• The growth was far lower than the 9.3 percent rise in August 2018.

Here’s why India is unable to attract a larger share of foreign travelers.