BQuick On April 8: Top 10 Stories In Under 10 Minutes  

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

1. Covid-19 Tests Should Be Free, Rules Supreme Court As Cases Cross 5,000 Mark

Covid-19 infections in India crossed the 5,000-mark as Prime Minister Narendra Modi's faces the tough choice of whether or not to lift the nationwide lockdown.

• Total Covid-19 cases rose to 5,274—an addition of 485 since last evening.
• This includes over 400 who've recovered and 149 deaths.
• The Supreme Court ordered the Centre to make coronavirus tests free of cost, irrespective of whether they are taken in government or private labs.
• This even as Indian Council of Medical Research said that India has conducted over 1.21 lakh tests till date—13,345 of which were done on Tuesday.
• PM Modi will be holding a meeting of chief ministers via video conference on April 11, to discuss the future course of action with respect to the lockdown.
• Today, Modi told floor leaders of the opposition and other parties that the nationwide lockdown will not be lifted in one go on April 14, according to Biju Janata Dal’s Pinaki Misra.
• Meanwhile the Brihanmumbai Municipal Corporation and Arvind Kerjiwal government in Delhi made wearing masks in public areas compulsory.
• Uttar Pradesh, on the other hand, has sealed 15 of its worst-affected districts to contain the spread of the virus. The sealing is expected to be stricter than the ongoing lockdown.

Follow the developments around the coronavirus outbreak in India here.

Globally, cases rose over 1.45 million, with the death toll crossing 83,000.

• Spain saw fatalities and new cases rise to the highest in four days, while Belgium had its worst day of the outbreak so far.
• U.K. Prime Minister Boris Johnson is stable and responding to treatment.
• Meanwhile, a consortium led by University of Oxford’s Jenner Institute, has fast-tracked clinical trials of a vaccine candidate to start this month.

Track the global spread of the pandemic here.

2. India Caps Spending By Some Ministries

India imposed caps on spending by some ministries and departments, as the coronavirus outbreak slows economic activity and hurts revenue collection.

• Spending by the so-called category ‘C’ ministries including coal, commerce and environment, were capped at 15 percent of budget estimates for the first quarter of the financial year started April 1.
• Ministries including home affairs and oil that form part of category ‘B’ would be able to utilize 20 percent of their available limits during the period.
• Category ‘A’ ministries that cover health, food and public distribution won’t be affected by the order.

A second package to support sectors critically affected by the pandemic is likely as early as next week.

3. Government To Issue Quick Tax Refunds

The government will fast-track all pending income tax, goods and services tax and customs refunds worth about Rs 18,000 crore to provide relief during the coronavirus outbreak.

• All pending income tax refunds of up to Rs 5 lakh to businesses and individuals will be released immediately, said a statement by Ministry of Finance.
• This is estimated to benefit 14 lakh taxpayers, it said.
• But Sandeep Bhalla, partner at Dhruva Advisors, said this is not a benefit as it’s taxpayers’ own money. Most of the pending refunds up to Rs 5 lakh were anyways issued as payouts under this threshold are processed expeditiously, Bhalla told BloombergQuint.
• Refunds pending over Rs 5 lakh that were held back due to year ending should also be released, he said.
• GST and custom refunds will also be immediately released to provide benefit to about 1 lakh business entities, including micro, small and medium scale enterprises, the statement said.

Clearing of GST refunds will help businesses facing cash crunch to resume operations, according to Deloitte India.

5. TVS Eyes U.K.’s Classic Norton Motorcycles

India’s TVS Motor Co. is among prospective bidders considering making an offer for Norton Motorcycles of the U.K., which went into administration in January, people with knowledge of the matter told Bloomberg News.

• TVS has approached Norton’s administrators about a potential deal, according to the people, who asked not to be identified because the information is private.
• The British firm is being overseen by BDO LLP.
• A purchase of Norton would allow TVS to branch out into more premium models from its current line-up of two-wheelers used by commuters.

Since 1902, Norton’s ownership has changed hands multiple times over the years.

6. Trifecta Of Problems For Oil Marketers

State-run oil marketers are expected to report one of their worst quarterly earnings in the three months ended March on account of a sharp drop in crude oil prices and fall in refining and marketing margins.

• Benchmark Brent crude on average tumbled 18 percent in the fourth quarter, according to data compiled by BloomergQuint, after Russia baulked at Saudi Arabia-led OPEC’s plan for deeper output cuts to cope with falling demand amid the novel coronavirus outbreak, triggering an all-out price war.
• If the market price falls, refiners who bought the existing stock at a higher rate end up selling it cheaper and vice-versa. Lower Brent prices may lead to an inventory loss for the three listed oil retailers —Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd.

Here’s how crude oil movement is expected to impact oil marketing companies in fourth quarter.

7. Covid-19 Impact: Edgy Bonds, Lower Pharma Sales And Drop In Cargo Volume

The primary debt markets, which saw a test of sentiments of sorts this week, are sending out a message that all is still not well despite recent policy interventions.

• The response to two companies that tested the markets this week suggests that appetite remains low and risk aversion remains high.
• HDFC Ltd. raised Rs 2,500 crore at 7.2 percent at a spread of 168 basis points over the benchmark 3-year sovereign bond.
• REC Ltd., meanwhile, withdrew its 10- year bond issue as investors sought a higher coupon rate.

Debt capital market bankers say the experience of this week suggests that investor appetite is still weak.

India’s pharmaceutical sales rose in March, albeit at a sluggish pace, owing to panic buying of medicines for chronic ailments such as cardiac and diabetes amid a nationwide lockdown to combat the coronavirus pandemic.

• Sales grew 8.9 percent year-on-year to Rs 11,856 crore, according to data released by AIOCD-AWACS—a pharmaceutical market research organisation.
• That’s in line with the growth a year ago and 12.1 percent in February 2020. In the quarter ended March, pharma sales grew 9.7 percent year-on-year.

Here’s how domestic drugmakers fared in March.

Cargo handled by Indian ports fell the most in five months, dragged down by a drop in liquid cargo and container volumes, as the coronavirus outbreak stalled economic activities.

• Ports across the country handled 618.7 lakh tonnes of cargo in March, a decline of 5 percent over the year-ago period, according to data compiled by BloombergQuint.
• Liquid cargo—oil and gas related products—fell 5.1 percent year-on-year, the most in eight months, to 227.2 lakh tonnes, the data showed.
• Container volumes tumbled 10.5 percent —the biggest in at least 27 months—at 120.2 lakh tonnes in March.
• Liquid cargo and container together constitute more than half of the total cargo volumes.

Find out the companies which can be adversely impacted by this.

8. Goldman Expects India’s GDP Growth To Plunge To 1.6%

Growth in the Indian economy could fall to levels not seen for decades as key sectors see a sharp decline in business during the 21-day coronavirus lockdown and a likely staggered exit from those restrictions.

• Goldman Sachs now forecasts that India’s real GDP growth could fall to 1.6 percent in FY21 compared to its earlier projection of 3.3 percent, it said in a report titled An Unprecedented Sudden Stop for India.
• The research house has pared its growth forecast for the second time now. Before the local spread of Covid-19 accelerated, Goldman Sachs had pegged growth at 5.8 percent in FY21.
• “This is a gigantic 420-basis-point downgrade,” Prachi Mishra, chief India economist at Goldman Sachs, told BloombergQuint in an interview.

Watch the full interview with Prachi Mishra on which sectors will be hit the most.

9. Why Companies Can’t Claim Insurance For Covid-19 Losses

India’s lockdown to contain the new coronavirus outbreak has brought businesses across the nation to a halt, causing losses. While companies do buy insurance to protect themselves against business interruption, according to insurers such policies don’t cover a pandemic like Covid-19.

• The hospitality and travel sectors are among the worst affected industries.
• While the central bank and the government have taken a host of measures to boost liquidity, provide a moratorium on loans and ease compliance, these are like to only aid recovery and not help recover the loss.
• Companies want the insurance regulator to extend the scope of business interruption insurance to the disruption caused by the new coronavirus outbreak.

Here’s what existing business interruption policies are and what they cover.

Related Coverage

• The only Indian billionaire who made money during the Covid-19 crisis.
• India’s stock analysts turn to new indicators amid earnings doubts.
• World’s dirtiest air gets cleaner after India’s lockdown.
• India can’t count on banks to lead virus recovery.
• Evidence mounts that the global recession is already here.

10. It’s Wrong To Suspend MPLADS For Covid-19

There would have been absolutely no problem with the government decreeing that this year’s MP Local Area Development Scheme funds should be spent entirely on Covid-19 related measures or projects, writes Shashi Tharoor.

• By centralising the allocation of funds, the government has created significant delays in the devolution of funds to where they are most needed.
• Actual MPLADS expenditure, though recommended by the MP, is, after all, in the hands of the collector.
• A new system of governance by executive fiat in what is still a parliamentary democracy, suggests an ominous trend.

It is still not too late to amend the Cabinet decision in this regard, Tharoor argues.