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Daily Financial News Analysis – 18th Nov’19 | PDF Download


India should lead on Environment

  • India’s spectacular economic progress has lifted millions out of poverty.
  • Residents with electricity access: 90%
  • Economic progress has also brought intolerable pollution.
  • Air pollution: 1-5 lakh premature deaths, higher rates of respiratory and heart diseases, stroke, and cancer.
  • India is also vulnerable to global warming.
    1. Agriculture is exposed to extreme weather
    2. Changing rainfall patterns
    3. Large share of its population lives in coastal areas at risk from rising sea levels
  • India needs to moderniseits energy sector.
  • India has technological/ engineering know-how.
  • Mitigating local air pollution and climate change will require curbing the use of coal in power generation and industry.
  • Coal accounts for the bulk of India’s carbon dioxide emissions.

  • Coal is entrenched because of history, large reserves, and existing infrastructure
  • Continued reliance on coal would not benefit the average Indian family or firm.
  • Solar is now already cheaper than coal in many countries.
  • The costs of renewable power generation in India can drop even further.
  • Fiscal incentives to speed up the shift away from coal to cleaner energy.
  • The simplest approach would be progressively to increase the coal cessby Rs 5,000 per ton of coal by 2030, from its currently modest Rs 400 per ton.
  • Annual carbon emissions and fossil fuel air pollution deaths in 2030 would fall by nearly 40%.
  • A higher coal cess could increase electricity prices over 10 years by up to 70% .
  • Coal cess revenues could be used to boost transfers to low-income households through the social safety net system and to fund additional public investments in health, education and infrastructure.
  • Support will be needed to ensure a better future also for displaced coal workers.
  • Expanding renewable energy capacity will require
    1. upgrading the power grid,
    2. simplifying land acquisition for renewables plants,
    3. fostering domestic production of solar panels
  • Choices made today – such as railways and compact urban growth versus roads and sprawling growth – will have lasting implications for decades to come.
  • We can use sulphur dioxide filters in smokestacks.
  • India is the third largest emitter (behind China and the United States) of heat-trapping carbon dioxide.
  • India’s leadership on the environment and its choices on energy and infrastructure will have a direct impact on the global fight against climate change and on the well-being of its citizens.

IBC may have to be tweaked

  • State Bank of India and Fin Min are exploring a legal framework where ALTERNATIVE INVESTMENT FUND will have the first charge on assets and cash flow of entities receiving funding.
  • This may call for introducing changes in the Insolvency and Bankruptcy Code (IBC) to incorporate the concept of seniority of lenders.
  • At the time of winding up or bankruptcy of a company, it needs to repay its debts.
  • The order in which these are repaid is referred to as seniority.
  • As obvious, senior debts need to be paid before the junior ones.
  • The finance ministry has referred the matter to the law ministry.
  • Essar ruling: commercial wisdom of committee of creditors (CoC) will prevail and the same cannot be substituted by National Company Law Tribunal.
  • In this background if the AIF is given certain privileges over and above the ones given to other lenders then the commercial decisions by AIF will prevail and lenders and authority will have to abide by it.

Maldives style water villas in India soon

  • The luxury of Maldivian water villas may soon be experienced in India.
  • Niti Aayog: prepared a Rs 1,500 crore water and land villa project in the lagoons of Lakshadweep and the Andaman & Nicobar Islands.
  • New airports + sea planes + helicopter + floating jetties

Deposit cover should be doubled

  • Deposit Insurance and Credit Guarantee Corporation or DICGC should double the limit for deposit cover from Rs 1 lakh to Rs 2 lakh per depositor.
  • The current limit for deposit cover in case of a bank failure to repay depositors of Rs one lakh per depositor was last revised in 1993.

Draft Industrial Policy

  • The Department for Promotion of Industry and Internal Trade (DPIIT) has prepared an initial draft industrial policy.
  • Target: raise value addition in the manufacturing sector to USD 1 trillion by 2025
  • The policy envisions to create globally competitive business enterprises which can generate gainful employment and sustainable livelihoods.
  • It entails creating industry that is equipped with innovation, technology; financially viable and environment friendly; and whose benefits are shared by all sections of the society.
  • The initial draft policy is being circulated to seek views of different ministries and departments.
  • The policy would work in tandem with the Skill India Mission to improve employability of future workforce, and with the foreign trade policy to enhance India’s share in global merchandise exports.

Biggest negatives of India

  • The Asian Infrastructure Investment Bank (AIIB) lists delays in project implementation and the resultant cost overruns as the biggest concerns when it comes to funding India.
  • The Beijing headquartered multilateral bank has USD 3 billion exposure to India which has a lot of appetite for credit and will continue to be the largest borrower in the near future.
  • The bank was established in 2016 to fund developmental projects.
  • India is the second-largest shareholder after China.
  • Apart from this regulatory issues and those surrounding land acquisitions are also concerns for the bank but added that they face these issues across many other countries too.

Q1. India’s first plant to convert paddy straw into biogas will get oprationalised at which place?

  1. Karnal
  2. Hyderabad
  3. Chennai
  4. Allahabad

Q2. The target of Sustainable Alternative Towards Affordable Transportation scheme is to produce _______ million tonnes of CBG by 2023

  1. 5 MT
  2. 7.5 MT
  3. 10 MT
  4. 15 MT




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