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Daily Financial News Analysis – 7th Nov’19 | PDF Download


Alternate Investment Fund

  • Cabinet cleared the structure of the proposed exclusive AIF for the real estate sector.
  • Initial corpus Rs 25,000 crore.
  • With a commitment to continue to provide more budget funds, in addition to the initial Rs 10,000 crore, as and when demand arises.
  • State Bank of India and LIC have agreed to contribute a total of Rs 15,000 crore to the AIF.
  • AIF mandate: to enable completion of the stuck, liquidity-starved housing projects, mainly those in the affordable and middle-income categories.
  • Finance minister Nirmala Sitharaman said some sovereign wealth funds and pension funds have also expressed interest in the AIF.
  • Even the projects of firms that are already under the insolvency process could resort to the fund, provided liquidation hasn’t been initiated.
  • SBICAP Ventures would decide on the eligibility of each projects for AIF funds and stagger the release of funds from escrow accounts to ensure that the monies are utilised strictly for the intended purpose.

15th FC to submit interim report

  • 15th Finance Commission recommendations which are supposed to be implemented from April 1, 2020.
  • For providing “necessary policy inputs or direction” to the government, as the Budget for 2020-21 is just less than three months away.
  • The final report would be submitted only next year.
  • FC the constitutional body suggests the devolution of taxes to states from the divisible pool.
  • The FC has been asked to examine whether “a separate mechanism for funding of defence and internal security ought to be set up and if so, how such a mechanism could be operationalised” .

India gained $755 million from Trade War

  • Trade and trade diversion effects of United States tariffs on China
  • In additional exports, mainly of chemicals, metals and ore, to the US in the first half of 2019.
  • Due to the trade diversion effects of Washington’s tariff war with China
  • Ongoing US-China trade war has resulted in a sharp decline in bilateral trade, higher prices for consumers and trade diversion effects
  • This increased imports from countries not directly involved in the trade war.
  • These trade diversion effects have brought substantial benefits for Taiwan, Mexico, and the European Union.
  • Trade diversion benefits to Korea, Canada and India were smaller but still substantial, ranging from $0.9 billion to $1.5 billion.

Engineering Procurement and Construction segment

  • Rating agency Crisil report
  • Revenue growth for highway developers in the EPC segment could get halved in both 2019-20 and 2020- 21 fiscals to around 15% against 30% logged in FY19.
  • The decline would be largely due to slower awarding of projects and delayed receipt of appointed date from NHAI.
  • NHAI awarded around 7,400 km in FY18.
  • It fell to about 2,200 km in FY19.
  • In the current fiscal and the next, awarding is expected to be around 4,000 km a year.
  • NHAI notifies the appointed date only when majority of the land, 80% for HAM projects, is procured.

SC on stubble burning

  • All farmers be given a Rs 100 per quintal incentive to prevent them from setting their fields on fire in preparation for the next crop.
  • The bench also demanded an action plan within three weeks.
  • The court said “enough was enough” and slammed the central and the concerned state governments for shifting the blame on each other and doing virtually nothing to improve air quality.
  • “We expect better from a responsible, elected government. Can you say that there is no solution? Say that stubble burning is bad but let’s do it zonewise?”
  • “Why can’t you help the farmers with machines and money and pick up the stubble for use elsewhere,” Justice Mishra observed. “What is this? A total failure of the state machinery




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