13-dfa-jan

Daily Financial News Analysis – 13th Jan’20 – Free PDF Download

 

Internet shutdown and economy

  • India takes pride in advances it has made in terms of promotion of technology.
  • The government is pushing Digital India to enhance productivity and value.
  • SC judgment on J&K just reiterated internet is a basic necessity.
  • But a new report on internet shutdowns shows that the country also curbs internet freedom to a high degree.
  • The Global Cost of Internet Shutdowns report shows that India was the third-most economically affected country, after Iraq and Sudan, accounting for over 100 shutdowns.
  • In 2019: internet shutdowns lasted 4,196 hours costing $1.3 billion.
  • India lost close to half of what it had between 2012 and 2017 in just 1 year.
  • Economic impact of internet shutdowns for 2012-17 was $3.04 billion.
  • Reports from Twitter, Facebook and TikTok showed that most content takedown requests had come from India.
  • Shutting down services for maintenance of law and order is justifiable.
  • Does not require internet but works on bluetooth.
  • The purpose of shutdowns get defeated with such apps.
  • After all, being in the same club as Iran and Sudan on digital freedoms is deeply shameful.

Data storage in draft e-comm policy

  • DPIIT has convened a meeting of industry representatives from IT and e-commerce sectors on January 14.
  • Aim: to discuss the merits and de-merits of draft e-commerce policy on data storage.
  •  Accenture, Adobe, Facebook, Genpact, Google, HCL, Infosys, Intel, Microsoft and TCS are expected to participate.
  • The meeting will be chaired by an additional secretary level officer of the DPIIT.
  • Department is working to release the national e-commerce policy before 31 March 2020.
  • Feb 2019: government released a draft national e-commerce policy.
  • It proposed setting up a legal and technological framework for restrictions on cross-border data flow.
  • It also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad.
  • Several foreign e-commerce firms have raised concerns over some points in the draft pertaining to data.
  • The department has received huge response on the draft and it is examining all the views and comments.
  • Personal Data Protection Bill was approved by the Cabinet last month.
  • The Personal Data Protection Bill spells out a framework for handling of personal data including its processing by public and private entities.
  • A company may have to pay a penalty if found violating norms under the Personal Data Protection Bill.

Startups Cutting Employee Costs

  • Fast-growing internet startups with high cash-burn rates have started downsizing staff after increased investor scrutiny of their money-guzzling business models.
  • Big-name startups that are cutting staffs are yo, Ola, Paytm, Quikr, Zomato and Rivigo.
  • Experts and industry insiders said companies were slashing headcount in verticals including sales, customer support and marketing to control inflated wage bills.
  • “The time has come when most startups want to rationalise costs, and employee benefit is one of the largest cost-centres,” said Harish Kumar, managing partner at recruitment firm Wenger & Watson.
  • In 2018, a key reason why internet companies ramped up headcount was due to a blinkered focus on growth, including launching new businesses, category or product portfolio expansions and increasing their presence across cities.

Air India

  • Aviation Ministry has rejected the proposal to relax the Substantial Ownership and Effective Control (SOEC) clause.
  • Overseas carriers will not be able to bid for more than 49% of Air India.
  • They won’t get full operational control
  • The government wants to privatise the state-owned national carrier.
  • Relaxing SOEC norms means the Indian government losing control over airlines running in India.
  • No country can afford to lose total control over its airlines. –offical
  • The SOEC clause ensures that airlines operating in India are controlled and managed by nationals.
  • Two-thirds of board members and the chairman have to be Indians.
  • Operational headquarters have to be located in India.
  • A relaxation would have meant that a foreign airline, along with an investment authority from its country of origin, could buy 100% in the national carrier and control Air India from headquarters based anywhere in the world.

Importing coking coal

  • Dharmendra Pradhan has said India is in talks with Mongolia and Russia for importing coking coal.

  • Aim: to reduce dependence on few countries for supplies of the commodity.
  • India has been importing coal from Australia.
  • Coking coal is a raw material for making steel.
  • India has set a target to produce 300 million tonne of the metal by 2030-31.
  • Around 85 per cent of the India’s coking coal demand is met through imports.
  • India is looking to bring that coal at a reasonable price.
  • In 2016, a delegation comprising senior officials of the Steel Ministry and state-run Steel Authority of India (SAIL) went to Mongolia’s capital Ulaanbaatar for securing a deal with the east Asian country for importing of coking coal.

 

 

 

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