Cabinet on Coal
- Cabinet decided to promulgate an ordinance amending the Mines and Minerals (Development and Regulation) (MMDR).
- Aim: to revive investor interest in the sector.
- Dozens of captive coal mines with abundant reserves of the fuel could be up for grabs soon.
- Domestic and foreign steel companies and also local power companies will also take part in the auctions.
- Supreme Court decision in 2014: 204 captive blocks licences were cancelled
- So far, only 89 have been reallocated & just 29 of them are operational.
- Steel and power firms have interest in coal mining as it gels well with their businesses if unhindered open market sales of surplus coal is allowed
- FDI in coal will get a boost
- With coal imports surging and becoming another drag on the country’s current account as oil imports.
- Sajjan Jindal, chairman at JSW Group, said, “Huge reform… This will go a long way in reducing the coal imports which is over $15 billion/year.”
- He added, “This was a long pending reform which will make the Indian steel industry more aggressive and competitive on a global level.”
World Bank projects India’s growth
- Global Economic Prospects by
- The World Bank has projected a 5% growth rate for India in the 2019-2020 fiscal.
- India likely to recover to 5.8% in the following financial year.
- Bangladesh: above 7%
- Pakistan: below 3%
- The global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year’s significant weakness, but downward risks persist.
- Steps to improve the business climate, the rule of law, debt management, and productivity can help achieve sustained growth.
New electric vehicles
- February 7-12, Delhi: Auto Expo
- Several manufacturers are set to showcase their EV portfolio.
- Electric vehicles may not have gained traction with the customers yet but they are still reckoned as the technology of future.
- No manufacturer can afford to ignore their potential.
- All in all, over a dozen electric cars will be on display, many of which will be launched this year itself.
- The next decade will see EVs becoming mainstream and with a robust charging infrastructure coming in place, this will accelerate the adoption of EVs in the personal segment as well.
- Government’s subsidy scheme FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles) does not include those for personal buyers.
- Last week, the government approved setting up of 2,636 charging stations in 62 cities across 24 states and Union Territories, which may lead to an improvement in demand.
- Batteries account for over 40% of the total vehicle cost.
- Electric cars are costlier by an estimated 30% compared to the conventional cars a major component of the battery are imported by all the manufacturers
e-Commerce discounts and competition
- Competition Commission of India (CCI) conducted a study to understand functioning of e-commerce in India and its implications for markets and competition.
- Discounts by e-commerce portals leads to user growth.
- But offering huge discounts by large platforms may have the potential to harm competition in the sector.
- Platforms denied any involvement in pricing and have consistently maintained that all sellers on their platforms were independent sellers who themselves set prices.
- This, however, does not detract from the fact that ‘preferred sellers’ appear to be operating exclusively on either of the two major platforms, the fair trade regulator added.
Jet Airways insolvency
- The insolvency proceedings of grounded Jet Airways have hit yet another snag.
- 2 of its lenders, IDBI Bank and Indian Overseas Bank, on Wednesday sought an exemption from releasing funds as they are under the central bank’s prompt corrective action (PCA) framework.
- It has three risk threshold levels (1 being the lowest and 3 the highest) based on where a bank stands on these ratios.
- Banks with a capital to risk-weighted assets ratio (CRAR) of less than 10.25 per cent but more than 7.75 per cent fall under threshold 1.
- Second threshold: CRAR more than 6.25 per cent but less than 7.75 per cent
- Third threshold: falls below 3.625 per cent
- NPA of 6 per cent or more but less than 9 per cent fall under threshold 1
- Those with 12 per cent or more fall under the third threshold level.
- Profitability: negative return on assets for two years fall under threshold 1
- Three years under threshold 2 and four years under threshold 3
North East Natural Gas Pipeline Grid
- Indradhanush Gas Grid with viability Gap Funding/ Capital Grant at 60% of the estimated cost of Rs 9265 crore (Including interest during construction).
- Quantum of VGF would be capped at 60% of estimated project cost and would not be linked with upward capital cost variation.
- Total length of pipeline is 1656 KM and tentative project cost is Rs 9265 crore.
- As per the plan, Gas Pipeline Grid would be developed in the eight states of the North-Eastern region
- The pipeline grid would ensure reliability and uninterrupted natural gas supplies to the consumers which otherwise gets severely affected due to various reasons in this part of the country.
- Availability of Natural gas across the region is expected to boost industrial growth without impacting the environment and would offer better quality of life to the people in general due to use of cleaner and green fuel.