Business
Pandemic to populist schemes: K’taka in fiscal soup
Karnataka, which has vibrant automobile, agro, IT, aerospace, textile, biotech and heavy engineering industries, is showing a worrying trend due to impact of pandemic and natural calamities.
Despite being the cradle of startups and known as Silicon Valley of India, Karnataka took a huge hit on the financial resources from 2020-21 till date. The state’s public debt rose to 31.38 per cent between 2019-20 and 2020-21, creating a precarious financial situation.
The result of the pandemic has been such that, according to the 2020-21 finance and appropriation accounts report published by the Comptroller and Auditor General (CAG), the government recorded a drop of Rs 14,535 crore in tax collection.
The total debt of the state went up from Rs 3.19 lakh crore to Rs 3.97 lakh crore, an increase of Rs 78,000 crore, forcing the government to put some ambitious and populist programmes in abeyance.
Losses incurred in SGST, state excise duty, sales tax, stamps and registration and vehicle taxes. However, the non-tax revenue increased marginally from Rs 7,681 crore to Rs 7,894 crore.
According to Ministry of Statistics and Programme Implementation, the growth of GSDP has decreased by 9.28 per cent in 2019-20 and 2.23 per cent in 202-21 from 10.71 per cent in 2017-18 and 11.50 per cent in 2018-19.
The government had to deal with a severe drought situation when it assumed power in 2019, and then adding more woes, half of the state was affected by flood fury. Later, the Covid pandemic further complicated the financial situation of the state. During the tenure of Chief Minister B.S. Yediyurappa, no major populist programmes could be doled out. Presently, his successor Chief Minister Basavaraj Bommai has a tough job in hand as he is to present an election year budget on March 4.
The CAG report also shows that the government had to increase its borrowings. Effectively, the resultant impact has pushed the interest component to Rs 22,666 crore or 14.6 per cent of the state’s revenue receipts which is placed at Rs 1.56 lakh crore. The CAG has also noted that 13 projects of irrigation, 41 of roads, three of bridges and one in others category remained incomplete for over five years.
Ashwathnarayan, state BJP General Secretary, told IANS that as political parties are in the race to woo voters with social welfare schemes and freebies on the lines of Tamil Nadu and Andhra Pradesh, CM Bommai is inclined towards middle class and the upcoming budget is not going to be a fancy budget.
When asked whether the BJP is not under pressure after Delhi Chief Minister Arvind Kejriwal delivered free essential services to people, he said that Delhi is a mini state, it does not include farmers, mass transport system, irrigation projects, law and order system and even medical education. It is more like a municipal corporation area. Free electricity, free water and other populist programmes are not practically feasible in a large state like Karnataka.
Basavaraj Tonagatti, SEBI RIA, Fee-Only Financial Planner, CFP and Finance Blogger, told IANS that If you look at last year’s budget, you can notice that debt servicing increased to 21 per cent from 2019-20 to 2020-21. However, the capital expenditure increased just by around 5 per cent. This shows that the government is borrowing more but not diverting the same towards capital expenditure. It also shows that the government is not spending on creating assets, in particular physical infrastructure like roads, railway lines, factories, ports, etc. “Hence, I hope this year they manage their debt and divert the spending towards capital expenditure,” he said.
Though government is saying everything is fine, private investment has been going down for a long time, consumption is down, unemployment is high.
Abdul Azeez, Honorary visiting Professor of Institute for Social and Economic Change (ISAC), Bengaluru said that the pandemic has decelerated economic growth, increased unemployment and strengthened inflationary pressures, as a result of which the programmes of social justice have taken a hit.
The focus is to encourage consumption. If consumption increases, inflationary pressure will remain high. Already retail inflation has gone up to 6 per cent and wholesale by 11 per cent, he said. The government should think of providing necessary assistance to producers and they should be ensured of supply of electricity and water, he added.
Pavan Srinath, Independent Policy Researcher, said, “we need a growth oriented budget. We need to spend more. In the central budget also, capital expenditure has been increased. There is rural distress, high unemployment, the government should use its capacity to spend more.”
During the Congress regime, when Siddaramaiah was at the helm, he rained sops and freebies on people through bhagya schemes. The freebie blitzkrieg was so much that raised a debate whether these freebies are making people lazy.
Kannada writer S.L. Bhyrappa and Jnanpith recipient Chandrashekar Kambar came down heavily on Siddaramaiah government on Annabhagya scheme. Bhyrappa said, it is not possible to make poor people self-reliant through schemes like Anna Bhagya. The trend is very dangerous.
Chandrashekar Kambar maintained that freebies have made a deep impact on labour attitudes and the farming sector. When you take care of almost all the basic needs of the people — be it food, clothing, shelter, healthcare, children’s education, there is little motivation for work hard. Instead, the government should enable poor people to lead a dignified life, he said.
Rubbishing the criticism, Siddaramaiah said he will continue to implement schemes to bring poor people into the mainstream. Only hungry people will understand what is hunger. However, he suffered defeat in the following general elections.
Business
Is Market Correction Over? Sensex Soars By Over 1,900 Points; Nifty Gains Over 2%
The marquee indices closed with monumental gains as Dalal Street recovered with some requisite optimism ahead of the Maharashtra state election results on November 23.
Indian Markets Close With Bumper Gains
On Friday, November 22, the marquee indices closed with monumental gains, as Dalal Street recovered with some requisite optimism ahead of the Maharashtra state election results on November 23.
The BSE Sensex closed for the day’s proceeding with some big numbers. The oldest index in Asia closed with gains of a colossal 1961.32 points or 2.54 per cent. This took the overall value of the index to 79,117.11.
The situation was equally euphoric at the National Stock Exchange. The NSE Nifty closed at 23,830.90, having gained 481.00 points or 2.06 per cent.
In addition, the Nifty Bank index also made gains of over 1.5 per cent. Thebanking index closed with gains of 858.50 points or 1.70 per cent, pushing it beyond the coveted 50K mark, propelling it to 51,231.40.
Gainers and Losers
The days went exceedingly well for most listed companies, the day closed with a green wall. At the BSE end, SBI, Titan and TCS were the biggest gainers with all of the said companies gaining over 4 per cent.
ITC, L&T, Infosys and Reliance also made major gains in excess of 3 per cent by the end of day.
This comes after days, nearly a two-week long period of decline, that marred the market, pushing Sensex below its 80K mark, and Nifty, much below its 25K mark.
It remains to be seen, whether the much discussed market correction that brought about bringing the indices to their actual value, has come to an end or whether sea of red will continue in the time to come.
In addition, it also remains to be seen, whether, the election results for teh critical state of Maharahstra would have an effect on the market, in the next trading week.
Asian Markets
The Asian markets also flourished green with great momentum, as these indices closed on a positive note as well.
Japan’s Nikkei gained 0.68 per cent or 257.68 points, moving towards the 40K mark, closing at 38,283.85.
Another Tokyo-based index, TOPIX, closed at 2,696.53, gaining by 0.51 per cent or 13.72 points.
As we move to China, the story was a lot different, as, contrary to the Indian and Japanese markets, the Chinese markets closed in red.
Hang Seng closed with significant losses in its numbers, closing with a massive fall of 1.89 per cent or 371.14 points, at 19,229.97.
The loss was even greater in mainland China, as the Shanghai-based SSE Composite also ended the day’s trade with deep cuts. The index crumbled by 3.06 per cent or 103.21 points of its value and closed at 3,267.19.
South Korea’s KOSPI was in tandem with other market as closed with some good news. KOSPI closed with an increase of 0.83 per cent or 20.61 points, closing for the day at 2,501.24.
Business
‘Innocent Unless And Until Proven Guilty’: Adani Group Issues Statement In The US Bribery Indictment; Denies Charges, Calls Them Baseless
The Adani Group, which has been at the eye of the storm since the beginning of the new day, has issued a statement in the US Indictment matter.
Adani Denies Charges
The company, in a statement procured by the conglomerate-owned IANS, said, “The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied.”
Furthermore, the statement asserted its stance and added, “As stated by the US Department of Justice itself, “the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.” All possible legal recourse will be sought.”
Committed to Highest Standards
The Adani Group further added that it has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.
US Court Indicts Adani and Co.
The company, in an attempt to assuage stakeholders, partners and employees, said that the company is a law-abiding organisation, fully compliant with all laws.
The storm was kicked off by a post from short-seller group Hindenburg, which shared the news of the US Federal Court’s indictment of Gautam Adani and seven others associated with the company.
Billionaire Gautam Adani has been charged by US prosecutors for allegedly being part of a scheme to pay over USD 250 million (about Rs 2,100 crore) bribe to Indian officials in exchange of favourable terms for solar power contracts.
The press release from the US court elaborated on the allegations and claimed that the company and its leadership had indulged in mass bribery activity, in which the company bribed Indian officials to bag a contract for its Adani Green Energy company.
This in turn led to misleading American investors and global financial investors.
The court reportedly also issued an arrest warrant against Gautam Adani and seven others.
Adani Shares Tank
In the aftermath of the report, Adani Group company shares tanked at Dalal Street. With Adani Enterprises shares hitting the lower circuit, losing 20 per cent of their value. The situation was the same with the other Adani stocks, including Adani Green Energy, which is in the middle of the new storm.
Business
Bharat NCAP Awards 5-Star Crash Test Rating to Mahindra Thar Roxx
The Mahindra Thar Roxx has earned a prestigious 5-star rating in Bharat NCAP’s latest crash tests, reflecting its commitment to safety. Recently evaluated under stringent testing, the SUV excelled with a 31.09 out of 32 score for adult occupant protection and 45 out of 49 for child safety.
Tested in its AX5L and MX3 variants, the Mahindra Thar Roxx delivered notable results, scoring 15.09 out of 16 in the Frontal Offset test and a perfect 16 out of 16 in the Side Impact test. The assessment revealed strong protection for most areas, with adequate ratings for the driver’s chest and lower legs.
The Mahindra Thar Roxx has received high marks for child occupant safety, scoring 24 points in Bharat NCAP tests, along with 12 points for CRS (Child Restraint System) installation and a Vehicle Assessment Score of 9. This top-tier safety rating applies to all Thar Roxx units produced from November 2024 onward, underscoring Mahindra’s dedication to enhancing safety features across its SUV range. Additionally, Mahindra’s XUV400 and 3XO models have also achieved 5-star safety ratings, further emphasizing the automaker’s commitment to robust safety standards.
The Mahindra Thar Roxx offers two interior themes – Classic Ivory and a new Dark Mocha Brown. Comfort and convenience are prioritizing with ventilated seats, leatherette upholstery, a digital driver display, a larger 10.25-inch touchscreen, a high-quality Harmon Kardon sound system, a panoramic sunroof, rear AC vents, wireless connectivity for Apple CarPlay and Android Auto, and a six-way adjustable driver’s seat, combining practicality with luxury.
Mahindra Thar 5-door comes packed with safety and interior upgrades to enhance its appeal. On the safety side, it includes essentials like six airbags, three-point seatbelts for all occupants, hill control features, electronic stability control, and a seatbelt reminder. Advanced driver-assist features, such as autonomous emergency braking, adaptive cruise control, lane-keeping support, lane departure alerts, and a 360-degree camera system with blind spot monitoring, add an extra layer of protection.
Mahindra Thar Roxx offers two engine choices: a 2.0-litre turbo-petrol and a 2.2-litre diesel. The petrol engine comes in two setups—150 bhp and 330 Nm of torque for the manual, and 174 bhp with 380 Nm for the automatic. The diesel option is available only with four-wheel drive.
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