A round-up of the biggest articles from newspapers.
Chandra set for second term as Tata Sons Chairman
Tata Sons Chairman N Chandrasekaran is all set to be appointed for a second term, The Economic Times reported.
Why it’s important: He has the support and approval of the board of Tata Trusts and its chairman Ratan Tata.
A second term had already been “informally ratified” as Chandrasekaran’s performance and conduct had been appreciated by stakeholders.
He had taken on various challenges, bet on future growth opportunities while consulting Ratan Tata on crucial group plans and important policy matters.
Chandrasekaran also played a major supportive role in the victory of the Tata group in the long legal battle with Cyrus Mistry, former chairman and estranged shareholder of Tata Sons.
Govt plans guidelines on content takedown
The government is likely to offer detailed guidelines on the procedure to be followed by law enforcement agencies seeking information or content takedowns from social media platforms like Facebook or Twitter, The Economic Times reported.
Why it’s important: This will address a key industry demand for clarity about the official agencies that are authorised to send such requests and the procedure required to be followed.
Social media platforms have been vocal in their concern over stringent takedown timelines as well as what they term as the opacity in the revised IT rules, which came into effect on May 26.
Non-compliance can invite criminal penalties against key company executives.
Centre Begins Review of Legal Issues in GST
The Centre has begun a comprehensive review of the GST law, as well as various rules pertaining to the levy, The Economic Times reported.
Why it’s important: It will provide clarity on issues that have cropped up since it was rolled out in July 2017.
The review is aimed at clearing the air on issues such as whether services provided by back offices of multinational companies in India qualify as exports, which are zero-rated and therefore don’t face tax.
Similarly, there is confusion over discounts, reimbursed by FMCG and consumer durables companies to their dealers to sell products at specially reduced prices, being liable for GST or not.
The review is expected to simplify the law and reduce disputes.
Employees flee hospitality sector as uncertainty prevails
Recruiters are seeing an unusual flow of resumes, a jump of almost 100 percent over the last year, from professionals working in the hospitality sector, reported The Economic Times.
What it’s so: The hospitality sector has been one of the worst affected by the pandemic.
The continued uncertainty over the sector returning to normal operations and surging job losses with many establishments shutting shop or downsizing, talent is rushing out to other sectors like ecommerce, food-tech, retail and technology, which are among the least hit by the pandemic.
People right from the entry level to the top level are desperately looking out for opportunities in other sectors and some are even starting up their own ventures.
It might take a couple of years for this sector to reach the pre-Covid levels.
Vedanta may have to shell out more cash for Videocon
Lenders to Videocon Industries Ltd are likely to seek higher upfront cash from the Vedanta group, which won the bid to acquire the bankrupt company, the Mint reported.
Why it’s so: The the lenders may now ask Vedanta group firm Twin Star Technologies to substantially revise the upfront cash component from the current offer of ₹200 crore.
The offer has been criticized by creditors as meagre, given Videocon has assets spanning oil and gas, consumer durables and real estate.
Videocon’s lenders had received about 11 proposals; however, all except two fell through as they did not meet the bidding criteria.
Some also wanted to buy the assets on a piecemeal basis, which the lenders did not agree to.
Bengaluru, Delhi, Hyderabad, Mumbai to drive jobs creation
Cities like Bengaluru, Chandigarh, Chennai, Delhi, Hyderabad, Mumbai and Kolkata are set to drive job creation , the Mint reported citing a new survey by staffing firm Teamlease Services.
Why it’s important: It is bolstering India’s gradual recovery from the second wave of the covid-19 pandemic.
This is because the reach of vaccination is high in these cities.
So, revival will happen faster there.
The leaders: Jobs in sales and technology, particularly deep tech, are in high demand.
IT, e-commerce, healthcare and edtech were among the sectors that remained largely unaffected by the pandemic.
Others such as banking, finance and insurance, telecom, manufacturing and engineering were set to revive relatively quickly.
The laggards: In contrast, FMCG and fast-moving consumer durables will take a few more months before showing signs of revival.
Sectors such as retail, lifestyle and hospitality will take longer to recover.
Centre says four power load despatch units came under cyberattack
Four of India’s five regional centres that help oversee the country’s critical electricity load management functions have faced cyberattacks in recent months, Mint reported.
Why it’s important: It could have caused widespread blackouts.
However, the Chinese hackers failed to break into the systems, and no data breach was detected as necessary protective measures have been taken.
There have also been cyberattacks aimed at India’s transportation sector.
Most originate from China, Singapore, Russia and the Commonwealth of Independent States (CIS) countries.
No spike in insolvency cases after one-year moratorium
The number of corporate insolvency cases admitted in tribunals stayed low at 164 in the three months ended 30 June, reported Mint.
Why it’s important: This is despite the government’s decision to lift the one-year moratorium on creditor action against defaulters in March.
This is expected to offer relief to the government, which decided to lift the suspension amid concerns about widespread financial stress.
The corporate affairs ministry assessed that an increase in the payment default threshold from ₹1 lakh to ₹1 crore and a new alternative resolution scheme for small companies—called the pre-pack scheme—would check any sudden rise in insolvency cases.
Russia in talks with Kerala for Sputnik V plant
Covid-19 vaccine Sputnik V could soon be manufactured in India by Russian firms, the Business Standard reported.
What the plans are: The Russian authorities are in talks with the Kerala government for scouting land to set up an international manufacturing site for the vaccine, developed by the Gamaleya Centre.
Kerala Industries Minister P Rajeeve: “Talks are on between the Russian government and Kerala regarding the setting up of a manufacturing unit of Sputnik V in our state.”
The state government may look at areas around Thonnakkal, in Thiruvananthapuram district, for the facility.
If successful, this would be one of the few sites of Sputnik V owned by Russian firms outside the country.
RDIF, which markets the vaccine, has tie-ups with Indian contract manufacturers like Serum Institute, Hetero, Gland Pharma.
Russia had produced only 33 million doses of Sputnik V as of May.
India eyes $3-billion oil assets in Russia
India is in talks with Russia for a fresh investment of at least $2-3 billion in its upstream assets, the Business Standard reported.
Why it’s important: The Russian government has offered some oil and gas fields to ONGC Videsh (OVL) and any consortium they stitch together.
A possible investment by India into the prolific, but contentious, oil and gas exploration projects within the Arctic Circle is also being discussed.
This will be for exploring and producing oil and gas in Russia.
The project is strategically important because it allows access to the Asian markets through the Arctic North Sea route.
This is a shorter route compared to the one through the Suez Canal.
‘Innovation will be key to benefit multifold from this tech growth’
Salil Parekh ,CEO and MD of Infosys, in an interview with the Business Standard, talks about the company’s plans after registering the best in a decade numbers in the Q1 FY22.
What the CEO says: The key element going ahead is how we work as ‘One Infosys’ and make sure that we are doing things that support the client in their digital transformation.
The direction is the entire ecosystem, and are looking beyond cost.
I believe One Infosys will bring in more innovations.
Innovation will be key to benefit multifold from this tech growth.
We will be seeing more asset acquisitions.
We have been increasing fresher hiring from campuses.
The potential in India is enormous, because of the way the country is moving towards digitization.
‘Came out of Covid unscathed; see huge potential for growth’
India Cements vice-chairman and managing director, N Srinivasan – in an interview with the Business Standard – talks about his company’s plans when it celebrates its 75th anniversary.
What he says: It gives us immense pride that even after 75 years, we are still relevant.
We started with a capacity of 1 lakh tonnes per year and have gone up to 16 million tonnes.
China is the largest producer with 2.6 billion tonnes, after which comes India with 400 million tonnes (if we exclude grinding units) while the US with 60-70 MT is next.
There is a huge gap between the west and us.
If the government delivers according to expectations, there is huge scope for growth.
India Cements came through Covid unscathed.
We make money and put it into the same industry and never try to diversify or go into unrelated sectors.
This is why this industry has never troubled the banking system.
On then why Chennai Super Kings?
This company was always sports-oriented. Early in the 1960s, nine of ten Ranji trophy players used to be India Cements employees. Then we went into running teams in the Tamil Nadu league. So, it was a natural extension to go for CSK.
Auto financiers warn of surge in bad debt
Auto finance companies have warned of a sharp rise in bad debt, reported the Business Standard.
Why it’s so: It is owing to Covid-related shutdowns announced by various state governments in April and May.
Though collection trends recovered to pre-Covid levels in the March quarter, they deteriorated in April and May as customers lost jobs and were unable to pay.
Apart from three-wheelers, taxi drivers also failed to repay loans in the June quarter, thus leading to a sharp rise in bad debt.
Auto finance companies’ fortunes are tied up with the automobile industry, which witnessed plant closures in the June quarter.
The diversion of oxygen from industrial to healthcare usage, led to closure of automobile factories for at least a fortnight during April-May, impacting the production and factory dispatches.
Centre plans big boost for MSMEs with adata bank
The Centre is working towards building a robust data bank for small businesses by integrating information across various ministries and government data, the Business Standard reported.
Why it’s important: The MSMEs ministry is in talks with other government departments, so that more businesses are registered as MSMEs.
MSME ministry urges other ministries to accept Udyam registration as formal identity for their schemes.
As of now, over 3.8 mn MSMEs have registered on the Udyam portal.
Experts believe the move will end information asymmetry and help the sector in a big way.
This could help form better schemes.
ESG rating framework not on SEBI’s agenda, for now
The SEBI is currently not planning a framework for ESG (environment, social and governance) ratings, even as investors are increasingly looking at companies with high ESG scores, reported the Business Standard.
Why it’s important: SEBI is of view that such rating action requires high-quality, comprehensive data, along with other preferred parameters, which is currently lacking.
The SEBI does not want rating firms to get into any new product beyond the quantified assessment of the creditworthiness of a borrower.
At present, top 1,000 listed firms (based on market cap) are required to disclose an overview of ESG risk.
This is voluntary for FY22, and mandatory from FY23.
Disclosures cover aspects, such as emissions and impact on biodiversity.
Some rating firms currently give ESG scores based on their own database.
Govt may restrict benefits for employees of Air India
The government is likely to limit employee benefits only up to the time it is an owner of cash-guzzler national carrier Air India, The Times of India reported.
Why it’s important: It will set the template for the privatisation of other public sector companies as part of its ambitious strategic sale programme.
The move will mean that the new owner of the airline will have new terms for employees and can tweak the compensation packages in a way that it benefits sections where it wants to make them more attractive.
Air India employees are entitled to several benefits that go beyond the usual health and provident fund scheme to also include free tickets for several segments.
‘Pawan Munjal can’t use ‘Hero’ tag for EVs’
In a setback for the Pawan Munjal-run Hero MotoCorp, a 2010 family settlement bars the company and its promoter from using the popular ‘Hero’ brand name for any type of electric vehicle as the global rights for the green technology have been allotted to his family member and nephew Naveen Munjal’s Hero Electric, The Times of India reported.
Why it’s important: Any violation here “will lead to legal action”, Naveen said, making it clear that “only my family has the right to use the Hero brand for green vehicles”.
There is no non-compete/prohibition on other clan members who can enter the category but with a different branding.