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Peer-to-Peer Lending in India

peer to peer

This summarizes part of the study on peer-to-peer lending in India conducted by the author during her research internship with Department of Economics and Policy Research at Reserve Bank of India.

Peer-to-peer (P2P) lending is a business model that has captured everyone’s attention globally and is now deepening its roots in India. With the advent of online industry, the financial sector is revolutionized; strongly attracting investors, businesses, customers, analysts as well as the regulators. Concerns over escalating non-performing assets (NPAs) and customer’s shift towards loans from private lenders (like family, friends, etc.) due to rigid collateral requirements and stringent availability of bank credit, coupled with various technological advancements and government initiatives towards cashless and digital economy, are responsible, to some extent, for the evolution of P2P lending.

Peer-to-Peer lending is an innovative form of crowd funding with financial returns. It involves the use of an online platform to bring lenders and borrowers together, thereby mobilizing unsecured finance. The platform enables a preliminary assessment of the borrowers’ creditworthiness and collects the loan repayments. Accordingly, a fee is paid to the platform by both borrowers and lenders for the process. Interest rates on the loan ranges from a flat interest rate fixed by the platform to dynamic interest rates as agreed upon by borrowers and lenders. One of the main advantages of Peer-to-peer lending for borrowers is that the rates are lower than those offered by money lenders or the unorganized sector. On the other hand, the lenders benefit from P2P lending as they enjoy higher returns under this scheme than those obtained from a savings account or from any other investment.

Although there has been significant growth in online lending platforms globally, there is no uniformity in the regulatory stance about this sector across countries. While P2P lending platforms are banned in Japan and Israel, they are regulated as banks in France, Germany and Italy, and are exempt from any regulation in South Korea. Differences in regulatory frameworks for the online lending sector across the world can be traced back to two opposing arguments.  Those who are against regulating this sector believe that any such move might stifle its growth at this nascent a stage. On the other hand, proponents of regulation argue that unchecked growth of this sector may weaken the monetary policy transmission mechanism and breed unhealthy practices by market players which may, in the long run, generate systemic problems given the susceptibility of this sector to attract high-risk borrowers. The balance then lies in developing an appropriate regulatory and supervisory tool-kit that harnesses this sector’s ability to provide an alternative source of credit for the right kind of borrowers, facilitating growth in an orderly manner.

P2P lending in India can be broadly categorized into three types—microfinance, consumer loans and commercial loans. Currently, there are several online P2P lending platforms operating within the country. Some of these have targeted businesses undertaking microfinance activities with stated primary goals of having a social impact and providing easier access of credit to small enterprises. These are largely tech companies registered under the Companies Act.  Presently, there are around 30 P2P lending start-ups in India. These companies have decided to form an association with the intention of self-regulation and are expected to complete their registration process soon. It is estimated that the P2P lending sector in India is worth INR 20 crore and is expected to lend approximately INR 1.25 crore per month in the future.

According to the data available at Faircent’s website, INR 334.9 lakh loan amount has been proposed for high risk interest rates i.e. 22 – 26 percent followed with INR 307.47 Lakh loan amount proposed for Medium risk interest rates (18 – 22 percent). The average rate of interest (27.86 per cent) has been earned under very high-risk bucket (26 – 32 percent) and the highest average loan tenure (24.65 months) has been granted under high- risk and very high-risk bucket. The maximum number of defaults have happened for the short-term loans (6 months) or under very high-risk bucket (4.93 percent).

According to the data available at i-Lend’s website, there is a gap between the number of lenders willing to lend and number of lenders who have lent partial or full amount. The gap also exists in the amount one is willing to lend and that which has been lent. This gap represents the demand-supply gap of the lending market on the platform. The maximum gap is within the interest bracket of 22 -26 percent and the minimum is in 12 – 14 percent. This make sense, as the lenders will always want to earn the highest interest rate and the borrowers will always want to pay the lowest interest rate. Similarly, this gap can also be seen on the borrowers’ side of the market, in terms of number of the borrowers participating and the amount of borrowings.  The maximum gap, again is within the interest bracket of 22 -26 percent while the minimum gap is now within 18- 22 percent. Also, the demand-supply gap on this platform is observed to be maximum for the loan tenure of 12 months followed by that of 18 months. In addition to that, the demand-supply gap is seen to be maximum for loans used for debt consolidation; the second-widest demand-supply gap is noticed in education loans.

P2P lending is driving huge unorganized lending sector in India. Data available on i2ifunding website shows the wide network of P2P lending and how it is connecting borrowers and lenders from across the country, mostly targeting those states that have a persistent alternative source of lending. The maximum number of borrowers on this platform are from Delhi (55.80 percent), followed by NCR (19.48 percent), Maharashtra (6.86 percent, excluding Mumbai), Karnataka (5.71 percent), and UP (4.13 percent).

Policy recommendations:

  1. Make P2P lending reach more citizens: States like Tamil Nadu, Rajasthan, Bihar and Andhra Pradesh have more than 50 percent of outstanding cash debt through non-institutional agencies and almost no presence of P2P lending.

  2. Reduce the demand-supply gap: A persistent gap between demand and supply can push the lending market to fail.  

  3. Cap the borrowings where maximum defaults are recorded: Maximum number of defaults have been observed for short-term loans or under very high-risk bucket.
  4. Introduce Orchard platform for P2P lending:  The interest rates in P2P lending sector are high and increasing, compared to 10-year government yields and other benchmark interest rates, which are relatively low and decreasing.

The Evolution of Measures of Capital Account Openness

capital account

The Balance of Payments of a country can be divided into current account and capital account flows. The current account balance of a country indicates the difference between exports and imports of a country. The capital account records the inflows and outflows of capital into and from a country that affect its foreign assets and liabilities. Some of these are investments, loans and debt instruments. Any action of the government or the central bank of a country that tightens or relaxes the inflow or outflow of capital in and out of the country can be called a Capital Control Action (CCA).

CCAs have always been used as policy instruments by the governments and the central banks around the world for macroeconomic management. Developing countries have been using CCAs to protect their currency and economy from the shocks of sudden inflow or outflow of foreign capital caused by any internal or external change. The debate on the usage and efficacy of CCAs as an instrument of monetary policy has been going on for quite some time now.

Essentially, a CCA involves relaxation or tightening of capital flows for a particular asset or a group of assets.  While this policy change has been quantified by economists using various methodologies, the source of data on CCAs has largely remained the same, which is the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER) published by the IMF. This report contains country-wise information on CCA and has become more detailed over time, providing information pertaining to inflows and outflows of multiple asset categories. Up until 1996, the AREAER database provided very limited information on capital controls. From 1996 onward, it became more comprehensive and started providing disaggregated information on capital controls by asset categories, thereby assisting economists to develop better measures of capital controls.

Quinn in 1997 published a paper where he used the AREAER database to codify the capital controls of 64 countries using a scale of 0 to 14 with 14 being the indicator of least restriction. Quinn’s work was the first instance of quantifying capital controls and can be considered the first generation of quantitative measures for capital account openness.

The second generation of measures for capital account openness came 10 years after Quinn’s work when Chinn and Ito constructed a comprehensive measure of financial openness by deploying dummy variables for the four major indicators in the AREAER database, i.e. presence of multiple exchange rates, current account openness, capital account openness and the requirement to surrender export proceeds. According to them, bringing in current account transactions and exchange rates captures the openness of capital accounts better.

In 2009, Schindler constructed an index to measure the openness or the lack of it on a disaggregated level for multiple asset categories such as money market instruments, shares, bonds and other forms of investment. In 2012, Klein built upon Schindler’s work and proposed an index that considered inflows and outflows separately for each asset category. Klein also made a distinction between controls that are applied to a broad range of assets for a long period (‘walls’) and episodic controls on a narrow range of assets (‘gates’). In 2015, Fernandez along with Schindler and others, fine-tuned the work done by Schindler and Klein and constructed a very comprehensive dataset of capital control measures for 100 countries for 10 categories of assets over a period of 39 years starting from 1975 up until 2013. Schindler, Klein and Fernandez’s work can be called the third generation of measures of capital account openness.

A fundamental flaw with the above measures is that these measures express the openness of capital account or lack of it in binaries, which implies that they do not capture or reflect the degree of openness of a nation’s capital accounts. For example, relaxation of reporting requirements for foreign direct investment while keeping the percentage of investment allowed unchanged is a relaxing action. But this will not be reflected in a measure that expresses itself in binaries of ‘YES’ and ‘NO’ or ‘0’ or ‘1’. Also, all these measures have been derived from the AREAER database which publishes only yearly data, thus limiting the researchers from using their measures to assess the efficacy of CCAs which usually take place more than once a year.

Researchers in India have tried to address this problem. Pandey, Shah, Pasricha and Patnaik in 2016 have constructed a count measure of India’s capital controls by counting the number of CCAs (relaxing or tightening) on a weekly basis, as informed by the Reserve Bank of India through circulars or notifications. This approach appears to be more sensible as it provides information on the progressive tightening or relaxation of capital controls by a country. It is crucial, however, to admit  that even this measure might be susceptible to measurement errors as one CCA can be more intense than a couple of CCAs taken together.

Be that as it may, CCAs will continue to be used as policy instruments for years to come. As data on the announcement and implementation of these actions becomes more accessible, researchers will be able to construct better quantitative measures for assessing the efficacy these actions. Governments and policy makers around the world are bound to benefit from the body of knowledge that these measures will produce.

The World Bank just pledged $1 billion for urban transport & agriculture in Maharashtra


Here are the Policy and Finance headlines from 1st March 2017.

Policy News

Get all accounts on net banking by 31st March – Govt to banks. 

The ministry of Electronics and Information Technology has asked to get all accounts enabled with Net Banking by March 31st this year. A third of all bank accounts across the country are not linked to the internet yet, the government said. One lakh common service centers launched by the government will help the banks on the move.

During his first Presidential address to the Congress today, US President Donald Trump said, “My job is not to represent the world. My job is to represent the United States of America.” He stated, “America respects the right of all nations to chart their own path,” adding, “But we know that America is better off, when there is less conflict”

Govt notifies law to criminalize possession of banned notes

The government has notified a law that makes the possession of more than 10 scrapped notes by individuals a criminal offence. Having over 25 pieces of old notes for research purposes will also be considered a criminal offence. The law prohibits the holding, transferring or receiving of ₹500 and ₹1,000 notes from December 31, 2016, and imposes fines on offenders.

Compiled by Aayush Makharia

Finance News

CSO estimate: India GDP growth at 7% in Q3, economy bucks the note ban.

– Going by the Q3 India GDP growth rate numbers released by Central Statistics Office (CSO), the impact of demonetization seems to have been negligible on Indian economy.

– CSO’s estimate of real gross domestic product (GDP) for the December quarter came in at a robust 7%, while growth in gross value added (GVA) was 6.6%.

– These numbers suggest that the impact of demonetization, which had resulted in the withdrawal of a huge portion of currency in circulation, was negligible.

(Source: Livemint)

2) World Bank pledges $1 billion for urban transport, agriculture in Maharashtra.

– World Bank Chief Executive Officer (CEO) Kristalina Georgieva, who is on a visit to Mumbai, has agreed to lend $1 billion to Maharashtra for two projects in the areas of urban transport and climate change.

-This is the highest assistance that World Bank has committed to any Indian state.

– The lending would be extended at Libor-plus rate for a period of 18 to 20 years.

– The assistance would be used to fund the third phase of Mumbai Urban Transport Project (MUTP), and a climate resilient agriculture programme in dry-land regions of Vidarbha and Marathwada.

– Over the last five years, the World Bank has invested over $1.4 billion in Maharashtra in the areas of urban transport, rural water supply, and agriculture.

– Apart from the direct assistance of $1 billion, the organization would also help Maharashtra draw in funding from other multilateral lending agencies and private sector.

(Source: Livemint)

3) SEBI’s charge – from U K Sinha to Ajay Tyagi.

– U.K. Sinha’s six-year term (with two extensions) as head of the Securities and Exchange Board of India (SEBI) ends on 2 March.

– The 1976-batch Indian Administrative Service (IAS) officer from the Bihar cadre leaves behind a stellar legacy with incredible results in all markets under the supervision of the regulator.

– Ajay Tyagi, ex-Finance Ministry official, will replace him as the Chairman.

– The new Chairman will be have to deal with old issues like refunding the Sahara investors as well as new challenges like high-frequency trading.

(Source: Livemint)

4) China’s Central Bank faces a delicate balancing act.

– China’s central bank faces a dilemma: whether to raise borrowing costs and potentially undermine the nascent economic recovery, or hold firm and risk spurring capital outflows.

– The People’s Bank of China is trying to take the middle road, boosting money-market rates as well as increasing capital controls.

(Source: Bloomberg)

5) Sydney home prices surge at fastest annual pace since 2002.

– Despite tighter lending restrictions aimed at discouraging speculative buying by landlords, the runaway housing market shows few signs of easing.

– Housing values in Australia’s largest city Sydney have risen at the fastest annual pace in 14-years in February as record-low interest rates outweighed regulatory efforts to avert a housing bubble.

(Source: Bloomberg)

Compiled by Pradnya Nerkar

Livemint talks about the Economics of Illegal Immigration


Machine Learning For Cyber-security Not Cyber-crime

Cyber-criminals have yet to adopt machine learning for offensive attack strategies and they probably won’t for a long time.

The cyber-security industry has always been under constant strain from cyber-criminals and malware. With increasing integration of hardware, software and services being built into every aspect of our lives, the task of keeping data secure has become even more difficult.

The arsenal of tools that cyber-criminals now have at their disposal has raised concerns for security companies, and turned the criminals into threat actors who can create, disseminate and penetrate a target’s defences using custom-built and never-before-seen malware. The security industry has had to adopt a new way of dealing with the unknown by leveraging the powerful capabilities of machine learning algorithms.

Threats To Secure Cloud Operations Are Evolving

John Howie, former COO of the Cloud Security Alliance, says secure providers aren’t enough; threats to users are evolving fast.

Confidence in the way the cloud providers manage security has risen as the sun sets on the first decade of cloud computing. If concern over cloud security has taken a step or two to the rear, it remains just off center stage, showing up in surveys as a diminished but still present concern.

And, a broadcast by a former chief operating officer of the Cloud Security Alliance explains why cloud security has yet to move offstage in the IT manager’s consciousness. John Howie, chief privacy officer and head of cyber-security at the Hauwei Consumer Business Group, said new threats are evolving with the cloud in webinar broadcast by IEEE Jan. 24. Howie was COO of the Cloud Security Alliance from 2012 to 2014 and is a principal of Howie Consulting Inc.

AI Technology Takes Center Stage At Retail Convention

Artificial intelligence (AI) and other leading-edge technologies will be highlights of this year’s National Retail Federation (NRF) Big Show in New York, but many retailers are still struggling with more rudimentary analytics.

Many retailers continue to struggle to keep up with the disruptions that digital natives have brought to the industry. Companies such as Amazon introduced recommendation engines and rating systems. And in the last decade, the iPhone and Android mobile devices have put even more power into consumers’ pockets. Shoppers can be in one physical retail location and search for a better deal elsewhere using their smart phones.

The world is shifting underneath retailers’ feet. And more is yet to come. At the National Retail Federation event in New York (January 15 through 17) technology vendors are be showcasing some of the most cutting edge technologies for retailers, including chatbots, artificial intelligence, augmented and virtual reality, and more. Are retailers ready?

It depends. There’s really a range of experiences across companies. Analytics can offer retailers value across many aspects of their businesses, from supply chain optimization to workforce management to understanding consumer behavior.

Compiled by Shreyansh Surana

Policy Updates. In today’s policy updates, I give highlights of the Economic Survey released by India’s CEA Arvind Subramaniam.

The Economic Survey projects the GDP growth in 2017-18 to be between 6.75 per cent to 7.5 per cent post-demonetisation. For the current fiscal, the growth is projected to fall to 7.1 per cent from 7.6 per cent last fiscal.

Good fiscal performance by States should be incentivised to keep the overall fiscal performance on track

The Survey has highlighted the need for fiscal prudence both by the Centre as well as the States in order to maintain overall fiscal health of the economy.

It elaborates that as the fiscal challenges mount for the states because of the Pay Commission recommendations, and mounting payments from the UDAY bonds, there is a need to review how fiscal performance can be kept on track. Greater reliance will need to be placed on incentivising good fiscal performance, not least because states are gradually repaying their obligations to the Centre, removing its ability to impose a hard budget constraint on them says the Economic Survey. Above all, however, incentivising good performance by the States will require the Centre to be an exemplar of sound fiscal management itself.

Universal Basic Income (UBI) Scheme an alternative to plethora of State subsidies for poverty alleviation

The Survey has advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty.

The Survey says the UBI, based on the principles of universality, unconditionality and agency, is a conceptually appealing idea but with a number of implementation challenges lying ahead especially the risk that it would become an add-on to, rather than a replacement of, current anti-poverty and social programmes, which would make it fiscally unaffordable.

Based on a survey on misallocation of resources for the six largest Central Sector and Centrally Sponsored Sub-Schemes (except PDS and fertilizer subsidy) across districts, the Economic Survey points out that the districts where the needs are greatest are precisely the ones where State capacity is the weakest. This suggests that a more efficient way to help the poor would be to provide them resources directly, through a UBI.

Exploring the principles and prerequisites for successful implementation of UBI, the Survey points out that the two prerequisites for a successful UBI are: (a) functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary and (b) Centre-State negotiations on cost sharing for the programme.

The Survey says that a UBI that reduces poverty to 0.5 percent would cost between 4-5 percent of GDP, assuming that those in the top 25 percent income bracket do not participate. On the other hand, the existing middle class subsidies and food, petroleum and fertilizer subsidies cost about 3 percent of GDP.

Property Tax can be tapped to generate Additional Revenue at City Level

Urban Local Bodies (ULBs), having primary responsibility for the development and service provisioning of cities, face major and inextricably linked problems: large infrastructure deficits, inadequate finances, and poor governance capacities.

Currently, tax revenues are not constrained by inadequate taxation powers of ULBs. One promising source is property tax. The study done for the Survey shows that property tax potential is large and can be tapped to generate additional revenue at city level. Satellite imagery can be a useful tool for improving urban governance by facilitating better property tax compliance.

Apparel and Leather industry key to generation of formal and productive jobs

The Survey recommends:

An FTA with EU and UK in the case of apparel will offset an existing disadvantage by India’s competitors- Bangladesh, Vietnam and Ethiopia. In the case of leather and footwear, the FTA might give India an advantage relative to competitors. In both cases, the incremental impact would be positive.
The introduction of the GST offers an excellent opportunity to rationalize domestic indirect taxes so that they do not discriminate in the case of apparels against the production of clothing that uses man-made fibers; and in the case of footwear against the production of non-leather based footwear.
A number of labor law reforms would encourage employment creation in these two sectors.

Labour migration in India increasing at an accelerating rate

Policy actions to sustain and maximise the benefits of migration include: ensuring portability of food security benefits, providing healthcare and a basic social security framework for migrants – potentially through an inter-state self-registration process.

Redistributive Resource Transfers (RRT) should be significantly linked to fiscal and governance efforts on the part of the states

Redistributive Resource Transfer or RRT to a state (from the Centre) is defined as gross devolution to the state adjusted for the respective state’s share in aggregate Gross Domestic Product (GDP). The top 10 recipients are: Sikkim, Arunachal Pradesh, Mizoram, Nagaland, Manipur, Meghalaya, Tripura, Jammu and Kashmir, Himachal Pradesh and Assam.

The Economic Survey 2016-17 points out that there is no evidence of a positive relationship between the transfers and various economic outcomes. Instead, there is a suggestive evidence of a negative relationship. For example, larger RRT flows seem to negatively affect fiscal effort (defined as the share of own tax revenue to GSDP). These trends are robust to alternative definitions of RRT.

In this context, the question is whether RRT, in future, can be linked more saliently to fiscal and governance efforts on the part of the States.

The Economic Survey 2016-2017, also suggests providing a part of the RRTs or to redistribute the gains from resource use as a Universal Basic Income (UBI) directly to households in relevant states which  receive large RRT flows and are more reliant on natural resource revenues.

Fiscal activism embraced by advanced economies not relevant for India

Since the 2008-09 Global Financial Crisis (GFC), internationally fiscal policy has seen a paradigm shift from the emphasis on debts to deficits, arguing for greater activism in flows (deficits) and minimising concerns about sustainability of the stocks (debt). But India’s experience has reaffirmed the need for rules to contain fiscal deficits, because of the proclivity to spend during booms and undertake stimulus during downturns. India’s experience has also highlighted the danger of relying on rapid growth rather than steady and gradual fiscal and primary balance adjustment to do the “heavy lifting” on debt reduction. In, short it has underscored the fundamental validity of the fiscal policy principles set out in the FRBM.

Suggests setting up of a centralised Public Sector Asset Rehabilitation Agency

The Survey reaches to the conclusion that it may be necessary because

Public discussion of the bad loan problem has focused on bank capital. But far more problematic is finding a way to resolve the bad debts in the first place.
Some debt repayment problems have been caused by diversion of funds. But the vast majority has been caused by unexpected changes in the economic environment after the Global Financial Crisis, which caused timetables, exchange rates, and growth rate assumptions to go seriously wrong.

This concentration creates a challenge since large cases are difficult to resolve, but also an opportunity since TBS could be overcome by solving a relatively small number of cases.
Restoring them to financial health will require large write-downs.
Among other issues, they face severe coordination problems, since large debtors have many creditors, with different interests. And they find it hard –financially and politically—to grant them sizeable debt reductions, or to take them over and sell them.

It increases the costs to the government since bad debts of the state banks keep rising, and increases the costs to the economy, by hindering credit, investment, and therefore growth.
Since, private run Asset Reconstruction Companies (ARCs) have not been successful either in resolving bad debts, though international experience (especially that of East Asian economies) shows that a professionally run central agency with the government backing could overcome the coordination and political issues that have impeded progress over the past eight years.

Source: Swarajya Magazine

In other important Developments, Livemint talks about the Economics of Illegal Immigration. 

US President Donald Trump’s first steps to tighten American border policy have, unsurprisingly, courted controversy. His executive order clamping down on immigration from seven predominantly Muslim nations is aimed at bolstering national security. The issue that had dominated his campaign trail and much of the first week of his presidency—stopping illegal immigration from Mexico—is a different matter. The driving impulse here, even if obfuscated by unfortunate rhetoric and a border wall solution that is essentially a boondoggle, is economic. That impulse is more complicated than it may initially seem.

An Indian firm has launched an analytics application that can converse with you

Web analytics concept - Multicolor version


Italy tries to skirt a populist revolt: With Paolo Gentiloni named as the new Prime Minister and changes in the country’s electoral law (a one stage election with bonus seats being available only to a party that receives more than 40% of votes) it may seem that Italy is safeguarding itself from the rise of a populist government. However, Italy may not be wholly insulated. The possibility of a coalition government formed by the 5 star government cannot be ruled out – owing to a growing nationalist sentiment across the globe. While a break out of an Italian banking crisis now seems to have been evaded, questions around how the government will deploy its $ 21.4 billion fund to support the banking system, whether a state rescue of Monte dei Paschi is consistent with EU rules and whether Brussels will give its approval on terms of compensation offered to investors who may have been inappropriately sold junior bonds still remain. Two smaller banks need another capital injection after being rescued last year by Atlante, a private sector industry-funded bank rescue vehicle. Whether these funds will be allocated by Atlante or whether the banks will be eligible for a state bailout is also unclear.

While these systemic risks need to be addressed urgently, there is a bigger structural risk that Italy faces – a high public debt burden. Italy has faced challenges of operating in an open, global economy with its SMEs being heavily dependent on bank lending and too resistant to outside capital that critically impacts the boost to growth and productivity in Italy. An inefficient judicial system, inflexible labour laws and pervasive corruption are telling indicators of the need for far reaching reforms in Italy. Continue reading.

German pride shifting to frustration in role as motor of Europe: A jump in inflation to 1.7% in December, has made German economists and monetary officials wary of economic challenges facing the country ahead. While German monetary officials are urging the ECB to do away with the monetary stimulus, officials at ECB believe that German inflation is an indicator of faster German growth and that core inflation of 1% is still quite under the tolerance threshold. They further challenged a debate of a spiralling inflation by pointing out that German companies are only partially passing on higher costs to clients and that Germans haven’t noticed a significant rise in the price level. Wage growth is also subdued and does not indicate an upward pressure to core inflation. More here.

Euro zone bailout fund – Greek public debt is manageable: The euro zone bail out fund has declared Greece’s debt crisis to be manageable although IMF has estimated the Greek debt burden to reach 175% of GDP by 2020, 164% by 2022 and thereafter explode to 275% of GDP by 2060. However, a spokesman from the Eurpoean Stability Mechanism has assured that the euro zone has promised to offer Greece additional debt relief subject to it delivering on all its reform promises. However, Germany – facing elections – is strongly opposing any additional relief until 2018 when Athens finally delivers on its promises. Euro zone governments are also hesitant on providing additional support to Greece. Read more.

Facing unemployment, austerity and scandal, Brazil struggles to keep it togetherWith Brazil struggling to fight a recession owing to a slowdown in China, falling commodity prices and a fiscal consolidation programme by Dilma Rousseff, each passing day seems to be a challenge for the country. A country already having lost faith in its political system due to a widely criticised and under investigation political scandal, the new government under Temer seems to be taking some harsh and controversial steps – freezing of the fiscal budget for the next two decades in real terms at the 2016 level, adopting of certain controversial pension and labour reforms – to deal with its fiscal deficit. The result is a general discontent in Brazilian society that shows signs of a political turmoil in the near future. What is more unnerving is the growing support for Congressman Jair Bolsonaro who is seen openly associating Brazil’s ‘good old days’ to its military dictatorship.

Compiled by Swara Dharmaraj

Data Analytics


Data analytics firm Manthan has launched an artificial intelligence-powered conversational analytics application, as its new offering within the range of analytics capabilities.The product that can answer complex business queries in natural language using company’s data available on Manthan’s analytics suite cost the Bengaluru-based company over $7.5 million in R&D cost.

It allows a voice assistant like Amazon’s Alexa or Apple’s Siri to be one’s most-trusted employee if they are a large business owner and use Manthan’s new capability Maya. Moving beyond personal assistance tasks like sending emails or giving weather updates, voice-based assistants – integrated with Maya’s information system – can now answer business queries to a CXO looking for last month’s profit report or wanting to know why the company’s sales was down last weekend. More about Manthan here.

This editorial charts out the growth forecasts for the data analytics sector, while mentioning some applications that are slated to see a spike such as Coca Cola’s Freestyle dispensers which allow users to specify mixtures of flavors from the brand for a custom drink. The company captures information on what drinks are dispensed and at what time of day, among other data elements. This data is used to fine-tune stocking and inventory even for non-Freestyle vending machines.

A TechCrunch article details the vagaries of big data. It claims that companies can only harness their true potential through applications of predictive algorithms since their beauty lies in the fact that they don’t need to understand the cause and effect behind statistical relationships in order to work incredibly well in practice. “For an enterprise to glean the benefits of prediction, it must first give up trying to deduce why things are a certain way, and start trusting the lines of code which tell us that they are”, it says.

Big data stands to transform economic measurement in substantial ways. The volume and precision of data available allows economists to revisit the foundational assumptions underpinning common indexes. This column presents a new empirical methodology that leverages big data to translate nominal numbers into real output or welfare. ‘The unified approach’ nests major price indexes and addresses implicit biases in these measures. An examination with barcode data suggests that standard methods of measuring welfare overstate cost of living increases by ignoring new products and demand shifts.

Compiled by Reshu Natani

IMF Director Says Trump’s Fiscal Plans Likely to Boost U.S. Economy



Oil Falls as U.S. Drillers Replace Barrels Lost in OPEC-Led Cuts
Oil dropped from a three-week high amid speculation that increased U.S. drilling will boost output, offsetting cuts by OPEC and other producers.

Futures fell 1.1 percent in New York after failing to extend Thursday’s 2 percent rally. Rigs targeting crude in the U.S. rose this week by 15 to 566, the highest since November 2015, according to Baker Hughes Inc. data reported Friday. American crude output is the highest level since April, government data show. Oil supplies from OPEC are plunging this month, according to tanker-tracker Petro-Logistics SA.Last month’s pact between the Organization of Petroleum Exporting Countries and 11 other nations gave hope to a market stuck in a 2 1/2 year slump. While Saudi Arabia says more than 80 percent of the agreed cuts have been implemented, analysts and investors are waiting for data to gauge the extent of the decrease. The International Energy Agency says rising prices will spur U.S. shale output, and drillers are adding more rigs.

West Texas Intermediate for March delivery fell 61 cents to $53.17 a barrel on the New York Mercantile Exchange on Friday. Total volume traded was about 25 percent below the 100-day average.Brent for March settlement dropped 72 cents, or 1.3 percent, to $55.52 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $2.35 premium to WTI.

Energy shares slipped after Chevron Corp. posted its first annual loss since at least 1980, signaling the difficulties faced by the world’s biggest oil companies as they struggle to emerge from the worst collapse in a generation. The S&P Oil & Gas Exploration and Production Select Industry index fell 1 percent.U.S. crude output climbed by 17,000 barrels a day to 8.96 million in the week ended Jan. 20, according to an Energy Information Administration report on Wednesday. Rigs targeting crude have risen by 250 to 566 since touching a seven-year low in May, according to Baker Hughes data. Read more.

Rural Wage Growth Defies Demonetisation, Rises To 7.3%: Nomura
Defying demonetisation, nominal rural agricultural wages growth rose to 7.3 percent in November on year-on-year basis, largely owing to hike in minimum wages announced by the government in September last year, financial services major Nomura said in a report.
Interestingly, the report said that the steady wage growth suggests a likely release of pent up demand after remonetisation.

“Nominal rural agricultural wages growth rose to 7.3 percent year-on-year in November 2016 (the month demonetisation was announced) from 6.9 percent in October, remaining well above the previous 12-month average of 4.8 percent,” Nomura said in the report.
Demonetisation of Rs 500 and Rs 1,000 currency notes came into effect from November 9, 2016.

According to the financial services major, rural wages may have defied this demonetisation effect because of the hike in minimum wages announced by the government in September 2016.

“The resilience of nominal rural wage growth, despite demonetisation and amid lower inflation ( that is higher real wages), suggests that the current slowdown in rural demand is transitory and could give way to a sharp release of pent up demand once the economy is sufficiently remonetised, which we expect by end-March,” the report said.
Rural wage growth has only recently started to trend higher, after almost two years of stabilisation, it noted. Continue reading.

Abe Open to Bilateral Trade Deal With U.S. After Trump Exits TPP
Japanese Prime Minister Shinzo Abe signalled that he’s open to a bilateral trade deal with the U.S. after Donald Trump formally withdrew from a 12-nation Asia-Pacific accord this week in one of his first acts as president.

One-on-one talks with the U.S. on a trade deal are “not absolutely impossible,” Abe told lawmakers on Thursday in Tokyo, adding that he’s finalizing negotiations for a summit with Trump. The leaders are set to have a phone conversation in the coming days before meeting in Washington on Feb. 10, the Yomiuri newspaper reported on Thursday.
Abe, a key proponent of the Trans-Pacific Partnership regional trade agreement, is seeking ways to boost economic relations with Japan’s only military ally. Trump prefers to negotiate bilateral trade deals and has warned that he might withdraw U.S. troops from South Korea and Japan if allies did not pay more for their services.

Asked in parliament about the potential fate of Japan’s sensitive agricultural sector in any bilateral talks, Abe vowed to “protect what must be protected.”

Abe said he wanted the Washington summit to show that the alliance between the two nations is “unshakable,” adding that he planned to discuss the East China Sea and the South China Sea. Japan relies on the U.S. for a “nuclear umbrella” to protect against regional threats including North Korea and China.

Asked by his former Defense Minister Itsunori Onodera to comment on bolstering Japan’s own defenses to enable pre-emptive strikes on missile bases, Abe said this was legally possible, but there was no plan to gain such capabilities.

“I want to strengthen the deterrent power of the entire U.S.-Japan alliance,” Abe said. “We must think about our own deterrence in the context of our defense-only policy and within the framework of the alliance.”

The first visit to Japan by a Trump administration official will be made by U.S. Defense Secretary James Mattis on Feb. 3. Defense Minister Tomomi Inada told parliament she welcomed the visit as a sign of America’s interest in Asia. Continue reading.

Lagarde Says Trump’s Fiscal Plans Likely to Boost U.S. Economy
President Donald Trump’s plans to overhaul the U.S. tax system and increase infrastructure spending should accelerate growth in the world’s biggest economy over the next two years, said International Monetary Fund Managing Director Christine Lagarde.

In an economic update last week, the IMF bumped up its forecast for U.S. growth by 0.1 percentage point this year and 0.4 point for 2018. The U.S. economy will expand by 2.3 percent in 2017 before accelerating to a 2.5 percent rate in 2018, the fund said.

While Trump has promised to cut taxes and boost infrastructure spending, he’s also threatened to impose tariffs on trade partners such as China and Mexico. Lagarde said it’s too early to predict how Trump’s other policies may impact the economy. More here.

Compiled by Sharayu S Pawar


Nifty50 is overbought, expect volatility in a wide range; protect profit at higher levels 

The Nifty50 is overbought by now, but it continued to post gains for the fourth day in a row and ended the week with a gain of 290 points, or 3.50 per cent. The ending of the week threw up extremely divergent signals on the daily and weekly charts.

We expect a modest opening for the market on Monday. Not only is the Nifty50 showing overbought conditions on the daily charts, it faces pressure from external technical factors like a  potential rise in the US Dollar Index and a spike in US bond yields. Continue reading here.


Sensex up 10% from December lows; investors should stay put despite B-Day volatility 

The market began the week with a gap down reacting to Trump’s ‘Make in USA and hire in USA’ rhetoric after the inauguration, but the inherent strength of the market was so strong that such noise was shrugged off immediately and market bounced back quickly thus setting tone of bullish outlook for the whole week ahead.

Not surprisingly, in such bullish undertones, the negatives quarterly results were disregarded and stock prices defied all logic to inch higher. More here.


Oil prices fall as data suggests drill ramp up in US

Oil prices slipped on Friday, extending losses after data suggested drilling is ramping up in the United States, prompting investor concern about how effective the Organisation of the Petroleum Exporting Countries (Opec) and other producers will be at supporting prices by cutting supplies.

US crude futures for March delivery settled down 61 cents, or 1.1 per cent, at $53.17 a barrel.

Brent was down 72 cents at $55.52 a barrel.The US weekly oil and gas rig count from Baker Hughes showed that US drillers added 15 oil rigs in the week, the 12th gain in 13 weeks. That brought the total count to 566, the most since November 2015.Prices had risen during Asian trading, though activity was thin due to the start of the Lunar New Year holiday in much of that region, including China and Singapore.

Compiled by Beverley Dias

Sensex closes up 174 points to hit 3-month high on optimism over Budget

3/3/2008 - MUMBAI: BSE Sensex showing certain indices in Mumbai. Sensex was down 570 points - PTI Photo [Business]

Public Policy

Arun Jaitley says CBEC staff will have adequate work in GST regime

Finance minister allays concerns of Central Board of Excise and Customs officials threatened with redundancy under the goods and services tax regime. He stated that the advent of technology will minimize the interaction between assessee and assessor and the level of discretion given to taxmen. Read about it here.

Housing sector biggest beneficiary of demonetisation: Venkaiah Naidu 

Housing sector is the biggest beneficiary of demonetisation as interest rates have fallen; Union Minister M Venkaiah Naidu today said and expressed hope that Finance Minister will announce more incentives for the sector in the Budget on February 1. Taking a jibe on commentators who cast doubts on benefits to government from demonetisation as INR 15 lakh Crore have come back into the system, Naidu said this would lead to more people coming under the tax net. More here.

Importers worried over service tax on ocean freight: EEPC 

The Finance Ministry order levying 4.5 per cent service tax on ocean freight has come as a “bolt from the blue” for the importers and exporters and will adversely impact the domestic trade, Engineering Export Promotion Council (EEPC) has said.

“As a result of the January 12 notification by the Revenue Department, import ocean freight and ancillary charges would be subject to a service tax at the rate of 4.5 per cent. Previously, service provider and receiver who were located outside the taxable territory of India were exempted from this tax,” EEPC India Chairman T S Bhasin said. “The order has created ‘serious problems”, he added.

Besides the additional tax burden, this makes it difficult for the Indian importers to know what the foreign exporters’ ocean freight is. Continue Reading.

Systemic reform will improve ease of doing business: Nirmala Sitharaman 

Seeking private investment, Commerce and Industry Minister Nirmala Sitharaman today said systemic reforms being pushed by the government may have some short term pain but will make India an easier place to do business. The government is committed to systemic reforms, however painful it is in the short run, she said while hinting at recent demonetisation exercise carried out by the government to eliminate parallel economy.

GAAR from 1 April, to be invoked in fair and rational manner: Tax dept

General anti-avoidance rules (GAAR) was proposed in 2012-13 to check tax evasion and avoidance by foreign investors on their transactions in India. The Income Tax department seeks to address concerns of foreign investors over the implementation of GAAR from 1 April. GAAR seeks to give the tax department powers to scrutinise transactions structured in such a way as to deliberately avoid paying tax in India. After being postponed twice, it is slated to be implemented from financial year 2017-18. Read more on Livemint.

Compiled by Aditi Khutal 


Sensex closes up 174 points to hit 3-month high on optimism over Budget

  • BSE Sensex closed higher by 174 points, or 0.63%, to 27,882, while the Nifty 50 rose 39 points, or 0.45%, to 8,641
  • Market barometer Sensex rallied for the fourth day to end at a 3-month high of 27,882 as February derivatives series got off to a strong start ahead of Budget next week, recording best weekly gains since May last year.
  • Market started the February series on a strong footing led by positive global cues following another record closing in the US. Further, widening of bets on hopes of a series of market and corporate friendly measures from the Budget for 2017-18 to revive an economy hit by the cash ban in November last year helped.

First merged Budget in 92 years: Top rail-linked stocks to watch

  • The Modi government’s rule of doing away with a 92-year-old colonial tradition of presenting a separate Rail Budget and merge it with the Union Budget has taken the sheen off railway-linked stocks, which have been trading rangebound over the past one month.
  • Experts say as far as budgetary allocation is concerned, the importance of the sector will not diminish any bit. In fact, Budget measures could prove to be positive for many railway-linked stocks, experts said.

SEBI sets listing rules for exchanges

  • The Securities and Exchange Board of India announced on Friday new measures for exchanges listing on a rival bourse to resolve any potential conflicts of interest, including closer oversight from an independent panel set up by the regulator.
  • The rules come as BSE Ltd gears up to list on bigger rival National Stock Exchange on Feb. 3, after its up to 12.4 billion rupees ($182.23 million) initial public offering was heavily oversubscribed.
  • Among the new measures, SEBI said exchanges may appeal to an independent panel at the bourse in which they are listed when it feels “aggrieved” by a source of potential conflict.

The exchange can also submit any complaints to an independent panel to be set up by SEBI to provide “independent oversight and review” and to monitor potential conflicts on a regular basis.

  • Concerns over conflicts of interest rose after the National Stock Exchange appealed to SEBI to be allowed to list on its own exchange, saying listing on another bourse would expose it to regulation by a rival.

Compiled by Pooja Shah

Data Analytics

In line with the Modi government’s decision with regard to the demonetization move, the Income Tax department is all set to catch black money hoarders who have managed to get their money cleaned up. The IT dept is calling for bids for Managed Service Provider (MSP) to develop analytical tools for assessing the data of all the people who deposited their money in the banking system & collate it with the vast amount of data it has accumulated over the years into a dashboard format to be used by the Department. Read more.

This article is very useful for learning as top how to use data analytics to improve the practice of Kaizen for a company’s management. The article describes as to how plan with big data whereby rather than relying on traditional theoretical improvement in growth & productivity estimates managers can rely on rely on data to draw up more accuracy duration estimation, better identification and mitigation of risks, and a much more reasonable allocation of resources.How to implement newer programs in a realistic fashion, how to use exploratory data analytics techniques to find out hidden lacunae in their operations & how to improve upon them.

The perils of using data analytics as a sole criterion to measure employee productivity in a company is discussed in this article. Some of the drawbacks include employees fudging their productivity figures , manipulating spreadsheets of employee work output,  lack of empathy for an employee’s personal issues, invasion of privacy in the quest for extraction of social media data,stifling creativity & workplace freedom.

Compiled by Prateek Kumar Mishra

India oil consumption growth will be the fastest among all major economies by 2035

Offshore drilling rig, Gulf of Mexico


The Dow Jones Industrial Average continued with its record run today, after surpassing the 20,000 milestone yesterday. The S&P and Nasdaq also hit record levels immediately after opening, before easing off their highs.

India oil consumption growth will be the fastest among all major economies by 2035, BP Statistical Review of World Energy said. India, Asia’s second-biggest energy consumer since 2008, had in 2015 overtaken Japan as the world’s third-largest oil consuming country behind US and China.

According to BNP Paribas SA, the fed will increase interest rates every quarter in 2018. Given the fiscally expansive policies proposed by Donald Trump, the new president’s agenda may help to lift wages in 2018, hoisting labor costs, the bank said in a Jan. 25 report.

According to figures released on Thursday by the Office for National Statistics, the UK economy grew 0.6 percent in the fourth quarter from the previous three months, the same rate as in the second and third quarters and better than the 0.5 percent figure economists had estimated. It also makes Britain the fastest-growing among the world’s seven most developed economies. The fourth quarter figures were driven by service businesses, with strong contributions from retail sales and travel – consumer-based industries that capitalised on public confidence. Manufacturing bounced back from a weak third quarter.

China’s latest population development plan, released by the State Council late Wednesday, projects that about a quarter of China’s population will be 60 or older by 2030. That’s up from 13.3 percent of the population in the country’s latest census in 2010. A shrinking labor force would further erode China’s competitive edge in manufacturing and would also be a drag on consumption. The total population is now expected to peak around 2030 and begin to decline after that.

Compiled by Nicole Almeida

Data Analytics

AI Crushes Poker Professionals and Why it Matters

A machine named Libratus, developed at Carnegie Mellon University, has been consistently beating 4 of the world’s best poker players. In a 20-day tournament to showcase the ability of the machine, Libratus has amassed a profit of over $700k and is very much in the lead with only a week left to play. Although the human players have been allowed to share notes, they have found the computer to be increasingly difficult to outmaneuver.

This is a huge breakthrough for AI since unlike chess or go, poker deals with imperfect information and includes bluffing and semi-bluffing, traditionally considered to fall within a ‘human’ domain. The researchers hope that given its success in this complicated environment, AI enabled technology would become a successful tool in international negotiations and conflict management in the future.

Demonetisation Analytics

The GoI has begun the exercise of engaging private agencies to compare demonetization-period data with I-T returns to zone in on tax defaulters. The department has identified that INR 2 lac+ was deposited in 60 lac bank accounts amounting to over INR 7.34cr. This data will be matched against information from I-T returns, TDS and Third Party Reporting to construct a profile of each individual taxpayer. The techniques utilized involve cutting edge analytics, clustering and large volume data management.

Viacom’s March towards being a Data-driven Company

Viacom is one of the world’s premier media companies, owning both Nickelodeon and MTV. In the course of its operations, Viacom collects a vast amount of data and has an intricate understanding of what its audiences watch and when they watch it. This helps the company to optimise its show schedule and so forth. However, the system itself faces issues of bandwidth, with excess bandwidth going to waste at times that few people are consuming the media company’s products, particularly during sleeping or working hours. To correct this, Viacom has built a platform (based on Apache Spark) which will integrate real time analytics and optimise the provision of bandwidth to ensure quality of content at all times. Interestingly, Viacom will also monitor environmental factors that are beyond its control such as Wi-Fi connectivity at a client’s home and look to mine insights that could further optimise its content delivery.

Compiled by Shivam Kaushik

Public Policy


India mulls reviving colonial era gold mines with $2 billion reserves

The Government of India is planning to revive a cluster of colonial era gold mines, shut for 15 years, but with an estimated $2.1 billion worth of deposits left to look for ways to cut its trade deficit. India is the second largest importer of gold in the world, behind China, with an estimated $30bn of gold being annually imported from overseas.

Govt plans expansive budget despite growth, revenue worries

Arun Jaitley is looking at how to fund giveaways to taxpayers and higher public investment to help nurse Indian economy back to health after demonetisation

The FinMin is set to borrow more than what was originally planned and raises concern whether the govt is taking too many fiscal risks. A fiscal advisory panel has suggested that to stretch the fiscal deficit just slightly over 3% to free up funds for railway and infrastructure projects.

This has drawn a warning from the rating agency S&P who mentioned that delayed fiscal consolidation could hurt India’s chances of an upgrade due to its high and rising levels.

The FinMin and his team have forecasted a recovery in the nominal GDP to be around 12% in 2017-18, assuming that the oil prices stay in the $55-60/barrel bracket and the GST being implemented in July. The IMF has shaved almost a percentage point off India’s forecast of real economic growth, to 6.6%, in the current fiscal year to March. link

Opinions: Moving towards a secure digital economy

Digital transactions are changing the way India transacts, trades and is taxed. The project endeavours to breach the Urban-Rural divide. But a wider adoption of digital payments will invariably change the dimensions of risks, crime and security as well. “Digital pickpockets” or cybercriminals may dominate the days ahead as they target digital and online transactions. Since their domain of work is a low risk environment (due to lack of forensic and human capabilities and attribution challenges) and an expansive reach of technology that will make even “petty pickings” attractive. And although cybercrime will affect us all, it will harm the poor disproportionately. It could ravage the small savings of many, deprive them of their meager means and, most importantly, result in erosion of trust in the financial ecosystem currently being built. It is, therefore, important that the government pay heed to small fraud. link


Trump orders building of Mexico border wall, targets US ‘sanctuary’ cities

POTUS Donald Trump orders crack down on US cities that shield illegal immigrants, proceeding quickly on sweeping and divisive plans to boost national security.

Trump signed two executive orders for building a 2000-mile wall along the US-Mexico border. This could change US’ fundamental stand on immigrants and test the US-Mexico relations. Trump has signaled at creating additional space near the southern border to make it easier and cheaper for the authorities to detain and deport the immigrants. He is set to meet the Mexican Prime Minister in the coming week.

Compiled by Manas Gokhale

Trump pulling out of Trans-Pacific Partnership (TPP) is Opportunity for India


Public Policy

US decision to pull out from TPP may be an opportunity for India

US President Donald Trump’s decision to withdraw from the Trans-Pacific Partnership (TPP) that his predecessor Barack Obama pioneered may comfort India and pave the way for a more balanced outcome of the ongoing trade negotiations for the Regional Comprehensive Economic Partnership (RCEP).Trump’s focus on signing bilateral trade deals to maximize gain and his “Buy American and Hire American” policy may, however, prove counter-productive to India’s interest. TPP is a trade agreement under negotiation among 12 nations: Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam, which together account for 40% of the world’s gross domestic product (GDP). Although the deal is aimed at countering China’s influence in international trade, India feared that it could adversely affect the country through trade diversion and stringent non-tariff measures.

SBI-led consortium moves SC in Aircel-Maxis case

A consortium of banks led by the State Bank of India (SBI) moved the Supreme Court on Tuesday seeking to be heard before the court decides to cancel Aircel’s use of the 2G licences it acquired in 2006.The government’s top law officer, attorney general Mukul Rohatgi, appeared on behalf of 12 banks, including SBI, Punjab National Bank, Bank of Baroda and Canara Bank. “Aircel owes the banks around Rs 20,000 crore. Any order on 2G airwaves could have an impact on the creditors,” Rohatgi told the court. On 6 January, the apex court had restrained Aircel Ltd from selling and trading 2G spectrum allotted to it in 2006 and said it would consider cancellation of the licences if the Maxis Group owner T. Ananda Krishnan failed to respond to the court’s summons. Maxis Group has a 74% stake in Aircel. A special Central Bureau of Investigation (CBI) court has ordered Krishnan to appear before it in connection with the Aircel-Maxis case, but he hasn’t complied. The CBI has set a 27 January deadline for him to appear before it. The Aircel-Maxis case relates to irregularities in allotment of 2G spectrum licences during the previous UPA government. The case will be heard next on 3 February.

Has the govt walked the talk on reviving public investments?

Soon after the Narendra Modi-led government assumed office, key officials began stressing the role of public spending on capex to revive investments and growth . Halfway into the government’s term in office, talk of such spending still dominates news but data on actual spending suggests that the government has failed to raise the level of public investments significantly over the past few years.The Modi government began its term on a promising note.By the end of 2014, government project announcements rose to a record high, an analysis of capex data from the Centre for Monitoring Indian Economy Pvt. Ltd (CMIE) shows. The analysis is based on four-quarter rolling averages of new project announcements (to smoothen the impact of lumpy announcements).

Compiled by Aayush Makharia

Data Analytics

Insurers and professionals are seeking more training in data analytics

Survey conducted by Celent and The Institutes shows that insurance and actuaries professionals are seeking advanced training in data analytics, and also specifies the subjects they would like to specialize in, to grow in their careers. More here.

Advanced Logic Analytics to marry data analytics with financial services market.

The company has been in the R&D stage for quite sometime now for creating analytical solutions across geographies, and plans to focus on London and New York markets before a major expansion in 2018. Explore this topic.

Real-time big data analytics changed the way data is managed.

With the new dynamic ways of using data, static data can take a back seat now, even though it will continue to be used. There are many areas where real-time data is used, like health system enrollment documentation update and fraud detection for credit-card transactions. Companies like IBM, Informatica, SAS Institute are the major players in this field. More on this.

Compiled by DivyaSri Palaparti


Dow Tops 20,000 as Earnings Feed Rally, Bonds Fall: Markets Wrap

The Dow Jones Industrial Average climbed past 20,000 for the first time as stocks around the world extended a rally after corporate earnings reignited investors’ optimism in economic growth. Bonds sold off with oil. The index for American blue chips took the round-number milestone after a handful of rallies fell short in the past month. It was the second-fastest 1,000-point trip in its history. The MSCI All-Country World Index headed for the highest closing level since 2015. European equities were swept up in trades favouring banks and cyclical companies. Bonds fell. The Mexican peso slumped after U.S. President Donald Trump said he plans to unveil actions that include steps toward building a border wall.

China’s Great Rebalancing Has Gone Missing From Stock Market

It was supposed to be the face of new China — a stock market in the technology hub of Shenzhen designed to nurture future stars like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Yet the ChiNext market set up in 2009 is proving a dud, at least when measured against the old-economy heavy Shanghai Composite Index in recent months. That’s in face of economic data that show how the new growth drivers — consumption and services, where private companies dominate — are in good shape.

FRBM report is out. This is why it matters to you

We seldom worry about the macro part of the budget—about terms such as fiscal deficit and tax-to-gross domestic product (GDP) ratio. The Fiscal Responsibility and Budget Management (FRBM) Committee submitted its report on 23 January 2016, a bit over seven months after it was set up. Though the report is not public, news reports say that the panel has recommended fiscal consolidation, but not at the expense of growth. Reports say that it tells the government not to worry if the fiscal deficit stays at, or just above, 3%. If your eyes are glazing over, unglaze them, because we’ll find out what this means and how it affects our lives.

World Bank Sees Oil, Industrial Commodities Surging in 2017

The outlook for energy and industrial commodities is looking more bullish as stronger demand and supply constraints are boosting prices from oil to zinc, the World Bank said.
Average prices for fuels such as crude, natural gas and coal will rise 26 percent this year from 2016, while those for metals including lead and zinc will climb about 11 percent amid increasing supply tightness, the Washington-based lender said in its quarterly Commodity Markets Outlook released Tuesday.

The Bloomberg Commodity Index advanced 11 percent last year after touching the lowest level in two decades in January. Zinc and Brent crude were among the biggest gainers. Iron ore surged more than 80 percent in 2016 as the credit stimulus in China helped to sustain steel output in the top producer.

“Prices for most commodities appear to have bottomed out last year and are on track to climb in 2017,” World Bank’s economist John Baffes said in the report.
Crude oil prices are projected to average $55 a barrel in 2017, a 29 percent increase from 2016, following the agreement between OPEC members and other producing nations to trim bloated global inventories amid rising demand from Asia. The forecast assumes that producers will partially comply with the pledge, the bank says.

Compiled by Prachi Dosani

Is the Modi govt really reviving public investments? This And Other Stories From 24th January


Data Analytics

Software Chooses Consumer Over Engineering

There’s a new emphasis in the software world with a focus on ease of use and more standardised platforms that support speed to market and innovation by makers.

In today’s world, the differences between consumer-friendly software and the software used by technicians like engineers and scientists are increasingly hard to point out. In the past, these two types of software were dramatically different, not just because of the groups who were using them but also because of the user experiences they provided.

Now the industry demand for cross-functional and user-friendly software is higher than ever and software vendors are tasked with developing flexible technologies to meet these demands.

The maker movement is a perfect example of this in action. Makers are creating and building robots, motherboards and other ground-up technologies based on low cost components and software resources now commonly available and used by engineers. The maker movement has reinvigorated the engineering industry and proven that there’s a little bit of engineering in everyone.

IT Headed For Fundamental Changes, SIM Survey Shows

IT organisation budgets look happy and positive on the surface, but there’s less money for maintenance and more for cloud and software development. The signs point to tumultuous times ahead.

IT organisations are increasing their budgets and hiring and salaries, according to the most recent SIM IT Trends study for 2017. But while the report looks very positive on the surface, IT pros need to gird themselves for uncertain times.

That’s according to Leon Kappelman, primary investigator on the survey for the Society for Information Management organisation (SIM) and professor of information systems at the University of North Texas, College of Business.

Kappelman told InformationWeek in an interview that we are in the midst of a “very tumultuous” period, as corporate technology spending is undergoing a significant change. There are big drops in the budget amounts going to hardware, software, and facilities, and more money spent on cloud.

“Everything looks very happy and positive from 50,000 feet,” Kappelman told InformationWeek in an interview. “But when you look under the hood, things are very tumultuous.”

Record Number of Vulns For Adobe, Microsoft, Apple In ’16, Says Zero Day Initiative (ZDI)

Like rules, records were made to be broken, and the security industry’s largest-ever vulnerability reporting and remediation didn’t disappoint, with 674 total advisories in 2016 – eight more than the year before, according to a report this week from the Zero Day Initiative.

ZDI, launched in 2005, encourages responsible reporting of zero-day vulnerabilities to affected vendors by financially rewarding researchers, and protecting customers while the affected vendor creates, tests, and delivers a patch. ZDI paid out nearly $2 million in rewards in 2016, the group reported this week.

More information on the vulnerabilities can be read in here.

Compiled by Shreyansh Surana


BSE IPO sailing, but some analysts have concerns over growth estimates

The initial public offering (IPO) of BSE has been seeing huge interest among investors, who have already subscribed to half the issue size on the very first day. But some market analysts are not convinced the domestic equity course has a strong growth story to command this kind of investor interest. India’s market capitalisation is projected to grow from $2 trillion at present to $5 trillion over the next 10 years.Vikas Khemani of Edelweiss Securities, says BSE definitely has growth drivers, but some of the concerns over its business are real. It is difficult to believe that Indian capital market will grow, but BSE will not grow. I think some of those some of those concerns are there for sure. Even though growth drivers are there, but we will still have to wait and watch.

Central Bank to buy back perpetual bonds worth Rs 500 crore

Public sector Central Bank of India will go for a premature buyback of 9.4 per cent perpetual bonds worth Rs 500 crore.The decision was taken at the lender’s board of directors meeting held today.

“The Board of Directors of the Bank at their meeting held on January 23, 2017 considered and approved the proposal for premature buy-back of 9.40 per cent perpetual bonds of Rs 500 crore,” it said in a regulatory filing.

The board has also authorised the Chairman and Managing Director for taking various procedural decision related to the buyback.

Idea in High Court against TRAI’s Rs 950 crore penalty recommendation 

Idea Cellular today moved Delhi High Court against TRAI’s recommendation to impose penalty of Rs 950 crore on the telecom firm for allegedly not providing interconnection to Reliance Jio (RJIO), even as DoT said the plea was premature.

The matter is pending before another bench of the high court where the DoT and TRAI have contended that the plea was not maintainable.

TRAI had recommended imposition of Rs 50 crore penalty per circle on Airtel, Vodafone and Idea, which came to Rs 1050 crore each on the first two for their 21 circles and Rs 950 crore on the third for 19 circles.

Government raises Rs 30,000 crore via disinvestment proceeds

The government has raised around Rs 30,000 crore from disinvestment proceeds, said department of investment and public asset management (DIPAM) secretary, Neeraj Gupta. This is the highest amount grossed through the stake sale programme. In this fiscal, the government has budgeted around Rs 56,500 crore from disinvestment proceeds, of which Rs 20,500 crore was to come through strategic sales.The government will also divest its 10% stake in Moil Ltd. on Tuesday where it currently holds 75.58% stake.

Compiled by Hrishikesh K Poduval

 Public Policy

 Has the Modi govt walked the talk on reviving public investments?

Soon after the Narendra Modi-led government assumed office, key officials began stressing the role of public spending on capex to revive investments and growth. Halfway into the government’s term in office, talk of such spending still dominates news but data on actual spending suggest that the government has failed to raise the level of public investments significantly over the past few years. Read more on Livemint.

Kyoto Protocol: Cabinet approves ratification of second commitment period

The Union cabinet approved ratification of the second commitment period of the Kyoto Protocol on containing the emission of green house gases (GHGs). The second commitment period of the Kyoto Protocol was adopted in 2012. So far, 75 countries have ratified the second commitment period. Read more.

Jaitley may deny railways’ social obligation costs relief demand in budget

Indian Railways’ demand to be relieved of its social obligation costs may come a cropper when Union finance minister Arun Jaitley presents the annual budget on 1 February. The cash-strapped railways has been requesting the finance ministry to relieve the national carrier of its social obligation costs such as discounted fares for senior citizens, sportspersons, cancer patients among others amounting to around Rs1,600 crore annually. Here’s more about this topic.

UP, Bihar sending more migrant labourers to Gulf than Kerala, Tamil Nadu

Uttar Pradesh (UP) and Bihar are sending more migrant labourers abroad mainly to the Gulf countries presently than Kerala and Tamil Nadu, says data available with the Protectorate General of Emigrants (PoE), reversing trends seen in the decades earlier. According to the PoE, the top preferred destinations for these migrants are Saudi Arabia, the United Arab Emirates (UAE) and Kuwait, despite employment options shrinking in recent years thanks to a slump in oil prices. Read more.

Why Trump’s withdrawal from Trans-Pacific trade deal is a boon for China

President Donald Trump’s formal withdrawal from a long-planned trade deal with Pacific Rim nations creates a political and economic vacuum that China is eager to fill, offering a boost for beleaguered US manufacturing regions while damaging American prestige in Asia, argues this oped from Livemint.

A case study of how Iceland curbed alcohol consumption, smoking and use of drugs amongst its young population and what others could try to replicate. Iceland tops the European table for the cleanest-living teens. The percentage of 15- and 16-year-olds who had been drunk in the previous month plummeted from 42 per cent in 1998 to 5 per cent in 2016. The percentage who have ever used cannabis is down from 17 per cent to 7 per cent. Those smoking cigarettes every day fell from 23 per cent to just 3 per cent.

The way the country has achieved this turnaround has been both radical and evidence-based, but it has relied a lot on what might be termed enforced common sense. Read the case.

Compiled by Archit Puri