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IMF cuts India’s 2019-20 growth rate to 4.8%

IMF’s chief economist, Gita Gopinath, had in December said India’s growth forecast was likely to be revised down “significantly” in the upcoming January review.

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The International Monetary Fund has slashed its estimate on India’s 2019 economic growth to 4.8% from the 6.1% expansion it projected in October, citing a sharper-than-expected slowdown in local demand and stress in the non-bank financial sector.

The steep cut in India’s growth rate has weighed on IMF’s projection on the world economy, which it now expects to have expanded 2.9% in 2019 compared with the previous forecast of 3.0%.

The IMF’s World Economic Outlook (WEO) Update revised India’s 2020 growth forecast to 5.8%, down 0.9 percentage point from the previous estimate. For 2021, the estimate is 6.5%.

The markdown has been the highest for India in the latest WEO projections.

The report cited monetary and fiscal stimulus, along with its expectation of subdued oil prices, for the projected improvement in India’s growth this year and the next.

Globally, growth is expected to accelerate to 3.3% in 2020 from 2.9% in 2019 and further to 3.4% in 2021. The IMF has trimmed its estimate on the world economy by 0.1 point each for 2019 and 2020 and by 0.2 percentage point for 2021 from the earlier forecasts.

The WEO estimates China to have grown 6.1% in 2019. For the current year, the forecast is for 6% growth.

“A more subdued growth forecast for India accounts for the lion’s share of the downward revisions,” the IMF said.

IMF’s chief economist, Gita Gopinath, had in December said India’s growth forecast was likely to be revised down “significantly” in the upcoming January review.

Other agencies have also slashed the growth forecast for India.

Last week, the United Nations cut India’s FY20 growth forecast to 5% from 5.7, in line with the estimate of the government’s statistics office. The World Bank too has cut its estimate to 5% from the previous forecast of 6%.

“In the third quarter of 2019, growth across emerging market economies (including India, Mexico, and South Africa) was weaker than expected at the time of the October WEO, largely due to country-specific shocks weighing on domestic demand,” the IMF said.

On the upside, the effects of monetary easing and improved sentiment resulting from phase one of the US-China trade deal are likely to improve prospects of a global recovery. However, downside risks like rising US-Iran tensions could disrupt oil supply and weaken investment, said the report.

For the emerging markets, the report cautioned that improvement from reform efforts could fail to materialise in the face of intensifying social unrest that reflect the erosion of trust in established institutions and lack of representation in governance structures.

In terms of policy, the report suggested governments to enhance inclusiveness and build governance structures that strengthen social cohesion and ensure adequate safety nets to protect the vulnerable.

The government has over the past few months taken several steps to lift growth, including a cut in corporate tax rates, a real estate fund for stressed housing projects and a national infrastructure pipeline. It is expected to announce another set of measures to arrest the slowdown in the upcoming budget, to be presented on February 1.

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Vodafone Idea plunges 16%, now less than Rs 3 a stock

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Mumbai, Feb 18 : Vodafone Idea scrips on Tuesday plunged over 16 per cent to trade below Rs 3 a stock after India Ratings downgraded its rating on non-convertible debentures of Rs 3,500 crore citing stress on the company’s near-term liquidity post the Supreme Court’s ruling.

From a 52 week high of Rs 35.30 a stock that Vodafone Idea logged on March 13, 2019, it has now fallen below Rs 3 a share on Tuesday as its survival has come under question after the apex court ruling on February 14 directing the telcos to pay the adjusted gross revenue (AGR) related liabilities to the government next month.

With the government mulling the possibilities of invoking bank guarantees of the telcos to recover the statutory dues, Vodafone Idea chairman Kumar Mangalam Birla on Tuesday met Telecom Secretary Anshu Prakash on the AGR payment issue after paying Rs 2,500 crore on Monday.

The company had urged the court that the bank guarantee deposited with the government by Vodafone Idea should also not be encashed. Birla has maintained that without relief on the AGR payout, it may not be possible to continue as a going concern.

The company in a regulatory filing said that “India Ratings and Research (Ind-Ra), has downgraded its rating on Non-Convertible Debentures of Rs 3,500 crore of erstwhile Vodafone Mobile Services Limited (since merged with the Company)”.

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Bill Gates Is Driving a Porsche Taycan. Here’s Why He Didn’t Get a Tesla

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San Francisco, Feb 18 : Tesla CEO Elon Musk on Tuesday took a jibe at Microsoft co-founder Bill Gates after the world’s second richest man declared he has bought his first EV — Porsche Taycan.

Gates told a noted YouTube tech reviewer Marques Brownlee in an interview that he purchased his first-ever EV Porsche Taycan, calling the vehicle “very, very cool”.

“My conversations with Gates have been underwhelming tbh (to be honest),” Musk tweeted to a user.

The initial EV Porsche Taycan Turbo S model starts at $185,000 while the entry-level Tesla Model 3 starts from $35,000.

In the interview, Brownlee asked Gates about his thoughts on Tesla’s dominance in the electric vehicle market.

Gates acknowledged that Tesla is the cream of the crop when it comes to electric cars, adding that lots of manufacturers are moving to produce electric vehicles because Tesla’s appeal has been increased over the past few years.

“Tesla, if you had to name one company, that’s helped drive that, it’s them,” said Gates.

You can watch the complete interview here:

Musk has been tweeting his thoughts about tech honchos.

He recently questioned Facebook CEO Mark Zuckerberg’s understanding of Artificial Intelligence (AI) and called Amazon Founder and CEO Jeff Bezos a “copycat”.

Gates recently commissioned a $644 million hydrogen-powered superyacht. The plans of buying the superyacht were unveiled at the Monaco Yacht Show in December last year.

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Network18, TV18 stocks rise after consolidation announcement

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Mumbai, Feb 18 (IANS) Shares of Network18, TV18, Hathway and Den Networks surged on Tuesday after Reliance Industries’ announcement of consolidating the four entities into Network18.

Late on Monday evening, RIL announced a consolidation of its media and distribution businesses spread across multiple entities into Network18 and said that its stake in Network18 will reduce from 75 per cent to 64 per cent upon implementation of the scheme.

At 10.30 a.m., stocks of Network18 on the BSE were at Rs 30.05, higher by 4.89 from the previous close, and shares of TV18 were 14.12 per cent higher at Rs 28.70 per share.

Hathway Cable Datacom was at Rs 23.10 up 20 per cent, and stocks of Den Networks were up nearly 10 per cent at Rs 59.50 per share.

In its statement on Monday, RIL said: “The appointed date for the merger shall be February 1, 2020. The Board of Directors of the respective companies approved the scheme of amalgamation and arrangement at their meetings held today.”

The broadcasting business will be housed in Network18 and the cable and ISP businesses in two separate wholly owned subsidiaries of Network18. The company said that the restructuring would create value-chain integration, and render substantial economies of scale.

Post the consolidation, Network18 will be an integrated media and distribution company with a revenue of Rs 8,000 crore and will scale-up as one of the largest listed players in the sector, according to the company. Network18 will be net-debt free at consolidated level, providing a solid base for growth as well as improved shareholder returns, the statement said.

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