Bharat: Many in rural India are unable to open bank accounts due to the tedious process involved and requirements of documents needed for it.
More than 130 million Bharatwasi still do not have bank accounts.
Economic slowdown continues. This is also adversely affected by the handling of the NPA crisis. Only 6% of the cases of insolvency proceedings have been resolved. Bankers prefer refering all cases to NCLT over out-of-court settlement as they fear scrutiny of investigation agencies. The Prime Minister’s Office has suggested PSU bankers to refer to NCLT only cases involving amounts more than Rs. 200 crore. They should go for one-time settlement. This move will prevent closure of firms and job losses.
Telecom sector: All players except Jio are in distress. They have been losing their customers to Jio. They had taken rights at a very high price.
As their revenues have been falling, they have been unable to meet their commitments. Vodafone Idea was having a loss of Rs. 6,438.8 crore, gross debt (excluding lease liabilities) of Rs. 1,15,850 crore (as on Q3 FY20). Vodafone Idea’s total liability is estimated to be around Rs. 53,038 crore including Rs. 24,729 crore in spectrum dues and Rs. 28,309 crore in license fees. Bharti Airtel’s Q3 FY20 consolidated loss stood at Rs. 1,035 crore after provisioning for the interest component of its statutory dues. Bharti Airtel’s gross debt as on Q2 FY20 stood at Rs. 136,579 crore. After depositing Rs. 10,000 crore as part of its AGR, Airtel has pending dues of Rs. 25,000 crore. It is vital to focus on the sustainability of the telecom sector, which has to be competitive and not monopolistic for Digital India to be successful and a steady source of revenue. Companies have been doing their own calculations on AGR dues. They have appealed to the government for help to tide over difficulties and get easier funding. It is essential to bail them out. Reliance Jio remains profitable. It does not have AGR dues.
Government is considering to cut license fee from 8% to 3% and no cut in spectrum charge, and to allow payments in 10-15 annual installments. To Setting up of a stress fund is also under consideration to enable telecom industries to access fund for payment of AGR dues. Telecom stress fund will be funded by banks. Banks are at risk to face non-payment of debts to the tune of Rs. 1.5 lakh crore. Leading telecom companies have also requested the government to allow them to charge higher tariffs to compensate higher fees and spectrum usage charges.
Foundry: Globally, Bharat’s foundry sector has the second largest production capacity, next only to China. China’s casting exports aggregate USD 18 billion annually, while Bharat’s annual casting exports amount to USD 3.5 billion. Bharat’s current exports can easily be increased to USD 7-8 billion in the next 5 years and to USD 15 billion in 10 years.
Several emerging markets remain untapped by India. There are a lot of hurdles in customs, clearances, and bureaucratic red-tapism. Industry is technically competent. It can meet the requirements of defence and of modern carrier wagons and passenger coaches. Presently, more than 70% of requirements are imported. Credit flow is very poor. Registration and approval processes are very difficult and time-taking.
Real estate: Bharat’s real estate sector is reeling under adverse government policies, high rate of GST, demonetisation, unemployment, large scale retrenchment, credit crunch and NPA crisis resulting from bank balance sheet’s clearances and sweeping out. Finance Minister Nirmala Sitharaman’s rescue package of Rs. 25,000 crore for completion of stalled projects is too paltry to create any meaningful impact. It would have been better to restructure the ailing sector till the economy is on the path of growth.
Stock market: The value of Foreign Portfolio (FPI) investments in Indian equities market stood at USD 432 billion, higher than USD 402 billion in the previous quarter.
Indian tea: India is one of the largest growers, consumers and exporters of tea in the world. China has taken over India in tea production. Both countries produce varieties of tea providing nutrients. Demand for tea is not increasing due to pattern in drinking and also due to innovation and availability of fruit-based drinks, herbal drinks. Indian masala tea with spices and fragrant herbs (kesar etc.) has become popular globally.
The finest tea is grown in Darjeeling, which gives a golden colour without milk. It is an anti-oxidant, anti-acidic and soothing. It has great demand in Japan, Germany, and other countries. Its price ranges from Rs. 5000 to Rs. 50,000 per kg.
Tea industry has been suffering due to the rising cost of labour and inputs, vagaries of nature, and agricultural income tax levied by state governments. Therefore, many gardens are on sale or on the brink of bankruptcy. Moratorium and restructuring with fresh funds are the need of the hour to save the industry and prevent layoff. Use of surplus land for tea production should be allowed.
The Tea Board of India, with 17 offices across the country, undertakes direct promotional activities and represents the voices of the industry on production, consumption, export, regulation, and ways to avoid inordinate delay and bankruptcy.
From January to December 2019, tea production is 1389.70 million kg, tea export is 248.29 million kg and tea consumption is 1109 million kg. Small growers have been contributing to increase in production. The Tea Board needs to promote export of tea wastes and implement minimum floor price for green leaf with certain quality parameters. Better banking infrastructure near the garden is required. Two percent of TDS on cash withdrawal of over Rs. 1 crore is creating hardship for payment of wages and procurement of inputs. The government needs to provide necessary relief to tea gardens and their owners from this. Cost of finance is also high.
The Coronavirus epidemic spreading from China is having a detrimental effect on the global economy specially sectors like aviation, pharmaceuticals, and software. India’s manufacturing sectors and service sectors have been affected. India imports nearly 67% of basic drugs from across the borders. The government needs to provide NPA relief to companies hit by the Coronavirus. The government has allowed the force majeure clause to provide relief to suppliers and contractors.
Let Bharatwasis have the perception, the vision, and make proper analysis of the risks of the results of a policy or an action so that no sector of manufacturing and service falls sick.