SC says… The Supreme Court on Wednesday said there is “no merit in charging interest on interest” for deferred loan payment instalments during the moratorium period announced by the Reserve Bank of India in wake of the Covid-19 pandemic. The court observed that once moratorium is fixed then it should serve the desired purposes and the government should consider interfering in the matter as it cannot leave everything to banks. “You are not interested in helping the borrowers during lockdown. When defaulters take away thousands of crores of rupees, you come out with a rescue plan. But now you talk of the economy,” the court told the Centre.
Borrowers say… The court is hearing a plea that says RBI’s March 27 notification that allows banks to charge interest in the deferred loan instalments, is illegal as interest charges not only create hardship for borrowers but also goes against their ‘right to life guaranteed by Article 21 of the Constitution”.
Banks say… The Centre and the RBI have told the apex court that waiving the interest completely will not be easy for banks as they must pay interest to their depositors too. Banks are supposed to pay interest on Rs 133 lakh crore in deposits with them and a complete waiver of interest during moratorium period might risk the financial stability of banks putting the interests of depositors in jeopardy, they argued.
Does it help? The court posted the matter for hearing in the first week of August for allowing the Centre and the RBI to review the situation. The RBI’s loan moratorium offer on loan EMIs ends on August 31. That means for those still waiting to decide if they should opt for the loan moratorium or not based on the financial burden it will entail, the court’s decision, even if it is in the borrower’s favour, won’t help. State Bank of India told SC that 90% of its borrowers have not opted for moratorium on EMIs. For those who have already been forced to skip EMIs, the decision will have a big impact though.
Auction for commercial coal mining to be launched; Supreme Court to hear telecom companies‘ AGR dues case; SC likely to hear petition against preference to cases filed by influential lawyers and petitioners; India-Pak meet over locust menace; La Liga (Real Madrid vs Valencia)
People pay tribute to Indian army soldier Sunil Kumar, who was killed during confrontation with Chinese soldiers in Ladakh, in Patna, Bihar (AP)
Prime Minister Narendra Modi on Wednesday said the sacrifice of Indian soldiers killed in the clash with Chinese troops at Galwan Valley, Ladakh, will not go in vain. “India is culturally a peace-loving country … We have always worked closely with our neighbours in a cooperative and friendly manner; always wished for their development and welfare. We never provoke anyone, but we also do not compromise with the integrity and sovereignty of our country,” he said. “Whenever the time has come, we have demonstrated our power, proving our capabilities in protecting the integrity and sovereignty of the country,” he added.
External affairs minister S Jaishankar spoke to his Chinese counterpart Wang Yi Wednesday afternoon. According to an MEA statement, Jaishankar conveyed the “protest of the Government of India in the strongest terms” on the violent face-off in Galwan Valley, and recalled the June 6 agreement on “de-escalation and disengagement along the Line of Actual Control (LAC)” reached by the military commanders. Jaishankar also said Chinese attempt to “erect a structure in Galwan valley on our side of the LAC” was “an intent to change the facts on ground in violation of all our agreements”. “It was agreed that the overall situation would be handled in a responsible manner, and both sides would implement the disengagement understanding of 6 June sincerely,” it said.
Beijing, however, is steadfast on its claims over Galwan Valley — a marked departure from the past. According to China’s statement, Wang told Jaishankar, “the hazardous move of the Indian army severely violated the agreement reached between the two countries on the border issue”. China also “demands that India carry out a thorough investigation into the incident, severely punish those who should be held accountable, strictly discipline Indian frontline troops.” India should not “underestimate China’s firm will to safeguard its territorial sovereignty”, the statement said. But China and India agreed to “cool down the situation at an early date”, it added. A Chinese foreign ministry spokesperson said Galwan Valley “always belonged to it”.
The wreath-laying ceremony of 20 Indian Army soldiers who lost their lives in the face-off was performed at Army Hospital in Leh.
The traditional India-China playbook has insulated trade and commerce from border differences. But will that change now?
Reports on Wednesday said an immediate impact on trade is unlikely. But there are indications that the rules could tighten on strategic sectors such as 5G — India has allowed Huawei for 5G trials. On social media, #BoycottChina has gained traction, urging users to uninstall China-based apps, including TikTok. But decoupling from China isn’t a matter of clicking a button.
Trade: According to the General Administration of Customs of China, in the 11 months from January to November in 2019, China’s exports to India amounted to $68 billion, imports from India was $16.32 billion — a trade imbalance of $51.68 billion in China’s favour. According to CARE Ratings, India’s imports from China grew by a compounded aggregate rate of 4.48% between 2016 and 2019; exports to China grew by 23%.
Mobile market: Chinese companies dominate the Indian smartphone market. According to IDC, Xiaomi had a market share of 31.2% in the first quarter of 2020. In fact, four of the top five smartphone makers were Chinese firms — Vivo (21%), realme (13.1%) and Oppo (10.6%) being the others. These companies have invested heavily in setting up manufacturing bases in India, either directly or through original equipment makers such as Foxconn of Taiwan.
Investments in startups: Chinese companies write the cheques that fund Indian startups. Tencent, Shunwei Capital, Alibaba, Xiaomi and Fosun Capital are prominent Chinese investors. Indian startups to have received Chinese funding, in order of total funding, are Paytm (Alibaba and Ant Financial are investors), Ola (China-Eurasia Economic Cooperation Fund, Didi Chuxing, Tencent and Sailing Capital), Oyo (Didi, Huazhuhui), Snapdeal (Alibaba, Tybourne Capital) and Swiggy (Hillhouse Capital, Meituan, Tencent), ET Prime reports, citing data from Tacxn. Between 2015 and 2019, Chinese have invested over $5.5 billion in Indian startups, the Indian Expressreports, based on data from Venture Intelligence.
Supply chain: Industrial links to China are deep. According to Dun and Bradstreet, imports from China comprised 68% of India’s bulk drugs and intermediaries; 43.2% of electronics; 27% of garments; and 8.6% of auto ancillaries. There is a bigger dependence on emerging technology such as electric vehicles, where China controls 70% of world’s rare-earth production through investments or ownership of global mines.
More: China’s FDI in India has increased to $2.34 billion, as per official data. Gateway House, a think-tank, says the actual figure could be $6.2 billion, including rerouted investments. Also, Chinese tourists spent nearly $550 million a year in India.
India’s daily Covid caseload crossed the 13,000-mark for the first time with 13,124 people testing positive on Wednesday. This after two days of daily cases staying below the 11,000-mark. The overall national count stood at 367,093. The number of daily casualties though returned to the 300+ level, a day after the country had added the highest number of deaths to its cumulative toll: 2,003. With 344 fresh deaths across the country, the cumulative tally crossed the 12,000-mark, to 12,259.
Maharashtra and Delhi reported 114 and 67 daily deaths, respectively. The former also reported 3,307 fresh cases on Wednesday, taking its cumulative caseload to 116,752. Tamil Nadu, the country’s second-worst affected state, also crossed the 50,000-mark in cases on Wednesday. With 2,174 patients testing positive on the day, its cumulative caseload totalled 50,193. With 40+ deaths for the second consecutive day — 48 on Wednesday — the state’s death toll reached 576.
On the back of increased testing in Delhi — 8,093 samples were tested in the last 24 hours, up from last week’s average of 5,000-5,500 tests a day — the Capital’s case count reached 47,102. A record 2,414 new cases were reported on the day. While Delhi health minister Satyendar Jain tested positive in his second test, AAP MLA Atishi and three others in CM Arvind Kejriwal’s core team have also been infected.
Now, the spike of over 2,003 deaths in one day, after Maharashtra and Delhi updated their figures on Tuesday with earlier unreported deaths, has raised India’s Covid-19 fatality rate to 3.4%. It was reported at 2.8% by the health ministry on June 2. However, the figure is still lower than the global rate of over 5%, even as officials say more states are likely to reconcile figures retrospectively following death audits.
Finally, PM Narendra Modi on the day asked states to ramp up health infrastructure and trained manpower to deal with the pandemic, while also preparing for Unlock 2.0 to boost economic revival. Stressing on the importance of testing to quickly track and isolate those infected, he said the existing testing capacity needed to be utilised fully along with constant efforts for expansion. The expansion of health infrastructure should be given utmost priority so that every person infected with Covid-19 can receive timely treatment and deaths are avoided, Modi added.
Trouble: Manipur’s three-year-old government, led by Chief Minister Biren Singh, hangs in balance after three BJP MLAs resigned from the party to join Congress and six other MLAs withdrew their support. Of the legislators who withdrew support, four are from the National People’s Party (NPP), one from Trinamool Congress and another an Independent.
The backstory: Manipur’s 2017 assembly elections threw a hung verdict: the Congress emerged as the single largest party in 60-strong assembly with 28 MLAs, followed by the BJP with 21 MLAs. But the BJP got the support of 4 MLAs each from the Naga People’s Front and the National People’s Party and one each from the Lok Janshakti Party and TMC, and an independent to form the government. Biren Singh further strengthened his position after eight Congress MLAs defected. The first to defect, Shyamkumar Singh, was disqualified. Last week, the Manipur High Court directed the assembly speaker to “restrain” seven defected Congress MLAs from entering the House until further orders.
What now: With the loss of support of 9 MLAs, the BJP government’s strength has reduced to 30. The current assembly strength is 59 after Shyamkumar Singh’s disqualification. Congress said they would meet the governor and demand a special session of the assembly. It plans to move a no-confidence motion against the government. Congress spokesperson Ningombam Bupenda Meitei called the development “the beginning of the downfall of the BJP rule in India”.
Note: The Rajya Sabha polls in Manipur are scheduled for Friday (June 19).
PM Narendra Modi will today kick-off the auction for about 50 coal blocks, which the government claims is the first-ever commercial auction of coal mines, open for domestic as well as global firms under the 100% FDI route. A quick look at the auction:
The good: This auction, the pricing and the rules are friendlier to the bidder. The floor price has been kept at 4% of revenue and each bid thereafter will be in incremental multiples of 0.5%, till the revenue share touches 10%, after which it will be in multiples of 0.25%. Further, private commercial mining is now allowed — earlier private firms were limited to “captive mining”, i.e. mining coal for end-use at their own facility (say, a power plant). Incentives on early production include a 50% rebate on the revenue share. To prevent under-reporting of revenues by the winning bidder, the price at which coal is mined will be calculated on basis of the National Coal Index (NCI) — and the royalty for the government will be the higher of the actual or the NCI price.
The bad: India’s past coal auctions haven’t been a hit, though they were open only for PSUs. An auction conducted last year saw bids for merely 6 of the 27 blocks on offer. Though the centre has ended Coal India Limited’s de-facto monopoly, it still accounts for 80% of India’s coal production, of which 80% is sold to power producers. Add to this the drop in demand due to the lockdown, expectations are tempered. Consider this: As against consumption of 40.38 million tonnes (MT) in May last year, this May the power sector bought just 30.15 MT from CIL — a reduction of over 25%. Also, collectively, power plants currently have 50 MT of coal in stock, enough to last 29 days.
The need: India has the world’s third-largest coal reserves, estimated at 350 billion tonnes, but the production is much lower, at 729.10 MT in FY20. This year, the government has set a target of 1.6 billion tonnes — with 15 of the coal blocks up for grabs having a production potential of 5-10 million tonnes per year. That could fetch the state government anywhere between Rs 5,000-6,000 crore monthly — money that would be welcome in these tough times.
The 2019-2020 Champions League, suspended since March because of the coronavirus pandemic, will be completed as a 12-day mini-tournament in the Portuguese capital of Lisbon in August, UEFA announced on Wednesday. The “Final Eight” competition, comprising single-legged ties, will begin on August 12 with Benfica’s Estadio da Luz and Sporting’s Estadio Jose Alvalade as venues. The final will be held at the former on August 23. (Four of the eight Round of 16 second-leg ties still left to be played. Those will be played on August 7-8, with a decision still to be made on whether they will take place at the home team’s stadiums or in Portugal.)
Similarly, the Europa League will be completed with a “Final Eight” across four stadiums in Germany — Cologne, Duisburg, Dusseldorf and Gelsenkirchen — starting August 10, with the final on August 21.
UEFA also announced that it was planning to keep the same pan-continental format next year for the postponed Euro 2020. “The 12 original host cities have been confirmed as venues for the final tournament in the summer of 2021,” UEFA said in a statement.
In Tennis: Roland Garros chiefs said Wednesday that the delayed French Open will get underway on September 27. The French Open was switched from its traditional May-June slot because of the pandemic with September 20 pencilled in as a start date. Now, the Paris main draw of the season’s final Grand Slam event will begin a week later and finish on October 11. The ATP and WTA tours also announced their restart dates. The ATP Tour will resume in Washington from August 14 while the WTA starts in Palermo, Italy, on August 3.
What: Christian Coleman, the American who won the 100m gold at the World Athletics Championship in Doha last year, has been provisionally suspended by the Athletics Integrity Unit for missing doping tests. He is temporarily banned from competition until a final decision at a hearing conducted under World Athletics Anti-Doping (WADA) rules or the Integrity Code of Conduct.
Why: Coleman, who won the gold in 9.76 seconds last year to emerge as Usain Bolt’s successor, has missed three dope tests in 12 months, an infraction that calls for one- or two-year suspension from competition. If so, the sprinter would miss next year’s Olympics in Tokyo.
He says: Coleman took to Twitter to say he missed a test on December 9 because he “was five minutes away” when the anti-dope officer arrived at his home. He also missed a test on Jan. 16, 2019, and another on April 26, 2019, due to a filing failure. But the “Unsuccessful Attempt Report” by the anti-dope officers said “multiple, loud knocks were made every 10 minutes for the entire hour”, but added “no phone call was made per client instructions”. Coleman said: “Don’t tell me I ‘missed’ a test if you sneak up on my door… Knocked while I was Christmas shopping 5 mins away at the mall (I have receipts and bank statements) and didn’t even bother to call me or attempt to reach me.”
Surrounded by police officers and union officials, US President Donald Trump Tuesday signed an executive order banning chokeholds by police, “except if an officer’s life is at risk”, amid calls for police reforms. Beyond that, the order does offer much: It gives police departments a financial incentive to adopt best practices and encourages police to work with social workers when they respond to nonviolent calls involving mental health, addiction and homelessness issues. The order also does not mention racism, reports Associated Press
Calls for police reforms gained acceptance following the death of a black man, George Floyd, in police custody — he asphyxiated under the knee of a white police officer. Protesters demand authorities “defund the police” and end the legal protection, called Qualified Immunity, that prevents victims from suing the police. What “defunding” means is up for debate.
Democratic Party lawmakers, meanwhile, are to introduce their own bill in the Congress on police reforms, which seeks to limit legal protections for police, create a national database of excessive-force encounters and ban police chokeholds. The bill is to be placed in the House for vote next week but may face pushback from the Republicans — they especially oppose ending or diluting Qualified Immunity, arguing it gives police the freedom to go about their duty without fear of unnecessary retribution.
Bayern Munich. The German powerhouse secured a record-extending eighth straight Bundesliga crown (30th title overall and 29th during the Bundesliga era) on Tuesday, with a 1-0 win at Werder Bremen. The victory opened a 10-point gap between Bayern and second-placed Borussia Dortmund who, despite having three games in hand, cannot catch the champions. The Bavarian giants also became the first club in a major European league to win the title after returning to play amid the pandemic.
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