Dear Niveshaks,

A lot has been happening around the World and in India as well. The Doklam standoff keeps everyone on their heels with India maintaining its calm and diplomacy. From the financial world, the SBI brought about a 50 basis point cut to its deposit rates which would hamper the amount of savings of the retail customers of the bank. The SEBI may ease the dispute settlement norms as requested by legal advisors and other stakeholders.

The fiscal deficit soared to 81% of FY18 target in April-June owing to an increase in the food, fertilizer, and fuel subsidy. As per the Moodys poll, India to grow at a modest 6.5-7.5% over 12-18 months before it reaches to the 8% GDP growth rate again. Infosys, TCS, Tech Mahindra see a shrink in the workforce for the first time, and the Snapdeal, Flipkart and Ola founders look at clawing back the lost ground from the investors.

The Cover Story for the month of July discusses the ‘Insolvency and Bankruptcy Code’ enacted by the Government in 2016. In the words of Arundhati Bhattacharya, Chairman, State Bank of India, “Going to the Insolvency and the bankruptcy Code would be the new normal.” This code was brought in existence to come up with a better solution to the prevalent NPA issue of the banks, safeguard their interests and the welfare of other creditors and various stakeholders. The Bankruptcy Code shall supersede all the other existing laws with regards to the issue of insolvency in the country. Keeping in mind the focus of the present Government at the ‘ease of doing business,’ this Code shall improve the ranking of India at the global level by reducing the time to sort the Insolvency issues in the country which accounts for a staggering 4.3 years to resolve presently.

The Article of the Month, ‘Universal Basic Income,’ talks about a problem quite germane to India and globally too. The idea of UBI (Universal Basic Income) stresses upon the importance of achieving social cooperation and justice as well as a robust financial system by reducing income disparities. The article further compares the UBI with the other prevalent top six welfare schemes of India, critically going through its advantages and limitations when pitted against them. It poses apposite questions of whether such schemes be implemented in India and is a fine read to the reading masses.

The FinSight and FinGyaan sections discuss of the ‘State of Economies of the World’ and ‘Tail Risk in Sub-prime Crisis’ respectively. FinGyaan deals with the problem of carrying a tail risk being acute especially in the modern financial system. It mentions of the sub-prime crises as a typical story of classic informational and distorted conflicting incentive problem among the stakeholders of the security market and underpricing of the tail risk leading to a financial disaster. The FinSight mentions of the macroeconomic scenario of the world, discussing of the slump in Oil prices, the present situation in the three major countries of South East Asia, China, India and Japan and their impact on the world economy.

In the FinaFame section, one gets to know more about Mohammad Yunus - The Man who was the visionary and developer of the one of a kind micro-credit idea, the Grameen Bank. Awardee of the Nobel Prize, the article takes the reader through the personalities life history and his achievements. The Classroom section of the July issue briefs the reader about the ‘Arbitrage Pricing Theory’ and how it helps in predicting an assets’ return using various risks attached to it.

Stay Invested!
Team Niveshak