QBiz: RBI Guv Says Economy Losing Traction; US Warns of H-1B Cap

Here are the top business news headlines of the day.

RBI Governor Shaktikanta Das.

(Photo: PTI)

1. Economic Activity Clearly Losing Traction: RBI Governor at MPC

There are clear evidences of economic activity losing traction, as the GDP growth in Q4FY19 slowed down to 5.8%, Reserve Bank of India (RBI) governor Shaktikanta Das said while voting for a 25 basis points (bps) rate cut along with five other members in the June monetary policy meet.

The six-member monetary policy committee (MPC), which unanimously voted for a rate cut for the third time in 2019 and a shift in stance in the meeting, expressed concerns over the weakening economic growth which warranted the rate cut and expects inflation to remain below 4%, according to the minutes of the meeting.

(Source: Financial Express)

2. US Warns of Cap on H-1B Visas in Backlash to ‘Data Localisation’ Rules

The United States has told India it is considering caps on H-1B work visas for nations that force foreign companies to store data locally, three sources with knowledge of the matter told Reuters, widening the two countries' row over tariffs and trade.

The plan to restrict the popular H-1B visa programme, under which skilled foreign workers are brought to the United States each year, comes days ahead of US Secretary of State Mike Pompeo's visit to New Delhi.

(Source: BusinessLine)

3. Oil Prices Jump 6% as Trump Says Iran Made 'Very Big Mistake'

Oil soared more than 5% higher on Thursday after Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington.

Expectations that the U.S. Federal Reserve could cut interest rates at its next meeting, stimulating growth in the world's largest oil-consuming country, and a drop in U.S. crude inventories also supported prices.

(Source: The Economic Times)

4. NCLT Admits SBI’s Insolvency Plea Against Jet, Directs IRP to Find Solution in 3 Months

The National Company Law Tribunal (NCLT) Thursday admitted the insolvency petition filed by the lenders' consortium led by State Bank against Jet Airways.

The tribunal has also appointed Ashish Chhauchharia of Grant Thornton as the resolution professional for the crippled airline that stopped operations on April 17.

(Source: The Economic Times)

5. SBI Research Report Says Centre & States Need to Pursue Labour Law Reforms to Generate Employment

The Centre and state governments need to pursue labour law reforms as these are necessary for improving investment and generating employment, said SBI in its research report ‘Ecowrap’ Thursday. Observing that initiatives taken towards labour law reforms till date are “miniscule”, the report said that in an economy like India, which has a large workforce, it is important to improve employment and employability, streamline labour issues and develop adequate means to absorb the labour in the economy.

Making a case for labour law reforms, the report said the investors look out for stability and sustainability. Land and labour resources are critical for them to firm up their investment plans, it added. Currently, there are about 44 central labour laws and over 100 state labour laws.

(Source: Financial Express)

6. OPPO Sees Emerging Markets at the Heart of Smartphone Growth Story

Smartphones will remain the most commonly owned consumer electronics device in the near future, says Charles Wong, CEO, OPPO India. Even though smartphones are getting saturated with value-added features, he feels technology can continuously upgrade user-experience.

Wong, who is also President, OPPO South Asia, sees 5G and artificial intelligence (AI) playing an increasingly important role going forward. AI will be a key area of focus, as it brings two crucial values: Higher efficiency and better convenience.

(Source: BusinessLine)

7. Auto, Realty Companies May Not Get Relief at GST Council Meet

The Goods and Services Tax (GST) Council is unlikely to reduce tax on cement and automobile parts from the peak rate of 28 per cent in its meeting on Friday despite intense lobbying by the industry. Facing a severe slowdown, the two sectors — construction and automobile — have been seeking a demand boost from the government.

But a tax reduction on cement and auto parts would have meant a revenue hit of Rs 35,000 crore to the government, suggest estimates.

(Source: Business Standard)

8. Gold Hits over 5-Year High as Fed Hints at Rate Cuts

Gold prices jumped to their highest level in more than five years on Thursday, after the U.S. Federal Reserve signalled possible interest rate cuts later this year.

FUNDAMENTALS
* Spot gold was up 1.3% at $1,377.41 per ounce as of 0117 GMT, after hitting its highest since March 17, 2014 at $1,383.81.
* U.S. gold futures surged 3% to $1,397.70 an ounce.
* The Fed held interest rates steady, as expected, but said it “will act as appropriate to sustain” the country’s economic expansion as it approaches the 10-year mark and dropped a promise to be “patient” in adjusting rates.

(Source: Financial Express)

9. EPFO May Prefer Mutual Funds of PSBs for Managing Its Corpus

The Employees Provident Fund Organisation (EPFO) may rely only on public sector bank-owned mutual funds to manage its fund this fiscal.

Some of the investments made by private sector portfolio managers last year in the debt instruments of IL&FS, DHFL and Reliance Capital led to huge losses.

(Source: BusinessLine)