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EPFO directs field offices to timely credit pension to 65 lakh EPS beneficiaries

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Retirement fund body EPFO on Monday said it has issued directions for timely credit of monthly pension to over 65 lakh employees’ pension scheme (EPS) beneficiaries amid the coronavirus outbreak.

The Employees’ Provident Fund Organisation (EPFO) disburses monthly pension to over 65 lakh pensioners every month under the EPS.

“Due to the coronavirus pandemic, lockdown has been declared in various parts of the country. In order to ensure that no inconvenience is caused to the pensioners on account of the prevalent situation, the Central Provident Fund Commissioner (CPFC) has directed (over 120) field offices of the EPFO to generate and reconcile pensioners’ details and pension amount statements for the current month by 25th March, 2020,” a statement by the labour ministry said.

The CPFC has also directed that the pension should be forwarded to the banks in advance so that the monthly pension is credited into the account of the pensioners in time, during March itself.

The EPFO runs three social security schemes — EPS, Employee’ Provident Fund and Employees Deposit Linked Insurance. It has over six crore subscribers who get the benefit of provident fund, group insurance and pension.

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Foreign investors pull out over $16 bn from India amid Coronavirus pandemic: Report

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Increasing concerns of a major economic recession in Asia amidst the Coronavirus pandemic, foreign investors have pulled out an estimated $26 billion from developing Asian economies and over $16 billion out of India, an independent Congressional Research Center said in its latest report on global economic effects of COVID-19.

In Europe, over 30 million people in Germany, France, the UK, Spain, and Italy have applied for state support, while first quarter 2020 data indicates that the eurozone economy contracted by 3.8 per cent, the largest quarterly decline since the series started in 1995, it said.

In the US, preliminary data indicated that the GDP fell by 4.8 per cent in the first quarter of 2020, the largest quarterly decline since the fourth quarter of 2008 during the global financial crisis, the CRS said.

According to CRS, the pandemic crisis is challenging governments to implement monetary and fiscal policies that support credit markets and sustain economic activity, while they are implementing policies to develop vaccines and safeguard their citizens.

In doing so, however, differences in policy approaches are straining relations between countries that promote nationalism and those that argue for a coordinated international response.

Differences in policies are also straining relations between developed and developing economies and between northern and southern members of the eurozone, challenging alliances, and raising questions about the future of global leadership, the report said.

Amid growing concern across the world that Chinese companies are buying cheap, distressed assets hit by the Coronavirus pandemic, India, last month, reviewed the extant Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies.

With the amendment, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

Until before the new arrangement was made in the policy, the curb on FDI was only on Pakistan and Bangladesh as a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

This change has brought China in the ambit of ‘government permission’ before investing in any sector in the country.

China had slammed the move saying New Delhi is “against liberalisation”.

China claimed that India’s new rules for FDI “violate WTO principles of non-discrimination and are against free and fair trade”. It further called for a “revision of discriminatory practices”.

However, the Indian government has said that it is “not denial” of permission but only an approval process, which is in no way a violation.

Meanwhile, according to the Congressional report, while almost all major economies are shrinking as a result of Coronavirus, only three countries China, India, and Indonesia are projected to experience small, but positive rates of economic growth in 2020.

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Facebook buys 9.99 per cent stake in Reliance Jio for $5.7 billion, largest FDI in Indian tech sector

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The social media giant Facebook on Wednesday, announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the Reliance Industries’ telecom arm Jio, as the company looks to expand presence in India, the largest market in terms of subscriber base and  the second largest internet market after China. Company said that the investment “underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country”.

This is largest Foreign Direct Investment (FDI) in the Indian technology sector and also the largest investment by a tech company to buy minority stake globally. Today’s early trading showed a surge in the price of shares of RIL  by 8 per cent after Facebook announced its investment plans.

Facebook already has 400-plus million highly popular Whatsapp chat users in India and the social media firm looks to leverage it to offer digital payment services. Having a local partner could help it in navigating various regulatory issues, including those related to privacy and local storage.

Facebook in an official statement said, “Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd (RIL), making Facebook its largest minority shareholder.”

“This investment by Facebook values Jio Platforms at Rs 4.62 lakh crore ($65.95 billion) pre-money enterprise value, agreed at a conversion rate of Rs 70 to a US Dollar. Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis,” RIL said.

“Facebook’s investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis,” it added.

Facebook said the investment “underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country”.

“In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio,” it added.

A wholly-owned subsidiary of Reliance Industries Ltd (RIL), Jio Platforms  houses digital services of the group led by billionaire Mukesh Ambani. Reliance Jio Infocomm Ltd, with 388 million subscribers, is a wholly-owned subsidiary of Jio Platforms.

The Facebook deal is part of value unlocking by RIL to cut debt. RIL has been seeking strategic partnerships across its businesses while targeting to deleverage its balance sheet.

The group has also been in talks with Saudi Aramco for sale of a 20 per cent stake in its oil-to-chemical business for an asking of USD 15 billion. RIL has already tied up with BP Plc for fuel business as it targets to have a debt-free status by next year.

Jio had also been reportedly talking separately to Google but the fate of those discussions is not known.

Also, having a good telecom partner could help Facebook improve its reach to masses.

RIL could leverage on Facebook’s technology expertise and talent pool as well as help in its ambitions to make Jio a digital company. This apart, the deal would aid the company achieving zero debt status by March 2021.

Since launching Jio in 2016, RIL has emerged as the only Indian company capable of competing with US tech groups in the fast-growing Indian market, expanding from mobile telecom into everything from home broadband to e-commerce.

Jio has emerged as the number one telecom operator in India, both in terms of traffic as well as revenue in a virtual two-player market since the third player, Vodafone-Idea is struggling under regulatory burden. Jio’s main competitor is Bharti Airtel.

Facebook in its official statement added,”In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio,”

Together with WhatsApp and Instagram, Facebook overall is estimated to have more users in India than any other single country.

The number of internet users in India is projected to rise to about 850 million in 2022, according to consultancy PwC, up from 450 million in 2017.

“The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India,” RIL said.

“The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalisation, within just three-and-a-half years of launch of commercial services, validating RIL’s capability in incubating and building disruptive next-generation businesses, while delivering market defining shareholder value,” the statement said.

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World Bank approves $1 billion emergency aid for India to combat Coronavirus outbreak

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Amid Coronavirus pandemic hitting the global economy, the World Bank on Thursday, approved $1 billion emergency financial aid for India to combat the coronavirus outbreak, which has taken 2,069 people in its grip in the country and has claimed 53 lives so far.

“In India, $1 billion emergency financing will support better screening, contact tracing, and laboratory diagnostics; procure personal protective equipment; and set up new isolation wards,” the World Bank said.

It has approved total aid of $ 1.9 billion for 25 poor countries with the largest amount of assistance being given to India, followed by $ 200 million for Pakistan, $ 129 million for Sri Lanka, $100 million for Afghanistan and $ 83 million for Ethiopia.

After this first round of aid for 25 countries, now another round of relief packages to 40 other countries will be given.

The emergency resources would include money to purchase critical medical supplies such as masks and ventilators and the World Bank will lend its procurement expertise to help obtain these supplies on global markets.

World Bank President David Malpass and Managing Director of IMF Kristalina Georgieva are asking the G-20 countries to support instituting a 14-month pause in requiring the poorest countries to make debt repayments.

The World Bank said that the next step is to grant up to $160 billion assistance over the next 15 months to support measures against the global fight to arrest COVID-19 pandemic, focussing on immediate relief and bolster economic recovery.

According to Malpass, the proposal for financial aid was discussed at last week’s conference call with US President Donald Trump and other G-20 leaders and further approval would be taken when the World Bank’s policy panel, the Development Committee, holds a virtual meeting on April 17.

The Coronavirus pandemic has infected over one million people worldwide on Friday as the number rose to 1,016,128 and claimed 53,146 lives. Meanwhile, 328 coronavirus cases have been reported in the last 24 hours in India.

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