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GDP to contract 4.5% in current FY due to impact of coronavirus: Centre agrees with IMF’s prediction



Finance Ministry in a report on Monday said that as predicted by the International Monetary Fund, India’s Gross Domestic Product (GDP) will contract 4.5 per cent in the current fiscal year due to the impact of coronavirus.

The Finance Ministry’s economic report for June comes days after the government declared Unlock 2.0.

“The uncertainty caused by the absence of a vaccine against the coronavirus pandemic poses a serious challenge to the economy, the Department of Economic Affairs (DEA) said in its macroeconomic report.

The economic growth of pre-COVID times, as and when restored through fuller unlocking of the economy, will heavily lean on the reforms undertaken today to enhance its potential tomorrow, it added.

Even after the government had announced Unlock 2.0, the economy, which suffered a lot due to the spread of coronavirus pandemic resulting in lockdown, struggles to come back on the track.

The report further said that the Centre’s structural reforms and social welfare measures will help build green shoots in the economy.

Atmanirbhar Bharat stimulus package has accelerated the reforms at a time when the pandemic has led to fiscal constraints for the government and hampered public spending, it added.

The world is witnessing an unprecedented crisis since January 2020 with the highly contagious COVID-19 hitting major economies of the world in rapid succession, according to the report.

“Since its first outbreak in Wuhan, China, it has infected more than 200 countries with total number of confirmed cases exceeding one crore and the virus claiming more than five lakh lives,” it said.

The report also mentioned the domestic financial markets, and said that COVID-19’s impact on the economy is rapidly evolving, which is driving market volatility on a daily basis.

“With huge uncertainty around the pandemic stemming from the unknown, and the inability to plan for or know what’s next, such uncertainty is expected to adversely affect business climate and make firm delay their investment plans,” it said.

Amid the spread of coronavirus, Prime Minister Narendra Modi had in the month of May amid the lockdown had introduced an Rs 20 lakh crore stimulus package for the struggling economy.

The package had several sub-packages for agriculture, MSMEs, migrant workers and farmers among others.



‘Economy likely to enter into technical recession for first time in history’: RBI



In yet another setback for the struggling Indian economy, the Reserve Bank of India has projected that the economy is likely to enter into a technical recession for the first time in history at the end of the first half of 2020-21.

India has already witnessed a worrying decline of 23.9 per cent in the GDP for April-June quarter which was a result of nationwide lockdown induced due to the coronavirus pandemic.

However, before the pandemic too, the World Bank had projected India’s economy to grow a mere 4.5 per cent.

The RBI also said that the NSO estimates for the second quarter expected at the end of November 2020 will formally bear out the extent of improvement that occurred in the quarter gone by.

This decline in economy is an eyebrow-raiser for the nation as in the economic terms, when the GDP growth rate is negative for two consecutive quarters or more, it is termed recession.

Perhaps, the Reserve Bank has said that the economy will break out of contraction of the six months gone by and return to positive growth in the October-December quarter of 2020-21.

“With the momentum of September having been sustained, there is optimism that the revival of economic activity is stronger than the mere satiation of pent-up demand released by unlocks and the rebuilding of inventories. If this upturn is sustained in the ensuing two months, there is a strong likelihood that the Indian economy will break out of contraction of the six months gone by and return to positive growth in the third quarter (Q3) of 2020-21,” it said.


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Bezos sells more than $3 billion of Amazon shares



Amazon Founder and CEO Jeff Bezos this week has sold more than $3 billion worth of shares in his company, according to new filings with the US Securities and Exchange Commission (SEC).

This marks a significant jump from last year when Bezos sold $2.8 billion worth of shares, CNBC reported on Wednesday.

According to Forbes, Bezos now owns a 10.6 per cent stake in the e-commerce and cloud computing colossus Amazon.

This is the third time this year that the world’s richest person has sold Amazon shares worth billions of dollars. In August, he had sold Amazon shares worth $3.1 billion. Prior to that, he had offloaded shares worth $4.1 billion in February earlier this year.

The latest stock sales are part of a predetermined plan in accordance with insider trading laws, according to the filings with the SEC.

According to a Forbes report on Wednesday, the Amazon CEO remains the world’s richest person with an estimated net worth of $189.6 billion.


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Yes Bank scales up Covid-related provisioning to Rs 1,918 Cr in Q2FY21



Yes Bank has increased its covid-related provisioning to Rs 1,918 crore in the July-September quarter.

In its investor presentation, the bank said that the total aggregate Covid-related provision is 1.15 per cent of the total advances and provides for potential slippages from the above exposures including potential interest reversals.

In the July-September quarter, the bank made a covid-related provisioning of Rs 1,038 crore taking the cumulative provisioning for covid at Rs 1,918 crore.

The bank said that its balance sheet consolidation continues while improving granularity and liability profile.

It noted that its capital position significantly strengthened by the successful raising of Rs 15,000 crore through FPO. It further said that RBI special liquidity facility of Rs 50,000 crore has been fully repaid.

The bank also raised long term refinance borrowing in excess of Rs 5,500 crore.

On Friday, Yes Bank reported a net profit of Rs 129 crore for the July-September quarter.

During the corresponding quarter of the last financial year (2019-20), the bank had reported a loss of Rs 600 crore.

The net interest income of the restructured bank increased 3.4 per cent on quarter on quarter basis to Rs 1,973 crore.

As of September-end, the bank’s gross non-performing asset (GNPA) stood at 16.9 per cent, down from 17.3 per cent in the previous quarter. Its net NPA was 4.71 per cent against 4.96 per cent in the previous quarter.


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