Unveiling the Dual-Class Structure: Understanding Tata Motors DVR Shares
Tata Motors, a well-known automotive company, offers an unusual investment option with its Dual-Class Structure, which includes both ordinary shares and Differential Voting Rights (DVR) shares. Understanding the drivers underlying Tata Motors DVR share price becomes critical as investors seek diversity and various investment possibilities. In this post, we will look into the complexities of DVR shares and how they affect the company’s performance and shareholder value.
Unveiling the Dual-Class Structure: Understanding Tata Motors DVR Shares
Tata Motors, a well-known automobile manufacturer, provides an uncommon investment opportunity with its Dual-Class Structure, which contains both ordinary shares and Differential Voting Rights (DVR) shares. Understanding the drivers underpinning Tata Motors DVR share price becomes increasingly important as investors seek diversification and a variety of investment opportunities. In this essay, we will investigate the complexity of DVR shares and how they impact the company’s performance and shareholder value.
Exploring the Rationale behind DVR Share Issuance
Tata Motors, a well-known vehicle company, offers an unusual investment opportunity with its Dual-Class Structure, which includes ordinary shares as well as Differential Voting Rights (DVR) shares. Understanding the factors influencing the Tata Motors DVR share price is becoming increasingly important as investors seek diversification and a diverse range of investment choices. In this paper, we’ll look into the complexities of DVR stock and how they affect the company’s performance and shareholder value.
Analyzing the DVR Share Price Differential
Due to their lower voting power, DVR shares often trade at a discount to ordinary shares. The share price gap may change due to a variety of reasons such as the company’s financial performance, market sentiment, and regulatory changes. To understand the consequences of this price disparity and its potential impact on their investing decisions, investors must perform extensive study and analysis.
DVR Shares and Their Impact on Shareholders
DVR shares can raise important problems concerning corporate governance and shareholder rights. While the dual-class structure assures promoter control, minority shareholders may be concerned about potential misalignment of interests and restricted input in critical corporate decisions. Balancing the interests of diverse classes of shareholders continues to be a significant difficulty for organizations that choose this structure.
AMSTERDAM — The world’s financial system needs a “massive adjustment” to cope with higher interest rates, and key rules will have to be revisited, according to a top global regulator.
Klaas Knot, chair of the Financial Stability Board, an international standard-setting body, told POLITICO that rising interest rates fueled problems at several regional U.S. banks and similar losses may show up elsewhere.
“The speed with which interest rates have changed, that, of course, implies a massive adjustment in the financial system,” the Dutchman said in an interview from his office in Amsterdam. He added it was unclear exactly where those losses would be.
“In many, many places of the financial system, that adjustment will go well because it has been well-anticipated and has been well-managed. But history teaches us that is not always the case everywhere.”
The warning of potential trouble ahead echoes fears of other global officials and comes after the failure of Silicon Valley Bank, a $200 billion lender to the tech sector, sparked contagion across U.S. regional banks. The subsequent market panic contributed to bringing down Credit Suisse in Europe, forcing the Swiss government to hastily merge the lender with UBS.
Any domino effect can have huge impacts for the economy, businesses and households.
“We’ve seen the impact of rapidly changing interest rates manifest in the second tier of the regional U.S. banks,” Knot said. “But I would be very surprised if that was the only sub-sector of the financial system where you would have a significant impact.”
Despite the turmoil, Knot said he was more worried about risks stashed at “nonbanks” — a term that encompasses investment funds, insurers, private equity, pension funds and hedge funds — where authorities have less visibility on hidden losses.
“If they are hidden for a very long period of time, sometimes the problem then grows so big, that it only becomes unhidden or visible when it’s too big to deal with,” he said.
The FSB boss pointed to financial players that took the wrong side of a bet on interest-rates and may now be nursing losses. “I hope, of course, that this is well-dispersed over the financial sector,” he said. “Where we are worried is specific concentrations of such risk.”
In particular, he said, those losses could be amplified when there is a mismatch between hard-to-sell assets and easy withdrawals, and borrowed money is used to juice returns.
That combination has worried authorities for some time — but Knot said this didn’t mean regulators are behind. For instance, the FSB, whose membership includes central bankers, financial regulators and finance ministries, will issue recommendations for open-ended investment funds in July.
Under the plans, regulators would get more powers to trigger restrictions in a crisis, rather than leaving those decisions in the hands of the fund manager.
Rewriting the rules
The financial rulebook will need to be revisited substantially in light of recent events, he said.
“It’s a mistake to see the regulatory framework as something that is fixed, and something that should not be touched,” he said. “The financial industry is not at all fixed, it is continuously evolving. So, the regulatory framework should evolve with the evolving risks.”
The Dutchman said this means revisiting assumptions about how quickly banks can sell assets to meet depositor withdrawals, the speed of those withdrawals in a digital era, and the reserves that have to be set aside to cover potential unrealized losses from interest-rate risks — all of which were factors in the U.S. bank collapses.
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( With inputs from : www.politico.eu )
BRUSSELS — Just when you thought Europe’s China policy could not be more disunited, the two most powerful countries of the European Union are now also at odds over whether to revive a moribund investment agreement with the authoritarian superpower.
For France, resuscitating the so-called EU-China Comprehensive Agreement on Investment (CAI) is “less urgent” and “just not practicable,” according to French President Emmanuel Macron.
Meanwhile, German Chancellor Olaf Scholz is in favor of “reactivating” the agreement, which stalled soon after it was announced in late 2020 after Beijing imposed sanctions on several members of the European Parliament for criticizing human rights violations.
Speaking to POLITICO aboard his presidential plane during a visit to China earlier this month, Macron said he and Chinese leader Xi Jinping discussed the CAI, “but just a little bit.”
“I was very blunt with President Xi, I was very honest, as far as this is a European process — all the institutions need to be involved, and there is no chance to see any progress on this agreement as long as we have members of the European Parliament sanctioned by China,” Macron told POLITICO in English.
Beijing has proved skilled at preventing the EU from developing a unified China policy, using threats ranging from potential bans on French and Spanish wine to warnings that China will buy American Boeing instead of French Airbus planes.
Disagreement over the CAI is only one further example of divergence over China policy in Europe, where Beijing has expertly courted various countries and played them against each other in games of divide-and-rule over the past decade.
Scholz seeks CAI thaw
Following seven years of tortuous negotiations, the CAI was rushed through by former German Chancellor Angela Merkel at the end of Germany’s six-month rotating presidency of the Council of the EU in late 2020.
Merkel sought to seal the deal and ingratiate herself with Beijing before Washington could apply pressure to block it, causing tension with the incoming administration of U.S. President Joe Biden.
Germany has long been the most vocal cheerleader for the CAI due to its scale of manufacturing investments in China, particularly in the car-making and chemicals sectors.
The CAI would have made it marginally easier for European companies to invest in China and protect their intellectual property there. But critics decried weak worker protections and questioned to what degree it could be enforced.
Xi Jinping during Macron’s visit to Beijing | Ludovic Marin/AFP via Getty Images
Soon after the agreement was announced, Beijing imposed sanctions on several European parliamentarians in retaliation for their criticism of human rights abuses in the restive region of Xinjiang.
The deal, which requires ratification by the European parliament, went into political deep freeze.
Scholz, who at times seems to mimic the more popular Merkel, would like to take CAI “out of the freezer” — but has cautioned that “this must be done with care” to avoid political pitfalls, according to a person he briefed directly but who was not authorized to comment publicly.
“It is surprising Scholz still thinks this is a good idea, despite the vastly changed context from a couple of years ago,” said one senior EU official, who spoke on condition of anonymity to freely discuss sensitive diplomatic issues.
EU branches split
Not only are EU countries divided on how to approach CAI — there’s also a rift among institutions in Brussels.
With its members sanctioned, the European Parliament is certain to reject any fresh attempt to ratify the CAI.
But like Scholz, European Council President Charles Michel also hopes to resuscitate the deal. He has discussed this with Chinese communist leaders, including during his solo visit to Beijing late last year, according to a senior EU official familiar with the matter who was not authorized to speak publicly.
European Commission President Ursula von der Leyen, however, has stymied Michel’s attempts to place the agreement back on the agenda in Brussels. Von der Leyen is far more skeptical of engaging with China, citing increasing aggression abroad and repression at home.
Von der Leyen accompanied Macron on part of his China trip earlier this month, but said of her brief meeting with Xi Jinping and other Chinese officials that the topic of CAI “did not come up.” She has publicly argued that the deal needs to be “reassessed” in light of deteriorating relations between Beijing and the West.
Meanwhile, Chinese officials have made overtures to Michel and other sympathetic European leaders, suggesting China could unilaterally lift its sanctions on members of the European Parliament — but only with a “guarantee” the CAI would eventually be ratified.
A spokesperson for Michel said an informal meeting of EU foreign ministers will discuss EU-China relations on May 12. “Following that discussion we will then assess when the topic of China is again put on the table of the European Council,” he said.
During the same interview with POLITICO, Macron caused consternation in Western capitals when he said Europe should not follow America, but instead avoid confronting China over its stated goal of seizing the democratic island of Taiwan by force.
Manfred Weber, head of the center-right European People’s Party, the largest party in the European Parliament, described the French president’s comments as “a disaster.”
In an an interview with Italian media, he said that the remarks had “weakened the EU” and “made clear the great rift within the European Union in defining a common strategic plan against Beijing.”
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( With inputs from : www.politico.eu )
Biden’s economic team last week publicly took a less aggressive line as world economic policymakers convened in Washington for meetings of the International Monetary Fund and World Bank, where concern about China’s role as a leading global lender looms large. At the time, China released new customs data showing trade with the West — both the U.S. and Europe — dipped in the first quarter, fueling fears of economic slowdown and separation.
“It is important for the U.S. to be clear [that] we do not seek to decouple from China or seek to limit China’s growth in any way,” Jay Shambaugh, Treasury’s undersecretary for international affairs, said during a discussion at the Brookings Institution last week. Though the U.S. will sometimes “take targeted national security actions” aimed at Chinese firms, like last year’s trade rules targeting Chinese microchip makers, those policies are “not things we’re doing to benefit the U.S. economically vis-a-vis China.”
The comments were just some of the latest from Biden’s team, which has emphasized for months that they are not interested in a major decoupling of the world’s biggest economies. But despite the conciliatory tone, the U.S. is preparing a series of actions targeting critical parts of the Chinese economy. In addition to the expected executive order on investments, it is also considering a potential ban on the widely popular Chinese-owned app TikTok. And a senior trade official said last week that the U.S. could also hike tariffs on China to express its “displeasure” with Beijing’s failure to live up to its so-called Phase One trade deal, signed under then-President Donald Trump.
Those moves would come on the heels of aggressive trade action last year, when the administration put in place new export rules that explicitly sought to undermine Beijing’s prized microchip sector and passed massive industrial policies aimed at breaking reliance on the Chinese economy. At the time, national security adviser Jake Sullivan was clear that the goal of the strategy was to preserve America’s competitive edge in emerging high-tech industries, even if Washington does not pursue a broader decoupling.
“We must maintain as large of a lead as possible” in high tech sectors like microchips, Sullivan said, previewing new Commerce Department rules released in October that sought to grind Chinese chip development to a halt.
The administration insists that its economic, diplomatic and security leaders are united on China and that recent statements do not represent a shift in rhetoric or policy. But they also acknowledge that policy discussions continue over the scope of the executive order to regulate U.S. investment and other initiatives.
“We want to make sure we’re getting it right,” a senior administration official, granted anonymity to discuss policy discussions, said of the long-delayed executive order on American investments in China. “We want to make sure we’re consulting with allies, consulting with industry along the way, and then go through the regular order processes as regulations do. But I don’t think there’s really been any shift in any of those discussions now.”
Biden and Chinese leader Xi Jinping’s meeting last November on the sidelines of the G-20 summit in Bali marked a turning point in the tone from both sides. At the time, the two leaders pledged to put a “floor” on the souring relationship after the U.S. chip rules and then-House Speaker Nancy Pelosi’s trip to Taiwan brought the diplomatic relationship to a low not seen in decades.
The detente was supposed to be marked by the first trips to China for key members of Biden’s foreign policy and economic teams — Treasury Secretary Janet Yellen and Secretary of State Antony Blinken. But the road to rapprochement hit a series of speed bumps.
In February, a suspected Chinese spy balloon floated over the continental U.S., igniting a firestorm of criticism from Capitol Hill and the White House. Yellen and Blinken’s trips were subsequently postponed, and the Biden administration sanctioned Chinese firms connected to the balloon incident. The Chinese government’s economic overtures to American businesses and policymakers — ongoing since the Biden-Xi meeting — dried up as well.
But now it appears the Biden administration is eager to reopen the economic dialogue. Administration officials have tried in recent weeks to reschedule the Cabinet members’ trips to Beijing. Though they have so far been rebuffed, China watchers say Beijing is likely to come back to the table soon.
“Beijing policymakers definitely are eager to get the U.S. to loosen its restrictive policies on China trade and investment,” said Ho-fung Hung, a professor at the Johns Hopkins School of Advanced International Studies focused on China’s economy. “With the worsening unemployment problem, debt crisis, and the urgency of recovery from the Covid lockdown, Beijing is desperately looking for ways to jumpstart its economy, at least to make sure it won’t worsen.”
The desire to renew in-person dialogue has its limits. At the same time, the White House is also pushing ahead with the first wide-ranging government oversight of American business in China.
Since the Trump administration, national security lawmakers and Cabinet officials have sought to craft new rules to oversee — and potentially block — U.S. investments in Chinese tech sectors. The goal is to prevent American firms from funding or developing tech that can later be used by the Chinese military.
Biden’s executive order scrutinizing U.S. investment in China was originally expected to be finalized last year. But that action was delayed as NSC officials clashed with the Treasury Department over which Chinese sectors the new oversight should target — and whether the government should have the power to prevent American business deals in China, or merely oversee them.
That debate has spilled into the new year, further delaying the release of the executive order. POLITICO reported in February that the White House is planning to announce a scaled-back executive order focused on disclosure and transparency by the end of April. While policymakers last year considered including up to five major Chinese industries — microchips, artificial intelligence, quantum computing, biotechnology and clean energy — in the order, the biotech and clean energy sectors are now likely to be left out of the program.
Biden’s economic officials have briefed industry groups in Washington on the broad contours of the order in recent weeks, a senior administration official confirmed. While some aspects of that order are still being finalized, the official said that it would likely include at least some prohibitions on U.S. investments in Chinese tech in addition to notification requirements for new deals.
“When Congress got close to passing an outbound investment provision that would have rode along in the CHIPS bill, that [amendment] included only notification,” the official said. “We noted publicly at the time that we thought any kind of regime based on notification would need to be complemented by a narrow, but tailored, set of prohibitions as well. So nothing has really shifted since.”
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( With inputs from : www.politico.com )
LONDON — Joe Biden is not someone known for his subtlety.
His gaffe-prone nature — which saw him last week confuse the New Zealand rugby team with British forces from the Irish War of Independence — leaves little in the way of nuance.
But he is also a sentimental man from a long gone era of Washington, who specializes in a type of homespun, aw-shucks affability that would be seen as naff in a younger president.
His lack of subtlety was on show in Belfast last week as he issued a thinly veiled ultimatum to the Democratic Unionist Party (DUP) — return to Northern Ireland’s power sharing arrangements or risk losing billions of dollars in U.S. business investment.
The DUP — a unionist party that does not take kindly to lectures from American presidents — is refusing to sit in Stormont, the Northern Ireland Assembly, due to its anger with the post-Brexit Northern Ireland protocol, which has created trade friction between the region and the rest of the U.K.
The DUP is also refusing to support the U.K.-EU Windsor Framework, which aims to fix the economic problems created by the protocol, despite hopes it would see the party reconvene the Northern Irish Assembly.
The president on Wednesday urged Northern Irish leaders to “unleash this incredible economic opportunity, which is just beginning.”
However, American business groups paint a far more complex and nuanced view of future foreign investment into Northern Ireland than offered up by Biden.
Biden told a Belfast crowd on Wednesday there were “scores of major American corporations wanting to come here” to invest, but that a suspended Stormont was acting as a block on that activity.
One U.S. business figure, who spoke on condition of anonymity, said Biden’s flighty rhetoric was “exaggerated” and that many businesses would be looking beyond the state of the regional assembly to make their investment decisions.
The president spoke as if Ulster would be rewarded with floods of American greenbacks if the DUP reverses its intransigence, predicting that Northern Ireland’s gross domestic product (GDP) would soon be triple its 1998 level. Its GDP is currently around double the size of when the Good Friday Agreement was struck in 1998.
Emanuel Adam, executive director of BritishAmerican Business, said this sounded like a “magic figure” unless Biden “knows something we don’t know about.”
DUP MP Ian Paisley Jr. told POLITICO that U.S. politicians for “too long” have “promised some economic El Dorado or bonanza if you only do what we say politically … but that bonanza has never arrived and people are not naive enough here to believe it ever will.”
“A presidential visit is always welcome, but the glitter on top is not an economic driver,” he said.
Joe Biden addresses a crowd of thousands on April 14, 2023 in Ballina, Ireland | Charles McQuillan/Getty Images
Facing both ways
The British government is hoping the Windsor Framework will ease economic tensions in Northern Ireland and create politically stable conditions for inward foreign direct investment.
The framework removes many checks on goods going from Great Britain to Northern Ireland and has begun to slowly create a more collaborative relationship between London and Brussels on a number of fronts — two elements which have been warmly welcomed across the Atlantic.
Prime Minister Rishi Sunak has said Northern Ireland is in a “special” position of having access to the EU’s single market, to avoid a hard border with the Republic of Ireland, and the U.K.’s internal market.
“That’s like the world’s most exciting economic zone,” Sunak said in February.
Jake Colvin, head of Washington’s National Foreign Trade Council business group, said U.S. firms wanted to see “confidence that the frictions over the protocol have indeed been resolved.”
“Businesses will look to mechanisms like the Windsor Framework to provide stability,” he said.
Marjorie Chorlins, senior vice president for Europe at the U.S. Chamber of Commerce, said the Windsor Framework was “very important” for U.S. businesses and that “certainty about the relationship between the U.K. and the EU is critical.”
She said a reconvened Stormont would mean more legislative stability on issues like skills and healthcare, but added that there were a whole range of other broader U.K. wide economic factors that will play a major part in investment decisions.
This is particularly salient in a week where official figures showed the U.K.’s GDP flatlining and predictions that Britain will be the worst economic performer in the G20 this year.
“We want to see a return to robust growth and prosperity for the U.K. broadly and are eager to work with government at all levels,” Chorlins said.
“Political and economic instability in the U.K. has been a challenge for businesses of all sizes.”
Prime Minister Rishi Sunak has said Northern Ireland is in a “special” position of having access to the EU’s single market | Pool photo by Paul Faith/Getty Images
Her words underline just how much global reputational damage last year’s carousel of prime ministers caused for the U.K., with Bank of England Governor Andrew Bailey recently warning of a “hangover effect” from Liz Truss’ premiership and the broader Westminster psychodrama of 2022.
America’s Northern Ireland envoy Joe Kennedy, grandson of Robert Kennedy, accompanied the president last week and has been charged with drumming up U.S. corporate interest in Northern Ireland.
Kennedy said Northern Ireland is already “the number-one foreign investment location for proximity and market access.”
Northern Ireland has been home to £1.5 billion of American investment in the past decade and had the second-most FDI projects per capita out of all U.K. regions in 2021.
Claire Hanna, Westminster MP for the nationalist SDLP, believes reconvening Stormont would “signal a seriousness that there isn’t going to be anymore mucking around.”
“It’s also about the signal that the restoration of Stormont sends — that these are the accepted trading arrangements,” she said.
Hanna says the DUP’s willingness to “demonize the two biggest trading blocs in the world — the U.S. and EU” — was damaging to the country’s future economic prospects.
‘The money goes south’
At a more practical level, Biden’s ultimatum appears to carry zero weight with DUP representatives.
DUP leader Jeffrey Donaldson made it clear last week that he was unmoved by Biden’s economic proclamations and gave no guarantee his party would sit in the regional assembly in the foreseeable future.
“President Biden is offering the hope of further American investment, which we always welcome,” Donaldson told POLITICO.
“But fundamental to the success of our economy is our ability to trade within our biggest market, which is of course the United Kingdom.”
A DUP official said U.S. governments had been promising extra American billions in exchange “for selling out to Sinn Féin and Dublin” since the 1990s and “when America talks about corporate investment, we get the crumbs and that investment really all ends up in the Republic [of Ireland].”
“President Biden is offering the hope of further American investment, which we always welcome,” Donaldson said | Behal/Irish Government via Getty Images
“The Americans talk big, but the money goes south,” the DUP official said.
This underscores the stark reality that challenges Northern Ireland any time it pitches for U.S. investment — the competing proposition offered by its southern neighbor with its internationally low 12.5 percent rate on corporate profits.
Emanuel Adam with BritishAmerican Business said there was a noticeable feeling in Washington that firms want to do business in Dublin.
“When [Irish Prime Minister] Leo Varadkar and his team were here recently, I could tell how confident the Irish are these days,” he said. “There are not as many questions for them as there are around the U.K.”
Biden’s economic ultimatum looks toothless from the DUP’s perspective and its resonance may be as short-lived as his trip to Belfast itself.
This story has been updatedto correct an historical reference.
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( With inputs from : www.politico.eu )
FRANKFURT ― The markets are jittery and inflation still needs taming. Coming together, those two things put the European Central Bank in a real bind.
Fight one fire and it could cause the other to flare. The ECB can keep raising interest rates to try to get inflation under control, but that risks fueling financial market tensions. Conversely, it can give banks some breathing space by slowing its rate-hiking, but that carries the danger of prolonging the region’s economic malaise.
Frankfurt’s official line is that it can do both with no serious consequences. Many economists in the eurozone don’t buy that.
In private, it’s a dilemma that splits the ECB’s decision-makers, and even in public differences of opinion are bubbling to the surface. Here’s what’s at stake:
Why is the ECB raising rates?
The idea is that increasing interest rates subdues inflation because it makes consumers and businesses less likely to borrow ― so that results in reduced spending.
As inflation has started to pick up since last summer, the ECB has raised interest rates at a record pace. They’ve gone from -0.5 to 3 percent as the annual rate of price rises has surged to a eurozone record 10.6 percent inOctober.
The Bank tries to keep inflation at 2 percent so it’s currently way off target.
How this contributed to the crisis
The unpleasant side effect is that with rising borrowing costs (because of higher interest rates), the value of bonds that banks hold usually fall. This gives investors a bad case of the jitters. After the collapse in March of lenders like Silicon Valley Bank and Credit Suisse ― though their problems seemed unconnected ― it was this that prompted concerns they might not be the only institutions with troubles, and fueled contagion fears around the globe.
But Lagarde plowed on regardless
The ECB remained unfazed in the face of emerging banking troubles: It delivered a previously signaled 0.5 percentage-point rate increase in March, less than a week after SVB failed and at a time when Swiss banking giant Credit Suisse was teetering.
Following that decision, ECB President Christine Lagarde stressed that she sees no trade-off between ensuring price stability and financial stability.
In fact, she said the Bank could continue to lift rates while addressing banking troubles with other tools.
The case against
Many economists disagree with Lagarde that the battle for price stability can be pursued without risking financial stability.
The ECB delivered 0.5 percentage-point rate increase in March, less than a week after SVB failed | Patrick T. Fallon/AFP via Getty Images
Claiming so “should be a career-ending statement,” said Stefan Gerlach, chief economist at EFG Bank in Zurich and a former deputy governor of the Central Bank of Ireland. “This is the idea of the ‘separation principle’ of 2008 revisited. That wasn’t a good idea then, and isn’t now either,” he added.
What’s the separation principle?
In 2008, at the start of the financial crisis, as well as in 2011, when the sovereign debt crisis hit, the ECB adhered to the idea that interest rates could be used to ensure price stability at the same time as other measures, such as generous liquidity injections, could ease market tension.
But this just added to the problems and had to be unwound quickly.
This time around, the Portuguese member on the ECB Governing Council, whose country suffered particularly under the consequences of the sovereign debt crisis, is less blasé than Lagarde.
“Our history tells us that we had to backtrack a couple of times already during processes of tightening given threats to financial stability. We cannot risk that this time,” Mario Centeno told POLITICO in an interview.
The case for Lagarde
After the initial fears that troubles could spread across the eurozone, investor nerves have calmed and bank shares started to recover. At the same time, new data showed that underlying inflation pressures kept rising, suggesting that Lagarde and her colleagues were right to stick to their guns ― at least for now.
If that’s the case, March’s interest rate rise ― what Commerzbank economist Jörg Krämer described as “necessary” investment in the central bank’s credibility ― will have paid off.
Market turmoil actually helps
The nervous markets could help the ECB to reach its inflation target without having to raise interest rates as aggressively as previously thought.
Banks tend to slap an additional risk premium on their lending rates which raises the cost of borrowing money for consumers and business. So banks end up doing part of the tightening job for the central bank.
ECB Vice President Luis de Guindos suggested as much in an interview released last month, though he cautioned that it was too early to assess how much impact exactly it may have.
What’s the endgame?
The challenge for the ECB is to strike the right balance. If it doesn’t it risks either the repeat of 2008-style financial troubles or a return to the stagflationary period (low growth on top of high inflation) that roiled the Continent in the 1970s.
If it raises rates too aggressively, bank failures followed by a recession risks forcing the ECB into an interest rate U-turn for the third time, creating massive credibility risks. Conversely, if they don’t hike enough, the central bank may lose a grip on inflation, which is its main mandate.
The only way Lagarde can win is to deliver both price stability and financial stability. In that sense, there is no trade-off ― one without the other just won’t be enough.
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( With inputs from : www.politico.eu )
Nanded: Telangana Chief Minister and Bharat Rashtra Samithi (BRS) chief K Chandrashekhar Rao on Sunday in Maharashtra said that State’s farmers should be given Rs 10,000 per acre for investment along with free electricity round the clock.
While addressing a gathering at Maharashtra’s Nanded, BRS supremo said, “farmers should be given Rs 10,000 per acre for investment along with 24 hours free electricity. In case of any unfortunate death of a farmer, he should be given insurance of Rs 5 lakhs. Like Telangana, govt should buy the produce of farmers by opening centres here too.”
Earlier on Thursday, CM KCR announced a compensation of Rs 10,000 per acre for farmers of Telangana, who lost their crops due to recent unseasonal rains and hailstorms.
He had also visited rain-affected areas in a few districts of the state and assured the farmers of financial assistance for cross losses.
CM KCR while addressing the Ramapuram village of Khammam district on Thursday, said, “Due to the rains, there was a loss of 2,28,250 acres of crops throughout the state. Out of this, maize crops suffered the maximum damage of 1,29,446 acres. As per the central government norms, they won’t get much money. In the Telangana government, along with putting in big investments and completing the pending and new projects, we are implementing farmer support schemes that are not there anywhere else in the world. With it, the farmers are also getting stable and coming out of their debts. Despite that, they are some fools who say that we won’t get anything from agriculture. Today Telangana is first in per capita income in the country. We have the highest per capita income, more than Maharashtra. In the GSDP growth rate, farming plays a vital role.”
“Farmers don’t have to feel bad about it as the government is with you”, he said assuring support to the farmers.
“After BRS was formed we have been saying that India requires a total integrated agricultural policy. For funds, we have to write a report to the Centre and we don’t know when they will give it. We don’t want to depend on the Centre as it takes six months to respond,” said the BRS chief.
Hyderabad: A 150 percent rise has been witnessed in new investment proposals received by Telangana in 2021-22 as compared to the investment proposals received by the state in 2020-21.
According to the report based on a study by the MSME Export Promotion Council and the Confederation of Organic Food Products and Marketing Agencies, during the year 2021-22 investment proposals worth Rs 76,568.89 crore as against the proposals worth Rs 31,274.56 crore in 2020-21 successfully created over 60,000 direct jobs.
Releasing the study on investment and development in Telangana,’ MSME chairman Dr DS Rawat said that there has been a huge jump in investment by the private sector in 2021-22 and touched Rs 60,618.05 crore in the financial year 2022 as against Rs 14,882.35 crore in 2021.
Similarly, there has also been a manifold increase in the investment projects, which includes Rs 5413.39-crore completed projects, a revival of projects worth Rs 1159.00 crore, and total investment projects outstanding of Rs 2,36,383.74 crore.
Agriculture and allied sectors in the state also witnessed 12.4 percent and 9.09 percent growth in 2020-21 and 2021-22 respectively.
The study also found that such growth was possible due to investment promotion and policy support, which is reflected in the doubling of exports from Rs 66,276 crore to Rs 1,45,522 crore, and employment from 3,71,774 to over 7 lakh in the IT sector between 2014-15 and 2021-22 respectively.
With a plan to set up of a large number of micro and ancillary units in semi-urban and rural sectors, it is estimated that out of 2.6 million MSMEs, 56 percent will be set up in rural areas while the rest 44 percent in urban areas.
SRINAGAR: 5327 applications and investment proposals have been received so far in Jammu and Kashmir, Minister of State for Home Affairs, Nityanand Rai said on Thursday
In a written reply to a question in the Rajya Sabha, Rai said that as per the information provided by the Government of J&K, a total of 5327 applications/investment proposals have been received so far since the announcement of the New Industrial Policy 2021. “The anticipated investment which was worth Rs. 64,058 crores in December 2022 has now touched Rs. 66,000 crore.”
Out of 5327 proposals received, he said, land has been allotted in respect of 1854 units and 854 have paid the premium. “560 units have signed the Lease deed and have taken over the possession of the land allotted,” he said in the reply, as per the news agency GNS, adding, “129 units have started work on the ground.”
In addition, he said, 350 existing units have also come into production after the announcement of the New Industrial Policy, 2021.
After the introduction of J&K Industrial Policy, 2021, an investment worth Rs. 1924.64 crores (Rs. 376.76 crore in 2021-22 and Rs. 1547.88 crores in 2022-23 (up to January 2023) have come on the ground, he said. “The investment during the current financial year is the highest ever compared to any other previous financial years.”
The Government of Jammu and Kashmir, he said, has taken several steps such as Business Reforms Action Plan – Ease of Doing Business, development of new industrial estates, development of basic infrastructure including roads, power, water, drainage, sewerage treatment and handholding of investors to encourage investments and to create employment opportunities for the youth coupled with income generation.
Among other steps, he said, the government has allowed the Business Reform Action Plan- Ease of Doing Business (BRAP-EoDB) to boost industrial growth.
He said Government is strategically working on the Implementation of BRAP. “352 BRAP points have complied and 3188 burden compliances have been reduced under BRAP,” he said, adding, “167 services of 18 departments have been provided on single window portal. The BRAP score of J&K has improved from 0.30% to 79.67%.”
Also, he said, Single Window Clearance System has been started to provide seamless services to prospective investors. He said all the Government to Business services have been brought on Single Window System for the convenience of both the Government departments and the investors.
He said that there has been the development of new Industrial Estates and improvement of infrastructure. “Investor Facilitation Cell is in place for necessary facilitation/ awareness, intending to connect the industries with global markets and further inviting investors to promote J&K as an ideal investment destination.” (GNS)
SRINAGAR: Jammu and Kashmir’s Lieutenant Governor Manoj Sinha Sunday laid the foundation stone for the first direct foreign investment project at Sempora area of Srinagar where a mega-mall will come up at the whopping Rs 250 crore.
Talking to reporters on the sidelines of the function, the LG said that today is the historic day for the JK as the United Arab Emirates (UAE) based EMAAR Group has decided to invest Rs 250 Crore to set up a mega-mall on the 10 lakh square feet area at Sempora, Srinagar. “This is a moment of pride. The Emaar group will also invest in setting up IT towers in Jammu and Srinagar, besides the mall and total investment by the group will touch Rs 500 Crore,” he said.
Earlier, addressing the gathering, the LG said that the investment made by the Emaar group is just a beginning. He urged the EMAAR group to ensure the completion of the mall within the shortest possible time.
The LG said that some people have a negative mindset in JK and continue to criticize the government policies as they can’t digest the huge development taking place in the UT.
“JK has witnessed a huge sea change post August 5, 2019. The government land was kept under illegal possession by some people that was retrieved. The land retrieved will be used for setting up industries, playgrounds for youth and graveyards for the people,” he said.
The LG said that JK was getting the cheapest power in the country. “JK is the first place after Telangana to have first Women Entrepreneur Institute (WEI),” he said. (KNO)
