Core sector shrinks for sixth month running

August contraction wider than July’s

India’s eight core industrial sectors contracted by 8.5% in August compared to August 2019, marking the sixth month in a row of shrinking output.

The decline in August was sharper than the 8% decline in July as per revised data released by the Department of Promotion of Industry and Internal Trade, with coal and fertilizers being the only two sectors registering growth of 3.6% and 7.3% year-on-year, respectively.

The sharpest decline on a year-on-year basis in August was registered in refinery products (19.1%), followed by cement (14.6%) and natural gas (9.5%). For the five months from April to August, the core sectors, which account for a little over 40% of the Index of Industrial Production, shrank 17.8%.

Earlier, the sectors’ July output was estimated to have shrunk 9.6%. The government has also revised the numbers for core sector performance in May, stating that output shrank 21.4% that month instead of the 23.4% reported earlier.

Core sectors had seen an 8.6% dip in March 2020. The sharpest decline was registered in April when output contracted 37.9%.

Fertilizers is the only sector to have managed positive growth in the first five months of FY21, clocking a 4.6% uptick.

Current account surplus widens to $19.8 billion in Q1

RBI cites steeper decline in imports relative to exports

India recorded a surplus of $19.8 billion (3.9% of GDP) in its current account balance in the first quarter of FY21, on top of a surplus of $0.6 billion (0.1% of GDP) in the preceding quarter, according to RBI data. A deficit of $15 billion (2.1% of GDP) was recorded a year earlier.

The surplus in the current account in the first quarter of 2020-21 was on account of a sharp contraction in trade deficit to $10 billion due to a steeper decline in merchandise imports relative to exports on a year-on-year basis, RBI said on Wednesday.

Aditi Nayar, principal economist, ICRA, said, “The current account surplus in Q1 was well above our expectations, as the fall in remittances was remarkably muted, despite the adverse economic conditions globally amid the ongoing pandemic.”

“With domestic and global lockdowns to fight COVID-19 [having] a differentiated impact on exports and imports, the merchandise trade deficit shrunk to just $10 billion in Q1, most of which was accounted for by the net oil balance,” she said.

Palantir co-founder on its mission and controversies

Palantir Technologies today went public at an initial valuation of more than $21 billion, giving investors a chance to buy into one of Silicon Valley's most talked-about tech companies.

Axios Re:Cap dives into Palantir's mission and controversies with company co-founder Joe Lonsdale.

External debt declines to $554.5 billion at end-June 2020

Commercial borrowings largest component at 38%: RBI

The country’s external debt at end-June 2020 was lower at $554.5 billion, recording a decrease of $2.4 billion from $556.9 billion recorded in June 2019.

The June 2020 external debt level was lower by $3.9 billion over its level of $558.4 billion at end-March 2020, the RBI said on Wednesday.

The year-on-year percentage variation was -0.4, while the month-on-month percentage variation was -0.7, it said.

The external debt-to-GDP ratio increased to 21.8% at end-June 2020 from 20.6% at end-March 2020.

Valuation loss due to the depreciation of the U.S. dollar vis-à-vis major currencies such as the euro, yen and SDR were at $0.7 billion.

Excluding the valuation effect, the decrease in external debt would have been $4.5 billion instead of $3.9 billion at end-June 2020 over end-March 2020, RBI data showed.

Commercial borrowings remained the largest component of external debt, with a share of 38.1%, followed by non-resident deposits (23.9%) and short-term trade credit (18.2%).

Investors vote out Dhanlaxmi Bank MD

Over 90% votes cast against Gurbaxani

Shareholders of Thrissur-based Dhanlaxmi Bank Ltd. ousted the MD and CEO at the annual general meeting held on Wednesday.

In all, there were 10 resolutions relating to passing of accounts, appointment of statutory auditors, increasing the authorised share capital and appointment of directors, including MD and CEO Sunil Gurbaxani.

Shareholders representing 90.49% of the total votes cast voted against the appointment Mr. Gurbaxani as MD and CEO. All other resolutions were passed with a majority. A few days ago, the All India Bank Employees’ Association had sought the intervention of the Reserve Bank of India to save the bank before it could run into trouble.

Dhanlaxmi Bank was put under the Prompt Corrective Action framework by the RBI in November 2015 due to deteriorating financial health.

The lender had come out of the framework, in which several restrictions were imposed, only last year and had since been recording profit.

Significantly, Lakshmi Vilas Bank too saw turmoil after shareholders ousted seven directors last week, following which the RBI approved the appointment of a Committee of Directors to run its daily affairs.

(With PTI inputs)

U.S. Senate aims to pass temporary government funding bill on Wednesday

WASHINGTON (Reuters) – The U.S. Senate will give final approval later on Wednesday to a temporary federal government funding bill, Senate Majority Leader Mitch McConnell said, which would avert government shutdowns on Thursday when existing money expires.

The House of Representatives already has approved that bill to continue most federal funding at current levels through Dec. 11.

Debate Commission Says Changes Coming After Trump-Biden Faceoff

The commission that runs presidential debates said it would change the formats of the next presidential debates after Tuesday’s chaotic clash between President Donald Trump and Democratic nominee Joe Biden to provide a more orderly exchange of views.

“Last night’s debate made clear that additional structure should be added to the format of the remaining debates to ensure a more orderly discussion of the issues,” the commission said in a statement, without specifying what changes it would make.

Trump brought his confrontational style to Tuesday night’s debate, constantly interrupting Biden, prompting numerous blunt and angry retorts on both sides.

“The CPD will be carefully considering the changes that it will adopt and will announce those measures shortly,” the commission’s statement said, thanking moderator Chris Wallace of Fox News for “the professionalism and skill he brought to last night’s debate.”

Wallace had to shout at the nominees several times in order to keep the debate running as planned.

Presidential debate formats are crafted after weeks of negotiations from both campaigns and the commission, a fact Wallace reminded Trump of Tuesday night when he departed from the rules.