The erratic rains are hitting consumer where it hurts the most. Onion prices have touched a two-year high as weak supplies and poor crop prospects. In Lasalgaon, the country’s largest onion market, the price was 4900 rupees per quintal (49 rupees a kilo) and retail prices have touched 80 rupees a kilo. Prices at the same time last year were a third of this, roughly 1500 rupees per quintal. Onions are a staple food for India’s poor and a big influence on the food component of the inflation index (remember two years ago), so consumers and economists are both fretting over rising onion prices. In fact, onions have been credited with bringing down at least two governments since 1980s. The Modi government has asked the state commodities importer to float a tender to import onions. Cry no more!
State Bank of India wants to bring back the teaser loans. These are typically mortgage loans used to lure borrowers by offering a lower rate for a fixed starting period, after which it would revert to the market rate. SBI’s chairperson Arundhati Bhattacharya slipped the question in a chat with RBI chief Raghuram Rajan on stage at a banking seminar. The loans have long been a bone of contention between the RBI and SBI when they were introduced to boost demand after the 2008 crisis. RBI had expressed concern then that the loans were discriminatory to existing borrowers paying the market rate and more important, were a credit risk. SBI withdrew the product after a fair amount of bellyaching, but with credit demand again in the dumps, it sees the potential for a revival.
“I never say no to your ideas. We will have to look into it.” RBI Governor Raghuram Rajan to SBI Chairperson Arundhati Bhattacharya.
Tata Communications wants to sell its data centre and Google and Amazon are in the fray to buy it. They are not alone. PE funds Blackstone, Carlyle, KKR and Bain are all interested. Tata Comm wants to reduce its debt burden and focus on its carrier business and the sale could fetch it anywhere between $650-700 million, a good chunk of its $1.4 billion debt. While the funds are likely looking at this as an investment opportunity, the interest from Google and Amazon is interesting because of their existing businesses – Amazon Web Services and Google Cloud. Amazon had said in March that it has no immediate plan to set up a centre in India, but buying a running unit may be more palatable. Along with everything else, India’s cloud computing market is also set for explosive growth so it’s no wonder that Tata’s centre has so many bidders.
The RBI’s move to grant licenses to 11 payment banks has the traditional banks sweating. But Governor Rajan assured them that they will be “add-on” banks not competition and will help bring costs of some services down.
Air India is getting a new chief and he has spent his career in the railways and holds four engineering degrees. The state airline is on its way to recovery after a 300-billion rupee bailout, but has enough and more challenges. It remains to be seen if Ashwani Lohani, a career bureaucrat and a railway and tourism official, will be up to the task.
Indian people stand in a line to buy subsidized onions at the Rythu Bazaar produce market in Hyderabad on August 5, 2015. The Telangana government set up special counters for the sale of subsidized onions with onion prices skyrocketing, with a fixed price of 20 Indian rupees (INR) per kilogram (kg) (with a maximum of two kg per person) against the retail market price of around 50 INR per kg. AFP PHOTO/NOAH SEELAM
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