Business, Economy & Banking Current Affairs

SEBI Approves Airtel and Telenor Merger

Bharti Airtel has stated that it has got approvals from the Securities and Exchange Board of India (SEBI), Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) for the proposed scheme of merger with Telenor (India) Communications Private Ltd. Bharti Airtel now has filed the joint company application before the New Delhi Bench of the National Company Law Tribunal for approval. Bharti Airtel had announced its proposed merger with Telenor South Asia Investments Pte Ltd in February.

Salient Highlights

The merger will transfer all of Telenor India’s assets and customers and thus augmenting Airtel’s overall customer base and network.

The merger is also subject to other statutory approvals like that of the Competition Commission of India.

The merger will further bolster Airtel’s strong spectrum foot-print in seven circles including Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. These seven circles with a huge population concentration will offer a high potential for growth. It will result in the addition of 43.4 MHz spectrum in the 1800 MHz band.

SEBI

Securities and Exchange Board of India (SEBI) was established in 1988. It got statutory mandate and powers under the SEBI Act, 1992. Its objective is to protect the interests of investors in securities and to promote the development and regulation of securities market.
The Key functions of SEBI are to regulate stock exchanges and other securities markets; registering and regulating the working of intermediaries who are associated with securities markets in any manner; Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds; promoting and regulating self-regulatory organizations and prohibiting fraudulent and unfair trade practices relating to securities markets.

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India Loses its Fast Growing Economy Tag to China

As per the data released by the Ministry of Statistics, India registered 7.1% growth in the financial year 2016-17, which is slower than the 8% registered in 2015-16. In the fourth quarter of 2016-17, India registered a growth of GDP growth of 6.1% compared with China’s 6.9% in the same period. Hence, it has lost its fastest-growing major economy tag in the fourth quarter of 2016-17. 

A decline is also visible in the Gross value added (GVA) growth. It was 6.6% for 2016-17 and 5.6% in the Q4 of 2016-17, compared with 7.9% in 2015-16 and 8.7% in Q4 of that year. The GDP growth rate has registered a slightly higher growth because of proportionate increase in indirect tax net of subsidies.

While GDP gives a picture of whole economy, GVA gives pictures at enterprises, government and households levels. In other words, GDP is GVA of all enterprises, government and households. Further, Gross Value Added (GVA) broadly reflects the supply or production side of the economy.
The GDP numbers have been computed based on the new 2011-12 base year recently adopted for data including the Index of Industrial Production (IIP) and Wholesale Price Index (WPI).

Reasons

The demonetisation drive of the government had an adverse impact on the economy. The GDP growth got reduced in Q3 and Q4 when compared with the growth rates in the beginning of the year.

GVA growth also registered a slow down in almost every sector in Q4 of 2016-17 when compared with the growth registered in the corresponding period of the previous year.

Capital formation was also relatively soft with growth below 30%.

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