Why is it important? The two high-value notes ceased to be legal tender effective midnight of Tuesday. It’s aimed at flushing out black money since a significant portion is stored as high-value notes. Paper cash is also used to fund corruption and illegal activities such as drug dealing, human trafficking and arms trade. This is not the first time India went for demonetization. While the move will have an immediate impact, the fight against black money and corruption will need more interventions. The move, however, highlights the government’s willingness to take the problem head on.
Tell me more: There are 16.5 billion Rs500 notes and 6.7 billion Rs1,000 notes in circulation now, and replacing them with lower denomination notes, and new Rs500 and Rs2,000 notes will pose logistical difficulties. It is expected to cause short-term difficulties to citizens (even though hospitals, petrol bunks and a few other agencies are allowed to accept Rs500 and Rs1,000 notes for additional three days).
What is it? The year-on-year decline in InterGlobe Aviation Pvt. Ltd’s yield. InterGlobe runs the country’s largest airline IndiGo. Yield is the average fare paid per mile per passenger.
Why is it important? It reflects the intense competition among the airlines in India, as they try to match the ticket prices to attract more customers. Despite the decline in the yield, IndiGo’s profits went up 23.6%, thanks to reduction in lower unit costs (excluding fuel) and better capacity utilisation (load factor went up to 82.2% from 78.4% a year ago).
Tell me more: According to the Directorate General of Civil Aviation data, IndiGo has 40% market share, followed by Jet Airways, Air India and SpiceJet.
Why is it important? It will be Ford’s third global product development centre in Asia, and will focus on product development, mobility solutions and business services for India and other parts of the world. The centre is expected to be operational by 2019, consolidate its 9,000 employees in one location and hire another 3,000 people.
Tell me more: As a market, India is yet to warm up to Ford. Ford’s market share in September was 3.28%. Its annual sales in four out of the last six years have shown a decline.
What is it? The drop in Sensex, India’s benchmark index, on Wednesday, its steepest fall in 14 months.
Why is it important? It comes on the back of early signs that Donald Trump might win the presidential elections in the US, and the fear that his protectionist stand might be bad for Indian businesses. Despite the speed with which Trump gained ground, many experts were betting on Hillary Clinton.
Tell me more: More importantly, the steep drop in Sensex comes after the unexpected announcement of demonetization of Rs1,000 and Rs500 notes by the government. A crackdown on black money is expected to be hard on trade and business, especially the real estate sector.
Why is it important? Florence blocked the fast food chain from opening a restaurant on the Piazza del Duomo in the historic central square of the city, close to its famous Duomo cathedral. McDonald’s has sued the authorities for discriminatory regulations. The fight highlights the tug of war between businesses that want to leverage on the tourists who visit historic places, and the groups that believe excessive commercialisation will reduce their value.