Data recap: PF rates, gold bonds, SVB deal, and more
3 min read 30 Mar 2023, 10:06 PM ISTEvery Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you delve deeper into the stories reported by Mint in the week gone by
PremiumEvery Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you delve deeper into the stories reported by Mint in the week gone by. The outstanding sovereign gold bonds issued by the central bank have crossed the 100-tonne mark cumulatively. Silicon Valley Bank has found a buyer after its failure earlier this month. Expect a higher interest rate on provident fund in 2022-23.
Biggies’ Bonanza
Thanks to several incentives and exemptions, and the 2019 cuts in tax rates, the effective tax outgo for Indian companies has been on a decline, a recent Mint analysis of corporate tax data showed. Companies are now effectively paying a smaller share of profits as tax than even the statutory corporate tax rate of 25.2%, i.e. the rate applicable in the absence of any incentives. Larger companies are paying even less. Reliance Industries reported an effective tax rate of 16.5% in FY22.
Golden Patch
The outstanding quantity of sovereign gold bonds (SGBs) issued by the Reserve Bank since 2015 crossed the 100-tonne mark in the previous issue that ran from 6 to 10 March. The issue got investor subscription for 3.53 tonnes, a 22-month high. With this, the outstanding quantity reached 101.57 tonnes, Mint reported. The latest issue saw investors flock to SGBs amidst the Western banking crises. Prospects for the yellow metal look bright for at least two more quarters, experts said.
Rescue Move
$16.5 billion: That’s the discount at which First Citizens Bancshares Inc., one of the largest regional banks in the US, has agreed to buy about $72 billion of the assets of Silicon Valley Bank (SVB). First Citizens has acquired all of SVB’s deposits, loans and branches, weeks after the latter collapsed in the biggest bank failure in the US since 2008. Earlier, in Switzerland, UBS had taken over rival Credit Suisse in a similar rescue deal after its financial troubles.
Speed Limit
What is the maximum rate of growth an economy can sustain without leading to too much inflation? A new World Bank paper has referred to it as the “speed limit" for growth—and said that this speed limit was expected to drop to a three-decade low in the 2020s. That means growth rates are set to slow down to their weakest in this century so far. “Nearly all the economic forces that powered progress and prosperity over the last three decades are fading," the report said.
Fleet Update
Indian airlines added 82 aircraft to their fleet in 2022, but retired as many as 75, resulting in a net addition of just seven aircraft, Mint reported, citing government data. The net additions stood at 35 in 2019, 45 in 2020, and 141 in 2021. The sharp decline has resulted in high fares and raised concerns over the sustainability of domestic passenger growth. IndiGo added 51 aircraft last year, the most of all airlines, but deregistered 36.
Minor Hike
8.15%: That’s the interest rate the Employees’ Provident Fund Organisation will pay on provident fund for 2022-23, as per a decision taken by its central board of trustees this week. This is a marginal hike of 5 basis points. Last year, the provident fund interest rate had been cut to 8.1%, which was the lowest since 1977-78. The recommendation is likely to soon get its customary approval from the central government. A bulk of EPFO’s corpus is invested in government securities.
Diminishing Clout
For the first time in 53 years, the number of employees working in state-owned banks was less than those working in private sector banks in India as of March 2022. This is just one way public sector banks have lost clout in the past few decades, a howindialives.com analysis showed. Between March 2013 and March 2022, their employee base shrank 13%, while that of private banks increased 2.4 times. As a result, the employee share of public sector banks shrank from 73% to 49%.
Chart of the Week: Rise of EVs
Registrations of EVs in India have crossed the 100,000 mark for the sixth straight month in March, data from the Centre’s Vahan dashboard showed. The festive push seen in October and November 2022 has continued in 2023 as well. The number of registrations in March is the highest since November.
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