News digest: IL&FS crisis, Samvat 2074, Govt vs RBI, power demand, and more

Former Governor Raghuram Rajan says the rift between the central bank and the government could be resolved if both sides respected each other's intent and autonomy

IL&FS effect: Sebi may review existing regulatory norms for liquid schemes

The liquidity squeeze triggered by the Infrastructure Leasing & Financial Services (IL&FS) default has prompted the Securities and Exchange Board of India (Sebi) to review the existing regulatory framework for liquid schemes. 

The market regulator is considering new measures that will help these schemes manage liquidity and risks better, said industry sources. Among the suggested changes, Sebi could reduce the single-investor limit in liquid schemes, restrict the flow of “hot” money in such schemes, and direct such schemes to have larger liquidity buffers in tough markets. Read more

Only 2 of past 5 Samvats gave double-digit returns; 2074 was lackluster

Samvat 2074, which ended on Tuesday, was yet another year of lacklustre performance for the benchmark BSE Sensex. It clocked gains of only 7.4 per cent, less than the 7.8 per cent yield on the risk-free 10-year government bond. In the past five years — except Diwali 2014, when it shot up 26.4 per cent year-on-year (YoY), and 16.6 per cent last year — Sensex returns have been disappointing.  
 

During this year, the Sensex had hit an all-time high of 38,897; the Nifty had climbed to 11,739 on August 29, before running into rough weather amid a rising dollar and bond yields, trade tensions between the US and China, and a deteriorating macro environment at home. Read more 

Govt and RBI have to respect each other's turf, says Raghuram Rajan

Says govt and central bank have to respect each other’s turf

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday said the rift between the central bank and the government could be resolved if both sides respected each other’s intent and autonomy. 
 

“The RBI is something like a seat belt. As a driver, the driver being the government, it has the possibility of not putting on a seat belt, but of course if you do not put on your seat belt you get into an accident, and the accident can be quite severe,” he told CNBC TV18. Read more 
 

Power demand growth on a 5-year high as industrial sector wants more

Riding on the ongoing electrification drive and a reversal of muted industrial needs, power demand is on an upswing. During the April-September period of the current year, power demand has recorded  7.6 per cent growth — the highest in the past five years. 
 

The peak power demand trend in the April-September period over the past five years shows Bihar at the top with a growth rate of 71 per cent. That’s the highest among all states. Read more 
 

Red or blue? America votes in litmus test of Trump's controversial policies

Voting began on Tuesday in the crucial midterm elections in the US which could be seen as a referendum on President Donald Trump’s controversial policies and the outcome would determine the next two years of his presidency.

Polling started in the eastern states including Maine, New Hampshire, New Jersey, New York and Virginia at 6:00 am (local time), amidst last-ditch effort by President Donald Trump to retain majority in the House of Representatives. Read more