The week was marked by release of NSSO report generating considerable debate on credibility of GDP data, important directions by the Supreme Court on cases related to real estate developers and results announcement by major banks.<\/p>\n
National Sample Survey Office (NSSO) report on service sector enterprises has generated serious debate on GDP figures. The 74th<\/sup> survey of NSSO states that only 55% of the units from Ministry of Corporate affairs (MCA) database were found to be operational putting a question mark on the GDP extrapolated based on the MCA database. Earlier surveys were based on Economic Census (EC) and business register (BC) data and this was the first time, MCA data was used. The reason was MCA database consists of nearly 3.5 lakh enterprises against 1.35 lakh units with EC\/BR database giving greater representation and accuracy. While concerns are being raised that MCA data would be giving higher GDP figure than actual, the report says, \u201caggregates estimates are likely to be highly underestimated\u201d. Whatever may be the fact, the report does help bring out the deficiency in data collection of the economy and should spur the policy makers to correct the same.<\/p>\n Lifting its earlier stay, Supreme Court has asked the central government if it can complete the unfinished projects of real estate developer, Unitech, affecting over 15,000 home buyers. The Court had stayed NCLT permission in Dec\u201917 allowing central government to take over the management of the company. The directors of the company are under arrest facing charges of siphoning of funds with a complex case history. In another similar order, Court asked Noida authorities if they can complete the pending projects of Amrapali. This intervention reflects the unique structure of Indian constitution which focuses on ordinary citizens rather than market forces. Real estate companies are paying the price for the excesses of 2005-10 period when there was little control over their activities and had virtually risen \u2018above law\u2019.<\/p>\n The week saw results announcement from banking majors, SBI and ICICI bank. SBI, reeling under huge NPA, saw some improvement with NPA provisioning coming down from Rs 24,000 During March\u201918 quarter to Rs 17,300 crore in March\u201919. This helped it post a modest profit of about Rs 800 crore against loss of Rs 7,800 crore in March\u201918 quarter. Operationally, there is not much change and move from loss to profit is due to decline in NPA provisioning. Gross NPA level has also come down to 7.5% from almost 11% a year ago. ICICI Bank is possibly the only private sector grappling with high NPA, like PSBs, at close to 7.4%. With provision of about R 5,500 crore, bank managed profits of just about Rs 1,000 crore, almost the same as last year. In contrast, HDFC Bank, which declared its results two weeks back, has NPA level of less than 1.4% and correspondingly, reported much higher profits of about Rs 6,0oo crore.<\/p>\n International automobile companies also seem to be going through challenging times, like in India. BMW reported over 75% decline in its pre-tax profits from over \u20ac3.1 bn to just \u20ac0.76 bn. The decline is catching more attention as it comes after almost a decade. Interestingly, the decline has come about without any change in units sold, indicating severe cost pressure. However, that is not all. Global automobile industry is facing several regulatory punitive actions largely due to mis-reporting of emission standard. The company has set aside \u20ac1.4 bn as provision for fine for collusion related to emission. However, even excluding this, profits have come down significantly and that is what should be worrying the company.<\/p>\n