CJI Dipak Misra recommends Ranjan Gogoi as successor

Chief Justice of India Dipak Misra sent a letter to the central government recommending Justice Ranjan Gogoi as his successor.

Justice Gogoi will be sworn in as the next CJI on 3 October, a day after Justice Misra’s tenure ends. The CJI has written to the ministry of law and justice endorsing and recommending the name of Justice Gogoi, the senior-most judge, as the next CJI.

People with knowledge of the matter had confirmed on 1 September that Justice Misra had decided to go by convention and recommend the name of Justice Gogoi, who is next in seniority to him, to succeed him.

Law minister Ravi Shankar Prasad had recently asked Justice Misra to recommend his successor, setting in motion the process of a change of guard in the apex court.

Speculation over Justice Gogoi’s appointment as the next CJI arose after the court’s four most senior judges, including Justice Gogoi, called a press conference in January this year and criticized Justice Misra on various issues, especially the manner of allocation of cases to certain benches. Justices J. Chelameswar (since retired), Madan B. Lokur and Kurian Joseph were among those who addressed the press conference, perhaps a first in the history of the Indian judiciary.

According to the memorandum of procedure, which governs the appointment of members of the higher judiciary, “appointment to the office of the Chief Justice of India should be of the senior-most judge of the Supreme Court considered fit to hold the office”. It stipulates that the law minister will, at an appropriate time, seek the recommendation of the outgoing Chief Justice for the appointment of the next CJI. Under this process, after receiving the CJI’s recommendation, the law minister puts it before the Prime Minister, who advises the President on the matter.


Prasad had recently said the government’s intention on the appointment of the next CJI should not be questioned. He had also said the executive will take a call when the incumbent names the senior-most judge of the Supreme Court as his successor as per convention. Prasad was responding to a question at a press conference on whether the government would follow laid-down conventions and procedures to appoint Justice Gogoi as the next CJI.

One dead, 25 injured in Kolkata bridge collapse

One person died while many more were injured when a flyover collapsed in the busy Majerhat area of Kolkata, sending vehicles crashing down and leaving many trapped.

West Bengal Chief Minister Mamata Banerjee, who has ordered a high-level probe, said from Darjeeling that the casualty figure may go up.

The bridge, which runs over the Majerhat railway station, connects Behala’s Taratala and Alipore. Police and disaster management teams rushed to the spot to rescue those trapped under the collapsed bridge.

While police confirmed the death of a biker, Soumen Bag, fire brigade personnel engaged in the rescue work said 25 injured were pulled out from the rubble. Rescue work was still going on till late into the night. NDRF DG Sanjay Kumar said earthmovers were being used for rescue operations.

While some reports said that the bridge is 40 years old, former PWD minister Kshiti Goswami claimed that it was built more than 100 years back.

In March 2016, a flyover had collapsed on a crowded street in Posta near Burrabazar, killing 27 people and crushing cars and other vehicles.

Mahindra rolls out Marazzo

Facing steep competition in its turf of utility vehicles, Mahindra & Mahindra drove in an all-new multi-utility vehicle Marazzo with an entry price of Rs.9.9 lakh (ex-showroom price Delhi).

Marazzo has been developed by Mahindra’s R&D centre in Chennai, along with engineering teams at its north-American unit and Italian design house Pininfarina. It will compete with models such as Toyota’s Innova at the upper-end, while Maruti’s Ertiga would be the target at the entry point.

The company has spent around Rs.1,500 crore to develop the vehicle over past four years, and Mahindra is hoping to regain some of the share that it has lost in its stronghold of UVs and SUVs to competitors such as Maruti, Hyundai and Toyota.

Competitors have eaten into Mahindra’s strength in the UV/SUV space and against an over 50% share in the category around 2012, it has a little over 25% now. Products such as the Hyundai’s Creta, Maruti’s Ertiga and Brezza, and Toyota’s Innova have given a tough run to the company.

Marazzo comes strapped with a 1.5-litre diesel engine. Its four variants are priced between Rs.9.9 lakh and Rs.13.9 lakh.

Bandra - Versova Sealink

Work on the much awaited Versova-Bandra Sea Link is set to start next month, with the Maharashtra state infrastructure arm, MSRDC, signing an agreement with Reliance Infrastructure consortium for the Rs.7,000 crore project. The eight-lane toll bridge, scheduled to be completed by mid-2023, will reduce the 90-minute travel between Bandra and Versova to 10 minutes.

To ensure seamless travel for motorists from across the western suburbs, the project plan has been tweaked by including an extra ramp, and providing for links to major roads. Now, the bridge will have three ramps midway: at Juhu Koliwada to link with the Western Express Highway, at Carter Road and at Bandra to link with Reclamation via Bandstand. The southern end of the bridge would connect to the Bandra-Worli Sea Link, while in the north it would end near Nana Nani Park in Versova, and will have road link up to SV Road in Andheri.

“The bridge will attract around 70,000 vehicles, including a major quantum of the 42,000 vehicles taking the Bandra-Worli Sea Link,” said Radhyesham Mopalwar, MD, Maharashtra State Road Development Corporation. To speed up the Rs.7,000 crore project, MSRDC has announced that the Reliance Infrastructure-Astaldi joint-venture would get a Rs.350 crore bonus if the sea link is ready six months before the deadline.

Reliance Infrastructure’s partner, Italy’s Astaldi S.p.A, is the world’s third largest player in bridge construction.

The project would allow Mumbaikars to have hasslefree connectivity from Worli to Versova with just one toll stoppage as the existing toll plaza will be merged with the one on the new bridge.

PMI data shows loss of momentum: August 2018

India’s manufacturing momentum further faded in August as the Nikkei India Manufacturing Purchasing Managers’ Index to 51.7 from 52.3 in July.

Even though the seasonally adjusted headline PMI reading remained in expansion territory, it is well below the 53.2 level recorded in June. A reading above 50 shows expansion, while the one below 50 indicates contraction from the previous month.

Indian manufacturing companies also continued to face higher input costs in August. The survey said that currency weakness contributed to higher raw material costs. Although sharp, input cost inflation moderated to the weakest since May. Business sentiment wanes in August, while new order growth decelerates.

Tepid growth in domestic new orders, coupled with rising input cost pressures, weighed on manufacturers’ business confidence. While companies retained their optimistic output projections for the next 12 months, the level of optimism eased from July’s three month-high and remained below the historical average.

A silver lining was the surge in export orders, which rose for the tenth consecutive month in August. Moreover, the rate of expansion accelerated to the strongest since Febuary.

That said, since imports are also likely to remain at elevated levels, it is expected to negate the benefits arising from improving exports.

The PMI data suggests that after the sharp rise in manufacturing output in June quarter GDP numbers, the momentum has waned. Considering input cost inflation and limited ability of firms to raise prices, the scenario in India’s manufacturing sector may not be as hunky-dory as the quarterly GDP numbers project.

RBI Buys Gold

The Reserve Bank of India has bought gold for the first time in nearly a decade, signalling that the metal could be in demand as a store of value when returns and capital values of fixed-income bonds are declining in a rising rate environment.

The RBI added 8.46 metric tonnes of gold to its stock of holdings during the financial year 2017-18 that ended June 30, taking the level of gold reserves to 566.23 metric tonnes, according to its latest annual report.

It last bought 200 metric tonnes from the IMF to boost its reserves in November 2009.

Over the past nine years, the gold stock in RBI reserves was stable at 17.9 million troy ounce. But RBI has started adding to its stock since December 2017, data submitted to the IMF indicate.

Stock of gold, as of June 30, amounted to 18.20 million troy ounce or equivalent to 566.23 metric tonnes, up from 17.9 million troy ounce in November, 2017.

The RBI’s decision to buy gold is significant because unlike many other central banks such as the People’s Bank of China, RBI does not regularly trade in gold, although the RBI Act permits it to do so.

Economists reckon that investing in gold is a prudent treasury move by the central bank at a time of rising yields. RBI has already sold close to $10 billion worth US treasury securities between April and June, data with the US treasury department suggest.

Rising yields could trigger mark-to-market losses for RBI’s bond portfolio. Of the $405 billion worth reserves with the central bank, $245 billion were held in the form of bonds and securities as of June 30.

Diversifying reserves to include gold is a prudent measure at such times. The Annual Report points out that RBI continued diversification of foreign currency assets with attention to risk management. The gold portfolio had also “been activated,” said Bhattacharya.

The RBI did not say where it bought the gold from or the reasons for such transactions. But economists say that the central bank might also want to create a buffer to meet the redemption needs of Gold Bond Schemes through which it sold bonds worth more than ₹4,000 crore.

The RBI has to redeem the three- to eight-year bonds at the prevailing price of the metal and keep an extra stock of gold in its kitty to hedge against price risks.

Motown Musings : August 2018

Passenger vehicle sales in India fell for the second consecutive month in August, hurt by the floods in Kerala and due to the high base of last year.

Based on the numbers reported by automakers, August PV sales are estimated to be 2-3% lower than a year earlier, even as demand for commercial vehicles remained strong in the past month.

Industry sources estimate PV sales at about 2.84 lakh units, marginally lower than the previous month. Dispatches to Kerala, which accounts for 8% of the Indian passenger vehicle market, were affected in the second half of August.

Interestingly, the commercial vehicle segment continued its strong run, despite expectations that the new axle rules introduced by the government in July could pull down growth.

Only four of the top 12 carmakers registered sales growth in August. While Tata Motors and Toyota Kirloskar posted strong double-digit expansion of 28% and 17%, respectively, sales at Mahindra & Mahindra grew by 1.8% and at Ford by 3.4%.

Maruti Suzuki, the market leader that has been reporting double-digit growth month after month, too posted an about 3.6% drop in sales, causing the entire market to shrink.

Sales were hurt due to severe floods in Kerala and heavy rains in other parts of the country, claimed Maruti Suzuki. The floods in Kerala not only impacted the usual sales, but also a pickup in demand typically experienced during the Onam festival.

Rising fuel prices, increase in interest rates and new ruling by the insurance regulator to pay premium upfront for multiple years are factors that could pose headwinds in the coming months. However, with rising GDP, normal monsoon in most parts of the country along with the introduction of new models and festivities around the corner, vehicle makers are hoping for a bounce back in demand after a temporary lull.

In the commercial vehicle segment, sales continued to remain strong with the economy growing at its fastest pace in recent times. All the top four manufacturers — Tata Motors, Ashok Leyland, Mahindra and VE Commercial Vehicles — registered 25% or higher growth in the past month.