Biz EOD: Unemployment spikes in 7 states; GST compensation to states may rise 50%; Cabinet okays stimulus
BusinessToday.In May 20, 2020
Seven states - Tamil Nadu, Jharkhand, Bihar, Karnataka, Haryana, Maharashtra and Andhra Pradesh - reported a substantial spike in unemployment rate in April compared to overall unemployment growth in the country. According to Finance Ministry sources, the per month compensation requirement for states will go up from Rs 14,000 crore in 2019-20 to Rs 20,250 crore in 2020-21. The Union Cabinet chaired by Prime Minister Narendra Modi approved Rs 3 lakh crore funding for MSMEs and special liquidity scheme for NBFCs. Read for more top stories from the world of business and economy:
For the first time ever, CMIE's monthly unemployment rate has hit double digits in April 2020, at 23.5 per cent, as labour market conditions worsened following a lockdown imposed by the coronavirus outbreak.
The centre is already struggling to fully compensate the states for dues in 2019-20. It has not paid to states the compensation for December 2019 to March 2020 as their compensation requirements far outpace the collections.
According to a survey by proxy advisory firm Institutional Investor Advisory Services (IiAS), 78 per cent investors and sell -side analysts feel companies should suspend dividends and fortify their balance sheets.
Defensive sectors such as pharma and FMCG could currently offer good opportunities since these have been defying the coronavirus pandemic very well.
Other proposals approved today are allocation of foodgrains to migrants; adoption of auction methodology of coal and lignite mines; and a formalisation scheme worth Rs10,000 crore unorganised sector's micro food processing enterprises.