Script gone wrong: RBI takes demonetisation hit, cuts dividend to govt by more than half

The Reserve Bank of India (RBI) dividend to the government has come down by half. (REUTERS file photo)

The Reserve Bank of India (RBI) dividend to the government has come down by half. (REUTERS file photo)

The Reserve Bank of India’s (RBI) announcement on Thursday to more than halve its dividend payout to the government has once again put demonetisation under the spotlight, for failing to deliver on the expectations that were used to defend the November 8 decision.

It was expected that there would be a big windfall for the RBI, when the dodgy part of the cash held in denominations of Rs 1,000 and Rs 500 – about Rs 3 lakh crore — doesn’t return to the system and is written off from the central bank’s liability.

The RBI could then transfer this windfall to the government through higher dividend or some other means. The government, in turn, could use this money to build infrastructure, capitalise banks or invest in any other way to accelerate the economic growth.

The script has gone horribly wrong. We know now that most of the cash held in high-value notes, dodgy or otherwise, have returned to the system. It is another matter that the authorities continue to be in denial, maintaining that they are still counting the demonetised notes.

Worse, the RBI’s announcement coincided with the release of a research report by the State Bank of India (SBI) – the country’s largest – that severely undermines the government’s claim that the impact of demonetisation would subside in a few months and make way for accelerated growth as we speak.

According to the SBI report, in the first four months of the current fiscal year, bank credit shrunk Rs 1.5 lakh crore, or 2%, compared to the same period a year ago. The report has identified the sluggish trend in home loans and personal loans as the most worrying.

These suggest that consumer confidence hasn’t turned around and people remain wary of their economic prospects.


What is also worrying is that the informal credit network that provides fuel for the much-vibrant cash economy of India had crumbled in the wake of demonetisation. If proponents of demonetisation are to be believed, the demand that the informal credit network catered to, should have shifted to the formal (banking) sector). That clearly hasn’t happened.

The findings of the SBI report also underscore what this author had earlier argued against demonetisation: That there could be a no bigger sin that our policy-makers could commit than turning the management of a multi-layered, complicated economy such as India’s into a linear set of reductive calculations.

The fallout on RBI’s finances is another case in point.

Let alone a windfall, the RBI has not been able to protect its income, thanks to demonetisation. For 2016-17, it will pay Rs 30,459 crore in dividend to the government, compared to Rs 65,876 crore it paid last year. There are broadly three reasons for the lower payout, directly or indirectly linked to the November 8 decision:

First, the central bank is understood to have spent about Rs 15,000 crore on printing new notes. This money wasn’t budgeted, because the note-ban decision was supposed to be a surprise move.

Second, when people rushed to deposit demonetised notes, banks ended up with huge piles of cash and left the financial system with excess liquidity that could have stoked inflation or triggered other imbalances.

The RBI was forced to conduct reverse repo operations, meaning it had to borrow short-term money from the banks to suck out excess liquidity. Some estimates put the excess liquidity to be as high as Rs 8 lakh crore in early January, which means the RBI must have paid a fair amount in interest charges to the banks.

The last, but the most important, reason for the fall in RBI’s earnings relates to a decline in returns on investment in US treasury bonds, which was aggravated by the rupee’s appreciation against the dollar.

The RBI earns a good part of its income by investing India’s foreign exchange reserves in US treasury bonds. A big spurt in this income through 2015-16 had helped the central bank make a record dividend payout to the government.

In 2016-17, it was expected to moderate because interest rates in the US were softening. But the blow to the RBI turned to be harder, thanks to an appreciating rupee that further diminishes the impact of lower dollar earnings. Between July 2016 and June 2017, which is the financial year for the RBI, the rupee has risen nearly 5% against the US dollar, primarily because imports have been sluggish.

Demonetisation hit exports hard, especially in sectors that are import-intensive. It also dampened consumption spending, keeping imports and demand for foreign exchange subdued and helping the rupee appreciate.


Men’s fashion weeks: relying on American TV-inspired themes of days gone by

Men’s fashion weeks: relying on American TV-inspired themes of days gone by

A model walks the runway at the Louis Vuitton Spring Summer 2018 fashion show during Paris Menswear Fashion Week. Catwalking / Getty Images

If the garments shown last week at men’s fashion week in Paris are any indication of how men will be dressing come spring/summer next year, we are in for a bit of a shock.

Luxury designers seem to be in on some sort of market secret to which the public is not yet privy – one that demands an influx of Hawaiian-style shirts and colourful Harrington jackets.

Menswear has been heavily influenced by sport – graphic T-shirts, bomber jackets and athletic- inspired trousers have been popular of late. But brands showing at Paris took a wholly unanticipated approach with their spring/summer 2018 runway shows, relying on American TV-inspired themes of days gone by. They took to dressing their models at times as characters from old American Western flicks, and at others as stereotypical tourists vacationing in Europe.

Let’s start with the Hawaiian shirt – a cringeworthy item of clothing an example of which, typically, most American dads have hanging in the back of their wardrobes, reserved solely for tropical excursions with the family. Dsquared2 re-introduced the trend at men’s fashion week in Milan only days earlier, and it certainly continued in Paris.

At Balenciaga, creative director Demna Gvasalia took the image of the American father to heart, inviting his male models to bring their children to the catwalk. While some walked with toddlers saddled on their hips, others showed off bright Hawaiian shirts – garish yellow and orange shades, palm trees and all. Another version showed a triad of blues, pinks and purples in an abstract foliage-inspired pattern. A Hawaiian shirt on the Paul Smith runway depicted a tropical evening, with palm trees billowing beneath a large moon and vast sky full of stars. Another one illustrated underwater life, with fiery coral reefs and fish.

At Louis Vuitton, it seemed almost every second model wore one of these dated shirt styles in bright blue and red floral designs, stamped with Louis Vuitton lettering across the chests, or in light green or navy styles that could double as safari shirts. At Cerrruti 1881, the style made an appearance in a slightly more tailored, off-white version with brown- and mustard-hued leaf motifs.

Mustards and yellows stood out on the runways – a suggestion, perhaps, that the fashion-conscious man will step out of his comfort zone in terms of colours next summer.

At Hermes, a burnt-red, almost burgundy, tone was the highlight pigment, seen on knits, trenches and a crocodile-leather jacket. Muted, military tones were also abundant among the brands, as were the opposite: electric, cobalt blues incorporated into collections from Billionaire, Louis Vuitton and Issey Miyake, to name but a few.

Many vivid, neon tones were seen on vinyl materials – another throwback to past eras. Vinyl or shiny PVC and faux leathers were the fabrics of choice for raincoats, trenches, trousers and zip-up Harrington jackets. In some instances – like Berluti’s yellow vinyl jacket with a subtle sheen, paired with off-white trousers and a jacket, or Lanvin’s bright-green version, threaded through the belt loops of trousers and tied at the waist – the concept worked well, giving the typically cheap material a sophisticated, street-cool update. The gold rain mac paraded by Julien David might even have some selling power among men who favour flamboyance.

But, when plastic-y textiles were paired with bold text spelling out “Europa!” over checked and denim button-down shirts at Balenciaga, the cool factor was not all that evident.

A similar theme opened the Louis Vuitton show, as models wore uber-tight spandex bicycle shorts and sporty, contoured athletic leggings along with socks and sandals (just as the boys at Prada had worn a few days earlier in Milan).

Suits, for the most part, were of relaxed silhouettes – unfitted and at times boxy, again playing off the stereotype of the middle-class American man, rather than the tailored Parisian gent – though suits by Dior Homme, Alexander McQueen and Balmain were expectedly slim-fitting.

Hues of lavender and mint green were spotted on suits at the Haider Ackermann show, with exceedingly sagging trousers, displaying the elasticated waistlines of boxers underneath, and blazers unbuttoned, revealing bare chests. Styling was somewhat bizarre, with simple, black flip-flops completing the men’s looks.

At Thom Browne, suit jackets were either abnormally high, at waist length, or uncannily long, reaching mid-thigh. Gender norms were questioned, as some of the male models were dressed in button-down and pleated skirts and dresses, too.

Worthy of mention are the shirts that were introduced at Valentino. Conventional collars were replaced with long strips of fabrics – such as those used on women’s blouses to tie loose pussy bows at the neckline. Instead, one strip would artfully drape over the centre of the shirt, buttoned underneath the opposite side’s collar and then left loose, creating the appearance of an asymmetrical, haphazard tie.

To wrap up without mentioning denims would be irresponsible, to say the least, as jeans have become more and more acceptable in high fashion.

At Balenciaga, cuts were straight and slim, and at Junya Watanabe, the denims were patchworked. Not the most fashion-forward approaches, but it quickly became clear that these Paris collections heralded a more regressive style revolution.


[Update: Gone from the beta too] Twitter removes its homescreen widget support from the latest alpha

Twitter is struggling to figure out what it wants to be when it grows up. Life can be tough when you’re a social network that almost everyone has heard about but no one knows how to use when they’re just joining for the first time.

But despite these tumultuous times at Twitter’s headquarters, the Android app has seen some of its best days in the past few months: an overhauled Material Design inspired interface, a test for a night mode, Android N Direct Reply, and more. But instead of giving something new, the latest Twitter alpha 6.9.0 takes away a feature: the homescreen widget.

If you have the widget added to your homescreen, you will see the above message instead when you’re on the latest alpha. The widget is clearly no longer functional. Whether this change will carry through to the beta and stable versions remains to be seen, but it’s clear that Twitter’s Android developers are at least considering the possibility of removing the widget support altogether. Maybe they found out it wasn’t used all that much and the people who had added it were so few that it didn’t warrant keeping it alive and supported. I guess we’ll have to wait and see. In the meantime, feel free to cry foul in the comments below.

[Source:-Android Central]

Website penalties gone: Google upgrades to Penguin 4.0

Website penalties gone: Google upgrades to Penguin 4.0

Google isn’t messing around when it comes to spam cluttering their search engine. Penguin 4.0 is a perfect example.

Google has just made a major announcement regarding its core algorithm. In a post on the Official Google Webmaster Central Blog, the search engine giant published information regarding the incorporation of Penguin 4.0 to its core algorithm.

“After a period of development and testing, we are now rolling out an update to the Penguin algorithm in all languages,” said Google’s Gary Illyes from the Google Search Ranking Team in a relatively short post.

According to Illyes, the new changes are among the most highly requested from webmasters: making Penguin real time and more granular.

What does this mean for webmasters and developers? How should the SEO world adapt to these changes? In order to get a better idea, let’s dissect the exact changes being made.

A Little Background

Penguin, first announced in April 2012, is a Google algorithm update that attempts to stop search engine spam. The goal is to prevent the use of spamdexing techniques – also known as black-hat SEO – that manipulate search engine results.

Some of the illegitimate techniques used include link spamming, keyword stuffing, and the use of unseen or invisible text on web pages. Penguin would devalue pages that included these techniques by decreasing their placing in the search engine results page.

Previously, these techniques were widely used to achieve a highly ranked website. After Penguin was released, webmasters were forced to audit every link and page on their website so they wouldn’t be affected by Penguin. If a website was penalized for containing some of these elements, it couldn’t recover until Penguin was refreshed.

These refreshes were inconsistent and irregular. A list of Penguin updates, published by Barry Schwartz at the Search Engine Roundtable, shows that the most recent Penguin update took two years to implement. “The last update in 2014 – Penguin 3.0 – may have only affected less than 1% of US/UK searches, but that ultimately translated to 12 billion queries,” asserts Christopher Ratcliff from Search Engine Watch.

The new updates announced by Google are meant to change the way Penguin reacts with the core algorithm and the way it influences and/or penalizes pages on the web.

Penguin is Now Real-Time

The first major change to the algorithm is that Penguin 4.0 is now in real time. “With this change, Penguin’s data is refreshed in real time, so changes will be visible much faster, typically taking effect shortly after we recrawl and reindex a page,” Illyes said in the post.

Previously, Penguin was refreshed on an unknown and inconsistent schedule. “Once a webmaster considerably improved their site and its presence on the internet, many of Google’s algorithms would take that into consideration very fast, but others, like Penguin, needed to be refreshed,” Illyes said.

For webmasters, this is extremely important. Now that the algorithm element is real-time, website data is refreshed almost immediately, every time the page is recrawled and reindexed by Google. This means that changes made to influence SEO will be reflected much quicker in the Google search results pages.

Penguin is Now More Granular

Previously, penalizations handed out by Google could influence an entire web domain. Meaning that one small problem could influence an entire website’s SEO. This was a huge problem for webmasters and developers that had to pay attention to every small detail that was included in the website.

“Penguin now devalues spam by adjusting ranking based on spam signals, rather than affecting ranking of the whole site,” said Illyes.

Essentially, the new changes seem to point to the fact that Penguin will stop penalizing entire websites for flawed content. Instead, websites will be impacted on a page-by-page basis, giving webmasters the opportunity to improve individual pages.

Recommendations Moving Forward

Penguin is now among the 200-plus signals that Google uses in its core algorithm to rank pages and determine how they display on the search engine results page. Despite the fact that Google is “…not going to comment on future refreshes” of Penguin, it’s safe to assume that it will be updated more frequently.

There is still a lot that is unclear about the Penguin update, including the use of disavow files. Gary Illyes still recommends using disavow files to recover from issues related to Penguin according to a Twitterpost. When asked “Can you address whether disavow files are still a useful link pruning tool under Penguin 4.0?”, he responded, “we haven’t changed our recommendations for the disavow tool with this launch.”

Yet, in a Facebook exchange between Illyes and Barry Schwartz, Illyes did clarify that “manual actions are still there, so if we see that someone is systematically trying to spam, the manual actions team might take a harsher action against the site.”

“The web has significantly changed over the years, but as we said in our original post, webmasters should be free to focus on creating amazing, compelling websites,” Illyes concluded in the post.

Overall, these changes will undoubtedly affect the SEO realm as experts move quickly to adapt the adjustments and implement them on their websites.

[Source:-Know Techi]