Week 4

Makeover for Education šŸ«

August 01, 2020

Good Morning,

Welcome! I hope you have your ā€œSubah Kee Chaiā€ ready and you're excited to read your weekly 10-minute digest. 

This week saw the release of the New Education Policy (2020) by the Indian Government. It also saw the race to secure gold loans by struggling businesses, and lastly, it saw the repercussions of the ban on Chinese products. I hope you enjoy reading today's newsletter! 

Now letā€™s get into the news.

Markets

Despite the announcement that lockdown measures were being eased in early August,

. Surprisingly, the big heavyweight Reliance Industries Limited was amongst the top losers as investors became over-confident about the company and started booking profits at much higher levels. HDFC, Kotak Bank and Asian Paints were other top losers of the week. On the contrary, Axis Bank, Sun Pharma, and M&M were among the top gainers. Domestic traders blamed the market fluctuations on the weak cues from the global indices as the USA reported a 32.9% plunge in GDP. Lastly, gold is continuing its steep rise as prices crossed the 55,000 mark and crude oil finished the week in the green as well.  

On Thursday, the

as the country moves back towards normality. These new norms do not apply to containment zones. Here's a brief summary:

1. Gyms and yoga centers are allowed to reopen on August 5th. No more boring home workouts! Gyms are back!

2. The night curfew will be lifted from August 1st, and restaurants will be allowed to stay open till late. 

3. Independence Day and "at home" functions will be allowed on August 15th. 

4. There will be no restrictions on interstate or intrastate movement of people and goods. 

Maintaining social distance and wearing a mask is compulsory. 

New Education Policy 

The wait is finally over! After 34 years, the Indian Government finally announced

, which introduces a number of reforms to the education system in India. Here is a quick rundown of the new reforms:

For Schools

1. The school education system is being restructured completely as the

. Traditionally students would complete 10 years (age 6 to 16) of school and then undertake 2 years (Grade 11 and 12) at college. This system, however, is being replaced by a 5-year foundational program (Age 3 to 8), followed by 3 years preparatory school (Age 8 to 11), 3 years middle school (Age 11 to 14), and 4 years of secondary school (Age 14 to 18). 

2. Under the new policy, students will enjoy the flexibility to choose a wide range of subjects broadening the future opportunities available in different sectors. 

3. Students are going to love this one! Board exams will only test core competencies and will run twice a year.  

4. The three-language policy will continue with the local language to be preferred until Grade 8. 

5. Students will have 10 bag-less days in the academic year, which they can use to experience career paths of their choice, for e.g. an informal internship, or shadowing an expert in the field of your choice. 

For Colleges

1. Indian colleges will have common college entrance exams similar to the American-originated SAT and ACT. These tests will be held twice a year. 

2. A four-year multidisciplinary Bachelors's degree will be preferred, and if students decide to drop out midterm they will be allowed to return and complete their degree after a break. 

3. Private institutions will face a fee cap to make higher education more affordable to low-income groups. 

4. Lastly, the top foreign universities will be encouraged to expand into India, and the Indian Government will motivate Indian Universities to go global as well. 

Big Picture:

Under the new policy, it is compulsory for schools and higher education institutions to promote art & culture. This holistic and expansive theme in the new education policy will allow Indian students to diversify their knowledge and explore a plethora of opportunities in different fields. 

Gold Mine

A recent Bloomberg report highlighted that Indian families hold the largest stash of

, according to the World Gold Council. As a result of the novel coronavirus slowing down a number of businesses, many individuals are desperately securing loans against their jewelry to stay afloat during this sinking economy. It really is a bloodbath for struggling businesses as they fight to secure a gold loan (a loan secured with gold as security). 

Where there is blood, unfortunately, the sharks aim to capitalize, primarily banks, gold-lending companies, and informal lenders. Banks such as HDFC Bank and Federal Bank Ltd have realized the growing demand for gold loans, and are expanding the loans they offer to include loans using gold as collateral (charging an interest rate of 7 - 15%). This added competition will prove beneficial for borrowers as the cost of borrowing will reduce. However, as a result of new entries into the gold loan market, Indian gold lending veterans Muthoot Finance Ltd and Manapurram Finance Ltd are also changing their policies to make it easier for customers to secure loans. (charging an interest rate of 12 - 29%). Manapurram Finance Ltd is offering gold loans straight to your doorstep through a 24/7 bank network, with staff on standby to answer any queries and to simplify the process. 

Zoom out:

While banks are entering the gold-loan market reducing the borrowing cost, consultancy firm KPMG believes 46% of India's gold loan industry is still at the hands of informal lenders, whose primary aim is to capitalize on individuals who unfortunately pay exorbitant interest rates (25 - 50%) out of desperation to keep their struggling business afloat. The decision to expand into gold-loans by banks will allow customers to secure cheaper loans, however, it will take time for these types of loans to reach businesses in rural areas who are running against the clock.  

Geopolitics 

Dying Tik Tok

While it is unlikely,

in an attempt to re-start its heavily damaged business. The company recently completed a questionnaire regarding data collection issued by the Indian Government and is hoping the Government officials have a change of heart and decide to overturn the ban. In addition, Tik Tok promised to create local data centers in India, which will store Indian user information. Tik Tok will also open an engineering plant in Bangalore for future technology innovations and to expand their business creating jobs for local Indian technicians and engineers. Tik Tok is desperately seeking to become a localized company in India and claim that they have always been law-abiding. However, if the USA decides to ban Tik Tok, it will be the last bullet for the dying company as it will come crumbling down over the next week. 

  The China Narrative

Earlier in July, Prime Minister Narendra Modi decided to ban 59 Chinese Apps over data security concerns. However, Indian tech moguls don't want the train to stop there as they are

. Co-Founder at Policybazaar, Yashish Dahiya, and MobiKwik head Bipin Preet Singh were among the few who called for greater action. They called for further trade restrictions and regulations on Chinese products before they dominate the market. An official at China's Indian embassy, however, stated that Beijing will take necessary actions to prevent bans that threaten their legitimate rights and called for the Indian Government to correct their wrongdoings. 

You are in demand!

If you were laid off from your job as a result of your sector being affected by the novel coronavirus,

. Yes, you read that correctly! Individuals working in damaged sectors such as aviation, automobile, and hospitality gain this advantage as hiring companies believe this pandemic experience has showcased the resilience and the ability to work under pressure. It is surprising, but companies are seeking fresher perspectives and the salaries offered will not be lowered for people switching sectors. If you've been laid off, you are in demand somewhere else! 

Sports 

Mohun Bagan Day

Every year since 2001,

is celebrated on the 29th of July. Mohun Bagan is a Kolkata based football club established in 1889. The day celebrates Mohun Bagan's historic victory over East Yorkshire Regiment in the IFA Shield Final on 29th July 1911. The victory was seen as a huge moment in India's freedom struggle at the time as it gave hope to the people that the British could be defeated. The iconic club has won the National Football League three times and the I-League twice, the most recent being in 2020.  

Mandatory quarantine for IPL stars

As mentioned in last week's newsletter, the IPL is looking to commence in mid-September. However, international players that will be participating in other tournaments before the IPL will be

in the UAE and undergo two COVID-19 tests before being given the green flag to play.  

  Wise words

Former Indian National Football team captain

urges budding Indian football youngsters to seek opportunities abroad at a professional level and to play for European clubs. He states that it will help players gain experience and improve the opportunities for a number of Indians who dream to play at top clubs in Europe. The long-road to success, however, is at the expense of lower wages as lower league European clubs do not pay a lot. The only downfall to moving abroad is losing the heavy paycheck players receive at the Indian Super League (ISL), but in the long-run, it could be a dream come true. 

Birdie

Indian golfer

narrowly made the cut at the Baraccuda Championship after securing two back-to-back birdies. 

Other News

1.

, resigned following India's decision to ban 59 Chinese apps as the company was heavily impacted. Law firm Khaitan & Co were appointed to handle litigation matters against merchants whose payments were suspended as a result. 

2.

, a Microsoft owned public cloud transformation specialist company. 

3. Wednesday celebrated

. Project Tiger was launched in 1973 to reduce poaching and habitat destruction. #SaveTheTiger

4.

for the April-June quarter as profits were down 92%. However, they are still the strongest airline to emerge out of the affected aviation industry due to their large cash pool.

5.

till August 31st. All flights under the Vande Bharat Mission will run as normal. The new travel bubbles with India will see approved flights run as well. 

Quiz

Quiz time! This week is India trivia! 

How well do you know India?

1. What is the National Sport of India? 

2. Where is the Gateway of India located?

3. How many states does India have? (excluding union territories)

4. Who was the first President of India? 

5. What is the national flower of India?

Get thinking! 

See you next week!

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See you next week!

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Quiz Answer: 

1. Hockey 

2. Mumbai, India

3. 29 states (and 7 union territories) 

4. Rajendra Prasad 

5. Lotus 

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Written by: Adnan Bahrainwala (Founder of Subah Kee Chai)