Market ends the week on a relatively positive note after the grim start of the series. More so, it has been a runaway week for Reliance Industries who bagged yet another marquee investor for its Jio platform.
In Vista Equity, RIL found a third high profile investor for its Jio platform, within a month. Vista Equity will pick up a 2.32% stake in Jio Platform for Rs 11,367 crore. The deal values Jio for an equity value of Rs 4.91 lakh crore, 12.5% premium over the deal with Facebook. Three deals over the month have helped Reliance Industries to raise Rs 60,000 crore for a cumulative 13.5% stake.
Intraday, Sensex closed 199.32 points up at 31,642.70 while Nifty closed 0.57% higher at 9,251.50. HUL (up 4.89%), Nestle India (up 3.85%) and Tech Mahindra (up 3.84%) were the major gainers while Axis Bank (down 3.85%), NTPC (down 3.81%) and M&M (down 3.48%) were the major losers of the day.
Labor law reforms: Greater good but at what expense?
In the fight against coronavirus, India's labor class has well and truly been at a receiving end. As if their hardships under the lockdown were not enough, the government is now utilizing the current crisis as an opportunity to accelerate the labor reforms.
India's stringent labor laws and trade union setup have always been a major impediment for foreign investors. Easing of labor laws has been a long impending demand from domestic industries as well. Strict labor laws are seen as a major factor, leaving Indian industries globally incompetent. It has also acted as a deterrent for global investors.
The matter has always been a political hot potato and all the previous attempts to reform have met with stiff resistance. However, given the current crisis where state governments are under acute pressure of streamlining their revenue, two major Indian states have now decided to take up this controversial issue head-on.
The Uttar Pradesh government has, in an ordinance, exempted state-based industries from the purview of all but three labor laws for the next three years. Following the footsteps, Madhya Pradesh has also granted 1,000 days' concession to its industries.
Both the states have introduced the ordinance in the pretext of protecting key industries from shutting down, encouraging new investments and to set up the new industrial infrastructure.
The reform has come at a time when the unemployment rate in the country has spiked to 27.11% from under 7% level before the start of the pandemic in mid-March. There is no doubt that the current crisis provides an opportune moment to carry this long impending reform. However, one can only hope that it will not leave India's poor more vulnerable to exploitation.
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