In this week’s wrapup, we talk about the farmers’ protest around MSP, why the Indian Railways could face a bigger electricity bill, how Byju’s is trying to save itself, the discussions around a common currency for BRICS, and why the definition of a forest is important in India.

We don’t have a Markets edition this week.

An explainer on MSP and the farmers’ protest

When farmers have a bumper harvest, it’s not always a good thing. Because it means that an oversupply of the crops in the market can cause prices to crash. And often, these rock-bottom prices won’t be enough for farmers to even cover their cost of production. It’s a massive loss.

And since agriculture generates employment for nearly half of India’s population even today, the government has a scheme in place to protect the farming community — a Minimum Support Price (MSP). Every year, the government publishes a price list for 22 crops and says that it will buy a certain quantity of these crops from the farmers at a fixed price.

But the thing is, less than 25% of farmers actually seem to benefit from this MSP. And now, they want MSP to be codified into law so that they can reap the true benefits. That’s why the farmers have banded together to protest in Delhi.

But is it even economically feasible? That’s what we discussed on Monday.

The Indian Railways just got a bigger electricity bill!

The Railways is India’s largest electricity consumer!!! It spends a whopping ₹20,000 crores a year on the electricity needed to run the trains and offices. But now, it might have to pay even more because they have lost a legal battle to a bunch of state electricity discoms (distribution companies).

See, over the past few years, the Railways has flaunted its tag as a deemed distribution licensee and started buying electricity directly from the folks who generate it. And then distributed it to the railway network across India. Basically, they bypassed the discoms who are the middlemen. And in the process, the Railways have avoided paying higher electricity charges as well as surcharges.

But the discoms were losing out on revenue. So they took the matter to a tribunal which settles these sorts of disputes.

And let’s just say that things didn’t go in favour of the Railways.

But how did the tribunal come to its conclusion? You’ll have to read Tuesday’s story to find out.

Do investors love Byju’s again?

In 2021, Byju’s was valued at a mammoth $22 billion!

Cut to today, and the once high-flying startup has slashed its own valuation by 99%!!! It needs money urgently. And desperate times call for desperate measures, huh? It’s trying its hardest to raise money from investors and save itself.

And it looks like the valuation cut has helped. Investors have already committed $300 million to the edtech.

But is there more to this than meets the eye?

Probably. Because Byju’s has resorted to something called a rights issue! They don’t raise money from external investors. Rather, they go back to the existing investors and tell them that they are giving these investors the first right to buy the new shares. If the investors decide not to buy it, external parties can come in. And the existing investors will end up with less of a stake in the company.

But how does this process really work? Well, you’ll have to read Wednesday’s story to find out.

Can the BRICS have a common currency?

BRICS is an alliance of the world’s developing economies. It was kickstarted by Brazil, Russia, India, and China back in 2006 because they felt intimidated by the dominance of goliath economies like Europe and the US. A few years later, South Africa jumped in, forming a global economic group that was determined to challenge the world’s wealthy economies. And now BRICS has expanded its membership with 5 more countries (Saudi Arabia, Iran, Egypt, Ethiopia and the United Arab Emirates) on board. The might of BRICS seems to be growing!

And now, the group seems to be considering something that would dethrone the US dollar which finds a place in 60% of the global reserves and makes up for 80% of global trade. It wants to create its own currency. Yup, a BRICS currency that would be in common use in India, China, Russia…you get the drift.

But is this idea just a fantasy or is there some merit to it? In Thursday’s story, we explored the pros and cons.

What’s a forest, anyway?

How do you define what constitutes a forest?

In 1996, the Supreme Court of India 1996 said it was the “dictionary meaning” that would define forests. And the dictionary simply says it’s “a large area of land that is thickly covered with trees.”

But the incumbent Indian government wasn’t happy with that.

So, it went against the Supreme Court ruling last year and amended an existing law called the Forest Conservation Act (FCA) of 1980 which had been set up to keep a check on deforestation. The government said that the land had to be marked as a forest in its revenue records. That’s the only definition it would accept.

But activists believed this ‘new’ definition could be problematic. So they took the matter to the Supreme Court which just passed an interim order asking the government to go back to the dictionary meaning for now.

But why is the definition of forests important? We explained that in Friday’s story.

Anyway, that's it from us this week.

But don't forget to tune in tomorrow for edition #3 of our new personal finance newsletter Money Milestones. We'll talk about the results from our first ever community survey on the financial aspects of raising a child or a pet.

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