PM Narendra Modi’s infra development vision to play catalytic role in overall economic growth: Assocham
Lauding PM Modi for launching landmark projects in Varanasi, industry body Assocham said expanding investment in infrastructure will generate jobs, promote tourism and play catalytic role in overall growth and development of Indian economy. Assocham secretary general Uday Kumar Varma Wednesday said the government’s vision for new and improved infrastructure that can serve the nation for a long time.
Varma was referring to the inauguration of a sewage treatment plant, two major national highways and an inland waterways project by the prime minister in his Lok Sabha constituency, Varanasi, on Monday. The prime minister launched projects worth Rs 2,413 crore, which includes a multi-modal terminal on the Ganga river.
Varma said, “Infrastructure development will boost the confidence of domestic and global investors/stakeholders as it will reduce the cost of doing business, stimulate economic growth, spur job-creation and improve living standards of the people, not just in Uttar Pradesh but countrywide.”
“Our country needs reliable infrastructure to connect supply chains and efficiently move goods and services seamlessly, thus a multi-modal terminal on the Ganges offers an unprecedented opportunity for local businesses to export more goods and services and create high-quality jobs at home,” Varma said.
Considering that infrastructure is vital to economic growth, he said, “India’s ability to realise its competitive potential depends on making smart infrastructure choices, thereby responding to economic, demographic, fiscal, and environmental changes in order to help people, places and businesses thrive and prosper.”
Varma also said that availability of infrastructure support would give fillip to the growth and development of micro, small and medium enterprises (MSMEs) which is critical to the overall growth of industrial sector in both UP and across India. “Lack of proper infrastructural facilities causes a very serious damage to an enterprise’s valuable chain process including production, consumption and distribution of products,” he said, adding that this constraint is apart from scarcity of finances, inadequate marketing facilities and technological obsolescence that are being already faced by MSMEs.
“So, there is utmost requirement of infrastructure development for growth of industries in general, and MSMEs in particular, which should include all types of infrastructural facilities like railways, waterways, roadways and airways, proper channels of telecommunication, adequate supply of power and other supporting facilities like tool rooms, testing labs, design centers and others,” the Assocham secretary general added.
PM Modi on Monday inaugurated India’s first multi-modal terminal on the Ganga river and received the country’s first container cargo transported on inland waterways from Kolkata. He also inaugurated two important roads, having a total length of 34 kilometres and built at a cost of Rs 1,571.95 crore. The Ring Road will provide easier and more convenient access to Sarnath, an important site for Buddhist pilgrimage.
He also inaugurated two sewage infrastructure projects worth Rs 425.41 crore in Varanasi and laid the foundation stone for another project worth Rs 72.91 crore for Ramnagar.
WPI inflation in October rises to 4-month high of 5.28%; key things to know
After retail inflation was recorded at a 13-month low of 3.31 percent in October, WPI inflation climbed to four-month high of 5.28 percent in the same month up from 5.13 percent in September, official data showed. The wholesale inflation stood at 3.68 percent in October last year.The upward trajectory was noted mainly due to spike in petrol and diesel prices, even as food prices softened. Meanwhile, the August WPI Inflation was revised to 4.62 percent from 4.53 percent.
The inflation for October is highest in four months as such a level was previously witnessed in June at 5.68 percent.The wholesale inflation for the month under review rose by 0.7 per cent to 121.7 (provisional) from 120.8 (provisional) for the previous month, Ministry of Commerce & Industry data showed.
“Given the easing in the crude oil prices and the recent strengthening of the INR, we expect the WPI inflation to range between 4.5-5.0% in the remainder of H2 FY2019. Despite the change in the monetary policy stance to calibrated tightening and the uptick in the core-CPI and core-WPI inflation in October 2018, the MPC appears likely to maintain a status quo on the repo rate in the December 2018 policy review, following the decline in the October 2018 headline CPI inflation, the deep correction in crude oil prices, and the pullback in the INR,” Aditi Nayar of ICRA said.
An easing of prices was observed in the food articles with deflation at 1.49 per cent in October, against 0.21 percent September, government data showed. Compared to the 3.83 percent in the last month, the prices of vegetables also came down with deflation at 18.65 percent in October, compared to 3.83 per cent in the previous month, the data showed.
In ‘fuel and power’ basket in October rose to 18.44 percent, from 16.65 percent in the month of September. Among food articles, potato prices continued to rise with 93.65 percent inflation in the month of October. While onion observed deflation of 31.69 percent; the same for pulses stood at 13.92 percent.
Donald Trump says Indian trade negotiators ‘the best’, calls PM Narendra Modi a friend
The US President Donald Trump Tuesday complimented Indian trade negotiators as ‘the best’ and said that the trade talks between the two countries are moving along. Before lighting the ceremonial Diya, while celebrating Diwali inside the historic Roosevelt Room of the White House, Donald Trump referred India-US trade deal negotiations and said “We’re trying very hard to make better trade deals with India. But, they’re very good traders. They’re very good negotiators. You would say right. The best. So we’re working. And it’s moving along.”
This is the second consecutive Diwali that the US President Trump has celebrated along with nearly two dozen top Indian Americans officials of his administration in the White House. He also invited the Indian Ambassador to the US, Navtej Singh Sarna, his wife Dr Avina Sarna, as well as his special assistant Pratik Mathur to the White House Diwali celebrations.
“The United States has deep ties to the nation of India and I am grateful for my friendship with Prime Minister Modi,” Trump said, adding that his daughter Ivanka Trump is also friends with Narendra Modi. It may be noted that Ivanka was the first top official of the Donald Trump administration to travel to India.
Both Modi and Trump are likely to meet soon as the two leaders are slated to attend the G-20 Summit in Argentina on November 30 and December 1. The White House, however, is yet to make an announcement in this regard.
“I’ll be talking to him soon. Thank you,” Trump told Indian Ambassador to the US, Navtej Singh Sarna. Meanwhile, he also added that Indian-American community was a plus-plus” for both India and for the United States.
During the presidential campaign, the US President Donald Trump had praised Indian Prime Minister Narendra Modi for the economic and bureaucratic reforms in the south Asian nation. In June last year, he had also hosted Narendra Modi at the White House.
“I’m honoured to host this beautiful ceremony at the White House. Very, very special people. We’re gathered to celebrate a very special holiday observed by Buddhist, Sikhs and Jains throughout the United States and around the world. Hundreds of millions of people have gathered with family and friends to light the Diya and to mark the beginning of a New year: very special new year,” he said.
Since 2003, Diwali celebrations at the White House has become an annual tradition. While in 2009, the then Us President Barack Obama lighted the ceremonial lamp in the East Room of the White House, the first lady Michelle Obama also celebrated Diwali in the White House in 2013.
With trade touching an all-time high of $1.60 bn, India and Peru to discuss FTA in New Delhi next month
With bilateral trade between India and the South American country Peru touching an all-time high of $1.60 bn, the next round of talks for the free trade agreement (FTA) between the two countries is scheduled to take place next month.
Confirming to FE, a senior diplomat in the Embassy of India in Lima said that, “Officers from both countries are meeting for the third round of negotiations in New Delhi from Dec 4-7.”
According to diplomatic sources the aim of this FTA between the two countries is aiming at liberalising norms for trade in goods and services. Both sides are keen on expanding their trade basket especially in the agriculture sector as well as deepening their trade and investments.
FE was the first to report that the talks of the special trade agreement with Peru was started in 2017 and since then two round of talks have already taken place, in fact a senior level team from New Delhi from the Ministry of Commerce and Industry had visited Lima to study the feasibility of having such an agreement with the South American nation and identified the issues that could be addressed.
In an interview to FE, ambassador of Peru in India, Jorge Juan Castañeda Méndez said, “Both India and Peru are celebrating 55 years of diplomatic relations. Peru could be used by Indian investors as a gateway to the region. With the government of Peru planning to rebuild after last year´s devastating floods, there is a huge opportunity for Indian companies to invest in various sectors including construction of roads, highways, ports, and airports.”
Both countries have complementary seasons; soon there will be mangoes and potatoes from our country entering India. A lot of citrus fruits, avocado, grapes and quinoa are already here, the envoy of Peru added.
“There has been a significant increase in trade between the two countries. Import of Gold from Peru has gone up from last year’s $ 1.3 bn and it has potential of going up further. Silver is the other metal that India is keen on. India is buying copper from Peru as there is huge concentration of Copper which Indian mining companies can explore,” he said.
The LatAm nation is the world’s sixth largest producer of gold, second largest producer of silver, and the third largest producer of copper, tin, zinc, and lead.
In 2015, Peru was the second largest exporter of table grapes- Red Globe variety- to India, a position it holds even today. These grapes are typically available in Indian supermarkets between December and April every year. Also, Indian importers have shown a growing interest in Peruvian avocados, leading to a steady increase in its consumption since 2016.
All this has become a possibility because the open trade barriers between the two countries provide Peru with a new and significant trade partner.
These 4 southern states bring half of India’s overseas remittances; Kerala tops the list
India continues to be the top nation with $69 billion of remittances that it received last year from the large pool of skilled, semi-skilled and unskilled Indian migrants across the world, with four southern states in the country accounting for almost half of its total remittances, according to a study by the Reserve Bank of India (RBI). The states of Kerala, Karnataka, Tamil Nadu and Andhra Pradesh had a share of about 46% or $31.74 billion (Rs 2,30,900 crore), of total remittances of $69 billion that India received last year from its citizen working overseas.
Kerala topped the list of states, accounting for about 19% share or $13.11 billion (approximately Rs 95,000 crore) of the total remittances, it showed.
Of the total $69 billion in 2017, about 58.7% was received by four states — Kerala, Karnataka, Maharashtra and Tamil Nadu. After Kerala, Maharashtra had the largest chunk of remittances at 16.7% (11.52 billion), followed by Karnataka 15% (about $10.35 billion), Tamil Nadu 8% and New Delhi 5.9%.
In terms of countries, 82% of the total remittances came from seven countries – UAE, the US, Saudi Arabia, Qatar, Kuwait, the UK and Oman. Indians working in The Gulf Cooperation Council (GCC) countries – mostly semi-skilled and unskilled workers – sent more than 50% of the total remittances in the financial year 2016-17, it added. It may be noted that over 90% of Indians overseas work in the Gulf region and South East Asia.
On the other hand, Indian residents working in the US, considered highly skilled, were the second largest contributors.
According to the study by the RBI, over half of this amount was used for family maintenance (consumption), while 20% deposits in banks, followed by investments in land and property and shares (8.3%), it added. The Rupee Drawing Arrangement (RDA) is the most preferred mode, accounting for about 75% of remittances, especially from the GCC countries.
The study by the central bank was largely corroborated by surveys conducted by various multilateral agencies such as ILO 2018. These agencies have also indicated a shift in cross-border migeration flow from states like Karnataka and Kerala to Bihar and Uttar Pradesh, which comprise of semi-skilled contractual workers having a low level of income. Bihar and Uttar Pradesh accounted for 4.4% of total remittances in 2016-17, it added.
In April this year, the World Bank said in a report that India grabbed the top position with about $69 billion of remittances in 2017, followed by China ($64 billion), Philippines ($33 billion) and Maxico ($31 billion).
Demonetisation: 80,000 being chased by I-T for large cash deposits
The income-tax department (I-T) is ‘chasing’ 80,000 persons who had deposited cash during demonetisation period which didn’t match their income profile, chairman of central board of direct taxes (CBDT) Sushil Chandra said on Wednesday. He also said that the government would exceed the direct tax collection target of Rs 11.5 lakh crore for the current fiscal.
During the demonetisation (November 8-December 30, 2016), more than 23 lakh people were identified to have deposited suspiciously large sum of cash in bank account. Subsequently, they were sent messages to explain the source of cash. Chandra said that a large number of such persons filed returns following I-T department’s queries.
However, nearly 3 lakh individuals failed to file returns even after initial communication. The I-T department then issued statutory notices to them, which resulted in 2.15 lakh persons filing returns.
“For the 80,000 cases, returns have not been filed; the department is chasing them and the assessment would have to be framed,” Chandra said.
In August, replying to a question on status of I-T department action on persons identified during demonetisation, the government had said that 2.1 lakh non-filers were identified among PAN holders and that these people subsequently paid self-assessment tax of `6,410 crore. Additionally, Chandra said that the direct tax base currently stood at 7.42 crore taxpayers, which include those who filed IT returns and those who paid taxes through deduction at source but didn’t file returns. So far, 6.02 crore IT return have been filed, which is 54% more than during the same period last year.
“We have also identified 80 lakh persons who had filed returns in the last three years but have not filed returns so far. We are communicating with those persons that you had filed IT returns in earlier years which was more than the threshold limit so you should again file,” Chandra said. He was speaking after inaugurating the CBDT pavillion at the India International Trade Fair.
The government would cross budget target of Rs 11.5 lakh crore as the second quarter saw very good advance tax collection due to improved corporate performance, the CBDT chief said. “This year, we have fast-tracked refunds to taxpayers filing returns. Refunds have been disbursed to 2.15 crore assessees amounting to `1.15 lakh crore, and with this most of refunds have been disbursed,” he said.
RBI board meet: finance ministry keen on boosting MSME credit, NBFC liquidity
The finance ministry will seek immediate solutions to the issues of MSME credit and NBFC liquidity in the central bank’s board meeting on November 19, official sources said on Wednesday, adding that discussions on the central bank’s capital framework could be continued even after the meeting. This indicates a thaw in the relations between the government and RBI.
The sources said the government’s priority at this juncture is to boost credit flows to small and medium enterprises (SMEs) and non-bank finance companies (NBFC).
In the forthcoming board meeting, being held for the second time in two months, the finance ministry and RBI might also try to reach an mutually-agreeable solution on the former’s proposal to relax the Prompt Corrective Action (PCA) framework for weak banks so that their immediate lending capacity is boosted. Economic affairs secretary Subhash Chandra Garg recently said the government was not seeking Rs 3.6 lakh crore from the central bank to meet its fiscal requirements. However, he admitted that a proposal was under discussion to ‘fix’ an appropriate economic capital framework of RBI.
While the RBI has recently acceded to some of the demands from the government – it allowed more bank lending to NBFCs and relaxed the terms for Indian firms to raise overseas debt – the intractable ones are the issues of capital transfer and the PCA framework.
Broadband connectivity in villages under bharat net fails to pick up
The government’s aim to provide high-speed broadband in villages using Bharat Net infrastructure has failed to achieve any significant success as the utilisation target to provide last mile internet connectivity to rural households from 1.15 lakh service-ready gram panchayats (GPs) has been found to be less than 10%.
Several officials from the Department of Telecommunications (DoT) whom FE spoke to said that this is a “very serious issue” as Bharat Net is one of the flagship projects of the government and abysmal utilisation of its infrastructure indicates lack of coordination and inter-agency tussle.
A senior DoT official said that despite weekly and fortnightly reviews in last two years, some officials have been found to be shirking responsibility along with the inability to deal with on-field problems. “What’s more disturbing is that inter-organisation issues have cropped up between the implementing agencies, BSNL and BBNL, which is threatening to derail the earlier achievements,” he added.
BBNL, a public sector undertaking, is the special purpose vehicle (SPV) set up by government to enable the connectivity, while state-run telecom operator BSNL is entrusted with the task of laying optical fibre for the project.
Another official said that till October, 1.15 lakh GPs were service ready, which means that last mile internet connectivity from the GP to the consumer using Wi-FI hotspots or other means can be provided.
“Detailed instructions were given on operations and management (O&M) as well as on utilisation of Bharat Net infrastructure, including by telecom operators and internet service providers (ISPs). But extensive field reports suggest non-functioning of 80-90% of the GPs and there is massive under-utilisation, even non-utilisation in many cases,” he added.
Another senior official said: “Though utilisation targets were already set, the actual utilisation on ground is believed to be less than 10%. This means there is utter lack of professionalism on part of BBNL and BSNL with poor planning, lack of monitoring and coordination between them”.
Bharat Net, which aims to connect 2.5 lakh GPs with high-speed internet, will act as the backbone for government’s ambitious Digital India Mission for providing services online to people in villages. The first phase for connecting 1 lakh GPs was completed in December last year and the second phase to connect 1.5 lakh GPs by March 2019 in under implementation.
Concerned over the lack of utilisation of Bharat Net infrastructure, the DoT has read the riot act to officials in BSNL and BBNL. Earlier this month, directions were issued that “disciplinary action” would be initiated against officials who fail to rectify issues in GPs within 48 hours.
However, many within the department are of the view that it is “too little, too late” as these issues had been identified early on, but not much serious efforts were put to rectify them.
P Chidambaram attacks Modi govt on PM Fasal Bima Yojana, says it allows insurance companies to rob farmers
Former finance minister and senior Congress leader P Chidambaram has launched another attack at the Narendra Modi government by saying that the Prime Minister Fasal Bima Yojana has been designed to allow insurance companies to rob farmers.
In a series of tweets, P Chidambaram criticised the policy, and said: In 2016-17, insurance companies made a neat profit of Rs 6460 crore! Robbing the farmers to fatten the insurance companies.
He said that the Congress had cautioned about the scheme, which was “designed to profit the insurance companies at the cost of the farmers”.
P Chidambaram comments followed the RTI revelation that over 84 lakh farmers have withdrawn from the scheme. RTI activist PP Kapoor sought details of the scheme, upon which he learnt that insurance firms earned over Rs 15,000 crore in two years of the scheme, media reports said.
The government under the leadership of Narendra Modi launched Pradhan Mantri Fasal Bima Yojana in 2016, with the aim to help needy farmers through the insurance route. However, many media reports highlighted discrepancies in the scheme adding to farmers’ woes.
MSME lending, PCA issue: RBI, govt trying to reach common ground, say sources
The government and Reserve Bank seem to be veering around to reach an agreeable solution particularly with respect of relaxation of the Prompt Corrective Action (PCA) framework and easing of lending norms for the MSME sector ahead of the RBI board meeting on November 19, sources said.
If not in this board meeting, sources said, the issue of relaxation of PCA framework which the finance ministry has been pitching for would be reached in the next few weeks. As a result of relaxation, some banks may come out of the PCA framework by the end of the current fiscal.
Of the 21 state-owned banks, 11 are under the PCA framework. These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.
The PCA framework kicks in when banks breach any of the three key regulatory trigger points namely capital to risk weighted assets ratio, Net non-performing assets (NPA) and return on assets (RoA). The RBI is also likely to agree to easing of lending norms for the MSME sector including strict rating criteria to improve credit flow to this sector, sources said.
Besides, the central bank is expected to consider special dispensation for micro, small and medium enterprises (MSME) sector and non-banking financial companies (NBFCs) which have been facing liquidity issues.
The government feels that the MSME sector which employs about 12 crore people plays a critical role in the economy, and the sector hit by demonetisation and implementation of Goods and Services Tax (GST) needs support.
However, the central bank has been averse to government demand for special dispensations for MSME and NBFC sectors as it consider them vulnerable. Last week, Finance Minister Arun Jaitley said there is a need to minimise NPAs in order to maintain the strength of the banking system and enable it to help the economy grow.
It is only a strong banking system that will be able to improve credit in those sectors which really need credit, the Finance Minister had said, adding, “The MSME sector needs credit, several other players in the market need credit. NBFCs need credit because a large part of lending is done by them.”
There are reports of growing tensions between the RBI and the government, with the Finance Ministry initiating discussion under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor.
RBI Deputy Governor Viral Acharya had in a speech last month talked about the independence of the central bank, arguing that any compromise could be “potentially catastrophic” for the economy.
Heavens seem to be smiling on India, says uday kotak; here’s why
As crude oil prices crashed a whopping 7% to $66 a barrel, top banker Uday Kotak said it’s advantage India and that “heavens seem to be smiling on India”. The country has been under a lot of pressure due to higher-than-$60 a barrel oil price in last one year but the latest retreat is giving a lot of comfort to India.
Kotak said that if oil sustains below $70, it would be advantage India. The country is the third largest importer of crude oil and covered 80% of its total energy needs from imports.
On Wednesday, crude oil prices plunged 7%, while the month of October witnessed the biggest fall since the price collapse of 2014. The oil price collapse despite the United States sanctions on Iran due to a slew of factors: eight countries, including India, were granted temporary waivers from sanctions; oil supply surged; economic growth contracted, leading to lower oil demand.
Infosys founder Narayana murthy backs Modi for second term, pitches for continuity
Infosys co-founder N R Narayana Murthy showered praises on the Prime Minister Narendra Modi for introducing and executing major reforms such as Goods and Service Tax (GST), and for being the driving force behind the economic growth of the country. In an interview with ET NOW, Murthy also complimented PM Narendra Modi and his cabinet for working ‘very hard’ in reducing corruption at the central level.
“I broadly feel that PM has led a strong economic progress minded government. We cannot hold PM responsible for execution, it is the bureaucracy that has to do it,” Murthy said when asked about the execution and implementation of the key reforms including GST and the Insolvency and Bankruptcy Code (IBC).
Further, he said that having a prime minister focused on economic growth and discipline is a good thing, adding continuity is a good thing for the economy.
He also talked about the ongoing rift between the central government and the Reserve Bank of India (RBI), as well as other institutions. While stressing on the need to strengthen institutional autonomy, Murthy said that both the parties – RBI and the government – are doing “what is legitimately their mandate” and they will come to a solution.
Meanwhile, while talking about the government’s focus on building statues and temples, instead of development, he said that these are not the points of concern for him.
Apart from this, Murthy recently said that new technologies like machine learning, automation and Internet of Things (IoT) can help in accelerating growth for businesses in India if used intelligently and in an assertive manner. He also stressed on the point that enterprises should focus on providing training to youths in the country on these technologies.
Narayana Murthy, a man who created a symbol of India’s information technology glory way back in 1981, served Infosys CEO from 1981 to 2002 and as chairman from 2002 to 2011.
Room ACS to make India bigger climate villain than China; here’s how
Air conditioners are making your room cooler and the Earth warmer! And India could become a bigger climate villain than China by 2050. A study has found that room ACs (RACs) will make the Earth 0.5 degree Celsius warmer by the 22nd century, while the highest RAC-related Co2 emission will come from Mexico and India by 2050.
Developing countries, mainly India, Mexico, Brazil, and Indonesia, will see an exponential increase in total (direct and indirect) emissions from RAC operation as a share of the global carbon dioxide emissions through 2050, a study ‘Global Cooling Challenge’ released by environment minister Harsh Vardhan earlier this week showed.
In China, the energy demand for space cooling from RACs doubles by 2050. Despite this significant rise in RAC stock, China’s energy demand does not grow at a similar pace to India’s or Indonesia’s, primarily because of the higher penetration of inverter air conditioners in that market, the study added.
Presently only 7% of households in India have ACs, despite having extremely high cooling needs. But, going forward with rising per capita income, the AC sales in India is set to grow 10-15% every year, also posing climate risks.
“Although India has one of the lowest penetration of air conditioning across the world today, this is set to change quickly… While this soaring demand for space cooling is a critical developmental and social imperative, it also represents one of the largest end-use risks to climate,” Harsh Vardhan said on the report.
He said that the government is committed to accepting the responsibility of providing impetus to environmentally benign frugal innovation to address the cooling related challenges.
By the mid 21st century, the Carbon emissions from RAC operation will continue to contribute an increasing share of the global carbon dioxide emissions through 2050, doubling to about 15% from the 2016-levels, the study added.
More importantly, India’s RAC carbon footprint by 2050 is expected to be much higher than China, and only lower than Mexico, as per the study. Presently, India’s RAC carbon emission is about 5% as a percentage of total emission, while China’s is about 8%. This will change to about 23% from India and about 13% from China.
Mexico will be the biggest contributor of Co2 emissions from RAC operations, with a whopping 26% share, highest in the world.