India to retain top position in remittances with USD 80 billion, says World Bank
India will retain its position as the world’s top recipient of remittances this year with its diaspora sending a whopping USD 80 billion back home, the World Bank said in a report Saturday. India is followed by China (USD 67 billion), Mexico and the Philippines (USD 34 billion each) and Egypt (USD 26 billion), according to the global lender. With this, India has retained its top spot on remittances, according to the latest edition of the World Bank’s Migration and Development Brief.
The Bank estimates that officially-recorded remittances to developing countries will increase by 10.8 per cent to reach USD 528 billion in 2018. This new record level follows a robust growth of 7.8 per cent in 2017. Global remittances, which include flows to high-income countries, are projected to grow by 10.3 per cent to USD 689 billion, it said. Over the last three years, India has registered a significant flow of remittances from USD 62.7 billion in 2016 to USD 65.3 billion 2017. In 2017, remittances constituted 2.7 per cent of India’s GDP, it said. The Bank said remittances to South Asia are projected to increase by 13.5 per cent to USD 132 billion in 2018, a stronger pace than the 5.7 per cent growth seen in 2017.
The upsurge is driven by stronger economic conditions in advanced economies, particularly the US, and the increase in oil prices having a positive impact on outflows from some GCC countries such as the UAE which reported a 13 per cent growth in outflows for the first half of 2018. Bangladesh and Pakistan both experienced strong upticks of 17.9 per cent and 6.2 per cent in 2018, respectively, the Bank said. For 2019, it is projected that remittances growth for the region will slow to 4.3 per cent due to a moderation of growth in advanced economies, lower migration to the GCC and the benefits from the oil price spurt dissipating.
The Gulf Cooperation Council (GCC) is a regional inter-governmental political and economic bloc of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. As global growth is projected to moderate, future remittances to low- and middle-income countries are expected to grow moderately by four per cent to reach USD 549 billion in 2019. Global remittances are expected to grow 3.7 per cent to USD 715 billion in 2019. The Brief notes that the global average cost of sending USD 200 remains high at 6.9 per cent in the third quarter of 2018. Reducing remittance flows to three per cent by 2030 is a global target under Sustainable Development Goal (SDG) 10.7. Increasing the volume of remittances is also a global goal under the proposals for raising financing for the SDGs, it said.
“Even with technological advances, remittances fees remain too high, double the SDG target of 3 per cent. Opening up markets to competition and promoting the use of low-cost technologies will ease the burden on poorer customers,” said Mahmoud Mohieldin, Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships at the Bank. The average cost of remitting in South Asia was the lowest at 5.4 per cent, while Sub-Saharan Africa continued to have the highest at 9 per cent. No solutions are yet in sight for practices that drive up costs, such as de-risking action of banks, which lead to closure of bank accounts of remittance service providers.
Another persistent factor that keeps fees high is the exclusive partnership between national post office systems and any single money transfer operator, as it allows the operator to charge higher fees to poorer customers dependent on post offices, the Bank said. “The future growth of remittances is vulnerable to lower oil prices, restrictive migration policies, and an overall moderation of economic growth. “Remittances have a direct impact on alleviating poverty for many households, and the World Bank is well positioned to work with countries to facilitate remittance flows,” said Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank.
GST collections fall short of target – check what these charts suggest
Revenue collections from GST in November (tax for October) stood at Rs 97,637 crore, short of the Rs 1 lakh crore monthly target set by the government. In fact, in the current fiscal, barring September, the collections have been less than the budgeted target every single month.
The government had targeted a GST collection of Rs 13.5 lakh crore for the year, or Rs 1.1 lakh crore each month. To meet the annual target, the government will have to now collect Rs 1.33 lakh crore till March next year. With GST revenues well short of the budgeted targets, it is becoming challenging for the government to stick to its fiscal deficit target of 3.3% of GDP without reduction in expenditure.
In FY19 till October, 44.4% of the total budgeted receipts had been collected while 59.6% of the budgeted expenditure had been incurred. Also, revenue expenditure growth has started to outpace capital expenditure growth.
A Kotak Economic Research report notes that in the second half of this fiscal, direct taxes collections have already been budgeted at a higher clip and the scope for upside in direct taxes could be limited and likely possible in corporate taxes only. Even the disinvestment target of Rs 80,000 crore for this fiscal will prove hard to meet, with only Rs 15,000 crore mopped up till November-end.
Jharkhand to set up one small cold store in every block
Jharkhand government has decided to set up one small cold store of 30-tonne capacity each, in every block, which can potentially help farmers save costs by preventing rotting of fresh vegetables. However, the success of the plan depends on uninterrupted power supply.
“We will cover all the blocks, but priority will be given where mainly vegetables are grown,” chief minister Raghubar Das told FE in an interview.
Since the government cannot manage it, the day-to-day maintenance task to run the store will be given to the local primary agriculture cooperative society (PACS), he added. The state has already set up 46 such cold stores after the Rs 32.76 crore scheme was approved in July this year.
“Our target is to build 100 stores this year (2018-19) and the remaining in the next phase,” said Das. This will help the small farmers who will be able to keep their unsold vegetables near their village, the chief minister said. Jharkhand has 262 blocks and the state needs to spend about Rs 70 crore to build these cold stores, officials said.
Asked about uninterrupted power supply required to run these cold stores, Das said that the state plans to make 24X7 power available in the rural areas by August 2019.
“We will start separate feeder for agriculture next year that will help to provide power. Our target is to make 24X7 power available in the rural areas by August 2019,” he said at the Global Agriculture and Food Summit, organised by the state with FICCI, in Ranchi last week. He added the state government has been working on providing electricity to each village.
According to study by Ludhiana-based Central Institute of Post-Harvest Engineering & Technology (CIPHET), the post- harvest losses in seven vegetables, namely cabbage, cauliflower, green pea, mushroom, onion, potato and tomato, range in 7-12%. Glut in the market is a major problem of losses in all vegetables, the study found. Though it did not take into account leafy vegetables, an earlier study of the CIPHET had found post-harvest loss is as high as 52% in spinach.
India’s vegetable production is estimated to have increased to 179.7 million tonne in 2017-18 from 178.2 million tonne in 2016-17.
The chief minister also said that the state was planning to send 100 farmers each to Philippines and China next year. Already, 52 farmers have returned from Israel after a week-long tour. Farmers are very excited as they studied modern technology and how crops are grown by utilising less water while yielding higher returns.
“We want our farmers to adopt new technologies in agriculture. These farmers, after their return from Israel, are influencing others to adopt new techniques of farming.” He also said the government would set up an agency to facilitate exports of vegetables from the state.
“Jharkhand is known for growing vegetables like cauliflower, jackfruit, okra and others round the year. We are encouraging farmers to grow organic vegetables since these products have good demand in Dubai and other places in the middle-east and Europe. We will train our farmers to grow those vegetables which have demand in export market,” he said.
Asked about whether farmers were receiving MSPs for their crops, he said, “MSP is not an issue. There are very limited production of oilseeds and pulses. We will also write to Centre to start procurement once infrastructure is ready.”
Das said the focus is to increase income of farmers by helping them take on dairy, poultry, fishery production as additional sources of income.
ACT East: India-Myanmar to deepen relations with President Kovind’s visit, discussion on Rohingya refugees also on cards
As part of India’s ‘Act East Policy’ President Ram Nath Kovind will be heading to Myanmar to promote Indo-Pacific Strategy, agreements including one for prefabricated housing for Rohingya refugees will be inked next week. In his maiden visit to the neighbouring country with India shares both land and maritime borders, will be accompanied by a three member ministerial delegation from Northeast including Minister of State for Railways Rajen Gohain, Lok Sabha MP from Assam Ram Prasad Sarma, and Rajya Sabha MP from Manipur K Bhabananda Singh.
Kovind will meet with both President U Win Myint and State Counselor Daw Aung San Suu Kyi during the five-day visit starting December 11. Briefing the media persons ahead of the visit, foreign secretary Vijay Gokhale said Myanmar was a “close neighbour” and served India as a link to Southeast Asia.
According to the foreign secretary, India signed a development programme for Rakhine State in Myanmar late last year which was designed to assist the Myanmar government in Rakhine State to build housing infrastructure for return of displaced persons.
In the first phase, 250 units have been planned and through virtual means, the president will be handing over the first 50 units, he said. Responding to a question about the trilateral highway connecting India-Myanmar-Thailand, the foreign secretary said that a large part of it had been completed by the governments of the three nations. However, key bridges over some rivers and streams are under construction.
“It is likely to take time because we are operating in difficult conditions, both geographically and in terms of security in some cases, because of disturbances in parts of Myanmar,” Gokhale said. Over the last three political, economic and defence ties with Myanmar have been deepening with several high level visits from both sides. The armies and navies of the two countries also participate in bilateral military drills.
While India has been increasing its engagements with Southeast Asia under its Act East Policy, it is also the key development aid partner of Myanmar. New Delhi is working on some major infrastructure projects in that country including the India-Myanmar-Thailand trilateral highway and the Kaladan multimodal transport project connecting Sittwe port with Mizoram.
In November New Delhi has extended its 2012 Border Region Development agreement with Myanmar, which commits it to spending $5 million each year on development projects along their shared 1,600 km border. Kovind and the First Lady will travel to Yangoon and lay a wreath at the Martyrs Mausoleum, where Gen Aung San, father of Aung San Suu Kyi rests, on the same day. They will also visit the Shwedagon Pagoda. The president will also interact with the surviving veterans of the Indian National Army (INA).
On December 13, the president will visit the Shri Kali Temple and also the ‘mazhar’ (shrine) of Bahadur Shah Zafar, the last Mughal Emperor who was exiled to Myanmar and died in Yangoon. Finally, he will visit the Dhamma Joti Vipassana Meditation Centre and inaugurate the ‘Enterprise India’ exhibitions in which 45 Indian companies are expected to participate.
South- South cooperation gets stronger, India and Cuba identify new sectors for cooperation
In line with the government’s “Focus LAC” initiatives and deepening South-South Cooperation, a Letter of Intent (LOI) was signed between the Cuban Business Group of Logistics for Agriculture, GELMA, and the Indian company ESCORTS for exchange of technical data in relation to the project for the supply, post-sale and specialized technical services in the companies under GELMA Business Group.
Top Indian diplomat in the Indian embassy in Havana confirmed to Financial Express Online that, “During FIHAV 2018 where almost 45 Indian companies had participated, LOI was inked on the sidelines. In fact sectors identified between the two sides for enhancing economic cooperation include agriculture, renewable energy, health, biotechnology, pharmaceuticals, and sports.”
According to Madhu Sethi, Indian Ambassador to Cuba, “FIHAV is an appropriate destination for the Indian companies to meet international delegates across sectors from not only Cuba but the entire Caribbean & Central American region.”
She suggested that such a fair allows the Indian companies to showcase the prowess of the Indian Industry and to tap the lucrative opportunities that the country has to offer.
The relations between the two countries acquired a new momentum with the visit of President Ram Nath Kovind in June and in his talks with his Cuban counterpart President Miguel Diaz-Canel, the two countries had talked about strengthening economic relations. And two MoU’s on Cooperation in the field of Biotechnology and Traditional Medicines and Homeopathy were signed at the end of talks.
According to the envoy, “Biotechnology and pharmaceutical sectors are the main pillars of Cuban economy in which both are currently operating. The main products being traded are active ingredients, raw material and equipment.”
Also, since Cuba is one of the founding members of the International Solar Alliance (ISA) and cooperation under the ISA Framework is happening, India has offered $ 75 million LoC for 100 MW solar power project in that country.
At the 36th edition of FIHAV which was organised by Cuba where over 70 countries participated and had 45 companies from various sectors were there under the Ministry of Commerce and Industry and FICCI. This fair is considered to be one of the most important multi-sectoral trade fair in Caribbean and Central American region with most government procurement orders and business being conducted at the show.
Cuba which is under transformation and liberalization and one of the last few markets in the world to open up has enormous scope for Indian Exporters along with potential lines of credit from EXIM Bank, and areas including India – technology collaboration, skill development, training, SME collaborations.
Also, as has been reported earlier, India could explore opportunities in getting gold from that country as well as seek joint co-operations in copper, nickel and cobalt mining operations.
Johnson & Johnson distributor found guilty of profiteering after GST rate cut
The GST anti-profiteering authority has found a distributor of Johnson & Johnson (J&J) guilty of not passing on the tax rate cut benefit of over Rs 5 lakh to consumers. The case before the National Anti Profiteering Authority (NAA) states that the distributor had hiked the base price of two products — J&J baby shampoo 100ml and J&J baby powder 200gm — after the GST Council slashed tax on them to 18 per cent from 28 per cent on November 15, 2017.
The Directorate General of Anti Profiteering (DGAP), which investigated the complaint against the said distributor, went through its books of accounts for the period November 15, 2017 to March 31, 2018. It was found that the base price of the baby shampoo was increased from Rs 57.24 to Rs 62.10 a piece following the November 15 rate cut. Similarly, the base price of the baby powder was increased to Rs 87.67 from Rs 80.82 a piece.
NAA, while asking the distributor to deposit over Rs 5 lakh to consumer welfare fund, directed it to reduce the prices of all the products by making commensurate reduction in their rates. “The respondent (distributor) is directed to deposit the profiteered amount of Rs 5,01,646 along with the interest to be calculated at the rate of 18 per cent from the date when the above amount was collected by him from his customers,” NAA said.
NAA also asked DGAP to further investigate the quantum of profiteering made by the distributor from April 1, 2018, and submit its report to the authority. EY Tax Partner Abhishek Jain said :”A critical aspect to be noted in this ruling is that the responsibility of compliance with anti-profiteering provision is on the seller of the products and a retail dealer selling goods to the end customer cannot shift his accountability of this compliance to the original manufacturer of the goods”.