INDIAN ECONOMY: OVERVIEW, GROWTH & DEVELOPMENT
G20 Summit: India, Indonesia set $50-bn trade target by 2025
India and Indonesia on Saturday set an ambitious USD 50 billion target for bilateral trade over the next six years as Prime Minister Narendra Modi and President Joko Widodo discussed ways to deepen cooperation in a number of key areas including economy, defence and maritime security. The two leaders, who are in Osaka, Japan for the G20 Summit, met in the morning and discussed ways to boost bilateral ties and enhance cooperation in trade and investment. According to Ministry of External Affairs spokesperson Raveesh Kumar, India and Indonesia set a USD 50 billion target for bilateral trade by 2025. Trade between the two countries in 2016 was USD 12.9 billion. It rose 28.7 percent to USD 18.13 billion in 2017 with Indonesia’s exports to India reaching USD 14.08 billion and its imports from India standing at USD 4.05 billion, according to Indonesia’s Central Statistics Agency. During his meeting between Prime Minister Modi and Indonesian President Widodo, the two leaders discussed ways to deepen bilateral cooperation in trade and investment, defence and maritime fronts. This was Modi’s first official engagement on the second day of the June 28-29 Summit.
Govt cuts interest rate on small savings schemes by 0.1pc
The government Friday reduced interest rate on small savings schemes, including NSC and PPF, by 0.1 percent for the July-September quarter. The move is aimed at matching the softening of interest rates in the banking sector since the RBI cut its benchmark policy rate thrice during the year. Barring interest on savings deposits, which has been retained at 4 percent annually, rate on all other schemes has been slashed by 0.1 percent. Public Provident Fund (PPF) and National Savings Certificate (NSC) will fetch annual interest rate of 7.9 percent from the existing rate of 8 percent, while Kisan Vikas Patra (KVP) will yield 7.6 percent with maturity of 113 months. At present, interest rate on KVP is 7.7 percent and maturity is 112 months. The girl child savings scheme Sukanya Samriddhi Account will fetch a lower return of 8.4 percent from 8.5 percent. Term deposits of 1-3 years will fetch interest rate of 6.9 percent, to be paid quarterly, while the five-year quarterly pegged at 7.7 percent and for recurring 7.2 percent from existing rate of 7.3 percent. Interest rate for the five-year Senior Citizens Savings Scheme will now fetch a lower rate of interest at 8.6 percent from 8.7 percent.
High courts withdraw relief to 27 compulsorily retired tax officials
Two high courts have refused to give relief to tax officials compulsorily retired by the government on serious charges of misconduct. Earlier this month, the government had invoked Section 56(j) of Fundamental Rules to compulsorily retire 15 officials dealing with indirect taxes and 12 officials of the income tax department over allegations of corruption and other wrongdoings. The Calcutta High Court has set aside the interim relief given by Central Administrative Tribunal (CAT) to two officials sacked under the Section 56J of Fundamental Rules. On Thursday, the Lucknow Bench of Allahabad High Court had turned down a plea for relief by a compulsorily retired tax official on jurisdictional grounds. The Calcutta High Court noted that the Single Judicial Member of CAT, Kolkata has committed judicial impropriety in passing impugned orders against compulsory retirement of IRS officers GS Harsha and Ashok R Mahida. The High Court raised questions on a Single Bench taking up a matter fit for consideration by a Division Bench. AK Patnaik, a Kolkata Bench member of CAT had impugned the government order compulsorily retiring Harsha. Following this, the CAT Chairman transferred him to the Karnataka Bench on Friday.
What India can dictate, and what she can’t
The Reserve Bank of India (RBI), this week, provided clarifications on an earlier circular on data localisation. In April 2018, the central bank had first advised all system providers to ensure that data relating to payment systems operated by them be stored in India. In some quarters, these clarifications have raised further doubts. While some of concerns, forwarded by lawyers and those who represent multinational companies, seem genuine, people are possibly confusing the many types of data, the many ways it ought to be stored and mirrored. There is personal data, data held by e-commerce companies and cab aggregators. Then, there is payments data. Business spoke to policy experts, strategic experts, and lawyers to make sense of some of the RBI clarifications, and the way forward.
Odisha govt presents rs 1.39 lakh cr budget for fy20
Projecting economic growth in the range of 8-8.5 percent, the Odisha government on Friday presented the annual budget of Rs 1.39 lakh crore for the 2019-20 fiscal. The outlay of the state budget, tabled by Finance Minister Niranjan Pujari in the assembly, is about 15.8 percent more than that of 2018-19. Noting that Odisha’s economy is expected to grow at 8.35 percent in 2018-19 — surpassing the all India growth rate of 7.2 percent — he said the outlay is proposed to be financed by revenue receipts of Rs 1,15,266 crore and Rs 23,734 crore through borrowings and other receipts. The total administrative expenditure is estimated at Rs 57,310 crore, which includes Rs 25,500 crore for salaries, Rs 13,300 crore for pension, Rs 6,500 crore for interest payment and Rs 4,840 crore for maintenance of capital assets. Total revenue receipts for 2019-20 include the state’s tax revenue of Rs 33,000 crore, non-tax revenue of Rs 12,500 crore, Odisha’s share in central taxes of Rs 39,207 crore and Rs 30,559 crore as grants from the Centre. The budget focuses on boosting agriculture productivity, expanding irrigation, improving health care, education and skill development and drinking water, among others, Pujari said. Chief Minister Naveen Patnaik hailed the budget and said the aspirations of the people of Odisha have been reflected in it.
Modi govt freezes ads placed in 3 Indian newspaper groups
India’s government has cut off advertisements to at least three major newspaper groups in a move that executives and an opposition leader said was likely retaliation for unfavourable reports. Critics have said that freedom of the press has been under attack since Prime Minister Narendra Modi’s government first took office in 2014 and journalists have complained of intimidation for writing critical stories. Now the big newspaper groups, which have a combined monthly readership of more than 26 million, say they are being starved of government ads worth millions of rupees that began even before Modi was elected to power last month with a landslide mandate. “There is a freeze,” an executive at Bennett, Coleman & Co that controls the Times of India and The Economic Times, among the country’s biggest English-language newspapers, said. “Could be (because of) some reports they were unhappy with,” the executive said, seeking anonymity because he was not authorised to speak to the press. Around 15percent of the Times group’s advertising comes from the government, the executive said. The ads are mostly government tenders for contracts as well as publicising government schemes.
SC to hear, decide sensitive cases
Upon reopening on July 1 after a six-week summer vacation, the Supreme Court will deal with very sensitive issues, including the Ayodhya land dispute, review pleas in Rafale case and the contempt case against Rahul Gandhi for wrongly attributing to the court his “chowkidar chor hai” slogan. The top court, which would function with its full judicial strength of 31 judges under the stewardship of Chief Justice (CJI) Ranjan Gogoi, is likely to deliver its verdict in the review pleas in Rafale case. The petitions, including the one filed by ex-Union ministers Yashwant Sinha and Arun Shourie, and lawyer Prashant Bhushan, seek review of the apex court’s December 14, 2018, judgment dismissing all pleas challenging procurement of 36 Rafale fighter jets from France. Also, a three-judge bench headed by the CJI would decide the fate of BJP MP Meenakshi Lekhi’s contempt plea against Gandhi for wrongly attributing to the top court his “chowkidar chor hai” jibe against Prime Minister Narendra Modi. Gandhi, however, has already tendered unconditional apology for it and sought closure of the case. The outcome of the in-camera mediation proceedings, undertaken by a three-member panel headed by former apex court judge Justice FMI Kallifulla, to find an amicable solution to the politically-sensitive Ram Janmabhoomi-Babri Masjid land dispute, would be watched with bated breath. The mediation committee, which also comprises spiritual guru Sri Sri Ravishankar and senior advocate Sriram Panchu, is “optimistic” about finding an amicable solution to the vexatious dispute. It has been granted time till August 15 by a five-judge bench headed by the CJI. Fourteen appeals have been filed in the SC against the 2010 Allahabad High Court judgment, delivered in four civil suits, that the 2.77-acre land in Ayodhya be divided equally among three parties — the Sunni Waqf Board, the Nirmohi Akhara and Ram Lalla.
India’s forex reserve records high of $426.42 bn
India’s foreign exchange reserve touched a life-time high of USD 426.42 billion after it surged by USD 4.215 billion in the week to June 21, RBI data showed. Forex reserves had scaled a record high of USD 426.028 billion in the week to April 13, 2018. In the previous reporting week, the reserves had declined by USD 1.358 billion to USD 422.2 billion. The rise in reserves was on account of increase in foreign currency asset, which is a major component of the overall foreign exchange reserves. In the reporting week, foreign currency assets increased by USD 4.202 billion to USD 398.649 billion. Expressed in dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US units like the euro, pound and yen held in the reserves. Gold reserves remained unchanged at USD 22.958 billion, according to RBI data. Special drawing rights with the International Monetary Fund (IMF) increased by USD 4.2 million to USD 1.453 billion. The country’s reserve position with the fund also rose by USD 9.6 million to USD 3.354 billion.