Prime Minister Narendra Modi signalled a major push to boost investments in the country and capture a part of the supply chain that is expected to move out of China as global corporations look to diversify their production base in the aftermath of Covid-19.
Many of our global institutions are so dependent on their donors for funding that they often become pawns for their political agendas. This has contributed to what Shashi Tharoor and Samir Saran have termed the “new world disorder”, with countries slipping back into 19th century style spheres of influence.
The US, the European Central Bank, Japan, and even emerging economies such as Turkey and Indonesia are printing money to bring economies back to life. So must India. Here’s what this stimulus means, and what India can do.
The finance ministry has begun negotiations with bankers on a likely tax-free bond issue. The money may be raised in multiple instalments. The government plans to raise temporary funds from the central bank through ways and means advances (WMA), a short-term borrowing window. The structure of the issue and number of instalments are yet to be decided.
The government is mulling fiscal incentive and capital subsidy for reviving and restarting old active pharmaceutical ingredient units in a bid to make India an alternative hub for bulk drugs at a time when China faces quality as well as trust issues.
Secretary of State Mike Pompeo praised New Delhi for lifting the export ban on critical medical supplies to combat the global coronavirus pandemic.
Demand in the world’s third-biggest consumer of fuel plummeted this month as the government imposed a lockdown on 1.3 billion people, restricting their mobility and shutting down most businesses. At the same time, oil prices have collapsed, further reducing tax receipts from fuel products and crude production from local fields.
Indian industry has sought fine-tuning of guidelines for restarting units and has demanded greater clarity on rules to ensure that business entities are not penalised.
One of the concerns for the government is the inability of local industry to build Brand India, which is recognised worldwide. This is seen to be crucial to attract international investors.
Food processing industries minister Harsimrat Kaur Badal on Thursday said that one section of the Delhi-Amritsar-Katra Expressway would pass through Amritsar after being split into two at Kartarpur even as the other section would go through Gurdaspur to Katra.
"India needs to be cleverer about reopening the economy," Rajan noted. If the country faces a surge of cases after the government lifts the restrictions then questions will arise on how successful the lockdown was, he said, which might push the country into another lockdown. This would then diminish credibility and confidence of the government.
Prime Minister Narendra Modi has given little indication that he wants to be India’s version of President Franklin D. Roosevelt. But migrant workers tossed out of cities with no food, shelter or transport won’t return without a New Deal: nest eggs for old age and healthcare. A lifeline to small businesses now looks like the only saviour.
The Central Public Works Department has been entrusted with the job of construction of secretariats which would be developed as a high security office on the lines of Delhi’s CGO Complex. It would have public dealing offices for central ministries and even accommodate ministries which have been looking for office space in states.
According to the recent government notification, all overseas investments from countries sharing border with India would need a prior approval from the government.
“India’s Achilles heel on ratings remains its parlous state of fiscal affairs. A potential spike in its general government debt from around 70% of GDP to around 75-80% of GDP may possibly trigger a reassessment of ratings, particularly for Moody’s,” said Nomura.
India imports merchandise worth around $70 billion from China annually, largely in sectors like consumer durables, auto components, pharma and electronics. The share of China in the country’s total imports is about 14%, the second-largest after the Middle-East.
Gadkari said the decisions taken will gradually be shared in the public domain, adding that the government was standing firmly behind the industry. .
The task force was set up following Prime Minister Narendra Modi Independence Day speech of 2019 where he alluded to an investment of Rs 100 lakh crore in infrastructure. The task force in its final report has suggested setting up for three committees for monitoring, implementation and funding of infrastructure projects.
To contain the spread of coronavirus, Prime Minister Narendra Modi had imposed 21 days lockdown which was later extended till May 3. According to the rating agency, the traffic growth for FY2020 was near-zero mainly because of slowing economic growth, revision in axle load norms, and the Covid-19 pandemic-driven lockdown that began in late March.
PM-KISAN ensures 100% funding from Government of India.Under the Scheme an income support of Rs.6000 per year is provided to all farmer families across the country in three equal installments of Rs 2000 each every four months.
Union Food Processing Industries Minister Harsimrat Kaur Badal pointed out this issue in a meeting with members of industry chamber FICCI via video conference called to ascertain the requirement of food processing sector for post-lockdown scenario, an official statement said.
Areas like drones and robotics would see major investment and research going forward in India, which would move faster into the digital age, industry experts said, discussing opportunities for the country once the coronavirus-inflicted situation returns to normalcy.
Perhaps this is the time when a single-window clearance in the Prime Minister’s Office (PMO) should be set up for the purpose. The more FDI that comes in the better. But we should be looking to woo companies that intend to start greenfield projects and dig deep in the Indian manufacturing hub.
"We have to be ready for tremendous inflation for perishable food products in future as farmers would be investing low in such products," said S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation (Amul). Many farmers from Narayangaon tomato belt of Maharashtra have already reduced planting of tomatoes.
As the mandis in Gujarat are not operational, some traders who are into exports are travelling to interior areas and buying directly from growers.
The government is considering a fresh ordinance to amend the Companies Act to decriminalise several offences, apart from allowing Indian companies to directly list overseas.
Large manufacturing plants that have fallen silent due to the lockdown risk losing their insurance cover if the Covid-19 induced restrictions get extended beyond May 3.
Though the India Meteorological Department’s (IMD) forecast for spatial and month-wise distribution of monsoon is still a month away, an internal assessment note shows that coastal region of Odisha, West Bengal and Mizoram may get ‘below normal’ rainfall while southern part of Tamil Nadu and Kerala are expected to receive ‘above normal rainfall’.
Chinese investors — strategic and financial — pumped in an estimated $4 billion into the Indian startup ecosystem in 2019, making them the largest backers of the country’s digital economy. Their investments in funds are estimated to be much more.
About 90% of India’s workforce of 500 million is engaged in the informal sector. The 40-day lockdown to contain the spread of Covid-19 has forced millions of these people out of jobs.
In its report titled - Global Macro Outlook 2020-21 (April 2020 update), Moody's has lowered G-20 advanced economies as a group to contract by 5.8 per cent in 2020. Moody's said the economic costs of coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly.
“An amount of Rs 25,000 crore is pending with land acquisition officers across the country for distribution,” an official aware of the matter said. “The minister has asked state governments to release this money on a priority basis.” States, including Maharashtra and Uttar Pradesh, have pending dues of over Rs 4,500 crore each that needs to be disbursed, officials aware of the matter told ET.
According to data from fertiliser ministry, fertiliser dealers across the country purchased 15.77 lakh tonnes which is 46% higher that last year’s sales of 10.79 lakh tonnes during first 22 days of April.
Experts said that the move would help the department transition into the new work culture while also helping in clearing a number of pending cases and also the cases like countervailing duty refund, custom duty refund and other refunds.
If the lockdown is extended beyond May 3, the home ministry must amend its order and allow units in urban areas to resume work, while e-commerce should be freely allowed, it said. “E-commerce operations may be permitted without any restriction on nature of goods,” the report said.
Chairman of CII National Committee on Exports and Imports, Sanjay Budhia said China has announced export rebate of up to 13 per cent and also devalued its currency. Another exporters' body, Engineering Exports Promotion Council (EEPC), has also made a case for term loan extension.
"222 private sector establishments disbursing Rs 338.23 crores to 54,641 beneficiaries, 76 public sector establishments disbursed Rs 524.75 crores to 24,178 beneficiaries and 23 cooperative sector establishments disbursed Rs12.54 crores to 924 claimants," EPFO said in a statement.
The total contribution from the employees amounting to Rs 7.30 crore is being remitted to the PM-CARES Fund, it said. The COVID-19 pandemic and the related dislocation in normal economic activity have severely affected economically weaker sections of the society and their means of livelihood.
With this, the government has established a unified authority to regulate all financial services in International Financial Services Centres (IFSCs) in the country.
It is fully committed to supporting the Indian government in its response to this unprecedented challenge, said ADB President Masatsugu Asakawa. "The quick-disbursing fund is part of a larger package of support that ADB will provide in close coordination with the government and other development partners.
Firms want to move or lessen their dependence. An active hunt for host nations is on.
The report, titled 'Future of Work accelerated: Learnings from the COVID-19 Pandemic' was written after surveying and talking to CXOs of 42 Indian companies. The report says that 60% of the companies have reported an increase in individual employee productivity, although business productivity has decreased for 99% of all companies surveyed.
"All employers need to carry out risk assessments and ensure their workplaces meet strict occupational safety and health criteria beforehand, to minimize the risk to workers of exposure to COVID-19," ILO said in its report on Tuesday.
The industry is reaching out to farmers to source cattle, organising workers and scheduling their shifts to ensure social distancing, procuring protective facial coverings and gloves and discussing logistics with van transporters and ship liners for exports.
State finance ministers, during a video conference on Monday, also discussed issues arising out of the lockdown, including the urgent requirement of some form of aid for micro, small and medium enterprises, which have been affected the most, besides relief for the services sectors.
The council president D Mathewkutty said out of the 834 registered cashew factories in the state around 700 remains closed for the past five years. Around 200 entrepreneurs have come under NPA category while another 100 accounts are in the stressed asset status.
The power ministry on Monday extended the deadline for submission of stakeholders' comments on the draft Electricity Amendment Bill by four weeks till June 5.
Under the proposal, small firms will be eligible to borrow an additional 20% of their credit limit, the people said, asking not to be identified as the discussions are private. The extra debt will be fully backed by PM Narendra Modi’s administration, the people said. The government will set up a special fund to pay for any defaults, they said.
Prime Minister Narendra Modi’s virus containment measures — a 40-day mandatory stay-at-home for almost all of the nation’s 1.3 billion people — have crippled business activity and put a lid on consumption, the backbone of the economy. That is seen resulting in India posting its first full-year contraction in more than four decades.
In a note on Monday, Ind-Ra revised its economic growth estimate for the country from its forecast of 3.6 per cent published on March 30, 2020 to to 1.9 per cent.
