Here is what RBI must do to unclog markets: Former SEBI chief’s formula for economic revival 1

Here is what RBI must do to unclog markets: Former SEBI chief’s formula for economic revival

UK Sinha stressed on the urgent need to focus on reviving the economy and securing jobs.
The Reserve Bank of India (RBI) has to ensure that the targeted long term repo operations (TLTRO) money it announced recently to support non-banking financial companies (NBFC), housing finance companies (HFC), microfinance institutions (MFI), and micro, small and medium enterprises (MSME) actually reaches such deserving financial institutions and small businesses, former Securities and Exchange Board of India (SEBI) Chairman UK Sinha said. “There should be willingness to enhance the targeted amount as and when needed,” Sinha wrote in The Indian Express today stressing on the urgent need to focus on reviving the economy and securing jobs. He suggested measures for unclogging the financial markets as the first step towards economic revival.
Sinha sought for more clarity in directions and monitoring along with increasing credit to cover first loss or credit guarantee, issuing tax-free bonds, supporting MSMEs under stress through a special fund or a special purpose vehicle, and lastly, direct corporate bond buying programme by the RBI for increasing the targeted amount. The former SEBI chief said that the liquidity released by the RBI is not reaching the desired beneficiaries. Instead, banks have parked the money with the RBI under reverse repo while insurance firms are, reportedly, out of the bond market currently. According to Sinha banks are hesitant in lending and declined to appRead More…

India’s holding of US govt securities hits record high of $177.5 billion in February 2

India’s holding of US govt securities hits record high of $177.5 billion in February

The Treasury Department releases foreign holdings data on a country-wise basis. (Reuters photo)
Continuing to increase its exposure, India’s holding of US government securities jumped by over USD 13 billion in a month to record high of USD 177.5 billion at the end of February. In the last one year since February 2019, the overall holding of India has jumped by a staggering USD 33.2 billion.
Latest data from the US Treasury Department showed that the amount of securities owned by India has also gone up by the maximum quantum in a span of one month, amid the country slowly hiking the level since November last year when it stood at USD 159.2 billion. Related News Japan was the largest holder with securities worth over USD 1.268 trillion at February end, followed by China with holdings to tune of USD 1.092 trillion.
At a distant third place was the United Kingdom, which had securities valued at USD 403.2 billion, as per the data.In terms of holdings, India is at the 13th position. It owned American government securities worth USD 164.3 billion at the end of January, which was also the highest level then, and in December, the same stood at USD 162 billion.
The Reserve Bank of India buys these bonds. The Treasury Department releases foreign holdings data on a country-wise basis. At the fourth place is Brazil (USD 285.9 billion), followed by Ireland (USD 282.7 billion), Luxembourg (USD 260.8 billion), Hong Kong (USD 249.8 billion), Switzerland (USD 243.7 billion), Cayman IsRead More…

SAARC nations unveil emergency stimulus packages to tackle COVID-19 economic fallout 3

SAARC nations unveil emergency stimulus packages to tackle COVID-19 economic fallout

Bangladesh has announced a USD 11.6 billion stimulus package to support the economy, with a primary focus on supporting the manufacturing and service sectors, agriculture and social safety nets.
The SAARC countries have rolled out a raft of stimulus packages to boost investments, buffer private businesses and bolster growth in response to the COVID-19 pandemic that has upended life and disrupted economic activity in a region inhabited by over 1.8 billion people.
The World Bank recently warned that South Asia faces its worst economic performance in 40 years due to the deadly coronavirus pandemic which has been wreaking havoc worldwide. It advised the governments to “ramp up action to curb the health emergency, protect their people, especially the poorest and most vulnerable, and set the stage now for fast economic recovery”. Related News Also read: Check latest updates on Coronavirius
India, a USD 2.9 trillion economy – the biggest in the 8-member SAARC grouping, responded by unveiling a Rs 1.7 lakh crore (USD 22.6 billion) economic stimulus plan, providing direct cash transfer to poor senior citizens and women and free foodgrain and cooking gas to give relief to millions hit by the lockdown.
The central bank cut the key interest rate by 75 basis points to make loans cheaper and provided Rs 1 lakh crore of liquidity to the market. Also, a moratorium on repayment of loans for three months has been provided.
The government has suspended the Insolvency and BankruptcyRead More…

Job plan for 22 lakh stranded migrant workers; govt, industry join hands in rare move 4

Job plan for 22 lakh stranded migrant workers; govt, industry join hands in rare move

Industry bodies such as the Confederation of Indian Industry (CII) are already working on a proposal to conduct a survey to assess the potential work opportunities. (Bloomberg image)
The chaos that the lockdown brought into the lives of lakhs of migrant workers in India may soon be taken care of as the government has planned to collaborate with the industry to bring the workers ineffective use. The government and the industry will map the skill sets of the workers to determine the kind of work that can be offered to them, reported The Indian Express. However, the unavailability of appropriate data is one of the major roadblocks that the government may face as the data sets include basic details such as Name, Account Number, Mobile Number, Aadhaar number, etc. 
In order to overcome this roadblock, there are efforts being taken to fill up this information gap to feed the available worker pool to nearby industrial units as the industry bodies need more granular data to do so. Industry bodies such as the Confederation of Indian Industry (CII) are already working on a proposal to conduct a survey to assess the potential work opportunities for these migrant workers after partial relaxation was granted to industry for the resumption of work beginning April 20. Related News Also Read | Coronavirus impact: Global economic contraction to be steepest on record, recovery U-shaped
Data has been collected for 22 lakh migrant workers and more work is being done to update thRead More…

Fitch Ratings sees India growth slipping to 0.8% in FY21 5

Fitch Ratings sees India growth slipping to 0.8% in FY21

Growth is, however, expected to rebound to 6.7 per cent in 2021-22. Fitch Ratings on Thursday slashed India’s economic growth projections to 0.8 per cent in the current 2020-21 fiscal saying an unparalleled global recession was underway due to disruptions caused by the outbreak of coronavirus pandemic and resultant lockdowns. In its Global Economic Outlook, Fitch Ratings said India’s gross domestic product (GDP) growth will slip to 0.8 per cent for the year April 2020 to March 2021 (FY21) as compared to an estimated 4.9 per cent growth in the previous fiscal. Related News Growth is, however, expected to rebound to 6.7 per cent in 2021-22. The rating agency predicted two consecutive quarters of contraction or negative year-on-year growth in current fiscal — (-)0.2 per cent in April-June and (-)0.1 per cent in July-September. This compares to 4.4 per cent estimated growth in January-March. Growth is expected to rebound to 1.4 per cent in the last quarter of 2020 calendar year. Fitch said the slump in FY21 growth was mainly due to a projected fall in consumer spending to just 0.3 per cent in FY21 from 5.5 per cent a year back and a 3.5 per cent contraction in fixed investment. The agency has further made large cuts to global GDP forecasts in its latest Global Economic Outlook (GEO) in response to coronavirus-related lockdown extensions and incoming data flows. “World GDP is now expected to fall by 3.9 per cent in 2020, a recession of unprecedented depthRead More…

Time for India to think long-term during Covid-19 crisis, says economist Arvind Panagariya 6

Time for India to think long-term during Covid-19 crisis, says economist Arvind Panagariya

The COVID-19 pandemic is a “time for thinking long-term. (Reuters Photo) Eminent economist Arvind Panagariya has said that India must now think long-term to create better paying formal sector jobs by seizing the opportunity presented by multinationals possibly moving out of China to diversify their operations in the wake of the COVID-19 pandemic. Panagariya, Professor of Economics at Columbia University and Director, Raj Center at Columbia’s School of International and Public Affairs, emphasised that the one thing the current crisis has revealed is the vulnerability of Indian workers to a shock that forces a near end of economic activity. The COVID-19 pandemic is a “time for thinking long-term. It will be a pity to let the crisis go to waste. The current crisis will only last till a vaccine becomes available. We must think beyond that,” Panagariya told PTI. “After 70 years of development effort, we have still left our workers predominantly employed on tiny farms (70 million of them averaging less than a quarter hectare in size) and in informal or self-employment in tiny enterprises that give them barely subsistence level of income on a daily basis.” Panagariya stressed that the COVID19 crisis has made it evident that India needs to create better paid, formal sector jobs and that requires moving workers out of tiny farms and enterprises into more productive and better paying jobs. Related News “That in turn requires a shift of industrial and servicesRead More…

India should take ‘measured approach’ with stimulus packages to deal with COVID-19: Arvind Panagariya 7

India should take ‘measured approach’ with stimulus packages to deal with COVID-19: Arvind Panagariya

Panagariya noted that future taxpayers will have to pay for the expenditures the government incurs today by either borrowing or printing money. India should resist calls for mega relief and stimulus packages that pitch for generous availability of credit to even unviable businesses and focus on a more “measured approach” by limiting interventions to provision for working capital and ensuring basic necessities for all to deal with the impact of the COVID-19, eminent economist Arvind Panagariya has said. The former NITI Aayog Vice Chairman said that India, like nearly all other countries in the world, faced “difficult choices” against the COVID-19 pandemic. “So far, India has walked the tight rope as well as it could have, given its resources and management capabilities,” Panagariya told PTI. Related News Elaborating on the path ahead for India as it navigates health and economic concerns in the wake of the COVID-19 pandemic, Panagariya said there have been calls for mega relief and stimulus packages from various quarters. “The scale of some of these packages is so large as to give some sections living standards that exceed what they enjoyed prior to the advent of the coronavirus on Indian soil. “These packages also pitch for such generous availability of credit that businesses that would be unviable in normal times would get a long lifeline in the post-corona world,” said the professor of Economics at Columbia University and Director, Raj CenterRead More…

Mumbai alone to bring about one-third of all India direct tax collection; check which metro follows 8

Mumbai alone to bring about one-third of all India direct tax collection; check which metro follows

Mumbai alone is expected to bring about one-third of total taxes collected. (Image: Reuters) India’s economic hub Mumbai has topped the government’s direct tax collection targets as India sets region-wise goals for collection of personal income tax and corporate tax financial year 2020-21. The city alone is expected to bring about one-third of total taxes collected at around 31% of the nationwide target of collecting Rs 13.19 lakh crore, The Indian Express reported. National capital Delhi follows with the target set at Rs 1.89 lakh crore or 14.3% of the total target, according to a communication by the Central Board of Direct Taxes (CBDT) on Thursday.  Next in line are Karnataka and Goa region with a 10.7% share and Tamil Nadu and Puducherry follow with 6.9% share in overall target. With coronavirus pandemic affecting India as well, the government has decided to stick to the Budget target of direct tax collections for 2020-21, There are rising concerns about a hit to the country’s growth sharply for this financial year due to nationwide lockdown of over 40 days. In the previous fiscal 2019-20, the net direct tax collections had slumped after 20 years owing to the economic slowdown and the impact of the coronavirus pandemic.  Related News In the previous financial year, the government had collected Rs 1.42 lakh crore less from the downward revised target at Rs 10.27 lakh crore, a decline of about 10% from FY19 collections. For the current fiscal yeRead More…

Coronavirus pandemic to bring Asia’s 2020 growth to halt for 1st time in 60 years: IMF 9

Coronavirus pandemic to bring Asia’s 2020 growth to halt for 1st time in 60 years: IMF

Asia’s economy is likely to suffer zero growth this year for the first time in 60 years, the IMF said in a report on the Asia-Pacific region released on Thursday. (Reuters photo) Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented” toll on the region’s service sector and major export destinations, the International Monetary Fund said on Thursday. Policymakers must offer targeted support to households and firms hardest-hit by travel bans, social distancing policies and other measures aimed at containing the pandemic, said Changyong Rhee, director of the IMF’s Asia and Pacific Department. Related News “These are highly uncertain and challenging times for the global economy. The Asia-Pacific region is no exception. The impact of the coronavirus on the region will be severe, across the board, and unprecedented,” he told a virtual news briefing conducted with live webcast. “This is not a time for business as usual. Asian countries need to use all policy instruments in their toolkits.”Asia’s economy is likely to suffer zero growth this year for the first time in 60 years, the IMF said in a report on the Asia-Pacific region released on Thursday. While Asia is set to fare better than other regions suffering economic contractions, the projection is worse than the 4.7% average growth rates throughout the global financial crisis, and the 1.3% increase during the Asian Read More…

These industries allowed to open; check full list of lockdown relaxations for services, factories 10

These industries allowed to open; check full list of lockdown relaxations for services, factories

The construction of roads, irrigation projects, buildings, all kinds of industrial projects, and renewable energy projects will also be allowed to restart operations. In a major relief to the industries, manufacturers, and service providers, the Narendra Modi government has allowed various economic activities to operate from April 20. The production units which require continuous process and the manufacturing units of essential goods will be allowed to operate from April 20. The construction of roads, irrigation projects, buildings, all kinds of industrial projects, and renewable energy projects will also be allowed to restart operations. In the services sector, IT and IT-enabled services are allowed to operate at a half-strength from the same time. Besides, all agriculture activities will also remain fully functional. The government has said that the step has been taken to mitigate the hardship faced by the public and these activities will be operationalised by state / UTs. However, it has also clarified that the relaxation in operating such activities will not be applicable in the containment zones. Related News Also Read: Amazon, Flipkart, ecommerce services allowed as Modi extends lockdown; here’s what govt says Among other sectors to get relaxation in restarting their operations, oil and gas exploration refinery; brick kilns in rural areas; services provided by a self-employed person such as electrician, IT repairs, plumbers, motor mechanics, carpenters, Read More…