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Indian Economy : News,Discussions & Updates
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India exits $2 trillion m-cap club after sell-off by FPIs
After two years, the Indian stock market has exited the $2 trillion club after the sell-off on August 2 erased 8.8 percent of investor wealth.
The value of all listed Indian stocks fell to $1.97 trillion on August 2 after foreign portfolio investors (FPIs) began withdrawing their capital, reports The Economic Times, citing Bloomberg data.
This pushed India to the ninth position among large markets, sliding below Germany.
Eight of the 10 most valued Indian companies saw a combined loss of Rs 89,535 crore in market valuation in the week-ended August 2.
India had first crossed the $2 trillion market capitalisation (m-cap) mark in May 28, 2017. It had replaced Germany as the seventh largest market. In November 2017, it became the eighth largest country in terms of market valuation after overtaking Canada.
FPIs began pulling out their money from capital markets after Finance Minister Nirmala Sitharaman suggested that FPIs restructure themselves as corporate entities to avoid paying a higher levy that was imposed on the super-rich in its Budget presentation on July 5.
State Bank of India (SBI), Oil & Natural Gas Corporation (ONGC), Axis Bank, Coal India and Larsen & Toubro were the biggest contributors to the erosion in market valuation in July.
FPIs withdrew a net Rs 2,881 crore from the Indian capital markets in just the first two sessions of August. They were net sellers in July, reversing the trend in 2019’s first half were they were net investors.
Countries in the $2 trillion club include the US, China, Japan, Hong Kong, UK, France, Canada and Germany.
Among the largest 15 countries by m-cap, only India and South Korea have so far lost market value in 2019.
India exits $2 trillion m-cap club after sell-off by FPIs
After two years, the Indian stock market has exited the $2 trillion club after the sell-off on August 2 erased 8.8 percent of investor wealth.
The value of all listed Indian stocks fell to $1.97 trillion on August 2 after foreign portfolio investors (FPIs) began withdrawing their capital, reports The Economic Times, citing Bloomberg data.
This pushed India to the ninth position among large markets, sliding below Germany.
Eight of the 10 most valued Indian companies saw a combined loss of Rs 89,535 crore in market valuation in the week-ended August 2.
India had first crossed the $2 trillion market capitalisation (m-cap) mark in May 28, 2017. It had replaced Germany as the seventh largest market. In November 2017, it became the eighth largest country in terms of market valuation after overtaking Canada.
FPIs began pulling out their money from capital markets after Finance Minister Nirmala Sitharaman suggested that FPIs restructure themselves as corporate entities to avoid paying a higher levy that was imposed on the super-rich in its Budget presentation on July 5.
State Bank of India (SBI), Oil & Natural Gas Corporation (ONGC), Axis Bank, Coal India and Larsen & Toubro were the biggest contributors to the erosion in market valuation in July.
FPIs withdrew a net Rs 2,881 crore from the Indian capital markets in just the first two sessions of August. They were net sellers in July, reversing the trend in 2019’s first half were they were net investors.
Countries in the $2 trillion club include the US, China, Japan, Hong Kong, UK, France, Canada and Germany.
Among the largest 15 countries by m-cap, only India and South Korea have so far lost market value in 2019.
India exits $2 trillion m-cap club after sell-off by FPIs
India beats trend, grows exports as US-China tussle hits major Asian economies
While the ongoing US-China trade war caused exports to decline in major Asian economies, India actually benefited from the strained relations of the world's top two economies, a Bloomberg report says.
Limited ties with the neighbouring giant, and a diversified export basket proved advantageous as India’s share in world exports rose to 1.71 per cent in Q1FY19, compared to 1.58 per cent in Q4FY17. During the same period, the export share of Asia’s top 10 exporting nations declined, the report said.
The business wire report recalled that Reserve Bank of India Governor Shaktikanta Das had felt that India, not being a part of the global manufacturing supply chain, would be more or less insulated, and this would help mitigate the situation for domestic exporters.
Das had said, "India is not part of the global value chain so US-China trade tension does not impact India as much as several other economies."
Among top Asian exporters, South Korea and Japan suffered large drops in exports. Both countries maintain close ties to the US but count China as their largest buyer. India, on the other hand, counts China as its third-largest export market behind the US and the UAE.
Bloomberg quoted Ajay Sahai, director-general and chief executive officer of the Federation of Indian Exports Organisation (FIEO), as saying "Trade tensions between the US and China have given India an opportunity to ramp up exports to both countries."
India beats trend, grows exports as US-China tussle hits major Asian economies
While the ongoing US-China trade war caused exports to decline in major Asian economies, India actually benefited from the strained relations of the world's top two economies, a Bloomberg report says.
Limited ties with the neighbouring giant, and a diversified export basket proved advantageous as India’s share in world exports rose to 1.71 per cent in Q1FY19, compared to 1.58 per cent in Q4FY17. During the same period, the export share of Asia’s top 10 exporting nations declined, the report said.
The business wire report recalled that Reserve Bank of India Governor Shaktikanta Das had felt that India, not being a part of the global manufacturing supply chain, would be more or less insulated, and this would help mitigate the situation for domestic exporters.
Das had said, "India is not part of the global value chain so US-China trade tension does not impact India as much as several other economies."
Among top Asian exporters, South Korea and Japan suffered large drops in exports. Both countries maintain close ties to the US but count China as their largest buyer. India, on the other hand, counts China as its third-largest export market behind the US and the UAE.
Bloomberg quoted Ajay Sahai, director-general and chief executive officer of the Federation of Indian Exports Organisation (FIEO), as saying "Trade tensions between the US and China have given India an opportunity to ramp up exports to both countries."
India beats trend, grows exports as US-China tussle hits major Asian economies
RBI lowers GDP growth forecast to 6.9% for FY20 on demand, investment slowdown
1 min read . Updated: 07 Aug 2019, 02:06 PM IST PTI
(Bloomberg file)
Mumbai: The Reserve Bank of India (RBI) on Wednesday marginally lowered the GDP growth projection for 2019-20 to 6.9% from 7% projected in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.
The RBI has cut the repo rate by an unusual 0.35 percentage points to 5.40% in its third monetary policy review for the current fiscal year. Repo rate is the rate at which the RBI lends to banks.
RBI governor Shaktikanta Das said the central bank has lowered the GDP growth forecast owing to demand and investment slowdown, which is causing dampening effect on growth.
"Real GDP growth for 2019-20 is revised downwards from 7% in the June policy to 6.9% — in the range of 5.8-6.6% for the first half of 2019-20 and 7.3-7.5% for the second half — with risks somewhat tilted to the downside," RBI said in the monetary policy statement.
Das said perhaps at this point of time there was cyclical slowdown and not a deep structural slowdown. "Nevertheless, there is a need for structural reforms. We are still working on it."
The GDP growth for the first quarter of the next fiscal year beginning April 2020 has been projected at 7.4%.
The RBI said various high-frequency indicators suggest weakening of both domestic and external demand conditions. The Business Expectations Index of the RBI's industrial outlook survey showed muted expansion in demand conditions in the second quarter, although a decline in input costs augurs well for growth, the central bank said. "The impact of monetary policy easing since February 2019 is also expected to support economic activity, going forward. Moreover, base effects will turn favourable in H2 2019-20," it added.
RBI lowers GDP growth forecast to 6.9% for FY20 on demand, investment slowdown
1 min read . Updated: 07 Aug 2019, 02:06 PM IST PTI
- Real GDP growth for 2019-20 is revised downwards from 7% in the June policy to 6.9%
- GDP growth for the first quarter of the next fiscal year beginning April 2020 projected at 7.4%
(Bloomberg file)
Mumbai: The Reserve Bank of India (RBI) on Wednesday marginally lowered the GDP growth projection for 2019-20 to 6.9% from 7% projected in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.
The RBI has cut the repo rate by an unusual 0.35 percentage points to 5.40% in its third monetary policy review for the current fiscal year. Repo rate is the rate at which the RBI lends to banks.
RBI governor Shaktikanta Das said the central bank has lowered the GDP growth forecast owing to demand and investment slowdown, which is causing dampening effect on growth.
"Real GDP growth for 2019-20 is revised downwards from 7% in the June policy to 6.9% — in the range of 5.8-6.6% for the first half of 2019-20 and 7.3-7.5% for the second half — with risks somewhat tilted to the downside," RBI said in the monetary policy statement.
Das said perhaps at this point of time there was cyclical slowdown and not a deep structural slowdown. "Nevertheless, there is a need for structural reforms. We are still working on it."
The GDP growth for the first quarter of the next fiscal year beginning April 2020 has been projected at 7.4%.
The RBI said various high-frequency indicators suggest weakening of both domestic and external demand conditions. The Business Expectations Index of the RBI's industrial outlook survey showed muted expansion in demand conditions in the second quarter, although a decline in input costs augurs well for growth, the central bank said. "The impact of monetary policy easing since February 2019 is also expected to support economic activity, going forward. Moreover, base effects will turn favourable in H2 2019-20," it added.
RBI lowers GDP growth forecast to 6.9% for FY20 on demand, investment slowdown
Strong demand boosts India's factory activity to 52.5 in July: PMI data
India’s factory activity accelerated in July as domestic demand and output strengthened, encouraging firms to hire at the fastest rate in five months, a private business survey showed on Thursday.
The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 52.5 in July from June’s 52.1. It has remained above the 50-mark separating contraction from growth for two years.
“Survey participants linked the uptick in growth to a pick-up in demand, mostly stemming from successful marketing efforts, competitive pricing and favourable public policies,” Pollyanna De Lima, principal economist at IHS Markit, said in a release.
“We see from underlying data that the domestic market provided the main impetus to sales growth.”
New orders, a measure of overall demand, came in at a faster pace last month and helped boost factory output. But growth in foreign demand slowed to its weakest rate in 15 months, the survey showed.
Overseas demand was hampered by slower global trade flows, underscoring the brodening impact of international tariff tensions, especially led by the bruising Sino-U.S. row that has entered its second year with no resolution in sight.
Although input costs rose at a slower pace last month firms raised prices for the first time in three months. Yet the marginal increase suggests overall inflation will remain below the Reserve Bank of India’s (RBI) medium-term target of 4%.
“The relatively negligible increases in input costs and output charges...suggest that we will likely see a further reduction in India’s benchmark interest rate as the RBI continues its effort to support economic growth,” De Lima said.
Indeed, RBI policymakers are expected to cut borrowing costs for the fourth meeting in a row this month, a Reuters poll showed.
Those expectations boosted optimism to the highest since March and prompted manufacturing firms to hire at the fastest pace since February, the survey showed.
India’s economy grew at its slowest pace in more than four years in the January-March period, falling behind China’s pace for the first time in nearly two years.
Strong demand boosts India's factory activity to 52.5 in July: PMI data
India’s factory activity accelerated in July as domestic demand and output strengthened, encouraging firms to hire at the fastest rate in five months, a private business survey showed on Thursday.
The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 52.5 in July from June’s 52.1. It has remained above the 50-mark separating contraction from growth for two years.
“Survey participants linked the uptick in growth to a pick-up in demand, mostly stemming from successful marketing efforts, competitive pricing and favourable public policies,” Pollyanna De Lima, principal economist at IHS Markit, said in a release.
“We see from underlying data that the domestic market provided the main impetus to sales growth.”
New orders, a measure of overall demand, came in at a faster pace last month and helped boost factory output. But growth in foreign demand slowed to its weakest rate in 15 months, the survey showed.
Overseas demand was hampered by slower global trade flows, underscoring the brodening impact of international tariff tensions, especially led by the bruising Sino-U.S. row that has entered its second year with no resolution in sight.
Although input costs rose at a slower pace last month firms raised prices for the first time in three months. Yet the marginal increase suggests overall inflation will remain below the Reserve Bank of India’s (RBI) medium-term target of 4%.
“The relatively negligible increases in input costs and output charges...suggest that we will likely see a further reduction in India’s benchmark interest rate as the RBI continues its effort to support economic growth,” De Lima said.
Indeed, RBI policymakers are expected to cut borrowing costs for the fourth meeting in a row this month, a Reuters poll showed.
Those expectations boosted optimism to the highest since March and prompted manufacturing firms to hire at the fastest pace since February, the survey showed.
India’s economy grew at its slowest pace in more than four years in the January-March period, falling behind China’s pace for the first time in nearly two years.
Strong demand boosts India's factory activity to 52.5 in July: PMI data
India's gold demand to soften in Q3 on price rise, rural distress: WGC
India's gold demand is expected to soften in the September quarter as record high local prices dampen buying in the world's second biggest consumer of the precious metal, the World Gold Council (WGC) said on Thursday.
The fall in consumption could weigh on global prices that have risen nearly 10% so far in the 2019, but could help in bringing down the south Asian country's trade deficit, supporting the rupee.
Rural distress, higher prices and a hike in India's import tax could dampen demand during the September quarter, said Somasundaram PR, the managing director of WGC's Indian operations.
Two-thirds of India's gold demand comes from rural areas, where jewellery is a traditional store of wealth.
But this year's monsoon has so far delivered less-than-average rainfall, delaying sowing in many parts of the country and raising concerns the success of summer-sown crops.
Indian gold futures hit a record high of 35,409 rupees ($511.54) per 10 grams in July. Local prices have risen 10% so far in 2019.
However, demand would recover in the final quarter, Somasundaram said. In a report published on Thursday, the WGC forecast India's gold consumption in 2019 at 750 to 850 tonnes, from 760.4 tonnes last year and a 10-year average of 838 tonnes.
"People will get used to these kinds of prices and normal buying will resume," he said.
Demand usually rises in the October-December quarter due to the wedding season and festivals such as Diwali, when buying bullion is considered auspicious.
Meanwhile, scrap gold supplies in India could increase 15% in 2019 to around 100 tonnes as the rally in local gold prices prompts consumers to sell old trinkets and jewellery, he said
In the first week of July, India raised the import duty on gold to 12.5% from 10% as policymakers try to bring down the fiscal deficit and recapitalise banks.
The duty hike could lift gold smuggling in 2019 above last year's around 95 tonnes, Somasundaram said.
India's gold consumption in the June quarter rose 13% to 213.2 tonnes on higher jewellery and investment demand, helping India surpass China as the biggest consumer of the metal in the world for the first time since the December quarter of 2013, the WGC said in its report.
India's gold demand to soften in Q3 on price rise, rural distress: WGC
India's gold demand is expected to soften in the September quarter as record high local prices dampen buying in the world's second biggest consumer of the precious metal, the World Gold Council (WGC) said on Thursday.
The fall in consumption could weigh on global prices that have risen nearly 10% so far in the 2019, but could help in bringing down the south Asian country's trade deficit, supporting the rupee.
Rural distress, higher prices and a hike in India's import tax could dampen demand during the September quarter, said Somasundaram PR, the managing director of WGC's Indian operations.
Two-thirds of India's gold demand comes from rural areas, where jewellery is a traditional store of wealth.
But this year's monsoon has so far delivered less-than-average rainfall, delaying sowing in many parts of the country and raising concerns the success of summer-sown crops.
Indian gold futures hit a record high of 35,409 rupees ($511.54) per 10 grams in July. Local prices have risen 10% so far in 2019.
However, demand would recover in the final quarter, Somasundaram said. In a report published on Thursday, the WGC forecast India's gold consumption in 2019 at 750 to 850 tonnes, from 760.4 tonnes last year and a 10-year average of 838 tonnes.
"People will get used to these kinds of prices and normal buying will resume," he said.
Demand usually rises in the October-December quarter due to the wedding season and festivals such as Diwali, when buying bullion is considered auspicious.
Meanwhile, scrap gold supplies in India could increase 15% in 2019 to around 100 tonnes as the rally in local gold prices prompts consumers to sell old trinkets and jewellery, he said
In the first week of July, India raised the import duty on gold to 12.5% from 10% as policymakers try to bring down the fiscal deficit and recapitalise banks.
The duty hike could lift gold smuggling in 2019 above last year's around 95 tonnes, Somasundaram said.
India's gold consumption in the June quarter rose 13% to 213.2 tonnes on higher jewellery and investment demand, helping India surpass China as the biggest consumer of the metal in the world for the first time since the December quarter of 2013, the WGC said in its report.
India's gold demand to soften in Q3 on price rise, rural distress: WGC
Postal dept decides to convert India Post Payments Bank to a SFB
The postal department said it has decided to convert the India Post Payments Bank into a small finance bank, enabling it to offer small loans to customers.
Besides, the department looks to open one crore accounts for IPPB in 100 days.
The decisions were taken at the annual Heads of Circles Conference held at Srinagar in Jammu and Kashmir from July 29-31, 2019 to adopt a 100-day action plan and a five-year vision to align the Department of Posts with the Prime Minister's New India initiative, a statement from the postal department said.
The decision included "Converting the India Post Payments Bank (IPPB) into a Small Finance Bank (SFB) to provide micro credit at the doorsteps to individuals and SME's. Targeting the milestone of one crore accounts for IPPB in 100 days" among several other steps.
India Post will partner with Common Service Centre to provide a suite of citizen centric services such as banking, remittance, insurance, DBT, bill and tax payments etc at post offices, the statement said.
The postal department has decided to develop infrastructure to extend the reach of the e-commerce industry to tier 2 and 3 town as well as to rural areas by investing in 190 parcel hubs, 80 Nodal Delivery Centers and a Pan India Road Transport Network.
Telecom Minister Ravi Shankar Prasad at the conference urged the officers of the Department at all levels to think to reform and perform in order to transform.
"In particular, he asked the Heads of Circles to leverage technology to strengthen Digital India by adopting Artificial intelligence, IOT and Cloud computing for citizen centric services," the statement said.
Postal dept decides to convert India Post Payments Bank to a SFB
The postal department said it has decided to convert the India Post Payments Bank into a small finance bank, enabling it to offer small loans to customers.
Besides, the department looks to open one crore accounts for IPPB in 100 days.
The decisions were taken at the annual Heads of Circles Conference held at Srinagar in Jammu and Kashmir from July 29-31, 2019 to adopt a 100-day action plan and a five-year vision to align the Department of Posts with the Prime Minister's New India initiative, a statement from the postal department said.
The decision included "Converting the India Post Payments Bank (IPPB) into a Small Finance Bank (SFB) to provide micro credit at the doorsteps to individuals and SME's. Targeting the milestone of one crore accounts for IPPB in 100 days" among several other steps.
India Post will partner with Common Service Centre to provide a suite of citizen centric services such as banking, remittance, insurance, DBT, bill and tax payments etc at post offices, the statement said.
The postal department has decided to develop infrastructure to extend the reach of the e-commerce industry to tier 2 and 3 town as well as to rural areas by investing in 190 parcel hubs, 80 Nodal Delivery Centers and a Pan India Road Transport Network.
Telecom Minister Ravi Shankar Prasad at the conference urged the officers of the Department at all levels to think to reform and perform in order to transform.
"In particular, he asked the Heads of Circles to leverage technology to strengthen Digital India by adopting Artificial intelligence, IOT and Cloud computing for citizen centric services," the statement said.
Postal dept decides to convert India Post Payments Bank to a SFB
RCEP pointless without India, says Thai envoy; negotiations may extend to next year
A Regional Comprehensive Economic Partnership (RCEP) would be pointless without India, said Thailand’s Ambassador to India Chutintorn Gongsakdi. His comments assume significance in the context of the 27th round of negotiations on RCEP in Beijing.
“I don’t want India to feel it is the payoff for everyone, it has to be positive for India as well. If you gain nothing, walk away. When we negotiate FTAs, trade negotiators are taught to think ahead, think of the country’s future and all members of RCEP see India in our future. India is on the rise and it will be the driver of the global economy like China and the US," the envoy told CNBC TV18.
Negotiations on RCEP began in 2012 and some countries like China see India as a roadblock to the conclusion of talks.
A recent article in the South China Morning Post said, “India is widely viewed as the biggest roadblock to concluding RCEP, the first negotiations for which were held in May 2013 in Brunei. Delhi has allegedly opposed opening its domestic markets to tariff-free goods and services, particularly from China, and has also had issues with the rules of origin chapter of RCEP. China is understood to be 'egging on' other members to move forward without India”.
China’s Assistant Commerce Minister has said Beijing would work with all sides to push for completion of negotiations this year.
However, the Thai envoy said that RCEP negotiations would extend to next year.
Gongsakdi said, “What I have heard is that we can announce the conclusion of negotiations on the text of RCEP, and the other half which is the bread and butter, the schedule of commitments or the market access part that can continue next year. If we are able to announce conclusion of the text, that will send out a positive message”.
He also said envoys of Thailand, Indonesia and ASEAN Secretary General recently had a positive meeting with Commerce Minister Piyush Goyal which helped them understand India’s economic predicament. While there was disappointment that Goyal would not be attending the RCEP meeting, there were still more rounds of talks to go, he added.
Indian industry is against concluding the RCEP in its present form as there is a growing worry that it would only lead to more Chinese goods entering the market. At the same time India wants favorable services trade which allows free movement of trained professionals.
The envoy mentioned that other country also had concerns over market access. “One of the things that came up was rules of origin, so even if goods are not coming from China, they could come from China and then be re-exported through other countries as people try to circumvent US restrictions. So we will have to look at rules of origin. India has also raised issues about services and movement of natural persons and how countries use domestic regulations to circumvent market access that they have pledged. These are not just problems for India”, he said.
Gongsakdi said all ASEAN nations were concerned about the US-China trade war, Japan-South Korea tensions and the US sanctions.
“The message coming out of the ASEAN meetings would be that sense should prevail and we should re-invest our time and efforts in the multilateral trading system where everyone is equal under the international trade rules and keep markets open,” he added.
A Regional Comprehensive Economic Partnership (RCEP) would be pointless without India, said Thailand’s Ambassador to India Chutintorn Gongsakdi. His comments assume significance in the context of the 27th round of negotiations on RCEP in Beijing.
“I don’t want India to feel it is the payoff for everyone, it has to be positive for India as well. If you gain nothing, walk away. When we negotiate FTAs, trade negotiators are taught to think ahead, think of the country’s future and all members of RCEP see India in our future. India is on the rise and it will be the driver of the global economy like China and the US," the envoy told CNBC TV18.
Negotiations on RCEP began in 2012 and some countries like China see India as a roadblock to the conclusion of talks.
A recent article in the South China Morning Post said, “India is widely viewed as the biggest roadblock to concluding RCEP, the first negotiations for which were held in May 2013 in Brunei. Delhi has allegedly opposed opening its domestic markets to tariff-free goods and services, particularly from China, and has also had issues with the rules of origin chapter of RCEP. China is understood to be 'egging on' other members to move forward without India”.
China’s Assistant Commerce Minister has said Beijing would work with all sides to push for completion of negotiations this year.
However, the Thai envoy said that RCEP negotiations would extend to next year.
Gongsakdi said, “What I have heard is that we can announce the conclusion of negotiations on the text of RCEP, and the other half which is the bread and butter, the schedule of commitments or the market access part that can continue next year. If we are able to announce conclusion of the text, that will send out a positive message”.
He also said envoys of Thailand, Indonesia and ASEAN Secretary General recently had a positive meeting with Commerce Minister Piyush Goyal which helped them understand India’s economic predicament. While there was disappointment that Goyal would not be attending the RCEP meeting, there were still more rounds of talks to go, he added.
Indian industry is against concluding the RCEP in its present form as there is a growing worry that it would only lead to more Chinese goods entering the market. At the same time India wants favorable services trade which allows free movement of trained professionals.
The envoy mentioned that other country also had concerns over market access. “One of the things that came up was rules of origin, so even if goods are not coming from China, they could come from China and then be re-exported through other countries as people try to circumvent US restrictions. So we will have to look at rules of origin. India has also raised issues about services and movement of natural persons and how countries use domestic regulations to circumvent market access that they have pledged. These are not just problems for India”, he said.
Gongsakdi said all ASEAN nations were concerned about the US-China trade war, Japan-South Korea tensions and the US sanctions.
“The message coming out of the ASEAN meetings would be that sense should prevail and we should re-invest our time and efforts in the multilateral trading system where everyone is equal under the international trade rules and keep markets open,” he added.
Markets bounce back on buzz of govt examining tax concerns of FPIs
After dropping about 400 points intra-day, Sensex ends with 100-point gain on reports that Centre is examining FPI concerns
By Sundar Sethuraman | Mumbai
Last Updated at August 3, 2019 02:23 IST
Since the Union Budget, the benchmark Nifty has lost nearly 8 per cent amid selling to the tune of Rs 12,000 crore by FPIs
The buzz of the finance ministry examining the tax concerns of foreign portfolio investors (FPIs) sparked a sharp rebound in the domestic equity market on Friday, even as most global bourses tumbled amid a fresh spike in tensions between the US and China. A 7 per cent decline in Brent crude prices on Thursday night helped ease some concerns on the macroeconomic front.
After dropping as much as 410 points in intra-day trade, the benchmark Sensex recouped all the losses to end 100 points higher at 37,118. The 50-share Nifty ended slightly below 11,000, a psychologically important level.
The rebound happened after media reports said the government was likely to put on hold a plan to raise the minimum public shareholding in listed companies to 35 per cent from 25 per cent. The government, the reports said, was also looking for ways to ease concerns of FPIs, which have pulled out of the Indian equity market after the Budget announcement of higher taxes for individuals and trusts earning more than Rs 2 crore a year.
“We may not notify this year the 35 per cent minimum shareholding norm as we have got some representation on the issue and we will look into it in detail and understand the viability of such a proposal,” a source, who is dealing with the matter, told Reuters.
Rattled by the escalation in the long-running trade dispute between the US and China, global equities tumbled, with most markets in Europe, China and Hong Kong declining close to 2 per cent. US President Donald Trump on Thursday announced a 10 per cent tariff on an additional $300 billion of Chinese imports from September, spooking the investors. He further said that high-level talks between the two sides in Shanghai had gone badly. China’s commerce ministry responded by vowing to retaliate with necessary counter measures.
Since the Union Budget, the benchmark Nifty has lost nearly 8 per cent amid selling to the tune of Rs 12,000 crore by FPIs. On Friday, FPIs offloaded shares worth nearly Rs 2,900 crore, while domestic institutions provided buying support to the tune of Rs 2,800 crore. Indian markets have lost Rs 13.6 trillion in market capitalisation since July 5, when the new tax surcharge was announced by Finance Minister Nirmala Sitharaman.
“In a gloomy market environment, the imposition of tax surcharge has affected about 40 per cent of FPIs and triggered a significant outflow in July, compared to inflows in June. In the near term, we expect the market to be range-bound, with a negative bias,” said Ravi Sundar Muthukrishnan, head of research, Elara Capital.
Andrew Holland, chief executive officer, Avendus Capital Public Markets Alternate Strategies, said: “If the pre-Budget tax regime is restored, you could see better flows to India.”
The benchmark indices have logged their fourth consecutive weekly fall — the longest losing streak since September 2018, when the IL&FS crisis came to light.
Market players say the FPI taxation is only one of the many headwinds faced by the domestic markets. “India’s GDP has been deteriorating over the past few quarters. Most key engines of GDP growth — private consumption, private capital expenditure, net exports and public infrastructure spending — are facing stiff challenges. Rural distress, the NBFC crisis, declining consumer confidence, and elevated unemployment levels suggest consumption is unlikely to pick up anytime soon. Challenging global growth environment is likely to persist, which is a negative for exports. In effect, the government’s infrastructure spending — railways, defence and other public infrastructure — is the only hope to spur economic growth in the medium term,” said Muthukrishnan.
Markets bounce back on buzz of govt examining tax concerns of FPIs
After dropping about 400 points intra-day, Sensex ends with 100-point gain on reports that Centre is examining FPI concerns
By Sundar Sethuraman | Mumbai
Last Updated at August 3, 2019 02:23 IST
Since the Union Budget, the benchmark Nifty has lost nearly 8 per cent amid selling to the tune of Rs 12,000 crore by FPIs
The buzz of the finance ministry examining the tax concerns of foreign portfolio investors (FPIs) sparked a sharp rebound in the domestic equity market on Friday, even as most global bourses tumbled amid a fresh spike in tensions between the US and China. A 7 per cent decline in Brent crude prices on Thursday night helped ease some concerns on the macroeconomic front.
After dropping as much as 410 points in intra-day trade, the benchmark Sensex recouped all the losses to end 100 points higher at 37,118. The 50-share Nifty ended slightly below 11,000, a psychologically important level.
The rebound happened after media reports said the government was likely to put on hold a plan to raise the minimum public shareholding in listed companies to 35 per cent from 25 per cent. The government, the reports said, was also looking for ways to ease concerns of FPIs, which have pulled out of the Indian equity market after the Budget announcement of higher taxes for individuals and trusts earning more than Rs 2 crore a year.
“We may not notify this year the 35 per cent minimum shareholding norm as we have got some representation on the issue and we will look into it in detail and understand the viability of such a proposal,” a source, who is dealing with the matter, told Reuters.
Rattled by the escalation in the long-running trade dispute between the US and China, global equities tumbled, with most markets in Europe, China and Hong Kong declining close to 2 per cent. US President Donald Trump on Thursday announced a 10 per cent tariff on an additional $300 billion of Chinese imports from September, spooking the investors. He further said that high-level talks between the two sides in Shanghai had gone badly. China’s commerce ministry responded by vowing to retaliate with necessary counter measures.
Since the Union Budget, the benchmark Nifty has lost nearly 8 per cent amid selling to the tune of Rs 12,000 crore by FPIs. On Friday, FPIs offloaded shares worth nearly Rs 2,900 crore, while domestic institutions provided buying support to the tune of Rs 2,800 crore. Indian markets have lost Rs 13.6 trillion in market capitalisation since July 5, when the new tax surcharge was announced by Finance Minister Nirmala Sitharaman.
“In a gloomy market environment, the imposition of tax surcharge has affected about 40 per cent of FPIs and triggered a significant outflow in July, compared to inflows in June. In the near term, we expect the market to be range-bound, with a negative bias,” said Ravi Sundar Muthukrishnan, head of research, Elara Capital.
Andrew Holland, chief executive officer, Avendus Capital Public Markets Alternate Strategies, said: “If the pre-Budget tax regime is restored, you could see better flows to India.”
The benchmark indices have logged their fourth consecutive weekly fall — the longest losing streak since September 2018, when the IL&FS crisis came to light.
Market players say the FPI taxation is only one of the many headwinds faced by the domestic markets. “India’s GDP has been deteriorating over the past few quarters. Most key engines of GDP growth — private consumption, private capital expenditure, net exports and public infrastructure spending — are facing stiff challenges. Rural distress, the NBFC crisis, declining consumer confidence, and elevated unemployment levels suggest consumption is unlikely to pick up anytime soon. Challenging global growth environment is likely to persist, which is a negative for exports. In effect, the government’s infrastructure spending — railways, defence and other public infrastructure — is the only hope to spur economic growth in the medium term,” said Muthukrishnan.
Markets bounce back on buzz of govt examining tax concerns of FPIs
Now, also an Aadhaar card for cattle and buffaloes
India is implementing the world’s biggest project of tagging every bovine animal that may yield huge productivity gains.
Written by Tarun Shridhar | New Delhi | Updated: August 8, 2019 9:00:15 am
These animals with ear tags won’t mind more of this fodder. (Express photo by Bhupendra Rana)
We all know of Aadhaar, the 12-digit unique random number that establishes the identity of every Indian, by capturing his/her name, gender, age, etc. and linking this basic demographic information to that person’s biometrics such as fingerprints and iris scans.
We are also aware how this number, unique to every individual, has helped in de-duplication and elimination of ghost beneficiaries in various government welfare and development programmes, thereby ensuring their transparent, targeted and fair delivery. Aadhaar is today the world’s biggest — indeed, the only one of its kind — digital and online database of virtually the entire human population of a country.
While the Aadhaar unique identification number (UID) has attracted much attention, debate, fanfare, flak, controversy and even litigation, another giant database — this one relating to livestock information — is currently being created in India. The nodal agency and repository for this Information Network for Animal Productivity and Health or INAPH is the National Dairy Development Board (NDDB). The similarities with Aadhaar are striking: INAPH, too, assigns a unique random identification number to each animal, while capturing a host of data and information useful for the effective and scientific management of India’s livestock resources. When completed, it will also be the biggest global database of animals.
The INAPH project, in its first phase, would cover the country’s 94 million-odd productive “in milk” female cow and buffalo population — all indigenous, nondescript, crossbred as well as exotic milch animals. The exercise will subsequently be extended to all bovines, including males, calves and heifers, old and stray animals. Each animal will be provided a thermoplastic polyurethane ear tag bearing its 12-digit UID. The data being captured by it includes the species, breed and pedigree of the particular animal, apart from information relating to its calving, milk production, artificial insemination (AI), vaccination and feeding/nutrition history. To that extent, this database is more comprehensive than that offered by the Aadhaar for humans!
The objective behind INAPH is to enable proper identification of animals and traceability of their products, be it milk or meat. Through this, farmers, processors, animal husbandry department officials and healthcare professionals can devise appropriate strategies for livestock management. A major cause of zoonotic diseases and challenges in addressing them today is the absence of animal identification and traceability mechanisms, which are also impediments to accessing global markets for Indian livestock products. If our dairy and livestock industry has to meet internationally-accepted sanitary and phytosanitary standards, a robust and comprehensive animal information system that allows traceability of products to their source is sine qua non. With INAPH, it will be possible to protect product integrity and quality. The products obtained from healthy or premium animals can be separated from those originating from diseased or nondescript ones.
The animal UID — Pashu Aadhaar, as it may be called — aims to address these very issues. So far, nearly 22.3 million cows and buffaloes have been assigned UIDs and their complete data uploaded on the INAPH database. This is only the beginning. The next step should be to leverage this data for scientific and risk-based management of animals to deliver better health and reproduction outcomes, enhanced productivity and improved livestock product quality.
India has the world’s largest livestock population and is also its biggest milk producer. However, the foremost issue plaguing the country’s livestock sector is its abysmally low productivity, apart from poor animal health, prevalence of economically debilitating diseases, and pedigree testing/genome selection for breeding based on non-scientific and anecdotal methods. Much of this is attributable to the absence of a reliable animal database. The plethora of information through INAPH, including on the ancestry and production performance of animals, would help identify healthy and productive livestock for breeding, assist in rejuvenation of the weaker ones, plan for better nutritional management and systematically manage diseases. The data available can be used to select disease-free, high genetic merit bulls and fertile cows for breeding — including for indigenous breeds that are low on productivity, despite their inherent resilience to disease and climate vagaries.
While the ubiquitous Aadhaar Card has given almost all Indians a unique and universal identity of their own, the INAPH UID or Pashu Aadhaar can do something similar for our cattle and buffaloes (299.60 million, as per the last 2012 Livestock Census). But the INAPH database goes beyond just establishing animal identity. Just like Aadhaar seeks to provide good governance along with efficient and transparent delivery of government services, so does INAPH. In fact, it aims for more.
Take AI, one of the longstanding programmes implemented across the country. It has so far met with limited success in terms of boosting overall animal productivity. One reason for it is simply the use of not-so-good quality semen from low genetic merit bulls. And that is linked no less to the poor records of the AI status of most cows or the source/pedigree of the donor bulls. The AI programme will definitely get a shot in the arm with more reliable data on the insemination history of each animal made available through the INAPH. Likewise, more efficient nutrition management through ration balancing can be achieved, wherever the database throws up relevant information on the feeding status of each animal. The list and possibilities are endless: The entire chain, from inputs (AI/breeding, vaccination, feed and fodder, and nutrition) to output (milk and meat), can be managed in a manner that assures enhanced animal productivity and improved product quality.
At the end of the day, the future generations of our livestock need to be healthier in order to contribute more to the well-being of both the farmer and the consumer. We have embarked on assigning individual identities to each of India’s cattle and buffaloes using the best available digital technologies. The database generated should be seen as a significant step in heralding the next White Revolution and making livestock a vehicle of rural prosperity.
The writer is former Secretary, Ministry of Fisheries, Animal Husbandry & Dairying and Department of Animal Husbandry & Dairying, Government of India
Now, also an Aadhaar card for cattle and buffaloes
India is implementing the world’s biggest project of tagging every bovine animal that may yield huge productivity gains.
Written by Tarun Shridhar | New Delhi | Updated: August 8, 2019 9:00:15 am
These animals with ear tags won’t mind more of this fodder. (Express photo by Bhupendra Rana)
We all know of Aadhaar, the 12-digit unique random number that establishes the identity of every Indian, by capturing his/her name, gender, age, etc. and linking this basic demographic information to that person’s biometrics such as fingerprints and iris scans.
We are also aware how this number, unique to every individual, has helped in de-duplication and elimination of ghost beneficiaries in various government welfare and development programmes, thereby ensuring their transparent, targeted and fair delivery. Aadhaar is today the world’s biggest — indeed, the only one of its kind — digital and online database of virtually the entire human population of a country.
While the Aadhaar unique identification number (UID) has attracted much attention, debate, fanfare, flak, controversy and even litigation, another giant database — this one relating to livestock information — is currently being created in India. The nodal agency and repository for this Information Network for Animal Productivity and Health or INAPH is the National Dairy Development Board (NDDB). The similarities with Aadhaar are striking: INAPH, too, assigns a unique random identification number to each animal, while capturing a host of data and information useful for the effective and scientific management of India’s livestock resources. When completed, it will also be the biggest global database of animals.
The INAPH project, in its first phase, would cover the country’s 94 million-odd productive “in milk” female cow and buffalo population — all indigenous, nondescript, crossbred as well as exotic milch animals. The exercise will subsequently be extended to all bovines, including males, calves and heifers, old and stray animals. Each animal will be provided a thermoplastic polyurethane ear tag bearing its 12-digit UID. The data being captured by it includes the species, breed and pedigree of the particular animal, apart from information relating to its calving, milk production, artificial insemination (AI), vaccination and feeding/nutrition history. To that extent, this database is more comprehensive than that offered by the Aadhaar for humans!
The objective behind INAPH is to enable proper identification of animals and traceability of their products, be it milk or meat. Through this, farmers, processors, animal husbandry department officials and healthcare professionals can devise appropriate strategies for livestock management. A major cause of zoonotic diseases and challenges in addressing them today is the absence of animal identification and traceability mechanisms, which are also impediments to accessing global markets for Indian livestock products. If our dairy and livestock industry has to meet internationally-accepted sanitary and phytosanitary standards, a robust and comprehensive animal information system that allows traceability of products to their source is sine qua non. With INAPH, it will be possible to protect product integrity and quality. The products obtained from healthy or premium animals can be separated from those originating from diseased or nondescript ones.
The animal UID — Pashu Aadhaar, as it may be called — aims to address these very issues. So far, nearly 22.3 million cows and buffaloes have been assigned UIDs and their complete data uploaded on the INAPH database. This is only the beginning. The next step should be to leverage this data for scientific and risk-based management of animals to deliver better health and reproduction outcomes, enhanced productivity and improved livestock product quality.
India has the world’s largest livestock population and is also its biggest milk producer. However, the foremost issue plaguing the country’s livestock sector is its abysmally low productivity, apart from poor animal health, prevalence of economically debilitating diseases, and pedigree testing/genome selection for breeding based on non-scientific and anecdotal methods. Much of this is attributable to the absence of a reliable animal database. The plethora of information through INAPH, including on the ancestry and production performance of animals, would help identify healthy and productive livestock for breeding, assist in rejuvenation of the weaker ones, plan for better nutritional management and systematically manage diseases. The data available can be used to select disease-free, high genetic merit bulls and fertile cows for breeding — including for indigenous breeds that are low on productivity, despite their inherent resilience to disease and climate vagaries.
While the ubiquitous Aadhaar Card has given almost all Indians a unique and universal identity of their own, the INAPH UID or Pashu Aadhaar can do something similar for our cattle and buffaloes (299.60 million, as per the last 2012 Livestock Census). But the INAPH database goes beyond just establishing animal identity. Just like Aadhaar seeks to provide good governance along with efficient and transparent delivery of government services, so does INAPH. In fact, it aims for more.
Take AI, one of the longstanding programmes implemented across the country. It has so far met with limited success in terms of boosting overall animal productivity. One reason for it is simply the use of not-so-good quality semen from low genetic merit bulls. And that is linked no less to the poor records of the AI status of most cows or the source/pedigree of the donor bulls. The AI programme will definitely get a shot in the arm with more reliable data on the insemination history of each animal made available through the INAPH. Likewise, more efficient nutrition management through ration balancing can be achieved, wherever the database throws up relevant information on the feeding status of each animal. The list and possibilities are endless: The entire chain, from inputs (AI/breeding, vaccination, feed and fodder, and nutrition) to output (milk and meat), can be managed in a manner that assures enhanced animal productivity and improved product quality.
At the end of the day, the future generations of our livestock need to be healthier in order to contribute more to the well-being of both the farmer and the consumer. We have embarked on assigning individual identities to each of India’s cattle and buffaloes using the best available digital technologies. The database generated should be seen as a significant step in heralding the next White Revolution and making livestock a vehicle of rural prosperity.
The writer is former Secretary, Ministry of Fisheries, Animal Husbandry & Dairying and Department of Animal Husbandry & Dairying, Government of India
Now, also an Aadhaar card for cattle and buffaloes
PMO to formulate India’s stance on data localisation
By Amiti Sen
New Delhi
Published on August 08, 2019
MeitY’s draft data protection Bill, proposing localisation of personal data of individuals, has been criticised by the US and the EU
The Prime Minister’s Office (PMO) has taken over the task of overseeing India’s position on data localisation, as many trading partners, including the US and the EU, are up in arms against the government’s proposal of making it mandatory for all companies doing business in India to store at least one copy of personal data of consumers in a server within the country.
American companies such as Amazon, Microsoft and American Express, backed by the US government, have also expressed their unhappiness with the existing mandatory rule on data localisation in India by the Reserve Bank of India for payment systems despite the recent clarification from the central bank that in case of cross-border transactions, a copy of the domestic data can be stored abroad. “The PMO has asked various Ministries including Commerce and Industry and IT on their views on the controversial issue of data localisation. It wants to take a decision after taking into account all points of view,” a government official told BusinessLine.
US apprehensions
American companies have made representations to the PMO to protest against the data localisation rules stressing that it would make their operations more complicated and costly.
The draft data protection Bill, put together by the Ministry of Electronics and IT (MeitY), based on the recommendations of the Justice Srikrishna committee report on data protection submitted last year, has resulted in a lot of controversy, especially for its suggestion on data localisation.
The Srikrishna Committee emphasised that data localisation was critical for law enforcement as it is easier for agencies to access information required for the detection of crime as well as in gathering evidence for prosecution if it is available within their jurisdiction as compared to awaiting responses to requests made to foreign entities which store data abroad. Under the draft data protection Bill, the data localisation rules emphasise that one copy of all personal data to which the law applies are to be kept in a server within India. Further, certain categories of data, which are to be specified by the government as critical personal data are to be stored in India alone.
The requirements for cross-border transfer of data are also imposed.
“While MeitY was initially aiming at ensuring that the data protection Bill is placed before Parliament in the on-going session, the opposition from other countries and foreign players, has delayed it. Now that the PMO has taken over, it may take some time before the Bill is finalised,” the official said.
The cost factor
The reason for foreign companies to oppose data localisation is mainly that the cost involved would be significant as they would have to set up servers and the entire required infrastructure including hiring of personnel to store data in India.
The RBI, which made data localisation for payments system mandatory last year, received so much criticism from foreign players that it had to come out with a clarification on implementation issues.
As per the clarifications, there is no bar on the processing of payment transactions outside India, but the Payment System Operators will have to ensure the data is stored only in India after processing.
In case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier.
The same should be stored only in India. The data stored in India can be accessed for handling customer disputes, whenever required.
“The RBI is now not keen to make any more concessions in the data localisation rules for payment systems but the companies don’t seem to be giving up,” the official said.
Data wrangle :
By Amiti Sen
New Delhi
Published on August 08, 2019
MeitY’s draft data protection Bill, proposing localisation of personal data of individuals, has been criticised by the US and the EU
The Prime Minister’s Office (PMO) has taken over the task of overseeing India’s position on data localisation, as many trading partners, including the US and the EU, are up in arms against the government’s proposal of making it mandatory for all companies doing business in India to store at least one copy of personal data of consumers in a server within the country.
American companies such as Amazon, Microsoft and American Express, backed by the US government, have also expressed their unhappiness with the existing mandatory rule on data localisation in India by the Reserve Bank of India for payment systems despite the recent clarification from the central bank that in case of cross-border transactions, a copy of the domestic data can be stored abroad. “The PMO has asked various Ministries including Commerce and Industry and IT on their views on the controversial issue of data localisation. It wants to take a decision after taking into account all points of view,” a government official told BusinessLine.
US apprehensions
American companies have made representations to the PMO to protest against the data localisation rules stressing that it would make their operations more complicated and costly.
The draft data protection Bill, put together by the Ministry of Electronics and IT (MeitY), based on the recommendations of the Justice Srikrishna committee report on data protection submitted last year, has resulted in a lot of controversy, especially for its suggestion on data localisation.
The Srikrishna Committee emphasised that data localisation was critical for law enforcement as it is easier for agencies to access information required for the detection of crime as well as in gathering evidence for prosecution if it is available within their jurisdiction as compared to awaiting responses to requests made to foreign entities which store data abroad. Under the draft data protection Bill, the data localisation rules emphasise that one copy of all personal data to which the law applies are to be kept in a server within India. Further, certain categories of data, which are to be specified by the government as critical personal data are to be stored in India alone.
The requirements for cross-border transfer of data are also imposed.
“While MeitY was initially aiming at ensuring that the data protection Bill is placed before Parliament in the on-going session, the opposition from other countries and foreign players, has delayed it. Now that the PMO has taken over, it may take some time before the Bill is finalised,” the official said.
The cost factor
The reason for foreign companies to oppose data localisation is mainly that the cost involved would be significant as they would have to set up servers and the entire required infrastructure including hiring of personnel to store data in India.
The RBI, which made data localisation for payments system mandatory last year, received so much criticism from foreign players that it had to come out with a clarification on implementation issues.
As per the clarifications, there is no bar on the processing of payment transactions outside India, but the Payment System Operators will have to ensure the data is stored only in India after processing.
In case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier.
The same should be stored only in India. The data stored in India can be accessed for handling customer disputes, whenever required.
“The RBI is now not keen to make any more concessions in the data localisation rules for payment systems but the companies don’t seem to be giving up,” the official said.
Data wrangle :
- All companies doing business in India must store at least one copy of their consumers’ personal data on a server here
- This proposal has irked global firms such as Amazon, Microsoft and American Express
- These firms say that this proposal will make their operations in India more expensive
- They are also against the RBI’s rule of making data localisation for payment systems mandatory
- The RBI has however clarified on the implementation of this rule
Seemed like an interesting article. Can anybody get past the paywall ??
Core elements of the global banking industry are moving to India
Core elements of the global banking industry are moving to India
Industrial growth decelerates in June to a four-month low of 2%
2 min read . Updated: 10 Aug 2019, 12:16 AM IST, by Asit Ranjan Mishra
Only eight out of the 23 industry groups in the manufacturing sector showed growth in June (Photo: Aniruddha Chowdhury/Mint)
New Delhi: India’s factory output growth slipped to a four-month low of 2% in June, signalling a broad-based demand slowdown and further signs of stress in the economy.
Data released by the National Statistical Office (NSO) on Friday showed manufacturing and mining sectors tottering below the 2% level. Electricity, however, grew at a robust pace of 8.2% due to rising summer demand.
Analysis of the user-based sectors showed that the slowdown in the economy has gripped most sectors, except intermediate goods, which grew at 12.4% in June. Capital goods, infrastructure goods and consumer durables all contracted in June, while primary goods almost remained flat, growing at a feeble 0.5%.
Only eight out of the 23 industry groups in the manufacturing sector showed growth in June.
Madan Sabnavis, chief economist, CARE Ratings, said the high base effect in the coming months is set to statistically pull down IIP growth further. “Hence, for the full year, it looks unlikely that IIP can go beyond the 4-5% range, unless there is a recovery in the second half," he added.
On Wednesday, the Reserve Bank of India pared its growth projection for 2019-20 to 6.9% from its June forecast of 7%, while reducing policy rates by 35 basis points. It maintained that risks to growth are tilted toward the downside, with domestic economic activity remaining weak, while the global slowdown and trade tensions have intensified.
“Evolving trends do not bode well for the pace of GDP growth in the first quarter of 2019-20, which in conjunction with range-bound retail inflation, suggest a substantial likelihood that another rate cut is in the offing," said Aditi Nayar, principal economist, Icra Ratings.
A slew of high-frequency indicators have been pointing to a sharp slowdown in demand, both in rural and urban India. The auto sector is going through its worst phase in decades due to the prolonged slump in demand, leading to massive job losses.
Wholesale dispatches at Maruti Suzuki India Ltd, the country’s largest passenger vehicle manufacturer, slumped 36.3% year-on-year in July, its sharpest decline in the past two decades.
A series of factors, including government incentives for electric vehicles, higher insurance costs, volatile stock markets and a liquidity squeeze in a slowing economy, have slammed the brakes on demand for new vehicles.
Construction activity indicators, too, slackened, with contraction in cement production and slowdown in finished steel consumption in June.
Import of capital goods, a key indicator of investment activity, also contracted during the month.
Merchandise exports contracted, weighed down by the subdued performance of gems and jewellery, petroleum products, rice, engineering goods and cotton.
Industrial growth decelerates in June to a four-month low of 2%
2 min read . Updated: 10 Aug 2019, 12:16 AM IST, by Asit Ranjan Mishra
- The slowdown has gripped most sectors except intermediate goods, which grew at 12.4% in June
- Construction activity indicators, too, slackened, with contraction in cement production and slowdown in finished steel consumption in June
Only eight out of the 23 industry groups in the manufacturing sector showed growth in June (Photo: Aniruddha Chowdhury/Mint)
New Delhi: India’s factory output growth slipped to a four-month low of 2% in June, signalling a broad-based demand slowdown and further signs of stress in the economy.
Data released by the National Statistical Office (NSO) on Friday showed manufacturing and mining sectors tottering below the 2% level. Electricity, however, grew at a robust pace of 8.2% due to rising summer demand.
Analysis of the user-based sectors showed that the slowdown in the economy has gripped most sectors, except intermediate goods, which grew at 12.4% in June. Capital goods, infrastructure goods and consumer durables all contracted in June, while primary goods almost remained flat, growing at a feeble 0.5%.
Only eight out of the 23 industry groups in the manufacturing sector showed growth in June.
Madan Sabnavis, chief economist, CARE Ratings, said the high base effect in the coming months is set to statistically pull down IIP growth further. “Hence, for the full year, it looks unlikely that IIP can go beyond the 4-5% range, unless there is a recovery in the second half," he added.
On Wednesday, the Reserve Bank of India pared its growth projection for 2019-20 to 6.9% from its June forecast of 7%, while reducing policy rates by 35 basis points. It maintained that risks to growth are tilted toward the downside, with domestic economic activity remaining weak, while the global slowdown and trade tensions have intensified.
“Evolving trends do not bode well for the pace of GDP growth in the first quarter of 2019-20, which in conjunction with range-bound retail inflation, suggest a substantial likelihood that another rate cut is in the offing," said Aditi Nayar, principal economist, Icra Ratings.
A slew of high-frequency indicators have been pointing to a sharp slowdown in demand, both in rural and urban India. The auto sector is going through its worst phase in decades due to the prolonged slump in demand, leading to massive job losses.
Wholesale dispatches at Maruti Suzuki India Ltd, the country’s largest passenger vehicle manufacturer, slumped 36.3% year-on-year in July, its sharpest decline in the past two decades.
A series of factors, including government incentives for electric vehicles, higher insurance costs, volatile stock markets and a liquidity squeeze in a slowing economy, have slammed the brakes on demand for new vehicles.
Construction activity indicators, too, slackened, with contraction in cement production and slowdown in finished steel consumption in June.
Import of capital goods, a key indicator of investment activity, also contracted during the month.
Merchandise exports contracted, weighed down by the subdued performance of gems and jewellery, petroleum products, rice, engineering goods and cotton.
Industrial growth decelerates in June to a four-month low of 2%
Average monthly job creation at a 4 month high: EPFO data
The good news in this month's payroll numbers is that the average monthly job creation in India has seen an uptick. As per the latest payroll release of EPFO, the average monthly job creation stands at 4.60 lakh which is the highest since February 2019
By Mudit Kapoor
Last Updated: July 23, 2019 | 11:00 IST
Average monthly job creation in India has seen an uptick
EPFO which is a barometer for judging the formal job creation In India has been posting healthy numbers for the current financial year.
A total of 20 lakh jobs have created in the first two months of the current financial year; 10.15 lakh in April and 9.86 lakh in May.
The good news in this month's payroll numbers is that the average monthly job creation in India has seen an uptick. As per the latest payroll release of EPFO, the average monthly job creation stands at 4.60 lakh which is the highest since February 2019.
Since the November 2018 release, when the average job creation was 6.11 lakh a month, the numbers have steadily declined. The average monthly job creation was 5.65 lakh in December 2018, 4.90 lakh in January 2019. In February it declined to 4.52 lakh, and continued to slide at 4.50 lakh in March, 4.49 lakh in April and 4.37 lakh in May 2019. As per the July release of EPFO, the job creation numbers show a increase of 5.26 per cent in average monthly job creation in India's formal employment.
In the previous release of EPFO in which the job creation numbers of April 2019 were reported, displayed a robust creation of 10.43 lakh jobs. In the recent release, April's number has seen a downward revision of 27,758 jobs. The job creation numbers for the month of April 19 stands at 10.15 lakh as per the latest EPFO disclosure.
The job creation numbers for the year 2018-19 stands at 61.12 lakh, while 15.52 lakh jobs were created in the seven month period from September 2017 to March 2018. It is also important to note that no downward revision has been made in these numbers in comparison to the last EPFO's payroll release.
In the month of May 2019, 11,139 jobs were created in the age group of less than 18 years, 2.9 lakh jobs were created in the age group of 18-21 years, 2.56 lakh jobs in the age group of 22-25 years, 1.20 lakh for 26-28 age group, 1.6 lakh jobs in 29-35 age group and 1.47 lakh jobs for people aged more than 35 years .
In the age group of 18-21 years and 21-25 years, which account for more than half of the job creation in May 2019, the top five states which produced these jobs are Maharashtra, Tamil Nadu, Karnataka, Gujurat, Haryana and Delhi.
For the same age group (18-25 years) the top avenues were expert services, trading (commercial establishments), engineering, textiles, building and construction industry and establishments which are engaged in manufacturing, marketing servicing and usage of computers.
Average monthly job creation at a 4 month high: EPFO data
The good news in this month's payroll numbers is that the average monthly job creation in India has seen an uptick. As per the latest payroll release of EPFO, the average monthly job creation stands at 4.60 lakh which is the highest since February 2019
By Mudit Kapoor
Last Updated: July 23, 2019 | 11:00 IST
Average monthly job creation in India has seen an uptick
EPFO which is a barometer for judging the formal job creation In India has been posting healthy numbers for the current financial year.
A total of 20 lakh jobs have created in the first two months of the current financial year; 10.15 lakh in April and 9.86 lakh in May.
The good news in this month's payroll numbers is that the average monthly job creation in India has seen an uptick. As per the latest payroll release of EPFO, the average monthly job creation stands at 4.60 lakh which is the highest since February 2019.
Since the November 2018 release, when the average job creation was 6.11 lakh a month, the numbers have steadily declined. The average monthly job creation was 5.65 lakh in December 2018, 4.90 lakh in January 2019. In February it declined to 4.52 lakh, and continued to slide at 4.50 lakh in March, 4.49 lakh in April and 4.37 lakh in May 2019. As per the July release of EPFO, the job creation numbers show a increase of 5.26 per cent in average monthly job creation in India's formal employment.
In the previous release of EPFO in which the job creation numbers of April 2019 were reported, displayed a robust creation of 10.43 lakh jobs. In the recent release, April's number has seen a downward revision of 27,758 jobs. The job creation numbers for the month of April 19 stands at 10.15 lakh as per the latest EPFO disclosure.
The job creation numbers for the year 2018-19 stands at 61.12 lakh, while 15.52 lakh jobs were created in the seven month period from September 2017 to March 2018. It is also important to note that no downward revision has been made in these numbers in comparison to the last EPFO's payroll release.
In the month of May 2019, 11,139 jobs were created in the age group of less than 18 years, 2.9 lakh jobs were created in the age group of 18-21 years, 2.56 lakh jobs in the age group of 22-25 years, 1.20 lakh for 26-28 age group, 1.6 lakh jobs in 29-35 age group and 1.47 lakh jobs for people aged more than 35 years .
In the age group of 18-21 years and 21-25 years, which account for more than half of the job creation in May 2019, the top five states which produced these jobs are Maharashtra, Tamil Nadu, Karnataka, Gujurat, Haryana and Delhi.
For the same age group (18-25 years) the top avenues were expert services, trading (commercial establishments), engineering, textiles, building and construction industry and establishments which are engaged in manufacturing, marketing servicing and usage of computers.
Average monthly job creation at a 4 month high: EPFO data
Rising price of gold boosts central bank's forex reserves coffers
The rising price of the precious metal has helped the central bank increase overall forex reserves despite currency reserves not rising
By Rajesh Bhayani, Last Updated at August 9, 2019 23:59 IST
The Reserve Bank of India’s (RBI’s) strategy to add gold to forex reserves has started yielding fruits. The rising price of the precious metal has helped the central bank increase overall forex reserves despite currency reserves not rising, and sometimes even falling.
According to the RBI’s forex reserves data, put out every week, its foreign currency reserves in end-June was $400 billion. On August 2, it fell marginally to $399 billion, according to data released on Friday.
In the same period, however, the gold reserves increased $2.2 billion to a total of $25.16 billion.
Total forex reserves, including all assets, were $427.68 billion in June-end. It increased by only $1.27 billion as of August 2.
Hence, increase in gold reserves as kept the total reserves growing.
This is an important because earlier, the RBI was reluctant to add gold to its reserves as part of policy.
In November 2009, it had bought 200 tonnes of the metal from the International Monetary Fund for $1,032 per ounce. After that, it was only in March 2018 that it bought 2.4 tonnes.
Since then, the RBI has bought 60 tonnes of gold, taking its total holding to 618.2 tonnes.
In the same period the foreign currency reserves have remained more or less the same but gold reserves have increased almost 20 per cent, thanks to increase in stock and also price of the metal.
Gold price is marked to market as per formula once a month.
Sources in the sector said the decision to add gold to forex reserves was strategic because most central banks were using the precious metal as a hedge against changing financial market risk and the dollar.
In 2018, central banks added 651 tonnes to their reserves. In the same period, the RBI added 42 tonnes.
An economist specialising in banking, who did not want to be named, said, “The RBI is also buying gold as part of forex reserves because it is selling sovereign gold bonds on behalf of the government. These bonds have no hedging, but adding gold to reserves is equivalent to hedging that risk.”
Sovereign gold bonds were first issued in November 2015. Since then, the RBI has sold such bonds worth 25.37 tonnes of the precious metal, according to the World Gold Council.
In a recent interview RBI Governor Shaktikanta Das said, “For deployment of (forex) reserves, there is a clear understanding about how much should go into bonds, how much should go into gold assets, and within bonds how much should go into each country. Also, we have set criteria that say there should be safety, liquidity and return on our investments, in that order. Therefore, a certain portion is also held in gold as part of our asset diversification strategy.”
Rising price of gold boosts central bank's forex reserves coffers
The rising price of the precious metal has helped the central bank increase overall forex reserves despite currency reserves not rising
By Rajesh Bhayani, Last Updated at August 9, 2019 23:59 IST
The Reserve Bank of India’s (RBI’s) strategy to add gold to forex reserves has started yielding fruits. The rising price of the precious metal has helped the central bank increase overall forex reserves despite currency reserves not rising, and sometimes even falling.
According to the RBI’s forex reserves data, put out every week, its foreign currency reserves in end-June was $400 billion. On August 2, it fell marginally to $399 billion, according to data released on Friday.
In the same period, however, the gold reserves increased $2.2 billion to a total of $25.16 billion.
Total forex reserves, including all assets, were $427.68 billion in June-end. It increased by only $1.27 billion as of August 2.
Hence, increase in gold reserves as kept the total reserves growing.
This is an important because earlier, the RBI was reluctant to add gold to its reserves as part of policy.
In November 2009, it had bought 200 tonnes of the metal from the International Monetary Fund for $1,032 per ounce. After that, it was only in March 2018 that it bought 2.4 tonnes.
Since then, the RBI has bought 60 tonnes of gold, taking its total holding to 618.2 tonnes.
In the same period the foreign currency reserves have remained more or less the same but gold reserves have increased almost 20 per cent, thanks to increase in stock and also price of the metal.
Gold price is marked to market as per formula once a month.
Sources in the sector said the decision to add gold to forex reserves was strategic because most central banks were using the precious metal as a hedge against changing financial market risk and the dollar.
In 2018, central banks added 651 tonnes to their reserves. In the same period, the RBI added 42 tonnes.
An economist specialising in banking, who did not want to be named, said, “The RBI is also buying gold as part of forex reserves because it is selling sovereign gold bonds on behalf of the government. These bonds have no hedging, but adding gold to reserves is equivalent to hedging that risk.”
Sovereign gold bonds were first issued in November 2015. Since then, the RBI has sold such bonds worth 25.37 tonnes of the precious metal, according to the World Gold Council.
In a recent interview RBI Governor Shaktikanta Das said, “For deployment of (forex) reserves, there is a clear understanding about how much should go into bonds, how much should go into gold assets, and within bonds how much should go into each country. Also, we have set criteria that say there should be safety, liquidity and return on our investments, in that order. Therefore, a certain portion is also held in gold as part of our asset diversification strategy.”
Rising price of gold boosts central bank's forex reserves coffers
