Indian Economy : News,Discussions & Updates

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China urges India to join efforts to create ‘mega regional market’

China on Tuesday floated the idea of creating a “mega regional market” with India to mine existing advantages and create new ones within two of the world’s fastest growing economies.

“China and India have different political systems but practise market economy. These are the only two countries with more than 1 billion people each. There is huge potential in (creating) market demand, further (creating) international market demand at a deeper level and at a mega regional level,” said Li Wei, president of the Development Research Centre (DRC) of the State Council (China’s cabinet).

Enhanced cooperation between China and India, Li said, will be a win-win situation and help expand the two markets.

Li, who was speaking at the third round of dialogue between the DRC and India’s NITI (National Institution for Transforming India) Aayog, referred to India’s demographic advantage, its efficiency in the software industry and low labour costs as being complementary to China’s experience in developing infrastructure and lifting hundreds of millions of people out of poverty.
 

RISING SUN

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RBI gives credit for debit card usage
With a view to encourage usage of debit card, the Reserve Bank of India (RBI) further reduced the Merchant Discount Rates (MDR) for debit card transactions. MDR is the cost paid by a merchant to a bank for accepting payment from their customers via credit or debit cards every time a card is used for payments in their stores. The merchant discount rate is expressed in percentage of the transaction amount.

For merchants with turnover of up to Rs 20 lakh, the MDR has been capped at 0.40% if the transaction involves physical infrastructure such as a swipe machine. If the transaction is conducted via a QR code, the MDR has been further reduced to 0.30%. Regardless of the value of the transaction, the MDR for such merchants can not exceed Rs 200 per transaction.

For merchants whose annual turnover exceeds Rs 20 lakh, the MDR has been capped at 0.90% for swipe machine based transactions and 0.80% for QR code based sales, subject to a maximum of Rs 1000 per transaction. MDR for both debit & credit cards were same till June 2012, when the RBI first reduced MDR for debit cards to boost their usage for sales. Till then, debit cards were primarily used for cash withdrawals from ATMs. Consequently, MDR for debit cards were first fixed at 0.75% for transactions of amount up to Rs 2000, while for transactions above Rs 2000, MDR was 1%.

Following the demonetisation drive last year, when currency of Rs 500 and Rs 1000 denomination was withdrawn from circulation, MDR was further reduced for transactions up to Rs 1000, to 0.25% of the transaction value. For transactions above Rs 1000 but less than Rs 2000, MDR was kept at 0.50% of the transaction value.
RBI gives credit for debit card usage- Business News
 
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RBI raises FY18 inflation forecast to 4.3-4.7%, rupee dips 14 paise to 64.5
The rupee on Wednesday weakened further by 14 paise to close at 64.52 against the US dollar after the Reserve Bank decided to keep rates unchanged and raised the inflation forecast.

Besides, heavy capital outflows in anticipation of rate hike by the US Federal Reserve and a strong dollar overseas largely ruled forex market sentiments.
Though the RBI's policy outcome was in line with wider expectations, upside risks emanating from high commodity prices against the backdrop of global headwinds added some pressure on the trading front.

Growing worries over higher government borrowings this financial year and apprehensions over fiscal slippages also weighed on trade.

The Reserve Bank in its last meeting for 2017 kept the key interest rate unchanged but raised the inflation forecast for remainder of the current fiscal to 4.3-4.7 per cent.

The central bank also retained its economic growth outlook at 6.7 per cent as announced in the October policy.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,470.56 crore yesterday, as per provisional data.

Global crude prices slipped after a surprise rise in US inventories amid concerns about the outlook for economic growth.

Brent crude, an international benchmark, is trading at $62.22 a barrel in early Asian trade.

Meanwhile, domestic equity markets witnessed a big sell-off post RBI's policy outcome as investors expressed disappointment over the apex bank's decision to keep key policy rates unchanged as economic growth gathered pace and inflation quickened to a seven-month high.

The flagship Sensex tumbled over 205 points to end at 32,597.18 and Nifty dropped 74 points to 10,044.10.

The continued selloff in global bourses also dampened trading mood.

The Indian currency opened lower at 64.45 as compared to overnight level of 64.38 at the Interbank Foreign Exchange (forex) market here.

Maintaining its extreme bearish undertone, the local unit dropped to an intra-day low of 64.55 in mid afternoon deals, reacting to RBI policy outcome.

It finally settled the day at 64.52, showing a loss of 14 paise, or 0.22 per cent.

The rupee ended almost flat at 64.38 on Tuesday.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.4467 and for the euro at 76.2791.

On the global front, the US dollar edged broadly lower in a quiet market on Wednesday as concerns about a possible US government shutdown offset optimism about progress on tax reform legislation amid caution ahead of closely watched non-farm payrolls report.

The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 93.39 in early trade.

In cross-currency trades, the rupee advanced against the pound sterling to end at 86.31 from 86.33 per pound and rebounded against the euro to finish at 76.24 from 76.42 yesterday.

The home unit, however, dropped further against the Japanese yen to close at 57.51 per 100 yens as compared to 57.26 earlier.

Elsewhere, the pound sterling remained under pressure for the third day against the US dollar.

In forward market today, premium for dollar continued to rule weak owing to sustained receiving from exporters.

The benchmark six-month premium payable in May moved down to 137-139 paise to 139-141 paise and the far forward October 2018 contract also moved down to 275-277 paise from 278-280 paise yesterday.
RBI raises FY18 inflation forecast to 4.3-4.7%, rupee dips 14 paise to 64.5
 
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RISING SUN

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India's economy to be world's No.3 by 2028: forecast
India and key Association of Southeast Asian Nations members will become increasingly vital drivers of Asian growth over the coming decade, while China's economy slows to a pace comparable with the U.S., new projections from the Japan Center for Economic Research show.

India's gross domestic product is likely to top $6 trillion by 2028, overtaking Japan as the world's third-largest economy.



The center on Tuesday released its third Medium-Term Asian Economic Forecast for 2017 through 2030. The report, titled "Digital Asia 5.0 -- Innovation changes economic power relationship," puts the Philippines on track to log 6.4% real GDP growth in 2030, with India expected to post a 5.2% rate and Vietnam likely to record 5% expansion that year.

China, whose 6.7% growth rate in 2016 was nearly the same as India's, is projected to slow to 2.8% in 2030, despite high productivity.

The report gauges countries' growth prospects amid the spread of digital technology, using metrics including labor contributions, investment levels and productivity, which is affected by infrastructure quality and other factors. It offers forecasts for 2017 to 2030 for 11 Asian economies in total: China; India; the Newly Industrializing Economies (NIEs) of South Korea, Taiwan, Hong Kong and Singapore; and the ASEAN5, which covers Indonesia, Thailand, Malaysia, the Philippines and Vietnam. Japan and the U.S. are also included for the sake of comparison.

China's investment ratio to GDP is more than 40%, which stands out compared to its neighbors. The rate is expected to decline by 1 point per year and settle at the mid-20% level by 2030. Although the country's productivity growth rate is high, thanks to infrastructure and educational improvements, capital stock growth is slowing as it reins in production capacity and investment.

Conversely, while the Philippines' productivity growth rate is low, its capital stock is swelling by 6-8% a year. After the Philippines, India and Vietnam are also seeing brisk capital stock growth.



Among these three countries, India has a relatively large contribution of labor input to GDP growth. The number of people employed in India is increasing as the population expands, and the average length of education, in terms of years, is also increasing rapidly.

The ASEAN5's growth rate in 2030 is projected at 4.4% -- higher than the NIEs (1.9%), China, Japan (0.5%) and the U.S. (2.5%). This will make it a major growth engine next to India. In addition to the Philippines and Vietnam, Indonesia, Malaysia and Thailand are all projected to post growth rates of 3-4%, beating China.

Thailand is seeing high productivity growth but lower labor input than Indonesia and Malaysia. The number of employed Thai workers is on a downtrend, though extended education should pick up the slack.

As for the NIEs, Singapore's growth rate in 2030 is projected at 2.4%, with Taiwan headed for 2.2%, Hong Kong 1.7% and South Korea 1.6%.

Only Singapore is seeing positive labor input, though in Taiwan, productivity growth is helping to compensate for a decrease in employed workers.



As for Japan, which has the slowest growth rate of the group, labor input is negative and neither productivity nor the capital stock will improve much.

Shifting ranks

Based on the GDP growth outlook, the report also looks at how economies will stack up in terms of scale (nominal GDP using market dollar conversion) and prosperity (nominal GDP per capita).

Related stories

Though China's growth rate will decelerate toward 2030, its economic scale, which was equivalent to about 60% of the U.S. in 2016, will reach 80% by 2030. But like Japan in the mid-1990s, when it approached 70% of the U.S. economy, China will not get over the hump and actually surpass America.

China will remain the second-largest economy, well ahead of Japan. China's size advantage over its Asian neighbor will expand from 2.3 times in 2016 to 4.4 times. China is expected to continue accounting for about half of Asia's growth in the coming years.

But in the 2030s, India is likely to be the main driving force for economic growth in Asia. India, whose scale was equivalent to about 50% of Japan in 2016, will pull ahead in 2028 and be 1.2 times larger in 2030. This will make it the world's third-largest economy, up from seventh place now.

There are other looming shifts in economic scale: Indonesia is on track to almost catch South Korea in 2030; the Philippines should overtake Thailand in 2027 and Taiwan in 2029; Malaysia is likely to widen the gap with Singapore; and Vietnam should surpass the city-state in 2027.

In terms of both population and economic performance, Asia's center of gravity will shift from the east to the south -- namely India and ASEAN.

When it comes to prosperity, Malaysia is likely to join the ranks of high-income countries -- with nominal GDP per capita over $12,000 -- in 2023. China should reach that level two years later, but is unlikely to catch Malaysia by 2030. Thailand is likely to fall short of high-income status.

Indonesia is projected to become an upper middle-income country in 2019, with GDP per capita exceeding $4,000. The Philippines should make it in 2022, with Vietnam following in 2028. The Philippines would then overtake Indonesia in 2029.

Despite its high growth rate, India is unlikely to surge into the upper middle-income tier.

Singapore is likely to be the only Asian country to catch up with U.S. prosperity, pulling away from Hong Kong and Japan. Hong Kong should move further ahead of Japan, while South Korea gains ground from behind.

Japan Center for Economic Research economists Hiroyuki Motegi and Kazuya Manabe contributed to this article.
India's economy to be world's No.3 by 2028: forecast- Nikkei Asian Review
 
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RISING SUN

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Direct tax collections rise 14% to Rs 4.8 lakh crore in April-November period
Direct tax collections increased by 14.4 per cent to Rs 4.8 lakh crore during April-November this fiscal.

"The provisional figures of Direct Tax collections up to November, 2017 show that net collections are at Rs 4.8 lakh crore, which is 14.4 per cent higher than the net collections for the corresponding period of last year," Central Board of Direct Taxes said in a statement.

According to the statement, the net direct tax collections represent 49 per cent of the total Budget Estimates of direct taxes for 2017-18 (Rs 9.8 lakh crore).

The gross collections (before adjusting for refunds) have increased by 10.7 per cent to Rs 5.82 lakh crore during April-November, 2017.

Refunds amounting to Rs 1.02 lakh crore have been issued during April-November, 2017, it added.
Direct tax collections rise 14% to Rs 4.8 lakh crore in April-November period
 
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India reduces gap with China on prosperity: Study
The gap between China and India's prosperity+ has narrowed by four ranks since 2016 and to a quarter of what it was in 2012, according to the latest Legatum Prosperity Index, an annual ranking developed by the London-based Legatum Institute.

The upward trend in India's prosperity is significant in view of the fact that India registered lower GDP growth following demonetisation and implementation of the GST reform in 2017. India closed in on China+ through gains in business environment, economic quality and governance, the report said.

The Legatum Institute applauded India for improving governance by legislation "that increased the ability to challenge regulation in the legal system". The report attributed the gains in business environment and economic quality to improvement in intellectual property rights and massive rise in bank account holders.

The Prosperity Index determined by nine sub-indices — business environment, governance, education, health, safety and security, personal freedom, social capital and natural environment — is reviewed by a panel of academics from various disciplines and reputed schools like London School of Economics, Tufts University, Brookings Institution and University of California, San Diego.



In the 2017 Legatum Prosperity Index, based on 104 different variables analysed across 149 nations, India has significantly improved in the economic quality and education pillars. "More people are now satisfied with their standard of living and household incomes," the report said.

China, according to the report, has lost out "economically as people perceived greater barriers to trade and less encouragement of competition; and educationally through a falling primary school completion rate".

Overall, world prosperity increased in 2017 and now sits at its highest level in the last decade even as the world went through turbulence due to terrorism, war against Islamic State and displacement of massive number of people in West Asia and North Africa. The global prosperity is now 2.6% higher than in 2007. While prosperity improved around the world in 2017, no region grew as fast as Asia-Pacific.

The Asia-Pacific region, which includes China and India, registered greatest improvement in business environment and worst performance towards natural environment.
https://timesofindia.indiatimes.com...erity-study/articleshow/62031094.cms?from=mdr
 

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Trade Deficit Falls To $13.83 Billion In November
Merchandise exports for November rose 30.55 per cent from a year ago to $26.20 billion
Business | Thomson Reuters | Updated: December 15, 2017 18:45 IST


India's trade deficit was $14.02 billion in October

New Delhi: India's trade deficit narrowed to $13.83 billion from $14.02 billion in the previous month, government data showed on Friday. Merchandise exports for November rose 30.55 per cent from a year ago to $26.20 billion. Goods imports last month were $40.02 billion, a gain of 19.61 per cent from a year ago, data from the commerce and industry ministry showed.

At the same time, country's services exports grew by 8 per cent to $14.15 billion in October, the Reserve Bank (RBI) data showed today. They amounted to $13.11 billion in October last year. The imports of services increased as well, by 13.3 per cent, entailing an outgo of $8.7 billion in October, as per the RBI data on India's International Trade in Services. Import payments were at $7.68 billion in October 2016. Cumulatively, the services exports during the April-October period of the 2017-18 fiscal reached $94.48 billion. The imports stood at $55.44 billion. India is one of the major economies contributing to the world services export industry.

The services sector contributes to about 55 per cent in India's gross domestic product (GDP). The data published by the Reserve Bank of India is provisional and undergoes revision when the Balance of Payments (BoP) data is released on a quarterly basis.

Trade Deficit Falls To $13.83 Billion In November
 

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Indian shrimp exports set to double to $7 bn by 2022: Crisil
Country's shrimp exports is likely to double from USD 3.8 billion to USD 7 billion by 2022 due to strong demand, high quality, improved product mix and an increase in aquaculture area in several states, a report said.

"We expect shrimp exports from India to nearly double to USD 7 billion by 2022, driven by strong demand, high quality, improved product mix and an increase in aquaculture area in Andhra Pradesh, Gujarat, Odisha and West Bengal, even as our Asian rivals battle structural issues and rising domestic consumption," the rating agency Crisil said here.

The global shrimp industry is estimated at USD 30 billion and India's market share is estimated at 13 per cent by value terms.



India became the biggest exporter of shrimps with USD 3.8 billion exports during fiscal 2016. Indian exporters have in the past few years emphasised on lower-density shrimp farms to control diseases, while maintaining quality across the value chain. The use of resilient specific pathogen free (SPF) brood-stock imported from the United States has also helped the industry greatly.

Consequently, between fiscal 2012 and 2017, India's shrimp production doubled, and helped it grab the opportunity created by lower supplies from Asia, the report said.
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Since 2010, shrimp production in Asia has been severely affected by diseases, floods, labour issues and tightening environmental norms. Production in Vietnam has declined 40 per cent from peak levels because of shortage of fresh water, salinity intrusion and illegal shrimp farming.

Thailand, which was once the top exporter, is now ranked 5th after a 65 per cent plunge in production from peak levels.



During 2016, China's shrimp production also nosedived 60 per cent even as its consumption more than doubled, rendering it a marginal exporter. In addition, these countries also faced significant quality challenges.

Crisil said that the rival countries are now trying to get their house in order. Improving hatchery procedures is helping Thailand to recover slowly, but Vietnam is expected to take more time to sort out quality issues.

China is struggling with both structural issues and surging domestic demand. Consequently, India's primacy in shrimp exports is unlikely to be seriously challenged over the medium term.

Additionally, larger Indian exporters are expanding infrastructure to cater to increasing demand for value-added products from big global retail chains and restaurants. Therefore, we foresee value-added exports also rising from the current 15 per cent levels significantly.

"Strong volume growth and higher proportion of value-added products will bolster the operating profitability of several shrimp exporters. Additionally, healthy accretions and the absence of major debt-funded capital expenditure will reduce leverage and further strengthen their credit profiles," Crisil Ratings director Rahul Guha said.

Going forward, the movement of rupee value, protectionist tendencies and increasing stringency towards quality are among importer nations key monitorables, Crisil said.
Latest Business and Financial News : The Economic Times on mobile
 
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RISING SUN

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Ratnakar Dandekar’s India-made boats are sailing the world
A shipbuilding company has grown in size, and confidence, since it created its first ocean-faring boat
When the Indian Navy went looking for an indigenous sailboat manufacturer in 2008 they did not find anyone fitting that description. They floated a tender and precisely two boatbuilders from across the country responded.

One of them was the affable Ratnakar Dandekar, a boatbuilder from the Divar Island in Goa.

But Dandekar’s company, Aquarius Shipyard, had never constructed an ocean-faring sailboat. In fact, no Indian company had constructed an ocean-faring sailboat until that point. So when Dandekar got selected, on the basis of cost and track record, it meant a very steep learning curve.

Simple maxim

The challenges began the moment the wood arrived for the hull. “It had a humidity content of 64%, when the recommended figure was 12%. We were already four months into a one-year manufacturing contract and it made me very anxious. I simply stopped taking advice from people and began doing my own research,” Dandekar said.

He fitted dehumidifiers and heaters in a large godown and dried the wood. It took 30 days for the material to become suitable. Six months into the project, the outer skeleton of the boat — later named INSV Mhadei — was ready.

Also read: All-woman crew of INSV Mhadei sets sail for Mauritius

The next big hurdle was making the keel, literally the backbone of a sailboat. It involved pouring nine tonnes of lead into the keel. Dandekar travelled to a Vasai-based battery manufacturing company to see first-hand how lead is poured into batteries, a process that helped him with creating the keel.

Soon, Dandekar stopped visiting his home in Panjim and moved to Divar Island, close to his shipyard. When the 25-metre South African manufactured masts arrived by road from Mumbai, there was awe and anxiety in Dandekar’s shipyard. They had not seen such large masts before and Dandekar admitted that he had to learn the process of fixing the mast from scratch.



Ratnakar Dandekar on board the Thruriya | Photo Credit: Rahul Chandawarkar

Around this time, a fortuitous development changed his work life. The Indian Navy appointed noted Dutch boatbuilder Johan Vels as consultant to supervise the building of INSV Mhadei. Vels assumed the role of coach, mentor and guide.

He shared a simple maxim with Dandekar: “When you build a sailboat, it better be a good sailboat; otherwise why build it at all.” This changed Dandekar’s perspective. With Vels’ hand-holding, Team Aquarius built the boat in 14 months.

But there were the sceptics. When naval officer Capt. Dilip Donde (then Commander Donde) set sail on his path-breaking solo circumnavigation voyage on Mhadei in August 2009, Dandekar heard comments like, “This boat will not last more than three months in the ocean.”

Around the globe

That couldn’t have been further from the truth. Mhadei has circumnavigated the globe twice, first with Donde and soon after with Cdr. Abhilash Tomy, who became the first Indian to sail around the world without a single land halt in 2013.

Post Mhadei, Dandekar and his Aquarius Shipyard have grown in confidence. INSV Tarini was built in just 11 months and impressively, at the same cost as the Mhadei. Pointing to his laptop screen, he showed the system tracking Tarini’s daily movements.

A few weeks ago, the boat, with its six-women crew, sailed into the picturesque Lyttelton harbour in New Zealand as part of a seven-month global circumnavigation voyage.

A couple of months back, the ship builder constructed his third open-sea sailboat, Thuriya, for Tomy’s forthcoming global circumnavigation race in June 2018. And Dandekar — whose company has grown eightfold in size — is indeed ready to take on any boatbuilding challenge.

When he is not writing features and shooting pictures, the freelance journalist is busy training for his next triathlon.
Ratnakar Dandekar’s India-made boats are sailing the world
 

RISING SUN

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Foreign funds flock to Indian markets with over $30 bn inflows in 2017
Foreign investors are flocking to the Indian capital markets in a big way with a net inflow of over USD 30 billion (more than Rs 2 lakh crore) of so-called 'hot money' in 2017, with equities alone getting over USD 8 billion — an amount bigger than the cumulative investment of the previous two years.

As the year draws to a close, the Indian stock market seems to have regained its status as one of the most favoured destinations for foreign portfolio investors (FPIs), as they have taken their net investment position in equities so far in 2017 to Rs 55,000 crore — the highest in three years after Rs 20,500 crore in 2016 and Rs 17,800 crore in 2015.

However, this remains a far cry from the heady levels seen earlier — Rs 97,000 crore in 2014, Rs 1.13 lakh crore in 2013 and Rs 1.28 lakh crore in 2012.

However, a sharper turnaround was seen in 2017 in terms of FPI inflows into debt markets where the net investments have soared to a staggering Rs 1.5 lakh crore (USD 23 billion) after a net outflow of about Rs 43,600 crore in 2016.

Marketmen, however, believe that this kind of FPI flows may not continue in 2018 as the withdrawal of liquidity and rate hikes in developed economies pick up. Also, the inflation cycle is likely to turn following increase in commodity prices and recovery in consumer demand.

The overall net inflow has made 2017 as the best period for Indian capital markets (equity and debt) in terms of overseas investment in three years with a combined net inflow of over Rs 2 lakh crore (more than USD 30 billion).

The higher inflow in 2017 compared to the previous two years could be attributed to an expectation of a pickup in the domestic economic growth, experts said.

"Although demonetisation and Goods and Services Tax (GST) implementation has met with initial short-term hurdles and impacted economic growth, it reinforced conviction in the government's resolve in bringing economic reforms and so has the decision to recapitalise public-sector banks," Himanshu Srivastava, senior analyst manager research at Morningstar India said.

Further, domestic markets, having witnessed a relatively subdued growth in 2015 and 2016, were well placed from valuation perspective compared to other markets, which also turned the attention of foreign investors towards India.

Besides, euphoric sentiment among corporates on account of improvement in 'ease of doing business' ranking coupled with the government showing commitment in speeding up development and economic reforms before going for elections in 2019 bode well for foreign investors' confidence, said Dinesh Rohira, founder and chief executive at 5nance.com.

This year's inflow has pushed FPIs' cumulative net investment in the Indian equity market, since being allowed over two decades ago in November 1992, to Rs 8.75 lakh crore.

The cumulative figure for debt securities has also grown to Rs 4.2 lakh crore — taking the total for both debt and equities to Rs 13 lakh crore (USD 252 billion).

The capital poured in by FPIs is often called 'hot money' because of its unpredictability, but these overseas entities have still been among the most important drivers of Indian stock markets.

In terms of sectors, banking, housing finance and auto have seen consistent FPI inflows.

Moreover, PSU bank recapitalisation by the government has further boosted investor confidence in the financial services sector, Sharekhan AVP Research Lalitabh Shrivastawa said.

It was not a good year to start with from the perspective of foreign flows in equities. FPIs, which were on a selling spree in the last three months of 2016, extended their sell stance to January 2017 as well.

However, things improved in February this year, which could be largely attributed to the Union Budget that provided much-needed clarity to well-regulated FPIs on capital gains taxation and tax on the indirect transfer.

Also, results of the five state elections reinstated such investors' conviction in the government, as they indicated the greater certainty of reform implementation and growth returning in the Indian economy.

This has also helped March becoming the best month of 2017 when FPIs pumped in nearly Rs 31,000 crore. Thereafter, such inflow continued till July but the pace of capital infusion slowed down.

FPIs did take a break from buying and turned set sellers in August and September, pulling out over Rs 24,000 crore during that period. This could be attributed to risk aversion due to increased geopolitical tension arising on the back of stiff stand-off between the US and North Korea, below expectation growth in the domestic economy and profit booking.

Overseas investors reversed the selling trend in October and positive momentum continued in November when FPIs made their second highest monthly net flows for 2017 after March.

This inflow was boosted by government's decision to recapitalise PSU banks, which is expected to enhance lending and propel economic growth, coupled with news about India faring well in the World Bank's ease of doing business index.

However, FPIs have again started selling in December as rising crude prices and widening fiscal deficit prompted them to adopt a cautious stance.

With regard to the debt market, FPIs started the year on a negative note but infused money in February and their bullish stance has largely continued since then.

"In the last two years, the real rate had been relatively high in India which coupled with the stable currency attracted foreigners into debt markets," Quantum MF Fund Manager-Fixed Income Pankaj Pathak said.

Going ahead, Pathak believes 2018 would not be the same when it comes to investment by FPIs as "withdrawal of liquidity and rate hikes in developed economies pick up."

"Given 2019 would not be far, the expectation of some other economic reforms from the government would be high. But the major for FPIs going ahead would be to see growth coming back in the domestic economy, which has not yet picked up contrary to the expectation," Srivastava said.

"On a more short-term note, Gujarat election results would also be crucial which would indicate the popularity of the current government and prospects of future economic reforms," he added.
Foreign funds flock to Indian markets with over $30 bn inflows in 2017
 

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Ratnakar Dandekar’s India-made boats are sailing the world
A shipbuilding company has grown in size, and confidence, since it created its first ocean-faring boat
When the Indian Navy went looking for an indigenous sailboat manufacturer in 2008 they did not find anyone fitting that description. They floated a tender and precisely two boatbuilders from across the country responded.

One of them was the affable Ratnakar Dandekar, a boatbuilder from the Divar Island in Goa.

But Dandekar’s company, Aquarius Shipyard, had never constructed an ocean-faring sailboat. In fact, no Indian company had constructed an ocean-faring sailboat until that point. So when Dandekar got selected, on the basis of cost and track record, it meant a very steep learning curve.

Simple maxim

The challenges began the moment the wood arrived for the hull. “It had a humidity content of 64%, when the recommended figure was 12%. We were already four months into a one-year manufacturing contract and it made me very anxious. I simply stopped taking advice from people and began doing my own research,” Dandekar said.

He fitted dehumidifiers and heaters in a large godown and dried the wood. It took 30 days for the material to become suitable. Six months into the project, the outer skeleton of the boat — later named INSV Mhadei — was ready.

Also read: All-woman crew of INSV Mhadei sets sail for Mauritius

The next big hurdle was making the keel, literally the backbone of a sailboat. It involved pouring nine tonnes of lead into the keel. Dandekar travelled to a Vasai-based battery manufacturing company to see first-hand how lead is poured into batteries, a process that helped him with creating the keel.

Soon, Dandekar stopped visiting his home in Panjim and moved to Divar Island, close to his shipyard. When the 25-metre South African manufactured masts arrived by road from Mumbai, there was awe and anxiety in Dandekar’s shipyard. They had not seen such large masts before and Dandekar admitted that he had to learn the process of fixing the mast from scratch.



Ratnakar Dandekar on board the Thruriya | Photo Credit: Rahul Chandawarkar

Around this time, a fortuitous development changed his work life. The Indian Navy appointed noted Dutch boatbuilder Johan Vels as consultant to supervise the building of INSV Mhadei. Vels assumed the role of coach, mentor and guide.

He shared a simple maxim with Dandekar: “When you build a sailboat, it better be a good sailboat; otherwise why build it at all.” This changed Dandekar’s perspective. With Vels’ hand-holding, Team Aquarius built the boat in 14 months.

But there were the sceptics. When naval officer Capt. Dilip Donde (then Commander Donde) set sail on his path-breaking solo circumnavigation voyage on Mhadei in August 2009, Dandekar heard comments like, “This boat will not last more than three months in the ocean.”

Around the globe

That couldn’t have been further from the truth. Mhadei has circumnavigated the globe twice, first with Donde and soon after with Cdr. Abhilash Tomy, who became the first Indian to sail around the world without a single land halt in 2013.

Post Mhadei, Dandekar and his Aquarius Shipyard have grown in confidence. INSV Tarini was built in just 11 months and impressively, at the same cost as the Mhadei. Pointing to his laptop screen, he showed the system tracking Tarini’s daily movements.

A few weeks ago, the boat, with its six-women crew, sailed into the picturesque Lyttelton harbour in New Zealand as part of a seven-month global circumnavigation voyage.

A couple of months back, the ship builder constructed his third open-sea sailboat, Thuriya, for Tomy’s forthcoming global circumnavigation race in June 2018. And Dandekar — whose company has grown eightfold in size — is indeed ready to take on any boatbuilding challenge.

When he is not writing features and shooting pictures, the freelance journalist is busy training for his next triathlon.
Ratnakar Dandekar’s India-made boats are sailing the world
Very impressive portfolio. @Amal @Abingdonboy @Parthu

Aquarius Fibreglas India | Fibreglass Boat Manufacturers India | Rescue Boats India | Sailing Yacht Builders India
 

Butter Chicken

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Dec 2, 2017
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Sterlite Power bags $800 mn transmission project in Brazil

MUMBAI: Sterlite Power has bagged a transmission projects worth $800 million, or about Rs 5,138 crore, in Brazil, the largest lot offered in an auction by the government there.

The bids saw 47 companies from across the world participating, of which four bagged the projects.

Sterlite bagged the license for the largest project on offer, which entails building and operating around 1,800-km line running through Brazil's northern states of Para and Tocantins.
 

Pundrick

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Dec 2, 2017
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We are not diversifying our export basket. Electronics manufacturing needs special attention here we are missing the train with everyday passing.

The recently enacted Company's Act will be catalyst but we'll have to wait for sometime now, also the increase of excise duty on electronic duty is welcome move but little late as well.
 

Butter Chicken

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Dec 2, 2017
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India-Russia Trade Up 19 percent, Tariff Elimination on the Way

Following meetings with Indian trade officials in the capital Delhi, Russian Deputy Economic Development Minister Alexy Gruzdev stated that the two countries have approved the creation of a mechanism that will eliminate existing limits and barriers in bilateral trade. Gruzdev was summing up the conclusions of the meeting of the co-chairs of the Indo-Russian intergovernmental commission on trade, economic, scientific, technological and cultural cooperation, which was held in New Delhi on Saturday.

Gruzdev stated, “All in all, one of the priorities of our further dialogue on the intergovernmental level should become the enlargement of trade and economic co-operation. The creation of a mechanism for the identification, analysis and elimination of barriers in our bilateral trade has been approved”.

Gruzdev also said that the bilateral trade between Russia and India amounted to US $7.3 billion in the first 10 months of the year, which is an increase of 19 percent compared to the same period in 2016.

This trend is likely to continue with even more spectacular results. India has applied for a Free Trade Agreement with the Russia-backed Eurasian Economic Union, which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.
 

Ashwin

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Govt signals fiscal slippage in 2017-18
Additional Rs50,000 government borrowing programme and deteriorating GST collections are likely to take their toll on fiscal deficit target of 3.2% for 2017-18

New Delhi/Mumbai: A day after the goods and services tax (GST) data for December showed a slide in revenue receipts, the government on Wednesday signalled that it may breach its fiscal deficit target of 3.2% of gross domestic product (GDP) by expanding its market borrowing programme for this financial year by Rs50,000 crore.

This may force finance minister Arun Jaitley to recalibrate his fiscal consolidation roadmap of achieving a fiscal deficit of 3% of GDP by 2018-19.

In the budget, the government had pegged its aggregate gross market borrowing at Rs5.8 trillion. With Wednesday’s revision, the number now stands at Rs6.3 trillion.

Madan Sabnavis, chief economist at Care Ratings, said the government is preparing the market for a fiscal slippage. “Though higher disinvestment accruals and dividend receipts from public sector units may act as mitigating factors this year, fiscal deficit may still go up by 30 basis points to 3.5% as a result of the Rs50,000 crore additional borrowing,” he added. One basis point is one-hundredth of a percentage point.

The change in the borrowing schedule comes weeks after Moody’s Investors Service upgraded India’s sovereign rating for the first time in 14 years.

The finance ministry said in a statement that the government will not be raising any net additional borrowing “between now and March 2018” as it plans to trim its short-term borrowing programme.

“With revised borrowing, for fiscal 2018, issuance of dated securities will increase by Rs50,000 crore. But the impact on fiscal deficit could be around Rs25,000-30,000 crore because part of it is offset by lower T-bills issuance. Therefore, fiscal deficit could be higher by 20 basis points only due to higher borrowing,” said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India.

Aditi Nayar, principal economist at ICRA Ltd, said the government’s proposal does not rule out a fiscal slippage in the current financial year.

“A fiscal slippage, if any, may get funded through higher-than-budgeted small savings collections,” she added. Nayar expects a mild fiscal slippage in 2017-18.

Separately, the government on Wednesday also cut the interest rate on small savings schemes such as Public Provident Fund, Kisan Vikas Patra and Sukanya Samriddhi, by 0.2 percentage point for the January-March quarter.

GST receipts are a cause for concern. Total GST collection, including taxes on inter-state supplies and the cess on certain items, added up to Rs80,808 crore in December. This was a 14% drop from receipts in August, the first month of tax collection and return filing under the new indirect tax system that kicked in on 1 July.

The government has so far managed to raise about three-fourths of the targeted Rs72,000 crore through disinvestment, according to information available from the finance ministry.

Net direct tax receipts, however, grew 14.4% to Rs4.8 trillion in the April-November period from a year ago. Still, faster economic growth in the latter half of the current financial year could give fresh impetus to revenue collection.

N.R. Bhanumurthy, professor of economics at the National Institute of Public Finance and Policy, said the 3.2% fiscal deficit target was estimated in a business-as-usual scenario.

“On the back of two policy shocks (demonetization and GST), we should give the government some leeway on the fiscal front. It is difficult to estimate the impact of additional borrowing on fiscal deficit since revenue mobilization is currently in an uncertain territory,” he added.

In April-October, the fiscal deficit scaled 96.1% of the fiscal deficit targeted for the full year against 79.3% during the same period a year ago due to higher revenue expenditure, according to data from the Controller General of Accounts.

“This news is negative for the bond market. Since the duration of a dated bond is higher than a T-bill, such bonds carry higher interest rate risks,” said Gaurav Kapur, chief economist with IndusInd Bank Ltd.

Bond yields, which have been rising for the past few sessions on worries of a fiscal slippage, may rise further owing to the supply glut. Bond prices and yields move in opposite direction.

In morning trade on Wednesday, the yield on the 10-year benchmark bond had hit a high of 7.31%—a level last seen on 12 July 2016. However, it erased some losses and closed at 7.222%, compared with its previous close of 7.275%.
 

Bali78

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Dec 26, 2017
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In a first, e-goods made in India pull ahead of imports - Times of India
NEW DELHI: The Centre's efforts to promote local manufacturing through the 'Make in India' programme seem to be reaping dividends with the domestic production of electronics, one of the key reasons behind foreign currency spends after oil, moving ahead of imports for the first time in 2016-17.
Official sources told TOI domestic electronics production in 2016-17 stood at $49.5 billion, higher than the near $43 billion spent on imports. The government has taken a number of steps to boost manufacturing of electronics in the country, particularly of smartphones, appliances, set-top boxes and televisions. A majority of imports in many of these areas are coming from neighbouring China, something India is now trying to counter through fiscal incentives and other measures.

The local benefits were reinforced recently when the customs duty on import of a variety of products was raised earlier this month. This was for products such as mobile phones, set-top boxes, microwave ovens, and LED lamps.

Many units have also availed benefits over the past two years under the Modified Special Incentive Package Scheme (M-SIPS) and the electronics manufacturing clusters (EMC) programme.

The growth in local manufacturing has been strong over the past three financial years just as imports are moderating. In 2015-16, the local production was $37.4 billion against imports of $41 billion, while in 2014-15, electronics goods worth around $30 billion were made in India against $37.5 billion sourced from overseas.

The plan of the government is to push towards a massive spurt in digital activities and achieve a turnover of $1 trillion by 2022. Manufacturing of electronics is seen as a major contributor towards meeting this target.

Information technology minister Ravi Shankar Prasad has already held two rounds of meetings with top CEOs of the IT and electronics industry and those linked to the promotion of digital services.

"The policy initiatives of the Modi government have resulted in accelerating local manufacturing in electronics. We are confident that the momentum will be sustained over the coming years," Prasad told TOI. "The plan is to ensure that we make in India not only to meet the domestic requirement, but also to cater to the world markets."

The overall demand for electronics (sourced locally and through imports) in 2016-17 has been to the tune of $86.4 billion ($60.5 billion in 2014-15), and the government expects this to more than double by 2020 and stay between $171 billion and $228 billion. "The overall projection by 2023-24 is a whopping $400 billion," an official source said.

What is heartening for the government in this growth is the impetus it has provided to local production and jobs. While 6 crore handsets were manufactured in the country in 2014-15, this has grown nearly three-fold in just two years to 17.5 crore in 2016-17. The value of phones made in India has moved up from Rs 19,000 crore in 2014-15 to as much as Rs 90,000 crore in 2016-17.

A similar spurt has been seen in the production of televisions. "The production of LCD/LED TVs grew from nearly 90 lakh units in 2014-15 to 1.5 crore units in 2016-17. In terms of turnover, LED production grew from Rs 2,172 crore in 2014-15 to over Rs 7,100 crore in 2016-17," the source said.


The duty incentives for local manufacturing have already prompted a variety of companies to manufacture in India, or source from contract suppliers such as Taiwanese Foxconn and Wistron (which are investing/expanding in India) or home-grown ones like Dixon and Optiemus.

Those now sourcing locally include Chinese Xiaomi, Oppo, Vivo, Huawei and Gionee. Even American electronics giant Apple has started a modest assembly operation in Bengaluru. In the television arena, companies such as Sony and Panasonic are sourcing in India.
 

RISING SUN

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India ranks 5th in list of countries with highest NPA levels
The only countries ranked higher than India on the list are Greece, Italy, Portugal, and Ireland, all of who have been rattled by debt crises in recent years.




India has the highest level of non-performing assets (NPA) among BRICS countries and is ranked fifth on a list of countries with the highest levels of NPAs, a report by CARE Ratings revealed.

The only countries ranked higher than India on the list are Greece, Italy, Portugal, and Ireland. All these countries, along with Spain, are commonly referred to as PIIGS, and have been victims of sovereign debt crises in recent years.

Spain is the only PIIGS country ranked lower than India on the list, with an NPA ratio of 5.28 percent. At 9.85 percent, India’s NPA ratio is over 400 basis points higher.

In its report, CARE Ratings said that ‘the seriousness of the NPA problem can be gauged by the absolute level of impaired assets in the system. Ever since the RBI had spoken of asset quality recognition (AQR) in 2015, there was an increase in the pace of recognizing these assets’.

The rating agency also said that cleaning up bad loans from the system would be completed by March 2018 and any further rise in NPAs after that could be stemming from factors other than the ones identified by banks.

The report classified countries into four categories – those having very low levels of NPAs, those with low levels of NPAs, those with medium levels of NPAs and countries with high levels of NPAs.

Australia, Canada, Hong Kong, Republic of Korea and the United Kingdom were all found to have an NPA ratio of less than 1 percent and were classified in the first category.

The second category was largely made up of major economies from around the world like China, Germany, Japan, and the USA, all of who have NPA ratios of less than 2 percent.

The third category consisted of a few developed European countries but was largely constituted of fast-growing developing countries like Brazil, Indonesia, Thailand, South Africa and Turkey.
India ranks 5th in list of countries with highest NPA levels