INDIAN ECONOMY: OVERVIEW, GROWTH & DEVELOPMENT
Procter & gamble announces newest commitment to gender equality
Procter & Gamble (P&G) announced a new commitment around a number of initiatives that will promote gender equality across the Indian Subcontinent, Middle East and Africa (IMEA) region. The declaration, which was made by P&G’s IMEA and APAC President, Magesvaran Suranjan during the company’s inaugural #WeSeeEqual Summit in partnership with UN Women in Mumbai, is part of the company’s citizenship focus on being a Force for Good and Force for Growth.
“Gender equality is a core belief at P&G. Creating a world free of bias with equal representation and equal voice for everyone is both the right thing to do and the right business choice,” explained Magesvaran Suranjan. “We also want to spark conversations and change mindsets as champions for the cause of gender equality across the region. We will leverage the full strengths of our business and operations, and our advertising voice to tackle gender bias and encourage women’s economic empowerment.”
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Concern as WPI inflation touches 10-month low of 2.76 pc
Wholesale Price Index inflation in January touched a 10-month low of 2.76 per cent, a sharp 100 points lower than consensus estimates. But, according to SBI Research, the decline may not be just a data aberration but a cause for serious concern.
More so because manufactured products, imported core and domestic core, all declined in unpredictable fashion, possibly due to slower global growth and in large metal-consuming geographies like Europe, US and China and due to dumping of food products in India.
Going further, a slowdown in China’s real estate sector and the weakening auto sector due to a trade war, besides the impact of Brexit on Japanese auto makers, who will likely pull out of the UK, will add more stress to base metals.
“We are thus convinced about a monetary easing by RBI in April and will not be surprised if the rate cut is of larger magnitude,” reasoned Dr Sowmya Kanti Ghosh, Chief Economic Advisor, SBI Group.
Manufactured products inflation, which has a weightage of 64.23 per cent in the WPI, declined to 2.61 per cent in January, from 2.96 per cent in the same month last year. Fuel and power inflation declined to 1.85 per cent. On the other hand, core inflation (55 per cent weight) stood at a 15-month low of 2.89 per cent as against 4.25 per cent in the previous month. Within core inflation, manufacture of basic metals, chemicals and chemical products, machinery, motor vehicle and textiles, carrying a weight of 30 per cent, too fell 9 per cent.
Specifically, imported core inflation, with a weightage of 34.6 per cent, plays an equally important role as against domestic core, which has a weightage of 20.4 per cent. Imported core inflation registered a decline of 1.71 per cent from 4.4 per cent in December 2018, to 2.4 per cent in January 2019.
According to SBI Research, the third quarter may mark the start of a slide at Indian steel companies, and its full impact would be reflected in the current quarter.
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Lenders waiting for details of SBI’S jet airways restructuring plan
Cash-strapped Jet Airways and its lead lender SBI are frantically piecing together a restructuring, resolution and revival plan, but the airline’s 25 other lenders are still awaiting details.
Three public sector banks this newspaper spoke to confirmed that only an outline of the proposed package had been shared with the banking consortium so far, even as Jet Airways prepares to seek shareholder approval on Thursday.
The deal will be final only after promoters firmly commit to infusing equity, and after legal, financial and corporate due diligence.
“We don’t know yet if it’s a restructuring package or something beyond restructuring, or whether it’s going to be substantially different. These aspects will be clear only when we get the final proposal for our in-principal approval,” a senior banker said.
According to another lender, the banks are awaiting a ringside view of equity infusion by the airline
’s promoter, Naresh Goyal, whether the proposed plan secures Jet’s cash flow, and the terms being set regarding rights of first refusal.
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GST council meet on Feb 24 to decide on real estate, lottery rates
The GST Council, which met on Wednesday through videoconferencing, decided to defer the decision on rates related to the real estate industry and lotteries to February 24, when the Council members will meet in person. The members wanted the decision to be taken after a physical meeting.
The virtual meeting on Wednesday, however, decided to extend the deadline for summary sales return—GSTR-3B— for January by two days to February 22.
“Considering the speed at which returns are getting filed, thousands of returns being filed every hour, the suggestion before the GST Council was to extend the deadline by two days for all states; and since some areas are facing disturbance, for Jammu and Kashmir, it be extended till February 28,” Finance Minister Arun Jaitley said.
While the 33rd GST Council meeting decided to defer the decision on real estate to Sunday, the lottery issue was not discussed, Jaitley said. Wednesday’s meeting on the issue remained inconclusive as ministers from Delhi and Kerala demanded a physical meeting, while Punjab brought forth the issue of cost of land being included for GST on real estate.
Currently, a GST of 12 per cent with input tax credit is charged on projects under construction, and the ministerial panel is learnt to have recommended bringing it down to 5 per cent without ITC. It has also favoured rates for affordable housing to be brought down to 3 per cent from 8 per cent at present.
The ministerial group on real estate is headed by Gujarat Deputy Chief Minister Nitin Patel.
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India woos investors in defence manufacturing as Aero India begins
India on Wednesday wooed investors to capitalise on the ecosystem prevailing in the aerospace and other sectors and pitched for joint venture partnerships, saying it offered a big market in Defence manufacturing.
Defence Minister Nirmala Sitharaman made the pitch for investors seeking to give a big push for the ‘Make in India’ initiative at Asia’s premier air show which began at the Yelahanka air base, north of Bengaluru.
Eyeing India’s multi-billion dollar market, global defence majors are showcasing technologies and products including helicopters, fighter jets and transport aircraft at the five-day mega event. The event began on a sombre note, a day after two aircraft of Surya Kiran, Indian Air Force (IAF)’s aerobatics team, collided mid-air, killing a pilot and injuring two others who ejected to safety.
Also at the air show extravaganza, American Defence giant Lockheed Martin unveiled the F-21 multi-role fighter jet for India, to be produced locally, as it eyed a multi-billion dollar military order. “Hundred percent FDI is possible now in the defence sector, so I invite all investors to consider to capitalise on the ecosystem which prevails for Aerospace and other segments which can help to manufacture in India,” Sitharaman said in her inaugural remarks.
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India to remain fastest growing major economy in next decade
India will remain the fastest growing major economy, much ahead of China, in the next decade 2019-28, according to a global economic research report.
The report prepared by Oxford Economics, which is engaged in global forecasting and quantitative analysis, India is likely to achieve an average growth of 6.5 percent in 2019-28, the highest among the emerging economies.
India will be followed by the Philippines (5.3 percent) and Indonesia (5.1 percent), the report titled ‘Emerging Markets Sustained Growth in EMs Calls for Thrift and Innovation’ said. China has been assigned the fourth slot with an average growth rate of 5.1 percent for the next decade (2019-28). The report is authored by eminent economist Louis Kuijs.
It pointed out that emerging markets (EMs) with sustained fast growth are distinguished by rapid capital accumulation – mainly domestically financed – and robust total factor productivity (TFP) growth. “To achieve sustained rapid growth in the coming decades, EMs will need solid saving,” the report said.
According to the report, to avoid the middle-income trap (MIT), the upper-middle-income countries (MICs) in particular need to make progress in terms of ‘mastering technology’, raising the involvement of firms and/or people in innovation and R&D. “Major saving is required for sustained rapid growth in emerging economies,” it said, adding that TFP growth driven by innovation and R&D, especially in middle-income countries.
India is projected to grow at 7.5 percent in 2019 and 7.7 percent in 2020, more than China’s estimated growth of 6.2 percent in these two years, according to the International Monetary Fund’s recent World Economy Outlook update.
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Rafale jets steal the show at Aero India 2019
Political row hit Rafale jet was the cynosure of all eyes as the breathtaking display of manoeuvres by military aircraft and the aerobatic team cast a spell at Aero India, Asia’s premier air show on Wednesday.
The city’s skies dazzled with somersaults and stunts by the metal birds, which also paid tributes to the Surya Kiran aircraft pilot killed in a mishap during rehearsal on Tuesday. The might of the Rafale jet was in full flow as it roared into the skies at the Yelahanka air base, the venue for the event, giving a dazzling display with breathtaking manoeuvres.
The Rafale aircraft flew at low speed to pay tribute to Wing Commander Sahil Gandhi who died in a mid-air collision between two aircraft of IAF’s aerobatics team ‘Surya Kiran” during rehearsal on Tuesday.
Three Rafale jets have landed in Bengaluru for Aero India- two for flying and one on static display. Rafale has been participating in Aero India shows since 2011. India has signed an Inter-Government Agreement with France to purchase 36 Rafales– to form two squadrons.
Congress president Rahul Gandhi has been carrying on a sustained campaign against the Modi government on Rafale, accusing it of favouring Anil Ambani’s firm as an offset partner and saying it was crony capitalism.
The Comptroller and Auditor General (CAG) report tabled in Parliament recently revealed that the Rafale deal negotiated by the NDA government to procure 36 fighter jets was 2.86 percent cheaper than the UPA’s 2007 offer.
The Jaguar, Tejas and Sukhoi 30 aircraft flew in the ‘missing man’ (aerial salute) formation in honour of Gandhi. Army Chief Gen Bipin Rawat, Air Force Chief BS Dhanoa and Navy Chief Admiral Sunil Lanba were also present.
The biennial edition of International Aerospace and Defence Exhibition – Aero India 2019 was inaugurated by Defence Minister Nirmala Sitharaman in the presence of Karnataka Chief Minister HD Kumaraswamy.