Banikinkar Pattanayak

Articles By Banikinkar Pattanayak

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Private investment to pick up: CEA Krishnamurthy V Subramanian

The CIC rose just 4.9% until November 12 this fiscal, compared with 13.5% and 6.2% in the corresponding periods of FY21 and FY20, respectively.

Chief economic adviser (CEA) Krishnamurthy V Subramanian

Govt seeks greater industry role in boosting exports

Commerce and industry minister Piyush Goyal, who has already held scores of meetings with various state-run as well as industry bodies, has also proposed to reduce the compliance burden of India Inc, which will help boost exp

Having hit a monthly record of $35.7 billion in October, merchandise exports dropped below the $30-billion mark in November. Exports still registered a 26.5% rise in November from a year before but it was the lowest growth rate this fiscal.

Much at stake for India as WTO talks lose steam

However, in the absence of a strict time-line for reconvening the ministerial, which typically brings in the urgency to resolve outstanding issues, developing countries will find it difficult to make substantial headway in ne

Following persistent attack by the US on countries, including China and India, for “self -designating” themselves as developing nations at the WTO to enjoy special and differential trade benefits, New Delhi has rooted for a policy of voluntary forgoing of such a status.

People hoarded less cash during second Covid wave

According to the RBI data, the CIC rose just 4.9% until November 12 this fiscal, compared with 13.5% and 6.2% in the corresponding periods of FY21 and FY20, respectively.

Nevertheless, cash remains the king. As of November 12, the CIC made up for 13.4% of the budgetted FY22 nominal GDP, way above the pre-demonetisation level (November 4, 2016) level of 11.7%. Of course, the ratio this fiscal is lower than 14.5% at the end of FY21. This reinforces the fear that five years after the government announced demonetisation to curb the black money menace, cash still rules.

No legal tender status for private cryptos but innovation possible

Cryptocurrencies typically operate independently of a central bank. These are essentially digital currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds.

On November 18, Modi said that it is important that all democratic nations work together to ensure that cryptocurrency doesn’t end up in wrong hands.

USTR visit: India, US to focus on market access, revival of key trade meet

US trade representative Katherine Tai’s two-day visit starting November 22, her first as the chief trade negotiator of the US, will also set the stage for the revival of the annual bilateral trade policy forum meeting, whic

The India-US TPF, established in 2005, is a forum to resolve trade and investment issues between the two countries. It has five focus groups: agriculture, investment, innovation and creativity (intellectual property rights), services, and tariff and non-tariff barriers.

Fishery subsidy: India to seek fairer deal at WTO

“Naturally, the standards are set by the advanced fishing countries to suit their purpose. So, we think the text is not a balanced or fair text,” said one of the sources.

Given that a consensus on the ways to curb fishery subsidy remains elusive just days before the ministerial starts on November 30, an agreement at the meeting of the trade ministers seems unlikely unless key groups settle on a middle path.

WTO Ministerial Meet: Fishery subsidy talks may flounder on deep divide

India’s annual fishery subsidy is only about Rs 770 crore, granted mostly on things like fuel and boats, according to an official source.

India believes that big subsidisers (advanced fishing nations) must take greater responsibility in scrapping their dole-outs and reducing fishing capacities, in sync with the principles of “polluter pays” and “common but differentiated responsibilities”.

Telecom shines: Electronics exports surge, may hit record $15 billion in FY22

However, in the first half of the current fiscal, such exports surged 59% to $6.2 billion. Overseas despatches are expected to spike in the build-up to the Christmas season.

Mobile phones were the biggest driver of telecom product exports, having risen 160% until August this fiscal to $1.4 billion, thanks to a production-linked incentive scheme announced last year.

Monetisation scheme: Easier norms soon to woo gold depositors

These are among the proposals being considered by the finance ministry before it finalises the next set of changes to the monetisation scheme to draw more people to park their idle gold holding with banks and discourage impor

Similarly, people wishing to deposit gold in banks up to 50-100 grams each may not be asked any question by the taxman.

India-UAE FTA talks: Duty relief likely for job-intensive sectors

Both the sides started formal negotiations for a comprehensive economic partnership agreement (CEPA), as the FTA is formally called, in New Delhi from September 23. They aim to wrap up talks by December and sign a deal by Mar

The FTA is expected to raise bilateral merchandise trade to $100 billion in five years following the signing of the pact from about $43 billion in FY21. It also aims to more than double bilateral services trade to $15 billion during this period.

National Asset Reconstruction Company: First set of NPA transfer to bad bank likely by January

The plan to set up NARCL comes at an opportune time. Gross NPA ratio of banks may surge to 9.8% by March 2022, under a baseline scenario, from 7.48% in March 2021, driven partly by the Covid crisis, according to the Reserve B

Last month, the Cabinet approved a proposal to offer sovereign guarantee on the security receipts (SRs) issued by the NARCL, which is estimated to cost the exchequer Rs 30,600 crore over five years. In the first phase, fully-provisioned toxic assets will be transferred.

WTO ministerial: Fishery subsidy, patent waiver to fight Covid likely to top agenda

The 12th ministerial conference of the WTO will be held in Geneva from November 30 to December 3.

Fishery subsidy

Meet festive demand, lend liberally, PSBs told

The finance ministry has also asked ministries of agriculture, labour, housing, health and rural development to help bolster the number of beneficiaries for insurance as well as pension outreach as well.


Textile sector: Govt mulls major overhaul of ATUFS to spur investment

The TUFS, the earliest version of the ATUFS, was introduced in 1999 to make available funds to the textile industry for upgrading technology at existing units as well as for setting up new ones with state-of-the-art facilitie

Insolvency Code: Govt mulls next set of changes to insolvency and bankruptcy code

While the average recovery from toxic assets was to the tune of 39% of creditors’ claims until March 2021, in some cases, the haircuts were as high as 95%.

Court Justice

Government securities listing: FTSE Russell to offer India update in March 2022

David Sol, managing director (Index Policy) at FTSE Russell, said: “FTSE Russell is...encouraged by India’s progress towards inclusion in mainstream local currency emerging markets indices such as the FTSE EMGBI.”

While elevated input costs could rein in profit margins, better momentum in revenues in the coming quarters could soften the blow.

‘Equalisation’ levy: SEZs likely to get tax relief for domestic tariff area sales

SEZs sold manufactured goods worth Rs 50,033 crore in the domestic market last fiscal, down from Rs 53,831 crore in FY20. Their domestic sales would soar substantially if the tax incidence drops, industry executives reckon.

Moreover, the corporation tax has been trimmed to as low as 15% for setting up new manufacturing units anywhere. So, without fresh incentives, SEZs won’t be able to draw many companies now, they say.

Insolvency resolution: IBBI to oversee complaints against CoC

If the IBBI finds evidence of criminal irregularities, it will approach the special courts, set up under the provisions of the Companies Act, 2013, to punish the guilty, said the sources.

The mechanism will ensure the CoC members abide by the rules and the stressed asset resolution process remains transparent.

Trade winds: High-stakes EU & UK free trade agreements make wish lists longer

Ministries and industry bodies ready list of demands as formal talks to commence soon

Experts, too, have suggested that in their negotiations, both the sides need to work on less controversial issues first. Subsequently, innovative solutions need to be firmed up to break the log jam in more contentious matters.

Demand Seen: Loan guarantee scheme to stay through FY22

“There is also a chance that initially, it may be extended by three months through December 2021, which could be followed by another three-month extension,” one of the sources said.

In May, the finance ministry extended the validity of the ECLGS by three months through September 30 or until guarantees for the earlier limit of Rs 3 lakh crore were issued. Now, it’s expected to be extended further.

DEA secy-led panel to firm up sustainable finance road map

The task force will firm up recommendations to further strengthen the resilience of the country’s financial sector against risks emanating from various climate and ESG issues, a senior government official told FE. It will f

Finance ministry

Auto PLI for ICE players too, benefits to clean-tech investors higher by 5 pps: Heavy industry secretary Arun Goel

India’s advanced automotive technology production constitutes just 3% of the total output of its auto industry, way below the global ratio of 18%, he said.

New Incentives: Mega textile parks near ports to boost exports

Such mega parks will be able to better draw overseas buyers by offering a broad range of products and cater for large orders, given the greater synergy among its resident entities.

mega textile parks

Sri Lankan forex crisis worries exporters

Of course, Lankan importers haven’t yet defaulted on payments but such issues will surface soon if the forex crisis there isn’t stemmed swiftly, Indian exporters fear.

Although Sri Lanka and Afghanistan are still small markets for India, expeditious resolution of any trade issues with these countries will help those, especially small businesses, that are supplying to these nations.

Boosting Exports: Govt mulls sops to soften shipping cost blow; TMA scheme to be reintroduced

Under the TMA, which was valid for two years through March 2021, the government reimbursed exporters a certain portion of freight charges and offered assistance for the marketing of select agricultural produce.

The crisis hits exporters at a time when they are striving to reap benefits of a resurgence in global demand for merchandise, and threatens the country’s ambitious $400-billion export target for FY22.

Spending push: Finance ministry asks depts to step up capex & create durable assets

Chief economic adviser KV Subramanian had earlier said capex had a high multiplier of 4.5, against less than 1 in even well-directed revenue spending.

The finance ministry has already asked various infrastructure ministries and departments to step up capex and create durable assets.
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