IMF expects Indian economy to grow 5.7 % in 2013
India, along with the Philippines and Thailand, is exposed to larger risk of growth slowdown in emerging Asia, stemming from poor infrastructure and inefficient economic institutions, the International Monetary Fund (IMF) has said in its outlook for the Asia-Pacific region. If these are not addressed, they could put the countries in the middle-income trap, added IMF.
The middle-income trap is the phenomenon of so-far rapidly growing economies stagnating at middle-income levels and failing to rise to the high-income levels of advanced economies. This has often happened as a result of a sharp and persistent slowdown after a period of relatively strong growth.
IMF expects India’s gross domestic product (GDP) to grow 5.7 % in calendar year 2013 and 6.2 % in 2014, while China is seen growing 8 % in 2013 and 8.2 % in 2014. IMF pegs overall Asian economic growth at 5.7 % in 2013.
(Sources: Livemint, NDTV, Current Affairs Today, Daily India News, India Everyday)
Economic reform agenda runs into political hurdle
Two long-stalled reforms - one to lift the foreign ownership cap in insurers to 49 percent from 26 percent and another that would simplify land acquisition for factories - were due to be introduced in the legislature during the past week ended up being side-tracked by the political ruckus.
With opposition parties disrupting parliamentary proceedings, questioning investigations into multi-billion-dollar scandals related to allocations of telecoms airwaves and coal mines, there is no guarantee the bills will be passed during this parliamentary session, which ends on May 10.
Chidambaram promised investors during his roadshow in Boston, New York, Ottawa and Toronto to get the bills on insurance and land reform passed in the current session, hoping their passage will boost investment from eight-year low growth and help spark an economy growing at its slowest in a decade.
(Sources: Reuters India, Economic Times, NDTV, Business World, India Everyday)
CIL aims 492 million tonne coal output in FY14
Coal India Limited (CIL), the single largest coal miner in the country, has set a target to produce 492 million tonne (mt) of coal and dispatch 500 million tonne in the current fiscal.
This was announced by the CIL chairman S.Narsing Rao at a news conference at Burla, the head quarter for Mahanadi Coalfields Limited (MCL).
In 2012-13, CIL produced 452.5 mt against the target of 464 mt.
(Sources: Business Standard, Smart Investors, Power Today, NDTV, Rediff News)
Govt sets up committee to boost exports from MSMEs
Worried over widening trade gap, the government has set up a six-member inter-ministerial committee under the chairmanship of Finance Secretary R S Gujral that will suggest measures to boost MSME exports.
Micro, Small and Medium Enterprises (MSME) sector contributes about 40 % in the country's total exports and over 8 % to India's Gross Domestic Product (GDP).
The widening trade gap is adding woes on the Current Account Deficit (CAD) front, which has emerged as a tough policy challenge for the government. CAD crossed 6.7 % of the GDP in the third quarter of last fiscal. According to experts, the government should take steps like providing credit to the sector at affordable rates.
As per estimates, the share of MSME exports has fallen from 40 % to 36 % to the country's total exports. The sector accounts for around 45 % of the manufacturing output and provides employment to about 60 million persons through 26 million enterprises.
(Sources: Zeenews, Hindu Business Line, Indian Express, India Everyday, Deccan Herald)
AirAsia track record made Tatas re-enter aviation sector
A good partner and untapped potential in the low-cost sector made Tatas re-enter the aviation space although the industry remains tough, and the competition cut-throat, according to a company official.
The Tata Group, which pioneered civil aviation in India, is making a come-back with Malaysian low-cost carrier AirAsia and Telestra Tradeplace in a joint venture ‘AirAsia India’.
Last December, Ratan Tata had said he was unlikely to venture into the airline industry because of “destructive competition” in the sector. The decision to re-enter the market apparently stems from the fact that partner AirAsia, the largest low-cost operator in the continent, has a proven track record.
(Sources: Business Standard, Oman Tribune, the Hindu, Smart Investors, Rediff News)
RBI may cut rates as gold falls, oil slips
As the RBI gets ready to unveil its monetary policy for fiscal year 2013-14, the expectations are huge as it comes in the backdrop of a sharp correction in gold and oil prices, the two biggest contributors to India’s Current account deficit (CAD).
This fall in commodity prices is accompanied with a lowest headline WPI inflation reading of 5.96 per cent in the last three years aided by sharp fall in food inflation in addition to slowdown in manufactured inflation. However, the other measure of inflation, Consumer Price Index (CPI), stays elevated at 10.4 per cent. Growth, as measured by GDP growth, is expected to remain low at 4.9-5 per cent for the full year in FY’13.
(Sources: Financial Express, Indian Express, Times of India, India Everyday, News BCC)
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