สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 31 มกราคม 2557

Current Account Deficit to decline to 2.5%, raises hope of gold import duty cut

The Reserve Bank today said Current Account Deficit (CAD) in this fiscal is expected to decline to below 2.5 per cent of GDP from 4.8 per cent a year ago, raising hopes of a cut in import duty on gold. There is pressure on the government to reduce import duty on gold and relax inward shipment of the metal. The government had raised the customs duty on gold in phases from 4 per cent to 10 per cent in 2013 to check CAD. Besides, the RBI had enforced 80:20 rule to ensure that at least 20 per cent of the imports are exported before the exporters are allowed to import fresh quantities. In the backdrop of improvement in the CAD situation, Finance Minister P Chidambaram had said the government would review gold import restrictions by March-end. The CAD was at 4.9 per cent in Q1 and came down to 1.2 per cent in Q2. In the first half, CAD stood at 2.6 per cent. The CAD, which is the difference between inflow and outflow of foreign currency, was at a record high of 4.8 per cent or US $ 88.2 billion in 2012-13. The RBI, however, also cautioned that government would have to careful with regard to CAD as capital flows to Emerging Market and Developing Economy (EMDEs) in the next fiscal could moderate. In its Macroeconomic and monetary developments review for the third quarter, the RBI said restrictions on gold import and improvement in global trade has brought down the trade deficit and CAD in the current fiscal. "Despite a significantly more comfortable external position than in the summer of 2013, both fiscal and monetary authorities need to continue their efforts at macroeconomic stabilisation," the RBI said.

(Source: Economic Times)

Finance Ministry asks PM to approve highways bailout policy

The finance ministry has asked the Prime Minister to approve the much-awaited bailout policy for the highways sector that seeks to provide relief to financially stressed projects and help galvanise investments. The Cabinet had given an inprinciple approval to the policy in October and set up a panel under Prime Minister's Economic Advisory Council Chairman C Rangarajan to finalise the actual structure of the policy. It hadstated that the policy could be rolled out by the Road Transport and Highway Ministry after getting the finance minister's approval for the committee's final recommendations. The panel submitted its report last week. The finance ministry has now asked the Prime Minister to approve the recommendation which had been sent to Finance Minister P Chidambaram for final approval, said an official aware of the development. As per the proposed policy, projects that are facing "economic stress" would be allowed to avail of relief under the revenue-shortfall loan clause given in the model concessio agreement. The amount of shortfall between the toll revenue collected by the highway developer and expenses incurred, which include operation and maintenance costs as well as debt servicing and premium payments, could be restructured, said an official at the highways ministry. The finance ministry has agreed to tweak the exit policy under which members of special purpose vehicles set up to execute road projects can sell all their stake, making way for a new investors to come in. A major hurdle flagged by developers was that as per a previous notification, the entire SPV would be considered as substituted when a stake sale happens, leading to problems with tax migration, permits and other clearances.

(Source; Financial Express)

RBI, govt will pull out all stops to deal with taper impact: Finmin

The government and the Reserve Bank of India will do everything to ensure that the latest round of stimulus draw-down by the US Federal Reserve will not have a major impact on India, said a statement issued by the finance ministry on Thursday. The Fed said on Wednesday it would buy $65 billion in bonds per month starting February, down from $75 billion now. The announcement sent markets into a tizzy, with the BSE Sensex plunging 300 points before recovering a little, and the rupee going as low as 62.90 versus the dollar before closing at 62.56. “As the government has stated earlier, India’s economy is better prepared for the consequences, if any, of the taper. We have added to our foreign exchange reserves, which stand at $295 billion. The current account deficit, earlier estimated at $70 billion, is now expected to be below $50 billion in 2013-14,” the statement by the finance ministry said.

(Source: Financial Express)

RBI governor Raghuram Rajan slams lack of global monetary cooperation

RBI governor Raghuram Rajan slammed what he said was a breakdown in global monetary coordination, as the prospect of continued withdrawal in monetary stimulus by the US Federal Reserve threatens emerging markets. Concerns that foreign investors will exit from developing economies as the Fed scales back bond purchases, along with fears of a slower Chinese economy, have roiled markets from Turkey to South Africa and Brazil since last week. Turkey and South Africa responded by raising interest rates this week to help support their currencies. The Reserve Bank of India also tightened monetary policy, although that action was aimed at pushing down high consumer inflation. The Fed on Wednesday trimmed its monthly bond purchases by another $10 billion, despite the turmoil in emerging markets. The action was widely expected, although some investors had speculated that the US central bank might put its plans on hold given the jitters overseas. The so-called tapering marks the wind down of a period of easy money first ushered by the Fed in response to the 2008 global financial crisis. Emerging market policy makers have long complained that the Fed's massive money printing had triggered a wave of funds into their countries, inflating risk assets and raising the threat of destabilising flows once the Fed started to withdraw that stimulus.

(Source: Economic Times)

Economic Times

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