สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 3 กุมภาพันธ์ 2557

Firms may get more subsidy to invest abroad; move aimed at taking on Chinese companies

The government may increase the subsidy it gives to Indian companies to invest overseas to help them compete with Chinese companies that are on a statebacked plan to acquire resources and exports markets, especially in Africa and SAARC region. It is considering a proposal to increase the interest subvention by 100 basis points on financing project exports through the Exim Bank. "It is still being debated; the idea is to provide impetus to project exports from India, specially the infrastructure sector," said a senior government official, requesting anonymity. At present, the government provides 2 per cent interest equalisation support (IES) or subsidy on the credit facility extended by Exim Bank to overseas buyers for financing their project imports from India. In 2012-13, the bank had given an inprinciple commitment for supporting 51 projects with an aggregate value of $ 5.14 billion. The Indian companies offer their services along with a funding plan which is mostly financed by Exim Bank. These investments also help increase engineering exports because of the capital goods component in the project. India's engineering exports to Africa grew by 12.24 per cent at the end of September 2013 to $722 million against $643 million the corresponding month last year. The country exported $129 billion worth of capital goods in 2012-13, up 1.32 per cent in the year before. The government hopes to double India' s share in global trade by 2020 and has chalked out a strategy to increase its market share in emerging markets to achieve that target.

(Source: Economic Times)

Corporate Affairs Ministry strengthens data dissemination efforts

Corporate Affairs Ministry is implementing a "user-friendly" data dissemination policy that includes making basic statistics on Indian corporate sector accessible to the general public. Besides, plans are on the anvil for having a dedicated data portal of the Ministry. According to the Ministry, the idea is to disseminate corporate sector data in a "user-friendly" and "pro-active manner".  The Ministry, which is the repository of information about registered companies in the country, had also recently revamped website. Among others, it would be having an advisory group on data dissemination formats. Additional data reporting formats and templates are also being developed for sharing more information, the monthly newsletter said. An internal committee of the ministry had made recommendations on data dissemination steps. As part of data dissemination initiative, various new sections have been introduced on the Ministry website apart from coming out with monthly information bulletin -- that also carries basic statistics on the corporate sector. India has more than 900000 active companies whereas the count of registered entities is over 1300000. The efforts to strengthen data dissemination comes at a time when the new companies law is being implemented in the country.

(Source: Economic Times)

Can yes to FDI become a no?

Can the government of a state or Union Territory (UT) reverse an earlier decision to approve foreign direct investment (FDI) in its retail sector? The Union ministry of commerce and industry has sought legal opinion.   This comes after parties in power (Congress in both cases, as in the central government) were voted out in both Rajasthan and Delhi. The successor governments announced they were cancelling the approval given by their predecessors on the issue. Union commerce and industry minister Anand Sharma had objected, saying such a revocation could not be allowed. However, the Constitutional position isn’t so clear. Those which revoked the earlier approval: Delhi under the Aam Aadmi Party government and Rajasthan under the Bharatiya Janata Party. The policy of allowing FDI up to 51 per cent in multibrand retailing (MBRT) said it would be allowed in each state or UT if the government there had no objection. The policy “is an enabling policy only and state/UT governments would be free to take their own decision in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those states/UTs which have agreed, or agree in future, to allow FDI in MBRT under this policy”, was the official statement. An unnoticed point in this drama is that the proposed amendments to the Fema regulations by the Reserve Bank of India (RBI) still face a technical issue in the Rajya Sabha. Hence, technically, the FDI policy in MBRT does not enjoy legal sanction yet. While the government had passed the Fema amendments in the Rajya Sabha, it has not gone through with voting on the amendments proposed by CPI (M) member Sitaram Yechury. So far, 12 states and UTs had agreed to implement the policy, the majority under Congress rule — Andhra Pradesh, Assam, Haryana, Uttarakhand, Maharashtra and Karnataka, among others. Some of these are headed for elections in a few months, such as Andhra, Haryana and Maharashtra.

(Source: Business Standard)

Govt revises FY13 GDP growth to 4.5% from 5%

The government on Friday revised downwards economic growth for 2012-13 to 4.5% from the previous 5% due to sluggish performance of farming, manufacturing sectors and a decline in mining activity, raising fresh concerns about the health of the economy. The growth is the slowest in a decade and is expected to pile more pressure on the UPA coalition as it heads into general elections later in the year. While the growth is expected to revive in the current fiscal, critics are likely to sharpen their attack on the government over its handling of the economy. The economy expanded at its slowest pace of 4% in 2002-03. Slowing growth and high inflation have added to the anxiety and upset household budgets. Weak industrial growth has added to the woes. The statistics office also revised upwards the growth for 2011-12 to 6.7% from the previously reported 6.2%, while growth for 2010-11 was revised downwards to 8.9% from 9.3%. Economists cautioned that the new set of numbers on growth do not ring in fresh panic as they would be revised in the months with more data available. The government revises data periodically as more information trickles. Growth has consistently slowed after the spectacular expansion of over 9% before the 2008 global financial crisis. Factors like slowing global growth, delay in regulatory approvals, policy paralysis, high interest rates and stubborn inflation have hit the economy. Growth is expected to be around 5% in the current fiscal, and economists estimate the economy to bounce back in 2014-15 on the back of a revival in exports, farm sector and the impact of approvals to stalled projects. Explaining the reasons for the revision, the statistics office said growth of the primary sector, which includes agriculture, forestry, fishing, mining and quarrying, was revised down to 1% from the previous estimate of 1.6% in May. Growth in the secondary sector, which includes manufacturing, electricity, gas and water supply and construction, was revised down to 1.2% from the previous estimate of 2.3%, while the tertiary sector, which includes all the services, was revised marginally to 7% from the previous 7.1%.

(Source: Times of India)

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