สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 6 มีนาคม 2557

Current account deficit plunges to an 8-year low as gold curbs hit home

India's current account deficit fell to its lowest in eight years due to government-imposed curbs on gold imports and as the Reserve Bank of India's subsidy for non-resident Indians' US dollar deposits boosted capital flows. But the trend could reverse if the government eases duties on gold import and the Chinese Yuan depreciates hurting India's export growth. The December quarter CAD, the excess of spending overseas than earnings, fell to 0.9% of the gross domestic product, from 6.5% a year earlier. For the April-December period, it was 2.3% of the GDP, down from 5.2% the same period earlier, data from the RBI showed. The government and the central bank imposed a series of measures as the gold imports led to the currency getting pummelled till August of last year. The import duty on gold was raised to as high as 10%, from a low of 2% and mandatory export requirements were placed for imports. Also, RBI underwrote potential exchange-rate losses to bring in net $21.4 billion in special nonresident Indian deposits. Data from the Reserve Bank of India indicates that CAD amounted to $4.2 billion in the December quarter, from $31.9 billion a year ago. Net services inflows rose 8.9% year-onyear to $ 18.1 billion during the year, essentially reflecting a decline in payments on account of services imports. Despite RBI's efforts bringing in a gross $34 billion from NRI deposits, the capital account surplus shrank as the companies that indulged in overseas borrowing were repaying loans. The capital account surplus fell to $23.8 billion, from $31.5 billion in the December quarter. The overall balance of payments ended in a surplus of $19.1 billion for the quarter compared to a meagre surplus of $781 million in December '12 quarter. India's merchandise export, which has been gaining in the last few quarters after the rupee depreciated substantially, may again slow as the rival Chinese Yuan is falling, making their products competitive. Merchandise exports rose 7.5% in the December quarter to $79.8 billion, when the restrictions on gold imports led to a 14.8% decline in imports. Gold imports collapsed to $3.1 billion, from $17.8 billion a year earlier, even as smuggling of the precious metal climbed.

(Source: Economic Times)

India votes from April 7 in nine phases, counting on May 16

The Great Indian General Election, the biggest ever democratic process in the country’s history, will be conducted in nine phases between April 7 and May 12. Counting of votes in all 543 constituencies is slated for May 16 and the 16th Lok Sabha has to be constituted by May 31. With 81.45 crore eligible voters across 9.30 lakh polling stations, polling will involve the use of electronic voting machines (EVMs). Elections will be conducted in phases on April 7, April 9, April 10, April 12, April 17, April 24, April 30, May 7 and May 12. The biggest phase will be on April 17 when 122 constituencies across 13 states go to the polls. The model code of conduct, which bars the government from using public money to announce new schemes and projects, came into force this morning following the announcement of the schedule for elections to the 16th Lok Sabha and simultaneous Assembly polls in Andhra Pradesh, Sikkim and Odisha.  Sampath said the nine-phase polling and the entire process -- from today to counting of votes on May 16 -- will be over in 72 days, three days less than the previous election. The number of voters will be almost 10 crore more than the 2009 Lok Sabha election. Over 2.3 crore enlisted voters are in the 18-19 age group.

(Source: The Tribune)

India gets record investment in ports as tariff deregulated

India has secured a record Rs 20,700 crore ($3.4 billion) of investment in port projects after it deregulated tariffs. The nation has awarded bids for 30 ports in the year-ending March 31, Shipping Secretary Vishwapati Trivedi said in an interview. The value is more than three times greater than projects awarded in fiscal 2013, he said. The projects will add 217.6 million tonnes of annual cargo-handling capacity, according to the Ministry of Shipping. The bids will ease congestion at Indian ports where the average turnaround time for ships was about three days in 2013, compared with about one day in Singapore and Shanghai, according to a report by Anand Rathi Shares and Stock Brokers Ltd. They will also help India meet a 2020 target of more than doubling its port capacity to 3,200 million tonnes at an investment of Rs 2.87 trillion. In July last year, India stopped setting port tariffs and allowed future terminal projects at state-controlled major ports to raise rates with the proviso that performance goals are met. This year, Singapore's PSA International Pte Ltd won the largest order to build the fourth container terminal at Mumbai's Jawaharlal Nehru Port Trust for Rs 7900 crore, marking its entry into India's west coast. The company operates terminals at ports in Kolkata, Chennai and Tuticorin on the east coast, according to its website. Adani Ports and SEZ Ltd. won the bid for a Rs 1,270 crore-rupee container terminal at the Ennore port in southern state of Tamil Nadu.

(Source: Business Standard)

CAD falls to 0.9% of GDP in Q3; lowest in 4 years

Raising hopes that curbs on gold imports would be eased, India’s current account deficit (CAD) for the quarter ended December stood at $4.2 billion, or 0.9 per cent of the gross domestic product (GDP), a sharp fall from $31.9 billion (6.5 per cent) in the year-ago period. The fall resulted from a pick-up in exports and moderation in imports, especially of gold. According to news agency Bloomberg, the deficit in the December quarter was the lowest since 2010. For the quarter ended September 2013, CAD stood at 1.2 per cent ($5.2 billion). Experts pegged CAD for the entire financial year at about $35 billion, or two per cent of GDP. This could be the first time in four years that the CAD will be within the central bank’s comfort zone of up to 2.5 per cent. For 2012-13, the CAD had widened to a record 4.8 per cent of GDP, or $88 billion. S K Ghosh, chief economic advisor, State Bank of India, said while the CAD for the December quarter was a little higher than estimated, for the entire financial year, it could be about $35 billion, less than two per cent of GDP. On gold import curbs, Ghosh said, “We can’t continue with curbs. For 2014-15, the CAD could rise to 2.5 per cent of GDP, which is within RBI’s comfort level,” he said. On Wednesday, Finance Minister P Chidambaram said the government would revisit the gold import curb once the CAD data for the entire financial year was available. Aditi Nayar, senior economist at rating agency Icra, said in 2014-15, investment demand for gold was likely to remain muted if the customs duty was kept unchanged at 10 per cent, inflation moderated to an extent and the price of gold remained range-bound. “However, demand for gold for jewellery purposes is likely to be considerable in 2014-15, particularly following a healthy rabi harvest. As a result, in FY15, the value of gold imports will depend on policy decisions on the continuance of quantitative restrictions on the import of the precious metal,” Nayar said. In tandem with the improvement on the current account front, the balance of payments moved to positive territory. During the quarter ended December, $19.1 billion was added to India’s foreign exchange reserves, against the addition of a mere $0.8 billion in the year-ago period. In July-September 2013, a drawdown of $10.4 billion was recorded. For the nine months ended December 2013, the CAD stood at 2.3 per cent of GDP ($31.1 billion). For the corresponding period of 2012, it was 5.2 per cent ($69.8 billion).

(Source: Business Standard)

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