สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 20 มีนาคม 2557

Gujarat tops in economic freedom among states: Study

Giving a thumbs up to BJP's prime ministerial candidate Narendra Modi ahead of the general elections, a report said Gujarat tops the list of states in terms of economic freedom, improving its position from the 5th place in 2005. "Gujarat is not only the freest state, but it has also registered the fastest rate of improvement (from 0.46 to 0.65). The second fastest improver is Andhra Pradesh (from 0.40 to 0.50)," said the report on Economic Freedom of the States of India (EFSI)- 2013. Coming just ahead of the general elections, the report said Gujarat has widened its lead at the top of the economic freedom table, with an index score of 0.65 (on a scale from 0 to 1.0). Tamil Nadu, it added, remains in second position, but some distance behind, with a score of 0.54. Next in line come Andhra Pradesh (0.50), Haryana (0.49), Himachal Pradesh (0.47) and Madhya Pradesh (0.47). As per the report, Bihar ranks at the bottom with a score of 0.31, preceded by Assam (0.32) and Jharkhand (0.33). Assam remains at 19th position. Jharkhand has worsened more than any other state, with its index score falling from 0.40 in 2005 to 0.33 in 2013. Because of this, it has slipped from 8th position to 18th. The biggest improvement has been recorded by Chhattisgarh, which has moved up from 16th to 8th position. Rajasthan is another state that has shown much improvement, moving up from 12th to 7th position. On the other hand, Punjab's rank has slipped substantially, from 6th to 13th position. Its score has remained almost unchanged, but many other states have improved their scores while Punjab has not, it added.

(Source: Economic Times)

India business sentiment weak in first quarter: Survey

Business sentiment among Asia's top companies edged up in the first quarter, as solid improvement in the Philippines and South Korea outweighed weakness in China, India and Australia amid persistent concerns over the global economy, a ThomsonReuters/INSEAD survey showed. Uncertainty about the global economic outlook and rising costs remained the biggest risk factors for the region's firms, according to the survey, which also found sentiment in the autos, retail and resource sectors improved, while confidence among companies in the building sector tumbled. Solid gains in Japan, South Korea and regional trading hub Singapore supported the index, but weaker sentiment from China, Australia and India underscored fragile prospects for an improvement in global demand. Overall sentiment in Southeast Asia's $15 trillion economy was mostly positive, with Thailand being the only country in negative territory due to the lingering political turmoil. Sentiment among Asian automakers also improved considerably, with all 11 respondents saying they were neutral on the outlook. Despite the improvement, the survey showed that automakers were the least optimistic companies in Asia along with builders, with most respondents citing global economic uncertainty as the biggest business risk even though 64 percent of those surveyed reporting an increase in new orders and sales.

(Source: Economic Times)

Government allows more banks to import gold in easing of curbs

Government has allowed five domestic private sector banks to import gold, in what industry officials say could be a significant step towards easing of tough curbs on the metal imposed last year to cut the country's trade deficit. The move could boost gold supplies and bring down premiums for the metal in the world's second-biggest consumer after China. Two industry sources confirmed the names of the banks. They and the bank officials did not want to be named as they are not authorised to speak to media. India enforced the so-called 80/20 rule in July, making it mandatory to export a fifth of all gold imports. Under that rule, only six banks and three state-run trading agencies that had facilitated export of gold or jewellery in the past three years were allowed to import. The six banks were mostly state-run lenders. The Reserve Bank of India - the central bank - has now permitted gold imports within prescribed limits by the private banks even though they had not facilitated any exports of metal or jewellery in the past three years. The move to allow more banks to import gold may raise shipments to about 40 tonnes per month from more than 20 in February, industry officials said. India used to ship in as much 70 tonnes per month, the biggest import after oil that had pushed the current account deficit (CAD) to a record high in the year ended March 2013. India used to be the No. 1 buyer of gold before the levy of a record 10 percent import tax in stages and other restrictions led to a sharp cut. Premiums hit a record of $160 an ounce in December, triggering smuggling and forcing industry officials to call for a repeal of the curbs. Further major relaxations of the curbs are likely only after a new government is formed around June, officials involved with policymaking said. Finance Minister P. Chidambaram said earlier this month the gold import duty could be revisited only after the final CAD numbers are out. The CAD, final figures for which are expected to come in the first week of June, is likely to fall to less than $40 billion for the fiscal year ending March 31 from its record $88 billion in the previous year.

(Source: Economic Times)

Elections: What lies ahead for the rupee

The tapering of the US Fed’s Third Quantitative Expansion (QE3) is now well under way. The US is seeing an economic recovery, which means the Fed can accelerate the taper if it chooses. The tapering has triggered some foreign institutional investor (FII) outflows from emerging markets (EMs) in general, with India being an exception, in that FIIs have been strongly net-positive on India. India came close to a crisis in 2013. The current account deficit (CAD) hit dangerous proportions and the rupee came under pressure. The central bank organised a series of forex swaps for crude oil importers and the government imposed gold import controls. India now seems to have averted any immediate dangerous of a run on the currency and the CAD has also fallen sharply. The rupee has appreciated and there have been accretions to forex reserves. The Indian CAD is still very high in terms of gross domestic product (GDP). There could be renewed pressure on the rupee if the FII attitude changes and there are large outflows. Arguably, as happened in 2013, that would lead to currency weakness again and this would help exports. So, the macro economic situation would probably be manageable. The need to manage the currency rate is further complicated by the need to control domestic inflation. The RBI cannot afford to cut policy rates — or at least, it cannot afford to cut substantially — until retail inflation stabilises below the targets it has set. Some political instability is also guaranteed while one government leaves and another takes charge. In calendar year 2013, the rupee swung between 56 and 68 versus the dollar. It’s possible 2014 will see a similar range of swing. There could be a case for taking deep dollar-rupee currency options under the circumstances.

(Source: Business Standard)

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