สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 16 สิงหาคม 2556
Economic slowdown won't last long: PM
Prime Minister Manmohan Singh on Thursday said that the current economic slowdown will be short-lived, adding that the recent measures to speed up infrastructure projects, increase coal output and ease FDI flows would produce "visible results" soon and "our growth will accelerate, new employment opportunities will be generated."
Besides, he also said the government will launch a financial assistance scheme for skill development which would benefit about 10 lakh young men and women in the next 12 months, Singh said, "We will shortly launch a new scheme under which those who have successfully acquired new skills will be given a grant of about Rs. 10, 000". Singh also said that a high-level committee has been set up to collect accurate information about the socio-economic, educational and health status of the tribal population to design better schemes for them.
India would go to polls early next year, but policymakers are grappling with a series of socio-economic problems on account of reduced economic growth rate, high cost of living, a record current account deficit (CAD) and a sharply weaker rupee against the dollar that is impacting the country's competitiveness as well as inflation.
(Source: Business Standard, the Economic Times, the Financial Express)
Fear of foreign returns
The fear of the foreign has come back to haunt Indian entrepreneurs. As they got badly hemmed in or pushed out of market after market by low-cost or research-savvy foreign rivals, India's entrepreneurs have emerged as one of the most concerned classes about foreign competition.
In a recent global survey, done by the UK's Oxford Economics for German technology firm SAP, 43% of Indian small and medium enterprises (SMEs) cited increasing global competition as the biggest issue affecting them, compared to the global average of 26%. Economic uncertainty (34%) and shifting customer expectations (29%) were the second and third most concerns of Indian SMEs. Despite their anxieties about foreign competition in home turf, a neat 77% of Indian respondents said they are increasingly focused on new market geographies and 58% said that global expansion is the key to their growth.
About 45% said innovation, cost reduction, efficiencies and expanding products & services, would be critical to future growth. Almost all the 100 Indian SMEs surveyed—out of 2,100 from 21 countries, including the US, the UK, Brazil, Mexico and South Africa—said they have global exposures, with only 2% respondents saying they generate no revenues outside the country today.
(Source: the Financial Express)
Sourcing for IKEA separate the Indian arm, says govt
Formally approving IKEA's request for setting up stores in the country, the Union government has informed the Swedish furniture giant its sourcing from India for global operations would not be counted under the sourcing requirements for running single-brand retail stores here.
The commerce and industry ministry, in a June 14 letter, allowed the company to sell 18 kinds of products. IKEA already sources products worth Euro 1 billion from India and mainly from handloom and carpet clusters. The letter said: "Sourcing from IKEA entity from India or the Indian entity of the IKEA group cannot be included for compliance of IKEA India." For single-brand retail trading, companies with over 51% foreign investment have to source 30% of the value of goods from India.
(Source: the Economic Times, Business Standard)
FDI ban on critical drug likely: DIPP
The Department of Industrial Policy and Peomotion (DIPP), backed by the health ministry, may pitch for barring foreign direct investment (FDI) in existing rare and critical domestic drug making facilities, besides further tightening of norms in brownfield pharma sector.
Commerce and industry minister Anand Sharma is likely to propose the new conditions at a meeting today called by Prime Minister Manmohan, after DIPP sought a review of the norms finalized by Singh eight months back. Finance minister P Chidambaram and health minister Ghulam Nabi Azad are also expected to attend the meeting.
A host of pharma brownfield proposals, including Mylan's over 9,000-crore investment in Agila Specialities, are awaiting clarity on the policy.
(Source: the Economic Times, Business Standard)
Gold's seasonal lull may be worse this time as new rules baffle trade
Even as the bullion trade attempts to understand the new regulations relating to imports of gold, the World Gold Council expects the normal lull in Indian demand in the September quarter to be exaggerated this year. In its quarterly demand trend report released on Thursday, WGC pegged the June quarter gold import into India at 338 tonnes due to a 71% year-on-year jump in the total demand including jewellery consumption of 199 tonnes and bar and coin demand investment of 122 tonnes.
"The introduction of restrictions on payment terms for gold imports in May and an increase in import duties in early June created uncertainty in the market but had limited impact on end-user demand, which was met by stocks that had been built up to healthy levels following the April price drop," said the report.
The Reserve Bank of India (RBI) was forced to clarify the changes in gold import norms, after the bullion industry found it difficult to decode the central bank's instructions issued on July 22. Clarifying its position, the RBI has now put the onus clearly on nominated banks and agencies to ensure that at least a fifth of every lot of imported gold is exclusively made available for exports. The same is required to be supervised by the customs authority.
(Source: Business Standard, the Financial Express)
300,000 crores needed for infra projects by 2021; Mumbai Metropolitan Region
The Mumbai Metropolitan Region (MMR) will need Rs. 3 lakh crore in investment by 2021 for development of infrastructure, including ports, airports, water resources, roads, power and local municipal infrastructure, among others.
However, mobilization of resources remains a key challenge as improving municipal finances is a tough task and the state's experience with PPP projects has not been encouraging. According to UPS Madan, the metropolitan commissioner of Mumbai Metropolitan Region Development Authority (MMRDA), the onus of raising funds will fall on the state-run authority responsible for infra development of the MMR. "Getting 80% of investment at a regional level is a direct burden on MMRDA," he said at the Maha Infra Summit, in Mumbai.
According to Madan, of the R3 lakh crore, the share of PPPs is likely to be 28% while the government and state-run authorities would have to contribute about 22% and 29%, respectively. The remaining 21% would likely come from loans. The Maharashtra government is now also looking at forming a dispute resolution authority to address issues surrounding major infrastructure projects, many of which have been delayed.
(Source: the Financial Express, Business Standard)
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