สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 27 สิงหาคม 2556
Food for all; Lok Sabha clears the bill
The food security Bill has been passed in the Lok Sabha on Monday.
The Bill, which seeks to entitle 67% of the country's population — about 800 million people — to subsidized food, was passed after a six-hour debate in a late-evening sitting of the lower house. The Opposition, and even the Samajwadi Party (SP), which renders outside support to Congress-led UPA government, raised several questions — on future availability of food, financing of the ambitious programme and its long-term impact on farming practices in the country — but stopped short of opposing the Bill.
Food Minister K V Thomas said the food security programme, which would require 62 million tonnes of foodgrain a year, would entail a burden of Rs. 1,30,000 crore on the exchequer. The Bill would have a one-year time period for implementation.
When the Bill was taken up in the Lok Sabha, Congress President Sonia Gandhi said it was a "historic opportunity" for all parties to rise above political differences and help wipe out hunger and malnutrition from the country.
(Source: Business Standard, the Economic Times, the Financial Express)
Retailers mull cut imports to tide over rupee fall
With the rupee falling to new lows, many retailers are considering either stopping the practice of stocking imported products, or substituting these with local ones.
In the last three months, the rupee has depreciated 15%, pushing up prices of imported products. Retailers who deal with such products say the actual price rise would be clear only when new stocks arrive at their warehouses.
Consultants say those selling imported consumer durables, apparel, food products, furniture, etc, are the ones hit the hardest. Amid the economic slowdown and the depreciating rupee, retailers are reconsidering their assortment and merchandise mix. "Our team is watching how the new prices are moving carefully. We have to potentially consider whether to bring all the products we used to stock earlier. We need to be competitive," said Mark Ashman, chief executive of Hypercity, Shoppers Stop's hypermarket chain.
(Source: Business Standard)
Rs.1.9 lakh-cr infra projects get nod
The Prime Minister Manmohan Singh-headed Cabinet Committee on Investment (CCI) has cleared 36 projects worth Rs. 1.9 lakh-crore which were stuck across five key infrastructure sectors of power, roads, ports, cement and petroleum.
The decision covers 28 projects in the power sector alone, languishing for want of coal linkages and environment and forest clearances. These projects include 18 cases worth Rs. 1.1 lakh-crore where fuel supply agreements (FSAs) were getting delayed. The CCI has asked that the pacts be signed by September 6, according to a source close to the development. The Cabinet Committee on Investment has asked for an immediate resolution of issues hurting the progress of other infrastructure projects within the next two months.
The go-ahead by the cabinet panel for troubled projects comes within days of Finance Minister P Chidambaram assuring representatives of foreign institutions and banks of the government's intent to expedite clearance for large projects. The decision is expected to boost investor sentiment.
(Source: Business Standard, the Financial Express)
ADB to provide $18.4 mn for post harvest facility in Gujarat
In its first ever loan to private agribusiness in India, Asian Development Bank (ADB) will provide USD 18.4 million to Champion Agro to set up cold storage facilities for fruits and vegetables focusing on Gujarat.
"Up to 6,000 farmers in Gujarat could attain higher revenues from their crops with the construction of cold storage facilities for fruits and vegetables by Champion Agro using USD 18.4 million in funding from Asian Development Bank," ADB said in a release.
The project will include five collection centres, a controlled-atmosphere cold storage facility, and an individually quick frozen facility in Gujarat, as well as five distribution centres located in large cities in different states of northern India. "Rural poverty can be reduced through better post-harvest management, which not only helps significantly raise farmers' income but also provides direct employment opportunities," said Martin Lemoine, Senior Investment Specialist at ADB's Private Sector Operations Department.
Though India is the second largest producer of fruits and vegetables in the world, about 35% of its fresh produce gets wasted due to lack of post-harvest infrastructure. The ADB project is expected to improve the processing and distribution of quality fruits and vegetables sourced from local farmers as well as help them increase their yields through irrigation facilities.
(Source: Business Standard)
DIPP might look at Amazon's delivery plan for e-commerce FDI policy
The Department of Industrial Policy and Promotion (DIPP) might soon wipe the dust off some old files and documents, in order to prepare a Cabinet note on e-commerce.
Among the documents is a presentation made by US online retailer Amazon a few months ago at DIPP to convince that the multi-brand policy conditions such as state-wise permission could be followed in the e-commerce space, too. Plus, at least two consulting firms had prepared reports and position papers on the feasibility of permitting FDI in e-commerce over the recent months. Those may also be looked into.
According to sources, a communication supporting FDI in online retail from National Security Adviser Shivshankar Menon has been sent to all key ministries including DIPP, finance and home affairs. The e-commerce issue is believed to have come up while discussing the agenda of Prime Minister Manmohan Singh's meeting with American President Barack Obama in Washington DC on September 27. It is, however, unlikely that the Cabinet will clear the matter before the PM's visit.
(Source: Business Standard)
After clearing defence FDI, govt now adds an extra layer on security
The Indian government, which recently decided to allow foreign direct investment (FDI) above 26% in defence production on a case-to-case basis in technology-intensive areas, is introducing another regulatory layer to vet such proposals.
According to a senior government functionary, not just the defence ministry but the Foreign Investment Promotion Board (FIPB) will sit in judgment on whether a proposal for FDI higher than 26% in defence involves state-of-the-art technology.
According to the source, the Cabinet Committee on Security headed by the Prime Minister, the final arbiter, will take inputs both from the defence ministry and the FIPB. And the defence ministry has agreed to it. This, analysts said, could scupper the chances of much higher levels of FDI flowing in and technology changing hands.
American defence companies like Textron , Honeywell and Lockheed Martin among others have long waited for the Indian government to ease FDI norms in defence. India's defence expenditure has risen at a much higher rate than the global average, but indigenization of high-tech production hasn't kept pace with that spending surge.
(Source: the Financial Express)
Reducing CAD from $88 bn to $70 bn is possible: C Rangarajan
C Rangarajan, chairman of Prime Minister's Economic Advisory Council said on Monday that India may be able to contain its current account deficit (CAD) to $70 billion, about 3.7% of GDP in the current fiscal, due to the various measures taken by the government. Rangarajan also pegged economic growth in the current fiscal at 5.5%, exuding more confidence than private analysts that have forecast a sub-5% expansion.
"Reducing CAD from $88 billion (2012-13 fiscal) to $70 billion is possible because of various actions taken by the government. Gold imports falling by $10-12 billion itself will be a great relief," said Rangarajan, speaking at a seminar on 'Refuelling India's Growth Story' organized by the PHD Chamber of Commerce and Industry.
Rangarajan said agriculture and manufacturing sectors were set to fare better than the previous year. "I do expect growth in current fiscal to be 5.5% and agriculture, which is expected to grow at 4.5-5%, would provide a silver lining. Even manufacturing is expected to do better than last year's growth of 1.2% as we expect to see the impact of various measures, including pricing reform and enlarging the scope of foreign direct investment (FDI), in the second half of this year," he said.
(Source: the Economic Times, the Financial Express)
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