India still seems to be better placed in the global economic atmosphere, cloaking a considerable GDP growth of more than 7%, and generating confidence of a considerable economic growth during the upcoming financial year
The Chinese slowdown will have a negligible impact on India, credit rating agency Moody’s said in its recent report, citing reasons such as the country’s strong domestic market, accelerating economic growth and diversified source of funding.
“By comparison (with other countries such as China, Japan and Australia), delinquencies in India will improve thanks to the country’s accelerating economic growth,” Moody’s said in its Credit Outlook Report on Monday.
In the past, too, the global agency had underlined that the Indian economy will be less hit by the Chinese economic equation, but had insisted that the Indian government should continue to focus on mitigating its impact by taking pro-industry initiatives, improving agriculture production, encouraging manufacturing and strengthening its domestic consumption of goods.
But despite Moody’s projection, several industry analysts as well as the Reserve Bank of India (RBI) Governor Raghuram Rajan had reiterated that the Indian economy, too, will suffer one way or other. In January this year, stock market in India crashed. Last month, India’s merchandise exports slowed down for 15th month in a row, with no sign of turnaround visible in the near future, the Indian industry is experiencing the added fears.
The initial interpretation of the Chinese economy bubble was limited only to itself as many economists predicted the world’s second-largest economy to remain isolated. But soon, Chinese stock exchange crashed globally, twice in a year, including in the US and Hong Kong, thereby giving the world a signal that the impact will be contagious and anything but restricted to a particular economic zone.
Echoing the IMF MD., Christine Lagarde’s views that India still seems to be better placed in the global economic atmosphere, Moody’s too vouched for the considerable GDP growth of more than 7%, and a confident growth in the economy during the upcoming financial year as well.
Moody’s also said that markets in the Asian economies including India will emerge over time, as it currently doesn’t have covered bond-specific legal frameworks.
Source: The Dollar Business
Rating agency ICRA on Monday projected Indian economic growth to improve to 7.7 per cent in next fiscal, led by domestic consumption demand on the back of implementation of 7th Pay Commission and OROP recommendations.
The agency, in its Macroeconomic Update, however, said that although the fresh project pipeline appears robust, commencement of work will lag announcements, given moderate capacity utilisation in some sectors.
"A pickup in domestic consumption post the implementation of the Seventh Central Pay Commission's recommendations and One Rank One Pension (OROP) scheme for the defence services as well as a potential upturn in rural demand is expected to boost economic growth in FY17," it said.
ICRA said a sizeable portion of the planned rise of Rs 1.2 lakh crore in Plan expenditure in 2016-17 is to be funded through extra-budgetary sources, progress on which will influence the pace of infrastructure augmentation and economic growth.
"In ICRA's view, Indian economic growth is expected to improve to 7.7 per cent in FY17," the report said.
Indian economy is estimated to have grown 7.6 per cent in current fiscal. As per official projection, growth is likely to be between 7-7.75 per cent in 2016-17.
As regards project activity, it said announcements of new project in October-December quarter of current fiscal stood at Rs 1.2 lakh crore, concentrated in electricity, machinery, transport equipment, transport services and miscellaneous services.
"Value of revived projects improved to a four quarter high of Rs 40,000 crore in the third quarter of FY16, while remaining low; facilitation of clearances, lower input costs for firms are not sufficient to revive investment plans in the absence of a pickup in demand," it said.
Project completion declined by 12.8 per cent on a year-on-year basis to Rs 80,000 crore in third quarter of current fiscal, which was dominated by electricity, transport services, construction and real estate.
"A limited Rs 20,000 crore of projects stalled in the third quarter, smaller than the value of revived projects after a gap of 30 quarters," ICRA said.
It said structural issues continue to affect a considerable portion of the existing project pipeline.
More than two-thirds of the projects of Rs 32.2 lakh crore submitted to the Cabinet Committee on Investment (CCI) are concentrated in the power, steel and petroleum and natural gas sectors.
As regards government finances, the report said five rounds of hikes in excise duty on fuels have taken place since November 2015 to boost tax revenues by Rs 17,000 crore in last five months of this fiscal.
Source: Times of India
India is planning to invest over $120 billion in the development of airport infrastructure and aviation navigation services over the next decade, said President Pranab Mukherjee on Wednesday.
Inaugurating India Aviation 2016 here, he said the civil aviation sector is poised for a faster and sustainable growth with the development of 100 smart cities; new economic corridors; more than 50 new airports and expansion of existing airports.
"The deeper air penetration to smaller cities; better connectivity to northeastern part of India; higher disposable incomes of the middle class of India is expected to further propel the growth of Indian civil aviation industry," he said.
Mukherjee noted that India registered a growth of 14 percent in civil aviation sector during the last decade. With foreign direct investment (FDI) in air transport during the last 15 years touched the mark of $570 million, he said India continues to be a favourite destination for foreign investors in civil aviation sector.
The government has allowed FDI through the automatic route to the tune of 100 percent in green field airports; helicopter services and seaplanes; maintenance and repair organizations and flying training institutes. He also pointed out that 49 percent FDI is allowed through the automatic route for domestic scheduled passenger airlines and ground handling services.
"The open sky policy; greater focus on infrastructure development; liberal FDI norms; robust technical and engineering capabilities; assured supply of skilled workforce in information technology and communication network has opened the doors to global players. This will make India a manufacturing hub of aerospace industry," he said.
Mukherjee said as India is at the threshold of taking a major leap in the aviation sector, this event is well timed and resonates well with the latest policy initiatives of 'Make in India', 'Stand up India' and 'Start up India'. He called upon the global giants to seize this opportunity and take lead to forge long-term partnerships.
Source: The Statesman
With efforts on to make India an electronics manufacturing hub, the government today said the total investment in the sector has now reached Rs 1,20,000 crore, Telecom Minister Ravi Shankar Prasad said today.
He told the Lok Sabha that the government was promoting electronics manufacturing in a very big way and giving incentives and providing electronics clusters to investors.
"When our government came (in 2014), the total investment in electronics manufacturing was Rs 11,500 crore. Now it has reached Rs 1,20,000 crore. That is the kind of investment we are getting," he said during Question Hour.
Prasad said the government was working to make India a big hub of electronics manufacturing in which the Centre and state governments have to play a crucial part.
"Therefore, we would like to say that by 2020, India must also promote export of consumer goods. I want to assure this House that a large number of companies like Foxtone, Apple and others are keen to invest in India and we are creating an enabling atmosphere," he said.
The Minister said two companies have shown interest in electronics chip manufacturing and government's effort is to make India an important centre of chip manufacturing.
"I want to inform that now India is making about 11 crore mobile phones. That is a growth of 83 per cent in quantity terms this year. The growth of LED is 37 per cent. Others include LED light is 65 per cent and tablet is 27 per cent. We are promoting it. I had called a meeting of the IT Ministers of all States," he said.
Prasad said government has given a lot of duty differential to permit both foreign investors and local manufacturers.
"I want to tell you, ... Indian companies are making good phones and foreign companies are also getting a place in India," he said.
Source: The Economic Times
Foreign direct investment (FDI) in the country increased by 29% for the 15-month period—ended December last year—after the launch of the Make in India initiative, Parliament was informed on Wednesday.
Launched on 25 September 2014, the initiative aims at promoting India as an important investment destination and a global hub for manufacturing, design and innovation.
“FDI inflow has increased 29% during October 2014 to December 2015 (15 months after Make in India was launched) compared to the 15-month period prior to the launch of this initiative,” commerce and industry minister Nirmala Sitharaman said in a written reply to the Rajya Sabha.
In a separate reply, she said during April-January 2016, the government received 424 FDI proposals. Out these, 285 proposals have been disposed of.
In a separate reply about FDI in e-commerce, the minister said foreign investment in business to customer e-commerce activities has been “opened in a calibrated manner” and an entity is permitted to undertake retail trading through e-commerce under certain circumstances.
She said that a manufacturer is permitted to sell its products manufactured in India through e-commerce retail and a single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.
An Indian manufacturer is also allowed to sell its own single brand products through e-commerce retail. In a separate reply, she said the department of industrial policy and promotion is implementing the eBiz project which is envisaged to work as a single portal for providing all central and state services.
“Twenty central and 30 state government services have already been integrated on the portal,” she said.