General Affairs
After Both Tanks Break Down, India Knocked Out Of International Drill
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The Indian Army has been knocked out of the high-profile international tank biathlon taking place at the Alabino ranges in the Moscow region of Russia after both the main and reserve T-90 main battle tanks developed mechanical problems.
As a result of the breakdown of both tanks, the Indian squad was unable to complete the race and were disqualified. This is a sad end to the competition for the Army's tank crews since they had topped their group in the earlier round and were seen to be strong challengers to win the competition.
Russia, Belarus, Kazakhstan and China have now entered the final round of the event. Russia and Kazakhstan participated with T-72B3 tanks, Belarus with a modernised T-72 and China sent its indigenous Type 96B. India decided to field its top of the line Russian designed T-90 Main Battle Tank instead of the indigenous Arjun tank which was widely expected to participate at the games this time.
Nineteen teams in total participated in the exercises with the top four entering the final. In the past, India had participated in these games using T-72 tanks provided by the Russian hosts. The Army felt disadvantaged using these tanks and was keen to field its best tanks and best crews. Consequently, two state-of-the-art T-90s were shipped across to Russia for these games.
Each participating team has up to 21 personnel including team members, a coaching crew and a maintenance unit. There are three stages in the competition - all teams participated in the individual race. Twelve teams made it to the semi-finals including India which involved a relay race. The top four teams will also participate in a relay race in the finals.
As a result of the breakdown of both tanks, the Indian squad was unable to complete the race and were disqualified. This is a sad end to the competition for the Army's tank crews since they had topped their group in the earlier round and were seen to be strong challengers to win the competition.
Russia, Belarus, Kazakhstan and China have now entered the final round of the event. Russia and Kazakhstan participated with T-72B3 tanks, Belarus with a modernised T-72 and China sent its indigenous Type 96B. India decided to field its top of the line Russian designed T-90 Main Battle Tank instead of the indigenous Arjun tank which was widely expected to participate at the games this time.
Nineteen teams in total participated in the exercises with the top four entering the final. In the past, India had participated in these games using T-72 tanks provided by the Russian hosts. The Army felt disadvantaged using these tanks and was keen to field its best tanks and best crews. Consequently, two state-of-the-art T-90s were shipped across to Russia for these games.
Each participating team has up to 21 personnel including team members, a coaching crew and a maintenance unit. There are three stages in the competition - all teams participated in the individual race. Twelve teams made it to the semi-finals including India which involved a relay race. The top four teams will also participate in a relay race in the finals.
Forces Prepared To Face Any Eventuality: Arun Jaitley
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The armed forces are prepared to face any eventuality, Defence Minister Arun Jaitley today assured the Lok Sabha amid the ongoing standoff between Indian and Chinese military in the Doklam area.
In response to a question on reports of troop movements in Tibet by China amid the on-going Doklam standoff and a senior Army officer's statement that Pakistan's defence industry was better than India's, Jaitely said the armed forces have adequate defence equipment to tackle any exigency.
"Our defence forces are ready to take on any eventuality," he said without making any specific reference to Doklam.
A question was also asked about a CAG report which stated that the defence forces have ammunition that can last for 22 days in an event of a war, instead of the mandatory 40 days.
Responding to this, the Defence Minister contended that significant progress has been made on this front thereafter, but did not elaborate.
"Nobody should have a doubt on that," the Defence Minister asserted.
In response to another question on the government's target to achieve indigenisation by 2022, Subhash Bhamre, minister of state in the Defence Ministry, said taking into consideration the next 15 years, the forces have a Long Term Integrated (LTI) perspective on this.
Mr Jaitley also sought to allay fears of closure of ordnance defence factories, saying all these factories and defence PSUs are going to continue and no employee will be retrenched.
"The core expertise of these ODFs (ordnance factories) is (manufacturing) ammunition and they will continue to do that," Mr Jaitely said.
In response to a question on reports of troop movements in Tibet by China amid the on-going Doklam standoff and a senior Army officer's statement that Pakistan's defence industry was better than India's, Jaitely said the armed forces have adequate defence equipment to tackle any exigency.
A question was also asked about a CAG report which stated that the defence forces have ammunition that can last for 22 days in an event of a war, instead of the mandatory 40 days.
Responding to this, the Defence Minister contended that significant progress has been made on this front thereafter, but did not elaborate.
"Nobody should have a doubt on that," the Defence Minister asserted.
In response to another question on the government's target to achieve indigenisation by 2022, Subhash Bhamre, minister of state in the Defence Ministry, said taking into consideration the next 15 years, the forces have a Long Term Integrated (LTI) perspective on this.
Mr Jaitley also sought to allay fears of closure of ordnance defence factories, saying all these factories and defence PSUs are going to continue and no employee will be retrenched.
"The core expertise of these ODFs (ordnance factories) is (manufacturing) ammunition and they will continue to do that," Mr Jaitely said.
Final Hearings On Ayodhya To Begin In Supreme Court On December 5
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Whether a temple to Lord Ram can be built in Ayodhya at the site where the Babri Masjid was razed will be taken up by the Supreme Court at the end of the year. Judges today said they will start final hearings in the case on December 5 and have asked for all relevant documents to be translated by the Uttar Pradesh government into English within the next three months.
In 2010, the Allahabad High Court accepted that the disputed site of 2.77 acres was the birthplace of Lord Ram. It said two-thirds of the land should be allotted to two Hindu organisations, and the remainder to Muslims. While Hindus want to build a Ram Mandir or Ram temple, Muslims say they should be allowed to construct a new mosque.
Hindu organisations say that the Babri Masjid was built after a temple was destroyed on the spot where Lord Ram was born.
The 16th-century Babri mosque was razed to the ground in 1992 by thousands of right-wing volunteers or karsewaks. Top BJP leaders including LK Advani and senior minister Uma Bharti are being tried on charges of criminal conspiracy for the destruction of the mosque which was followed by deadly communal riots. They have denied any wrongdoing.
The Supreme Court suspended the High Court's verdict in 2011, but has yet to begin hearing appeals by the parties involved. In March, Chief Justice JS Khehar to negotiate a settlement out of court and offered his services as a mediator.
Earlier this week, Uttar Pradesh's Shia Waqf Board, which claims the land but is not a party to the title suit that was decided by the High Court, said the new mosque could be moved to a nearby neighbourhood where Muslims are in the majority. However, other Muslim organisations have not backed the offer. Sunnis form the majority of Muslims in India.
The BJP has said that it remains committed to building a temple but will follow the Supreme Court's orders.
In 2010, the Allahabad High Court accepted that the disputed site of 2.77 acres was the birthplace of Lord Ram. It said two-thirds of the land should be allotted to two Hindu organisations, and the remainder to Muslims. While Hindus want to build a Ram Mandir or Ram temple, Muslims say they should be allowed to construct a new mosque.
The 16th-century Babri mosque was razed to the ground in 1992 by thousands of right-wing volunteers or karsewaks. Top BJP leaders including LK Advani and senior minister Uma Bharti are being tried on charges of criminal conspiracy for the destruction of the mosque which was followed by deadly communal riots. They have denied any wrongdoing.
The Supreme Court suspended the High Court's verdict in 2011, but has yet to begin hearing appeals by the parties involved. In March, Chief Justice JS Khehar to negotiate a settlement out of court and offered his services as a mediator.
Earlier this week, Uttar Pradesh's Shia Waqf Board, which claims the land but is not a party to the title suit that was decided by the High Court, said the new mosque could be moved to a nearby neighbourhood where Muslims are in the majority. However, other Muslim organisations have not backed the offer. Sunnis form the majority of Muslims in India.
The BJP has said that it remains committed to building a temple but will follow the Supreme Court's orders.
BIMSTEC Natural Choice For India's Act East, Neighbourhood First Policy: Sushma Swaraj
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India on Friday said that that the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) regional bloc was a "natural choice" to fulfill New Delhi's key foreign policy priorities of Neighbourhood First and Act East.
Indian External Affairs Minister Sushma Swaraj, in her address at the 15th Ministerial Meeting of the BIMSTEC here, also said that the grouping is collectively working on strategies to counter the scourge of terrorism and violent extremism.
"Peace and security are essential for development to take place," she added.
She referred to the first meeting of BIMSTEC national security chiefs in New Delhi in March 2017 and said that it "adopted a holistic approach to tackle traditional and non-traditional security challenges, that threaten our region".
"We worked out collective strategies to counter the scourge of terrorism, violent extremism and transnational crimes, as also to strengthen our maritime and cyber security cooperation," she stated. "Specific follow-up measures in these areas are now under progress."
BIMSTEC comprises seven countries lying in the littoral and adjacent areas of the Bay of Bengal - Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.
With the South Asian Association for Regional Cooperation (SAARC) virtually rendered ineffective as a bloc, largely due to non-cooperation on the part of Pakistan in a number of areas, India has been giving more importance to BIMSTEC in recent times.
The bloc brings together 1.5 billion people or 21 per cent of the world's population.
India is the lead country for cooperation in four priority areas: counter-terrorism and transnational crime, transport and communication, tourism and environment, and disaster management.
Ms Sushma Swaraj said that for India, BIMSTEC was a natural choice to fulfill New Delhi's key foreign policy priorities of Neighbourhood First and Act East.
Stating that enhanced connectivity was vital to achieving BIMSTEC's common goals of growth, employment and prosperity, she said: "To achieve smoother cross-border flows of trade and people, we need to put in place the enabling soft infrastructure such as the Framework Agreement on Transit, Trans-shipment and Movement of Vehicular Traffic and the Agreement on Coastal Shipping, at the earliest."
She said that intra-regional tourism got a boost with the launch of the BIMSTEC Network of Tour Operators recently in New Delhi which brought together industry and stakeholders from across the region.
"Promotion of intra-BIMSTEC tourist circuits, joint marketing strategies, and BIMSTEC specific tourism products, notably the Buddhist circuit, would allow tourists to experience our rich and shared civilizational heritage," she outlined.
As for disaster management, Sushma Swaraj said that the BIMSTEC region was vulnerable to a variety of disasters due to its geo-climatic conditions.
"To build regional capacities, India is hosting the first BIMSTEC Disaster Management Exercise in October 2017," she said.
"This will help us develop quicker, coordinated and comprehensive responses to disasters, and provide timely relief and rehabilitation."
Describing energy as the engine of economic development, she said: "I am happy to note that cross-border exchange of power between India, Nepal, Bhutan and Bangladesh is on a rapid upswing. The BIMSTEC MoU (memorandum of understanding) on Grid Interconnection, which has been finalised, would further facilitate regional energy trade."
The Indian Minister also referred to her country's ambitious programme to harness renewable energy and called for building a strong renewable energy partnership among the member states of BIMSTEC "to tackle climate change together, for a greener world tomorrow".
Pointing out that BIMSTEC has a combined GDP of over $2.85 trillion, Ms Sushma Swaraj said: "There remains however an immense unfulfilled potential for deeper economic integration. Along with the work on BIMSTEC FTA (Free Trade Agreement), the BIMSTEC Trade Facilitation Agreement and the BIMSTEC Agreement on Mutual Assistance on Customs Matters would fasten trade, and must be concluded at the earliest."
In the area of public health, she said that India's premier medical institute, Jawaharlal Institute of Postgraduate Medical Education and Research (Jipmer), has launched the BIMSTEC Tele-medicine Network that brought together 10 top hospitals and medical institutes in the region to provide cutting edge tele-medicine services.
"The BIMSTEC Task Force on Traditional Medicine would be meeting in India in October 2017 to strengthen the role of traditional medicine for holistic health care," she added.
Indian External Affairs Minister Sushma Swaraj, in her address at the 15th Ministerial Meeting of the BIMSTEC here, also said that the grouping is collectively working on strategies to counter the scourge of terrorism and violent extremism.
"Peace and security are essential for development to take place," she added.
"We worked out collective strategies to counter the scourge of terrorism, violent extremism and transnational crimes, as also to strengthen our maritime and cyber security cooperation," she stated. "Specific follow-up measures in these areas are now under progress."
BIMSTEC comprises seven countries lying in the littoral and adjacent areas of the Bay of Bengal - Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.
With the South Asian Association for Regional Cooperation (SAARC) virtually rendered ineffective as a bloc, largely due to non-cooperation on the part of Pakistan in a number of areas, India has been giving more importance to BIMSTEC in recent times.
The bloc brings together 1.5 billion people or 21 per cent of the world's population.
India is the lead country for cooperation in four priority areas: counter-terrorism and transnational crime, transport and communication, tourism and environment, and disaster management.
Ms Sushma Swaraj said that for India, BIMSTEC was a natural choice to fulfill New Delhi's key foreign policy priorities of Neighbourhood First and Act East.
Stating that enhanced connectivity was vital to achieving BIMSTEC's common goals of growth, employment and prosperity, she said: "To achieve smoother cross-border flows of trade and people, we need to put in place the enabling soft infrastructure such as the Framework Agreement on Transit, Trans-shipment and Movement of Vehicular Traffic and the Agreement on Coastal Shipping, at the earliest."
She said that intra-regional tourism got a boost with the launch of the BIMSTEC Network of Tour Operators recently in New Delhi which brought together industry and stakeholders from across the region.
"Promotion of intra-BIMSTEC tourist circuits, joint marketing strategies, and BIMSTEC specific tourism products, notably the Buddhist circuit, would allow tourists to experience our rich and shared civilizational heritage," she outlined.
As for disaster management, Sushma Swaraj said that the BIMSTEC region was vulnerable to a variety of disasters due to its geo-climatic conditions.
"To build regional capacities, India is hosting the first BIMSTEC Disaster Management Exercise in October 2017," she said.
"This will help us develop quicker, coordinated and comprehensive responses to disasters, and provide timely relief and rehabilitation."
Describing energy as the engine of economic development, she said: "I am happy to note that cross-border exchange of power between India, Nepal, Bhutan and Bangladesh is on a rapid upswing. The BIMSTEC MoU (memorandum of understanding) on Grid Interconnection, which has been finalised, would further facilitate regional energy trade."
The Indian Minister also referred to her country's ambitious programme to harness renewable energy and called for building a strong renewable energy partnership among the member states of BIMSTEC "to tackle climate change together, for a greener world tomorrow".
Pointing out that BIMSTEC has a combined GDP of over $2.85 trillion, Ms Sushma Swaraj said: "There remains however an immense unfulfilled potential for deeper economic integration. Along with the work on BIMSTEC FTA (Free Trade Agreement), the BIMSTEC Trade Facilitation Agreement and the BIMSTEC Agreement on Mutual Assistance on Customs Matters would fasten trade, and must be concluded at the earliest."
In the area of public health, she said that India's premier medical institute, Jawaharlal Institute of Postgraduate Medical Education and Research (Jipmer), has launched the BIMSTEC Tele-medicine Network that brought together 10 top hospitals and medical institutes in the region to provide cutting edge tele-medicine services.
"The BIMSTEC Task Force on Traditional Medicine would be meeting in India in October 2017 to strengthen the role of traditional medicine for holistic health care," she added.
'PM Assured Article 370 Will Be Respected,' Says Mehbooba Mufti
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The people of Jammu and Kashmir fear that their identity is threatened, Chief Minister Mehbooba Mufti said today in a meeting with Prime Minister Narendra Modi in Delhi to discuss a legal challenge related to the state's special status. "Our agenda is - no fiddling with status quo and the PM assured that article 370 will be respected," she said after the meeting, referring to the state's special autonomous status in the constitution.
Ms Mufti's meeting with PM Modi revolves around Article 35-A - which bars outsiders from owning property in Jammu and Kashmir - being challenged in the Supreme Court.
A petition says the article discriminates against women of the state, who lose their right to own property in the state if they marry a "non-resident".
The article is considered fundamental to the special status of Jammu and Kashmir. Ms Mufti has said that if it is tinkered with then it will have a direct impact on demography of the state.
The Supreme Court has also asked the Centre to respond to another petition that challenges the validity of Article 370 of the Constitution, which grants Jammu and Kashmir its autonomous status.
"I told the PM that Jammu and Kashmir is going through a tough phase. People fear their identity is under threat...The message should go that Jammu and Kashmir is the pride of India, the taj (crown) of India and its special status should remain," Ms Mufti said.
The idea of India, she added, has to accommodate the idea of Jammu and Kashmir.
The Chief Minister's anxiety is linked to the opposite view of the ruling BJP, her alliance partner in the state. The BJP has long held the stand that Article 35-A is discriminatory in nature and should be scrapped. Yesterday, the BJP spokesperson in the state said the "time has come for the people of Jammu and Kashmir to say goodbye to Article 370 and revoke Article 35 A."
Yesterday, Ms Mufti met Home Minister Rajnath Singh. Sources say the Chief Minister wanted to know what the centre's stand would be in the Supreme Court.
Ms Mufti was reportedly told that "it is a procedural issue... the Attorney General would present the legal aspects as they exist in the constitution."
After meeting the Prime Minister, Ms Mufti said he was "very positive and said the alliance of PDP and BJP will be respected."
Ms Mufti's meeting with PM Modi revolves around Article 35-A - which bars outsiders from owning property in Jammu and Kashmir - being challenged in the Supreme Court.
The article is considered fundamental to the special status of Jammu and Kashmir. Ms Mufti has said that if it is tinkered with then it will have a direct impact on demography of the state.
The Supreme Court has also asked the Centre to respond to another petition that challenges the validity of Article 370 of the Constitution, which grants Jammu and Kashmir its autonomous status.
"I told the PM that Jammu and Kashmir is going through a tough phase. People fear their identity is under threat...The message should go that Jammu and Kashmir is the pride of India, the taj (crown) of India and its special status should remain," Ms Mufti said.
The idea of India, she added, has to accommodate the idea of Jammu and Kashmir.
The Chief Minister's anxiety is linked to the opposite view of the ruling BJP, her alliance partner in the state. The BJP has long held the stand that Article 35-A is discriminatory in nature and should be scrapped. Yesterday, the BJP spokesperson in the state said the "time has come for the people of Jammu and Kashmir to say goodbye to Article 370 and revoke Article 35 A."
Yesterday, Ms Mufti met Home Minister Rajnath Singh. Sources say the Chief Minister wanted to know what the centre's stand would be in the Supreme Court.
Ms Mufti was reportedly told that "it is a procedural issue... the Attorney General would present the legal aspects as they exist in the constitution."
After meeting the Prime Minister, Ms Mufti said he was "very positive and said the alliance of PDP and BJP will be respected."
Business Affairs
GST disruption, farm loan waivers to keep GDP from reaching 7.5, says CEA Arvind Subramanian
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The Indian economy has seen an across-the-board deceleration in activity and requires policy makers to come up with all the possible tools to revive growth, Chief Economic Adviser Arvind Subramanian said on Friday.
The likely growth this fiscal will be towards the lower end of the 6.75-7.5 per cent band suggested in January-end, mainly because of downside effects of factors like the appreciation of the rupee, farm loan waivers and transitionary challenges from implementing GST, he said.
The only upside possibility is exports growth.
"Farm loan waiver will be deflationary exerting a drag on growth in short run... We are not changing the growth forecast, but we are saying that because of all these risks it is less likely that we will see outcomes towards the upper end of the forecast," said Subramanian.
Addressing reporters after the Economic Survey-2 was tabled in Parliament, he said there was an "across-the-board deceleration" in real economic activity since the first and second quarters of last year.
"There are very favourable medium term developments. The real challenge now is short term growth and how we need to respond to that. We need to bring to bare all the policy tools we have to revive short term growth," said Subramanian, the author of the Survey.
For the last 10 months, he said, inflation figures have come out better by about 150 basis points than the target that was set.
"End March inflation is going to be well within target and average inflation for year as a whole is going to be well below target. Average inflation for year will be closer to 3 per cent," Subramanian said.
Outlining the benefits of demonetisation, he said there are early signs as cash usage in the economy has come down.
"Has cash come down in economy? We seem to have achieved a 20 per cent reduction in the equilibrium cash holding which means that the cash-GDP ratio has come down by about 1.6 percentage points and this was one of the objectives of DeMo.
It is something quite substantial that has been achieved," he said.
He further said that 5.4 lakh additional taxpayers were added during post demonetisation, November 8-March 31.
"It represents about 1 per cent of taxpayers. It led to increase in number of taxpayers. The reported taxable income has not gone up by as much because many of these new filers are reporting a taxable income around the threshold. So whether this increase in taxpayer will lead to increased taxes remains to be seen," Subramanian said.
Stating that providing remunerative minimum support price (MSP) for crops to farmers was needed, he said policies that prop up market prices above MSPs need to be looked at.
"In the policy mix we have to ask whether some forms of direct support could be part of policy mix. This farm stress has happened at the time of plenty," he added.
The Indian economy has seen an across-the-board deceleration in activity and requires policy makers to come up with all the possible tools to revive growth, Chief Economic Adviser Arvind Subramanian said on Friday.
The likely growth this fiscal will be towards the lower end of the 6.75-7.5 per cent band suggested in January-end, mainly because of downside effects of factors like the appreciation of the rupee, farm loan waivers and transitionary challenges from implementing GST, he said.
The only upside possibility is exports growth.
"Farm loan waiver will be deflationary exerting a drag on growth in short run... We are not changing the growth forecast, but we are saying that because of all these risks it is less likely that we will see outcomes towards the upper end of the forecast," said Subramanian.
Addressing reporters after the Economic Survey-2 was tabled in Parliament, he said there was an "across-the-board deceleration" in real economic activity since the first and second quarters of last year.
"There are very favourable medium term developments. The real challenge now is short term growth and how we need to respond to that. We need to bring to bare all the policy tools we have to revive short term growth," said Subramanian, the author of the Survey.
For the last 10 months, he said, inflation figures have come out better by about 150 basis points than the target that was set.
"End March inflation is going to be well within target and average inflation for year as a whole is going to be well below target. Average inflation for year will be closer to 3 per cent," Subramanian said.
Outlining the benefits of demonetisation, he said there are early signs as cash usage in the economy has come down.
"Has cash come down in economy? We seem to have achieved a 20 per cent reduction in the equilibrium cash holding which means that the cash-GDP ratio has come down by about 1.6 percentage points and this was one of the objectives of DeMo.
It is something quite substantial that has been achieved," he said.
He further said that 5.4 lakh additional taxpayers were added during post demonetisation, November 8-March 31.
"It represents about 1 per cent of taxpayers. It led to increase in number of taxpayers. The reported taxable income has not gone up by as much because many of these new filers are reporting a taxable income around the threshold. So whether this increase in taxpayer will lead to increased taxes remains to be seen," Subramanian said.
Stating that providing remunerative minimum support price (MSP) for crops to farmers was needed, he said policies that prop up market prices above MSPs need to be looked at.
"In the policy mix we have to ask whether some forms of direct support could be part of policy mix. This farm stress has happened at the time of plenty," he added.
Industrial output slips into negative zone, contracts 0.1 per cent in June
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Industrial output entered the negative territory in June contracting by 0.1 per cent mainly due to decline in manufacturing and capital goods sectors.
Besides, segments like mining, power generation, infrastructure/construction goods and consumer durables recorded poor performance.
Factory output, measured in terms of Index of Industrial Production, grew 8 per cent in June 2016, according to the data released by the Central Statistics Office on Friday.
On a quarterly basis, factory output growth during April-June slowed down to 2 per cent from 7.1 per cent in the corresponding period last year.
This is the first time in the current fiscal, the industrial output has shown a decline. The IIP grew by 3.4 per cent in April and 2.8 per cent in May as per the revised estimates released on Friday.
Manufacturing sector, which constitutes over 77 per cent of the index, showed a decline of 0.4 per cent in June as compared to a growth of 7.5 per cent in the same month last year.
The output of mining and electricity sectors during the month decelerated to 0.4 per cent and 2.1 per cent from 10.2 per cent and 9.8 per cent respectively in June last year.
Capital goods output, which is the barometer of investment, declined by 6.8 per cent from a growth of 14.8 per cent a year ago.
Similarly, the output of primary goods and intermediate goods during the month declined by 0.2 per cent and 0.6 per cent as against growth of 8.2 per cent and 6 per cent respectively during June last year.
The Consumer durables and Consumer non-durables have recorded growth of (-) 2.1 per cent and 4.9 per cent respectively.
In terms of industries, 15 out of 23 industry groups in the manufacturing sector have shown negative growth during the month of June 2017 as compared to the corresponding month of the previous year.
Industrial output entered the negative territory in June contracting by 0.1 per cent mainly due to decline in manufacturing and capital goods sectors.
Besides, segments like mining, power generation, infrastructure/construction goods and consumer durables recorded poor performance.
Factory output, measured in terms of Index of Industrial Production, grew 8 per cent in June 2016, according to the data released by the Central Statistics Office on Friday.
On a quarterly basis, factory output growth during April-June slowed down to 2 per cent from 7.1 per cent in the corresponding period last year.
This is the first time in the current fiscal, the industrial output has shown a decline. The IIP grew by 3.4 per cent in April and 2.8 per cent in May as per the revised estimates released on Friday.
Manufacturing sector, which constitutes over 77 per cent of the index, showed a decline of 0.4 per cent in June as compared to a growth of 7.5 per cent in the same month last year.
The output of mining and electricity sectors during the month decelerated to 0.4 per cent and 2.1 per cent from 10.2 per cent and 9.8 per cent respectively in June last year.
Capital goods output, which is the barometer of investment, declined by 6.8 per cent from a growth of 14.8 per cent a year ago.
Similarly, the output of primary goods and intermediate goods during the month declined by 0.2 per cent and 0.6 per cent as against growth of 8.2 per cent and 6 per cent respectively during June last year.
The Consumer durables and Consumer non-durables have recorded growth of (-) 2.1 per cent and 4.9 per cent respectively.
In terms of industries, 15 out of 23 industry groups in the manufacturing sector have shown negative growth during the month of June 2017 as compared to the corresponding month of the previous year.
Economic Survey 2016-17: Here's how Indian economy fared on trade, FDI and debt
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Finance Minister Arun Jaitley today tabled the Economic Survey 2016-17 Volume-2 in the Parliament. The Survey report focuses on various aspects of the Indian economy and explains at length what the country's economic conditions are and how it is expected to perform.
From structural reforms to the launch of the GST to impacts of demonetisation, it has focused on almost every economic decision including privatisation of Air India and rationalisation of energy subsidies.
In a part of its report, the Economic Survey has explained the current position of Indian economy on overall trade, external debt and inflow of foreign funds under Foreign Direct Investment or FDI.
TRADE DEFICIT
Reflecting the slowly improving world economic situation, India's exports turned positive at 12.3 per cent in 2016-17. This along with a marginal decline in imports by 1.0 per cent resulted in narrowing down of trade deficit to USD 112.4 billion in 2016-17 as compared to USD 130.1 billion in 2015-16. The current account deficit narrowed down progressively to 0.7 per cent of GDP in 2016-17 from 1.1 per cent of GDP in 2015-16 led by sharp contraction in trade deficit. Economic Survey said that India's balance of payments situation which was benign and comfortable during 2013-14 to 2015-16, further improved in 2016-17 as current account deficits lowered, resulting in further accretion of foreign exchange reserves.
FDI
The Survey noted that gross FDI has increased to USD 60.2 billion in 2016-17 from USD 55.6 billion in 2015-16. Net FDI inflows at USD 35.6 billion, however, moderated marginally by 1.1 per cent from USD 36.0 billion in 2015-16. Among the major economies running current account deficit, India is the second largest foreign exchange reserve holder after Brazil with reserves at USD 386.4 billion as on 7th July, 2017.
EXTERNAL DEBT
Most of the external debt indicators of India improved at end-March 2017 compared end-March, 2016. India's aggregate external debt stock at end-March 2017 stood at USD 471.9 billion registering a decline of USD 3.1 billion (2.7 per cent) over end-March 2016. The ratio of external debt to GDP fell to 20.2 per cent from 23.5 per cent, while foreign exchange reserves provided a cover of 78.4 per cent to external debt compared to 74.3 per cent in the previous year. Debt service ratio fell to 8.3 per cent from 8.8 per cent and ratio of concessional debt to total external debt increased to 9.3 per cent from 9.0 per cent. Short term debt (residual maturity) to total external debt fell to 41.5 per cent from 42.7 per cent. Short term debt (residual maturity) to forex reserves also fell to 52.9 per cent from 57.4 per cent. Cross country comparison of external debt indicates that India continues to be among the less vulnerable countries.
Finance Minister Arun Jaitley today tabled the Economic Survey 2016-17 Volume-2 in the Parliament. The Survey report focuses on various aspects of the Indian economy and explains at length what the country's economic conditions are and how it is expected to perform.
From structural reforms to the launch of the GST to impacts of demonetisation, it has focused on almost every economic decision including privatisation of Air India and rationalisation of energy subsidies.
In a part of its report, the Economic Survey has explained the current position of Indian economy on overall trade, external debt and inflow of foreign funds under Foreign Direct Investment or FDI.
TRADE DEFICIT
Reflecting the slowly improving world economic situation, India's exports turned positive at 12.3 per cent in 2016-17. This along with a marginal decline in imports by 1.0 per cent resulted in narrowing down of trade deficit to USD 112.4 billion in 2016-17 as compared to USD 130.1 billion in 2015-16. The current account deficit narrowed down progressively to 0.7 per cent of GDP in 2016-17 from 1.1 per cent of GDP in 2015-16 led by sharp contraction in trade deficit. Economic Survey said that India's balance of payments situation which was benign and comfortable during 2013-14 to 2015-16, further improved in 2016-17 as current account deficits lowered, resulting in further accretion of foreign exchange reserves.
FDI
The Survey noted that gross FDI has increased to USD 60.2 billion in 2016-17 from USD 55.6 billion in 2015-16. Net FDI inflows at USD 35.6 billion, however, moderated marginally by 1.1 per cent from USD 36.0 billion in 2015-16. Among the major economies running current account deficit, India is the second largest foreign exchange reserve holder after Brazil with reserves at USD 386.4 billion as on 7th July, 2017.
EXTERNAL DEBT
Most of the external debt indicators of India improved at end-March 2017 compared end-March, 2016. India's aggregate external debt stock at end-March 2017 stood at USD 471.9 billion registering a decline of USD 3.1 billion (2.7 per cent) over end-March 2016. The ratio of external debt to GDP fell to 20.2 per cent from 23.5 per cent, while foreign exchange reserves provided a cover of 78.4 per cent to external debt compared to 74.3 per cent in the previous year. Debt service ratio fell to 8.3 per cent from 8.8 per cent and ratio of concessional debt to total external debt increased to 9.3 per cent from 9.0 per cent. Short term debt (residual maturity) to total external debt fell to 41.5 per cent from 42.7 per cent. Short term debt (residual maturity) to forex reserves also fell to 52.9 per cent from 57.4 per cent. Cross country comparison of external debt indicates that India continues to be among the less vulnerable countries.
EXTERNAL DEBT
Most of the external debt indicators of India improved at end-March 2017 compared end-March, 2016. India's aggregate external debt stock at end-March 2017 stood at USD 471.9 billion registering a decline of USD 3.1 billion (2.7 per cent) over end-March 2016. The ratio of external debt to GDP fell to 20.2 per cent from 23.5 per cent, while foreign exchange reserves provided a cover of 78.4 per cent to external debt compared to 74.3 per cent in the previous year. Debt service ratio fell to 8.3 per cent from 8.8 per cent and ratio of concessional debt to total external debt increased to 9.3 per cent from 9.0 per cent. Short term debt (residual maturity) to total external debt fell to 41.5 per cent from 42.7 per cent. Short term debt (residual maturity) to forex reserves also fell to 52.9 per cent from 57.4 per cent. Cross country comparison of external debt indicates that India continues to be among the less vulnerable countries.
State Bank of India Q1 net profit misses estimates, bad loans rise
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State Bank of India (SBI), the nation's biggest lender by assets, on Friday reported first-quarter profit that missed analysts' estimates, following a decline in net interest income and rise in bad loans.
The results are the first since SBI merged with five of its subsidiary banks and also took over a niche lender for women from April 1.
For the merged entity, net profit was Rs 2006 crore ($312.84 million) in the three months through June, from Rs 374 crore a year earlier. Pre-merger, the bank's year-earlier profit was Rs 2521 crore.
The result compared with the 3029 crore average analyst estimate, Thomson Reuters data showed.
Net interest income fell 3.5 percent to Rs 17606 crore.
SBI, which accounts for about a fifth of India's banking sector assets, said for the merged entity, gross bad loans as a percentage of total loans was 9.97 percent at the end of June from 9.11 percent three months earlier and 7.40 percent at the end of June last year.
Indian banks have been hit by higher provisions and regulatory scrutiny as bad loans reached a record $150 billion in December. Earlier this year, the government gave the central bank greater power to push defaulting borrowers into bankruptcy proceedings.
State Bank of India (SBI), the nation's biggest lender by assets, on Friday reported first-quarter profit that missed analysts' estimates, following a decline in net interest income and rise in bad loans.
The results are the first since SBI merged with five of its subsidiary banks and also took over a niche lender for women from April 1.
For the merged entity, net profit was Rs 2006 crore ($312.84 million) in the three months through June, from Rs 374 crore a year earlier. Pre-merger, the bank's year-earlier profit was Rs 2521 crore.
The result compared with the 3029 crore average analyst estimate, Thomson Reuters data showed.
Net interest income fell 3.5 percent to Rs 17606 crore.
SBI, which accounts for about a fifth of India's banking sector assets, said for the merged entity, gross bad loans as a percentage of total loans was 9.97 percent at the end of June from 9.11 percent three months earlier and 7.40 percent at the end of June last year.
Indian banks have been hit by higher provisions and regulatory scrutiny as bad loans reached a record $150 billion in December. Earlier this year, the government gave the central bank greater power to push defaulting borrowers into bankruptcy proceedings.
Economic Survey: 10 takeaways from Narendra Modi government's economic report card ahead of Independence Day
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The second volume of Economic Survey for the financial year 2016-17 tabled before the Parliament today, proved to be a mixed bag. Arvind Subramanian, chief economic advisor to Prime Minister Narendra Modi, presented the document.
The Survey talks of a 'rekindled optimism on structural reforms in Indian economy'. Meanwhile, it also points out that Asia's third-largest economy might not attain grow at its full potential, because of the disruptions caused by these radical reforms
The Economic Survey talks of a lot of things - from unprecedented decline in inflation figures to contracting service and manufacturing sectors, Reserve Bank of India being the only central bank to slash interest rates across Asia, as well as difficulties in job creation.
Here are the key takeaways from the latest Economic Survey:
Brakes on GDP!
The Economic Survey cautioned that reaching the upper limit of projections for economic growth at 6.75 to 7.5 per cent will be difficult. There are downward risks to economic growth projected in the Volume-I of Economic Survey, presented earlier this year in February.
With Indian economy still reeling under disruptive effects of demonetisation, and trying to cope up with the ambiguous provisions of Goods and Services Tax, these speculations seem to stand true.
Fiscal Deficit to decline
Owing to the gradual fiscal consolidation path chalked out in Union Budget for 2017-18, the fiscal deficit is expected to come down to 3.2 per cent of GDP during 2017-2018, the Survey stated. After reaching this milestone, the fiscal deficit target of 3 per cent of GDP under the FRBM framework is likely to be achieved in 2018-19.
Hurrah! for GST
The Survey named Goods and Services Tax (GST) as the most significant economic reform put into practice during the financial year 2016-17. From July 1, 2017, this new tax regime unified an assortment of Central and State level indirect taxes, making unification of Indian markets possible.
The only one to cut rates
The Reserve Bank of India cut its policy rate by 50 basis points during 2016-17, the only central bank to do so recently in Asia. However, it shifted its monetary policy stance from accommodative to neutral in February 2017, the Survey noted. After decrease in interest rates put into effect last week, repo rate now stands at 6.00 per cent and reverse repo rate at 5.75 per cent.
This move is expected to bring down interest rates on loans extended by banks to customers. In other words, interest rates charged on home loans, car loans, etc will come down. The government even urged the commercial banks to pass on rate cut benefits to the masses by cutting their loan rates.
NPAs have grown
The asset quality of banks has taken a hit on account of slow growth and increasing indebtedness seen in some economic sectors, which has led to increase in number of NPAs. The gross non-performing advances (GNPAs) ratio of state controlled banks (SCB) rose from 9.2 per cent in September 2016 to 9.5 per cent in March 2017, the Economic Survey said.
Finance Minister Arun Jaitley had stated that resolution of bad loans will start soon, with RBI taking up more cases.
Decrease in inflation
CPI inflation came down to a series low of 1.5 percent in June 2017, on account of broad based decline in all commodity groups during 2016-17, the most significant being decline in food, the Survey said. Food inflation, which was the main driver of inflation in the past, decreased substantially during 2016-17 due to rise in supply of pulses and vegetables fuelled by a normal monsoon. Core inflation-indicative of underlying trends too declined in the last few months.
Anti-dumping provisions have worked
Government introduced imposition of Minimum Import Price (MIP) to check dumping of steel into Indian markets, and it seems to have worked. "Steps taken by the government have borne fruit since imports of Steel by India have declined by 36.2 percent while exports have risen by 102 percent in 2016-17," read the Economic Survey.
Service sector growth contracts
Services sector in India, which stood strong even during the global financial crisis, has shown moderation recently. The services growth moderation is mainly due to deceleration in growth in two services categories- trade, hotels, transport, communication and services related to broadcasting (7.8 per cent), and financial, real estate and professional services (5.7 per cent), the Survey said.
It further added, the share of services sector in total gross capital formation (GCF), at current prices has increased consistently over the last four years from 53.3 per cent in 2011-12 to 60.3 per cent in 2015-16.
Challenges to agricultural sector
There is regional disparity in the distribution of agricultural credit which also needs to be addressed. The key challenges that the horticulture sector faces in India are post-harvest losses, availability of quality planting material, and lack of market access for horticultural produce of small farmers.
Shaky job creation
Employment in India poses a great challenge in terms of its structure which is dominated by informal, unorganized and seasonal workers, said the Survey. Job scenario in India is characterised by high levels of under employment, skill shortages, with the labour markets impacted by rigid labour laws, and the emergence of contract labour.
The second volume of Economic Survey for the financial year 2016-17 tabled before the Parliament today, proved to be a mixed bag. Arvind Subramanian, chief economic advisor to Prime Minister Narendra Modi, presented the document.
The Survey talks of a 'rekindled optimism on structural reforms in Indian economy'. Meanwhile, it also points out that Asia's third-largest economy might not attain grow at its full potential, because of the disruptions caused by these radical reforms
The Economic Survey talks of a lot of things - from unprecedented decline in inflation figures to contracting service and manufacturing sectors, Reserve Bank of India being the only central bank to slash interest rates across Asia, as well as difficulties in job creation.
Here are the key takeaways from the latest Economic Survey:
Brakes on GDP!
The Economic Survey cautioned that reaching the upper limit of projections for economic growth at 6.75 to 7.5 per cent will be difficult. There are downward risks to economic growth projected in the Volume-I of Economic Survey, presented earlier this year in February.
With Indian economy still reeling under disruptive effects of demonetisation, and trying to cope up with the ambiguous provisions of Goods and Services Tax, these speculations seem to stand true.
Fiscal Deficit to decline
Owing to the gradual fiscal consolidation path chalked out in Union Budget for 2017-18, the fiscal deficit is expected to come down to 3.2 per cent of GDP during 2017-2018, the Survey stated. After reaching this milestone, the fiscal deficit target of 3 per cent of GDP under the FRBM framework is likely to be achieved in 2018-19.
Hurrah! for GST
The Survey named Goods and Services Tax (GST) as the most significant economic reform put into practice during the financial year 2016-17. From July 1, 2017, this new tax regime unified an assortment of Central and State level indirect taxes, making unification of Indian markets possible.
The only one to cut rates
The Reserve Bank of India cut its policy rate by 50 basis points during 2016-17, the only central bank to do so recently in Asia. However, it shifted its monetary policy stance from accommodative to neutral in February 2017, the Survey noted. After decrease in interest rates put into effect last week, repo rate now stands at 6.00 per cent and reverse repo rate at 5.75 per cent.
This move is expected to bring down interest rates on loans extended by banks to customers. In other words, interest rates charged on home loans, car loans, etc will come down. The government even urged the commercial banks to pass on rate cut benefits to the masses by cutting their loan rates.
NPAs have grown
The asset quality of banks has taken a hit on account of slow growth and increasing indebtedness seen in some economic sectors, which has led to increase in number of NPAs. The gross non-performing advances (GNPAs) ratio of state controlled banks (SCB) rose from 9.2 per cent in September 2016 to 9.5 per cent in March 2017, the Economic Survey said.
Finance Minister Arun Jaitley had stated that resolution of bad loans will start soon, with RBI taking up more cases.
Decrease in inflation
CPI inflation came down to a series low of 1.5 percent in June 2017, on account of broad based decline in all commodity groups during 2016-17, the most significant being decline in food, the Survey said. Food inflation, which was the main driver of inflation in the past, decreased substantially during 2016-17 due to rise in supply of pulses and vegetables fuelled by a normal monsoon. Core inflation-indicative of underlying trends too declined in the last few months.
Anti-dumping provisions have worked
Government introduced imposition of Minimum Import Price (MIP) to check dumping of steel into Indian markets, and it seems to have worked. "Steps taken by the government have borne fruit since imports of Steel by India have declined by 36.2 percent while exports have risen by 102 percent in 2016-17," read the Economic Survey.
Service sector growth contracts
Services sector in India, which stood strong even during the global financial crisis, has shown moderation recently. The services growth moderation is mainly due to deceleration in growth in two services categories- trade, hotels, transport, communication and services related to broadcasting (7.8 per cent), and financial, real estate and professional services (5.7 per cent), the Survey said.
It further added, the share of services sector in total gross capital formation (GCF), at current prices has increased consistently over the last four years from 53.3 per cent in 2011-12 to 60.3 per cent in 2015-16.
Challenges to agricultural sector
There is regional disparity in the distribution of agricultural credit which also needs to be addressed. The key challenges that the horticulture sector faces in India are post-harvest losses, availability of quality planting material, and lack of market access for horticultural produce of small farmers.
Shaky job creation
Employment in India poses a great challenge in terms of its structure which is dominated by informal, unorganized and seasonal workers, said the Survey. Job scenario in India is characterised by high levels of under employment, skill shortages, with the labour markets impacted by rigid labour laws, and the emergence of contract labour.
General Awareness
Google, NSDC launch programme to improve Mobile Developer Ecosystem
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On August 8, 2017, National Skill Development Corporation (NSDC) and Google India launched Android Skill Development Programme to impart mobile app development training on the Android and Web platform and improve the quality of mobile app development ecosystem in India.
About Android Skill Development programme by NSDC and Google India:
Under the initiative, NSDC would introduce a specific course to create applications for the mobile platform that can be used on smart phones and tablets running on the Android operating system.
- Manish Kumar, MD and CEO of NSDC said, this collaboration aims to accelerate mobile skill training and create opportunities for youth in India.
- Peter Lubbers, Head of Google Developer Training said, by building a world class curriculum and making it easily accessible to millions of students and developers in India, we want to contribute to the Skill India initiative.
- The 100-hour duration course is designed to be delivered by NSDC’s partner agencies, outside the formal education system.
- NSDC and Google India will also work together to focus on up-skilling Android trainers under the programme.
About National Skill Development Corporation (NSDC):
The National Skill Development Corporation (NSDC) is a public-private partnership enterprise under the Ministry of Skill Development & Entrepreneurship.
- It aims to promote skill development by catalyzing creation of large, quality and for-profit vocational institutions.
- NSDC includes 22 Sector Skill Councils and 87 training partners with over 2500 training centres spread across 352 districts in India.
Quick Facts about Google:
- Founded in: 1998
- Headquarters: California, United States
- Current CEO: Sundar Pichai
On August 8, 2017, National Skill Development Corporation (NSDC) and Google India launched Android Skill Development Programme to impart mobile app development training on the Android and Web platform and improve the quality of mobile app development ecosystem in India.
About Android Skill Development programme by NSDC and Google India:
Under the initiative, NSDC would introduce a specific course to create applications for the mobile platform that can be used on smart phones and tablets running on the Android operating system.
- Manish Kumar, MD and CEO of NSDC said, this collaboration aims to accelerate mobile skill training and create opportunities for youth in India.
- Peter Lubbers, Head of Google Developer Training said, by building a world class curriculum and making it easily accessible to millions of students and developers in India, we want to contribute to the Skill India initiative.
- The 100-hour duration course is designed to be delivered by NSDC’s partner agencies, outside the formal education system.
- NSDC and Google India will also work together to focus on up-skilling Android trainers under the programme.
About National Skill Development Corporation (NSDC):
The National Skill Development Corporation (NSDC) is a public-private partnership enterprise under the Ministry of Skill Development & Entrepreneurship.
- It aims to promote skill development by catalyzing creation of large, quality and for-profit vocational institutions.
- NSDC includes 22 Sector Skill Councils and 87 training partners with over 2500 training centres spread across 352 districts in India.
Quick Facts about Google:
- Founded in: 1998
- Headquarters: California, United States
- Current CEO: Sundar Pichai
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