dfa-5-sep

Daily Financial News Analysis – 5th Sep’20 – Free PDF Download

 

Robert Zoellick on Global Economy

  • The former head of the World Bank Robert Zoellick has warned the world could look like it did in 1900 if countries don’t work together to tackle the current crisis.
  • Rift between the US and China as a serious threat to the global economic recovery.
  • Mr Zoellick, one of America’s most senior public officials, has advised six US presidents during his career.
  • Robert said co-operation was “the only way the global economy will emerge from the recession
  • The world could look more like the world of 1900 when the great powers were in competition.
  • Mr Zoellick called for the US to work closely with China in finding a solution to the pandemic, rather than “indicting them for it”.
  • The person he blames for causing much of the damage is US President Donald Trump.
  • Mr Zoellick served under previous Republican Presidents George W Bush and George H W Bush. But he is clear about his dislike for the current Republican in office.

India’s Export-Import

  • Goyal has been holding a series of discussions with the EPCs, particularly since the lockdown.
  • The Commerce Secretary Dr Anup Wadhawan, DGFT Amit Yadav and other senior officers of the Ministry were present in the meeting.
  • The Minister said that the country’s exports as well as imports are showing positive trends.
  • The exports are approaching the last year’s levels, after making a sharp dip in April this year due to pandemic.
  • Regarding imports, the positive thing is that the Capital Goods imports have not declined, and the reduction in imports has been seen mainly in crude, gold and fertilizers.
  • He added that the trade deficit is reducing drastically and our share in the global trade is improving, thanks to our resilient supply chains, and perseverance and hardwork of our exporters.
  • The minister also said that we are trying to generate more reliable and better trade data so that nation can do better planning and frame policies accordingly.
  • The Minister said that 24 focus manufacturing sectors have been identified which have the potential to expand, scale-up operations, improve quality, and lead enhancement of Indian share in global trade and value chain.
  • These sectors have capacity to do import substitution and push exports.
  • On the issue of recent changes in the Merchandise Export from India Scheme (MEIS), the Minister said that the capping of Rs 2 Crore will not affect 98% of the exporters who claim benefit under the scheme.
  • The Government has already announced Remission of Duties or Taxes on Export Products (RoDTEP) scheme for exporters to take the place of MEIS, and a Committee has also been set up to determine the ceiling rates under the RoDTEP scheme.
  • This new scheme would reimburse the embedded taxes and duties already incurred by exporters.

V-Shaped Recovery

  • Monthly Economic Review for August
  • FinMin: India is witnessing a sharp economic revival and the worst is behind it
  • Manufacturing Purchasing Managers’ Index (PMI), auto sales and railway freight.
  • Manufacturing PMI rose to 52 in August, above the 50 mark that indicates expansion.
  • Tractor sales, fertiliser sales, steel consumption and production, cement production, power consumption, e-way bills, GST collection, daily highway toll collections, retail financial transactions, core industries, capital inflows and exports.
  • It flagged areas that may require specific attention to revive the economy and build resilience for the future, suggesting big structural reforms in land, legal, labour and capital markets to reverse the slowdown and boost risk appetite.
  • India’s economy contracted by a record 23.9% in the June quarter.
  • Leading automakers have reported high growth in August, both year-on-year and from the preceding month. E-way bills touched Rs 13.8 lakh crore last month, reaching 97.2% of the figure for August last year.
  • Finance Secretary Ajay Bhushan Pandey: “In the months of July and August, certain indicators like GST collections have reached (87-90%) of last year’s level… eway bills, imports and exports, so all those are (rising)”
  • The arrival of the Covid vaccine would signal the end of this uncertainty and bring back discretionary consumption to pre-Covid levels.
  • Areas that may require specific attention include agrarian supply chains, factor markets, infrastructure, information and communications technology (ICT), startups, financial inclusion, skilling and health care.
  • Chief economic adviser KV Subramanian, who made a presentation to the Economic Advisory Council of the Finance Commission, said the finance ministry was tracking high-frequency indicators and some were showing a rebound, commission chairman NK Singh told reporters.

US Investments in Manufacturing, Infra

  • Finance minister Nirmala Sitharaman welcomed US companies’ investments and partnerships in India, especially in the manufacturing and infrastructure sectors, during a virtual discussion with US-India Strategic Partnership Forum’s board of directors.
  • The discussion — held on the sidelines of USISPF’s third annual leadership summit on Thursday night — focused on ease of doing business in India, digitisation and fintech, agriculture and agricultural infrastructure, and private participation across all sectors of the Indian economy, the business forum said in a statement.

Vitamin-C Dumping

  • India has initiated an anti-dumping investigation into imports of Vitamin-C from China.
  • Vitamin-C is primarily used by pharma firms for producing various medicines.
  • Bajaj Healthcare, bulk drug manufacturer claimed that dumping was leading to a decline in its market share, profits, return on capital employed and cash profits, and causing material injury to the domestic industry.
  • The directorate recommends the imposition of a duty to the finance ministry, which takes a call on the levy.
  • India imported $7.96 million worth of Vitamin-C in fiscal 2020 of which $4.47-million worth came from China.
  • Vitamin-C also has uses in the non-pharma industry.
  • It is an antioxidant, an essential nutrient involved in the repair of tissue and functioning of several enzymes, and is important for the functioning of the immune system.

 

 

 

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