Table of Contents
Modi Russia visit
- 5th Eastern Economic Forum
- Prime Minister Narendra Modi said India willwalk shoulder-to-shoulder with Russia in its development of the Far East.
- India announced a $1 billion line of credit for the development of the resource-rich region.
- India was the first country to open a Consulate in Vladivostok
- Indian firms have invested over $7 billion in taking stake in Russian oil and gas fields.
- India ventured into Russia when its flagship overseas firm ONGC Videsh in 2001 acquired a 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia.
- OVL later bought Imperial Energy, which has fields in Siberia, as also stakes in Vankor oilfield in eastern Siberia.
- IOC and its partners have picked up 29.9 per cent stake in aseparate Taas-Yuryakh oilfield in East Siberia.
- Russian oil firm Rosneft in 2017 bought Essar Oil, whichoperates in Vadinar oil refinery in Gujarat and some 5,500 petrol pumps, for $12.9 billion.
- Modi said the friendship between Indiaand Russia was not restricted to governmental interactions in capital cities, but was about people and close business relations.
- India has actively engaged East Asia aspart of its ‘Act East’ policy.
- India unveiled the “Act Far East“policy to boost India’s engagement with Russia’s Far East region.
Cashless India?
- Banks may be dutifully executing the government’s cashless agenda but there’s little buy-in from merchants.
- Fewer than half the vendors acquired by bankshave gone cashless.
- 50% success ratio in merchants acceptingpayments digitally.
- Prime reason: Reluctant to leave a trail for the taxman, merchants, especially smaller shops
- Banks don’t make money in theacceptance business and taking away the sliver of cover they earn from MDR could hamper investments in merchant acquisition.
- Merchant economy is in a place wheresome say MDR charges are too high.
- For small merchants it could be anentry barrier.
JSW Steel bid for Bhushan Power
- National Company Law Tribunal (NCLT) has approved the JSW Steel’s ₹19,700-crore bid for debt-ridden Bhushan Power & Steel Ltd (BPSL).
- NCLT assured that the slew of criminal proceedings against BPSL promoters will not affect the company in future.
- Adding Bhushan Power would allow JSW toreach its goal of increasing capacity to 45 million tons in India and have overseas capacity of 10 million tons by 2031.
5,00,000 crore road projects
- Government will commission 68 roadconstruction projects worth Rs 5 lakh crore in the next three months.
- This will boost demand for commercial vehicles.
- Reiterated: petrol and diesel-engine vehicles will not be banned even as the country’s huge crude oil import and inflated levels of pollution remain a concern.
- Society of Indian Automobile Manufactur ers (Siam) conclave
- Oil imports of Rs 6-7 lakh core remain big issues for the country
- Commercial vehicle sales plunged by amassive 40% y-o-y in August.
- Acknowledging that the auto sector needs the government’s help, the minister said he will propose reduction of GST on vehicles, even if for a temporary period, to the finance ministry.
Kharif crop
- Condition of Kharif (summer-sown)crops is good and the country is likely to have bumper production of food grains.
- With better monsoon rains in August ,the sowing area of Kharif crops has improved significantly.
- As on August 30, rice area stood at 354.84 lakh hectare as against 372.42 lakh hectares in the year-ago period.
- Agriculture minister Narendra Singh Tomar
- Pulses acreage was down at 127.99 lakh hectares against 131.54 lakh hectares
- Area under coarse cereals was flat at 171.74 lakh hectares.
- Oilseeds acreage was marginally lower at 170.78 lakh hectares compared to 171.15 lakh hectares.
- Area under cotton was higher at 124.9lakh hectares as against 117.66 lakh hectares.
- Check soil health, before sowing operations in order to ensure balance use of fertilisers.
- Govt distributed soil health cards to 12 crore farmers.
- India has become self sufficient in foodgrains.
- Challenge: increase productivity andproduction as well as ensure use of modern technology, increased focus on research, right usage of fertilisers and higher income to farmers.
- Need of making farmers aware about judicious use of water in agriculture.
- Govt has fixed of MSP (minimumsupport price) at least 1.5 times of production cost.
- PM-Kisan programme under which Rs6,000 per year is being provided in three equal instalments and a pension scheme for farmers.
China-USA Trade Talks
- China and the U.S. announced that face-to-face negotiations aimed at ending their tariff war will be held in Washington in the coming weeks.
- Chinese Vice Premier Liu He agreed toa visit in “early October” .
- A rapid deterioration in relations last month has left global investors reeling amid increasing evidence that the conflict is harming the economy in both nations.
- Both sides raised tariffs on Sept. 1 in the latest round of retaliation, the U.S. plans to add more tariffs on Oct. 1., and then both nations will increase them again on Dec. 15 unless there is a breakthrough.
- Both sides face the choice” of whether to continue the lose-lose situation or to reach a deal with compromise from both sides.
- The IMF estimates that the current and upcoming tariffs will shave about 0.8% off global gross domestic product growth in 2020
Budget funding at risk
- Finance Minister Nirmala Sitharaman is counting on a record $24 billion windfall from the Reserve Bank of India and a budgeted Rs 1.05 lakh crore ($15 billion) income from asset sales to fund the fiscal deficit of 3.3% of gross domestic product in the year through March 2020.
- She’ll need more revenue next year to narrow that gap to 3% — as mandated by law — without compromising on spending.
- That may prove difficult since slower economic growth has made it harder for the government to improve tax collections and the boost from the central bank and assets sale program are unlikely to be repeated.
- Sitharaman has said she hasn’t decided yet on how the RBI funds will be used.
- The cash is more than enough to pay income support to farmers and recapitalize troubled state banks this year.
- Countries traditionally fund their large expenditure programs from taxes.
- India’s tax collection in the four months through July was only a fifth of the budget target of Rs 16.5 lakh crore.
- The shortfall last year forced the government to slash expenditure to meet the fiscal gap goal.
- The country’s tax-to-GDP ratio of about 11%ranks lower than the global average and has fallen despite an amnesty program in 2016.
- The government is penciling in a 12% increase in collections this year, based on economic expansion of 7%.
- That may be over-optimistic, given that GDP growthin the June quarter slowed to 5%.
- Govt has to find resources to fund recurring expenses for farm income, employment guarantees and health access.
- The success of the assets sale program is also uncertain, given declining investor appetite and volatile financial markets.
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