Daily Financial News Analysis – 16th Oct’19 | PDF Download

RBI Guv Faces Board Queries on Financial Frauds

•  Shaktikanta Das came under pressureat the bank’s board meeting last week.
• 2 external directors questioning howa string of frauds that have surfaced since 2018 remained undetected for years?????
• These incidents differ from eachother and are not exactly related, but a few members were quite vocal about it.
•  The governor explained theinformation sharing system and collection of data by the RBI… In some cases, the data itself — even the audited numbers — were either inadequate or fudged.
•  The external directors raised theissue at a time when the banking regulator is facing flak on social media, and facing the ire of depositors and financial market commentators.

Rev Secy on Tax Target

• Ajay Bhushan Pandey: government iswell on track to meet its tax targets.
• Any reduction in personal income taxwould depend on impact of the measures taken on revenue and the budget.
• Pandey strongly refuted criticism thatthe goods and services tax was the cause of the current economic slowdown.
•  Asked about rate rationalisation or aslab rejig in GST: what is required is a balanced approach looking at the revenue collection position, the revenue requirement position and the need for rationalisation.

2-year Holiday on Spectrum Payments

•  Telecom department is working on aplan.
•  To provide a 2-year holiday onpayment of spectrum dues. Totalling over ₹40,000 crore by thethree private telcos. Any decision will be subject toapproval by the FM.
•  ECONOMICS NOBEL WINNER’S TAKE ON INDIA
• Abhijit Banerjee: India’s economy wasin a “tailspin” and “doing very badly” . The government’s main focus has tobe on reviving demand. “I think demand is a huge problem right now in the economy.”

 Falling MILLET Prices

• Mandi prices of millets such as ragiand bajra ruling at 15-24% below their minimum support prices (MSPs).
•  Niti Aayog has recommended that theCentre offer 15-20% of MSP as commission to private traders to encourage them to buy coarse cereals at MSP.
• This will avoid distress sales byfarmers.
• If the proposal is implemented, theprivate trade will for the first time play a significant role in public procurement of grains.
•  Using private agencies is still acheaper option than asking FCI.
• PM-Aasha scheme

1. Price support scheme
2. Price deficiency payment scheme
3. Private procurement and stockist scheme

Exports shrink

• Merchandise exports shrank 6.6%year-on-year in September to $26 billion. The 3rd contraction in six months.
• Reflecting the impact of not justexternal headwinds but also subdued domestic manufacturing.
• Goods trade deficit hit a 7-month lowof $10.86 billion in September.
•  Imports plunged by almost 13.9%,mirroring a collapse in domestic consumption.
•  Exports of 23 out of 30 key itemscontracted, while imports of as many as 25 of the 30 products dropped. Industrial outputGold importsRural distress

IMF on Indian GDP Growth

• International Monetary Fund: India’sGDP growth projections by 90 bps to 6.1% for FY20 and by 20 bps to 7% for FY21.
• World Bank had slashed India FY20growth estimate to 6% from its original call of 7.5%.
• Moody’s Investors Service: cut itsforecast for India’s FY20 GDP growth by 40 bps to 5.8%.

Coal

• Power Minister RK Singh: ‘coal versus renewableenergy’ debate is “based on the wrong premises”
• The country is working to attain the intendednationally determined contribution (INDC) target of reducing the emissions intensity of its GDP by 33- 35% by 2030 from the 2005 level.
• Coal Minister Pralhad Joshi: his ministry “isimplementing coal washeries, permitting only super critical coal plants and planting trees for capturing carbon naturally”, to reduce the carbon footprint.

Agri Secy on Oilseeds

• 10th National Seed Congress
• To boost domestic production ofoilseeds and cut dependency on import of edible oil.
• Scientists should develop high-yieldingvarieties of seeds, especially that of soyabean.
•  Creating the world’s best traceabilitysystem to ensure availability of quality seeds to farmers. ‘Quality Seed for farmers’ Prosperity’
•  The secretary also talked about theneed to boost seed exports.
• According to industry data, the overallimports of vegetable oils during November 2018 to September 2019 went up by 3 per cent to 14.17 million tonne.
•  Agarwal said the government is in theprocess of bringing a new seed law and asked experts to give suggestions.
• Indian Council of Agricultural Research(ICAR) Director General Tirlochan Mohapatra spoke about DNA barcoding and stressed on developing protocol for DNA profiling.
•  He said seed production should bebased on demand placed by state governments

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