1. IIP, CPI Data Pour Cold Water on Green Shoots
Factory output contracted in December and retail inflation shot up to a 68-month high in January, data released on Wednesday, 13 February, showed, a day after the government cited seven economic indicators to claim that the economy was recovering.
The National Statistical Office (NSO) on Wednesday said that the index of industrial production (IIP) shrank 0.3% in December from a 1.8% expansion a month ago, while retail inflation accelerated to 7.59% in January from 7.35% in the previous month.
On Tuesday, Finance Minister Nirmala Sitharaman claimed that the economy is on the mend, relying on seven indicators, including IIP and the Purchasing Managers’ Index, to show that green shoots have started to emerge in the economy.
2. Non-Subsidised LPG Cylinder Price Hiked by Rs 146.38 Across Metros
A steep hike in cooking gas price was announced on Wednesday, 12 February, with the cost of a 14.2 kg unsubsidised domestic LPG cylinder being raised to Rs 858.50 in the national capital.
On an average, cooking gas price has been raised by ₹146.38 a cylinder across the metros.
The subsidy on cooking gas has also been raised to maintain the effective price of LPG cylinders for recipients. The subsidy outgo to domestic consumers has been doubled from around Rs 150 a cylinder to almost Rs 300. This has been done to ensure that consumers continue to pay around Rs 550 to Rs 570 a cylinder for cooking gas across the country.
Till now, petroleum product prices have been revised at the beginning of every month. But it appears that the public sector oil marketing companies shied away from hiking prices in the light of the Assembly elections in Delhi.
3. Govt Eases FPIs Registration Process, Notifies Common Application Form
The finance ministry has notified a common application form for registration of foreign portfolio investors in a bid to enhance operational flexibility and ease of access to the Indian capital market.
Last week, markets regulator Securities and Exchange Board of India (Sebi) had come out with a common application form (CAF) for registration of FPIs, allotment of permanent account number (PAN) and carrying out of Know Your Customer (KYC) for opening of bank and demat accounts.
"The finance ministry has notified the revised common application form for foreign portfolio investors which would serve as a single-window platform for the purpose of registration with Sebi, allotment of PAN and opening of bank and demat accounts," Economic Affairs Secretary Atanu Chakraborty said in a tweet.
(Source: Business Standard)
4. RBI’s CRR Step Won’t Make Your Loan Cheaper
The central bank’s recent measures to lower interest rates for consumers and small businesses are unlikely to benefit them and instead deliver some collateral gains to corporate borrowers, whose interest rates are still set on the marginal cost of the bank’s funds.
This is because from 1 October, all retail and small business loans have moved to the new external benchmark-based lending rate – it’s the repo rate for almost all banks –from the earlier marginal cost of funds-based lending rate (MCLR) framework. While MCLR is based on a bank’s incremental cost of funds, loans that are linked to external benchmarks such as the repo rate change only when there is a movement in the benchmark.
While the Reserve Bank of India’s Rs 1 trillion credit window and exemptions from setting aside money as cash reserve ratio (CRR) will lower the cost of funds for banks, it won’t reduce interest rates for loans that are linked to the repo rate, according to chief executives of Union Bank of India and Punjab National Bank (PNB).
5. IT Dept to Give Sebi Data of Taxpayers for Fraud Probe
The Income-Tax Department will share all taxpayers’ data, such as PAN information, with the Securities and Exchange Board of India (SEBI) in order to help the capital market regulator in its probe against various entities, including those involved in ‘stock market manipulation’, an official order has said.
The Central Board of Direct Taxes (CBDT), which frames policy for the Tax Department, had issued an order in this context on 10 February under Section 138 (1) of the I-T Act.
The sharing of information will be under three broad heads: Request-based exchange of data, suo motu, and automatic.
6. Unbelievable but True That Only 2,200 Had Declared Earnings of Rs 1 Cr: PM
While the previous governments had hesitated to touch the country's taxation system, the current dispensation was making it more citizen centric, Prime Minister Narendra Modi said on Wednesday, 12 February, urging people to pay their dues for the development of India.
Speaking at the Times Now Summit, he said the concern was that as some people always found ways to evade taxes, the honest got penalised.
"All governments hesitated to touch the tax system. Now, we are making it citizen centric. When a number of people do not pay tax, find ways to evade it, the burden falls on those who honestly pay their dues," he said.
The prime minister added that it was unbelievable but true that only 2,200 people in the country had declared earnings of Rs 1 crore per annum.
(Source: Business Standard)
7. Air Pollution Costs India $150 Billion a Year
Air pollution from burning fossil fuels is generating economic losses of $8 billion a day, according to a Greenpeace report.
That’s about 3.3% of global gross domestic product, or $2.9 trillion per year, according to a report from Greenpeace Southeast Asia and Center for Research on Energy and Clean Air.
China, the US and India bear the highest economic cost of soaring pollution, at an estimated $900 billion, $600 billion and $150 billion a year, respectively.
Air pollution continues to harm billions of people on a daily basis, despite efforts by some countries and companies to push for greater use of renewable energy and cleaner fuels.
8. RBI Hopes for Investment Cycle Turnaround as FY20 Planned Capex Rises
With a 42% rise in the planned capital expenditure for 2019-20 by the private corporate sector, the beginning of a turnaround in the investment cycle is likely, said an article published by the Reserve Bank of India (RBI). The planned capex is estimated to rise to Rs 1.2 lakh crore in 2019-20, up 42% from Rs 84,602 crore in the previous year.
“The planned or envisaged capex from all sources based on the pipeline projects sanctioned in all preceding years points to a noticeable improvement in 2019-20. The investment cycle appears to be poised to gain momentum in the short to medium term, but its sustainability needs to be watched closely,” the article said. The aggregate envisaged capex for 2019-20 will also depend on the level of corporate investment, including fresh projects sanctioned during the year.
(Source: Financial Express)
9. Sensex Gains on Hopes of Lull in China Virus Outbreak
Indian equities edged higher on Wednesday with benchmark indices rising nearly 1%, amid hopes that the worst of the coronavirus epidemic may have passed. Buying in global markets also supported sentiment in India. The BSE Sensex ended at 41,565.90, up 349.76 points or 0.85% while the Nifty closed at 12,201.20, up 93.30 points or 0.77%.
Markets in Japan, China, Hong Kong and Korea were also up 1% after China recorded the fewest new coronavirus cases since January. China’s National Health Commission reported 2,015 new cases of coronavirus and 97 deaths across the mainland on Wednesday, marking the lowest number of new cases in one day since late January, according to Reuters.
The outbreak, which originated in the central Chinese city of Wuhan, has led to the closure of factories, businesses and transportation in the country. It roiled global stocks and commodities, many of which are yet to recover.
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