1. India To Register Double-Digit Growth In FY22: S&P
An increase in commodity prices and a revival of domestic demand after the easing of lockdown have brought upside earnings surprises while changing consumer choices such as the preference for personal transport for health-safety reasons, have helped industries such as automobiles.
The Stronger than expected recovery of corporate earnings after the pandemic-related disruption, improved GST receipts, mobility trends showing driving in India has surpassed pre-pandemic levels, and several high-frequency indicators such as purchasing managers’ indices point to positive near-term prospects.
2. Finance Ministry Asks RBI To Ensure A Higher Dividend For Govt In FY22
The finance ministry has asked the Reserve Bank of India (RBI) to make every effort to secure a higher dividend for the government in the financial year 2021-22 (FY22), despite sliding interest rates globally, sources in the know said. It has also sought the RBI’s advice on gold monetization.
RBI has been the front-runner in helping India restrict economic shocks of Covid-19. RBI has advised against any change in the inflation goalposts. RBI Governor has assured Finance Minister that the Rs 12.05-trillion gross borrowing programme for FY22 will go through smoothly.
3. India’s January Trade Deficit Narrows
India’s trade deficit in goods narrowed to USD 14.54 billion in January as exports grew faster than imports. The exports rose 6.16% in January from a year earlier, while imports were up by 2.03%.
India records positive momentum in exports, reflecting expedited adaption of the world to the New Normal. Reduction of customs duty will promote domestic manufacturing. Easy access to input materials will help India to get onto the global value chain.
4. Government Backs Merger Of Two Tax Slabs In GST
The central government is in favour of merging the goods and services tax (GST) rates of 12% and 18% into a single slab, a top finance ministry official said, acceding to a demand first made by some states and endorsed by the Fifteenth Finance Commission (FFC).
The impact on the consumer will depend on the Council’s decision but reducing the tax rate will make the GST regime simpler for the states and, the government would hope, improve compliance. Sectors such as consumer cyclicals, consumer defensives may benefit from this decision.
5. Industry Cheers PLI For Telecom Sector
The Rs 12,195 crore PLI scheme (operational from FY22) for telecom equipment manufacturing is “a big positive” that will spur local production and generate employment, boding well for the 2nd largest global telecom market. India is eyeing trillion dollar digital economy over the next 2 years.
Telecom operators have new life breadth into them as India drives its “Make Local – Sell Global” philosophy. After extension of loan moratorium for another decade (albeit with some condition), announced last year, this news can rejuvenate call lines in the land of cheapest data rates in the world.
