1. PLI Scheme for Speciality Steel
The Union Government this week approved ₹6,322 crore Production Linked Incentive (PLI) scheme for the specialty steel sector in a bid to attract an additional investment of about ₹40,000 crore and capacity addition of 25 million tons in the segment. The five categories of specialty steel which have been chosen in the PLI Scheme are coated/plated steel products, high strength steel, specialty rails, alloy steel products and steel wires and electrical steel
The move can help boost the global competitiveness of India steel makers and boost investment in high grade steel sector. Out of the total steel imports of India last year, 59% was in the space of specialty steel resulting in a forex outgo of approximately ₹ 30,000 crore. The PLI Scheme can further help the country in restricting the import bill.
2. OPEC+ Agrees to Boost Oil Output
OPEC and its Russia-led oil-producing allies agreed to unleash 4 million barrels of bottled-up crude over the next two years, pledging to restore all of the cuts they made at the start of the pandemic as economies pick up and crude demand recovers.
World’s oil demand is expected to grow back to pre-pandemic levels by 2022 and so restating the cuts become all the more important in the inflationary context. International crude price has been trading near their 2 and half year highs and the increased supply of crude may help soften it, although threats from coronavirus variants and OPEC’s internal crash still remain high in the short to medium term.
3. India Inc’s overseas direct investment in June doubles at $2.8 bn
India Inc’s overseas direct investment has been on a roll in the past couple of months. India Inc had invested USD 1.39 billion in overseas ventures in June 2020. However, on a month-on-month basis, the investment was lower by over 58 per cent MoM
With profits soaring for Indian companies, the large cap companies such as Tata Steel, Wipro, Reliance Industries have rolled down their free cash flows to some of their subsidiaries outside the country. Out of the total investment, $1.17 billion was made in terms of issuance of a guarantee, whereas $1.21 billion was rolled out as loans. Moreover, equity investments were made to the tune of $426.84 million.
4. Government Capex: Need of the Hour
Large central public-sector entities, companies and undertakings achieved 16% of their aggregate capital expenditure target for FY22 in the first three months of the current financial year, by spending Rs 93,000 crore. The highest capex was done by NHAI & Railways at Rs. 30000 crore and Rs. 28,000 crores respectively. Government capex is the most efficient way to bring back demand in the economy when the country is recovering from the 2nd wave of covid induced lockdown.
Government capex is the most efficient way to bring back demand in the economy when the country is recovering from the 2nd wave of covid induced lockdown. Past experience shows that an increase in PSE Capex is usually mimicked by the states given the complementary investment activities.
5. MSMEs line up to get guarantee support under ECLGS
Under Aatmanirbhar Bharat Package around Rs. 1.09 crore MSME borrowers have been provided with guarantee support amounting to Rs 2.73 lakh crore as of July 2 this year under the Emergency Credit Line Guarantee Scheme
Such high demand and disbursements have urged the government last month to increase the limit from 3 lakh crore to 4.5 lakh crore. The demand also suggests confidence renewal in the economy on the back of economic revival. Vaccination drives and further addition to covid cases will drive the demand going ahead
