Category: Economy

Countries raised a record $95 billion in 2022 by charging companies for emitting carbon dioxide, but prices are still tremendously low to drive changes necessary to meet the Paris Agreement, said the World Bank in a report released in May.

In a statement, Jennifer Sara, Global Director, Climate Change Group, World Bank Group, said that even in difficult economic times, governments are prioritising direct carbon pricing policies to reduce emissions. However, to really drive change at the scale needed, the world needs to see big advances both in terms of coverage and price.

Many countries are using a price on carbon emissions to help meet their climate goals in the form of a tax, or under an emissions trading, or cap-and-trade, system. Presently, there are 73 global carbon pricing instruments in use, compared with 68 when the World Bank issued its 2022 report last May, covering around 23 percent of global greenhouse gas emissions. The figure raised in 2022 in carbon revenues was higher from around $84 billion raised in 2021.

In 2017, a report by the High-Level Commission on Carbon Prices indicated that carbon prices need to be in the $50-$100 per tonne range by 2030 to keep a rise in global temperatures below 2 deg C — the upper end of the limit agreed upon in the 2015 Paris Agreement.

As of April 1, 2023, less than 5 percent of global greenhouse gas emissions are covered by a direct carbon price at or above the range recommended by 2030. Adjusted for inflation, those prices would now need to be in the range of $61-$122 tonne, the World Bank report said.

Deputy Prime Minister of Singapore Lawrence Wong has warned that the calls to “de-risk” – rather than “decouple” – from China could lead to a more fragmented and decoupled world economy, which in turn, will split the world into competing regional blocs. There will be less trade, less investments and less diffusion of ideas, driving the world, especially Asia – where millions were lifted out of poverty, thanks to globalisation and trade – will end up worse off than before.

Addressing business leaders, academics and the media at the annual Nikkei forum Future of Asia in Tokyo on June 1, Wong made the statement in response to the discussion at the recent Group of Seven (G7) summit of advanced economies in Hiroshima in May. At the G7 summit, leaders introduced the term, de-risking, in their communiqué for the first time, trying to capture it more positively than their previous term, decoupling. De-risking means reducing “excessive dependencies” in critical supply chains such as by not over-relying on any country for the supply of materials or as a market.

In his speech, Wong, who is also Singapore’s Finance Minister, observed how geopolitical lines are clearly starting to be drawn. He said that there are signs of global foreign direct investment flows “becoming more concentrated among countries that are geopolitically aligned. This marks a significant change from the last three decades of globalisation, when investors assigned capital based on business considerations, and companies worked all over the world and linked up in global supply chains.

The Reserve Bank of India (RBI) plans to expand the pilot for the central bank digital currency (CBDC) in the fiscal year (FY) 2023-24, said the central bank’s annual report released on May 30.

The CBDC, referred to as digital rupee or e₹, will now be taken to more banks and locations in this financial year. “RBI aims at expanding ongoing pilots in CBDC-Retail and CBDC-Wholesale by incorporating various use cases and features,” the report said.

On October 31, 2022, the central bank launched the first pilot of digital rupee in the wholesale segment and identified nine banks to participate. The pilots for the wholesale and retail CBDC were started on November 1, 2022 and December 1, 2022, respectively. The nine lenders include State Bank of India (SBI), Bank of Baroda (BOB), Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.

The retail digital rupee, or e₹, can be used by people for day-to-day transactions.

Eight banks are participating in the retail pilot project, including SBI, ICICI Bank, Yes Bank, IDFC First Bank, BOB, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank. Under the pilot project, banks can invite selective customers and merchants to try the services through their mobile applications. After this, these users can make peer-to-peer transactions and peer-to-merchant transactions.

Global experts have agreed to produce a draft treaty to end plastic pollution. Environmental advocates welcomed the result of the five days of United Nations’ talks in Paris on plastic pollution recently, while expressing concern that the petroleum industry and some governments would water down the eventual treaty, as most plastic is made from fossil fuels.

The UN delegates at the Intergovernmental Negotiating Committee for Plastics on June 2 agreed to produce an initial draft before their next meeting in Kenya in November. The committee is charged with developing the first international, legally binding treaty on plastic pollution, on land and at sea.

A coalition led by the governments of Norway and Rwanda, and environmental groups, want to end plastic pollution altogether by 2040 by cutting production and limiting some chemicals used in making plastics. Countries with big petroleum industries such as the US, China and Saudi Arabia are more focused on plastic recycling, and want rules based on nations instead of across-the-board limits.

Globally, more than 430 million tonnes of plastic is produced annually, two-thirds of which are short-lived products that soon become waste, ending in the ocean and, often, working their way into the human food chain, the UN Environment Program said in an April report. Plastic waste produced globally is set to almost triple by 2060, with about half ending up in landfill, says the Organization for Economic Cooperation and Development.

India has extended the $1 billion credit facility to Sri Lanka for another year.

The State Bank of India (SBI) and the Sri Lankan government signed an agreement in March last year at the height of the country’s economic crisis. India on May 30 extended its $1 billion credit line to Sri Lanka to help the island nation hit hard by an extraordinary economic crisis to acquire food, medicine and other essential items. Since last year, the credit facility has been used for urgent procurement of fuel, medicine, food items and industrial raw materials, as per the requirements and priorities of Sri Lanka.

“India reaffirms its commitment to the people of Sri Lanka. The Amendment Agreement signed in presence of Honourable Minister @ShehanSema today will enable Sri Lanka to use the $1 billion Indian credit facility for the procurement of medicine, food, and other essentials for one more year,” the Indian High Commission in Sri Lanka tweeted.

India extended multi-pronged assistance of about $4 billion to Sri Lanka last year, through multiple credit lines and currency support, in line with India’s ‘Neighbourhood First’ policy.

Meanwhile, Sri Lanka also announced on May 30 that it has commenced the preliminary work to resume the abandoned Japan-funded Light Rail Transit project.

Morgan Stanley, in its latest report, has said that in a short span of 10 years, India has gained positions in the world order with significant positive consequences for the macro and market outlook.  

The report, India Equity Strategy and Economics: How India Has Transformed in Less than a Decade has predicted that India will emerge as a key driver for Asia and drive a fifth of global growth in the coming ten years.

Morgan Stanley has based its report on 10 big changes, mainly due to India’s policy choices, and their implications for its economy and market. These are Supply-side Policy Reforms, Formalisation of the Economy, Real Estate (Regulation and Development) Act, Digitalising Social Transfers, Insolvency and Bankruptcy Code, Flexible Inflation Targeting, Focus on FDI, India’s 401(k) Moment, Government Support for Corporate Profits, and MNC Sentiment at Multi Year High, the report added.

Noting its achievements over the years, the report said in 10 years, India’s base corporate tax rate has stayed below 25 per cent, while for new companies with operations commencing before March 24, it has stayed at 15 per cent. In terms of infrastructure development, there has been significant development in national highways, broadband subscriber base, renewable energy and railway route electrification.

The South African government granted diplomatic immunity to all international participants, including Russia President Vladamir Putin and other Russian officials, at BRICS-related events to be held in the country. South Africa, which currently chairs the bloc, is currently hosting the BRICS foreign ministers’ meeting in Cape Town (1-2 June).

The immunities and privileges in terms of the United Nations Convention grant immunity from personal arrest or detention. A gazetted notice was issued by the South African International Relations and Cooperation Minister Naledi Pandor for the Diplomatic Immunity and Privileges Act to be granted to all international officials at BRICS-related events in the country.

“Immunity from personal arrest or detention and from seizure of their personal baggage, and, in respect of words spoken or written and all acts done by them in their capacity as representatives, immunity from legal process of every kind,” the document reads.

A warrant for Putin’s arrest was issued by the International Criminal Court in The Hague in March, and since South Africa is a member of the formation, it is obliged to arrest Putin when he is in the country. Despite this, South Africa, as the current chair of the BRICS alliance, has officially invited Putin to the 15th BRICS summit at Durban in late August 2023. Russian Foreign Minister Sergey Lavrov is currently attending the BRICS foreign ministers meeting in Cape Town.

On his visit to the world’s tallest railway bridge in Jammu and Kashmir on May 17, 2023, Mohamed Aslam, Minister for National Planning, Housing and Infrastructure, Maldives, was ”very impressed” with the Chenab Bridge and the development the Indian Railways is bringing to India.

The Chenab Rail Bridge is constructed 359 metres above the Chenab River in Jammu and Kashmir region. It is about 35 metres taller than the Eiffel Tower.

The ministerial delegation from Maldives also included Shifaz Ali, Minister of State for National Planning, Housing & Infrastructure, Republic of Maldives, Mahjoob Shujau, Project Director, PMU, Republic of Maldives, and Mohamed Jinan Saeed, Project Manager, GMC-MTL project, PMU, Republic of Maldives.

With the Udhampur-Srinagar-Baramulla Rail Link (USBRL) Project about to be completed, Indian Railways is edging closer to connecting the Kashmir Valley to the rest of the railway network. The Chenab Bridge is the highest railway bridge in the world. It is a structural marvel built across a gorge of Chenab Bridge in the Reasi district of Jammu and Kashmir under the USBRL Project.

The Ministry of Railways said the bridge will be open to visitors by the end of December 2023 or January 2024.

A consortium led by Tata Consultancy Services (TCS) on May 22 announced that it received an Advance Purchase Order (APO) valued at over Rs 15,000 crore (around $1.8 billion) from government-owned telecom enterprise Bharat Sanchar Nigam Limited (BSNL). With the new deal, TCS will carry out deployment of 4G network across India for BSNL.

The TCS-led consortium includes Tejas Networks and C-DOT. Tata Group’s telecom gear making company Tejas Networks will be responsible for supplying and servicing the Radio Access Networks (RAN) equipment. Along with TCS, the APO was also issued to state-run ITI Ltd for this project. According to analysts, about 20 percent of the work and deal value will go to ITI.

The deal is the Indian IT services giant’s third major deal in 2023, after a $723-million deal from UK-based Phoenix Group and with British retailer Marks and Spencer. TCS already runs India’s passport project, the Indian Railways’ IRCTC site, and India Post’s digital project. Its contract for running the Passport Seva Programme was renewed last year in a deal worth Rs. 8,000 crore, said reports.

The deal to revive BSNL was in talks since September 2022.In July 2022, the Union Cabinet had approved a Rs 1.64 lakh crore revival package for BSNL, which included cash support of Rs 43,964 crore and non-cash support of Rs 1.20 lakh crore. 

The online retail market in India reached $60 billion in gross merchandise value (GMV) in FY23, registering a 22 per cent steady growth, said a report released by Redseer Strategy Consultants on May 19.

The Indian user base matured over the year with 31 percent of annual shoppers converting into monthly shoppers, up from 23 percent in FY21. These mature shoppers in select urban, tier 2 and 3 markets have helped ecommerce grow, the report said.

With 210 million annual shoppers, ads monetisation contributed $1.2 billion in revenue for the online retailers in the current financial year, with a 37 percent year-on-year rise. Despite losing momentum, the sector today stands at 2.5 times of pre-COVID levels and is performing much better than overall retail consumption, said Redseer. The popularity of e-tailing is due to increased propagation of smartphones and the internet.

Direct-2-consumer brand growth has also made traditional players take the digital route to sell their products. Monthly shopper base (MTU), which stood at 65 million in this fiscal is now 31 per cent of the annual e-tailing shopper base. It is the same metric that was just 23 per cent before the pandemic hit.