Category: Economy

There is an urgent need to create a new and dedicated fund to help developing countries successfully implement a post-2020 global framework to halt and reverse biodiversity loss, said Union Environment Minister Bhupender Yadav at the stocktaking plenary at the UN biodiversity conference, Convention on Biological Diversity COP15, in Montreal, Canada.

The Global Environment Facility, which caters to multiple conventions such as the UNFCCC and UN Convention to Combat Desertification, is the only source of funding for biodiversity conservation.

India said the developing countries bear most of the burden of implementing the targets for conservation of biodiversity and, thus, need adequate funds and technology transfer for this purpose. The minister underlined India’s stand that the goals and targets set in the Global Biodiversity Framework (GBF) should not only be ambitious, but also realistic and practical.

At CBD COP15, the parties are also trying to achieve a consensus on eliminating subsidies that are harmful to the environment, such as subsidies for fossil fuel production, agriculture, forestry and fisheries, by at least $500 billion annually, and using this money for biodiversity conservation.

However, Yadav said, India does not agree on reducing the agriculture-related subsidy and redirecting the savings for biodiversity conservation, as there are other national priorities. He added that when food security is of utmost importance for developing countries, prescribing numerical targets in pesticide reductions is unnecessary and must be left to countries to decide, based on national circumstances, priorities and capabilities.

Electronics production in India increased to Rs 6.4 lakh crore in value terms and exports hit an all-time-high of Rs 1.09 lakh crore in 2021-22, Minister of State for Electronics and IT Rajeev Chandrasekhar said in a statement in the Parliament.

The electronics production in 2020-21 was over Rs 5.44 lakh crore and exports were Rs 81,822 crore based on the data sourced from industry associations and Directorate General of Commercial Intelligence and Statistics.

The minister said that the Centre’s goal is to broaden and deepen the country’s electronic manufacturing ecosystem. The National Policy on Electronics 2019 envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components such as chipsets, and creating an enabling environment for the industry to compete globally. To create this ecosystem, 333 companies have received direct benefit of various schemes and programmes under Make in India programme, he added.

In another statement given during a session with UAE minister Omar Sultan Al Olama at the India Global Forum in Dubai, Chandrasekhar said with more than 820 million internet users, the MoS for Electronics and IT said India has the largest presence on the global internet and deserves an opportunity to shape its own destiny. He said that the India stack has helped build trust between the government and its citizens.

India could attract about $10 billion in renewable energy investment in 2023—a bright spot as public markets remain largely shut to raising big-ticket capital—said the top officials of Bank of America in India.

Kaku Nakhate, the President and India Country Head of Bank of America, in an interview, said that deals and investments will continue to flow into areas such as electric vehicles and green hydrogen, as investors need energy transition in their portfolios.

Sectors such as renewable energy and retail are set to benefit as India performs better than other emerging markets in drawing investors. Despite deal-making being hit globally by increasing interest rates and market volatility, India’s geopolitical stability helps position it for greater inflows. The bank also expects India to benefit from “friend-shoring” by companies that are rethinking their supply chains, disrupted by COVID-19 and the Ukraine war. India, with its democratic traditions and robust domestic markets, is well suited to attract this capital, Nakhate said.

Investors and companies attending the Bank of America’s recent North American roadshow were impressed by the Indian government’s clear targets to achieve net zero carbon, Nakhate said. The lender will continue to build out its distressed debt financing business in the renewable energy sector, which has generated double-digit returns, she said.

India’s retail inflation reduced sharply to an 11-month low of 5.88% on an annual basis in November from 6.77% in October, 2022, due to cooling global commodity prices and higher borrowing costs. The percentage of inflation, which is measured by the Consumer Price Index (CPI), came within the Reserve Bank of India’s (RBI) tolerance band of 2-6% for the first time this year.

India’s factory output, measured through the Index of Industrial Production (IIP), saw a contraction of 4% in October, said two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) on Monday.

The Consumer Food Price Index (CFPI) or the inflation in the food basket too eased month-on-month in November to 4.67%, from 7.01% in October, the data revealed.

Earlier, a Reuters poll of economists also said that India’s consumer price inflation likely decreased to a nine-month low of 6.40% in November primarily due to a moderation in food prices. The December 5-8, 2022 Reuters poll of 45 economists predicted the second consecutive decline in inflation to an annual 6.40% from 6.77% in October.

The government has mandated the central bank to maintain retail inflation at 4% with a margin of 2% on either side for a five-year period ending March 2026.

Bengaluru will host the first Finance and Central Bank Deputies (FCBD) gathering under India’s G20 Presidency beginning Tuesday. The Ministry of Finance and the Reserve Bank of India will jointly host the three-day gathering, from December 13-15, 2022, which will kick off discussions on the “Finance Track” agenda.

The G20 Finance Track is led by the central bank governors and finance ministers of G20 nations. The track focuses on economic and financial issues, and offers a useful forum for discussion of international economic issues and the coordination of policy. Finance Minister Nirmala Sitharaman and Governor RBI Shaktikanta Das will lead the Finance Track. The G20 Finance Ministers and Central Bank Governors Meeting will take place from February 23 to 25, 2023, in Bengaluru.

Ajay Seth, Secretary of Economic Affairs, and Dr. Michael D. Patra, Deputy Governor of the RBI, will co-chair the upcoming meeting of the G20 FCBD. Their counterparts from other G20 member nations will join them, along with other nations and international organisations invited.

According to an official press release, the G20 Finance Track covers the global economic outlook, the international financial architecture, infrastructure development and financing, sustainable finance, global health, international taxation, and issues relating to the financial sector, including financial inclusion.

Thailand Prime Minister Prayut Chan-o-cha on Saturday welcomed this year’s 10 millionth visitor to the country at Suvarnabhumi Airport to celebrate the revival of the tourism industry.

Two tourists who arrived on a flight from Saudi Arabia received special prizes from the Prime Minister. The prizes included Limousine transfer, air tickets, shopping vouchers and virtual land, among others. The passengers were welcomed by traditional drummers and dancers.

Around 40 million tourists were welcomed by the Asian country in 2019, but COVID-19 restrictions gave a major setback to the travel industry. Now, with relaxation in the restrictions worldwide, the travel numbers in Thailand have started a slow recovery and the government is aiming to generate tourism revenue of $16 billion this year.

The Thai government figures suggest the country would welcome roughly 23 million tourists in 2023, while some analysts believe a full recovery in tourist numbers could happen in 2024. Thai hotel owners and restaurant owners have breathed a sigh of relief as businesses have slowly picked up.

Analysts have also cautioned against over-optimism, with threats of economic stagnation, pandemic threats, slowdown and inflation persisting. The recovery also depends on China relaxing international travel rules, as the country sends maximum foreign tourists to Thailand.

Rural India added 4.3 million jobs in November leading to an increase in the employment rate from 37% in October to 37.5%. Jobs in urban India also witnessed a marginal increase, from 34.2% to 34.4%, last month, said the Centre for Monitoring Indian Economy (CMIE).

The Index of Consumer Sentiment (ICS) fell 0.2% in November after urban sentiment fell 1.5%, while rural India rose 0.5%, said the CMIE. The November 2022 ICS decline comes after two months of robust gains after rising somewhat sharply by 11.4% during the last two festival months.

In its weekly job analysis, CMIE underlined that the correction after the celebrations is understandable. It is important that this correction is comparatively small (0.2%) to the rise (11.4%).

The consolidation of consumer sentiment in November is based on the expectations that the economy will perform well in the near and medium-term future, especially in rural India. In addition, the Index of Current Economic Conditions (ICC) declined 1.6% in November, with a decline of 3.1% in urban India; the decline in rural ICC was more modest.

The ICS seems to have maintained its high level after the festival months, partly due to the onset of the wedding season. The CMIE observers expect this to continue for a few months and keep demand for consumer discretionary high.

Rural India is also promising as sowing of rabi plants appears to be progressing well. Higher production with increased prices for most agricultural products is a good sign, the experts added.

The World Bank revised its growth forecast for India in the current fiscal year to 6.9% from 6.5%, led by expected higher consumption and more robust domestic activity, which will help the country perform better than other emerging markets.

A report released by the World Bank on Tuesday said India is well-positioned to navigate external financial shocks. The country’s gross domestic product grew 6.3% in the July to September period—a decline from last quarter’s 13.5%—and has so far buffered itself from recessionary shocks facing other parts of the world.

The bank said global economic headwinds will likely take a toll on the country’s finances next year. It also changed its forecast for the financial year 2024, lowering it to 6.6% from 7%.

In a media briefing, World Bank senior economist Dhruv Sharma said that India’s overall fiscal deficit is expected to gradually decline over the next few years led by more efficient tax revenue collection. He added that the country is on track to meet its fiscal deficit target of 6.4% of GDP in the current financial year, while the general government deficit is expected to reduce to 9.6%. He underlined that the World Bank has no concerns about India’s debt sustainability at this stage.

Global airlines are predicting their first industry-wide profit in 2023, as air travel rebounds from COVID-19 restrictions. The trade association of world airlines, International Air Transport Association (IATA) on Tuesday said that it expects a net profit of $4.7-billion for the industry next year, with more than 4 billion passengers set to fly. It had previously said only that profits were “within reach” in 2023. For this year, the association narrowed its forecast for industry-wide losses to $6.9-billion from $9.7-billion.

Geneva-based IATA, which represents some 300 airlines comprising 83 per cent of global air traffic, also expects airlines to post a small net profit of $4.7 billion at a 0.6 per cent net profit margin. It will be the first profit earned by the airline industry since 2019 when net profits stood at $26.4 billion or 3.1 per cent net profit margin.

IATA director general, Willie Walsh, in an official statement, said the expected return to profit in 2023 is a great achievement keeping in mind the scale of the financial and economic damage caused by government-imposed pandemic restrictions. He, however, warned that many airlines will continue to struggle next year due to regulations, high costs and inconsistent government policies and other challenges.

Even as central banks across the world continue to raise their interest rates to limit growing inflation, India stands like an “oasis” in this era of uncertainty, says the latest Ecowrap report of SBI Research released on Friday.

In comparison to developed economies such as the US, the UK and Germany, the report shows India to have done noticeably better in areas of cost of living, food prices and energy costs. The report has been authored by Group Chief Economic Adviser of SBI Soumya Kanti Ghosh.

SBI Research compared the cost of living in India with the US, the UK and Germany by modifying each country’s exchange rate to achieve parity with the rupee and arrived at a comparable cost in rupee terms. The researchers found that if the household budget or cost of living was Rs 100 in September 2021 across all countries, it has now increased by Rs 12 in both the US and India, by Rs 20 in Germany, and Rs 23 in the UK. Similarly, in terms of rise in food and energy prices, India performed better than the US, the UK and Germany.