The levy of anti-dumping duty (ADD) on viscose spun yarn imported from China, Vietnam and Indonesia has been recommended by the Directorate General of Trade Remedies (DGTR).
The Indian Manmade Yarn Manufacturers Association had sought the levy as import of viscose yarn from these countries was hurting domestic manufacturers. After an investigation, the DGTR recommended the move.
Industry insiders are of the opinion if ADD were levied on viscose yarn, domestic yarn manufacturers would benefit. However, apparel exporters are of the view that recommended duty will affect viscose-based apparel production for domestic and export markets.
Similarly, it would impact weavers also as domestic viscose yarn prices were already ruling high.
M.A. Ramasamy, Chairman of Powerloom Development and Export Promotion Council, said the Council would write to the Centre against the proposed levy.
There were several technical textile products that were viscose-based and their production would be affected. The duty would impact the Centre’s production-linked incentive scheme.
Also, prices of viscose fabric would rise. There is also a threat of increase in import of viscose-based garments and madeups.
Source: Apparel Online
A contraction in merchandise exports narrowed to 0.8% year-on-year in December 2020, as compared to 8.7% in the previous month, according to a preliminary estimate released by the commerce ministry on Saturday. But imports rose at a faster pace of 7.6% in December, the first increase since February, driving up trade deficit to a 25-month high of $15.7 billion.
The rise in imports signals a possible revival of domestic demand, which was battered by the Covid-19 pandemic, as businesses go through a ‘reset’ phase following the unlock.
However, some amount of pent-up demand for raw materials may also have contributed to the rise in imports, analysts say, preferring to wait longer to pronounce any sustained demand recovery. Nevertheless, if inbound shipments continue to rise, import-sensitive exports, too, will get a boost, but it will also mark a return to the usual high trade deficit trend.
The outbound shipment of core products (goods excluding petroleum and gems and jewellery), which reflect the economy’s competitiveness, grew 5.2% in December, against a 0.4% fall in the previous month. Similarly, core imports rose 8.4% last month, compared with a 1.7% fall in November.
Exports in December dropped to $26.89 billion from $27.11 billion a year before. Imports rose to $42.60 billion last month from $39.59 billion a year earlier.
Already, hit by the pandemic, exports have witnessed a roller-coaster ride this fiscal. Having risen by 6% in September, the first expansion since February, outbound shipments faltered by 5.1% in October and 8.7% in November before the contraction narrowed again in December.
Core exports have accelerated at a quicker rate than that of overall merchandise exports month after month since May 2019, according to an FE analysis, based on the data from the Directorate General of Commercial Intelligence and Statistics.
Aditi Nayar, principal economist with ICRA, said: “The recovery in imports reinforces our expectation that the current account surplus will deflate to sub-$5 billion in the second half of this fiscal.”
The expansion in non-oil exports is enthusing in light of the curbs imposed by major trading partners following the resurgence of Covid-19 cases, Nayar said. Higher imports “signals a strengthening of the domestic growth impulses, pent-up demand for imported items as well as a rise in commodity prices’, she added.
The commodities that witnessed substantial rise in exports in December included certain cereals (262.6%), oil meals (192.6%), iron ore (69.3%) and cereal preparations and miscellaneous processed item (45.4%).
Already, presenting a less gloomy picture, the World Trade Organization in October expected global merchandise trade to fall by 9.2% in 2020 from the year before, compared with the 12.9% drop projected in April last year. This will augur well for India’s trade as well.
Highlighting that traditional and labour-intensive sectors have passed the most challenging times, Sharad Kumar Saraf, president of the exporters’ body FIEO, said both Christmas and New Year sales have shown positive trends. “Going ahead, we expect our inventories to be liquidated, adding further to the overall demand,” Saraf said.
Mahesh Desai, chairman of the engineering goods exporters’ body EEPC, said: “While the domestic economy is showing sure signs of a bounce-back, there is still a rough sail for exports in the global market. This is despite roll out of Covid 19 vaccine in several parts of the world.”
Source: The Financial Express
The government has identified investment prospects worth Rs 1.02 lakh crore across sectors overseen by 23 key ministries and departments, as it seeks to fast rekindle growth impulses through a virtuous cycle of investments and soften the Covid blows to the economy.
An empowered group of secretaries (EGoS), set up in June under Cabinet secretary Rajiv Gauba, has asked all wings of the government to vigorously pursue investment proposals having greater potential of fruition, official sources told FE. Secretaries have been asked to monitor pending foreign direct investment (FDI) proposals and ensure speedy clearances.
According to a DPIIT assessment, the petroleum ministry has the highest potential to draw investments (Rs 15,403 crore), followed by the ministry of electronics and IT (Rs 14,587 crore) and the chemicals and petrochemicals ministry (Rs 14,241 crore).
It has identified a total of 806 investment prospects and shared these with the project monitoring cell of respective ministries last week for further push. Prospects in departments, including steel, housing, heavy industries, commerce, economic affairs, textiles and food processing, are also included in this assessment.
Meanwhile, the department of pharmaceuticals has received as many as 215 applications from investors under the production-linked incentive (PLI) scheme for bulk drugs and another 28 for medical devices, reflecting their attractiveness. The list of eligible beneficiaries will be finalised by February. Incentives under both the schemes total Rs 10,360 crore over five years.
The idea is to end an investment famine that had set in even before the pandemic. Given that overleveraged, Covid-hit domestic private investors have cut down on fresh expansions, the reliance on FDI has risen substantially.
Despite the Covid gloom, FDI inflows in equity grew 15%, year-on-year, in the first half of this fiscal to $30 billion. But a sizable chunk of it was drawn by only one player — Reliance Jio.
Investments remain critical to the country’s resurgence story, as private consumption has been badly bruised by income losses in the aftermath of the pandemic.
Although a contraction in gross fixed capital formation substantially narrowed from 47.1% on-year in the first quarter to 7.3% in the three months through September, it still remained far below trend. Private consumption, meanwhile, shrank at a faster pace of 11.3% in the September quarter.
With the businesses going through the reset phase after the substantial lifting of the lockdown curbs, the government hopes to make a sustained push now to draw investors.
Addressing a virtual round-table of mostly foreign investors, Prime Minister Narendra Modi, in November, promised “whatever it takes” to make India the engine of global growth. He invited the top executives of 20 global pension and sovereign wealth funds that together manage about $6 trillion in assets to be part of the country’s “exciting progress ahead”.
The government in 2019 drastically cut the corporate tax rate to just 15% for setting up new manufacturing units in a bid to spur elusive private investments. But the outbreak of the pandemic dashed its plans.
It made renewed efforts in the aftermath of the pandemic by announcing 13 PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles. It pledged investments of close to `2 lakh crore over a five-year period to woo investors and boost domestic manufacturing.
Source: The Financial Express
As many as 6.03 crore GST e-invoices were generated in December 2020, higher than 5.89 crore in November, according to an official release.
The government had made it mandatory for businesses with turnover of over Rs 500 crore to generate electronic invoice or e-invoice for B2B transactions, from October 1, 2020.
In a statement, the IT ministry on Saturday said that GST e-invoice system, "the game changer in the GST system", has completed journey of three months and facilitated smooth transition of the tax payers to the new platform.
It has enabled more than 37,000 taxpayers to generate more than 16.80 crore invoice reference numbers (IRNs) during the last three months from the NIC developed e-invoice system.
"Starting with with 495 lakh (4.95 crore) during October 2020, generation of e-invoice has increased to 589 lakh (5.89 crore) in November 2020 and 603 lakh (6.03 crore) in December 2020," it said.
Notably, the e-way bill generation from the National Informatics Centre (NIC) developed e-way bill system is also highest during September to December 2020 compared to corresponding months of previous years.
The response of the system is good and generation of IRNs is hassle-free during this period.
"However, there have been common errors such as repeated requests on same document number, simultaneous requests on same document number, requests with validation or calculation errors etc. Proactive measures taken by NIC help desk, including communication with tax payers about the issues through mails and telephonic calls and suggestion of corrective measures, have facilitated in bringing the errors down," it said.
The government has reduced the aggregate turnover cut off to Rs 100 crore per annum for generation of IRN by the tax payers from January 1, 2021, and NIC has already enabled the API and offline tool based sites for these tax payers, the statement added.
NIC, it said, is also geared up with adequate infrastructure to handle the generation of e-invoices from these tax payers from January 1.
"NIC portal facilitates the big tax payers, whose turnover is more than Rs 500 crores, to enable direct API access to their suppliers and clients from their systems," it said.
Keeping requirements of small tax payers in view, NIC has developed the offline excel-based IRN preparation and printing tool, called as 'NIC-GePP' tool for the small tax payers.
"This application will allow the tax payers to enter the invoice details, prepare the file to upload on NIC IRN portal, download the IRN with QR code and print the e-invoice with QR code and print the e-invoice with QR code," the release added.
Source: The Economic Times
Latest economic data signals there was an uptick in demand, seemingly mostly made up of consumption, during the Diwali period, but at best indicates a sputtering economic recovery.
A 12% year-on-year rise in GST collections from November transactions, a sanguine 7.6% growth in imports in December, the first increase in ten months, and a sustained rise in railway freight loading in the five months through December, suggest a somewhat sustained momentum towards recovery.
However, other high-frequency data doesn’t quite confirm an unhesitant, broad-based resurgence. Core-sector production, manufacturing and services PMI and fuel sales have been weaker in the latest print (see chart).
Some amount of pent-up demand for raw materials from industry may also have contributed to the rise in imports in December. If inbound shipments continue to rise, import-sensitive exports, too, will get a boost. Seasonal demand during Christmas may have improved export orders for December, meaning the jury is still out on a sustained trade recovery.
Reflecting a gloomy picture of job creation, the unemployment rate headed downhill, from 6.5% in November to 9.1% in December, according to the CMIE data. The RBI’s forecasts of mild positive GDP growth rates of 0.1% and 0.7% in Q3 and Q4 respectively, still look optimistic.
The Centre is apparently giving a leg-up to demand with its budget spending and by encouraging CPSEs to bolster capex.
Its overall budgetary expenditure rose 48.3% on year, improving from a 9.5% rise in the previous month and a 26% decline in September. The capex in November at `43,803 crore was up 248.5% on year.
India’s GDP shrank at 7.5% in September quarter, a contraction much narrower than expected; the economy had contracted at a record 23.9% in the first quarter of this fiscal. All three components of demand — private consumption, fixed capital formation and government consumption — had contracted in Q2, but the first two at slower pace than in Q1. Government- consumption support to the economy was weaker in Q2 (-22.2%) compared with Q1 (+16.4%).
Source: The Financial Express
The spinners have urged the State and Union Governments to support them with capital and interest subsidies for new mills coming up with Rs. 10 crore investment and having annual turnover of Rs. 50 crore.
During the AGM, The South India Spinners Association, Coimbatore also requested subsidy for solar energy plants set up by mills with maximum annual turnover of Rs. 50 crore.
The association also asked to extend loans for such projects without collateral. The MSME mills should get loans at 7 per cent interest.
It is requested that the State Government should operate free trains to bring migrant workers back to the workplaces from their home states.
“The small mills should be able to purchase less than 1 MW power from the Indian Energy Exchange. There should be uniform GST rate for MMF textile value chain as it was for the cotton sector,” the association said.
The trade body welcomed the announcement that the Cotton Corporation of India (CCI) would set up warehouses in Tamil Nadu for sale of cotton. The project should be expedited and the cotton ordered by textile mills here should be supplied in next 1 to 2 months.
Source: Apparel Online
APPAREL EXPORT
India’s exports shrank for the third straight month in December but the pace of contraction slowed to 0.8% from 8.74% decline in November even as the country’s trade deficit widened.
Outbound shipments in December were $26.89 billion and in sectors like petroleum, leather and marine products witnessed contraction, preliminary data released by the commerce and industry ministry showed Saturday.
The trade deficit in December widened to $15.71 billion, as imports grew by 7.6% to $42.6 billion due to a sharp increase in gold imports. Gold imports rose 81.8% in December 2020 to $2.01 billion.
Other items that witnessed an increase in imports include electronic goods, vegetable oil, chemicals, textile yarn and fabric, machine tools, pharmaceuticals and precious & semi-precious stones.
“India is thus a net importer in December 2020,” the ministry said in a statement.
Among geographies, Singapore was the top destination for India’s exports last month with an increase of $241.63 million led by petroleum products and engineering goods, followed by the US and UK.
Major commodities of export which recorded growth during the month under review include Oil meals, Iron ore, Carpet, pharmaceuticals, spices, electronic goods, fruits and vegetables, and chemicals.
“The monthly exports have moved towards positive territory as major export products show signs of further revival as expected,” said Federation of Indian Export Organisations President, Sharad Kumar Saraf.
Saraf said the order booking position have continuously improved besides more new orders in the offing.
“Going ahead by this trend, we expect our inventories to be liquidated, adding further to the overall demand,” he said.
In December 2020, oil imports declined 10.37% to $9.61 billion.
Exports during April-December 2020-21 fell 15.8% to $200.55 billion compared to the same period last fiscal. Imports posted a decline of 29.08% to $258.29 billion.
To give a leg up to exports, FIEO sought notification of the Remission of Duties and Taxes on Exported Products
rates, addressing issues such as adequate availability of containers, softening of freight charges, release of the required MEIS benefits and clarity on SEIS benefits and risky exporters.
Source: The Economic Times
Khadi and Village Industries Commission (KVIC) has announced the launch of its e-commerce marketplace.
The inauguration comes after successfully running the beta mode of the platform for 4 months with around 700-800 products. With the beta version, it has served around 22,000 customers so far.
Currently the platform will have products across 58 categories selling apparels, footwear, groceries and more.
The digital marketplace is expected to cross Rs. 2 crore in turnover by end of the current financial year 2020-21 with Khadi masks, Khadi fabric and honey being the top-selling product products.
Vinai Kumar Saxena, Chairman, KVIC, mentions “There is a huge demand for Khadi products amidst PM Modi’s appeal for local products. Out of 2,672 Khadi stores across India, around 200 have already started with e-marketing. Now we are encouraging them to do this.”
The launch comes after the recent crackdown on selling of fake Khadi products on e-commerce marketplaces such as Amazon, Flipkart, Snapdeal and others as claimed by the commission.
Since then it has forced such marketplaces to remove around 160 web links selling products in the brand name of Khadi, while also issuing legal notices to more than 1,000 firms using Khadi India brand name to sell duplicate products.
KVIC in August came with its own marketplace in August to fulfill the growing demand of the Khadi products amidst pandemic.
RETAIL BRAND
Source: Apparel Online
In the third quarter of the current financial year, the credit rating of India Inc improved marginally as normalcy seemed to be returning steadily to businesses. Domestic rating agency CARE Ratings said that the credit quality as measured by its ‘modified credit ratio’ (MCR) has improved to 0.96, against 0.94 in the first two quarters of the fiscal year. Having MCR above 1 indicates improving credit quality. The improvement in credit quality, CARE Ratings said can largely be attributed to the measures undertaken by RBI and the government to mitigate the impact of the Covid-19 led disruptions.
The October-December quarter witnessed 75% of the credit ratings being reaffirmed. “14% of the entities reviewed witnessed rating upgrades v/s 9% in the year-ago period while 11% of the entities saw a rating downgrade from 13% in Q3 2019-20,” the report said.
Among various industries, data compiled by CARE Ratings showed that 12 of the 31-key sectors had an MCR of above 1 while for the remaining 19 the MCR was below 1. The sectors where improvement was registered included agriculture and allied activities, cement, education, electrical equipment’s, electricity generation, healthcare, IT, iron and steel, paper and paper products, pharmaceuticals, rubber and plastic products and sugar. On the other hand, sectors under pressure or having MCR below 1 with deteriorating credit quality included telecom, transportation and storage, real estate activities, construction, auto, hospitality, NBFCs and wholesale and retail trade.
“The auto sector was already grappling under weak demand conditions in FY20 and the lockdown due to COVID 19 further worsened the off-take affecting the credit profile of the sector,” the rating agency said. Meanwhile, it added that the credit profile of the construction sector was mainly impacted by stressed liquidity position, cost over-runs, delays in project execution, high receivables among other factors. “Hospitality was also one of the worst-hit sectors due the restriction imposed on its operations and saw a large number of downgrades,” the report added.
SME fare better than large entities
Small and medium enterprises (SME) fared better than large businesses when compared for credit quality. Although down on-year basis the MCR of SME segment was still at 1, indicating stability in the credit profile of these entities. Large enterprises, on the other hand, were at 0.94, 3 bps lower than that in the comparable period of a year ago. “Given the higher share of the large enterprises (81%) in the total portfolio of entities whose ratings and financial position was reviewed in Q3 2020-21, the credit quality pressures of this segment weighed down the overall credit quality,” CARE Ratings said.
Source: The Financial Express
Small and medium enterprises (SMEs) are critical to the success of any economy. In India, they account for about 45 per cent of total employment and contribute to around 30 per cent of national income.
The Covid pandemic has accelerated the growth of digital technologies adoption by SMEs. Many SME owners feel that they can relate to digital marketing much more than to other digital technologies.
This study, based on interviews with 50 SMEs, tries to understand how SMEs, both in the B2B and B2C segments, have integrated digital into their sales and marketing activities.
Based on the type of the target customer, SMEs are using digital marketing tools for four activities — brand building, lead generation, sales-force management, and sales support.
The study revealed that SMEs focussing on consumer markets are leveraging digital technologies for brand-building, more than those focussing on business markets. From furniture retailers and restaurants to textile merchants and residential builders, all were found to be using digital media extensively for brand-building.
These SMEs use digital marketing companies to help them with website design, digital advertising, social media marketing, and search engine optimisation. Since many of these SMEs have limited understanding of these activities, they rely entirely on the judgment of their digital marketing partners.
A kitchen furniture company owner has joined an online digital market course to help negotiate better.
Lead generation
SMEs focussing on consumer markets are using digital marketing more extensively for lead generation. In addition to leveraging their websites, SMEs are relying on social media platforms such as Facebook and Instagram for lead generation. Moreover, presence on directory services such as Justdial was also part of most SMEs’ digital plans.
Interestingly, LinkedIn is used as a lead source by both B2B and B2C SMEs for targeting professionals. Lead generation is an activity most understood by SMEs as the output is very measurable.
For products targeted at millennials, more than 50 per cent of new leads were being generated through digital marketing activities.
Many B2B and B2C SMEs have large sales forces that are mobile. These range from pharma distributors to textile wholesalers and auto-parts manufacturers.
The study revealed that many SMEs had implemented tools to schedule and track their sales personnel. A plastic container manufacturer has given an app to both customers and sales personnel to keep track of their meetings through GPS.
In most cases, these apps were also being used for order taking and order management, eliminating the need for cumbersome paperwork.
Sales support
Digital technologies are also being used extensively to support sales activities. This usage has been accelerated by the pandemic and the inability for SMEs to meet their customers physically.
Sales material and catalogues that were once all paper-based are transforming to digital formats. Use of video-conferencing and even virtual reality for product demonstration has increased.
A residential packer uses WhatsApp video calls where clients show him the items in their house. This helps the packer to quote a price to the clients. This has helped the packer make more customer calls in a day and also in faster closing of contracts.
The study reveals that mobile apps, customer management software, and communication tools such as WhatsApp have become common among SMEs.
Clearly, SMEs are embracing digital tools in the sales and marketing process. However, most SMEs do not understand all the potential uses of digital marketing. Given a fragmented market and the lack of scale, most large service providers are not focusing on SMEs. While digital marketing companies are certainly aiding SMEs in communication strategies, they do not focus on sales-force management.
The need of the hour is companies that can provide SMEs knowledge, planning, and implementation capabilities across all the elements of the sales and marketing value chain.
Academic institutions and incubation centres that have primarily focussed on start-ups should also be playing a role in SME development.
While both offline and online courses are available on digital marketing and technologies, the study shows that SMEs need a lot more hand-holding.
This presents a unique opportunity for digital service providers who can focus exclusively on SMEs, using innovative business models. Whoever cracks the code of SME digital marketing delivered has a winning proposition on hand.
Source: The Business-Journal
Future Group firms, Future Consumer and Future Enterprise, have bagged big orders from Reliance Industries. The deal can help the firm meet its much needed financial needs amidst the COVID-19 crisis.
The company, on its way to the recovery, has also resumed its expansion plans of Big Bazaar stores.
It is looking up to strong sales during its upcoming flagship sale event ‘Sabse Sasta Din’ on 26 January.
Moreover, focusing on the fashion and FMCG side, the company is putting efforts to diversify its portfolio by adding new brands by March 2021.
Recently, the company inaugurated a new Big Bazaar store in Palassio Mall in Lucknow and received encouraging response from the customers.
Going forward, it has also scheduled opening of one more Big Bazaar store in Mokama in Bihar this month.
RETAILERFASHION BRAND
Source: Apparel Online
The Government has floated the concept of undertaking channel deepening and maintenance works at major port trusts through the public-private-partnership (PPP) mode.
“A PPP model may be worked out for dredging projects with the hybrid model of combining the capital dredging with maintenance dredging for 10-20 years,” according to the draft dredging guidelines for major port trusts prepared by the ministry of ports, shipping and waterways.
“The revenue share between major ports and PPP operator may be the bidding parameter for floating the PPP projects. The existing PPP operators of the berth may share proportionate cost based on the volume of cargo handled along with the berths operated by the major ports themselves,” says the draft prepared by the ministry and circulated for public consultation.
The ministry has emphasised the need to increase the depth by 2-3 metres to 17 metre to handle higher capacity container vessels. The increased depth translates into reduction in transportation cost due to economies of scale as the cargo movement is shifted from Panamax to Capesize vessels for bulk cargo handling.
Given the high capital expenditure required for channel deepening works, the major ports may adopt the PPP mode to ensure funding from private agencies with support from the major ports.
Significant capital dredging is required at major ports in 3-5 years to handle the anticipated container vessels of 20,000 twenty-foot equivalent units (TEUs) capacity and bulk cargo carrying Capesize vessels.
The PPP model emerges as a “potential option with limited investment from the major ports,” the ministry said.
Adopting the PPP model for capital dredging will ensure that dredging is taken up as a “service requirement” for the port with minimal operation burden with the Port Authority.
The dredging industry is sceptical of the plan.
“PPP in dredging will be very difficult,” says a dredging industry executive. “Dredging is full of uncertainties; PPP is good for projects were certainty is there,” he said.
The complex traffic structure to be developed by major ports for different berth operators with different category of cargo is a key risk.
“As per the plan, the revenue for the PPP dredging operator will depend on the increase in traffic. And, linking it to traffic will bring in more uncertainty. A dredging contractor will put his money today and carry out the work, but he is not sure how and what he will be paid. Suppose, the contract is for 20 years and for the first ten years there is no return, what will he do if there is no incremental traffic coming,” he explained.
Stipulating measurable performance indicators including assured depth during the period of concession and adequate financial returns as per the financial viability structure also poses risk to the PPP model.
Source: The Business Journal
We spent most of 2020 in doom and gloom mode about the economy, courtesy the coronavirus. But it is time to be optimistic again as 2021 could be a mega-boom year for the Indian economy.
Vaccines are being distributed around the world, and India’s own vaccination programme will start soon. Fortunately, India also seems to have stabilised or even declined in terms of daily new cases, at least for now. Meanwhile, the Indian economy is now open to a large extent. Hence, while we still are not out of the woods, there’s enough reason to believe things will get better in 2021.
However, in order to truly jumpstart the economy, we still need more stimulus. Our greatest asset is our people and our domestic economy. If we want the economy to bounce back, we need to create massive, immediate consumption. Here’s a proposed plan called ‘Protsahan’ (which means stimulus/encouragement in Hindi) to give Rs 5,000 per person to every Indian, which they must spend within the next 12 months. This could amount to around Rs 20,000 per household. This substantial amount could not only help people tide over the tough times, but also give a massive push to our economy.
But some might say: where do we have this kind of money? What will it do to our deficit position? And will it be worth it? The answers to all these good questions are a resounding ‘yes’! We can do this and yes, it will be completely worth it. For this we will need to understand the proposed Protsahan scheme and go through some numbers.
This scheme will enable every Indian with a legitimate ID to get cash vouchers of Rs 5,000, to be spent within the next 12 months. Children under 18 can get half the amount, saving some costs, but for the sake of simplicity, let’s keep it the same amount for this article. These Protsahan vouchers can be digital (preferred) or physical (can be issued as special notes with an expiry date). Do note that these should be given to every Indian, as figuring out who needs it more will be a far more cumbersome and time-consuming exercise. The well-off can obviously forgo these vouchers or give them to those who need it more, but they will be offered to everyone.
The vouchers will have an expiry date (say 12 months) and will be divided into two parts. Half the money will have to be spent on travel, tourism, hotels, restaurants or any other hospitality or service-based businesses. The other half will have to be spent on groceries, appliances, clothes or food items. The vouchers will be tradable and exchangeable. This means one can exchange them for cash, though the expiry date on vouchers means they may carry a discount compared to cash. This freedom to let people use them as they want will save a lot of monitoring headaches. It’s just money in the hands of people, which has to be spent by them or by someone who they give it to.
Once this money comes back to the economy, it will create a major boost in almost all sectors, but particularly in those sectors that have suffered due to Covid. Jobs will come back. It will, obviously, also be a lot of fun for people as they will have free money in their hands, which they have to spend.
So, what’s the catch? Of course, the big question comes: how can we afford this? Let’s look at the numbers. For 140 crore people, a Rs 5,000 one-time payment would cost Rs 7 lakh crore. It’s a big amount of money. However, to finance this, the government would issue a long-term 30-year bond, paying a tax-free interest of 7% per annum. There are plenty of rich people in India who would like this kind of return and hence invest in this safe yet good-yield instrument. The government can have a separate extraordinary situation borrowing, accounting it separately.
In 30 years, India’s economy would be so huge that the principal of Rs 7 lakh crore wouldn’t be much and could be easily repaid. Meanwhile, the financing cost of this bond, at 7% of Rs 7 lakh crore, comes to around Rs 50,000 crore per annum. Yes, this is still significant money, and yes, we are borrowing-to-spend now, but the returns in terms of jump-starting the economy (and the higher tax revenues from it) will far outweigh the additional costs. Do note that even in these Protsahan vouchers, the government will collect GST. That alone will fund the interest payments for the first couple of years.
The government has announced various stimulus packages already for the industry. However, it now needs to stimulate our massive domestic demand. A one-off Protsahan voucher programme with a long-term bond to fund it could go a long way in giving India a roaring economic comeback in 2021. And that would indeed make for a very happy new year!
Source: The Economic Times
Owing to sluggish sales in the lingerie category, brands such as Clovia, Enamor and Jockey are shifting focus to activewear and athleisure wear. According to analysts, while consumers were buying lingerie every three months in the pre-Covid period, the purchase cycle has now become six months. To make up for this, Jockey introduced a range called Jockey Move in September last year, and both Clovia and Enamor have renewed their activewear and athleisure portfolios.
The activewear market has seen an upswing with the growing fitness consciousness amongst consumers. Experts estimate that the market for branded sportswear in India is valued at Rs 12,000-14,000 crore, and is growing twice as fast as the apparel market. As the impact of the pandemic recedes, experts predict that the activewear market would grow at 25-30% year-on-year.
In the past year, brands have changed their approach towards the activewear category, with the focus now on everyday wear. Jockey has positioned its latest range to cater to ‘everyday fitness enthusiasts’, while Enamor is centred around ‘throughout the day’.
Meanwhile, Clovia’s soon-to-be-launched activewear range addresses the ‘workout from home’ need. The company had entered the activewear category in 2019, but due to “pressure on working capital”, could not launch new products. After raising a new round of funding in December 2020, the company plans to introduce a bigger catalogue for activewear.
“Since we are new in the activewear category, we will focus on retailing it out of our 13 exclusive brand outlets (EBOs) and e-commerce platforms,” informs Neha Kant, founder and director, Clovia. The company claims its activewear category has grown by 15 times since March 2020.
Enamor, too, has doubled down its efforts on the activewear category over the past year, since its acquisition by Advent International in late 2019. The PE firm also has a controlling stake in men’s innerwear company Dixcy Textiles.
“Activewear and athleisure now contribute about 18-20% of our sales as compared to 10-12% in the pre-Covid times,” says Sunil Sethi, executive chairman, Gokaldas Intimatewear, the company that owns brand Enamor. The company is promoting and retailing its activewear and athleisure wear across all its physical retail touchpoints (multi-brand outlets and EBOs) as well as on e-commerce.
Both Clovia and Enamor have priced their products in the mid-premium segment — Rs 400-2000. Enamor, which gets the majority of its sales for the category from tier I towns, is looking to expand its presence in tier II towns and beyond through e-commerce and store expansion.
Tough match
The activewear market in India is highly competitive; besides sports brands like Adidas, Nike, Puma, Asics and Decathlon, private labels from retail giants such as Future Group’s fbb, Reliance Trends and Myntra, also have a presence in it.
Analysts are of the opinion that the mid-premium positioning of the activewear range by Enamor and Clovia give them an edge over the sports giants, who operate in the premium segment — upwards of Rs 1,500.
However, their brand image could come in the way. According to Madhur Singhal, MD, Praxis Global Alliance, due to their “sensuous and stylish positioning”, consumers do not associate these brands with sports and activities. “These brands should look at creating sub-brands to cater to the activewear segment, while at the same time not diluting their core,” he adds.
Industry watchers point out that a presence in multi-brand outlets is vital in reaching out to value-conscious consumers. Further, roping in a fitness enthusiast celebrity or influencer — like Calvin Klein did by bringing actor Disha Patani aboard — would help in building awareness.
Source: The Financial Express
After plunging into the worst recession in decades amid coronavirus (COVID-19) shutdowns in 2020, the US economy has been recovering in recent months.
With alarming case spikes and a long-delayed fiscal relief package, however, the recovery momentum is slipping away.
Overshadowed even more by a behind-schedule vaccine rollout, the country will only find an uncertain and challenging economic recovery ahead.
What's worse, the economic pain inflicted by the pandemic has rippled unevenly across a variety of sectors, companies and communities, with certain service-intensive industries, smaller firms, and low-income Americans taking a disproportionate blow. Economists called this a K-shaped recovery, which widens inequality, reports Xinhua.
DEEP RECESSION, SLOW RECOVERY
Amid COVID-19 shutdowns, the US economy shrank at an annual rate of 5.0 per cent in the first quarter of 2020, ending a decade-long economic expansion after the 2008 global financial crisis.
Then the economy went into free fall, dropping at a revised annual rate of 31.4 per cent in the second quarter as COVID-19 fallout, registering the largest decline since the government began the records in 1947.
Some 22 million jobs disappeared in March-April, pushing the employment rate up to a staggering 14.7 per cent. Economists estimated that at least 100,000 small businesses permanently closed in the spring.
As COVID-19 swept the country, US states, under pressure to reopen the economy, started to deliver plans in late April or early May, regardless of warnings from experts that many states were not yet well prepared due to lack of a plan for large-scale nationwide testing and tracing actions.
"The US situation remains bad and confused, with an absence of a national-level strategy for suppressing the virus, and therefore with no reliable strategy for the economic recovery," Jeffrey Sachs, economics professor at Columbia University and a senior United Nations advisor, told Xinhua in April 2020.
As businesses gradually reopened, the economy saw a robust rebound in the third quarter of 2020, expanding at a revised annual rate of 33.4 per cent, though the performance still fell short of the pre-pandemic level.
Meanwhile, the unemployment rate has been falling, yet at a slowing pace in recent months. Weekly initial jobless claims, though largely trending down, increased in four weeks since the start of November, indicating a stalled recovery in the labour market.
The total number of COVID-19 cases in the United States topped 20 million on Friday, according to the Center for Systems Science and Engineering at Johns Hopkins University.
"The recovery is slowing down in the US economy because of the surge in the coronavirus," Adam Posen, president of the Washington-based think tank Peterson Institute for International Economics, recently told Xinhua via email. "The coronavirus surge was avoidable, but unfortunately our political leadership did not succeed in preventing it."
LONG-OVERDUE RELIEF
As businesses and families grappled with the pandemic-induced recession, lawmakers approved a 2.2-trillion-US-dollar relief package in late March 2020 to salvage the economy, followed by months of deadlock over the size and scope of the next bailout.
The two parties spent so long to reach a deal because some politicians in Washington considered it not a help for them to win the election, and House Speaker Nancy Pelosi decided to wait for a meaningful size package, Posen said.
Recent COVID-19 spikes and a slowing recovery piled extra pressure on the lawmakers, and they eventually passed a 900-billion-dollar COVID-19 relief package, along with 1.4 trillion dollars in regular government funding for the rest of the fiscal year.
The relief plan allows another round of direct payments for individuals and federal unemployment benefits, both at a reduced level, as well as more funding for the Paycheck Protection Program to support small businesses, and for schools, testing and the distribution of vaccines.
US President Donald Trump, in a last-second statement, asked Congress to boost stimulus checks to 2,000 dollars each for individuals.
Democrats embraced the outgoing Republican president's call, but it was frowned upon by some Republicans. After a hold-up of the legislation for days, Trump signed the bipartisan package into law on Sunday night.
While the long-awaited relief package will likely cushion the impact of COVID-19, economists and some lawmakers considered it not enough to bolster the economy, calling for more aid measures and efforts to reign in the virus.
Officials of the US Federal Reserve forecasted the country's economy to contract by 2.4 per cent in 2020, better than a previous projection in September 2020 of a 3.7-per cent decline. For this year ahead, the central bank predicted a 4.2-per cent growth.
"Though state revenues have been coming in better than feared, the absence of additional aid will lead to spending cuts and layoffs," Ryan Sweet, senior director at Moody's Analytics, said in an analysis, adding that the latest stimulus will likely help avoid a double-dip recession.
K-SHAPED RECOVERY
The United States is going through a K-shaped recovery, as some sectors, companies and workers fared fine or even better after the downturn while the rest experienced a steep decline, US President-elect Joe Biden and some economists said.
Specifically, industries like technology and retail recovered fairly well, but travel, entertainment and food services continued to hover at a low level, with the virus keeping people at home.
A Washington Post article showed that between April and September of 2020, 45 of the 50 most valuable publicly traded U.S. companies turned a profit, but that the majority of firms cut staff and gave the bulk of profits to shareholders.
Meanwhile, low-income families, those without a college degree, and Black and Hispanic Americans were hit hardest by the pandemic and are largely still struggling to recover, said a Pew Research Center survey released in September.
US Federal Reserve Chair Jerome Powell has repeatedly stressed that the burden of the virus-induced economic downturn is not evenly spread. "Those taking the brunt of the fallout are those least able to bear it," he said.
"Recessions always accelerate inequality," Posen told Xinhua. "In some ways, this recession is less unequal because of the size and breadth of the unemployment assistance, and because some lower-wage workers have retained their jobs in critical services, unlike in a usual recession."
In some ways, however, "this recession is more unequal than others because the very wealthiest (top 5 per cent or 1 per cent) are gaining disproportionately from their equity shares in companies gaining market power," he added.
Posen said the prospect for the US economy from April through December 2021 is quite good, with the situation expected to improve after the distribution of vaccines.
"What I am unable to forecast confidently is how bad things get between now and the spring with widespread vaccine distribution, and how many people -- mostly women -- who dropped out of the labour force to look after children and family members are able to come back into employment," he said.
Source: The Financial Express Bangladesh
Forever New, the Australian women’s fashion brand, announces its plan to shut down its loss-making stores and open new stores over the next 12 months to overcome the disruption caused due to pandemic.
Moreover, it also plans to increase its focus on the digital landscape and is hopeful of making complete sales recovery by November 2021, on the back of its retail and e-commerce expansion.
Dhruv Bogra, Country Manager in India for Forever New, mentions that the footfall counts in the stores have started increasing.
He further mentions about retailer’s increased focus on the digital strategies especially during the festival season. “With innovation, digitisation and efficiency at the forefront, we are going to rebuild the industry.”
Founded in Melbourne, Australia, Forever New is known for wearable and timeless collections that celebrate modern femininity.
Source: Apparel Online
President Xi Jinping’sCommunist Party of China hasn’t given up on efforts to influence the course of Nepali politics and has positioned a three-member team in Kathmandu that is continuing to reach out to prominent politicians in the Himalayan nation, people familiar with the matter said.
President Xi had sent a four-member team led by Guo Yezhou, vice-minister of the international department of the Chinese communist party’s central committee that made a high-profile visit to Nepal that was closely tracked by the media.
The team wrapped up its visit on Wednesday, unable to deliver on its primary objective of uniting the two rival factions of the Nepal Communist Party led by Prime Minister KP Sharma Oli and former prime ministers Pushpa Kamal Dahal and Madhav Nepal.
Guo Yezhou’s delegation, which had targeted persuading PM Oli to roll back the December 20 presidential order dissolving Nepal’s 275-member House of Representatives, had also explored the possibility of getting the two warring factions to jointly contest the national elections on April 30 and May 10 if the presidential order can’t be rescinded. A third option believed to have been pursued by Guo Yezhou was designed to address the possibility of the Supreme Court rolling back the presidential order and involved the formation of a communist-led government with the support of opposition parties such as the Nepali Congress minus PM Oli.
Nepal watchers said the high-profile Guo Yezhou’s delegation was, however, only the public face of the Chinese effort.
“The covert aspect continues,” one of them said.
For now, this assignment has been handed to three officials of the Chinese communist party, who were part of the second team that had quietly travelled by road from China to Nepal before Guo Yezhou landed at Kathmandu’s international airport on Sunday last.
The three - Zekun Lai, Dongme Huang and Yonglin Zhong - are the Chinese communist party’s points persons on Nepal politics who have cultivated political leaders for years. “This is what you might call the backchannel effort that stays under the radar,” a diplomat based in Nepal said.
The change in the Chinese approach to keep its intervention a secret comes against the backdrop of resentment in some quarters in Nepal over its attempt to influence politics and politicians.
A day before Guo Yezhou’s delegation returned to China on Wednesday, dozens of people had hit the streets of Kathmandu holding a torch rally on Tuesday night to protest against the visit that was aimed at interfering in Nepal’s internal political matters.
To be sure, China denies that Guo Yezhou’s team was tasked to influence Nepal’s politics but underlines that it wants Nepal’s politicians to “properly manage internal differences”.
“As the country’s friend and close neighbour, we hope relevant parties in Nepal can take into account the national interests and the big picture, properly manage internal differences and commit themselves to political stability and national development,” the Chinese foreign ministry spokesperson said last week.
Source: The Hindustan Times
India’s cotton yarn export was worth 85,439 tonnes in October 2020, which is a year-on-year increase of 9.70 per cent, according to Ministry and Commerce and Industry (India).
Value-wise, the cotton yarn exports upped by 2.90 per cent to US $ 222.52 million in October ’20.
Bangladesh, China and Peru remained the top three exporting countries for India. India shipped cotton yarn worth US $ 55.96 million to Bangladesh in October (up 10.81 per cent); US $ 35.94 million (down 22.23 per cent) to China and US $ 19.91 million (up 59.16 per cent) to Peru.
In August-October 2020 period, India exported a total of 269,500 tonnes of cotton yarns, a year-on-year increase of 28 per cent. A substantial share was exported to Bangladesh (25.50 per cent), China (19.50 per cent) and Peru (8.90 per cent) in this quarter.
Though China has seen a decline in its import of cotton yarns from India, the feedback from cotton yarn traders and weaving companies in Jiangsu, Zhejiang, Guangdong and Shandong provinces is positive and the import enquiries were active in November and December as well.
A medium-sized cotton yarn operator in Ningbo (in Zhejiang province) stated that it imported cotton yarn imports are expected to reach 180,000-200,000 tonnes in December 2020, after witnessing import of 172,300 tonnes of cotton yarn in November with an increase of 7.62 per cent year-on-year, of which major contribution was done by the Indian cotton yarn exporters.
Source: Apparel Online
The financial and transport hub was hit hard last year by local virus-related restrictions, border closures around the world and sluggish global economy.
The bellwether economy shrank 5.8% in 2020, preliminary data showed on Monday, slightly better than the official forecast for a contraction of between 6.5% and 6%. The government has previously said it expects gross domestic product (GDP) to grow 4% to 6% this year.
The city-state has eased most of its coronavirus rules, although its borders remain largely shut. It began its COVID-19 inoculation programme last week, and the government is keen to open more of the economy with the help of the vaccine in a country dependent on travel and trade.
“Recovery going forward in 2021 will probably continue to be quite gradual,” said Barclays regional economist Brian Tan. “And a lot of it will depend on the speed at which the government can distribute the COVID vaccines and whether or not this can allow us to reopen the borders more quickly.”
GDP contracted 3.8% in October-December on a year-on-year basis, the ministry of trade and industry said in a statement, an improvement over the 5.6% drop in the third quarter. Economists polled by Reuters had expected a decline of 4.5%, according to the median of their forecasts.
GDP grew 2.1% on a quarter-on-quarter seasonally adjusted basis in October-December, slowing from the 9.5% expansion in the third quarter.
The Singapore dollar edged up to S$1.3203 per U.S. dollar, its highest since April 2018, after the data.
Prime Minister Lee Hsien Loong said last week that while the economy was seeing signs of stabilisation, the recovery will be uneven, and activity is likely to remain below pre-COVID-19 levels for some time.
The Singapore government has spent about S$100 billion ($75.45 billion) or 20% of its GDP, on virus-related relief to support households and businesses.
The central bank left monetary policy unchanged at its last meeting in October and said its accommodative stance would remain appropriate for some time.
“We don’t expect any changes in the monetary policy for now,” said Jeff Ng, senior treasury strategist at HL Bank. “The main bulk will still remain in fiscal policy in order to support the economy to recovery in 2021.”
Source: Reuters India
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 53.0 from November’s 54.9, with the gauge staying well above the 50-level that separates growth from contraction but missing expectations and easing to the softest pace in three months.
Analysts polled by Reuters had forecast the headline reading would slip to 54.8.
China’s vast industrial sector has staged an impressive recovery from the coronavirus shock thanks to surprisingly strong exports. The economy is expected to expand around 2% for the whole of 2020 - the weakest pace in over three decades but much stronger than other major economies still struggling to contain infections.
However, tougher coronavirus control measures in many of its key trading partners in the west could dent industrial demand, weighing on the recovery.
The Caixin PMI reading comes after an official gauge of factory activity, focusing more on larger and state-owned firms, also moderated but remained strong.
“The negative impact of the pandemic on the domestic economy further subsided and the manufacturing industry continued to recover. Both the supply and demand sides continued to improve. Overseas demand also steadily increased,” Wang Zhe, senior economist at Caixin Insight Group, wrote in a note accompanying the survey release.
The private sector survey also showed input prices rose sharply, at the fastest pace since 2017, with pricier raw materials, especially metals, blamed for the increase. Chinese factories also laid off more workers than they hired for the first time in four months, although the decline was modest.
“We need to pay attention to the mounting pressure on costs brought by the increase in raw material prices and its adverse impact on employment, which is particularly important for the design of the exit from stimulus policies implemented during the epidemic,” said Wang.
Gauges of both total new orders and factory output slipped from November’s but remained strong. Growth in new export orders also slowed.
“We expect the economic recovery in the post-epidemic era to continue for several months, and macroeconomic indicators will be stronger in the next six months, taking into account the low bases in the first half of 2020,” said Wang.
Source: Reuters India
President-elect Joe Biden won’t get a traditional inaugural parade down Pennsylvania Avenue after he takes the oath of office, but he will get a presidential escort to the White House.
Biden and incoming first lady Jill Biden will forgo the traditional inaugural parade on Jan. 20, the Presidential Inaugural Committee announced Sunday.
Instead, the Bidens will receive a presidential escort from 15th Street to the White House after his swearing-in on the West Front of the Capitol. The escort will include representatives of every branch of the military, including the U.S. Army Band, a Joint Service Honor Guard, and the Commander-in-Chief’s Guard and Fife and Drum Corps from the 3rd U.S. Infantry “The Old Guard.”
Planners have been looking for ways to continue many inaugural traditions while protecting the health and safety of Americans amid the deadly coronavirus pandemic.
Replacing the traditional inaugural parade with a presidential escort will allow Americans and the world to see the new first family arriving at the White House without attracting the large crowds that usually gather along Pennsylvania Avenue for the inaugural parade, the committee said.
“This is an exciting opportunity to work with Americans across the country to showcase President-elect Biden and Vice President-elect (Kamala) Harris’ steadfast commitment to a diverse, inclusive and unified nation,” said Tony Allen, the inaugural committee’s chief executive officer. “There are many grand traditions to the inaugural, and we plan to honor them by highlighting more of our nation’s people than ever before while keeping everyone safe.”
The inaugural parade isn’t going away completely.
A “virtual parade” will be televised and will feature performances in communities across the country. The parade will celebrate America’s heroes, highlight Americans from all walks of life in different states and regions, and reflect the country’s diversity, heritage and resilience, inaugural planners said.
Participants for the virtual parade will be announced in the coming weeks, but the inaugural committee said the programming will include musical acts, local bands, poets, dance troupes and others paying homage to America’s heroes on the frontlines of the pandemic.
“This innovative programming will keep people safe and use new ways to bring in Americans across the country — from rural towns and urban cities to younger and older Americans to everybody and everywhere in between,” said Maju Varghese, the committee’s executive director.
Participants will practice social distancing, and vigorous health and safety protocols will be in place, the inaugural committee said.
The 59th Inaugural Ceremonies will be smaller than in previous years because of the health risks posed by COVID-19. Biden and Harris will still take the oath of office on the Capitol’s West Front, and Biden will deliver an inaugural address that lays out his vision for beating the virus, building back better and bringing the country together.
Inaugural planners are urging Americans not to travel to Washington for the festivities but to participate in the celebration virtually.
Tickets for the ceremony will be limited. In the past, members of Congress have received around 200,000 tickets to distribute to their constituents. This year, they will be limited to tickets for themselves and one guest.
Rep. James Clyburn, co-chair of the Biden inaugural committee, said he expects a couple thousand people to attend. The platform for the swearing-in ceremony is already set up.
“We’re going to make sure that people participate in a way that will make them a part of the event, but keep them safe and healthy and comfortable,’’ he said, noting the usually "icy cold’’ weather.
“We’re going to do it in such a way that you will be a part of it, but you can stay warm at home in your pajamas and enjoy it," he said.
After the swearing-in, Biden, Harris and their spouses will participate in a “Pass in Review” ceremony on the Capitol’s East Front with members of the military.
Pass in Reviews are a long-standing military tradition that reflects the peaceful transfer of power to a new commander-in-chief. The new president, hosted by the Commander of Joint Task Force-National Capital Region, will review the readiness of military troops.
Clyburn, who was the guest Sunday at Richard Prince’s Journal-isms Roundtable, said he doesn’t expect President Donald Trump to show up at the inauguration.
“That would come as a surprise to me if he were to attend,’’ he said. “It would be a pleasant surprise – if he didn’t.’’
Source: USA Today
