Textiles industry to be stable in FY2022, and is expected to touch the pre-Covid level!
The textile industry will recover to pre-Covid levels in the next fiscal on account of boost in demands from domestic as well as export markets. Rating agency ICRA assigned ‘stable’ outlook for the sector as for FY2022.
The recovery in the domestic textile sector that picked up pace in Q3 FY2021, is likely to continue in the upcoming quarters.
Further, it will be supported by the opening up of economies and markets, improved consumer confidence levels and continued pick up in discretionary spending, it added.
Jayanta Roy, ICRA Senior VP & Group Head, Corporate Sector Ratings, said the textile sector appears to be on a firm footing with the worst of the pandemic impact behind us, and favourable progress on vaccination rollouts.
“As demand continues to normalise in domestic as well as export markets, we expect the textile sector performance to recover to pre-Covid levels in FY2022 at a broader level,” he said.
Based on an analysis for samples of large, listed players across segments, ICRA expects cotton spinning and apparel export segments to report relatively lower contraction in FY2021 vis-a-vis other segments (including fabrics and domestic apparels), considering higher dependence of these segments on exports.
Similarly, the recovery is slated to be faster for these segments in FY2022.
For fabric and domestic apparel categories, the revenue growth in FY2022 is projected at 30-35 per cent and 35-40 per cent, respectively, with these segments estimated to report steeper contraction vis-a-vis other segments in FY2021.
Revenues for the cotton spinning and the apparel export segments in FY2022 are likely to grow by 15-20 per cent, following a contraction in mid-teens, estimated for FY2021.
While operating margins for spinners are likely to revert closer to pre-Covid levels, those for apparel exporters may remain marginally lower than the pre-Covid levels amidst a competitive operating environment, wherein buyers could be expected to negotiate for steeper discounts.
Source: Apparel Online
Enthusiasm about Budget 2021 has been muted. Finding a balance between prioritising lives vs livelihoods, fiscal prudence vs budget largesse should be priority. But will Finance Minister Nirmala Sitharaman’s third budget have something for everyone as indications suggest?
Today, almost a year after Covid-19 descended on India, we are fully cognisant of the far-reaching impact of India’s healthcare system on people’s lives, their jobs, education, economy and collective morale. What is needed is enhanced spending on healthcare. The envisaged 2.5% of GDP is still a far cry from the current 1.3% allocation. It is also imperative to address the R&D needs of the pharma sector, beyond the current Covid-19 vaccination drive.
Covid-19 has also demonstrated the digital divide between the haves and have-nots, especially in our education system. Wide access to good teaching can be made possible through digital means. Lack of good teachers is a serious constraint that can be addressed through edtech. Substantial budgetary allocations for digitisation will attract many more school children. Education and skilling are tools that will empower the poor.
The fiscal challenge Covid has provided is also an opportunity to expedite the pace of reforms. GoI can use the budget to announce its further intent and follow up land and labour reforms. Removal of residual sector caps on foreign investments can provide further impetus to the ‘Make in India’ story. An appropriate regulatory and intellectual property (IP) regime for toll manufacturing should also be considered.
India’s manufacturing capabilities can then be leveraged by global players. There are certain tax considerations that can make Gujarat International Finance Tec (GIFT) City more attractive to overseas financial services providers. An enabling environment for development of a corporate bond market in India should also be created. Allowing institutional and retail investors a wider selection of credit investments will go a long way in the growth of credit markets in India, and lessen demands made on GoI and banks.
GoI’s balance sheet should be lightened to raise resources. Pension and sovereign funds, and stressed asset funds together with global corporates, would have interest. Apart from the traditional disinvestment route, Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT)-type structures for State-owned assets should be considered. Also, monetisation of assets to unlock capital for reinvestment, and the use of 360-degree data analytics — particularly in indirect tax — can significantly boost revenues.
India needs to leverage digital technologies, make cybersecurity a national agenda, and harness the full potential of artificial intelligence (AI), cloud computing, blockchain, etc. Organisations should be incentivised to invest substantially in these technologies to be globally competitive.
Agriculture was the only sector that grew in the April-June 2020 quarter among the eight sectors selected to compute India’s GDP. Gaps in supply chain, storage infrastructure and availability of input, including high quality seeds, need to be addressed. Ensuring adequate allocation for storage, logistics and distribution will make agri value chains resilient, and reduce wastage and price fluctuations in farm products. GoI should continue to support farmer producer organisations in their capacity building and in strengthening their global supply chains, especially in horticulture and animal husbandry.
While investments are crucial, India needs a significantly enhanced focus on skilling and innovation. Diverse job opportunities must be created, and the youth made employable by requisite skills imparted to them. Schemes on imparting technical and vocational education and training (TVET) need a substantial boost.
The production-linked incentive (PLI) scheme, investment promotion and the favourable tax rates levied on these are attracting investments. Availability of skilled resources will enhance India’s attractiveness as an investment destination. Budget 2021 will be an implementation document for GoI’s vision to get us back on the flight path.
Source: The Economic Times
The Indian economy will suffer lasting damage from the coronavirus crisis and after an initial strong rebound in FY22 (fiscal year ending March 2022) growth will slow to around 6.5 per cent a year over FY23-FY26, Fitch Ratings said on Thursday.
“A combination of supply-side scarring and demand-side constraints – such as the weak state of the financial sector – will keep the level of GDP well below its pre-pandemic path,” it said in commentary on the Indian economy.
Fitch said India’s coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support.
The economy is now in a recovery phase that will be further supported by the rollout of vaccines in the next months. “We expect gross domestic product (GDP) to expand by 11 per cent in FY22 (April 2021 to March 2022) after falling by 9.4 per cent in FY21 (April 2020 to March 2021),” it said.
India’s economy had been losing momentum even ahead of the shock delivered by the COVID-19 crisis. The rate of GDP growth sank to a more than ten-year low of 4.2 per cent in 2019, down from 6.1 per cent the previous year.
The pandemic bought a human and an economic catastrophe for India, with nearly 1.5 lakh deaths. Though the deaths per million are significantly lower than in Europe and the US, the economic impact had been much more severe.
GDP in April-June was 23.9 per cent below its 2019 level, indicating that nearly a quarter of the country’s economic activity was wiped out by the drying up of global demand and the collapse of domestic demand that accompanied the series of strict national lockdowns.
Further, a 7.5 per cent decline in GDP in the following quarter pushed Asia’s third-largest economy into an unprecedented recession. Fitch said the medium-term recovery will be slow. “Supply-side potential growth will be reduced by a slowdown in the rate of capital accumulation – investment has recently fallen sharply and is likely to see only a subdued recovery.” This, it said, will weigh on labour productivity, lowering its projection of supply-side potential GDP growth for the six-year period FY21 to FY26 to 5.1 per cent per annum compared to our pre-pandemic projection of 7 per cent.
“Our historical analysis of India’s growth performance highlights the key role played by a high investment rate in driving growth in labour productivity and GDP per capita over the last 15 years. But investment has fallen sharply over the last year and the need to repair corporate balance sheets and firm closures will weigh on the pace of recovery,” it said. Constrained credit supply amid a fragile financial system is another headwind for investment.
The banking sector entered the crisis with generally weak asset quality and limited capital buffers. Appetite for lending will be subdued, particularly as credit-guarantee and forbearance measures rolled out in the crisis start to be unwound.
“The economy should be able to grow somewhat faster than estimated supply-side potential over the medium term following the unprecedented downturn in FY21. But our projection for the medium-term recovery path – at around 6.5 per cent per annum over FY23 to FY26 – would leave GDP well below its pre-pandemic trend,” it said.
Source: The Financial Express
Maharashtra government has issued a trade circular stating that it will not adopt goods and service tax (GST) circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) but will issue its own following study of such circulars.
The trade has sought intervention of the Prime Minister’s Office to scuttle the move since it would be detrimental to industry already reeling under the adverse impact of the Covid-19 pandemic, while going against the principle of One Nation-One Tax that was introduced by GST.
“Henceforth, whenever CBIC issues any circular, Maharashtra Goods and Services Tax Department (MGSTD), on its examination, would issue a separate circular regarding its applicability for the implementation of the MGST Act,” the commissioner of state tax, Maharashtra has said in its trade circular issued January 12.
The state government has withdrawn circular 39T of 2019 on the grounds that a single source of information was needed to avoid confusion for trade, specially in cases where circulars are issued by CBIC and MGSTD.
Under GST, joint decisions are taken by Centre and states at the GST Council and implemented across the economy irrespective of tax jurisdictions.
A senior CBIC official said that the state was within its rights as per the GST Act to adopt only state-level circulars, and that this would not lead to confrontation with the Board.
But experts and trade bodies said that this could lead to a showdown between states and Centre as other states may also follow suit and issue their own circulars.
“If all states follow suit and issue their own circulars on the same topic on which CBIC has already issued a circular, it may become challenging to keep track of various state circulars, their date of applicability, and their interpretations,” said Harpreet Singh, partner for indirect taxes at KPMG India.
Confederation of All India Traders has written to Prime Minister Narendra Modi, seeking the immediate withdrawal of the circular issued by the Maharashtra government, as such a precedent could lead to confusion for traders—a large majority of which are engaged in inter-state trade—and increase the compliance burden.
“If states behave like this then each state will adopt separate policies for GST implementation and traders will have to be updated for all states, which is an uphill task, and will make the already complicated GST system more complicated resulting in untimely or no compliance,” said CAIT secretary general Praveen Khandelwal.
The industry body suggested that the Board could seek suggestions from states on a draft circular before issuing it and once it is issued, that circular should be binding on all states.
“Henceforth, whenever CBIC issues any circular, Maharashtra Goods and Services Tax Department (MGSTD), on its examination, would issue a separate circular regarding its applicability for the implementation of the MGST Act,” the commissioner of state tax, Maharashtra has said in its trade circular issued January 12.
The state government has withdrawn circular 39T of 2019 on the grounds that a single source of information was needed to avoid confusion for trade, specially in cases where circulars are issued by CBIC and MGSTD.
Under GST, joint decisions are taken by Centre and states at the GST Council and implemented across the economy irrespective of tax jurisdictions.
A senior CBIC official said that the state was within its rights as per the GST Act to adopt only state-level circulars, and that this would not lead to confrontation with the Board.
But experts and trade bodies said that this could lead to a showdown between states and Centre as other states may also follow suit and issue their own circulars.
“If all states follow suit and issue their own circulars on the same topic on which CBIC has already issued a circular, it may become challenging to keep track of various state circulars, their date of applicability, and their interpretations,” said Harpreet Singh, partner for indirect taxes at KPMG India.
Confederation of All India Traders has written to Prime Minister Narendra Modi, seeking the immediate withdrawal of the circular issued by the Maharashtra government, as such a precedent could lead to confusion for traders—a large majority of which are engaged in inter-state trade—and increase the compliance burden.
“If states behave like this then each state will adopt separate policies for GST implementation and traders will have to be updated for all states, which is an uphill task, and will make the already complicated GST system more complicated resulting in untimely or no compliance,” said CAIT secretary general Praveen Khandelwal.
The industry body suggested that the Board could seek suggestions from states on a draft circular before issuing it and once it is issued, that circular should be binding on all states.
Source: The Economic Times
India’s knitted garment exports have seen sharp decline of 23.08 per cent in Jan.-Nov. ’20 period to US $ 5.51 billion.
As all major markets of India fell in their import of knitted clothing during this period, there were some countries which remained positive.
According to Apparel Resources’ analysis, following countries have increased their knitted garment sourcing from India in Jan.-Nov. ’20 period:
Apart from these countries, India has also added a new destination in its knitted garment portfolio which is Namibia.
In Jan.-Nov. ’20 period of 2019, India shipped just under US $ 10,000 worth of knitted garments to this country, which rose by a massive 88,532 per cent to US $ 4.61 million in the corresponding period of 2020.
Source: Apparel Online
All eyes will be on the Budget that will be presented by the Finance Minister Nirmala Sitharaman on February 1, 2021. The Budget is being presented at a difficult juncture for the economy.
According to the first advance estimates, India's economy is projected to contract by 7.7 per cent in 2020-21. India's economy slipped into a technical recession after it posted two successive quarters of decline. But the contraction slowed down significantly in the second quarter of FY21 led by pent-up demand and a festive push.
Experts have predicted the economy to rebound sharply in the next fiscal on the back of low base and continued recovery. The Budget could be a key driver of growth.
What to expect?
The government has made it clear that it won't shy away from spending to revive the economy. The infrastructure push will have a multiplier effect on the economy.
The finance minister has said that the deficit concerns won't hold her back from pump priming the economy by easing the purse strings.
Any further tax sops could be difficult as the government is already grappling with a difficult revenue situation. The Budget could focus on generating more non-tax revenue and a large-scale asset sale programme could be on the cards.
A paperless Budget
Reports suggest that the finance ministry has done away with the Halwa ceremony and Budget 2021 will be paperless. Soft copies of the Budget could be circulated among Parliamentarians. These changes have been necessitated by the Covid-19 pandemic.
Source: The Economic Times
The Budget session of Parliament will begin on January 29 with the address of President Ram Nath Kovind to the joint sitting of both the Houses and the Union Budget will be presented on February 1.
A communication from the Lok Sabha Secretariat said on Thursday that the session would conclude on April 8.
In order to enable the standing committees to consider the Demands for Grants of ministries and prepare their reports, the Houses will adjourn on February 15 and meet again on March 8.
"Fifth Session of Seventeenth Lok Sabha will commence on 29 Jan. The Session is likely to conclude on 8 April. The President will address both Houses of Parliament assembled together at 11.00 am on 29 Jan. Union Budget will be presented at 11am on 1 Feb," said Lok Sabha Secretariat.
Like the previous session, both the Houses are likely to sit in shifts with Rajya Sabha meeting in the forenoon and Lok Sabha in the evening as part of health measures adopted due to the coronavirus pandemic.
Sources told PTI that the Question Hour would take place in the Budget session. In the previous session, the Question Hour was not taken up due to paucity of time as both Houses met for four hours each.
But a final decision would be taken soon, the sources said. PTI NAB ZMN
Source: The Mint
Focus on what is essential is former RBI governor Raghuram Rajan's advice to Finance Minister Nirmala Sitharaman as she prepares to deliver her third Budget this year in the backdrop of the pandemic that pummeled Asia's No.3 economy into recession.
While most economists have been pleasantly surprised by the resilience of the Indian economy as reflected in the less-than-feared 7.5% contraction in Q2, Rajan, in an interview to ET Now, believes it is too early to heave a sigh of relief. " Looking at the Sensex, one thinks problems are over. No, they are just starting."
Excerpts from what the professor at the University of Chicago had to say about the things running on India's mind:
Don't expect things to settle before 2022
For the US, people say sometime in the second quarter of this year we will be back; for India, my guess is we probably will not be back till late 2022 to where we might have been before the pandemic and then to make up the ground that we lost because we were growing at 4-5% before that. This is a line which is going up and we need to go back to that line. It will take a little longer and if we go back to status quo late this year or early next year and then make up further lost ground over the course, we would certainly have lost a lot of ground during this process.
What to do in Budget
The word prioritisation is very important. The government has to prioritise spending which means focus on what is essential and I would start with relief to the poorer households and ensure that there is adequate relief to small and medium enterprises. But then move on how to get the economy back on track. One of the best ways the government has of getting the economy back on track is doing these spending on infrastructure. Much of it is done by state governments rather than central governments and so getting the money out to the states is quite important. This is the wrong time to stop the states.
More infrastructure financed by share sales and so on and getting the infrastructure spending out through the states may be easier than getting it all done by the centre. Those are things to consider as we go forward. Clearly reforms are important, but we have to do them in a way that does not prompt a reaction which means much more thought going into them, much more consultation and much less of a my way or the highway.
Lessons from 2008
The lessons of 2008 are that it is not just stimulus which is needed to repair the system. We need to look to our fundamental processes and make that better. That drives the economy rather than easing monetary or fiscal spending. So, that is what we need to do at this point. I keep saying that we are missing the need to repair...The government has been attempting some reforms one can go into the details of why some of them have become controversial. But the reality is that we need a lot because our growth rate was falling even before the pandemic and we need to ensure that we have a much higher growth rate not just to recover the ground we have lost but also to create jobs for those many millions who are joining the labour force.
RBI's love for inflation
My personal view is the inflation targeting regime was a good signalling device for India to say that we are concerned about inflation...One could dispute the fact that the growth has been very detrimental in the sense that even though rates would cut the constraint on lending, the level of interest rates have been really low in real terms. When you subtract inflation, globally they have been very low. So you cannot hold the RBI responsible for having high interest rates. But the problem has been the bad loans in the banking system which is reluctant to lend for a variety of reasons.
So the credit growth has been very slow and that is not a problem of monetary policy. It is a problem of fixing the banking system, cleaning it up to ensure that it has the willingness to lend but also in reducing the risks in lending which is a very government centric task.
Bad banks, good or bad idea?
Viral Acharya and I had proposed a bad bank. I was very much against the idea in the past because it was just transferring money from one pocket of the government to the other pocket. How would the bad bank do anything differently from the public sector banks that already own the loans? I can see one reason for a bad bank is to aggregate loans which may be more effective in restructuring those loans because it does not need the permission of the 18 banks who held the loans earlier.
But in order for that to work, the bad bank has to have the personnel who have the competence and the capability of negotiating with the private sector entrepreneur, the promoter and ensuring that the banks get a fair deal. Today, that capability does not exist in the system. Also, the bad bank has to be quite transparent on the prices it pays to the public sector banks when it buys the loans from them.
What went wrong with farm reforms?
The government has to be much more clever about how it does these things. It has enormous political power but it cannot use it without consultations, without talking to the people who will be affected and oftentimes, being clever means not doing it itself but working through the states. There is a sense that the reforms that are being done are essentially not taking the entire set of possibilities into account because they are so centralised, because they were thought through by a small group of people...I can understand some in the government being dejected by this process but I think this pushback against its farm laws shows that is a time for reflection, to understand why this is not working as advertised, why people are not embracing reforms with open arms and then change the process by which it is done to something which is more inclusive and has a greater chance of succeeding.
Fiscal deficit obsession
It is important to keep an eye on it which means that we cannot spend as if there is no tomorrow; that is unfortunately a luxury we do not have, maybe even the US does not have it. But I do think that there is room for spending if it means strengthening the economy over the medium term and that includes a lot of morally justified spending on our poor households to make sure that they can survive well into the future.
On Sensex's wild run
There is tail risk that we will not contain the virus fully. But the markets are pricing in a strong recovery from the second quarter of this year and that is part of the reason for the exuberance in the markets across all assets which is partly why Indian market is going up.
Bitcoin bubble
Bitcoin reached $40,000 from $10,000 in the beginning of last year. Bitcoin is the classic bubble, it produces no value. It is an asset which cannot even be used for payment because it is really difficult. As my friend Austan Goolsbee (an American economist) says, they do not take Bitcoin as payment in Bitcoin conferences because it is just too costly and yet it hit $40,000! So why are people buying Bitcoin? They think it will go up and that is very bubblish in thinking.
The shape of India's recovery
All the numbers typically come from the formal sector of the economy and from large firms. The statistics organisation did try and extrapolate a little bit to the informal sector but we do not know how effective that is. I also worry about the structural damage done and you know damage done to households, damage done to children who now have been taken out of school for a long time or who have not been able to keep up with their classes and we need to prepare for all that.
Source: The Economic Times
According to Ministry of Commerce and Industry (India), the kidswear exports of the country are up 5 per cent to US $ 93.12 million in November ’20.
India has seen a Y-o-Y growth in all major destinations in November for its kidswear such as USA (1st), UK (2nd), UAE (3rd), Germany (4th) and France (6th) but fell in Saudi Arabia – its 5th top market.
USA upped its import of kidswear from India by 4.45 per cent to US $ 27.25 million in November ’20, while UK imported US $ 15.56 million worth of babies’ garments, growing 7.09 per cent on Y-o-Y basis.
Kidswear exports to UAE and Germany grew by 105 per cent and 25.89 per cent, respectively. The shipment to UAE doubled on yearly basis to US $ 13.88 million in November ’20 and the same valued US $ 4.62 million as far as Germany is concerned.
On the other hand, Saudi Arabia witnessed a drop of 6.49 per cent in its kidswear shipment from India which stood at US $ 4.47 million.
However, due to COVID-19 repercussions on the market, kidswear export was down by 15.16 per cent cumulatively in Jan.-Nov. ’20 period clocking US $ 883.25 million revenues.
USA, being the largest market, contributed US $ 245.50 million in total kidswear shipment value, falling 5.21 per cent on Y-o-Y basis.
Source: Apparel Online
Middle class tax payers may get a lot to cheer about the Budget proposals to be presented by Finance Minister Nirmala Sitharaman next month.
Sources said that the Budget 2020-21 may take the sops announced earlier under the Atmanirbhar Bharat package to help people in their fight against the Covid-19 pandemic further, by raising the basic tax exemption limit for an individual income tax payee to Rs 5 lakh from Rs 2.50 lakh at present to enhance net disposable income in their hands.
In the interim budget of 2019, the government had proposed a rebate on all payable taxes if an individual's taxable income is upto Rs 5 lakh per annum. But it kept the basic exemption levels unchanged.
Even last year, the basic exemption limit remain unchanged even though the government provided some relief to taxpayers by allowing them to choose between the existing tax regime and an alternative optional new tax regime with lower rates sans exemptions.
While the proposal to raise the basic tax exemption limit for individuals has come from different quarters, sources said that the Department of Revenue will take a call on its after examining the tax implications.
"This would also need to be assessed on basis of the potential number of taxpayers (estimated at 3.5 crore) who may fall out of mandatory tax return filing requirement. Subsequently, the other slab rates -- both under the existing and new regime -- can be adjusted on basis of the revised limits in line with the progressive tax rate system India has always adopted," Parizad Sirwalla, Partner and Head, Global Mobility Services-Tax, KPMG Assurance and Consulting LLP India, said.
Also on the anvil is an increase in the level of standard deduction that is currently fixed at Rs 50,000. This is expected to provide relief to tax payers as medical reimbursement and travel allowance exemption were done away with from FY 2018-19 in lieu of the standard deduction. Higher levels of standard deduction will help individuals to keep with the ever-rising medical cost that has got amplified due to the pandemic and the rising fuel costs.
Sources said that while the level of deduction has not been worked out, if accepted, it may go up to Rs 75,000-Rs 1,00,000 based on various pre-budget recommendations given to the Finance Ministry.
Standard deductions ensure that all taxpayers have at least some income that is not subject to income tax. These generally increase each year due to inflation.
Government finances, that are contrained by lower growth in tax collections, is expected to be augmented in a big way through disinvestment and higher dividend receipts from the RBI. The spectrum auctions and sale of non-core assets of PSUs including their prized land bank may fill the coffers to the extent that the deficit may be prevented from going completely out of hand.
Source: The Economic Times
India does not want a war but its soldiers are capable of giving befitting reply if any 'superpower' hurts the country's pride, Defence Minister Rajnath Singh said on Thursday amid the eight-month-old border standoff with China.
"We don't want war and we are in favour of protecting everyone's security but I want to say this in clear terms that if any superpower wants to hurt our pride then our soldiers are capable of giving them a befitting reply," Singh said.
The Defence Minister underlined that India never wanted conflict with any nation and preferred to maintain peace and friendly ties with its neighbours.
"It always wanted peace and friendly ties with its neighbours because it's in our blood and culture," he said at the fifth Armed Forces Veterans' Day at the Headquarters
Training Command of the Indian Air Force in Bengaluru.
Referring to the standoff with China, he said the Indian soldiers displayed exemplary courage and patience and if that can be narrated then every Indian will feel proud.
"I can tell you that things that had never happened in past took place this time." "No one can imagine that the Indian Forces carried out such charismatic works but I dont want to get into those details," he said.
Singh hailed the Indian soldiers who showed extraordinary courage in "eliminating terrorists on the Pakistan soil".
The Union Minister called upon the veterans to play a significant role of sharing their experiences with the society and inspire youth to get into the defence services.
Speaking about the issues challenging the veterans, Singh said after retirement income reduces while responsibilities increase.
"I know that the government has done much for you but I believe that much more needs to be done," he pointed out.
Singh said that under the Ex-servicemen Contributory Health Scheme (ECHS), the government has given powers to the local formation commanders to include private hospitals too enabling them to nominate any private hospital.
Further, he recalled that Prime Minister Narendra Modi cleared the long pending demand of One Rank One Pension soon after coming to power in 2014.
Prior to addressing the veterans, Singh along with Chief of Defence Staff General Bipin Rawat, placed wreaths and paid homage at the War Memorial as part of Veterans' Day celebration.
After the event, Singh and General Rawat interacted with the veterans. Next of kin, veterans and representatives of various ex-servicemen organisations were also present on the occasion. Indian Armed Forces celebrate Veterans Day on January 14 every year.
The day was chosen in recognition of the services rendered by the first Commander-in-Chief of Indian Armed Forces, Field Marshal K M Cariappa, who retired on this day in 1953.
Source: India TV
India could see a vaccine-driven turnaround—or pivot point--during the second half of the current calendar year and full resumption of economic activity by the December quarter, experts said.
Nomura defined the vaccine pivot point as “the point at which vaccines start to become more widely available and show demonstrative success in suppressing the virus, allowing governments to lift most social-distancing restrictions and citizens to become less fearful.”
The country’s Covid-19 vaccination drive, which begins Saturday, is likely to cost 0.2-0.5% of gross domestic product (GDP), according to estimates by economists.
HDFC Bank chief economist Abheek Barua sees the country reaching the vaccine pivot point sometime in the fiscal third quarter of FY22. “By the October-December quarter, a significant cohort of the population will be immune to the virus so that normal activity can resume,” he said. CARE Ratings chief economist Madan Sabnavis estimates it will happen sometime after September.
However, Nomura’s Sonal Varma expects the pivot point to be reached earlier in the July-September quarter as the country benefits from its domestic vaccine manufacturing capacity. Rating agency ICRA also sees the pivot in the third quarter of FY22.
“We expect sentiment to improve appreciably, and behaviours to get closer to the pre-Covid normals, during Q3 FY2022,” said Aditi Nayar, principal economist, ICRA.
The vaccine rollout is expected to gather traction gradually, and the benefits will rise exponentially as a critical mass of people receive the vaccination.
According to Rahul Bajoria, chief India economist at Barclays, the key tipping point will come when there is a significant reduction in the number of daily fatalities.
“A combination of vaccine coverage, availability and a reduced mortality rate to the point where people would feel comfortable that, even if they got it, they would recover within a week, would help in reaching that last mile unlocking,” Bajoria said.
According to official estimates, India’s economy is expected to contract 7.7% in the current fiscal year. Fitch Ratings said it could bounce back with an 11% rise in the next fiscal.
Cost to Exchequer
The government plans to vaccinate about 300 million people by August this year and complete the process for another 500 million by the end of 2022, effectively covering close to 60% of the population.
Nomura has pegged the total cost of the immunisation programme at 0.2% of GDP or Rs 45,000 crore.
State Bank of India and HDFC Bank estimate it will be higher.
“Taking the per dose cost estimate by the Serum Institute of India of Rs 250-Rs 300 and the administration cost estimate of Rs 100-Rs 150 from an EY-Ficci survey, we estimate the cost for vaccinating 80 crore people at 0.5% of GDP,” said Disha Kheterpal, economist at State Bank of India Research.
Employing a similar methodology, HDFC Bank arrived at a vaccine cost estimate of Rs 81,600 crore or 0.4% of GDP. Barclays pegged the cost of the vaccination drive at Rs 24,000 crore.
Source: The Economic Times
Networking has been the spine of productive sourcing and ASW Marketplace understands it better.
The virtual marketplace has proved that it is more than just a sourcing platform. Its many engaging features have, over the course of one month, made it a dynamic networking destination.
The super success of ASW’s recently concluded V-Expo has been attributed to its continual focus on networking and its efforts to help the industry meet people who matter.
You want it and you get it here at ASW Marketplace! Corroborating on the same, Annemarie Vlaming, Owner & Designer, AAI made with Love (Holland-based brand), said “I have found what I was looking for.” That’s what many buyers, who were there at the event, endorsed.
In fact, many of them have already made vocal their desire to be a part of more such ASW-organised shows in future.
Why not! ASW Marketplace has been constantly creating links, and helping connect all with probable trading partners and competitors – and all this 24X7.
So, without travelling and without meeting industry stalwarts physically, suppliers and buyers are getting an opportunity to interact with reliable partners, discuss products and prices and understand the global business climate.
At ASW Marketplace, networking is an ongoing process and 2021 will see more sourcing events and shows at the digital platform.
Source: Apparel Online
Having fired up hopes for populist measures with talk of delivering a “budget like never before”, India’s Finance Minister Nirmala Sitharaman will need to find credible sources for additional revenue from a pandemic sickened economy.
Government borrowing is already bumping against the ceiling, revenues are severely dampened and the fiscal deficit is expected to have ballooned on account of pandemic spending.
“It will be hard for the finance minister to find resources. But she will get some help from the economic revival that will likely increase some tax revenue,” said N.R. Bhanumurthy, economist and vice chancellor at Bengaluru-based B.R Ambedkar School of Economics.
“She has to push hard for non tax revenue such as divestment. The current year was a zero year for divestment.”
Stake sales and privatisation seldom meet targets. The government has raised just over 138 billion rupees out of the 2.1 trillion rupees ($28.72 billion) divestment target for the current year. It expects to end FY21 with not more than 300 billion rupees, according to government officials.
They said, however, that the government could raise over 1 trillion rupees from privatisation of Air India, Bharat Petroleum Corp Ltd, Container Corp. of India and Shipping Corp. of India in the first six months the fiscal year beginning in April.
Though, finding investors national carrier, Air India could be challenging in these restricted travel, COVID-19 times.
A senior government official involved in planning for the 2021/22 budget, which Sitharaman will deliver on Feb. 1, rued the revenues lost at the start of the current fiscal year, and doubted they could be clawed back.
“We need a big spending plan but there are few avenues of revenue right now,” the official told Reuters.
India lacks the option to raise larger funds from the market as the central government increased market borrowing by over 50% to fund a COVID-19 relief programme, a second official, also involved in budget planning, said.
Separately, the government is also likely to see a revenue shortfall of 7 trillion rupees this year, which it may have to redress through a new avenue in the coming fiscal year.
“There might be overtures to compensate for this year’s revenue shortfall by an increase in taxation for high net worth individuals as well as sin taxes,” said Radhika Rao, economist at DBS, referencing taxes on items such as tobacco and alcohol.
A third official refused to specify if the government will introduce a COVID-tax or cess but said they were looking at increasing taxes in certain categories but will ensure the burden does not fall on the middle-income citizens.
He said they would also look at imposing additional or higher import duties on high-end electronics.
LONG-TERM BUDGET
Sitharaman in an interview with Reuters in December said she plans to lift spending, otherwise it would completely undermine a government relief programme brought in last year to sustain poor families and small businesses.
Addressing a Confederation of Indian Industry conference last month, Sitharaman also excited expectations for a big-bang budget filled with sops by saying India was set to see a “budget like never before”.
The government would like to use the budget as path to launch three to four years of high growth, said the third official, stressing that the increase in spending would not be taken to unsustainable levels.
“So, all the funds announced would not be for this year. For this year we could have a growth in expenditure for sure, but the funds announced in the budget would be for years ahead.”
The government’s fiscal deficit for the year ending March is expected to be over 7%, and more than double the budgeted estimate.
Given all the uncertainties, economists reckon the government has no alternatives and has to boost spending.
With a population of nearly 1.4 billion, bedevilled by massive income inequality, India needs annual economic growth of over 8% to create enough jobs for the millions of young people joining the labour force each month.
It was falling short before COVID-19 struck. Growth was 6.1% in 2018/19, before dropping to 4.2% in 2019/20 as the pandemic erupted in the last quarter. The government projects the economy will suffer a 7.7% contraction this fiscal year, and private economists projections of double-digit growth in 2021/22 will partly result from the bounce off a low base.
“Hope hinges on the government to increase its spending to revive the private sector sentiment, overall demand and largely private investment,” said Arun Singh, global chief economist at Dun and Bradstreet.
($1 = 73.1225 Indian rupees)
Source: Reuters India
Techtextil India, leading exhibition of technical textile, is all set for its hybrid edition (the combination of physical and digital platforms) – to be organised from 1 to 3 September 2021 in Mumbai.
The event will connect technical textile players from across the globe through its multimodal platform.
It is pertinent to mention that the demand for medical textiles, particularly spun bond nonwovens, has skyrocketed ever since the onset of the pandemic.
Over the years, the editions of Techtextil India have been instrumental in uniting the technical textile fraternity and creating an atmosphere of collaboration through its physical platform.
The hybrid edition will not only physically, but also digitally unite exhibitors from the technical textile industry with key buyers and suppliers PAN India and worldwide.
While the physical fair offers the benefit of face-to-face interaction under strict observance of safety protocols, the digital platform will help exhibitors increase their brand exposure and interact with potential buyers from across the globe via features such as live streaming, video calls, live chats and more.
Live product demonstration on dual platforms will further enable exhibitors to showcase their products and new emerging technologies to a vast array of business attendees.
The hybrid fair will also make collaborative engagements extremely simple through its artificial intelligence (AI) assisted platform.
The potential suppliers will be automatically matched when buyers launch product or service queries, following which virtual appointments can be set up at a mutually agreed upon time.
The event is also looking forward to incorporate online panel discussions and knowledge programmes to impart erudite market insights and rejuvenate confidence amongst players across the 12 application areas of technical textiles.
Source: Apparel Online
China’s exports rose in 2020 despite pressure from the coronavirus pandemic and a tariff war with Washington, boosting its politically volatile trade surplus to USD 535 billion, one of the highest ever reported.
Exports rose 3.6 per cent over 2019 to USD 2.6 trillion, an improvement over 2019’s 0.5 per cent gain, customs data showed Thursday. Imports edged down 1.1 per cent to just over USD 2 trillion.
China’s exporters benefited from the relatively early reopening of its economy and demand for masks and other Chinese-made medical supplies. Exporters have taken market share from foreign competitors that still face curbs imposed to fight the pandemic.
Exports surged 18.1 per cent in December over a year earlier to USD 281.9 billion. Imports rose 6.5 per cent to USD 203.7 billion.
Source: The Financial Express
Bangladesh, the second-largest exporter of apparel goods, has been able to take the advantage of rising demand for cosy home textile as it has a range of quality products at reasonable prices.
Home textile products include bed linen, bed sheet and other bedroom textiles, bath linen, carpets and rugs, blankets, kitchen linen, curtains, cushions and cushion cover and covers for quilts.
Last year, Bangladesh’s exports earning from home textile products posted a 15 per cent growth to $936 million, which is very close to its target of $1 billion, according to Export Promotion Bureau (EPB).
In contrast, apparel, which brings home the lion’s share of export earnings, posted a 17 per cent drop in receipts to $27.5 billion in the same year.
However, during the July-December period of fiscal 2020-21, home textile shipments registered a 48 per cent growth to $547.48 million.
“In averting infections, people remained captive in their homes. Corporate offices allowed employees to work from home. Peoples’ movement as well as travel was restricted due to the pandemic,” said Mohammed Rashed Mosharrof, general manager (marketing) and head of operations of Zaber and Zubair Fabrics.
The company employs about 8,500 people in producing home textile products and export products worth $200 million a year.
These limited the use of outwear products but increased the demand for casualwear and the use of home textile products.
“Bangladesh cashed the opportunity and recorded a good growth in earnings,” he added.
The global home textile market size was valued at $94.73 billion in 2018 and is expected to register a compound annual growth rate of 5.01 per cent from 2019 to 2025, according to grandviewresearch.com.
“We have enough capacity to cater to the bulk of the demand, while our workers are more adaptable in technology or any kind of innovation,” said Belayet Hossain, managing director of RTT Textile Industries.
Besides, the production costs are lower than in China.
On top of that, global buyers are reducing dependency on China and are looking for alternatives in Asia.
“If we can ensure a suitable investment environment and the government can provide support in tackling the Covid-19 economic fallout, we have a great opportunity to grow in export destinations,” Hossain added.
The rise in cotton prices can pose to be a challenge for Bangladesh’s home textile exporters, according to M Shahadat Hossain, chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA).
If the government supports the sector, home textile exports can hit the billion-dollar mark, said Hossain, also the managing director of Towel Tex.
Source: Dhaka Tribune
Nepal’s foreign minister Pradeep Gyawali is in Delhi for a bilateral meeting. External affairs minister, S Jaishankar, will be his counterpart as co-chair of the joint commission meeting. It is a sign that after troubles last year, triggered by Nepal’s decision to publish a new map including territory India considers its own, the bilateral relationship is broadly on track. The two sides will discuss the status of connectivity projects, and Mr Gyawali is expected to make a strong pitch for early delivery of Covid-19 vaccines — India has already committed to supplying it to its close neighbours. This is positive and will earn India goodwill among Nepali citizens at large and reflect Delhi’s capacity to be a provider of public goods.
But even as the State-to-State relationship is on track, it is important for Delhi not to lose sight of the political churn in Nepal. Prime Minister KP Oli’s unconstitutional move to dissolve Parliament (the new Nepali Constitution does not give the PM the right to do so) has led to a de facto split in the Nepal Communist Party (NCP). Nepal’s Opposition parties are slowly building up a street movement against the current government. Four former chief justices have slammed Mr Oli’s move, even as the Supreme Court’s verdict on the constitutionality of the dissolution is awaited. Mr Oli is widely seen to have pushed the country into a period of instability in order to enjoy power without accountability. And there is a widespread belief that elections, announced for April-May, will not be held.
This churn has led to three tactical gains for India — the unity in NCP, a product of China’s blatant interference, is shattered; China’s efforts to reunify the party haven’t borne fruit; and India is not being blamed, as is often the custom in Nepal, for its internal troubles. At the same time, India must be careful not to be seen as backing Mr Oli. This will put it at the risk of being on the wrong side of democratic principles — Mr Oli’s move undermines Nepal’s fragile constitutional democratic structure — and of power. After all, this may mark the beginning of the end of Mr Oli’s dominance in Nepali politics and an alternative configuration is likely to take power eventually. India must stand firmly on the side of the democratic aspirations of Nepali citizens. That is ethical, prudent and strategic.
Source: The Hindustan Times
The German economy, Europe’s largest, shrank by 5 pper cent in the pandemic year 2020, ending a decade of growth as lockdowns wiped out much business and consumer activity. As dreary as they were, the numbers suggest consumers could be ready to unleash a strong recovery when the lid finally comes off.
The statistics office Destatis said Thursday that only the construction sector showed an upturn as industry and services saw deep declines. Agriculture, financial services, real estate and information and communication suffered smaller drops in output.
Industry fell 9.7 per cent while services including cultural and sporting events, which have suffered widespread cancellations, fell 11.3 per cent.
Looking ahead, the stage could be set for a substantial economic rebound since consumers might be ready to spend once the pandemic recedes, having increased their saving rate to a historic high of 16.3 per cent during 2020. Albert Braakmann, head of the group for economic estimates and prices, said consumption could increase significantly.
In the fourth quarter, growth roughly stagnated, said Michael Kuhn, head of the GDP and output calculation group at the agency. He said that since very little data was available for December, when the latest round of lockdowns hit, the agency was not making an official estimate. The fourth-quarter figure is to be announced on Jan. 29.
The pandemic downturn, which followed 10 straight years of annual growth, was smaller than that experienced during 2009, when the economy shrank by 5.7 per cent The 2020 figure compares to modest growth of 0.6 per cent in 2019.
In 2020, the economy seesawed between lockdowns and a robust upswing that still left growth below the previous year. The worst quarter, the second, saw a quarter-on-quarter plunge of 9.8 per cent followed by a rebound of 8.2 per cent in the third.
Source: The Financial Express
Around 40 tons of fabrics imported under false declaration were seized at the Chittagong port by the Customs House on Wednesday.
Customs officials say the seized fabrics has an estimated market value of Tk1.5 crore.
Sources at the Customs House said Nakano International Company Limited in Ishwardi export processing zone imported two containers of “bleached fabrics” from China.
One of the containers arrived about six weeks ago and the second one reached the port about three weeks ago but the company did not take any initiative to get them released.
This made the port officials suspicious about the importers. Customs House’s Assistant Commissioner Rejaul Karim said they verbally requested a representative of the importing company to have the goods tested.
The company told them that they did not import the goods and that someone else had imported them using their name.
Karim said they would take legal action against people involved in the incident.
Source: Dhaka Tribune
India on Thursday signalled that a joint commission meeting with Nepal on Friday was not the appropriate forum for discussing a border row, as Nepalese foreign minister Pradeep Gyawali began a two-day visit aimed at shoring up bilateral ties.
Gyawali is the senior-most Nepalese leader to visit India in more than a year after the Covid-19 outbreak. He is also the first leader to visit New Delhi since Prime Minister KP Sharma Oli triggered political turmoil by dissolving Nepal's Parliament last month and calling early elections.
Nepal’s foreign ministry, while announcing the visit on Tuesday, said in a statement that the joint commission will discuss the gamut of bilateral relations, including the boundary issue, Covid-19 cooperation, infrastructure, connectivity, trade and transit.
However, external affairs ministry spokesperson Anurag Srivastava made it clear the joint commission wouldn’t be the right forum to discuss the border issue. “Our position on the boundary issue is well known. Let me say that the joint commission meeting and boundary talks are separate mechanisms,” he told a weekly briefing.
“The joint commission is an important mechanism that provides the opportunity of reviewing at a high level the entire gamut of our bilateral partnership and providing political guidance to further enhance the special and unique ties that we enjoy,” he said, adding India is looking forward to “constructive discussions” on numerous sectors.
Gyawali will meet his Indian counterpart S Jaishankar for talks on Friday, after which they will chair the joint commission meet. This will be only the sixth meeting of the body since 1987, though it has convened four times since 2014. Gyawali also held several private meetings on Thursday.
The Nepalese delegation includes the foreign secretary and health secretary, reflecting the focus on Covid-19 cooperation. Though Nepal has formally reached out to India and China for vaccines, Kathmandu has indicated a preference for sourcing doses from New Delhi because of factors such as pricing, logistics and well-established links between the health sectors of the two countries.
People familiar with developments said on condition of anonymity that Nepal is hoping India will provide vaccines as assistance to inoculate some portion of the 12 million people it plans to cover in its first phase of vaccinations. Nepal also plans to buy millions of doses from foreign suppliers, including the Serum Institute of India and Bharat Biotech.
India has said its ability to export vaccines after meeting domestic needs will become clear over the next few weeks. Officials have also said India’s neighbours will get priority for the supply of vaccines.
India-Nepal ties came under the shadow of the border row last year after Oli issued a new political map that included Kalapani, Limpiyadhura and Lipulekh, which are part of Indian territory. The map was published in response to India’s opening of a strategic road to Lipulekh, located on the border with China.
The external affairs ministry described Nepal’s new map as “unjustified cartographic assertion”, and the people said the focus of Friday’s meeting will be taking forward development cooperation, including India-backed projects in Nepal.
Given that Oli currently heads a caretaker government, there is unlikely to be any substantive movement on the border issue. One option the two sides could look at is asking the bilateral boundary working group to look afresh at ways to finalise the border in disputed sections at Kalapani and Susta.
Before Oli’s sudden decision to dissolve Parliament, normalcy was restored in bilateral ties by back-to-back visits to Kathmandu last year by Research and Analysis Wing chief Samant Goel, Indian Army chief Gen MM Naravane and foreign secretary Harsh Shringla.
India has been keeping a wary eye on China’s efforts to broker an understanding between Oli and his main rival, Pushpa Kamal Dahal “Prachanda”, in order to keep the Nepal Communist Party united.
Former ambassador Rajiv Bhatia, distinguished fellow for foreign policy studies at Gateway House, said Nepal is among the “borderline countries” in India’s neighbourhood, with which ties require “constant nurturing and hand-holding”.
“India’s thrust over the past few months shows that it has adopted a very clear and calibrated approach while keeping political and diplomatic channels open. Cordial cooperative ties are in the interest of both sides, though there are challenges,” he said, adding the Nepalese side may opt to raise the border issue but the joint commission wasn’t the forum to discuss such matters.
Source: The Hindustan Times
With the House of Representatives having voted to impeach President Donald Trump for incitement to insurrection, it’s time to start contemplating what Trump’s defense will be in a Senate trial. The answer can be summed up briefly: Trump’s lawyers will argue that Trump did not commit a crime of incitement and that his words were protected by the First Amendment.
But wait, you may say, if you can remember Trump’s 2020 Senate trial 12 months ago (so much has happened since then that I barely can — and I testified during the House Judiciary Committee proceedings): Impeachment is for high crimes and misdemeanors under the Constitution. That doesn’t require conviction of a federal crime.
That means the First Amendment as interpreted by the Supreme Court isn’t relevant and shouldn’t protect Trump. The framers kept the “high crimes and misdemeanors” language intentionally broad so that presidents could be held accountable for a wide array of abuses of power, including interfering with a free and fair election.
Yet, still thinking back to the last impeachment, you will also recall that Trump’s lawyers — and some of his Senate defenders — never conceded that basic legal fact. In addition to arguing that Trump had done nothing wrong in his “perfect” phone call with the president of Ukraine, Trump’s defenders also maintained that Trump could not be impeached because he had not committed a federal crime. They insisted, despite the historical and logical evidence, that high crimes and misdemeanors under the Constitution need to be statutory federal crimes.
They are going to make that argument again. And this time, they will also be able to wrap themselves in the patriotic flag of the First Amendment. Specifically, they are going to rely on an iconic 1969 free-speech decision by the Supreme Court, Brandenburg v. Ohio.
The Brandenburg case reframed the law of incitement, extending the protection of the First Amendment beyond where it had been before. As late as the notorious 1951 case of Dennis v. United States, the court was still using a version of the “clear and present danger” test first devised by Justice Oliver Wendell Holmes in 1920. In the Dennis case, that standard was interpreted to allow conviction of nearly a dozen leaders of the Communist Party USA for sedition.
By 1969, free-speech advocates and scholars had come to see the Dennis approach as out of step with contemporary values of political self-expression. In the Brandenburg case, the court said that the government can’t outlaw or punish “advocacy of the use of force or of law violation except where such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.”
The Brandenburg rule thus has two components. The first is that the speech is “directed” to inciting imminent lawlessness. The second is that the speech is actually likely to achieve its result.
Again, under the Constitution’s definition of high crimes and misdemeanors, it isn’t legally necessary for Trump to have committed a federal crime. Abusing the power of his office is plenty. Nevertheless, Trump’s supporters will insist that Trump’s conduct fails the Brandenburg test and thus isn’t impeachable.
Whether Brandenburg would protect Trump from federal criminal prosecution is a subtle question. There probably wouldn’t be much doubt about the second prong, “likely to incite.” Trump’s speech did in fact incite lawlessness, and so it certainly seems to have been likely to do so.
The hard part is whether his speech was “directed” to incitement. Some scholars think this means that Trump’s words need to have explicitly called for violence. Read literally, they didn’t.
Yet a counterargument to this requirement of literalism has long been that it would inappropriately protect speech that was artfully framed to incite violence without ever explicitly doing so. The classic example is the speech given by Shakespeare’s Mark Antony over Caesar’s dead body. The speech famously uses irony (“Brutus is an honourable man”) to incite the mob to violence. It’s therefore plausible to conclude that the Brandenburg test doesn’t require literal use of inciting language.
If calls for violence don’t have to be explicit, the prosecuting side has an obligation to prove that violence is nonetheless what the speaker intended to incite. (Some scholars think both literal incitement and intent are required.) Circumstantial evidence — like whether he actually refused to call in the National Guard — could help to prove Trump’s intent. Without it, however, Trump will simply be able to say that he did not intend to incite violence, making it difficult to convict him for a crime under the Brandenburg standard.
Needless to say, it would be a terrible shame if Trump’s impeachment trial devolved into a legalistic exchange about whether the First Amendment and Brandenburg apply in impeachment proceedings. That’s exactly why you can expect Trump’s defenders and lawyers to make the argument. It’s reason to worry that the result of Trump’s second impeachment trial will be no different than the result of his first one.
Source: The Hindustan Times
