Prime Minister Narendra Modi will chair Niti Aayog's Governing Council meeting on February 20 where issues related to health, economy and labour reforms will be discussed, official sources said on Thursday.
The council, the apex body of Niti Aayog, includes all chief ministers, lieutenant governors of Union Territories, several union ministers and senior government officials.
Prime Minister Modi is the Chairman of Niti Aayog.
The council will deliberate on issues related to health, including COVID-19 vaccination programme, labour reforms and state of the economy, the sources said.
The Governing Council will also review action taken on the agenda items of the previous meetings and deliberate upon the future developmental priorities.
The Governing Council meets regularly, and its first meeting took place on February 8, 2015.
Source: The Economic Times
Apparel exporters have welcomed the Reserve Bank of India (RBI) sharing of a positive outlook for the economy. Industry believes that RBI’s decisions will improve India’s export competitiveness.
The RBI announced its bi-monthly monetary policy today.
Experts believe that it is overall positive and growth-oriented statement in today’s developmental, regulatory and monetary policy of the RBI.
The decision to retain repo rate at 4 per cent, bank rate at 4.25 per cent and reverse repo at 3.35 per cent, and steps taken to maintain the inflation at the tolerance band of 4 per cent will help investors.
The improvement in capacity utilisation in the manufacturing sector and flow of financial resources to the commercial sector will strengthen the efforts of the industry to bring back normalcy in manufacturing and exports.
Dr. A. Sakthivel, Chairman, Apparel Export Promotion Council (AEPC) complimented the RBI in this regard and said, “I am happy to note that the measures announced by RBI in its bi-monthly monetary policy decision today will enhance export competitiveness and ease of doing business for exporters.”
He further expressed confidence that the apparel industry will have full support and corrective measures through RBI’s objective of reviving the economy with measures relating to enhancing liquidity support to targeted sectors and liquidity management; regulation and supervision; and deepening financial markets.
Similarly upgrading payment and settlement systems; and strengthening consumer protection will also help apparel exporters.
Source: Apparel Online
The Reserve Bank has lowered the retail inflation projection for the current quarter of this fiscal at 5.2 per cent, saying it has returned within the “tolerance band”.
On the economy, the central bank said it is only going to look upwards from here.
In its last monetary policy review of this fiscal, the RBI has decided to keep the key repo rate unchanged at 4 per cent with accommodative stance to ensure that inflation remains within the target, RBI Governor Shaktikanta Das said while unveiling the policy on Friday. Das also said the retail inflation has “returned within the tolerance band” of 4 per cent.
The Reserve Bank has the mandate to keep retail inflation at 4 per cent with a bias of plus/minus 2 per cent on either side.
The inflation (retail) projection is revised to 5.2 per cent for Q4 of the current fiscal, Das said, adding vegetable prices are likely to remain soft in near term on the back of fresh arrivals in the market.
In its previous policy decision in December, the RBI had projected retail inflation to be at 5.8 per cent for Q4 FY’21. For the first half of the next fiscal year, the Reserve Bank has projected inflation to be in a band of 5.2-5 per cent.
And for the third quarter of 2021-22 (October-December), Das said: “We are projecting it (inflation) at 4.3 per cent. We are assessing the risks to be balanced”.
Source: The Financial Express
The new world order – dictated by the pandemic – is calling for better synergy between buyers and suppliers, as that’s the only mode of survival today.
At times when consumer shopping habits have changed and e-commerce defines the business, ASW Marketplace provides that much-needed synergy for apparel buyers and suppliers.
The biggest direction today for all small and big retailers is to go omnichannel with e-commerce platforms ably supporting bricks-and-mortar footfalls.
While the retailers need to be prepared for every shift in direction, manufacturers too need to revisit their way of working with focus on enhancing agility and saving cost. It’s here ASW Marketplace helps meet new trading partners and reassess supply chains.
With travelling and physical meetings on hold, this 24×7 technological platform ensures that buyers and suppliers stay connected and do not lose touch to ground realities.
And now with many big sponsors too becoming a part of the marketplace, the industry can avail the best of their unique offerings and technology.
Source: Apparel Online
Not taking a decision is sometimes a decision in itself. For the usual operative parts of Budget 2021, that has been the best thing about it. No changes were made to direct tax rates. And government expenditure was kept nearly flat to this year’s revised estimates (RE).
A quick snapshot of the numbers lay out the latter quite succinctly. Total budgeted expenditure, including extra budgetary resources (EBR) — essentially, resources mobilised by PSUs for specific capital expenditure projects — at Rs 40.66 lakh crore is a little less than RE for this year ( Rs 40.96 lakh crore)
Even for this Covid-wracked year, a large chunk of enhanced expenditure was on account of balance-sheet clean-ups — bringing FCI borrowing within the budget and settling subsidy arrears of the past. In other words, the fiscal boost is limited to keeping spends on an even line even as the denominator (GDP) has fallen from fiscal 2020 levels. This alleviates, substantially, foreign investor concerns on macro stability, thereby keeping foreign flows at even keel.
Both are good for business and capital markets. A stable tax regime helps businesses and boosts consumer confidence. A glide path on the fisc, along with a material shift of the outlay towards capital expenditure, keeps a degree of priming required to sustain industrial recovery. That is, equity markets caught on to the right signals on budget day.
A K-shaped recovery has been underway for the last few months. While the top half of enterprises and consumers seems to be seeing a smart pick-up in economic activity, the bottom half has struggled with job and income losses. With the twin ‘non-decision’, the upper hand of the ‘K’ has been given a tailwind. So, what happens to the bottom hand?
There are a bunch of announcements relating to what ex-chief economic adviser Arvind Subramanian describes as ‘software’ of the economy — a ‘bad bank’, or asset reconstruction company (ARC), a new development finance institution (DFI), a new programme on chronic power sector losses. All of them are unexceptionable. But their impact depends on execution, legislative work outside the budget — and they need time. None of them are quick wins that will have immediate impact on the pressing issue: aggregate demand.
Most high-frequency indicators tracking employment show widespread job losses. Add to it the withdrawal of the incremental Covid boost in the primary income support programmes — MGNREGA, PM-KISAN — and there is likely to be a negative fiscal impact of incomes at the bottom of the pyramid.
Going by the budget numbers themselves, GoI does not expect aggregate demand to materially exceed FY2020 levels. Remember, FY2020, pre-Covid, was one of the direst slowdowns in India’s post-1991 history. So, what gives?
One assumption could be that GoI has faith in supply-side measures pushing along a cyclical recovery, which was anyway expected after the bottoms of FY2020. Some factor market reforms had already been introduced last year, especially in labour and agriculture. Corporate tax was cut in the previous budget. Privatisation announcements have been made with increasing visible activity over the last 18 months.
The budget took forward the momentum via insurance FDI hike, and further announcement of privatisation of State-owned banks and insurance companies. The problem with this assumption is that the supply-side script has been played for at least 2-3 years, but growth has still been weakening.
The other assumption would be of ‘trickle down’. A bunch of market-friendly measures boost sentiment, attract foreign investment and create wealth in the top half (or even quarter) of the pyramid. ‘Animal spirits’ are unleashed, the wealth effect drives consumption across a range of discretionary products and services, and, finally, a part of it trickles down to the bottom half of the pyramid, pulling them up via creation of jobs in revived construction and manufacturing sectors.
‘Trickle-down’ has been a bad word in policymaking for some time now. But India’s best performance in poverty alleviation took place when the economy grew at a fast pace. It is now well established globally that the rich are well immunised from macro swings of fortunes. The poor, especially in (relatively) low-income countries like India, are a lot more vulnerable to income shocks arising out of poor growth. Ergo, an elite consumption and risk-taking fuelled growth is better than low or no growth.
It wouldn’t satisfy the purist. But in a world of bounded rationalities, it is a fair bet — letting the K bend itself into a U.
Source: The Economic Times
Kolkata-based leading knitted garment company Dollar Industries Limited has announced its Q3, FY21 results.
The total revenue of the company for Q3, FY21 and 9 months of FY21 stood at Rs. 312.44 crore and Rs. 730 crore as compared to Rs. 255.43 crore and Rs. 733.14 crore for Q3, FY20 and 9 months of FY20.
The revenue noticed growth of 22.32 per cent for Q3, FY21 and de-growth of 0.43 per cent for 9 months of FY21, respectively.
Profit after tax (PAT) for Q3, FY21 and 9 months of FY21 stood at Rs. 28.38 crore (i.e., 9.08 per cent) and Rs. 68.07 crore (i.e., 9.32 per cent) as compared to Rs. 19.58 crore (i.e., 7.67 per cent) and Rs. 46.58 crore (i.e., 6.35 per cent) for Q3, FY20 and 9 months of FY20.
The PAT marked growth of 44.95 per cent and 46.11 per cent for Q3, FY21 & 9 months of FY21, respectively.
Vinod Kumar Gupta, MD of the company, commented, “Our company crossed the mark of Rs. 300 crore of turnover this quarter. Also, this quarter the industry witnessed a sharp increase in prices of cotton and yarn starting November 2020. It will take a while before the prices stabilise for yarn. The company continues its journey of growth working on revamping the distribution channel and digitisation.
We look forward to a bullish Q4, FY21.”
Dollar Industries Limited claims to hold 15 per cent of the total market share in the organised segment and is the first Indian innerwear company to have a fully integrated manufacturing unit which is equipped with all the latest processing technology and the top-most finishing range to produce finished raw material dyed in any possible colour.
Source: Apparel Online
The IMF on Thursday welcomed India's Union Budget for focussing on growth and said fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery.
Gerry Rice, Director of Communications at the International Monetary Fund (IMF), at a press conference here said the Union Budget rightly focuses on health, education, public infrastructure and, if fully implemented, can help increase India's growth potential.
"We welcome the Indian government budget's focus on growth. Fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery," Rice said, responding to a question on the Union Budget presented by Finance Minister Nirmala Sitharaman in Parliament on February 1.
"We also welcome measures to improve fiscal transparency by including food subsidies in the budget. Of course, a medium-term fiscal consolidation strategy will be important to ensure credibility," he said.
"And we also agree with the need to further strengthen the financial sector and look forward to the details of the proposed measures in that area," Rice said.
Finance Minister Sitharaman on Monday proposed a sharp increase in expenditure on infrastructure, doubling of healthcare spending and raising the cap on foreign investment in insurance in her Budget for the next fiscal in a bid to pull Indian's economy out of the pandemic-induced economic crisis.
Source: The Economic Times
Stressing that economic growth will only move upwards, the Reserve Bank of India Governor Shaktikanta Das on Friday pegged the GDP growth rate for the next financial year at 10.5 per cent, though a tad lower than the government's projection of 11 per cent.
The projection is in line with the estimates in the Union Budget 2021-22 presented in Parliament earlier this week.
The Economic Survey, tabled by the government in Parliament recently, has projected that the economy will grow at 11 per cent, up from an estimated historic decline of 7.7 per cent in 2020-21, on account of the COVID-19 pandemic.
"... going forward, the Indian economy is poised to move in only one direction and that is upwards," Das said while unveiling the bi-monthly monetary policy.
The Governor said the Union Budget 2021-22, has provided a strong impetus for revival of sectors such as health and well-being, infrastructure, innovation and research, among others.
This, he said will have a cascading multiplier effect going forward, particularly in improving the investment climate and reinvigorating domestic demand, income and employment.
Also, the vaccination drive is expected to provide an impetus for the restoration of contact intensive sectors and a leading edge to the Indian pharma industry in the global market, Das said, while highlighting various aspects of the economy.
"It is our strong conviction, backed by forecasts, that in 2021-22, we would undo the damage that COVID-19 has inflicted on the economy," he stressed.
The monetary policy statement issued by the RBI said rural demand is likely to remain resilient on good prospects of agriculture. Urban demand and demand for contact-intensive services is expected to strengthen with the substantial fall in COVID-19 cases and the spread of vaccination.
Consumer confidence, it said is reviving and business expectations of manufacturing, services and infrastructure remain upbeat.
"The fiscal stimulus under AtmaNirbhar 2.0 and 3.0 schemes of government will likely accelerate public investment, although private investment remains sluggish amidst still low capacity utilisation," it added.
"... real GDP growth is projected at 10.5 per cent in 2021-22 – in the range of 26.2 to 8.3 per cent in H1 and 6.0 per cent in Q3," Das said.
After the Budget 2021-22 announcement on Monday, Economic Affairs Secretary Tarun Bajaj had said that real GDP growth would be 10-10.5 per cent in the next fiscal.
"Our revenue figure is under-stated not overstated. We have taken nominal GDP at 14.4 per cent and revenue growth at 16.7 per cent. So, the buoyancy is only 1.16. We are hopeful we will get more than this. We will definitely be within 6.8 per cent and could be lower also," Bajaj had said.
Source: The Economic Times
Leading Indian textile conglomerate Arvind Fashions Ltd. (AFL) has faced consolidated net loss of Rs. 66 crore (US $ 9.1 million) in Q3 of the current fiscal year as against Rs. 48 crore in the same period of last fiscal.
The company, having brands like Calvin Klein, Tommy Hilfiger, and US Polo Assn., saw its sales revenue during the said quarter touch Rs. 911 crore, as compared to Rs. 1,062 it had posted in the corresponding period last year.
“Better-than-expected sales recovery through improved footfalls during the festival period has resulted in significantly improved profitability and cash breakeven for continuing business in Q3 FY21,” said J. Suresh, company’s MD and CEO.
The company’s focus on digital and omnichannel initiatives and a deep cost focus continue to deliver robust outcomes. At the back of strong Q3, it expects H2 FY21 to be significantly better in terms of sales and profitability growth.
The company also has plans to raise Rs. 200 crore to strengthen its balance sheet this year.
It is also pertinent to mention here that the Arvind Fashions has seen a structural shift in demand to online as the company’s online sales are at 230 per cent of last year. Soon, as a company, it will have Rs. 1,000 crore of sales in the digital channel.
The offline sales have come back at more than 70 per cent of pre-Covid levels.
In an interview to ET, Kulin Lalbhai, Director of the company, said “Our online sales are at 230 per cent of last year which means it has more than doubled and because we have had such a large increase in sales, the operating leverage has kicked in.”
Source: Apparel Online
Textile and branded apparel player Arvind Ltd has posted a 30 per cent dip in consolidated net profit, to Rs 24.91 crore for the third quarter ended December 31, 2020, from Rs 35.77 crore in the said quarter last year.
The company's consolidated revenue from operations dipped nearly 19 per cent year-on-year in the quarter to Rs 1,514 crore, from Rs 1,869 crore in the corresponding period last year.
Sequentially, however, the company's consolidated revenue from operations rose 16 per cent in Q3 from Rs 1,305 crore in the second quarter ended September 30, 2020.
In its presentation to the stock exchanges, Arvind Ltd stated that its earnings were lower on account of the Covid-19 pandemic.
However, its business had returned to 80 per cent of October-December 2019-20 quarter with its margins too "almost fully" recovering.
For instance, Arvind Ltd's textile business had bounced back despite rise in cotton cost and other raw material, led by cost management and modest price increases. On the other hand, its denim revenues recovered to about 81 per cent in Q3 with volumes being at 88 per cent amid an average price realization of Rs 184 per meter as compared to Rs 188 per metre a year ago.
The quarter also saw its garment business stand at 89 per cent in terms of revenues along with 90 per cent volumes, especially those for jeans and knitwear recovering well. Whereas woven revenues stood at 66 per cent with 77 per cent volumes and a average price realization of Rs 146 per metre as against Rs 167 per metre last year. The company stated in its presentation that the business mix in wovens had shifted towards lower price point products.
Going forward, domestic demand is expected to continue its recovery momentum, with likely traction in key markets in European Union, UK and US depending on how the pandemic unfolds. The company stated in its presentation that it expected a cost push due to higher cotton, yarn and other input prices to keep pressure on margins even after increased price realization.
Meanwhile, Arvind Ltd. expected revenues to improve sequentially in Jan-Mar quarter, with earnings before interest, tax, depreciation and amortization (EBITDA) margins for textiles likely at 12 per cent and for advanced materials at 14 per cent. The company also expected its net debt to further reduce by about Rs 100 crore in the fourth quarter of current fiscal 2020-21.
Source: The Business Standard
Her third budget got Nirmala Sitharaman the kind of raving newspaper headlines and roaring stock market approval all finance ministers want, although few admit to actually wanting it. Much of the praise is well-deserved. Columnists in these pages have explained why.
Unless there are nasty surprises in the fine print no one has caught as yet, the afterglow of a budget that broke free from NDA 2’s fiscal overcautiousness should last most of February. Obviously, then comes March — but what may not be obvious is why March 2021 is an incomparably more crucial post-budget month than any others in recent times. GoI doesn’t have the luxury of fleshing out this budget’s key proposals at the usual sarkari speed.
Therefore, as the next financial year starts in April, GoI must be ready with its key budget measures. If all stakeholders know that the best bits of a good budget are good and ready to be implemented as FY2022 begins, it will shore up confidence no end.
Also, and equally importantly, clear evidence that GoI has sweated the details of its key proposals and is ready to operationalise them will have a multiplier effect on confidence even if there’s no major bad news. We rarely see a battle-ready, post-budget GoI as a new fiscal year begins. The very fact of 2021-22 starting with this big positive will deepen and widen the shallow pool of confidence.
So what are the best bits of a good budget that need to be worked on at warp speed? There are four.
DFI: Development finance institutions (DFIs) haven’t done the job earlier. There’s understandable scepticism about the new DFI. GoI’s Rs 20,000 crore seed capital by itself won’t do the trick unless the new body is staffed with quality people, who get a clear mandate and a clear undertaking that there will be no micromanagement. If that’s done — a big if — and done quickly — a bigger if — the new DFI can get down to business in earnest in the early part of FY2022, sourcing long-term capital and getting credit lines going. The impact of a well-designed DFI on both investment and investor mood will be huge.
ARC/AMC for banks: Why a bad bank, the popular name for the role the asset reconstruction and asset management companies will perform, took so long is a puzzle. But now that it is here, it should be up and running long before post-forbearance bad news on bad loans start flooding in. Otherwise, this single piece of bad news can sour the mood, allbut-freeze bank credit and have domino effects down the line.
Media reports suggest GoI is mulling banks owning or part-owning the ARC/AMC. Some pundits have already wondered whether there’s conflict of interest in this. There are details of funding to be sorted out, as well as an incentive structure. Plus, like in the case of the new DFI, the bad bank too needs quality people. That’s a long list. But if GoI can crack this and the ARC/AMC is functional early in FY2022, confidence among banks to lend and confidence in bank creditwill rise dramatically.
It’s a Gaol! No Longer
Privatisation: GoI trying to privatise is like India’s soccer team trying to qualify for the World Cup — the intent is all there, but we seem no closer to the desired outcome. True, BPCL perhaps fell victim to Covid. But Air India is still a sarkari airline because the sarkar took very long to get real. This budget promises to start small and then go big — a good strategy.
But even that will require quick identification of State units, including State owned banks, and a clear understanding of what’s a good price post-sale. With privatisation, the key thing to remember is that the best price is the one that the market can bear, not the price a committee of secretaries thinks is fair. Two or three quick privatisations of smaller State units will cheer investors no end, just for the sheer novelty of it, and whet the appetite for bigger public assets.
Spending programme: This has become a cliché. After every budget, pundits advise that spending programmes should be carefully designed and quickly implemented — and with a few exceptions, this doesn’t really happen. But this year needs a smartly designed spending programme to get off the ground quickly because GoI cash will be the first and biggest driver of sustained recovery.
Aside of spends on highways, which tend to get absorbed relatively fast, the bang for buck for GoI expenditure can be quite muted. That has to change, whether it’s new health projects or other asset-creation programmes. The big hike in allocations won’t mean much if months pass getting the cash into the broader economy.
If next month sees serious action on all four key measures, FY2022 will begin with exactly the kind of solid optimism that India needs.
The budget speech was in February. The real budget will be in March.
Source: The Economic Times
In line with the Union Budget, the Reserve Bank of India on Friday projected a GDP growth rate of 10.5 per cent for the financial year beginning April 1, on the back of recovery in economic activities.
With regard to inflation, RBI Governor Shaktikanta Das said vegetable prices are expected to remain soft in the near term as the central bank projected retail inflation rate to come down to 5.2 per cent in the current quarter and progressively decline to 4.3 per cent by the third quarter of the next fiscal.
He said the growth outlook has improved significantly and the vaccination drive will help the economic rebound.
Das further said the economy will rebound to 10.5 per cent in the next financial year.
After the Budget 2021-22 announcement on Monday, Economic Affairs Secretary Tarun Bajaj had said that real GDP growth would be 10-10.5 per cent in the next fiscal.
"Our revenue figure is under-stated not overstated. We have taken nominal GDP at 14.4 per cent and revenue growth at 16.7 per cent. So, the buoyancy is only 1.16. We are hopeful we will get more than this. We will definitely be within 6.8 per cent and could be lower also," Bajaj had said.
The RBI Governor further said that the government will be reviewing the inflation target by March end.
The Monetary Policy Committee headed by the RBI Governor has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2021, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent.
Source: The Business Standard
Find out about the EU’s circular economy action plan and what additional measures MEPs want to reduce waste and make products more sustainable.
If we keep on exploiting resources as we do now, by 2050 we would need the resources of three Earths. Finite resources and climate issues require moving from a ‘take-make-dispose’ society to a carbon-neutral, environmentally sustainable, toxic-free and fully circular economy by 2050.
The current crisis highlighted weaknesses in resource and value chains, hitting SMEs and industry. A circular economy will cut CO2-emissions, whilst stimulating economic growth and creating job opportunities.
The EU circular economy action plan
In line with EU’s 2050 climate neutrality goal under the Green Deal, the European Commission proposed a new Circular Economy Action Plan in March 2020, focusing on waste prevention and management and aimed at boosting growth, competitiveness and EU global leadership in the field.
On 27 January, Parliament’s environment committee backed the plan and called for binding 2030 targets for materials use and consumption. MEPs will vote on the report during the February plenary session.
Moving to sustainable products
To achieve an EU market of sustainable, climate-neutral and resource-efficient products, the Commission proposes extending the Ecodesign Directive to non-energy-related products. MEPs want the new rules to be in place in 2021.
MEPs also back initiatives to fight planned obsolescence, improve the durability and reparability of products and to strengthen consumer rights with the right to repair. They insist consumers have the right to be properly informed about the environmental impact of the products and services they buy and asked the Commission to make proposals to fight so-called greenwashing, when companies present themselves as being more environmentally-friendly than they really are.
Making crucial sectors circular
Circularity and sustainability must be incorporated in all stages of a value chain to achieve a fully circular economy: from design to production and all the way to the consumer. The Commission action plan sets down seven key areas essential to achieving a circular economy: plastics; textiles; e-waste; food, water and nutrients; packaging; batteries and vehicles; buildings and construction.
Plastics
MEPs back the European Strategy for Plastics in a Circular Economy, which would phase out the use of microplastics.
Textiles
Textiles use a lot of raw materials and water, with less than 1% recycled. MEPs want new measures against microfiber loss and stricter standards on water use.
Discover how the textile production and waste affects the environment.
Electronics and ICT
Electronic and electrical waste, or e-waste, is the fastest growing waste stream in the EU and less than 40% is recycled. MEPs want the EU to promote longer product life through reusability and reparability.
Learn some E-waste facts and figures.
Food, water and nutrients
An estimated 20% of food is lost or wasted in the EU. MEPs urge the halving of food waste by 2030 under the Farm to Fork Strategy.
Packaging
Packaging waste in Europe reached a record high in 2017. New rules aim to ensure that all packaging on the EU market is economically reusable or recyclable by 2030.
Batteries and vehicles
MEPs are looking at proposals requiring the production and materials of all batteries on the EU market to have a low carbon footprint and respect human rights, social and ecological standards.
Construction and buildings
Construction accounts for more than 35% of total EU waste. MEPs want to increase the lifespan of buildings, set reduction targets for the carbon footprint of materials and establish minimum requirements on resource and energy efficiency.
Waste management and shipment
The EU generates more than 2.5 billion tonnes of waste a year, mainly from households. MEPs urge EU countries to increase high-quality recycling, move away from landfilling and minimise incineration.
Source: Hellenic Shipping News
Ahead of the presentation of the Union budget, Finance Minister Nirmala Sitharaman threw down the gauntlet as it were. The FM audaciously claimed her next essay would be a ‘once in 100 years’ budget. Many believed she may have just over-promised and added to the pressure of coming up with a post-pandemic budget to both shore up and revive the economy.
However, going by the Sensex (which reclaimed Mt 50K at the end of Day 3), the bellwether for market sentiments, analyst comments and muted criticism, the consensus verdict seems to be that Sitharaman actually pulled it off. More importantly, she has signalled a paradigm shift. Some are even calling it the ‘1991 moment’, when India undertook an unprecedented acceleration in reforms, including the ejection of licence raj.
They are right. But there is a difference. Yes, then, too, the action was led by a PM-FM duo. But it was still Congress at the helm (sans a Gandhi leadership), the very same party that had authored the earlier regime and, hence, not totally committed to the idea of dismantling it. But for the balance of payments crisis and the consequent dependency on the Bretton Woods twins (International Monetary Fund and the World Bank) for a conditional bail-out, the reform movement would have remained an iterative exercise.
Thirty years later, the political regime has had a radical makeover.
BJP, which replaced Congress as the new political pole, is leading a coalition government for its second consecutive term in office. Led by Narendra Modi, BJP has demonstrated, not once but twice, its political prowess in managing a majority on their own. Even better, it is not vulnerable to coalition pressures. This regime, therefore, carries no historical baggage. In fact, if anything, it has a vested interest in hitting the legacy reset.
Yet, for six years, they struggled to find their voice in the budget. The 2021 Budget is the turning point — or a new beginning. Yes, the ‘bahi khata’ is Sitharaman’s calling card. But the real legacy is elsewhere. The subtext of this paradigm shift is the rewriting of the budget lexicon. Two structural reforms are clear standouts.
Don’t Give a Dime
First is the reset in the fundamental rule of budget-making. Inherited in 1980, thanks to the none-too-subtle nudge by the high priests at IMF who were overseeing a bail-out loan for India, Sitharaman has buried the fear of fiscal karma. In the past, the entire focus of the maths underlying every budget was to take the fiscal deficit (or gross borrowings) as a given, and work backwards.
Breaching this cap was unthinkable. Not surprisingly, none of her predecessors were comfortable in admitting to fiscal slippage. Exactly why the idea of internal and extra budgetary resources first introduced in the 1980s — turned into a fine art by Manmohan Singh later — became an integral feature of balancing the books. But what every FM did was to kick the fiscal can down the road. It was like the worst-kept truth. Yet, no one dared calling it out.
Sitharaman has turned the fiscal deficit into a residual of the expenditure priorities — in this instance, reviving the economy by creating capital assets and shoring the socioeconomic fabric of India. Which is what it should be. Further, she has come clean on the debt burden. To use sporting parlance, she has pivoted from defensive to offensive play.
Second is the practice of disinvestment. It was Yashwant Sinha who had introduced the idea in his 1990 Union budget, which was aborted after the government headed by Chandrashekhar fell. Even Sinha, despite being a voluble critic of this regime, would concede that Sitharaman has done more to the cause of public sector reform than any predecessor. It takes a lot of political courage to undertake a fundamental makeover.
Especially in directing the public sector, the hitherto untouchable, to cede the ‘commanding heights’ — the envisaged role in the 1960s to steer the Indian economy — to the private sector. In the process, unmindful of the ‘suit-boot sarkar’ jibe, Sitharaman has unambiguously reinforced the pro-business credentials of this government .
The new divestment policy — which should actually be christened ‘privatisation’ — Sitharaman tabled in Parliament with her speech, says, ‘[The priority is] Minimising presence of central government public sector enterprises (CPSEs) including financial institutions and creating new investment space for private sector,’ before bluntly adding, ‘CPSEs will be privatised, otherwise shall be closed.’
Now, This is Private
And since this policy is an annexure to the FM’s budget speech, eventually when Parliament passes the budget, this paradigm shift will be written in stone. Taken together with another budget proposal, asset monetisation, the imminent makeover of the public sector is apparent. Going forward, operating public infrastructure assets will be monetised by handing it to the private sector. Not only will this free up scarce government resources to be directed to other big-ticket infrastructure projects, it also signals a new role for the public sector: from creator to facilitator.
Source: The Economic Times
Fashion’s next generation of sustainable fibres are pushing toward a circular and greener future for one of the world’s most polluting industries.
Studies show the fashion industry is responsible for approximately 10 percent of global emissions, a reckoning that has fuelled start-ups to innovate a long overdue sector. From new biodegradable fabrics to eliminating polyester and circular textile recycling, more companies and brands than ever before are committed to change.
Eliminating polyester
In 2017 The Textile Exchange, a global non-profit organisation, challenged some of the world’s biggest retailers and brands (and also polluters) to reduce their reliance on polyester. Companies including Adidas, The Gap and H&M sought to reduce using virgin polyester in their collections by 20 percent by 2020. The target was reached just one year later, laying the foundation for more brands to find polyester alternatives.
Garments made from plastic bottles
Recycled polyester mostly originates from recycled plastic bottles. In the US alone, 35 billion bottles are discarded every year. Plastic takes up to 1,000 years to degrade in a landfill. One innovator to turn plastic into fibres is ECOsense, who’s fabric is made from 100 percent post-consumer plastic bottles.
The company says its solution dye process requires none of the water or harsh chemicals often found in package dyeing with the end result offering a natural, soft hand and the durability, drapability and colourfastness of virgin polyester.
The downside to recyclable plastic bottles is that doesn’t stop the use of plastic for the food and beverage industry.
Circular textile recycling
Images of discarded clothing and mountains of garment waste have triggered the need for companies to repurpose clothing instead of sending unsold garments to landfill. The circular economy has inspired a myriad of startups for second hand sales, but textile-to-textile recycling needs to embrace suppliers, brands and producers to work together and solve the surplus of waste.
Tools for the industry
Knowledge should be shared. A greener future is only possible if the fashion industry collectively works together and commits to change. Last year The Textile Exchange in partnership with Gap Inc. launched the Preferred Fiber Toolkit (PFT), a resource to be used by sourcing and design teams to inform companies on meeting their sustainability goals.
Toolkits such as these should be an industry-wide resource and publicly available, providing companies with consolidated, validated guidance and information. This particular toolkit includes a rigorous evaluation of raw material choices building upon quantitative data inputs from the Sustainable Apparel Coalition’s (SAC) Higg Materials Sustainability Index.
It also incorporates other holistic indicators to consider environmental considerations, such as biodiversity and land-use change, and waste-elimination guidance for contributing to the circular economy. Human rights, labor concerns, and animal welfare within raw material sourcing are also considered, to layer in additional nuance beyond environmental data. Enough data to help brands and retailers make better sourcing decisions.
Source: Fashionunited UK News
Textile testing provider Hohenstein has been authorized by the Federal Ministry for Economic Cooperation and Development (BMZ) to verify compliance for the Green Button, a German government certification for sustainable textiles. Now, in addition to certification for MADE IN GREEN by OEKO-TEX®, a qualifier for the Green Button, Hohenstein certifies for the 46 Green Button criteria.
Hohenstein draws on decades of specialized textile testing, certification and auditing. A founding member and testing body of the OEKO-TEX® Association, the company is firmly committed to consumer protection and product responsibility. Green Button applicants can choose Hohenstein as a single partner for the entire process, with or without MADE IN GREEN by OEKO-TEX® as a pre-requisite.
MADE IN GREEN by OEKO-TEX® is one of the labels qualified to demonstrate compliance with the Green Button social and environmental criteria. The traceable product label proves that textile and leather products have been tested for harmful substances and manufactured in an environmentally friendly and socially responsible manner.
During the introductory phase, the BMZ will bear the initial assessment costs. After March 1, 2021, companies will select from the list of approved certification bodies, including Hohenstein and contact them directly.
The Green Button originates in Germany but aims to be a global seal. In line with the globalized textile value chain, all companies that manufacture and/or distribute textile goods can apply for the Green Button.
Source: Textile World
H&M is proud to announce the collaboration with American denim legend, Lee, to push for the next generation of more sustainable denim. It’s a holistic collaboration with advances at every stage of design and production, from H&M’s first ever 100% recycled cotton jeans, to non-leather backpatches made from cork and jacron paper. For the first time, H&M will also share Life Cycle Assessment (LCA) data on hm.com indicating the water, C02 & energy impact of each denim garment from raw materials to end of use.
This transparency is matched by the positivity of the fashion, with oversized and cocooning silhouettes as well as workwear shapes that draw on Lee’s esteemed heritage. Lee x H&M features collections for women, men and kids, and will be available online at www.hm.com, as well as select H&M stores, from February 4th.
“We just loved working with Lee to push for change. A change for more sustainable and circular denim garments. We looked at every detail and challenged each other in a positive way. It’s also amazing to work with Lee’s iconic designs and give them a bit of our flavor, for H&M denim lovers around the world,” says Jon Loman, designer at H&M.
“Lee is proud to be collaborating with H&M to continue our efforts to make better denim. Our brand was founded more than 130 years ago with innovation in mind, and today we are happy to be joining with H&M to advance denim into a more sustainable future,” says Chris Waldeck, EVP Global Brand President, Lee® Lee x H&M is an ambitious collaboration that has sustainability central to its design. H&M and Lee took a holistic approach, looking at every stage of denim production. The collection is especially exciting as it contains H&M’s first 100% recycled cotton jeans, made from 80% post-industrial waste and 20% post-consumer waste.
There’s also denim that’s cotton-free, made from renewable man-made fibres, as well as water-saving dyes and lower impact denim washes that are 3rd party verified for their lower water usage, chemical, and energy consumption.
For the women’s collection, wide and loose jeans have a 90s throwback feel, while Lee’s classic Rider jacket is recut with an oversized cocoon shape. Denim corsets add a feminine edge, while dungarees and overshirts bring the functional workwear vibe, alongside Texloop™ RCOT™ Recycled Cotton jersey pieces for the full Lee x H&M look.
For the men’s collection, workwear jackets are a wardrobe essential with Lee’s true authenticity of design. Relaxed fit five pocket jeans are cut from 100% recycled cotton, while relaxed carpenter jeans are made with water-saving dyes and 100% Tencel™ Lyocell cellulosic sewing threads. There are workwear dungarees, denim bucket hats and tote bags, as well as heavyweight jersey pieces to complete the sustainably mad collection. The kids collection features Lee’s classic Rider jacket, cut with slightly cocooning shape. Jersey pieces play with the heritage of Lee’s world famous logo including items like relaxed t-shirts and hoodies with pops of color.
Source: Textile World
Exports of Pakistan to the United Kingdom (UK) has increased by 22% and crossed one billion dollars in six months, despite the Covid-19 pandemic crisis.
According to the press release issued by Pakistan’s High Commission in London on Wednesday, while giving an inaugural address at Pakistan’s first international virtual textile expo in 2021, the High Commissioner Moazzam Ahmad Khan said that Pakistan’s exports to the United Kingdom (UK) increased by 22% and touched the historic mark of one billion dollars during the first half of current financial year (2020-21), despite the Covid 19 pandemic.
Pakistan’s first international virtual textile expo in 2021 was held on 1 February, was organized by the Trade Development Authority of Pakistan (TDAP) in collaboration with the Economic and Trade Wing London. The expo was held in order to create awareness about the potential of the Pakistani textile sector, the demand in the UK market and to connect buyers and sellers through this virtual platform.
Virtual Expo is a one-stop sourcing event for household garments, ready-made garments and clothing, high-quality fashion clothing, materials and personal protective equipment (PPE) amidst Covid-19 challenge.
The webinar was attended by around 100 leading businessmen from Pakistan and the United Kingdom.
During the event, High Commissioner said that the textile sector of the country accounts for about 60% of the total exports in Pakistan, he added that the country is included in one of the countries worldwide that houses the entire value chain of textile products.
He further said that the country’s exports to the UK market enjoyed tax, free access, leading to exponential growth in textile exports, reflecting an upward trajectory in trade relations between Pakistan and the UK.
Meanwhile, Saeed Khilji, chairman of the Leicester Textile Manufacturing Association and Me. Faryal Sadiq, Vice President Sales and Marketing, Interlope highlighted the emerging demand for Pakistan’s wide range of textiles and clothing products in the UK market.
Source: Aboutpakistan.com
In its continuous efforts to support its expansion plans, British sportswear retailer JD Sports is seeking to raise £464.2 million through the placing of ordinary shares.
The placing shares, reportedly, constitute about 6 per cent of its share capital.
Notably, the placing price represented around 2.5 per cent discount to the mid-market closing price of 815p on Wednesday (3 February).
The fashion retailer seems to be on an acquisition spree, with the latest being its decision to acquire American sportswear brand DTRL for £495 million earlier this week.
JD Sports, speaking to media, said that besides the placing proceeds, it had £700 million of debt facilities. Here it is important to note that the retailer also had cash of £1 billion prior to DTRL deal.
The retailer, which had also bought Shoe Palace in December 2020, believes that lots of attractive opportunities will be available in due course and raising cash is an effort to support its strategy of expanding globally.
Source: Apparel Online
In its efforts to downsize its stores’ footprint, US retailer Sears plans to shut down more stores.
Transformco Holdings, which owns the American retail giant, is all set to close 13 more stores after years of steady retrenchment.
The shutting down of physical stores include those in Texas, California, Virginia, Hawaii, Florida, Maryland, New York and Massachusetts.
Transformco, however, hasn’t revealed more details on the same.
Closure of reputed aforementioned stores is not a surprise move by Sears. The retailer has been struggling for some time now. Divestment of Sears Canada few years back followed by Chapter 11 bankruptcy filing in 2018 were clear indication that all is not well at Sears.
The American retailer, reportedly, was last profitable in 2010.
In fact, ever since Sears filed for bankruptcy in 2018, it has shut down hundreds of stores and today it is hardly left with any more.
More on this, Forbes reported last week that Transformco had only 36 department stores left, while Kmarts had only 30.
With number of Sears’ stores further shrinking, the tunnel gets darker for malls, which has been going through one of its worst phases lately.
Source: Apparel Online
A federal, short-term backstop to support trade credit insurance for use primarily by small businesses that rely on insurance to facilitate cash flow and limited legal liability protection to safeguard businesses from unfair lawsuits are part of the recommendations sent by associations representing the US fashion industry to Congressional leaders.
As the US Congress debates additional stimulus measures in response to the COVID-19 pandemic, the associations sent a letter recently to Congressional leaders to highlight the industry’s needs. Signed by the chief executive officers (CEOs) of the American Apparel & Footwear Association (AAFA), Accessories Council, Council of Fashion Designers of America and the Travel Goods Association, the letter recommends measures that would support US businesses and American workers.
The group’s recommendations also include return to workplace incentives; healthy workplaces tax credit to support those businesses that have retrofitted facilities and purchased personal protective equipment to protect employees and customers; and duty drawback for charitable donations to fix a problem in current law that disincentivises donations of imported excess inventory.
“The fashion industry has played its part throughout the COVID-19 pandemic by repurposing supply chains to quickly fill our need for personal protective equipment, adjusting operations in line with health guidance, and creating safe spaces to shop for essential apparel and footwear needs across many seasons of this pandemic,” said AAFA president and CEO Steve Lamar in a press release.
Source: Fibre2Fashion News
US-based Softwear Automation has raised a funding of US $ 18.1 million in Series B round.
The robotics and automation solution provider for apparel and textile sewn industry was founded in 2012 and it began raising funds in 2019, according to the U.S. Securities and Exchange Commission filing.
Softwear Automation raised US $ 4.5 million back in 2017, according to an SEC filing, which was the same year when it expanded into a 50,000-square-foot industrial space in West Midtown and doubled its workforce.
The company then reported closing of about US $ 12 million in 2019. The Series B was led by Lear Corporation with participation from CTW Venture Partners.
The company’s flagship solution is the ‘Sewbot’, which leverages a patented computer vision system that uses cameras and needles to track the placement of fabrics in order to sew with a reported greater level of accuracy.
Since spinning out of Georgia Tech in 2007, the company has come on leaps and bounds, partnering with the likes of adidas and Li & Fung to streamline apparel manufacturing.
Source: Apparel Online
The freehold of the New Look store in Brighton has been reportedly brought by Mike Ashley’s Frasers Group. New Look’s company voluntary arrangement (CVA) was officially approved in September last year after creditors approved the proposals with a majority vote in favour. No store closures were featured in the CVA, and all 11,000-plus jobs were saved.
It is the second CVA for New Look in two years. In 2018, creditors approved a CVA that led to 60 store closures and nearly 1,000 job cuts.
The fashion retailer would now switch more than 400 of its UK stores to a turnover-based rent model, a three-year rent holiday on its 68 remaining stores, and enhanced landlord break clauses.
Separately, Frasers Group—which owns Sports Direct and House of Fraser—announced recently that its Jenners department store in Edinburgh will permanently close on May 3, rendering 200 jobless, according to British media reports.
A Frasers Group spokesperson said the decision came about because it was unable to reach an agreement with the owner of the Jenners building, Anders Povlsen, to continue their tenancy. Jenners has occupied the same Princes Street location in central Edinburgh for more than 180 years.
Source: Fibre2Fashion News
