Higher spending is needed to contain the toll on the economy due to lockdowns in the second wave of the pandemic. At this juncture, says the RBI Annual Report, the Indian economy is at a cusp. A combination of public and private investment can lead on to fast growth. However, private investment has been timid, and public investment has to has the added role to play of crowding in private investment, even as it increases capital formation out of budgetary resources. RBI’s insight is no recondite truth. The sentiment is widely shared by industry as well, as reflected by banker and CII President Uday Kotak’s call for one more round of scale stimulus…………..
Source: Economic Times
The March 2021 amendment of EIA notification of 2006 reduces the scrutiny of habitually polluting units which want to increase capacity and product mix. Recent changes in the environment clearance process for India's most polluting industries will allow them to expand their capacity and change their raw materials without seeking the central environment ministry's approval. This dilution of rules may not only worsen India's high pollution load but also result in lethal industrial disasters, experts warn. The March 2021 amendment to the Environment Impact Assessment (EIA) notification of 2006 reduces the scrutiny of habitually polluting units such as petrochemical, cement and fertiliser factories wishing to undertake critical changes in capacity and product mix. Earlier, these units could increase their capacity only up to 50% without a fresh clearance from the Ministry of Environment, Forest and Climate Change (MoEFCC). Now, they only need to secure a "no increase in pollution load" certification by a government-empanelled auditor or institution. And there is no longer a limit on the expansion. This dilution in rules shows an abdication of responsibility on the environment ministry's part, said experts. Not only do Indian industries have a weak track-record of compliance with pollution control rules but also systems put in place to allow relaxed scrutiny--such as the Online Continuous Emissions Monitoring System (OCEMS)--have been patchily implemented, as we explain. Also, the limited scrutiny of a unit's expansion, while ignoring the impact of associated activities such as road building, power supply and waste treatment, underestimates the environmental risk, experts said. The highly lethal gas leak at the LG Polymers factory in Visakhapatnam on May 7, 2020 may have been "indirectly caused" by the unit's poorly scrutinised expansion carried out without the requisite environmental clearance, said the report of the panel that investigated the disaster. Rameshwar Prasad Gupta, secretary, MoEFCC defended the move on the grounds that prior approvals are not a fail-proof fix for polluting industries though he admitted to the problem of compliance. "Laws and prior approvals are no substitute for good compliance. We are also working on this issue," he said, "Having prior approvals does not solve our problems, our compliance will have to increase irrespective of whether we have prior approvals or not." We discuss some such steps to improve compliance, such as installation of OCEMS, later in the story. '
No lessons learnt from Vizag disaster'
The leak of styrene gas from one of the storage tanks at the chemical plant of LG Polymers India in Visakhapatnam in coastal Andhra Pradesh killed 12 people and made hundreds ill. This was one of the worst gas leaks since the 1984 Bhopal gas tragedy that killed over 5,000 people and left lingering side-effects on over half a million.R LG Polymers had expanded its polystyrene production without a valid environmental clearance from the Union environment ministry and this may have indirectly led to the accident, concluded the high-power committee constituted by the Andhra government to probe the disaster. It reported that the company had expanded operations six times (production went up from 235 tonnes per day to 313 tonnes per day) between 2004 and 2018 on the basis of just approvals from the state pollution control board (SPCB). As per the EIA notification of 2006, this clearance should have come from the MoEFCC. An appraisal of the project's expansion by the Union environment ministry would have involved stricter scrutiny on two counts: It would have taken into account the project's potential impact on human health and natural and human-made resources. This would have been done by the relevant sectoral Expert Appraisal Committee based on an Environment Impact Assessment (EIA) report. An EIA report, among other things, includes baseline data on pollution and natural resources. Second, the project would have been subject to a public hearing and consultation under the EIA notification of 2006, which allows citizens living around the project site the legal space to voice their concerns over suspected risks from a project to themselves and their communities. "In case the LG Polymers had made an application on time, perhaps the terms of reference would have addressed the possibility of leakage of vapours/gas from the storage tanks/processes," the probe report said. Former bureaucrat and Vishakapatnam-based social activist E.A.S. Sarma criticised the manner in which the LG Polymers issue was handled. The fact that similar accidents happened in other plants in the area subsequently showed that no lessons had been learned from the disaster, he said. In its report, the probe panel said that LG Polymers bears "absolute liability" as a polluter but in its concluding remarks, it only offered administrative and regulatory suggestions to the SPCB. Sarma said that at the time of clearing successive expansions at LG Polymers, the state pollution board had been aware that the unit had not secured the prescribed environmental clearance but ignored the fact. "The Union environment ministry which is required to ensure that no industrial unit functions without an environment clearance never cared to monitor and enforce the same," he added. The unit was set up when the population around it was small. As the population density increased, Sarma explained, the risk factor increased. "When an expansion takes place in a densely populated area, it can have widespread and long-term environmental and health implications. The two laws for preventing air and water pollution, under which pollution control boards are created, require them to make an assessment of the location of an expansion from that point of view but the APPCB ignored it in the case of LG," Sarma said. The operations at LG Polymers have ceased and all its permits, licenses and consents were withdrawn after the incident, an LG spokesperson told IndiaSpend over email. The National Green Tribunal (NGT) took suo motu cognisance of the gas leak and ordered the company to pay Rs 50 crore as interim compensation to the victims of the gas leak and for the restoration of the environment. The company had moved the Supreme Court against a few other directions of the NGT in this regard and the matter is pending.
Highly polluting industries get exemptions
The March 2021 notification will apply to only those units which had obtained an EC while originally commencing operations. But highly polluting industries involving hazardous processes--those making pesticides, fertilisers, petrochemicals, cements, soda ash, asbestos, and pulp and paper--as well as distilleries and coal washeries, among others-- will benefit from it. The industrial processes and product use (IPPU) covers greenhouse gas emissions that occur during industrial processes. These emissions can be caused by industrial activity, the use of greenhouse gases in products, and from the non-energy use of fossil fuel carbon, as per the guidelines of the Intergovernmental Panel on Climate Change. These are industries that transform raw material by chemical and physical means. In 2016, India's IPPU emitted 226,407 gigagram of carbon-dioxide (CO2) equivalent (GgCO2e), accounting for 8% of the country's total emissions, as per India's Third Biennial Update Report to the United Nations Framework Convention on Climate Change. A CO2 equivalent is the metric used to compare emissions from various greenhouse gases on their global warming potential. In this category, cement production is the largest emission source in India, accounting for about 47% of total IPPU sector emissions, the report said. Industries under this category need the Centre's environmental clearance because of the significant impact their operations have on human health and resources, environmentalists say. Now, as per the new notification, once certified by auditors, the certification for "no increase in pollution load" would be examined only by the SPCB. Along with a certification, the industries also need to install and implement the OCEMS and have it connected to the servers of the Central Pollution Control Board (CPCB) and State Pollution Control Board (SPCB), the notification said. Industries would have to apply for an EC if the SPCB concerned holds that the expansion or changes in raw materials will result in an increase in the pollution load.
'Why not use the existing data system?'
Under the amended law, the pollution load of companies that have expanded operations will have to be checked based on the estimated emissions, effluents and discharge figures provided by them to the environment ministry when they obtained their initial environmental clearance. Environmental lawyer Ritwick Dutta questioned this move. Why cannot the pollution data generated through online continuous emissions/effluent monitoring systems (OCEMS) be checked to verify this pollution load, he asked. In February 2014, the CPCB had issued directions to 17 categories of highly polluting industries to install OCEMS to help tracking of emissions and discharge of pollution. "Instead of the auditors, the pollution control board should be checking if there is no increase in pollution load," said Dutta. This OCEMS system provides real-time data to CPCB and SPCBs, the central and statelevel pollution watchdogs. All the industries covered under the new notification were also covered under the CPCB's directions. However, the system has taken off in fits and starts, and remains non-functional in many places.
Continuous emissions monitoring slow to take off
The OCEMS system was intended to increase self-regulation and help strengthen the monitoring regime. While the CPCB first directed 17 categories of industries to install the emissions monitoring system in 2014, the Supreme Court (SC) went one step ahead. In its February 22, 2017 judgment, it directed all states and union territories to make provisions for online, real-time, continuous monitoring systems to display emission levels, in the public domain, on the portal of the state pollution control board concerned. However, of the 32 SPCBs required to install the OCEMS as per the Supreme Court order, only 50% had complied with the judgment, revealed a 2020 analysis done by non-profit organisation Legal Initiative for Forest and Environment. As many as 50% of the industries that required installation of OCEMS had not created the necessary portal. Of the 16 states and Union territories that complied with the judgment, only six (38%) allowed users to assess historical data, five displayed data going back to 30 days and the remaining only current pollution levels. In March this year, the NGT admitted a petition challenging non-compliance of the SC order on the installation of OCEMS. It directed SPCBs and the CPCB to act against truant units and directed states to respond on whether pollution data was being made available publicly. Dutta also pointed out that the expansion of industries and changes in product mix does not entail an increase in pollution load only via the main project unit but also through allied activities. The EIA notification of 2006, Dutta said, talks about the "potential for cumulative impacts", which include development of supporting infrastructure such as roads, power supply, waste treatment, housing, supply and after-use of the site. "Production might be more efficient even after expansion due to the use of new technology. But increased production will be accompanied by increase in transport, ferrying of supplies and such allied activities," Dutta said.
Shortage of technical experts
Other experts said that the new notification will further weaken an already weak enforcement and compliance mechanism, as was also found by the Comptroller and Auditor General of India in 2017. The new notification is in line with the overhaul of environment regulations as suggested in 2014 by a high-level committee that was headed by former cabinet secretary T.S.R. Subramanian, Kanchi Kohli, senior researcher at Delhi-based think-tank, the Centre for Policy Research, said. "The ministry's high-level committee had introduced the concept of 'utmost good faith' as central to its recommendations. What has been rolled out through the introduction of "no increase in pollution load" certification is the enforcement of the high-level committee's suggestion," she said. The high-level committee was constituted in 2014 to review all major environmental laws and regulations of the country. The parliamentary standing committee on Science and Technology, Environment, Forests and Climate Change had, however, rejected this committee's report. Kohli said that companies that fail to comply with conditions set by the environment ministry while granting them clearances must not be given permissions to expand operations without due scrutiny. Also, public hearings must be held before a company is allowed to expand production or change its product mix, she added. Between early 2015 and late 2017, SPCBs had exempted 146 of 206 classes of polluting industries from routine inspections and allowed them to self-certify their compliance, IndiaSpend reported in January 2020. The CPCB and SPCB are also facing an acute shortage of technical experts, which is weakening their efforts to enforce air quality standards, we had reported in 2020. "Public hearings prior to grant of expansions were one opportunity where several unresolved impacts could be flagged and addressed. Moreover, impacts that were never disclosed as part of the impact assessment process can be officially recognised and steps taken to mitigate risks both for project affected people and project operations. Therefore, it is crucial that there is a periodic review of all the promises and commitments made by project operators," Kohli added.
Source: Business Standard
Macroeconomic costs of the Covid second wave could be limited to Q1 with possible spillovers into July in the most optimistic scenario, says the central bank The second Covid wave may have put the brakes on a quick economic revival, but the nation is on the “cusp” of strong growth if the government’s capital expenditure combines with companies’ investment cycle, the Reserve Bank of India (RBI) said in its annual report. Services sector is still “wounded,” but the focus of government spending on infrastructure could unleash pent-up demand in the economy and create the suicient climate for allround development, it said. The central bank for its part will persist with easy monetary policy during the year to ensure that growth gains traction………….
Source: Economic Times
This targeting spending is also required for contact-based services that have borne the brunt of the pandemic since last year, economists said even as they acknowledged limited scal space for the government. Fiscal measures such as direct cash transfers, enhanced allocation under rural job guarantee scheme, free foodgrain distribution, modest cuts in excise duty on fuels, and expedited vaccination are crucial to overcome the second wave of Covid-19, top economists have said. It is crucial to support rural and urban demand because the economic impact of the pandemic this time will be more on demand impulse than on supplyside disruptions amid an intensication of infections in rural areas, they said.
Source: Economic Times
Stocks such as KPR Mills, Gokaldas Exports, Lux Industries, Indo Rama Synthetics, Nitin Spinners, Filatex India, Dollar Industries and Welspun India have rallied between 30% and 70% in the last three months. Textile stocks have seen a steady rise in the last few weeks with the revival in demand at home and also in the US and Europe, with several consuming centres removing curbs on outdoor gatherings and travel. Working from home (WFH) until now has also boosted the demand for home………….
Source: Economic Times
Subrahmanyam, a 1987 cadre IAS office, is currently Chief Secretary of Jammu & Kashmir J&K Chief Secretary, B V R Subrahmanyam, was on Thursday posted as OSD in the Union Commerce Ministry and will succeed Commerce Secretary Anup Wadhawan on his retirement next month-end. An order issued by the Union Ministry of Personnel, Public Grievances and Pensions said: "The appointments committee of the cabinet (ACC) has approved the appointment of B.V.R. Subrahmanyam IAS (CG; 87), Chief Secretary Jammu & Kashmir as officer on special duty in the Department of Commerce. The ACC has also approved his appointment as Secretary, Department of Commerce upon superannuation of Anup Wadhawan, IAS (UK; 85), Secretary Department of commerce on 30-06-2021." With the shifting of Subrahmanyam from J&K, three seniormost IAS officers -- Pradip Kumar Tripathi, Sudhanshu Panday and Arun Kumar Mehta -- are front runners for the Chief Secretary's post here. Tripathi and Panday are posted in the Centre, as Secretaries, Steel and Food and Public Distribution, respectively. Mehta has also been elevated to the rank of Secretary and is presently posted as Financial Commissioner (Finance Department) in J&K. Sources say Mehta is widely favoured for the top job as his honesty, integrity and grasp of administrative matters is unmatched. "He is least talk, maximum delivery kind of a civil servant," a source at the Centre said.
Source: Business Standard
The clean energy cess was introduced in 2010 at Rs 50 per tonne of coal, later rising to the current rate in 2016. In 2017, the cess was abolished and the same charges were levied as the GST compensation cess. Power distribution companies (discoms) in 12 states are cumulatively paying a hefty Rs 17,500 crore a year for the power they don’t use, according to a report by Forum of Regulators (FoR). The amount is paid as fixed costs to recover the cost of building power plants that lie underutilised due to less than anticipated growth of electricity demand. Among the discoms tracked in the study, the highest annual fixed cost paid for surplus power are by Uttar Pradesh (Rs 4,394 crore) Madhya Pradesh (Rs 4,325 crore), Punjab (Rs 1,880 crore), Haryana (Rs 1,719 crore) and Gujarat (Rs 1,528 crore). The figures pertain to FY21 for 10 states and FY20 for Madhya Pradesh and Punjab. The amount spent on unused power is equal to 13% of the annual revenue of Madhya Pradesh’s discoms. For Punjab, it is 6% of the revenue and for Uttar Pradesh it is 7%. Cost of unused power is 5% of Haryana discoms’ revenue and 3% of Gujarat discoms’ annual income. Under contractual requirements, discoms have to continue paying fixed cost to thermal power plants to recover the projects’ capital expenditure and cover debt obligations even when they do not procure electricity during periods of low demand. The FoR has suggested that the Centre and states should split the burden of the stranded generation assets in a 60:40 ratio, “in line with central plan funding”. The FoR, constituted in 2005 under the Electricity Act, 2003, consists of the chairperson of the Central Electricity Regulatory Commission and the heads of all state power regulators. The study analysed data for 12 states to measure the impact of power purchase cost on retail electricity tariffs. The report said the Centre can utilise the Rs 400 per tonne clean energy cess on coal to share the cost of stranded assets. The clean energy cess was introduced in 2010 at Rs 50 per tonne of coal, later rising to the current rate in 2016. In 2017, the cess was abolished and the same charges were levied as the GST compensation cess. If the imposition of this cess is to be continued, “then it is recommended that the proceeds from this cess be ploughed back to the electricity sector to mitigate the incremental cost on account of new environmental norms as per contribution made by each state”, FoR said. Clean energy cess constitutes about 11% of the power purchase cost, and if it is cut by Rs 100 per tonne, it would lead to savings of 3% of the average cost of electricity supply, the report said. Power purchase cost accounts for about 67% to 78% of the overall revenue requirement for discoms. Apart from the clean energy cess, coal price constitutes 25%, rail freight 41%, and road transportation charges 11% of the total power purchase cost. The report has also recommended regulating railway freight rates and coal prices to limit their impact of power tariffs, adding that the Centre may consider subsidising railway freight for a distance beyond 750 km.
Source: Financial Express
Arvind Limited, one of the largest textile companies in India, has reported 1 per cent revenue growth to ₹1,654.8 crore in its fourth quarter (Q4) FY21 that ended on March 31, 2021, compared to the revenue of ₹1,641.5 crore in corresponding period of previous fiscal. The company’s net profit for the quarter rose to ₹53.3 crore (Q4 FY20: loss ₹17.3 crore). EBIDTA for Q4 FY21 grew to ₹230 crore (₹167 crore), while profit before tax was ₹96.8 crore (loss: ₹11.0 crore). Revenue of textiles segment for the reported quarter slightly dropped to ₹1,325 crore (₹1,352 crore) while advance material’s revenue grew to ₹198 crore (₹179 crore). Denim revenue for the period grew 23 per cent to ₹412 crore (₹334 crore), and woven revenue increased 14 per cent to ₹444 crore (₹390 crore). However, garments revenue dipped 8 per cent to ₹360 crore (₹391 crore).
Source: Fibre2 Fashion
“We've built a strong reputation as a global brand, with high-quality products, value addition, innovation and we wanted this to reect in our name," said SB Garware, Chairman,” Garware Hi-Tech Films Ltd. Specialty Performance polyester lm manufacturer Garware Polyester Ltd announced a change in corporate brand name to Garware Hi-Tech Films Ltd. (GHFL). The company manufactures Sun control lms globally and has also recently launched its Automotive Paint Protection Films(PPF). “We've built a strong reputation as a global brand, with high-quality products, value addition, innovation and we wanted this to reect in our name," said SB Garware, Chairman,” Garware Hi-Tech Films Ltd. He added, “We are a hi-Tech company investing in new innovations and technologies and hope to attain a strong leadership position in the years to come. This is now captured correctly in our new name. The new identity and name is a reection of our commitment and focus to grow in dierent product categories and geographies”. A company release said: “After the change in identity and name, the organization will now be known as 'Garware Hi-Tech Films Ltd.', The name change has been updated on BSE, the company's new ticker symbol is updated as ‘GRWRHITECH'.“ “Garware Hi-Tech Films Limited (formerly Garware Polyester Ltd.) (BOM: 500655) is a company of the Garware Group copromoted by the Chairman and Managing Director SB Garware in the year 1957 along with the Founder-Chairman late Dr. Bhalchandra Garware, the company makes Hi-Tech specialty performance polyester Films in India and has its Stateof-the-Art manufacturing facilities at Aurangabad in Maharashtra, India. GHFL is the pioneer and one of the,” said the company release. Films for insulation of hermetically sealed compressors motors, Electric motor insulation, and cable insulation, sequin application lms, TV and LCD screen application, Packaging applications etc.
Source: Economic Times
From now on, Bangladesh passport is 'valid for all countries of the world.' Even a few months ago, the passport contained the words 'valid for all countries of the world, except Israel.' Dropping of the words 'except Israel' might lead many to believe that the government has decided to make a change in its policy towards the 'pariah' state on the Middle East scene. As the news, revealed by local and international media outlets, sparked debates, ministers concerned came up with their own explanations on the matter. The home ministry, responsible for issuing passport, argued that it is done to enhance international standard of Bangladesh passport. The foreign ministry clarified that there has been no shift in the country's foreign policy, especially towards Israel. The country will continue to support the rights and freedomstruggle of the Palestinian people. The foreign minister further mentioned that even after dropping the 'except Israel', travel to the Zionist country is still illegal for any Bangladeshi passport-holder. Bangladesh is yet to recognise Israel or establish diplomatic relations with, officially. However, despite the absence of any diplomatic ties, the trade relations between Bangladesh and Israel are slowly growing. Bangladesh has exported a small number of goods to Israel in the last few years. The latest official statistics, released by the Export Promotion Bureau (EPB), showed that in the FY20, Bangladesh exported goods worth about US$28,067 to Israel. EPB data also showed that total exports to Israel from Bangladesh stood at around $0.50 million in the last decade. The highest amount of goods worth $0.11 million was exported in FY19 while the lowest annual exports were recorded at $2,057 only in FY14. Textile, ready-made garments (RMG) and pharmaceuticals are major exportable items to Israel. Now a pertinent question is: how can exports take place when there is no diplomatic relations? It is learnt that Bangladeshi products generally landed in Israel through a third country like Singapore, Malaysia or the UAE. For instance, Bangladeshi manufacturers and exporters shipped the products to Singapore and received due payments from the island state. So, the total transaction is recorded as Bangladesh-Singapore trade. From Singapore, the products are transhipped to a mother vessel bound for Haifa seaport in Israel. In this process, Bangladeshi products ultimately enter the Israeli market. A representative or liaison office of Israeli importers in Singapore conducts the whole deal. The actual amount of exports from Bangladesh is thus unclear. The World Bank's World Integrated Trade Solution (WITS) database provides a contrasting figure in this connection. It showed that between 2010 and 2018, Israel imported products worth around $333.74 million from Bangladesh. In other words, Bangladesh exported products worth the said amount ($333.74 million) to Israel during the period under review. The figure doesn't tally with data available with EPB. One reason may be Israel records the imports done through the third country, from the country of origin. Again, WITS data shows that Israeli exports to Bangladesh stood at $3.67 million between 2009 and 2015. No data is available after 2015 in the WITS system. Bangladesh Bank data also doesn't have any mention of Bangladesh's imports from Israel. Therefore, it is necessary to get some explanation on the bilateral trade with Israel. It appears that in the age of globalisation, it is not possible to contain trade flow, especially when there is a demand. If the direct trade route is blocked, the traders will go for diversion using a well-recognised third country. Israel is also trading with Gulf Cooperation Council (GCC) countries using third counties. In 2018, Israeli exports to the GCC bloc were around $1.0 billion. Though Qatar and Oman had linked trade relations with Israel since 1996, Doha severed it in 2009. Israeli exports to the GCC market are sometimes channelled through Jordan or Turkey, but primarily via European and other non-Middle-East and North African (MENA) countries. In 2020, the United Arab Emirates and Bahrain signed agreements with Israel for normalisation of relations. Trade through third countries also gradually opens a window of further normalisation of relations. Indonesia is an example in this connection, which is trading with Israel by third countries. Bilateral trade between these two countries reached around $500 million. Indonesian citizens are now allowed to visit Israel procuring visa from a third country such as Thailand. Israeli official statistics showed that in 2019, some 38,700 Indonesians travelled to Israel and occupied Palestinian territory. In a similar vein, travellers from Malaysia to Israel numbered 14,700 although Malaysian passport mentioned that it is 'valid for all countries of the world, except Israel.' By dropping 'except Israel' from Bangladesh passport, the travel document may not be restrictive for Bangladeshi citizens to visit Israel. Like Malaysians and Indonesians, they may now collect the required visa from Israeli foreign mission in Bangkok or New Delhi. Israel now issues a `loose-leaf' visa which is not attached as a sticker on the passport page. Again, Israeli border control officials no more stamp in passport page of a traveller. Instead, they issue a permit in a separate paper, which travellers have to retain until they exit the country. Thus, there is no seal or sign in the travellers' passports showing that they have visited the Zionist country. Israel adopts the method to attract more tourists from countries with whom it has no diplomatic affiliation. As tourism is an essential source of Israel's economy, contributing around 6.0 per cent to the country's GDP, it needs more tourists to come in. Moreover, an incrementally higher flow of tourists from Muslim-dominated countries is a boon for Israel to enhance its image against the backdrop of repression of the Palestinians, who get wide Muslim supports. It is unknown whether a few Bangladeshis were earlier daring to visit Israel by acquiring a visa from a third country. That attitude may, however, change in the near future. There is a fear that this may affect support and sympathy to the legitimate and rightful struggle of the Palestinian people. But, trade may continue to grow as Bangladesh is looking for new markets.
Source: The Financial Express
The government is targeting exports of $28 billion next fiscal year as it plans to extend the duty-free import regime to more raw materials in the upcoming budget to support the manufacturers. Speaking with Dawn, Commerce Adviser Abdul Razak Dawood said the country was expecting its export revenues to jump to over $24bn this fiscal year. The nation’s exports jumped by over 13.5 per cent to $20.9bn in the first 10 months of 2020-21 from $18.4bn a year ago, according to the Pakistan Bureau of Statistics (PBS) data for the period between July and April. The textile and clothing exports posted a growth of over 18pc in 10MFY21 and Mr Dawood hopes the textile and clothing shipments to jump to $16bn by the end of June. “You see textile and clothing exports will fetch an additional $3bn — equal to half of the money the country had borrowed from the International Monetary Fund (IMF) in July 2019 under a 39-month bailout package. So I am very hopeful that growth trend in exports will sustain going forward. I am also discussing with the finance minister the possibility of cutting customs duties on more raw materials. Today 40pc raw materials are coming into Pakistan at zero duty. We want to make import of all raw materials duty-free in next few years,” he contended. Mr Dawood said his ministry planned to encourage export diversification to reduce the country’s reliance on textiles alone. “In next budget we intend to focus on pharmaceutical, engineering, processed food and footwear exports by reducing taxes on import of their raw materials to make them competitive internationally.” In the engineering sector, we are looking at exporting two- and three-wheelers, washing machines, refrigerators, transformers, etc. In textiles, the adviser is looking at encouraging production and export of garments for women, an area where Pakistan does not exist at all, as part of product diversification plan. He recognises that Pakistan’s exports have significantly increased this year, widening the trade deficit and bringing pressures on foreign exchange reserves. But he said the imports had increased mainly because of higher food, especially wheat and sugar, and raw material imports. The imports during 10MFY21 rose 17.8pc to $44.7bn against $38bn last year, expanding trade deficit to $23.8bn. The increase in imports, said the adviser, is attributable to higher food — sugar and wheat — imports, rising global oil and commodity prices, and increased inbound shipments of industrial raw materials for import substitution and exports. “I don’t support luxury imports; we have in the last couple of years taken a few actions to stop imports of such items by increasing taxes and imposing stringent regulatory requirements. This has helped local food industry immensely and increased shelf space for local products. We will continue this policy in the next budget as well and raise duties on luxury imports.” He said the government was pursuing a two-pronged trade policy to substitute imports and boost exports. “Import substitution is critical to create surplus for exports. Gradually we are seeing export culture taking roots in the country and policy formulation. Our survival lies in increasing our exports,” he argued. TEXTILE POLICY: He said the textile policy will be announced soon once the differences over energy rates are sorted out. He said the textile industry had performed well this year and is investing heavily in new technology and capacity expansion taking advantage of the cheap credit made available under the SBP’s Temporary Economic Recovery Facility (TERF). “They have increased exports because we gave them regionally competitive electricity rate of 7.5 US cents a unit, which was later increased to 9 cents a unit till June 30, 2021.
Source: The Dawn
The US economy grew at an annual rate of 6.4 per cent in the first quarter of 2021, the Commerce Department said in its second estimate. The US economy grew at an annual rate of 6.4 per cent in the first quarter of 2021, the Commerce Department said in its second estimate. Upward revisions to consumer spending and non-residential fixed investment were offset by downward revisions to exports and private inventory investment, according to the latest estimate released on Thursday by the Department's Bureau of Economic Analysis, a month after the "advance" estimate. Imports, which are a subtraction in the calculation of gross domestic product (GDP), were revised up, Xinhua news agency reported. The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the Covid-19 pandemic," the Bureau said. The latest GDP data was released on the same day as the Labour Department reported that initial jobless claims in the country dropped for a fourth straight week to 406,000, a new low since the Covid-19 pandemic ravaged the labor market early last year.
Source: Business Standard
Most Cambodians view China as the Kingdom’s most valuable partner in terms of trade, infrastructure, the economy and public services, according to a survey conducted by German political think tank Konrad Adenauer Stiftung and data consulting company Kantar. The study also pointed to a favourable view of the European Union as an international partner but underlined that most Cambodians do not know about the partial withdrawal of the EU’s Everything But Arms (EBA) trade scheme. The survey polled a total of 1,015 respondents from Svay Rieng, Ratanakiri, Kampong Thom and Koh Kong provinces as well as Phnom Penh. t found that 44 percent of respondents viewed China as Cambodia’s “best” partner in terms of infrastructure, economy and public services, followed by Japan (38 percent) and the US (25 percent). China was also viewed as Cambodia’s best partner for trade (46 percent), followed by Thailand (38 percent), the US (25 percent) and Vietnam (25 percent) The study suggested that these perceptions were likely shaped by aid contributions. China provides the most foreign aid to Cambodia, followed by Japan and the US. Only 39 percent of female respondents viewed China as a good trade partner, whereas 53 percent of males believed China was a good trade partner. The study also looked at perceptions of the EU and found that 67 percent of Cambodians view the relationship between the EU and Cambodia favourably. However, the survey suggested that most Cambodians were not aware of the EBA trade scheme, a system of trade preferences from which Cambodia had benefited since March 5, 2001. “Concerningly, an estimated two million Cambodians depend on the textile industry, yet less than half of all respondents (43 percent) had heard off the EBA, with even fewer understandings its meaning (16 percent),” the report said. According to a Konrad Adenauer Stiftung article published last May, the EBA benefits helped to grow exports to Europe and played a large role in reducing poverty in the Kingdom. It said Cambodia’s exports grew by 630 percent from 2008 to 2020. “This in turn has partly contributed to a steady economic growth of 7% annually and to lifting one-third of the country’s population out of poverty between 2007 and 2014,” the May 2020 article said. Of the respondents that had heard of the EBA, 96 percent of respondents said they felt it was important for Cambodia’s economic growth. On Aug 12, 2020, the EU officially partially withdrew EBA preferences from Cambodia because of human and labour rights concerns. According to the European Commission, approximately 20 percent of Cambodia’s exports to the EU were to be affected by the withdrawal and subject to normal tariffs. The remaining 80 percent of Cambodian exports to the EU continue to enjoy duty and quota-free access to the EU market. The effects of the partial removal of the EBA scheme are difficult to quantify in the current context of the pandemic, but the study reported that “many factories have already begun the process of relocating to other countries”. An ISEAS-Yusof Ishak Institute report published last year said the withdrawal would specifically apply to selected garment, footwear and travel goods as well as sugar. ISEAS, a Singaporean research institute, reported that the loss of EBA benefits would likely cause garment factories to close and jobs to be lost in the sector and added that females would be disproportionately affected. “Since female workers account for the majority of garment employment, this would particularly affect poor female workers from rural regions. A very rough estimate suggests that at least 60,000 jobs in garment factories would be lost,” it stated.
Source: Khmer Times
