Smriti Irani took charge as Women and Child Development Minister in June 2019 Smriti Zubin Irani continues to head the Women and Child Development Ministry in the refreshed Union cabinet of Prime Minister Narendra Modi. The Textiles Ministry, which she also headed, has gone to former Railway Minister Piyush Goyal. Thirty-six new ministers joined the government and seven got promoted, taking the total strength of the Union cabinet to 78. Nearly half of them are new. Ms Irani was Human Resource Development Minister from May 2014 to July 2016 and Minister for Information and Broadcasting from July 2017 to May 2018. She is India's first woman to hold office as Union Minister for Human Resource Development and as Union Minister of Textiles. She took charge as Women and Child Development Minister in June 2019. Today's reshuffle in the Council of Ministers by PM Modi is the first since he won a second term in May 2019. A month-long review was carried out by PM Modi and the BJP central leadership, leading to today's changes in the Union cabinet. These meetings were held amid widespread criticism of the government's handling of the pandemic. Seven more women leaders have also joined the government, taking the total number of women leaders in the Union cabinet to 11. They are Meenakashi Lekhi, Shobha Karandlaje, Anupriya Singh Patel, Darshana Vikram Jardosh, Annpurna Devi, Pratima Bhoumik and Bharati Pravin Pawar.
Source: NDTV
“Given the prospects of services trade, an Indo-Pacific wide services trade agreement should also be considered amongst friendly nations. It can help liberalise domestic regulations and build capacity on e-commerce and IT-enabled services and other areas such as Artificial Intelligence,” Goyal said at the India Pacific Business Summit was organised by industry chamber Confederation of Indian Industry, but added that nontariff measures act as major trade barriers in the region. Commerce and industry minister Piyush Goyal on Wednesday called for a services trade agreement among friendly nations of the Indo-Pacific region aimed at liberalising domestic regulations and building capacity in sectors like e-commerce and IT enabled services. “Given the prospects of services trade, an Indo-Pacific wide services trade agreement should also be considered.
Source: Economic Times
Separate ministry for cooperation carved out from ministry of agriculture and farmers welfare With reorganisation of some ministries for synergy, the finance ministry will get bigger with the addition of the department of public enterprises (DPE) to it. A separate ministry for cooperation has been carved out from the ministry of agriculture and farmers welfare. The whole exercise is aimed at removing operational bottlenecks due to multiple command centres and thereby imparting more efficiency and speed to decision-making. The DPE of the ministry of heavy industry and public enterprises is the sixth department in the ministry of finance, which hitherto housed the departments of economic affairs, expenditure, revenue, financial services and, investment & public asset management. Among other mandates, the DPE coordinates matters of general policy affecting all central public sector enterprises (CPSEs), evaluates and monitors their performance and undertakes review of capital projects and expenditure in CPSEs. Increasingly, there is a sense that the CPSEs are hamstrung by the need to report to multiple departments/ministries on operational issues. Currently, the DPE issues general guidelines for these firms, but their implementation rests with 45 different administrative ministries. If information has to be collated on how the guidelines such as closure of sick CPSEs, monetisation of assets or investment are being followed by 250-odd PSUs, one has to reach out to all administrative departments, delaying crucial policy decisions. Unlike in India, China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) performs investor’s responsibilities, supervises and manages the state-owned enterprises. The newly carved out ministry of cooperation will largely function as a regulator of the cooperative sector, performing similar functions like the corporate affairs ministry that oversees companies, while the agriculture ministry continues to deal with procurement and credit in which a large number of cooperatives are also involved. According to the notification issued by the government, the new ministry will deal with general policy in the field of cooperation and coordination of cooperation activities in all sectors while other ministries concerned will be responsible for cooperatives in the respective fields. This clears an initial confusion as to which ministry will govern fertiliser major Iffco or Gujarat Cooperative Milk Marketing Federation, popularly known as Amul; these entities will be respective administrative departments for fertilisers and dairy sectors. Similarly, the procurement of oilseeds and pulses, undertaken though agriculture cooperative Nafed, will remain with the agriculture ministry. The ministry of cooperation will basically oversee the Central Registrar of cooperative societies that regulate and govern all multi-state cooperative societies. The step assumes significance as some of the finance companies were allegedly converted to multi-state cooperatives to evade the regulating authorities like the RBI and Sebi. A separate ministry will definitely help as the cooperative never got importance in the agriculture ministry that it deserved and there were than 10 staff working in the cooperative division, a senior official said. Besides, it will also handle the affairs of the National Cooperative Development Corporation, which normally funds cooperatives to undertake government schemes.
Source: Financial Express
Industry leaders of Surat have requested that one of the seven mega investment textile parks of the country announced by the central government be set up in Surat. The request was raised during an open house meeting with the industries commissioner Rahul Gupta and M. Thennarsan, vicechairman and managing director of GIDC in the city on Wednesday. The team of industries department was on a one-day tour to Surat to discuss various issues with the stakeholders. Dr Rajiv Kumar Gupta, additional chief secretary, industries, said, “The textile and diamond hub Surat is witnessing rapid industrial development. We are working proactively to ensure that some of the big and world-class projects like DREAM City, world’s largest diamond bourse and others are completed in the time-bound manner and all issues of various stakeholders are ironed out.” The Union budget this year had an announcement of setting up seven mega investment textile parks in the country in the next three years. “Their demand was valid since Gujarat is one of the textile hubs in the country, so we have already pitched the idea to the central government,” said Dr Rahul Gupta, industries commissioner. Sources at Southern Gujarat Chamber of Commerce and Industry (SGCCI) said that they have been asked by the government officials to identify land parcel for the textile park. The Union budget mentioned that the parks will be set up over 1,000 acres of land with world-class infrastructure and plug-andplay facilities. Gupta said that among the other issues during the meetings there were some minor ones pertaining to GIDC and textile policy of 2019.
Source: Times of India
PATNA: In a bid to woo more investors, the state government is set to introduce three new policies — Bihar Textile and Leather Policy 2021, Bihar Logistics Policy 2021 and Bihar Pharma Policy 2021. Addressing mediapersons at the Udyog Bhawan on Wednesday, state industries minister Syed Shahnawaz Hussain said the framework of the policies was in its final stage. “The new policies, which will be presented to chief minister Nitish Kumar for his approval soon, will foster a long-term mutualism between the industries and the government,” he added. The minister had recently met investors and senior functionaries of the Synthetic Rayon and Textile Promotion Council, seeking suggestions for finalising the Bihar Textile and Leather Policy. Earlier, the state had rolled out the Oxygen Production Promotion Policy and Ethanol Production Promotion Policy. Within three months of the latter’s roll-out, 147 proposals have already received stage I clearance. Similarly, within two months of the oxygen policy, 13 proposals have cleared the first round. So far, the government has allocated 320 acres of land of the Bihar Industrial Area Development Authority to 10 units for setting up ethanol plants in the state. Shahnawaz claimed that Bihar was the first state to introduce an ethanol-related policy and other states were following suit. “Despite the challenges posed to the economy by the Covid-19 pandemic, Bihar has managed to attract 450 investment proposals amounting to Rs 33,973 crore in the last six months. The government has sped up approval of the proposals that may create employment opportunities for a large population,” he said and reiterated his commitment towards large-scale employment generation through massive industrialisation. The minister said, “Bihar has emerged as a state with unbound opportunities and is poised to lead the growth charts in future.” He also talked about the ‘Udyog Samwad Portal’ that has been launched as a one-stop platform for investors.
Source: Times of India
Money spent by importers of sports goods on brand promotions and appointment of brand ambassadors cannot be subjected to import duty, the Supreme Court has said. The ruling came in the backdrop of revenue officials issuing notices to several dealers who had imported golf kits, badminton and table tennis rackets and had roped in brand ambassadors, including PV Sindhu and Saina Nehwal. The tax department had approached the top court after a tax appellate tribunal rejected the revenue department’s contention. Bespoke 3, 4 Bed & Duplexes ₹28Cr* Onwards @ Wadhwa Samarpan Ad The Wadhwa Group VISIT SITE Sponsored by “We find no merit in this appeal,” the SC said in an order pronounced on July 1. The tax department had claimed that several multinational companies were undervaluing imports and that marketing spend is nothing but a mandatory requirement embedded in the cost to hoodwink Indian authorities. Experts had argued that whether the argument forwarded by the tax department holds ground would depend on documentation or contracts between Indian dealers and the multinationals from which they imported goods. The debate was whether payments under investigation would qualify as ‘condition of sale’ as part of the contractual obligation of the seller. “The inclusion of post importation marketing expenses in the value of imported goods for customs valuation has remained a subject matter of dispute as the condition of sale is purely dependent on contractual arrangements and facts involved,” said Abhishek A Rastogi, partner at Khaitan & Co, who represented the importers before the Supreme Court. “Reduction of taxes and better tax certainty will definitely result in more sponsorship for events and players,” said Rastogi. The tax department had contended that if the total cost of an imported badminton racket is Rs 1,000, then tax and custom duty are currently paid on this amount alone. If these dealers are spending Rs 100 on sponsorship or hiring a brand ambassador, this too should be added to the total cost of Rs 1,000 and subjected to tax and custom duty. ET had reported about the issue in June 2018, when the Directorate of Revenue Intelligence (DRI), the intelligence arm of the tax department, had initiated tax inquiries. The investigators scrutinised documentation, including emails, to check if there was any mention of marketing spends that could be considered a condition for sale. In some cases, say people close to the development, the investigators assumed that the condition of sale may not have been explicitly mentioned but was “understood”. The SC ruling settles the case and the appellate tribunal’s ruling would apply. This is set to impact several ongoing cases, where importers of foreign goods were issued notices for similar marketing spend.
Source: Economic Times
Many look to adopt digital modes, some take fresh loans Small businesses are looking at new ways to survive amidst the economic distress and subdued demand after the second wave of the Covid-19 pandemic. Industry data suggests that while grocery stores and pharmacies are thriving, businesses in other sectors are continuing to face headwinds and many are adopting digital modes are seeking fresh loans to restart operations or new businesses. “Kiranas and pharmacies are flourishing but others like salons, cloth merchants, are still subdued,” said Ketan Patel, CEO, Mswipe. According to him, about 25 per cent of restaurants and shops of smaller merchants will not come back as they face their own unique problems. Data with the Reserve Bank of India shows flux in point-of-sale terminals by banks, which declined to 45,24,724 by April end 2021 from 47,20,077 in March. Industry experts, however, said that this drop may be temporary due to the lockdowns and would bounce back once again as business activity normalises. Embracing technology However, more businesses are now embracing digital payments and technology. According to data with Razorpay, over 15 lakh MSMEs adopted digital payment solutions for the first time between March 2020 and May 2021. “Close to 30 per cent of the sign-ups we have are existing brick-and-mortar businesses. They have realised they need an online presence or need to go omni channel. They are not the bottom of the pyramid kirana stores but slightly more sophisticated retail stores, looking to go omni channel, that is online plus offline,” said Vedanarayan Vedantham, SME Business Head, Razorpay. “There has been huge growth in SMEs not only embracing digital payments but also processing more transactions,” he said. UPI transactions grew 346 per cent, becoming the most preferred payment mode for businesses, overtaking debit and credit cards, netbanking and others, according to Razorpay.
Uptick in credit demand
Lenders say that sectors such as hospitality, education and textiles are the worst affected. There is a steady demand for credit from most segments post the lockdowns but they expect a robust recovery given that the lockdowns were not as strict as last year. “Every time there is a lockdown, the tenacity of small business is lower so their cash flow gets affected. But the good thing is that their recovery is V-shaped and they go back to normalcy very quickly,” said Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital. The company had disbursed ₹130-odd crore in March 2021. In June, it was operational for 12 days but was back to almost March numbers. “The need for credit at this point is higher than ever,” Nath said. “About 65 per cent of the businesses will be moderately impacted while 25 per cent continue to do well. By July end we plan to be disbursing loans between ₹55 crore and ₹60 crore per month, at the same levels in February and March 2021,” said Manish Lunia, Co-Founder, FlexiLoans. To help out small merchants, the Centre has also included retail and wholesale trade as MSME and extended to them the benefit of priority sector lending.
Source: The Hindu Business line
The finance ministry could soon seek the Cabinet's approval for a plan to offer sovereign guarantee on the security receipts (SRs) issued by the NARCL while acquiring bad loans from lenders. This is estimated to cost the exchequer Rs 30,600 crore over five years. The National Asset Reconstruction Company (NARCL) is likely to be operationalised in a month, paving the way for the transfer of stressed assets worth about Rs 83,000 crore in the first phase to the so-called bad bank for resolution, sources told FE. “Formalities have been more or less completed. NARCL should take off in a month,” said one of the sources. Analysts have called for expeditious operationalization of the bad bank so that it takes root before the next, Covid-induced surge in bad loans hits the banking system. NARCL is expected to see the transfer of large stressed assets (of at least Rs 500 crore each) worth Rs 2.25 lakh crore in phases. The IBA, which is spearheading the initiative to set up the bad bank, has already filed an application with the corporate affairs ministry for the incorporation of the NARCL. It has also finalised NARCL’s article of association as well as memorandum of association. As reported by FE, not just large lenders but all public-sector banks (PSBs), except for Punjab & Sind Bank, could pick up stakes in NARCL. The IBA has also held talks with REC, seeking its contribution to equity. The finance ministry could soon seek the Cabinet’s approval for a plan to offer sovereign guarantee on the security receipts (SRs) issued by the NARCL while acquiring bad loans from lenders. This is estimated to cost the exchequer Rs 30,600 crore over five years. The government has backed the setting up of the NARCL, announced in the Budget for FY22, but it wouldn’t put in capital; instead, participating banks would contribute to the equity. However, it is set to give guarantee on the SRs to make the bad loan resolution process more viable and attractive. Expeditious resolution of bad loans is critical to stirring economic growth through sustained credit push. Global rating agency Fitch on Wednesday cautioned that regulatory relief measures have postponed banks’ underlying asset-quality issues for now. In fact, the banking sector’s average impaired loans ratio dropped to 7.5% in FY21 from 8.5% a year before. But their medium-term performance will be dented without a meaningful economic recovery, it said. The agency expects impaired loans to peak after FY23 and state-run banks, with lower capital base than private peers’, are at greater risk. NARCL is expected to acquire stressed assets at net book value by offering 15% of it upfront (in cash), and the rest (85%) in SRs. Once the bad loan is resolved, realisation for the relevant bank would be in sync with its SR interest in that asset. While Canara Bank has announced it would be the sponsor of NARCL and hold a 12% equity, other large banks are expected to pick up just about 10% each. An asset management company comprising professionals will also be set up within the broader NARCL structure, which will work out the toxic assets and take appropriate decisions, including on selling them off to investors.
Source: Financial Express
Industry Desk: Agriculture and home textile products have come up as promising forex earners in this pandemic time to fit the bill in giving Bangladesh an edge over its competitors in the world of exports. The two potential sectors have registered strong export growth in the fiscal 2020-21, clocking a $1 billion mark for the first time. Jute and jute goods also earned over $1 billion after 2018. In the last fiscal year, earnings from home textile items grew by 49.17% year-on-year to reach $1.13 billion and agricultural products earned $1.02 billion. The receipts from jute and jute goods shipments amounted to $1.16 billion, according to the Export Promotion Bureau (EPB) data published on Monday. The country is on the path of returning to normalcy after a pandemic-hit period, with its exports raking in $38.75 billion in FY21, recording a growth rate of 15.10%. The growth is riding on RMG export recovery, which earned $31.45 billion showing a 12.55% growth, according to the EPB. However, the total export receipts in FY21 was 5.47% below the annual target of $41 billion. In FY20, the figure stood at $33.67 billion, according to the EPB. The export earnings were also lower than $40.53 billion in the pre-pandemic FY19. Among other major sectors, frozen and live fish exports saw 4.65% growth to $477.37 million, which was $456 million in Fy20. Earnings from the pharmaceutical sector experienced a 24.47% jump to $169 million, while plastic goods earnings increased by 14.68% to $115.28 million. The specialised textile sector registered 12.81% growth to $131 million. In June alone in FY21, the export earnings showed significant growth. The earnings from merchandise shipments grew by 31.77% to $3.57 billion from $2.71 billion year-on-year, which was also 2.52 % below the target of $3.67 billion. Apparel shipments registered a 12.55 % year-on-year growth to hit $31.45 billion even during the pandemic. Despite the double-digit growth, the figure was still 6.89 % below the annual target of $33.78 billion. Of the total earnings from the garment shipments, knitwear items fetched $16.96 billion, registering a strong 21.94% year-on-year growth. Woven, which was in the negative territory over the last one and a half years, also posted a 3.24 % positive growth to reach $14.49 billion at the end of the last fiscal year. Exporters say the overall apparel export is very close to a complete rebound on the back of the recoveries of the European Union and the US markets. Rashed Mosharraf, executive director (marketing) of Zaber & Zubair Fabrics Ltd, said, “We are experiencing an organic growth of 10% on average in the home textile export each year.” He mentioned that the sector also enjoyed good growth during the Covid-19 lockdown as people stayed at home and home textile consumption also went high. Fazlee Shamim Ehsan, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the demand for both knitwear and home textile items has soared globally as people have been staying at home for a long time due to lockdowns amid the pandemic, he added. Despite the recovery sign, skilled manpower shortage, price hike of raw materials and Covid-19 uncertainty remain as challenges for the industry. Apex Footwear Ltd Managing Director Syed Nasim Manzur said, “Leather and footwear consumers in two the US and the UK have resumed their pent-up spending after regaining confidence following the rollout of vaccination in those countries.” The USA has experienced about a 27% hike in consumer spending last month, which is the largest export market for Bangladesh’s leather footwear, once the EU held that position. Italy and China, two other major destinations for Bangladeshi leather, resumed their factories over the last few months. “China is also souring a good quantity of leather goods from us as its domestic market also has a big demand,” he added. Mahmudul Haq, immediate past chief executive officer of Janata Jute Mills, said, “We have experienced good growth in the fiscal 2020-21 on the back of a rise in prices of raw materials, but our export volume dropped slightly.” He said their products lost some markets in the last fiscal year, which will affect Janata Jute’s exports earnings this year when prices of raw jute will come down. Turkey has already innovated regenerated and synthetic cotton as the replacement of jute yarn. Synthetic bags are also replacing jute bags. It is an alarming sign for exports, Mahmudul said. Commenting on the export growth, Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told that during the pandemic it is a very good performance, all credit goes to the government’s initiative to allow factories to operate amid Covid-19 complying with health protocols, and workers who worked hard for shipping goods on time. Faruque hoped the overall exports will be better by October this year as major export markets have already rolled out vaccination. The BGMEA president said the apparel sector’s contribution to export earnings has come down to 81%, which was about 84% during the pre-Covid period. But it is also good news that sectors such as agriculture, home textile and jute and jute goods have posted strong growth, leading the way to the country’s export diversification.
Source: Daily Industry
With many factory owners willing to pay penalties to keep their units running, PSPCL increases fine for violation of orders by two-and-a-half times. Manufacturers in Punjab on Wednesday condemned the decision of the Punjab State Power Corporation Limited (PSPCL) to extend the three-day shutdown on industrial units by a day. With a number of industrialists willing to pay penalties to keep their units running, the corporation also increased the fine for violation of orders by as much as two-and-a-half times. Also, a delegation of the Confederation of Indian Industry (CII) and other bodies from various parts of the state met the PSPCL managing director (MD) seeking a breather, but to no avail. CII (Punjab) vice chairman Amit Thapar said the situation has turned from bad to worse. “There were many industrialists who in the absence of power back-up wished to operate and were willing to pay penalties to save export orders from being cancelled. They were threatened by PSPCL officials that their supply will be snapped,” said Thapar. Shingora Textiles managing director Mridula Jain said, “Since Europe and the US are opening up now, the buyers are placing orders at the last minute. But with factories nonfunctional, the delayed shipments are to be shipped by air at our cost or we run the factories on generators incurring a daily expense of ₹2.5 lakh.” The PSPCL had earlier announced power regulatory measure with three weekly-off days for general industry (large scale), rolling mills, arc and induction furnaces consumers from July 7 to July 10. With the fresh extension, the industries will now be shut till 8am on July 11. Corporation MD A Venu Prasad said the power situation is “tight” in view of the prolonged dry spell, increase in demand of power from agriculture sector and the Talwandi Sabo Power Limited (TSPL) units going out of operation. “Rain is expected on Sunday and we hope we will soon be out of this situation. We are not imposing any domestic cuts and hope to give a breather to the industry soon,” he said.
Source: Hindustan Times
Nigeria and Pakistan are hoping to up bilateral trade to about $1 billion by enhancing trade and economic cooperation in the fields of Pharmaceuticals, Light Engineering products, Surgical Instruments, Automotive Parts, Sports Goods and Value Added Textiles, among others. Reports show that bilateral trade between Pakistan and Nigeria, dropped from $307 million in 2019 to $146 million in 2020. Pakistan’s imports from Nigeria fell from $280 million in 2019 to $116 million in 2020 while while the country’s exports to Nigeria increased from $27 million to $30 million in the same period. However, both nations see considerable potentials to take the trade volume to at least above $1 billion in the short run. Beside these sectors, there are also opportunities for both countries to enter into Joint Ventures in the field of oil, gas, agriculture technology and renewable energy. Nigeria’s High Commissioner to Pakistan, Abioye Muhammed Bello said there are huge untapped potentials in the pharmaceuticals, information technology, construction and textile sectors of the two countries can be explored through joint ventures. Bello, disclosed these at a meeting at the Lahore Chamber of Commerce & Industry, LCCI. The High Commissioner said that the Nigerian High Commission will extend best cooperation to the private sector of Pakistan for joint ventures with their Nigerian counterparts. He said that we should move forward to boost mutual trade and economic ties. He underlined the need to establish more banking channels to smooth bilateral trade. “Nigeria and Pakistan share a lot of commonalities. The two countries enjoy unique geographical locations which are strategic in their respective continents,” he added. LCCI President Mian Tariq Misbah, on his part said that Nigeria and Pakistan maintain a close relationship and both are key members of the Organization of Islamic Cooperation and Commonwealth.
Source: Blueprint
For now, inflation in the EU is forecast to average 2.2% this year, up 0.3 percentage points over predictions in May, and 1.6% in 2022. It's forecast to average 1.9% in the euro area in 2021, up 0.2 percentage points, and 1.4% next year. European Union economies are set to rebound by their highest rates in decades as coronavirus restrictions ease, but still face risks posed by COVID-19 variants and concerns over inflation, the EU’s executive branch said Wednesday. The European Commission’s 2021 summer forecasts predict that the economies in the 27- nation EU, and among the 19 countries using the euro single currency, are expected to expand by 4.8% this year, around half a percentage point higher than foreseen under the previous forecast. Real gross domestic product is expected to return to its pre-coronavirus crisis level in the last quarter of this year. Growth in 2022 is predicted to hit 4.5%. The commission puts its increasing optimism down to the fact that economic activity early this year has exceeded expectations, and due to the impact of coronavirus vaccine strategy, which has led to falling numbers of new infections and hospital admissions. “The EU economy is set to see its fastest growth in decades this year, fuelled by strong demand both at home and globally and a swifter-than-expected reopening of services sectors since the spring,” Economy Commissioner Paolo Gentiloni said. But he warned that the EU “must redouble our vaccination efforts, building on the impressive progress made in recent months: the spread of the delta variant is a stark reminder that we have not yet emerged from the shadow of the pandemic.” The commission said the economic risks depend on how households and companies respond to any new tightening of restrictions to stop the spread of variants. It also warned that inflation could rise if supply restrictions last and price pressures are passed on to consumer prices. For now, inflation in the EU is forecast to average 2.2% this year, up 0.3 percentage points over predictions in May, and 1.6% in 2022. It’s forecast to average 1.9% in the euro area in 2021, up 0.2 percentage points, and 1.4% next year.
Source: Associated Press
Israeli firm Nova Milan opened its first innovation centre in Costa Rica’s Alajuela city last week as part of a project to produce plant leather, sustainable fabrics and bioplastics from organic plant waste. The aim is to help Costa Rica's struggles with plant-based waste like banana, coconut, yuca and pineapple, and use leftover agricultural products. Company founders Irma Orenstein and Karim Quazzani developed the technology to recycle agricultural waste into valuable products, including one of the world’s nearly petroleum-free vegan leathers. "We are very proud to join efforts, based on Israeli innovation and technology, with the environmental commitment of Costa Rica, under the leadership and female entrepreneurship from Israel, with women from the Caribbean area," Bar-El was quoted as saying by Israeli media outlets.
Source: Fibre2fashion
On June 29, 2021, Cambodia unveiled its ninth round of stimulus measures to support businesses and low-income households as the country grapples with a sudden surge in COVID-19 infections caused by the Delta variant. The package aims to tackle several objectives: 1. Reduce the socio-economic impact caused by the pandemic as well as reduces transmission rates; Support business recovery through wage subsidies and tax exemptions initiatives that were issued in the eighth stimulus package; and 3. Support poor households through cash handouts. The support measures center heavily on Cambodia’s garment, textile, and footwear (GTF) industries, which contribute to more than 30 percent of the total GDP, 80 percent of total exports, and encompass over 800,000 workers. Suspended workers in these sectors will continue to receive financial aid of up to US$70 per month until the end of September 2021. Moreover, the government has continued its measures to support the tourism industry in the form of tax holidays. The industry is also a major contributor to the economy, accounting for some 12 percent of total GDP. Cambodia’s exports of garments, footwear, and travel goods were down 10 percent for the first 10 months of 2020, compared to 2019, valued at US$8.2 billion. The number of official factory closures registered with the Ministry of Labor as of October 2020 stood at 110, resulting in 65,000 laid-off workers. Revenue from international tourism saw an 80 percent dip from US$4.9 billion in 2019 to US$1.02 billion in 2020, with Cambodia only recording 1.3 million international visitors. The Cambodian Association of Travel Agents (CATA) predicts the industry needs at least five years to recover to reach its pre-pandemic growth.
Source: Economic Times
