The 42nd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman through video conferencing here today. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance& States/ UTs.
The GST Council has made the following recommendations:
Source: PIB
The Goods and Services Tax (GST) Council meeting on compensation for the states remained inconclusive on Monday, with 20-21 states opting for the Reserve Bank of India (RBI) window of Rs 1.10 trillion (earlier it was Rs 97,000 crore) and around 10 states insisting the Centre borrow and disburse the money.
The next meeting is now scheduled for October 12.
“The question was 20-21 states deciding to opt for the first option (the RBI window) and others wanting the Centre to borrow. Lots of discussion happened on that ... Bihar Deputy Chief Minister Sushil Modi suggested that 3-4-5 days be given to the states to discuss the issue. I gave eight days and the next meeting will happen on October 12,” Union Finance Minister Nirmala Sitharaman said after the meeting. She said no state, irrespective of its choice, would be denied compensation. In her answer to a question, she said she was not violating any provision of the compensation law. As to why she mentioned the number of states opting for one of the offers given by the Centre, she said, “20-21 states opted for it (RBI window) and we have put it on record. I can’t be told you should not mention it because it gives the feeling that the majority is deciding the issue. Even that will be unfair to the states which have opted.” It is not that the Centre is sitting on the money and not giving it to the states, but the money has to be borrowed, she said. Meanwhile, Kerala Finance Minister Thomas Isaac tweeted: “10 states demand(ed) that full compensation should be paid to the states during the current year as per clauses in the law and centre should borrow. Decision was postponed to the next meeting on 12th of October.” Meanwhile, the Centre will distribute Rs 20,000 crore collected through compensation cess so far this year to the states tonight, Sitharaman said. Sitharaman said borrowing for GST compensation would have no bearing on the money that states raise, keeping themselves with the bounds of 5 per cent of state gross domestic product. Also it will not be reckoned as debt from the point of view of the Finance Commission’s recommendations. The council decided to extend paying the states compensation cess beyond June 2022 but the period of the extension is yet to be decided. Sitharaman said the cess to be collected after June 2022 would be first used for paying interest on borrowing. The remaining part will be divided into two, with half of it for paying back the principal of Rs 1.10 trillion, which is the compensation gap arising out of the GST system, and the other half for paying the shortfall owing to Covid-related issues. She said no state would pay from its own pocket. The Centre had given two options to the states for compensating them for the shortfall in compensation cess – Rs 97,000 crore (now Rs 1.1 trillion) to be facilitated by the RBI and Rs 2.35 trillion of market borrowing. The council decided to give Rs 25,000 crore of integrated GST to the states that received less than what they required in previous years. IGST of Rs 1.60 trillion was unallocated. Of that Rs 80,000 crore was distributed to states. But since there was no formula of allocating the fund, some states got more than their share and others received less. Those who got more will not have to return the money immediately. The council also decided to give relief to companies whose turnover is less than Rs 5 crore. They will have to file quarterly returns from January against monthly returns now. Also, refunds will be given to only those whose bank accounts are validated by Aadhaar and the permanent account number. The council also decided to exempt from GST the Indian Space Research Organisation for launching satellites.
Source: Business Standard
High drama unfolded at the crucial Goods and Services Tax (GST) Council meeting on Monday. At least 10 Opposition-ruled states resisted the Union finance secretary’s attempts to “abruptly” conclude the meeting in favour of the first option on the issue of compensation. According to sources, after over six hours of deliberations, Finance Secretary Ajay Bhushan Pandey announced that the Department of Economic Affairs will be asked to prepare for borrowing by states, an option strongly rejected by Opposition-ruled states. In fact, Andhra Pradesh and Puducherry, which the Centre had earlier claimed were among the 21 states that had picked option 1, also pressed for borrowing by the Centre. This technically takes down the count to 19 states that have picked the first option of borrowing Rs 1.1 trillion under a special window of the Reserve Bank of India. The Centre has decided to revise the borrowing limit under the option to Rs 1.1 trillion from Rs 97,000 crore proposed earlier. “After six-and-a-half hours of discussion, when the house was almost equally divided, finance secretary suddenly said that the meeting is closed that that we will ask the DEA to get ready for borrowing by states, which is option 1,” said a source. “All opposing states then rose and resisted the move and argued that it was against GST rules as there was no consensus on the issue. It was only then that Union Finance Minister Nirmala Sitharaman agreed to meet again after 5-6 days to create a consensus,” he added.
The GST Council will meet again on October 12.
About 10 Opposition ruled states have proposed a third option to the government, which involves borrowing by the Centre as it can do so at competitive rates. To facilitate that, the compensation cess period has been extended indefinitely beyond June 2022, till the entire principal and interest is repaid and states fully compensated for the GST shortfall. “The rate at which Centre borrows is about 2 per cent lesser than what we will get. They have the capability to borrow, the window to borrow and a lower rate,” said West Bengal Finance Minister Amit Mitra. He added that with the compensation cess period being extended indefinitely, the Centre will not have to spend even a single rupee from its Budget. Another state finance minister pointed out that states are not in a position to borrow with most defaulting on salaries and pensions. “Centre can monetise its fiscal deficit,” he said.
Source: Business Standard
Approval letters will be issued to all the 16 applicants selected for the production-linked incentive (PLI) scheme for mobile phone manufacturing as a Cabinet nod is not required for the same. Issuance of approval letters was delayed in the absence of Cabinet nod for the proposal sent by the Ministry of Electronics and IT (Meity). However, the Department of Expenditure (DoE) has clarified that there is no requirement for Cabinet approval. “In terms of financial procedure and the facts of this case, the note for the Cabinet does not need to be submitted for consideration by the Cabinet, which has already approved the scheme after appraisal,” an office memorandum for DoE said.
According to the DoE, based on Rule 18 of Delegation of Financial Powers Rules (DFPR), where a project as a whole has been sanctioned after scrutiny and acceptance by the competent authorities, further concurrence of the same authorities shall not be required to sanction expenditure on the various constituent schemes included in the project, even if the magnitude of the expenditure involved in any such constituent scheme exceeds the financial threshold limit. A meeting of the empowered committee took place on October 2 to amend the guidelines of the scheme and determine competent authorities for approval of eligible applicants for the PLI scheme. The committee includes Niti Aayog CEO Amitabh Kant, Meity secretary Ajay Prakash Sawhney, DEA secretary Tarun Bajaj, DGFT Amit Yadav, DPIIT secretary Guruprasad Mohapatra and Meity joint secretary Saurabh Gaur. As many as 16 companies, including Foxconn, Samsung, Pegatron, Rising Star, Lava International etc. have been selected for the scheme. The objective is to promote five global and five local champions, and also firms in component manufacturing. The subsidy outlay for five global firms (invoice value of Rs 15,000 and above) is Rs 28,150 crore, approximately Rs 5,630 crore per company over five years. For local firms, the total incentive outlay is Rs 7,300 crore, which is around Rs 1,460 crore per company over five years. For electronic components, six eligible applicants will be given Rs 900 crore as incentive. The Meity had earlier sent the note to Cabinet for approval of the selected applicants. Over the next five years, the scheme is expected to lead to a total production of about Rs 11.5 lakh crore. The scheme is expected to promote exports significantly. Of the total production of Rs 11.5 lakh crore, more than 60% will be contributed by exports of the order of Rs 7 lakh crore. The scheme will bring additional investment in electronics anufacturing to the tune of Rs 11,000 crore. The scheme will generate approximately 3 lakh direct employment opportunities in next five years along with creation of additional indirect employment of nearly three times the direct employment. Domestic value addition is expected to grow from the current 15-20% to 35-40% in case of mobile phones and 45-50% for electronic components. The scheme will provide an incentive of 4 to 6% on incremental sales, over the base year of goods manufactured in India and covered under target segments, to eligible companies for a period of five years subsequent to the base year as defined. The production of mobile phone handsets in 2018-19 has reached 29 crore units worth Rs 1.70 lakh crore from 6 crore units worth Rs 19,000 crore in 2014. While the exports of electronics have increased from Rs 38,263 crore in 2014-15 to Rs 61,908 crore in 2018-19, India’s share in global electronics production has reached 3% in 2018 from 1.3% in 2012.
Source: Financial Express
Prime Minister Narendra Modi will hold an “exclusive” dialogue with global investors at a virtual Gobal Investor Roundtable on November 5, as India steps up efforts to lure multinational companies at a time when anti-China sentiments are growing globally. One of the key issues that the finance ministry — which is organising the roundtable along with the National Investment and Infrastructure Fund — wants addressed urgently is the concerns about the “enforceability of contracts” in India. In this context, economic affairs secretary Tarun Bajaj has written to legislative department secretary G Narayana Raju, highlighting that several global investors have consistently flagged concerns about the time and the cost involved in getting contracts honoured in India, including by the central/state governments and various public agencies. One of the important issues here is dispute resolution in public infrastructure contracts. Bajaj has suggested that swift action be taken to operationalise special courts provisioned under Section 20-B of the Specific Relief (Amendment ) Act 2018, according to which the state governments, in consultations with the chief justices of the respective high courts, can designate one or more civil courts as special courts. The dialogue is the latest of a series of meetings, chaired by Modi, to not just hear out investors’ concerns but also make concerted efforts to resolve nagging issues through discussions among several wings of the government. The government has decided to compile a list of suggestions shared by global investors in their meetings with the Prime Minister over the past six years and the actions taken on them before the planned meeting next month. Since domestic private investments have remained elusive in recent years, the government has been pinning hopes on larger inflows of foreign direct investments (FDI). India’s gross FDI inflows rose by as much as 20% on year last fiscal to a record $74.3 billion, before the pandemic hit. Even before the pandemic struck, the share of gross fixed capital formation (GFCF) in GDP collapsed to 29.8% on year in FY20 from as much as 34.3% in FY12. GFCF contracted by 6.5%, the lowest in the current GDP series, in the January-March period, having recorded a third straight quarter of fall. In the June quarter, thanks to the pandemic, real GDP contracted by a record 23.9%, year on year, with the GFCF having slid by a steep 47.1%.
Source: Financial Express
India's new Ambassador to Bahrain, Piyush Srivastava met Bahrain's Minister of Finance and National Economy Shaikh Salman bin Khalifa Al Khalifa and discussed bilateral cooperation India's new Ambassador to Bahrain, Piyush Srivastava met Bahrain's Minister of Finance and National Economy Shaikh Salman bin Khalifa Al Khalifa on Sunday and discussed bilateral cooperation between the two countries. Several ways to strengthen India-Bahrain cooperation in the financial and business sectors were deliberated during the meeting between the two dignitaries. "Ambassador Piyush Srivastava called on HE Sheikh Salman AlKhalifa Minister of Finance and National Economy discussed the development of Bahrain-India Relations on various levels which contributed to strengthening bilateral cooperation in Financial and Business Sector," Indian Embassy here tweeted. According to the Bahrain News Agency (BNA), both the sides reviewed the economic partnership between both the countries and ways of bolstering it to provide more promising investment opportunities. They also discussed issues of common interest and the latest global economic developments.
Source: Business Standard
Tamil Nadu Minister D. Jayakumar on Monday urged the Centre to release Rs 4,321 crore towards the state's share of Integrated Goods and Services Tax (IGST). He also said given the very limited options available, Tamil Nadu chooses Option 1 suggested by the Central government that is, raising debt from the market for a sum equivalent to the estimated GST revenue shortfall. At the 42nd Goods and Services Tax Council meeting, held via video conferencing, Jayakumar said the revenue gap of states must be assessed based on an appropriate proportion of the total anticipated loss this financial year under Option 1, and that Tamil Nadu hopes that it is reworked to reflect a higher proportion of the actual loss in revenue of states. He said the Group of Ministers set up for IGST settlement for 2017-18 has acknowledged that a sum of Rs 4,321 crore is due to Tamil Nadu."In 2020-21, for the period upto July 2020, compensation of Rs 12,258.94 crore is due to be paid to Tamil Nadu. It is a matter of grave urgency that the GST compensation payments are made immediately to enable us to continue to battle against Covid-19," Jayakumar told Union Finance Minister Nirmala Sitharaman who chaired the meeting. He said that their stance has consistently been that the Centre "has a moral and legal obligation to pay the compensation for the shortfall in GST collections" and it is for the Centre to find the necessary funds to compensate the states, if there was a shortfall in the cess collections. "As a via media in the 41st GST Council meeting, I had suggested that the Government of India could mobilise resources and lend the funds required to the GST Compensation Fund. The loan could then be serviced through an extension of the GST Cess for a few years beyond 2021-22," he said. Jayakumar also stressed that the issue of GST compensation to the state should be resolved in a timely manner preserving mutual trust which is the bedrock of GST.
Source: Business Standard
Proposals for new investment in the second quarter of the current fiscal continued to remain as depressing as at the beginning of lockdown in March 2020. Investment proposals worth Rs 58,700 crore were made for the creation of new capacities during Q2 FY21, compared to around Rs 69,000 crore in the first quarter, and Rs 3.94 lakh crore in the quarter before that, according to CMIE. The nationwide lockdown led the new investments to severely fall as no entrepreneur would consider making an investment proposal during such a period. Also, it could take a long time before new investment proposals climb up, CMIE said. Nearly 55 per cent of the new investments in the September 2020 quarter is from the manufacturing sector, out of which the chemicals industry attracted most investments. Besides, five projects collectively accounted for half the new investment projects proposed in the quarter. These are a multi-location Rs 7,000 crore solar power project in Rajasthan, a Rs 5,400 crore solar cells manufacturing project in Chennai, a Rs 5,000 crore biotech and life sciences park in Bangalore, a Rs 3,250 crore solar power project in Telangana, and a multi-location Rs 5,200 crore electric vehicle manufacturing plant in Uttar Pradesh. As far as the ownership of the projects is concerned, the structure of new investment proposals is the same as it was in the previous quarter. 44 per cent of the new investments are by government agencies and the rest are by the private sector. However, the Rs 25,800 crore investment proposals made by the Centre and state governments are the lowest in any quarter in the past 16 years, since June 2004. The private sector investment of Rs 32,800 crore is also the lowest by them since June 2004.
Meanwhile, even as new investment proposals never fell below Rs 5 lakh crore since 2004-05, CMIE added that it does not expect new investment proposals to cross Rs 5 lakh crore in this year. However, this can change if the central government decides to make large investments into infrastructure. Nevertheless, the government has not shown any inclinations to make large capacity-building investments this year.
Source: Financial Express
The minister was speaking at a webinar on strategies for alleviating policy constraints for exports in select sectors. Commerce and Industry Minister Piyush Goyal on Saturday said quality, technology and scale of production will help India take its annual exports to USD 1 trillion and not government subsidies. He exhorted exporters and the industry as a whole to target USD 1 trillion worth of shipments. "Why can't we aim for USD 1 trillion exports from India. We certainly can. I see no reason, (why) we cannot. For that we need to be clear on actionable items (and) subsidies are never going to get us there, I am very very clear about that," he said. "At least in my six years of engagement, I have not found subsidies to be the solution for India's problems. I think it's quality, technology, growth, scale; and sometimes for a short period you may need to give a little thrust or support. But if they are looking at literally running a long term engagement with the world on subsidy, it is not going to work," he said. The minister was speaking at a webinar on strategies for alleviating policy constraints for exports in select sectors. He said there is a need to identify areas where sensible policies can help take exports to USD 1 trillion. The minister also released a study - Domestic Constraints for Exports in Select Sectors - published by the Export-Import Bank of India. According to the study, an immediate refund of GST could increase the overall GDP by 2 per cent, exports by 7 per cent, aggregate imports by 6 per cent, and overall employment by nearly 4 per cent. It identifies sector specific policy initiatives that could improve operational conditions and efficiency of exporters gems and jewellery, auto and auto-components, electronics, textiles and clothing, and pharmaceuticals sectors. The study highlighted the need for direct government intervention to reduce costs at ports; attractive production oriented incentives; addressing procedural delays in approvals and refunds, as well as custom clearances by the Government; expediting GST refunds and duty drawback refunds to improve the manufacturing landscape, among others. "The effects of immediate refund of GST on individual sectors are much larger, with exports from the six identified sectors expected to register double-digit growth," it added.
Source: Economic Times
The minister was addressing representatives of Hindustan Chamber of Commerce. He also said that it is the collective effort of industry and the government that has helped in coming back to the recovery phase. Indicators like positive growth in the country's eports in September and increase in GST collections show that India will bounce back to high growth levels, Commerce and Industry Minister Piyush Goyal said on Saturday. The world now looks towards India as a trusted, reliable partner in the global supply chain, he said. The merchandise exports in September this year has recorded a growth of 5 per cent yearon-year, GST collections are up by 4 per cent over the corresponding period, and railway carried 15 per cent more freight, he said. The indicators show that "India will once again bounce back to high growth levels which is truly our destiny," he added. The minister was addressing representatives of Hindustan Chamber of Commerce. He also said that it is the collective eort of industry and the government that has helped in coming back to the recovery phase.
Source: Economic Times
“With India unlocking, demand resurgence is palpable in many sectors….This is despite headwinds of increasing Covid cases in non-metro cities and rural areas and rising food prices,” it said. The economy is on a recovery path and the upcoming festive season may add to the momentum, although the sustained spread of the Covid-19 virus poses a downside risk to short-term and medium-term growth rates, the finance ministry said in its monthly economic report for September released on Sunday. Nevertheless, data over two weeks through September 30 suggest India “may have crossed the peak of Covid-19 case-load”, the report said. During this period, the sevenday moving average of daily positive cases has steadily declined from about 93,000 to 83,000 while the seven-day moving average of daily tests has risen from about 1,15,000 to 1,24,000. “The pandemic, however, is far from over,” it said. Amid a political slugest over two farm Bills, the finance ministry report insisted the reforms in the agricultural sector were “more overdue than even the labour reforms as the existing laws kept the Indian farmer enslaved to the local mandi and their rent-seeking intermediaries”. “The local monopolists created by this legal infrastructure enabled the intermediaries to prosper at the cost of the farmer, especially the poor ones without the wherewithal to store their produce,” it said. The farm sector reforms enable the farmer to sell where he gets the best deal. The upcoming festive season is expected to further accelerate this momentum across several sectors, it said, reiterating that the government is open to taking further measures to soften the Covid blow. “With India unlocking, demand resurgence is palpable in many sectors….This is despite headwinds of increasing Covid cases in non-metro cities and rural areas and rising food prices,” it said. Several high-frequency indicators like PMI data, GST mop-up, toll collections, e-way bills, power consumption and auto sales have shown an uptick in September. The rebound signals pent-up demand and points at further recovery prospects for manufacturing, according to the report. The GST collection in September touched Rs 95,480 crore, up 4% from a year before, while the manufacturing PMI index hit its peak in over eight years last month. Exports grew 5.3%, year-on-year, in September, rail freight revenue earnings were up by 13.5% and power consumption grew 4.2%. Other indicators like e-way bills, kharif sowing, cargo traffic and passenger vehicle sales, too, showed upward movement. Agriculture remains the “sweet spot” and the growth of which will continue in the coming months. The ministry exuded confidence that positive results from implementation of the Rs 21- lakh crore Atmanirbhar Bharat package and graded unlocking of the economy have caused the recent turnaround in high frequency indicators. “All this makes the ministry confident that its effort to mitigate impact of Covid-19 are on the right track towards faster recovery of economy to normalcy,” the report added. A number of established agencies have projected a steeper GDP slide (some expect it to be as much as 15%) in FY21 than assumed earlier, after the government announced a record 23.9% contraction, the sharpest among the G-20 economies, in the June quarter. While most agencies have predicted a recovery in FY22 (S&P projects a 10% expansion next fiscal), some of them have cautioned that it will be greatly aided by a favourable base and a meaningful rebound will take time to materialise.
Source: Financial Express
The rupee depreciated 8 paise to 73.21 against the US dollar in opening trade on Monday even as the domestic equity market was trading with significant gains. The Indian currency opened at 73.16 at the interbank forex market then lost ground and touched 73.21 against the US dollar, down 8 paise over its last close of 73.13. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.12 per cent to 93.72. On the domestic equity market front, the BSE benchmark Sensex surged 400.32 points to 39,097.37, and the broader NSE Nifty rose 115.45 points to 11,532.40. Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,632.25 crore on a net basis on Thursday, according to provisional exchange data. Forex market was closed on Friday on account of Mahatma Gandhi Jayanti. Brent crude futures, the global oil benchmark, rose 2.14 per cent to USD 40.11 per barrel.
Source: Business Standard
Greece’s economy will contract by an estimated 8.2 per cent this year due to the effects of the coronavirus pandemic before picking up next year, the government said Monday as it submitted its 2021 draft budget to parliament. The 2021 budget was drawn up in an environment of unprecedented uncertainty, due to the indefinite expiration date of the unprecedented coronavirus pandemic, government spokesman Stelios Petsas said. Greece emerged nearly two years ago from eight years of international bailout programs, during which it made deep spending cuts and tax increases to qualify for rescue loans. Its financial crisis sent unemployment skyrocketing and wiped out a quarter of the economy. The country’s public debt is projected to reach 337 billion euros this year, or 197.4 per cent of gross domestic product. That would fall slightly to 342 billion euros, or 184.7 per cent of GDP, in 2021, according to the draft budget. Unemployment is forecast to rise to 18.6 per cent this year, compared with 17.3 per cent last year, before dipping to 16.5 per cent next year. Petsas said the recession forecast for 2020 is less severe than the 8.7 per cent contraction estimated for the eurozone as a whole. The economy is expected to bounce back 7.5 per cent next year, so that Greek people’s income will remain almost unchanged during the two-year period, the budget said. The primary budget balance – that is, the government’s budget without taking into account the cost of servicing debt – will tumble to a deficit of 6.2 per cent this year, and remain in a deficit of about 1 per cent next year.
Source: Financial Express
If duty imposed, Bangladesh apparel export would be hurt Indonesia has initiated a safeguard investigation regarding its import of apparel products that may negatively affect Bangladesh’s export of the products to the Southeast Asian country. Indonesian Safeguards Committee of the ministry of trade on Friday notified the issue to the World Trade Organisation. The committee said that it initiated the investigation regarding the import of the articles of apparel and clothing accessories following an application from the Indonesia Textile Association for a safeguard measures against the import of the products. The move, though not any country-specific, came at a time when both Bangladesh and Indonesia are in negotiations to enter into a preferential trade agreement (PTA). The next round of negotiations will be held in October 21-22. The two countries are scheduled to hold meeting today on the rules of origin issue for the PTA. The latest development may affect the negotiation process as well as Bangladesh’s export to the country if Indonesia finally imposes any safeguard duty after the investigation is completed, trade experts and exporters said. Bangladesh in the last fiscal year 2019-2020 exported readymade garment products worth $27.91 million to Indonesia, which is more than 54 per cent of the country’s total export of worth $51.42 million to Indonesia. Of the $27.91 million, the value of knitwear products export was $14.48 million and the amount of woven export was $13.44 million, according to Export Promotion Bureau data. According to the WTO, a safeguard investigation seeks to determine whether increased imports of a product are causing, or is threatening to cause, serious injury to a domestic industry. During a safeguard investigation, importers, exporters and other interested parties may present evidences and views and respond to the presentations of other parties, it stated. A WTO member may take a safeguard action such as the restricting of imports of a product temporarily only if the increased imports of the product are found to be causing, or threatening to cause, serious injury to the local producers, according to the WTO. Evaluating the application of the association, Indonesia in its notification said that there was a sufficient evidence to justify the initiation of a safeguard investigation. The products that fall under the investigation include overcoats, suits, shirts, blouses, tshirts, singlets and other vests, jerseys, pullovers, cardigans, babies’ garments and clothing accessories, other made up clothing or parts of garments, jackets, blazers, trousers and some other items. A senior trade official on Sunday told New Age that though the safeguard investigation was not any country-specific move, it would create trouble in the PTA negotiation process. There is no provision in the draft PTA of excluding Bangladeshi products from such types of duties, he said. Signing a PTA will not bring any expected outcome for Bangladesh if such duty is imposed as RMG products dominates the Bangladesh’s export to Indonesia, he said. The commerce ministry and the Bangladesh Trade and Tariff Commission will work on the issue, he added. Replying to a question whether Bangladesh’s apparel export would be affected if Indonesia imposes safeguard duty after investigation, Bangladesh Garment Manufacturers and Exporters Association Rubana Huq said, ‘Every bit counts.’ She said that it was important to have the ASEAN as a market, which is projected to grow into the 4th largest economy by 2030. It is also important to explore fashion wear suited for the Muslim population in Indonesia, she said. So, for the sake of both market and diversification, Bangladesh should not lose focus on the ASEAN market, she added. According to the Indonesian notification, stakeholders having substantial interests and interested parties in this investigation should submit written request within 15 days from the date of initiation October 1.
Source: New Age Business
Exporters across the country, including Faisalabad, are facing severe difficulties due to a shortage of cotton. The government’s cotton policy has reduced the country’s cotton production target from 14 million bales to 9 million bales. Due to the shortage of cotton yarn knitwear exports have fallen by 10.65 percent and garments exports by 13.74 percent in August. Faisalabad exporters have demanded the government to formulate an immediate cotton policy with the consultation of stakeholders to combat the current cotton crisis. In this regard, Mian Naeem Ahmed, former chairman of the Pakistan Hosiery Manufacturers and Exporters Association (North Zone), told Daily Times that the cotton crisis in Pakistan was the biggest threat to the value-added textile sector than corona. If the government failed to address the issue take the issue that results in the closure of the textile industry and a loss of jobs of millions of workers. He said that foreign buyers were demanding shipments from them in 45 days while mills were giving them yarn in three months. In such a situation how can they fulfill orders, he said. He said that due to the outbreak of corona in India and Bangladesh, garments orders were rapidly shifting to Pakistan but unfortunately due to low cotton production, there was a severe shortage of yarn. If not, not only orders from competing countries will stop in Pakistan, but we will also have lost our permanent buyers. He demanded the government to immediately abolish all duties and taxes on the import of cotton yarn. Syed Zia Alamdar Hussain, former president of Faisalabad Chamber of Commerce and Industry, said that the textile sector was currently facing three major problems, including a 40 percent shortage of raw materials, a 20 percent increase in electricity prices, and shortage of gas in winter. He said that the government does not give importance to exports. The government listens to us but does not act. “If the government does not heed our demands, not only the workers but also the mill owners will go on strike in the streets,” he said. Waheed Khaliq Ramey, chairman of the Cotton Power Looms Owners Association, said that due to the shortage of cotton, yarn prices are increasing day by day and it is being heard that International Hem Textile Fair is also going to be postponed. If this continues, the textile industry will shut down. He demanded the government to stop the export of yarn till our national needs are met. Mian Farrukh Iqbal, newly elected senior vice chairman of the Pakistan Hosiery Manufacturers and Exporters Association, pointed out that the textile sector was presently under disarray owing to high cotton prices. He demanded that the government should allow the export of cotton Yarn after met domestic needs. The district administration conducted a grand operation to retrieve two kanals 11 marlas public land worth Rs 408 million on Satiana Road, Gaitanwala Chowk, from the grab group those made the parking lot, transformers, water motors and other encroachments. That was removed by installing heavy machinery. Divisional Commissioner Ishrat Ali, RPO Raja Rifat Mukhtar, and Deputy Commissioner Muhammad Ali visited the spot and supervised the operation against encroachments. DG PHA Asma Ijaz Cheema, Assistant Commissioners City & Sadar Syed Ayub Bukhari, Umar Maqbool and Revenue Department officials were also present. According to the details, shops, fast food chains, and brand clothes were running the business in the plaza on government land where government land was parked and electricity was installed underground and a transformer was also installed. The inspection team visited and gave a deadline of one day for the self-destruction of businesses and installations, which was not implemented. The divisional commissioner said that the anti-encroachment drive was being implemented and a grand operation was being carried out against the mafia occupying government lands to relinquish the green areas and green belts were being prepared at such places to restore them to their original form. He said that in the light of the orders of the Supreme Court of Pakistan, the action is being taken against the occupation group and no one will be allowed to occupy government lands.
Source: The Daily Times
430 workers from 21 factories took part in limited-scale study by MJF A staggering 99.8 percent of the 430 garment workers, covered by a survey, claimed that they were not infected with Covid-19, according to a study by Manusher Jonno Foundation. Of the workers, 95.8 percent said they didn't have information whether their co-workers were infected or not. Only 1.8 percent of them mentioned that their family members were infected with the virus, says the study titled "Covid-19 Impact on Selected RMG factories and Way Forward". None of the respondents visited doctors or got tested for Covid-19 while 85.7 percent of them suffered from fever and cold during the period. They doubted whether the symptoms were related to the novel coronavirus, it said. The study is based on telephone interviews of 330 female and 100 male workers in 21 garment factories in Dhaka and Chattogram. On wages and benefits, the study said 99.8 percent of the respondents received wages for March and April this year. However, none of the respondents got full wage. And 91.48 percent of them said they did not get wages and allowances as per the labour law. Besides, 80.4 percent workers said they received masks from the factories, and 95.3 percent said they were satisfied with the hand-washing facilities at workplaces. MJF Programme Manager Shoma Datta shared the findings of the study, conducted between March and June this year, at a virtual meeting jointly organised by the MJF and The Daily Star. Tanjim Ferdous, a national consultant of the United Nations in Bangladesh, moderated the meeting. While presenting the findings, Shoma said 85.5 percent of the respondents said their factories resumed operation and 67.44 percent said they feel the threat of job loss. About sexual harassment amid the pandemic, 31.8 percent of the female workers said they were subjected to sexual harassment at workplaces, while 47.6 percent said the supervisors used abusive language if they failed to meet the target. Of the victims, 32.9 percent lodged complaints and only 7.4 percent got remedy. Shaheen Anam, executive director of the MJF, said the study does not give a complete picture of the entire garment sector, rather it gives a partial picture. The study was conducted on a limited scale. "We want the sector to thrive, and at the same time we want improvement in the living standards of the workers," she noted. Addressing the meeting, Planning Minister MA Mannan said the government has rolled out stimulus packages so that the garment sector remains unaffected by the pandemic. "We want to work together with all the stakeholders..." The minister also mentioned that Bangladesh Bureau of Statistics is conducting a study to know the socio-economic status of people, including the garment workers, amid the pandemic. At the virtual meeting, Jasmin Shila, former operator at a garment factory, said she and her family have been going through a tough time since she and her husband lost their jobs. She contacted some factories for a job but couldn't find one as all of those had sufficient manpower. Nazma Akter, executive director of Awaj Foundation, said that when the owners started shutting factories in big numbers in late March, many workers lost jobs. Later, many of those who still had jobs didn't return to their workplaces though international retailers and brands reinstated a significant number of work orders for local apparel manufacturers, she noted. Mahfuz Anam, editor and publisher of The Daily Star, said the importance of the garment sector is immense as more than four crore people are directly or indirectly involved in the sector which accounts for 84 percent of the country's annual exports. Nazneen Ahmed, senior research fellow at Bangladesh Institute of Development Studies, suggested creating a database of retrenched workers so that they can be given jobs in factories when normalcy returns in business activities. Referring to the measures to protect workers from Covid-19, Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said those were not adequate to keep the workers safe from virus infections. George Faller, chief technical adviser of the ILO's RMG Programme, said "Throughout, the ILO has been working with the government of Bangladesh in preparing several Covid19 guidelines and training on workplace safety and health and labour relations." Banasree Mitra Neogi, gender adviser to the MJF, said female workers must be protected through enforcement of legal measures at workplaces. The survey found that the majority of the respondents reduced food intake, started depending on loans and felt job insecurity and mental pressure, added Banasree. SM Shahed Hossain, human resources manager at the Chattogram-based Cliffton Textiles, said his factory was shut for one month between March and April this year because of the pandemic. But none of the workers was terminated. Home Indonesia initiates safeguard probe of RMG import (Source: Jasim Uddin, New Age Business, October 04, 2020) If duty imposed, Bangladesh apparel export would be hurt Indonesia has initiated a safeguard investigation regarding its import of apparel products that may negatively affect Bangladesh’s export of the products to the Southeast Asian country. Indonesian Safeguards Committee of the ministry of trade on Friday notified the issue to the World Trade Organisation. The committee said that it initiated the investigation regarding the import of the articles of apparel and clothing accessories following an application from the Indonesia Textile Association for a safeguard measures against the import of the products. The move, though not any country-specific, came at a time when both Bangladesh and Indonesia are in negotiations to enter into a preferential trade agreement (PTA). The next round of negotiations will be held in October 21-22. The two countries are scheduled to hold meeting today on the rules of origin issue for the PTA. The latest development may affect the negotiation process as well as Bangladesh’s export to the country if Indonesia finally imposes any safeguard duty after the investigation is completed, trade experts and exporters said. Bangladesh in the last fiscal year 2019-2020 exported readymade garment products worth $27.91 million to Indonesia, which is more than 54 per cent of the country’s total export of worth $51.42 million to Indonesia. Of the $27.91 million, the value of knitwear products export was $14.48 million and the amount of woven export was $13.44 million, according to Export Promotion Bureau data. According to the WTO, a safeguard investigation seeks to determine whether increased imports of a product are causing, or is threatening to cause, serious injury to a domestic industry. During a safeguard investigation, importers, exporters and other interested parties may present evidences and views and respond to the presentations of other parties, it stated. A WTO member may take a safeguard action such as the restricting of imports of a product temporarily only if the increased imports of the product are found to be causing, or threatening to cause, serious injury to the local producers, according to the WTO. Evaluating the application of the association, Indonesia in its notification said that there was a sufficient evidence to justify the initiation of a safeguard investigation. The products that fall under the investigation include overcoats, suits, shirts, blouses, tshirts, singlets and other vests, jerseys, pullovers, cardigans, babies’ garments and clothing accessories, other made up clothing or parts of garments, jackets, blazers, trousers and some other items. A senior trade official on Sunday told New Age that though the safeguard investigation was not any country-specific move, it would create trouble in the PTA negotiation process. There is no provision in the draft PTA of excluding Bangladeshi products from such types of duties, he said. Signing a PTA will not bring any expected outcome for Bangladesh if such duty is imposed as RMG products dominates the Bangladesh’s export to Indonesia, he said. The commerce ministry and the Bangladesh Trade and Tariff Commission will work on the issue, he added. Replying to a question whether Bangladesh’s apparel export would be affected if Indonesia imposes safeguard duty after investigation, Bangladesh Garment Manufacturers and Exporters Association Rubana Huq said, ‘Every bit counts.’ She said that it was important to have the ASEAN as a market, which is projected to grow into the 4th largest economy by 2030. It is also important to explore fashion wear suited for the Muslim population in Indonesia, she said. So, for the sake of both market and diversification, Bangladesh should not lose focus on the ASEAN market, she added. According to the Indonesian notification, stakeholders having substantial interests and interested parties in this investigation should submit written request within 15 days from the date of initiation October 1.
Source: The Daily Star
Weaving is a centuries-old tradition in the Philippines which is deeply rooted in the culture of many tribes and provinces, who each have their own particular pattern or style to tell their history or way of life. It has also become a source of livelihood for many communities. Through weaving, they are able to make clothing, textiles, banigs (or woven mats), and other items with different materials. One material used in weaving is indigenous grass. With an abundance of the raw material in the environment, it’s easy for locals to collect the material and eventually cultivate them for continuous use. LARA, a local brand in Samar, intends to use the traditional art and process of weaving with indigenous materials to produce contemporary fashion and lifestyle creations. The brand’s name came from the Waray term of “to weave,” which best describes its function. “It [LARA] puts Samar banig into the limelight with four main product lines – bags, footwear, accessories and home décor,” said Nen Ramos, the project head of LARA Samar. She added that the brand is a collaborative, passion project between Spark Samar, a tourism campaign meant to promote the beauty and culture of the region, the artisan banig weavers of Basey, Samar, and a pool of creative consultants. Examples of their products include bags of all shapes, sizes, and functions, pouches, and wallets.
Indigenous grass as a key element
In making the products, LARA sticks to the custom of using indigenous grass that grows aplenty in the region. But aside from the usual buri (palm tree) or pandan leaves, the brand opted to use tikog grass, a jointless grass more sturdy than pandan or buri, which is dried and woven into different shapes and patterns. Tikog, or ticog, is a special reed grass that grows in swampy areas along the rice fields. It acts like a sponge because it can hold higher volumes of water during the rainy season and release moisture into the soil during the dry season. Banig weaving using tikog is a century-old craft in one of the oldest towns in the Province of Samar–the Municipality of Basey. “Making a banig requires passion, artistry and a lot of hard work. Artisans from LARA Samar shared to us the procedure on how to make a banig,” Ramos said. First, locals harvest the grass that matches the desired length to make a woven product. The grass is then exposed to direct sunlight until completely dried. Ramos explained that the drying process gives a shiny brown tone to the grass and strengthens the fiber as well. Next, the dried tikog is sorted according to length before being dyed with the desired colors needed to make intricate designs. Lastly, the grass is flattened prior to undergoing the weaving process. Since the reed grass grows in abundance in the swampy areas along rice fields, the weavers have no trouble acquiring the raw material, provided that these are given a clean environment to grow in.
Rebuilding a city through weaving
According to Ramos, LARA reinvents the traditional art of weaving, a century-old craft that is the lifeblood of one of the oldest towns of Samar – the Municipality of Basey. “The weavers draw inspiration from the changing times, while remaining grounded on the old ways. They have mastered how to tweak and tinker with weaving and patterns, transforming the banig into modern fashion and lifestyle pieces that pay homage to the evolving scenes of their day-to-day lives. No two pieces are exactly the same because each pattern has a different story to tell. Through the delicate weaving and intricate patterns, the weavers are able to translate their devotion to this art form,” she said. LARA is the brainchild of Samar Governor, now Second District Congresswoman Ann Tan, along with Spark Samar, the tourism arm of the province. “When Typhoon Yolanda ravaged the town, the Baseynon’s reinvented the banig as a means to rebuild their communities, transforming the lowly sleeping mat into bags, accessories and even home décor,” Ramos said. After noticing the potential of the modernized banig, Congresswoman Tan gathered the four big banig houses of Basey and challenged them to come up with designs that could compete in the global, high-end fashion market. The weavers took the challenge to heart, thus creating LARA which is a part of Spark Samar’s Development Agenda of uplifting the lives of those in the marginalized sectors of the province. As a creative platform, the brand challenged the weavers of Basey to modernize the banig as a means to rebuild their communities after Typhoon Yolanda. Because of the support and encouragement given by Tan and Spark Samar, Ramos attests that the weavers have developed a deeper sense of confidence–design-wise. “They are now twice as eager to innovate and push boundaries, transforming traditional woven products into contemporary pieces like bags, accessories, shoes and even home décor,” she said.
The LARA collection
Presently, there are four collections in LARA. These are the Primera, Bulawan, Amon, Maqueda, Kinabuhi, and Heritage. For its first collection, the Primera, the brand featured colorful, leafy designs. But in Bulawan, the brand’s second collection, LARA takes inspiration from the pre-colonial patterns of the indigenous tribes in the Philippines. “As an ode to our great Waray ancestors, century old prints on fabrics are reinterpreted on a new canvas-Samar banig. Bulawan in Waray means gold. LARA paints the season with luxury using metallic hues aside from the classic, natural colors,” Ramos said. On the other hand, the Amon collection was influenced by the indigenous flora and fauna endemic in Samar Island which is then translated into the art of banig-embroidery. Promoting the beauty and culture of Samar is also the theme for the Maqueda and Kinabuhi collections. The Maqueda collection is derived from Maqueda Bay, the fishing ground whose bounty feeds the capital City of Catbalogan and its surrounding municipalities. In the meantime, the Kinabuhi (meaning livelihood) collection showcases through weaving and embroidered symbolic images the livelihood and culture of Samar. Lastly, the Heritage collection presents two types of weaving: Basey’s banig weaving and the textile patterns from the Kalinga province in the north. “Together they form a fusion of modern tapestries on everyday bags that reflect both form and function while exploring the infinite possibilities of fusion weaves together,” Ramos said.
Source : Manila Bulletin
