Ajay Bhushan Pandey appointed as new Finance Secretary
The Appointments Committee of the Cabinet (ACC) has approved the designation of Ajay Bhushan Pandey as the new Finance Secretary. Pandey currently is the Revenue Secretary under the Union Finance Ministry. He will replace the incumbent Finance Secretary Rajiv Kumar.
Pandey, a 1984 batch IAS officer from the Maharashtra cadre, is known for his work with the Unique Identification Authority of India (UIDAI). He joined the Aadhaar-issuing authority on September 1, 2010, before the biometric identification framework was even launched. The first Aadhaar number was issued a few weeks after his appointment. He spent nine years with UIDAI.
Pandey holds a BTech degree from IIT Kanpur. He also has MS and PhD degrees in Computer Science from the University of Minnesota.
Slowdown Blues: Fitch cuts India's FY20 GDP forecast to 4.9%
Fitch Solutions on Monday said it has lowered its 2019-2020 (FY20) GDP growth forecast for India to 4.9 per cent, citing weak domestic demand and supply chain disruptions due to the coronavirus outbreak. The agency expects economic growth to pick up to 5.4 per cent in financial year 2020-21.
"We at Fitch Solutions are revising down our forecast for India's real GDP growth to 4.9 per cent in FY20, from 5.1 per cent previously, and 5.4 per cent in FY21, from 5.9 per cent previously," the agency said in its outlook for the country.
The global rating agency warned that India's export manufacturing sector may be impacted by disruption in the automotive and electronics supply chain from the ongoing COVID-19 outbreak in China, which took the death toll in China to 2,912, and worldwide to more than 3,000.
The manufacturing sector, which constitutes 14 per cent of GDP growth, remained weak over the near term. The contraction in manufacturing eased slightly to 0.2 per cent in Q3, from 0.4 per cent in Q2.
"Our revision is due to our view for disruption in the automotive and electronics supply chain from the ongoing Covid-19 outbreak in China to weigh on India's export manufacturing sector, and for this to have negative knock-on effects on the broad services sector," Fitch Solutions said.
The development comes days after India's real GDP growth decelerated to 4.7 per cent in third quarter ended December 31, 2019, due to weak consumption, a contraction in gross fixed capital formation and a smaller net exports contribution. While the gross fixed capital growth fell by 4.5 per cent, the government consumption growth slipped to 11.8 per cent from 13.2 per cent in the second quarter.
The government has also revised the GDP figures for first and second quarters of this fiscal to 5.6 and 5.1, respectively. It expects GDP growth during the entire financial year 2019-20 to be at 5 per cent. This pegs GDP estimates for the fourth quarter of FY20 to 4.6 per cent.
"A failure of the FY21 Union Budget to provide support to the industry will also bring little reprieve for a sluggish industry already coming under heavy pressure from a credit squeeze following the collapse of several key Non-Bank Financial Companies (NBFCs)," it said.
Fitch expects a slight pick-up in growth in the next fiscal, assuming that the virus spread would come down from June, which may lead to a broad-based improvement in economic activity.
"We expect manufacturing activity to come under further pressure from weak domestic demand and also supply chain disruptions due to the Covid-19 outbreak, which started in China. Weak manufacturing activity would also have a knock-on impact on slowing services growth," it said.
The agency expects manufacturing and services to pick up in FY21. "We also expect economic activity to be supported by an improvement in the agriculture sector through better harvest prospects and fiscal support announced in the FY2020-21 Union Budget."
Slowdown over? GDP growth rises 4.7% in December quarter
Indian economy finally had a breather as GDP growth showed a slight uptick in December quarter, after falling for six quarters in a row. India's Gross Domestic Product (GDP) grew at 4.7 per cent in quarter ended December 31, 2019, showed data released by National Statistical Office on Friday.
"GDP at Constant (2011-12) prices in Q3 of 2019-20 is estimated at Rs 36.65 lakh crore, as against Rs 35 lakh crore in Q3 of 2018-19, showing a growth of 4.7 per cent," Ministry of Statistics and Programme Implementation said in a statement.
Economic growth has been falling since March quarter of FY18 when it was pegged at 8.13 per cent. Last quarter, GDP growth rate reached 4.5 per cent, the lowest in six and a half years, due to subdued expansion in agriculture, manufacturing, and government expenditure. India's economic growth had plunged 2.2 per cent in FY19 alone - from 8 per cent in the first quarter to 5.8 per cent in the last.
Analysts were expecting Indian economy to start on the path to recovery in December quarter, owing to rise in rural demand, government spending in welfare schemes and private consumption.
Although signs are good, Indian economy is not out of the woods yet. GDP growth has to increase a great deal if India is to realise its dream of becoming a $5 trillion economy by 2024.
Moreover, economists believe Indian economy will remain under strain due to the coronavirus outbreak in China, which has crippled the global supply chain. The crisis is expected to have a major impact on several Indian industries, including pharmaceuticals, electronics, consumer durables, automobile, among others.
Petronet LNG to buy super-chilled fuel in 2024 to feed India's growing demand
Petronet LNG, the country's largest importer of liquefied natural gas (LNG) in India, is looking to buy the super-chilled fuel through a long term contract starting from 2024, according to a document reviewed by Reuters.
It has issued a Request for Information (RFI) indicating an interest to buy about 1 million tonnes per annum (mtpa) of LNG for 10 years starting from 2024, with the possibility to extend, according to the February 19 document.
A request for information is a common practice to ask for written information about the capabilities of various LNG sellers to help them make more informed buying decisions.
Petronet's Director of Finance Vinod Kumar Mishra declined to comment on the RFI.
Petronet's request comes amid a trend among LNG buyers to move away from long-term contracts with fixed pricing to shorter contracts with lower volumes and more flexible terms. However, Indian companies have sought longer contracts as they expect domestic gas demand to increase.
The cargoes will be bought on a price formula linked to both Henry Hub natural gas futures in the United States and Dutch TTF gas futures and shipped on a delivered ex-ship (DES) basis, the document showed.
Indian companies typically price their LNG contracts on an oil-linked basis while some are tied to the Henry Hub, two sources familiar with LNG imports into India said. Contracts priced on a TTF basis are rare, the sources added.
Petronet is asking for suppliers to provide information related to the delivery and pricing of cargoes as well as flexibility that the suppliers can provide, including volumes and destination, the document stated.
Suppliers must respond by February 26 and Petronet will shortlist the five most competitive suppliers.
The company will analyse supply offers as well as potential LNG terminal investments if required by the suppliers.
Petronet is already in talks with several companies including U.S. based Tellurian and NextDecade Corp to buy LNG.
It currently has long-term contracts with Qatar Petroleum and Exxon Mobil Corp to lift about 10 mtpa of supply.
India wants to raise the share of gas in its energy mix to 15% by 2030 from the current 6.2% to reduce pollution, including the capital New Delhi.
Big trade deal coming soon; talks are on: PM Modi
Prime Minister Narendra Modi, during a joint press briefing with US President Donald Trump, said India and USA would soon start talks on a big trade deal. "Our commerce ministers have had positive talks on trade. Both of us have decided that our teams should give legal shape to these trade talks. We also agreed to open negotiations on a big trade deal," said PM Modi.
Bilateral trade between the two countries had seen two-digit growth and increased trade stability in the last three years, he said.
President Trump, too, said that India and USA were at the peak of their relationship and expected that the countries would soon agree upon a comprehensive "trade deal". Trump on Monday had termed Modi a "tough negotiator" saying the two countries would sign one of the biggest trade deals. India and USA were supposed to sign a trade deal before Trump's visit, but both the countries failed to reach an agreeable deal.
During an interaction with reporters at the Joint Base Andrews outside Washington last week, Trump said, "Well, we can have a trade deal with India, but I'm saving the big deal for later on."
"We're doing a very big trade deal with India. We'll have it. I don't know if it'll be done before the election (in November), but we'll have a very big deal with India," he added. Trump, forcefully pursuing his 'America first' policy, has previously described India as a "tariff king" for imposing "tremendously high" tariffs on American products.
India is demanding exemption from high duties imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their Generalised System of Preferences (GSP), greater market access for its products from sectors including agriculture, automobile, auto components and engineering.
On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items and medical devices, and cut on import duties on some ICT products. The US has also raised concerns over high trade deficit with India which was USD 16.9 billion in 2018-19.