Junior Digest

New Delhi, Feb 27,2021: Prime Minister Narendra Modi on Friday asked the financial sector to create innovative products for farmers, the fishing community, street vendors and Self Help Groups.

He said Aatmanirbhar Bharat will not be made only by big industry and big cities. Aatmnirbhar Bharat will be created in the villages by the hard work of small entrepreneurs and common people.

He said the capability of Self Help Groups from services to manufacturing and their financial discipline make them an ideal channel for investment in the rural infrastructure.

“It is not just a welfare issue but is a great business model,” said the Prime Minister, addressing a webinar on Budget and the financial sector.

Mr Modi also called for increased credit flow to businesses.

He said the government understands the uncertainties of business and recognises that every business decision is not underlined by bad intentions.

In such a scenario, it is the responsibility of the government to stand by business decisions taken with clear conscience.

“We are doing this and will continue to do so,” Mr Modi said, adding that mechanisms like insolvency and bankruptcy code, are assuring the lenders and borrowers.

The Prime Minister said as India’s economy gets bigger it is equally important for credit flow to start growing rapidly.

He lauded the excellent work of fintech startups in creating new and better financial products for new startups and their exploration of every possibility in this sector.

He added the fintechs have a very high participation in the startup deals that have taken place in the Corona era as well.

He cited experts that this year there would be a great momentum for the financial sector in India.

TOKYO Nov,10,2020: Japanese Prime Minister Yoshihide Suga instructed his cabinet on Tuesday to compile a package of stimulus measures to revitalise an economy hit by the coronavirus pandemic, the country’s economy minister said.
The package aims to cushion the blow from COVID-19, assist structural changes in the economy and boost productivity through digitalisation, Economy Minister Yasutoshi Nishimura told a news conference after a regular cabinet meeting.

“We’ll want to consider government spending that will attract private investment,” Nishimura said, adding the government will compile the package as soon as possible.

Japan’s economy is expected to have rebounded in the third quarter after posting a record postwar contraction in the preceding three-month period, when a nationwide state of emergency over the pandemic paralysed economic activity.

New Delhi/Washington, Jun 24 ,2020: The International Monetary Fund (IMF) on Wednesday forecast sharpest slump in Indian economy, projecting a contraction of 4.5 per cent in 2020 owing to COVID-19-induced lockdown and slower recovery.
‘India’s economy is projected to contract by 4.5 per cent following a longer period of lockdown and slower recovery than anticipated in April.’, the IMF’s World Economic Outlook report read.
Economic data available at the time of the April 2020, WEO forecast indicated an unprecedented decline in global activity due to the COVID-19 pandemic.
In emerging market economies, the average fiscal response to the pandemic is now estimated at 5 per cent of GDP, sizable but less than in advanced economies. Yet fiscal deficits are projected to widen sharply to 10½ per cent of GDP on average in 2020, more than double the level last year, the IMF said.
Many emerging markets have scaled up their support. India has unveiled liquidity support (4½ per cent of GDP) through loans and guarantees for businesses and farmers and equity injections into financial institutions and the electricity sector.
The Washington-based lender also revised down its forecast for the global economy amid the mounting COVID-19 fallout, projecting a 4.9 per cent contraction in 2020.
The latest projection is 1.9 percentage points below the World Economic Outlook (WEO) forecast released in April, indicating a grimmer economic outlook as the pandemic continues to ripple across the globe.
“Compared to our April World Economic Outlook forecast, we are now projecting a deeper recession in 2020 and a slower recovery in 2021,” IMF Chief Economist Gita Gopinath said in a virtual news conference, noting that these projections imply a cumulative loss to the global economy over two years of over 12 trillion US dollars from the crisis.
“The downgrade from April reflects worse than anticipated outcomes in the first half of this year, an expectation of more persistent social distancing into the second half of this year, and damage to supply potential,” Gopinath told reporters.
Advanced economies are projected to contract 8 per cent this year, 1.9 percentage points lower than the forecast in the April WEO.

New Delhi , January 30 ,2021: The Economic Survey has compared those states that implemented Pradhan Mantri Jan Arogya Yojana (PMJAY) and those which did not and says it has reflected significant improvements in several health outcomes in states that implemented the scheme.
It says that the sates which adopted the programme experienced greater penetration of health insurance, experienced a reduction in infant and child mortality rates, realized improved access and utilization of family planning services, and greater awareness about HIV/AIDS.
The Economic Survey 2020-21 was tabled by Finance Minister Nirmala Sitharaman in Parliament on Friday.
While some of these effects stemmed directly from enhanced care enabled by insurance coverage, others represent spillover effects due to the same.
“Even though only a short time has elapsed since its introduction, the effects that are identified by the survey underscores the potential of the programme to significantly alter the health landscape in the country, especially for the vulnerable sections,” a release said.

Drawing comparison between data from West Bengal with that of the neighbouring states of Bihar, Assam and Sikkim, the Economic Survey says that the proportion of households that had health insurance increased in Bihar, Assam and Sikkim from 2015-16 to 2019-20 by 89 per cent while it decreased by 12 per cent over the same period in West Bengal.
It says that in addition, from 2015-16 to 2019-20, infant mortality rates declined by 20 per cent for West Bengal. The decline was 28 per cent for the three neighbouring states.
“Similarly, while Bengal saw a fall of 20 per cent in its under-5 mortality rate, the neighbours witnessed a 27 per cent reduction. Modern methods of contraception, female sterilization and pill usage went up by 36 per cent, 22 per cent and 28 per cent respectively in the three neighbouring states while the respective changes for West Bengal were reportedly negligible,” the survey said.
It said while West Bengal did not witness any significant decline in unmet need for spacing between consecutive kids, the neighbouring three states recorded a 37 per cent fall.
Findings have also revealed that various metrics for mother and child care improved more in the three neighbouring states than in West Bengal.

New Delhi, Feb 1,2021: The Goods and Services Tax (GST) revenue collection for January has almost touched Rs 1.20 lakh crore, the Ministry of Finance said here on Sunday.

‘The gross GST revenue collected in the month of January till 1800 hrs on January 31 is Rs 1,19,847 crore, of which CGST is Rs 21,923 crore, SGST is Rs 29,014 crore, IGST is Rs 60,288 crore (including Rs 27,424 crore collected on import of goods) and Cess is Rs 8,622 crore (including Rs 883 crore collected on import of goods),’ the Ministry said in a statement here.

The total number of GSTR-3B Returns filed for the month of December up to January 31 is Rs 90 lakh. The government has settled Rs 24,531 crore to CGST and Rs 19,371 crore to SGST from IGST as regular settlement, it added.

The total revenue earned by the Central Government and the state governments after regular settlement in the month of January is Rs 46,454 crore for CGST and Rs 48,385 crore for the SGST.

‘In line with the trend of recovery in the GST revenues over past five months, the revenues for the month of January are eight per cent higher than the GST revenues in the same month last year, which in itself was more than Rs 1.1 lakh crore,’ said the statement.

During the month, revenues from import of goods were 16 per cent higher and the revenues from domestic transaction (including import of services) were six per cent higher than the revenues from these sources during the same month last year.

The GST revenues during January have been the highest since introduction of GST and almost touched the Rs 1.2 lakh crore mark, exceeding the last month’s record collection of Rs 1.15 lakh crore.

GST revenues above Rs 1 lakh crore for a stretch of last four months and a steep increasing trend over this period were clear indicators of rapid economic recovery, post the pandemic.

Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax and Customs IT systems and effective tax administration, have also contributed to the steady increase in tax revenue over the past few months.

‘The average YoY growth in GST revenue over the first four months in the second half of the financial year has been eight per cent, as compared to (-) 24 per cent during the first half of the year,’ the statement added.

Singapore, Aug 18 ,2020: Singapore has announced USD 5.8 billion to extend a wage subsidy programme to next March, as most sectors continue to struggle amid the coronavirus pandemic, reported South China Morning Post.
The Deputy Prime Minister and Finance Minister Heng Swee Keat believe that this announcement will help the companies to retain their workers.
South China Morning Post reported that unemployment here stands at 2.9 per cent, up from 2.4 per cent in the January-March period and not far off the 3.4 per cent peak during the Global Financial Crisis.
“[The scheme] draws heavily on our reserves and risks trapping our workers in unviable businesses,” Heng was quoted as saying.
He further said that USD 5.8 billion plan, apart from the four sets of stimulus that were announced between February and May, would be financed with the reallocation of funds from “other areas such as development expenditures that were delayed by COVID-19”.
South China Morning Post also reported that the aerospace, aviation and tourism sectors would be provided with a government offset of 50 per cent of the first S$4,600 of workers’ monthly wages until next March.
“Some sectors are also recovering faster than others. I will, therefore, adjust support based on the projected recovery of the different sectors,” he said.
Besides the wage subsidy boost, the other measures included “SingapoRediscovers” vouchers worth S$320 million that citizens can spend in the local tourism sector.
“Local consumption will not fully make up for tourist spending, but I hope Singaporeans will take the opportunity to explore our local culture and heritage, nature, art, and architecture,” he added.
South China Morning Post that the government, last week, had downgraded its GDP forecast to between -7 and -5 per cent from between -4 and -7 per cent after the trade-reliant economy shrank 13.2 per cent in the second quarter – more than the 12.6 per cent drop expected.

LONDON/BRUSSELS ,Dec 31,2020: British lawmakers approved Prime Minister Boris Johnson’s post-Brexit trade deal with the European Union on Wednesday, as both sides looked to begin a new chapter of relations just days before their divorce becomes a reality.

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Britain and the European Union signed the deal on Wednesday and the British parliament will finalise its implementation, ending over four years of negotiation and safeguarding nearly a $1 trillion of annual trade.

Both sides said it was a chance to begin a new chapter in a relationship forged as Europe rebuilt after World War Two, but which has often seen Britain as a reluctant participant in ever-tighter political and economic integration.

Johnson, in a specially convened sitting of parliament, said he hoped to work “hand in glove” with the EU when its interests aligned, using Britain’s new-found sovereignty to reshape the British economy.

“Brexit is not an end but a beginning,” Johnson said. “The responsibility now rests with all of us to make the best use of the powers that we regain, the tools that we’ve taken back into our hands.”

Parliament’s lower house voted 521 to 73 in favour of the deal.

Britain’s Queen Elizabeth gave final approval to the legislation which enabled the government to implement and ratify the UK’s trade deal with the European Union. The so-called Royal Assent was effectively a rubber-stamp for the law which passed through parliament.

“House of Lords is notified of Royal Assent to the European Union (Future Relationship) Act,” the House of Lords said in a tweet after midnight.

The deal has been criticised on several fronts since it was agreed on Dec. 24. The opposition Labour Party say it is too thin and doesn’t protect trade in services, fishermen rage that Johnson has sold out their interests, and Northern Ireland’s status remains subject to much uncertainty.

Nevertheless, Johnson has won the support of his party’s hardline Brexiteers – delivering a break with the EU far more radical than many imagined when Britain shocked the world in 2016 by voting to leave.

Long-time eurosceptic lawmaker Bill Cash said Johnson had saved Britain’s democracy from four decades of “subjugation” to Brussels: “Like Alexander the Great, Boris has cut the Gordian knot.”

Johnson said he hoped to end the “old, tired, vexed question of Britain’s political relations with Europe” and instead become “the best friend and ally the EU could have.”
NEW CHAPTER

Earlier, against a backdrop of EU flags, top EU officials signed the treaties struck on Dec. 24 to preserve Britain’s tariff- and quota-free access to the bloc’s 450 million consumers.

“It is of the utmost importance for the European Union and the United Kingdom to look forward, in view of opening a new chapter in their relations,” the EU said in a statement.

Britain formally left the EU nearly a year ago and the new partnership agreement will regulate ties from Jan. 1 on everything from trade to transport, energy links and fishing.

After both sides have signed, the deal will be in place until the end of February, pending final approval by the European Parliament to make it permanent.

Nov 17,2020:India has granted other countries “unfair” trade and manufacturing advantages “in the name of openness,” Foreign Minister S. Jaishankar said in a speech criticizing the effects of globalization on Monday. Speaking just a day after the signing of the Regional Comprehensive Economic Partnership (RCEP) in 15 countries, Jaishankar was particularly critical of trade deals which he said had forced India to “deindustrialize”.

“In the name of openness, we have allowed subsidized products and unfair production advantages from abroad to prevail. And all the while, it has been justified by the mantra of an open and global economy, ”Jaishankar said at the Deccan Dialogue conference supported by the Ministry of External Affairs.

Without referring directly to RCEP, the world’s largest trading bloc from which India decided to withdraw a year ago, Jaishankar said the government has decided to move away from trade deals, in favor of ‘an’ Aatmanirbhar Bharat (Autonomous India). Policy where India could decide the rules and consolidate “a global national power”.

“The past trade agreements have had the effect of deindustrializing certain sectors. The consequences of future commitments would lock us into global commitments, many of which are not to our advantage. Those who advocate openness and efficiency do not present the full picture, ”Jaishankar said, adding that India was not“ turning its back on the world ”but strengthening itself.

Jaishankar’s comments indicate that India is not currently considering an offer from RCEP countries to join the group at a later stage. In a separate statement, which Japan is said to have drafted, all RCEP countries pledged to resume talks with India, if and when it decides to reapply in writing.

Kolkata , September 2 ,2020: West Bengal Chief Minister Mamata Banerjee on Wednesday wrote a letter to the Prime Minister Narendra Modi on Centre’s failure to pay Goods and Services Tax (GST) dues to states citing revenue shortfall, and urged him to “intervene” on the matter “to rekindle the trust between states and the Centre at the GST Council”.
“I am deeply anguished by the GST imbroglio, which tantamounts to a betrayal of the trust and moral responsibility of the Government of India towards the states, violating the very premise of federalism,” said Banerjee in the letter. ANI has a copy of the letter.
She said states gave up 70 per cent of their taxing powers to usher in the GST regime on the promise of full compensation of shortfall in GST collection for five years by the Central government on an agreed formula.
Banerjee added that, at a time when due to the pandemic many states are unable to pay salaries of their employees and pensions of their senior citizen, they are being “thrust with two unilateral options”, both of which require them to borrow a large amount of money.
“The Centre must borrow to meet the shortfall at this critical hour,” said Banerjee.
She also added that the Central government have the power to monetise its debt, while the states do not hold the same power.
“Government of India gets a much lower interest on such borrowing while the interests on such borrowings by the state would be much higher,” said the chief minister.
She further said the Central government can raise the resource to service its debt, the states cannot service huge additional debts when their “finances are on the verge of collapse”.

Stockholm, Oct 12,2020: The 2020 Nobel Prize in Economic Sciences was on Monday awarded to US economists Paul R Milgrom and Robert B Wilson for their work on auction theory and invention of new auction formats, benefitting sellers, buyers and taxpayers around the world.

“The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2020 to Paul R Milgrom, Stanford University, US and Robert B Wilson, Stanford University, US, for improvements to auction theory and inventions of new auction formats,” the academy said in a statement.

Their theoretical discoveries have improved auctions in practice.

“Paul Milgrom and Robert Wilson, have studied how auctions work. They have also used their insights to design new auction formats for goods and services that are difficult to sell in a traditional way, such as radio frequencies. Their discoveries have benefitted sellers, buyers and taxpayers around the world,” it added.

Robert Wilson developed the theory for auctions of objects with a common value – a value which is uncertain beforehand but, in the end, is the same for everyone. Examples include the future value of radio frequencies or the volume of minerals in a particular area.

He showed why rational bidders tend to place bids below their own best estimate of the common value: they are worried about the winner’s curse – that is, about paying too much and losing out.

Paul Milgrom formulated a more general theory of auctions that not only allows common values, but also private values that vary from bidder to bidder.

He analysed the bidding strategies in a number of well-known auction formats, demonstrating that a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values during bidding.

“The duo of academics–Milgrom and Wilson– invented new formats for auctioning off many interrelated objects simultaneously, on behalf of a seller motivated by broad societal benefit rather than maximal revenue. In 1994, the US authorities first used one of their auction formats to sell radio frequencies to telecom operators. Since then, many other countries have followed suit,” the statement further added.

“This year’s Laureates in Economic Sciences started out with fundamental theory and later used their results in practical applications, which have spread globally. Their discoveries are of great benefit to the society,” Peter Fredriksson, chair of the Prize Committee said.

Born in 1948 in Detroit, Mr Milgrom received his doctorate in 1979 from Stanford University. He is a professor in the same university.

Mr Wilson, born in 1937 in Geneva, US, educated from Harvard University, Cambridge, US. Now, Mr Wilson is professor of Management at Stanford University.

According to a release, the prize money 10 million Swedish kronor, will be shared equally between the Laureates.

Last year, Indian-American economist Abhijit Banerjee and Esther Duflo, both of MIT, and Michael Kremer of Harvard were honored for more than 20 years of economic research to develop new ways to study and help in alleviating global poverty.

New Delhi, Feb 1,2021: The Union Budget for 2021-22, presented by Union Finance Minister Nirmala Sitharaman on Monday in Parliament, focused mainly on health and economy battered from Covid-19 crisis.

Over 137 per cent more money was allocated to the Health sector as compared to previous year. For reviving the economy, the government pushed infrastructure projects, created a “bad bank” for bad loans and financial institutions for financing projects and also eased Foreign Direct Investments.

Ms Sitharaman announced a new centrally sponsored health scheme PM Atma Nirbhar Swasth Bharat Yojana of Rs 64,180 crores. Under the new scheme, health and wellness centers, laboratories, research institutes, hospitals and information portals would be setup

Further, Rs 35,000 crore were allocated to the nationwide immunisation programme of Covid-19 vaccines.

A total of Rs 1.97 lakh crore was allocated in next five years for Production Linked Incentive scheme (PLI) schemes in 13 sectors of infrastructure. The main purpose is to enhance manufacturing and job creation.

The government earmarked Rs 20,000 crore to set up Development Financial Institution(DFI) for infrastructure financing. It aims to create a Rs 5 lakh crore lending portfolio to be created under the proposed DFI in three years.

Ms Sitharaman announced setting up of “bad banks”, a move to uplift the banking sector from bad loans.The idea was in discussion for years and has finally come into being.

The “bad bank” will take over the bad loans of various financial institutions which will help these institutions in cleaning their balance sheets.

The government also attempted to revive the agricultural sector by announcing a new farm cess on petrol and diesel. The new cess, to be called as agri infra cess, will be charged Rs 2.5 per litre on petrol and Rs 4 on diesel.

Ms Sitharaman also put a light on the minimum support price (MSP regime) which, according to her, has undergone “sea change” in the last six years as it was now 1.5 times the cost price.

Agriculture sector has become crucial for the government as tens of thousands of farmers from several states have been protesting at the borders of Delhi against the new laws which they feel as anti-farmer and pro-corporate.

The tax slabs were kept unchanged. In a respite to elderlies, the income from pensions and interests for people above 75 years of age was totally exempted from all taxes.

The markets reacted enthusiastically. The Sensex bulled over 2,300 points and settled at 48,600.

Poll-bound states West Bengal, Tamil Nadu, Kerala and Assam found an echo in the Budget.

As per the announcements, Tamil Nadu will get Rs 1.03 lakh crore for building 3,500 km of roads, Kerala Rs 65,000 crore for 1,500 km of roads, West Bengal Rs 95,000 crore for 675 km road and Assam will see 1,300 km roads being constructed.

For labour class, a “One Nation One Ration Card” was announced for providing benefits in unorganised sectors. Last year, the labourers and migrants were hardest hit from Covid-19 crisis and nationwide lockdown due to hardships in getting rationed food and jobs.

This scheme allows beneficiaries to claim their rations from anywhere in the country, especially the migrant workers.

The government will also implement the new labour codes for extending social security benefits with the application of minimum wages across all categories of workers.

The Budget proposed a National Rail Plan for India (2030) to create a ‘future ready’ Railway system by 2030. It aims for 100 per cent electrification of Broad-Gauge routes to be completed by December, 2023.

The Budget also has an urban focus. The Finance Minister announced a Jal Jeevan Mission Urban will be launched with an outlay of Rs 2.87 lakh crore over 5 years which is aimed at universal water supply in all 4,378 urban local bodies, with 2.86 crore household tap connections and liquid waste management in 500 AMRUT cities.

She also announced Urban Swachh Bharat Mission 2.0 with an outlay of Rs1,41,678 crore over 5 years from 2021 focused on complete fecal sludge management, waste water treatment, source segregation, management of waste from urban construction, bioremediation of legacy dump sites.

The Ujjwala scheme will be expanded to over one crore more beneficiaries. We will add 100 more districts in the next three years to the city gas distribution network. A gas pipeline project will be taken up in Jammu and Kashmir.

To further the National Education Policy under the reinvigorating human capital under the Atma Nirbhar Bharat mission, the Minister said a central university will also be established in Leh for accessible higher education at Ladakh.

Data Analytics, AI, ML, MCA 21 version 3.0 will be launched to have additional modules for e-adjudication, consultation, compliance management will be launched.

The Defence sector got around seven per cent more in Union Budget 2021 with compared to last year.

Among other announcements, the Budget proposes to exempt Non-Resident Indian from TDS. It also lowers tax of dividends for Foreign Portfolio Investors.

The interest of Rs 1.5 lakh on loans for affordable houses has been read down. Moreover, the tax benefit for taking loans for affordable houses has been extended till March 31, 2022.

For startups, the government extended the tax holiday till March 31, 2022.

The government said there was a sharp increase in capital budget. The capital expenditure increased to Rs 5.54 lakh crore from 4.12 lakh crore in the previous year. The rise was nearly 34 per cent.

Hailing the Union Budget 2021-22, Prime Minister Narendra Modi said it will enhance India’s self-confidence amid Covid 19 pandemic while asserting that the budget envisions self-reliance.

“The Union Budget 2021-22 has been presented amid unprecedented circumstances…. Amid the situation created by COVID-19. Today’s budget will enhance India’s self-confidence and will instill self-confidence in the world. The budget has the vision of self-reliance and takes along every section of the society,” PM Modi said after the Union Budget was tabled in the Parliament.

The Prime Minister said that the budget focuses on sectors that are related to both wealth and wellness whereas a special impetus is also given on infrastructure and MSME sectors.

Industry heads and leaders called the budget a “well-crafted”. SBI Chairman Dinesh Kumar Khara said the Union Budget has unveiled a set of well-crafted and robust policies that encompasses the vision of an Atmanirbhar Bharat.

Aditya Birla Capital CEO Ajay Srinivasan said the Government has clearly indicated its focus on sustainable and inclusive growth through a strongly expansionary budget.

However, Indian National Congress (INC) reacted sharply, describing the imposition of cess on petrol and diesel in the budget as a “vengeful act” against farmers who took out the tractor rally.

The opposition party said it was a case of “wrong diagnosis and prescription”, and that Finance Minister Nirmala Sitharaman could have been “brave” by extending help to the poor, but chose to be “timid”.

“As expected, the FM has paid special attention to election bound states. She announced large capital outlays for Kerala, Tamil Nadu, West Bengal and Assam,” former Union Minister for Finance and Home Affairs, P Chidambaram said.

“Preelection-boundools: they know that the proposals are only outlays and the actual expenditure will happen only after the schemes are approved and over a period of several years depending upon the pace of implementation,” he added.

The Aam Aadmi Party too expressed disappointment. “The BJP-ruled Central government has again disappointed Delhi in the budget. Delhi has been allocated only Rs 325 crores in the budget while it pays Rs 1.5 lakh crores to the Centre,” Deputy Chief Minister Manish Sisodia tweeted.

Ms Sitharaman again carried “Bahi-Khata”, a traditional ledger of records, instead of a colonial briefcase to present General Budget in Parliament.

The colonial legacy of carrying the Budget papers in briefcase was dropped last year by Ms Sitharaman when she, for the first time in the history of Independent India, carried the Budget in a “Bahi-Khata”, wrapped in a red-cloth.

This was the third consecutive Budget to be presented by Ms Sitharaman and the ninth straight Budget of the NDA government which had come to power in 2014.

Dec 27,2020:China will overtake the United States to become the world’s biggest economy in 2028, five years earlier than previously estimated due to the contrasting recoveries of the two countries from the COVID-19 pandemic, a think-tank said.

“For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China,” the Centre for Economics and Business Research said in an annual report published on Saturday.
“The COVID-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour.”

The CEBR said China’s “skilful management of the pandemic”, with its strict early lockdown, and hits to long-term growth in the West meant China’s relative economic performance had improved.

China looked set for the average economic growth of 5.7 percent a year from 2021-25 before slowing to 4.5 percent a year from 2026-30.

While the United States was likely to have a strong post-pandemic rebound in 2021, its growth would slow to 1.9 percent a year between 2022 and 2024, and then to 1.6 percent after that.
Japan would remain the world’s third-biggest economy, in dollar terms, until the early 2030s when it would be overtaken by India, pushing Germany down from fourth to fifth.

The United Kingdom, currently the fifth-biggest economy by the CEBR’s measure, would slip to sixth place from 2024.

However, despite a hit in 2021 from its exit from the European Union’s single market, the British gross domestic product (GDP) in dollars was forecast to be 23 percent higher than France’s by 2035, helped by the UK’s lead in the increasingly important digital economy.

Europe accounted for 19 percent of output in the top 10 global economies in 2020 but that will fall to 12 percent by 2035, or lower if there is an acrimonious split between the EU and the UK, the CEBR said.

It also said the pandemic’s impact on the global economy was likely to show up in higher inflation, not slower growth.

“We see an economic cycle with rising interest rates in the mid-2020s,” it said, posing a challenge for governments which have borrowed massively to fund their response to the COVID-19 crisis.

“But the underlying trends that have been accelerated by this point to a greener and more tech-based world as we move into the 2030s.”

New Delhi, October 20,2020: Congress leader Shashi Tharoor on Tuesday said that International Monetary Fund’s (IMF) headquarters could be shifted from the US to China as indicated by the current growth projection made by the global organisation after the emergence of COVID-19 pandemic.
“Is the IMF’s relocation to Beijing imminent?” Tharoor posed the question on his Twitter handle.
“The International Monetary Fund’s by-laws specify that its headquarters will be located in the world’s largest economy. For 75 years this placed it in Washington, DC. With the way the US and Chinese economies are moving after #Covid-19, is the IMF’s relocation to Beijing imminent?”
Citing the IMF data, the Congress leader further said that China will be the only major economy to grow this year while the US would shrink by 4.3 per cent.
“The IMF itself says China will be the only major economy to grow this year. It predicts that China will expand 1.9 per cent in 2020, while the U.S. would shrink by 4.3 per cent. China’s growth will accelerate to 8.4 per cent next year, says the IMF, compared to 3.1 per cent in the United States. Challenging!” he said in a tweet.

Geneva [Switzerland], Sep 18 ,2020: Developing countries should invest about 1.2 trillion dollars — on average 3.8 per cent of their GDP — to guarantee at least basic income security and access to essential health care for all in 2020 alone, according to a new policy brief by the International Labour Organisation (ILO).
Since the onset of Covid-19 pandemic, the social protection financing gap has increased by nearly 30 per cent, said the brief titled ‘Financing gaps in social protection: Global estimate and strategies for developing countries in light of the Covid-19 crisis and beyond.’
This is the result of increased need for healthcare services and income security for workers who lost their jobs during the lockdown and the reduction of GDP caused by the crisis.
The situation is particularly dire in low-income countries which need to spend nearly 16 per cent of their GDP to close the gap — around 80 billion dollars.
Even before the Covid-19 crisis, the global community was failing to live up to the social protection legal and policy commitments it had made in the wake of the last global catastrophe — the 2008 financial crisis.
Only 45 per cent of the global population is currently effectively covered by at least one social protection benefit. The remaining population — more than 4 billion people — is completely unprotected.

National and international measures to reduce the economic impact of the Covid-19 crisis have provided short-term financing assistance.
Some countries have sought innovative sources to increase the fiscal space for extending social protection like taxes on the trade of large tech companies, the unitary taxation of multinational companies, taxes on financial transactions or airline tickets.
With austerity measures already emerging even with the crisis ongoing, these efforts are more pressing than ever, the study said.
“Low-income countries must invest about 80 billion dollars, nearly 16 per cent of their GDP, to guarantee at least basic income security and access to essential health care to all,” said Shahrashoub Razavi, Director of the ILO’s Social Protection Department.
“Domestic resources are not nearly enough. Closing the annual financing gap requires international resources based on global solidarity,” she said.
Mobilisation at the international level should complement national efforts, said the ILO report.
International financial institutions and development cooperation agencies have already introduced several financial packages to help governments of developing countries tackle the various effects of the crisis but more resources are needed to close the financing gap, particularly in low-income countries.

PARIS/TOKYO/WASHINGTON,Nov13,2020: G20 countries have agreed for the first time on a common framework for restructuring government debt, in anticipation of the coronavirus crisis leaving some poorer nations struggling to pay and in need of relief.
With the COVID-19 pandemic straining the finances of some developing countries, G20 finance ministers said on Friday that more help was needed than a current temporary debt freeze, which will be extended until June 30, 2021.

Major creditors, including China, will be expected to follow the joint guidelines agreed by the G20, which lays out how debt deemed to be unsustainable can be reduced or rescheduled.

Non-governmental groups said the accord should have gone further by including middle-income countries and forcing private investors to accept cancellations.

The coronavirus crisis has exacerbated problems for the poorest countries, 50% of which are now in or at risk of debt distress and in an early sign of its impact, Zambia is on the brink of becoming Africa’s first COVID-era sovereign default.

IMF Managing Director Kristalina Georgieva last week said African states alone faced a financing gap of $345 billion through 2023 to deal with the pandemic and its economic impact.

“I count on everyone’s constructive spirit to ensure swift and cooperative implementation of the common framework, with several countries already asking for debt treatments, in particular in Africa,” French Finance Bruno Le Maire told his G20 counterparts during an online meeting.

China, which accounted for 63% of overall debt owed to G20 countries in 2019, has been reluctant to acknowledge the need for outright cancellation or reduction of debts.

Under the new framework, creditor countries will negotiate together with a debtor country, which will be expected to seek the same treatment terms from private sector creditors.

The scheme borrows heavily from the rules established by Paris Club, an informal grouping of mostly rich country governments established in 1956, that until now was the only joint forum for negotiating debt restructurings.

The G20 finance ministers said in a joint statement that the new framework aims “to facilitate timely and orderly debt treatment” for countries eligible for the debt payment freeze put in place in April, but which only included private sector creditors on a voluntary basis.

“From now on all interested parties must ensure to implement the common framework. Debt transparency is extremely important,” Japanese Finance Minister Taro Aso told reporters after a G20 conference call, describing the agreement as “historical”.
WAVE OF CRISES

The new framework also goes further by requiring all public creditors to participate, after China was criticised by G20 partners for not including debt owed to its state-owned banks.

Wary about debt write-offs, Beijing has defined the state-owned China Development Bank as a private institution, resisting calls for full participation in debt relief.

While China signed on to the framework, it remained unclear how it would implement the measures, one source familiar with the negotiations told Reuters.

Tim Jones, head of Policy at Jubilee Debt Campaign, said in a statement that the G20 announcement allowed for, but discouraged outright debt cancellation, and did not create a mechanism to compel private sector participation.

“This announcement falls far short of what is needed to tackle the wave of debt crises in poorer countries,” he said.

“With many countries facing debt crises and Zambia today on the verge of default, the G20 need to stop kicking the can down the road,” he added.

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Eric LeCompte, a United Nations adviser on debt and executive director of Jubilee USA Network, said inclusion of private sector creditors was a significant step, but criticised the G20 for failing to include middle-income countries.

“Unfortunately, middle-income countries that will see some of the highest poverty increases due to the crisis, are excluded from this process, LeCompte said.

The Paris Club, which is organised by the French Finance Ministry, and G20 countries had already agreed last month to extend this year’s debt freeze under which they deferred $5 billion in debt servicing to help the world’s poorest countries.

G20 leaders are expected to endorse the common framework at a virtual summit meeting next week.

New Delhi, Oct 27,2020: Union Finance Minister Nirmala Sitharaman attended 4th Annual India Energy Forum by CERA Week on Oct 27. She said, “India’s growth this year will be negative or near zero. Next year India can be one of the fastest growing economies. Festival season has commenced in India, as a result of which I expect the demand to go up and therefore, be sustainable also.” She further said, “Foreign Direct Investment (FDI) inflow between April and August of 2020, grew by about 13% compared to non-COVID 2019’s comparable period. Globally, we are one of the lowest in terms of Corporate Taxation. For any investment which comes into manufacturing and which commences production by 31st March 2023, they shall be paying only 15% Corporate Tax.”

Dec 02,2020: The United States is facing economic crises again and it is essential to move with urgency, Treasury Secretary-nominee Janet Yellen said Tuesday, warning that inaction will produce a self-reinforcing downturn causing yet more devastation.

Yellen made the remark after US President-elect Joe Biden introduced his economic team at the Transition headquarters in Wilmington, Delaware.

I’ve spent my career trying to make sure people can work and achieve the dignity and self-worth that comes with it. Mr. President-elect, I know you’ve done the same. I saw that understanding during the last Great Recession and the Recovery Act that followed, Yellen said.

And now we are facing historic crises again, she said, adding the coronavirus pandemic and its economic fallout have caused much damage to American people and had a disproportionate impact on the most vulnerable among us.

Lost lives. Lost jobs. Small businesses struggling to stay alive or closed for good. So many people struggling to put food on the table and pay bills and rent, she said.

It’s an American tragedy, she added.

And it’s essential that we move with urgency. Inaction will produce a self-reinforcing downturn causing yet more devastation. And we risk missing the obligation to address deeper structural problems. Inequality. Stagnant wages, especially for workers who lack a college education.

Biden said no one is better prepared to deal with this crisis than Yellen. She will be the first Treasury Secretary who was also Chair of the Federal Reserve, Vice Chair of the Federal Reserve, and Chair of the President’s Council of Economic Advisors. Janet is one of the most important economic thinkers of our time, he said.

New Delhi, Feb 25,2021: The Reserve Bank of India has “major concerns” about crypto currency as it could affect financial stability, Governor Shaktikanta Das said on Wednesday.

Das, in an interview with television channel CNBC-TV18, said the central bank has conveyed the same to the government which has plans to bring in a bill in Parliament.

“We have certain major concerns about cryptocurrency. We have communicated them to the government.

“It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide,” he said.

The governor also said he wants to make it very clear that the blockchain technology is different.

“The benefits of it have to be exploited, that is another thing, but on crypto, we have major concerns from the financial stability angle.

“We have shared it with the government and government will consider and take a call.”

The government is reported to be planning to bring in a legislation in Parliament barring individuals and companies from dealing with cryptocurrency.

New Delhi, Nov 23,2020: Chief Economic Adviser K V Subramanian on Monday said India is likely to post current account surplus in the current financial year as there is moderation in import due to under heating of the economy triggered by the COVID-19 crisis.

This crisis is different from what the world witnessed during the taper tantrum, he said while addressing a virtual conference organised by industry body CII.

Taper tantrum phenomenon refers to the 2013 collective reactionary response that triggered a spike in US treasury yields, after investors learned that the US Fed was slowly putting brakes on its quantitative easing (QE) program. This led to a surge in inflation to high double digits emerging economies.

In contrast, he said, the COVID crisis is different and India identified the nature of this crisis and treated it differently from other economic crises of the past.

Noting that COVID crisis is a crisis to demand and primarily a negative shock to demand, Subramanian said, India’s response was suitably crafted to deal with that.

“And that is in fact if you can see is reflected in the fact that, this year we may be having a current account surplus. We had almost USD 20 billion current account surplus in Q1… USD 19.8 billion to be precise. Even if let’s say subsequent quarters do not see that kind of performance, we still will likely have a current account surplus…,” he said.

He further noted that there was impact on growth in the short run because of lockdowns etc and added that because of the efforts of the government, growth is not likely to get affected in the medium to long term due to COVID.

“So, in some sense, compared to a normal emerging economy crisis which is one of overheating of the economy, the COVID crisis is one of under heating of the economy and that is why the reforms, actually, felt very necessary so that the medium to long term growth of the (Indian) economy is not impacted and the potential growth of the economy is kept up high,” he said.

Talking about various reforms, Subramanian said Insolvency and Bankruptcy Code was towards greater formalisation of economy. It was followed by long pending agriculture and labour reforms, he added.

“If you take the agriculture reforms, the MSME definitional changes, the performance-linked incentive (PLI) scheme, the labour reforms, all these together are an attempt to actually change the macro configuration of the economy towards those sectors that are more employment intensive, especially the primary and secondary sectors,” he said.

This is important for sustained growth to happen and that can only happen through robust job creation in the economy, not through jobless growth, he added.

Observing that the idea of Aatmanirbhar Bharat is not anathema to competition, he said self-reliance can never happen without adequate capabilities.

Capabilities are never built in a vacuum but they are built only by competing with the best, he added.

New Delhi, Feb 25,2021: Prime Minister Narendra Modi on Wednesday made a strong pitch for privatisation, saying the Central Government will push ahead with plans to “monetise” and “modernise” the assets of the country.

In a webinar on privatisation, Mr Modi announced the Centre’s asset monetisation and privatisation plan.

Public sector enterprises which do not occupy a position of strategic importance should not be kept functional, the Prime Minister stated.

He said that many public sector enterprises are loss-making and several of them need the support of public money.

“It burdens the economy,” he aded.

“It is government’s duty to support enterprises and businesses. But it is not essential that it should own and run enterprises,” Mr Modi said.

Reiterating the need of privatisation in the country, he said, the push behind privatisation would lead to less governmental interference in people’s lives.

Stressing his vision of “minimum government, maximum governance”, he said, the private sector brings in investment, global best practices, top-quality managers, changes in management and modernisation.

Mr Modi said his government is committed to privatising all PSUs barring four strategic sectors — atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services, where the government will retain a bare minimum presence.