India's GDP contracts by 6.6% in 2020-21: First revised estimates

NEW DELHI, Jan 31: The National Statistical Office (NSO), in its first revised estimates of GDP, has said the Indian economy shrunk by 6.6 per cent in 2020-21, primarily due to the COVID-19 pandemic and nationwide lockdown curbs imposed by the government.

The provisional data released by the government May 2021 had said the GDP contracted by 7.3 per cent in 2020-21.

As per the Ministry of Statistics & Programme Implementation release, real GDP or GDP at constant (2011-12) prices for the years 2020-21 and 2019-20 stands at ₹135.58 lakh crore and ₹145.16 lakh crore, respectively, showing a contraction of 6.6 per cent during 2020-21 as compared to growth of 3.7 per cent during 2019-20.

“Nominal GDP or GDP at current prices for the year 2020-21 is estimated at ₹198.01 lakh crore as against ₹200.75 lakh crore for the year 2019-20, showing a contraction of 1.4 per cent during 2020-21 as compared to growth of 6.2 per cent during 2019-20," the statement said.

At the aggregate level, nominal GVA at basic prices declined by 1.6 per cent during 2020-21 against the growth of 6.9 per cent during 2019-20. In terms of real GVA – GVA at constant (2011-12) basic prices -- there has been a contraction of 4.8 per cent in 2020-21 vs growth of 3.8 per cent in 2019-20, the release added.

During 2020-21, the growth rates of the primary sector (comprising agriculture, forestry, fishing and mining & quarrying), secondary sector (comprising manufacturing, electricity, gas, water supply & other utility services, and construction) and tertiary sector (services) have been estimated as 1.6 per cent, (-)2.8 per cent and (-) 7.8 per cent as against a growth of 1.9 per cent, (-) 6.8 per cent and (-) 8.4 per cent, respectively, in the previous year.

Nominal Net National Income (NNI) or NNI at current prices for the year 2020-21 stands at ₹171.94 lakh crore as against ₹177.17 lakh crore in 2019-20, showing a contraction of 2.9 per cent during 2020-21 as against growth of 6 per cent in the previous year, it stated.

Per Capita Income i.e. Per Capita Net National Income at current prices is estimated at ₹1,32,115 and ₹1,26,855 respectively for the years 2019-20 and 2020-21, it stated.

Time For Contrition, Not Boast: Congress's Takedown Of Economic Survey

NEW DELHI, Jan 31: The Congress today issued a blistering criticism of the economic survey -- which projected an 8 per cent to 8.5 per cent growth in 2022-23 -- saying it will take the BJP government 2 years to just back to the pre-pandemic situation.

"This is a time for contrition and change (of approach), not for boasts and no change," tweeted senior Congress leader P Chidambaram, who was the finance minister in the Manmohan Singh government.

In a series of tweets, Mr Chidambaram said the last two years have "impoverished people". "Millions of jobs have been lost; 84% households have suffered loss of income; 4.6 crore have been pushed into poverty," he added, pointed out that the country now ranks 104 out of 116 countries in the Global Hunger Index.

"The EconomicSurvey2022 is a classic case of "what statistics say" versus "what they actually reveal," tweeted his party colleague Randeep Surjewala.

"It clearly reveals 'Intrinsic Weakness of the Economy' and the 'Gross Economic Mismanagement' by the Modi Government… Govt should be ashamed of the economic ruin caused by misplaced priorities," he added.

"EconomicSurvey2022 fails to assess the brutal impact of high prices on Indians - with massive job losses & erosion of incomes! It ignores the divide - as income of richest Indians increased by 13 Lakh CR, the poorest 15 CR households have seen income reduction of 53%," Surjewala said in other posts.

"Self serving cheerful assessment of economy raises doubts about what the Budget is set out to achieve- which should be to stimulate the ailing economy, revive sectors, boost consumption, encourage investment & create jobs -none of which the survey insists is a problem at all!" read another post.

The dig was at the survey's prediction that country will witness an actual GDP expansion of 9.2 per cent in 2021-22. The figure is higher than 9 per cent growth projection by the International Monetary Fund for the current fiscal, but lesser than Reserve Bank's 9.5 per cent growth forecast for 2021-22.

For the next fiscal, the growth rate figure for the next fiscal projected by the Economic Survey is lesser than the 9 per cent rate of growth for 2022-23 projected by the International Monetary Fund (IMF). "This implies that overall economic activity has recovered past the pre-pandemic levels," the survey noted.

The Economic Survey document was tabled by finance minister Nirmala Sitharaman in Parliament today, a day before the presentation of the Union Budget on February 1.

Senior Congress leader Rahul Gandhi said the government sees high tax collection as its big achievement but does not see the people's pain under the tax burden, referring to finance minister Nirmala Sitharaman's remark that gross tax revenue during April-November 2021 has grown by 50 per cent year-on-year, while the GST mop up remained above ₹ 1 lakh crore mark since July 2021.

"The people of the country are troubled by the burden of tax collection, whereas for the Modi government the tax earnings are a big achievement. There is a difference of perception -- they see only their wealth, not the pain of the people," Gandhi said in a Hindi tweet.

GST collection in January stands at Rs 1.38 lakh crore

NEW DELHI, Jan 31: The goods and services tax (GST) collection crossed the Rs 1.30 lakh crore-mark for the fourth time as the Government of India collected Rs 1,38,394 crore gross GST revenue for January 2022, the Ministry of Finance said on January 31.

The last time the Centre’s GST collection stood below the 1.30 lakh crore mark was in September 2021, when it collected a gross GST revenue of Rs 1.17 lakh crore.

The Government of India recorded its highest monthly GST collection at Rs 1.39 lakh crore in April 2021.

Revenues for the month of January 2022 were 15 percent higher than GST revenues in the same month last year and 25 percent higher than the GST revenues in January 2020, the ministry said.

The union ministry added that the total number of GSTR-3B returns filed up to January 30, 2022, stands at 1.05 crore, including 36 lakh quarterly returns.

“The gross GST revenue collected in the month of January 2022 till 3 PM on 31.01.2022 is Rs 1,38,394 crore of which CGST is Rs 24,674 crore, SGST is Rs 32,016 crore, IGST is Rs 72,030 crore (including Rs 35,181 crore collected on import of goods) and cess is Rs 9,674 crore (including Rs 517 crore collected on import of goods),” the ministry said.

“Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalisation measures undertaken by the Council to correct inverted duty structure,” the Finance Ministry said.

“It is expected that the positive trend in the revenues will continue in the coming months as well,” it added.

Nearly 52 million fewer full-time jobs in 2022, finds ILO’s latest labour market forecast

By Deepak Arora

GENEVA, Jan 20: The International Labour Organization (ILO) has downgraded its forecast for labour market recovery in 2022, projecting a deficit in hours worked globally equivalent to 52 million full-time jobs, relative to the fourth quarter of 2019. The previous full-year estimate in May 2021 projected a deficit of 26 million full-time equivalent jobs.

While this latest projection is an improvement on the situation in 2021, it remains almost two per cent below the number of global hours worked pre-pandemic, according to the ILO World Employment and Social Outlook – Trends 2022 (WESO Trends).

Global unemployment is expected to remain above pre-COVID-19 levels until at least 2023. The 2022 level is estimated at 207 million, compared to 186 million in 2019. The ILO’s report also cautions that the overall impact on employment is significantly greater than represented in these figures because many people have left the labour force.

The downgrade in the 2022 forecast reflects, to some extent, the impact that recent variants of COVID-19, such as Delta and Omicron, are having on the world of work, as well as significant uncertainty regarding the future course of the pandemic.

The WESO Trends report warns of the stark differences in the impact the crisis is having across groups of workers and countries. These differences are deepening inequalities within and among countries and weakening the economic, financial and social fabric of almost every nation, regardless of development status. This damage is likely to require years to repair, with potential long-term consequences for labour force participation, household incomes and social and – possibly - political cohesion.

The effects are being felt in labour markets in all regions of the world, although a great divergence in recovery patterns can be observed. The European and the North American regions are showing the most encouraging signs of recovery, while South-East Asia and Latin America and the Caribbean have the most negative outlook.

The disproportionate impact of the crisis on women’s employment is expected to last in the coming years, the report says. While the closing of education and training institutions “will have cascading long-term implications” for young people, particularly those without internet access.

“The world of work has been fragile since the onset of the pandemic two years ago. Globally, we are witnessing rising inequality and poverty, driven by disruptions to the labour market. The new labour market forecast can be vital for policy planning for a country like India, where most of the work is informal, to prevent further employment losses and reductions in working hours. Sustainable recovery is possible, but it must be based on the principles of decent work, including health and safety, equity, social protection, and social dialogue”, said Dagmar Walter, Director, ILO DWT for South Asia and Country Office for India.

The WESO Trends gives assessments of how labour market recovery has unfolded worldwide, reflecting different national approaches to pandemic recovery and analysing the effects on different groups of workers and economic sectors.

The ILO report shows that, as in previous crises, temporary employment created a buffer against the shock of the pandemic for some. While many temporary jobs were terminated or not renewed, alternative ones were created, including for workers who had lost permanent jobs. On average, the incidence of temporary work did not change.

The WESO Trends also offers a summary of key policy recommendations aimed at creating a fully inclusive, human-centred recovery from the crisis at both national and international levels. These are based on the “Global Call to Action for a Human-Centred Recovery from the COVID-19 Crisis that Is Inclusive, Sustainable and Resilient,” that was adopted by the ILO’s 187 Member States in June 2021.

India's forex reserves down to $632.7 bn as of 7 Jan: RBI data

NEW DELHI, Jan 14: The country's foreign exchange reserves declined by $878 million to stand at $632.736 billion in the week ended January 7, RBI data showed on Friday.

In the previous week ended December 31, the reserves had dropped by $1.466 billion to $633.614 billion. It had touched a lifetime high of $642.453 billion in the week ended September 3, 2021.

During the reporting week ended January 7, the decline in the forex kitty was mainly due to a fall in gold reserves and foreign currency assets (FCA), a major component of the overall reserves, as per weekly data by the Reserve Bank of India (RBI).

FCAs decreased by $497 million to $569.392 billion in the reporting week.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves declined by $360 million to $39.044 billion, according to the data.

The special drawing rights (SDRs) with the International Monetary Fund (IMF) fell by $16 million to $19.098 billion.

The country's reserve position with the IMF dipped by $5 million to $5.202 billion in the reporting week, the data showed.

Elon Musk Says Tesla Not In India Due To 'Challenges With The Government'

NEW YORK, Jan 13: Elon Musk has wanted to sell Tesla Inc. cars in India as early as 2019. Three years later, the U.S. electric-vehicle pioneer isn't really much closer.

"Still working through a lot of challenges with the government," Musk said in a Twitter post early Thursday in Asia, replying to a user who'd asked if there was any update on Tesla's launch in the South Asian nation.

Tesla CEO Musk and Prime Minister Narendra Modi's administration have been in talks for years, but disagreements over a local factory and the country's import duties of as much as 100% have led to an impasse. The government has asked the EV maker to ramp up local procurement and share detailed manufacturing plans; Musk has demanded lower taxes so that Tesla can start off by selling imported vehicles at a cheaper price in a budget-conscious market.

In October, an Indian minister said he had asked Tesla to avoid selling China-made cars in the country, and urged the automaker to manufacture, sell and export vehicles from a local factory. India, with a population comparable to China, is a highly promising market for EV makers, but the country's roads are still dominated by cheap, no-frills cars made by the local units of Suzuki Motor Corp. and Hyundai Motor Co.

Tesla will also face competition from other foreign players, including Mercedes-Benz, which announced Wednesday it'll roll out a locally assembled EQS -- the electric version of its flagship S-Class sedan -- in India by the fourth quarter.

Income Tax Returns Deadline Extended To March 15

NEW DELHI, Jan 11: Government has extended the deadline for filing income tax returns to March 15, according to a notification issued by the department of revenue of the finance ministry. The last date for filing returns was December 31, 2021.

The income tax department also tweeted about the extension of return filing deadline.

The deadline has been extended due to difficulties being faced by the taxpayers because of the prevailing Coronavirus situation, the notification said, adding that it has also been done due to problems being faced while e-filing of various audit reports under the provisions of the Income Tax Act 1961.

"The due date for furnishing of Return of Income for the Assessment Year 2021-22, which was 30th November 2021 under sub-section (1) of section 139 of the Act, as extended to 31st December 2021 and 28th February 2022... is further extended to 15th March, 2022," the notification issued by the finance ministry said.

Apart from Income Tax Returns, the due date for filing of various audit reports has also been extended by the Ministry of Finance's Central Board of Direct Taxes. The new deadline is February 15, 2022.

In addition to this, the government has also extended the deadline for filing various audit reports. These can now be filed till February 15, 2022.

Interestingly the extension of deadline has come after Revenue secretary Tarun Bajaj had said on December 31, 2021 that there was no proposal to extend the income tax return filing deadline any further.

Government earlier had already extended the return filing deadline from the original July 31, 2021 to December 31, 2021.

Though crores of returns have been filed, taxpayers have faced technical problems due to the new e-filing portal of the income tax department, which also forced finance minister Nirmala Sitharaman to intervene in the matter and take it up with the site's vendor Infosys.

Way Forward for Indian Banking Sector : Focus on basics

By Bikash Narayan Mishra

NEW DELHI, Jan 4: Modern Indian Banking is appx 250 years old; it originated in mid-18th century. Many banks originated and later liquidated/failed in the first 200 years 1770 to 1969. The largest and oldest bank still in existence and doing well is State Bank of India; having started as bank of Calcutta way back in 1806. The first swadeshi bank is Punjab National Bank which was set in 1895.

In the first two decades post-independence Indian banking was confined to few business houses for selected lending. Things started changing after the nationalization of 14 major private banks in July 1969. Another six banks were again nationalized in April 1980. The government was successful in breaking the nexus of industries and banks and a shift from class banking to mass banking started. Rapid expansion of branches, massive mobilization of public deposits, flow of credit to priority sector, agriculture and allied activities happened in a big way.

Another landmark year for the Indian economy could be 1991 when liberalization started in the country. All the sectors were affected and Indian economy started getting integrated with the global economy. Banking sector was no exception.

The private sector banking, especially the new generation banks started opening their shops all over the country. Because of their techno savviness and and focus on retail/personal lending they started infusing the much-needed competition in Indian Banking. The PSBs had no option but to change their delivery models and tried to follow suit in terms of automation and also focus on retail lending.

This phase (1991-2014) also saw the introduction of prudential norms, focus on implementation of best practices/corporate governance and strengthening of capital base as per Basel norms.

However, the banking sector started witnessing a decline in assets quality and financial soundness during this period.

Gross NPAs of scheduled commercial banks which was only 2.4 per cent in March 2011 rose to 7.6 percent in March 2016 and to an all time high of 11.5 percent as on March 2018. A series of measures had to be taken by govt during the last five years (2016-2021) to arrest the decline in asset quality and help banks to continue to be driver of growth of the economy; besides avoiding any failure of banks in the 21st century.

This included introduction of a strong recovery law such as IBC, Insolvency and Bankruptcy code 2016 and the setting up of IBBI in October 2016. The Government has infused huge amount of capital in PSBs during last five years. The last five years also saw the amalgamation of PSBs in a big way.

The country witnessed amalgamation of Associate banks with SBI in October 2017. Amalgamation of Vijaya Bank and Dena bank with BOB in April 2019 and another six small/mid-sized banks were merged with four comparatively larger banks in April 2020. Thus we have 12 PSBs and 21 PVBs (private sector banks) as on date.

While the amalgamation is expected to bring in synergies and a Pan India feature in the merged entity the existence of a few smaller sized and mid-sized banks side by side, it makes one feel that exercise is experimental and incomplete.

So, in the PSB space we have six large sized banks, including SBI, and an equal number of banks in the small n medium category. Even as the amalgamation process has been completed from the balance sheet angle and also on the technology front, all the players are confronted with lot of HR issues.

We need to wait for little more time to witness the benefits of the amalgamation for the economy and for the general public.

Against the above backdrop and some of the reform measures initiated by the Government in this calendar year, we need to introspect where the banking sector stands today and what is needed to take things forward to enable the existing players to deliver the way it is expected of them for the 5 trillion economy that we are aiming at in the next three to five years.

While continuing the reforms the government has set up three new entities viz the NARCL (national asset reconstruction company limited), IDRCL (India Debt Resolution Company Limited) and NaBFID (National Bank for Infrastructure Development). Lots of expectations are there from the new entities for obvious reasons.

The NARCL and IDRCL together are expected to resolve the huge NPA bag of the banking sector. The IBC is getting amended from time to time to improve the delivery. Also there is lot of expectation from the third new institution ie NaBFID, for the experience with the earlier DFIs such as IFCI, IRBI and IIFCL to name a few has not been encouraging! The Government also plans to privatize two PSBs as envisaged in the last budget.

Are the above measures necessary and sufficient to transform our banking sector for the best kind of delivery? They may be necessary but perhaps not sufficient.

The ongoing pandemic has added discomfiture our recovery efforts. The regulator while presenting the annual progress and trend reports has observed that banks asset quality notwithstanding the silver lining in as much as GNPA reaching 6.9 percent in September 2021, the lowest in six years, could again get affected adversely as forbearances end soon.

While the entire Indian banking industry has suffered during the last five years on account of asset quality issues some of them both in PSBs and PVBs have shown resilience and have done the damage control in a better manner.

Prudent banking perhaps includes prudent leadership at the top. In the trend and progress, the regulator further observes that the PSBs have lost substantial portion of their market share in credit and the trend continues unabated.

In the pre-liberalization period the PSBs accounted for nearly 90 percent of market share. During the last 30 years they have lost about 30 percent of it. With, an increasing number of PVBs joining the banking space in the last 25 years or so PSBs were bound to lose some share. But this was so sudden and so rapid and if this trend continues the PSBs will have an existential crisis soon.

In a mixed economy and transitional society such as ours we need both players to take the economy forward. All is not well with the PVBs also be that Yes bank crisis or the recent RBL bank issues.

The regulator also observes that the PVBs CEOs are much better compensated than their PSBs peers. But still they fail their organization and disappoint one and all. There is thus not one fits all kind of solution to the industry. The reforms to continue with greater focus on HR, on accountability, on digitized disruption and on inclusive growth.

@ The author is a senior advisor with Indian Bank Association and the opinions expressed here are his own. He was earlier with Punjab National Bank and has served in Delhi NCR, Odisha and Punjab.

Paytm sinks to record low as Macquarie India sees more pain ahead

MUMBAI, Jan 10: Shares of Paytm parent One97 Communications fell more than 2 percent to a 52-week low after Macquarie Securities India suggested that the company’s future earnings growth may be worse than it had earlier forecast.

The stock dropped to Rs 1,201.25 on the National Stock Exchange on January 10.

The brokerage firm slashed its price target for the stock by 25 percent to Rs 900 from Rs 1,200 earlier, implying a further downside of 28 percent from the January 7 closing. Macquarie retained its ‘underperform’ rating on the stock.

Macquarie’s pessimism for the company comes when the stock has already fallen more than 38 percent from its high of Rs 1,955 on November 18, which followed a disastrous debut on Dalal Street.

“Post the various business updates and results, we believe our revenue projections, particularly on the distribution side, are at risk,” Macquarie said in a note.

The brokerage cut its estimate for Paytm’s revenue by an average 10 percent per year till 2025-26 due to lower distribution and cloud revenue, which has only partially been offset by higher sales from payment operations. Macquarie now expects Paytm’s revenue to grow at 23 percent in the next five years as against 26 percent earlier.

Macquarie sees regulatory headwinds as the “elephant in the room” for Paytm. The Reserve Bank of India’s latest proposal to cap charges on digital payments could impact the company’s revenue significantly, the brokerage firm said.

The recent rejection of Paytm’s application for insurance broking also highlighted the risk that the fintech major faces in clearing regulatory hurdles.

“Senior executives have been resigning from Paytm, which is a cause of concern and could impact business in our view if the current rate of attrition continues,” Macquarie noted.

More importantly, Macquarie is concerned over Paytm’s lending operations, which the company’s management had touted as an important growth driver before the initial public offering. Macquarie noted that Paytm’s average loan ticket size has been declining and stands at below Rs 5,000.

“At this size, we don’t think it is doing many merchant loans and most of the loans are small value BNPL (buy now pay later) loans. Hence, the eventual distribution fees realised by them are likely to be much lower than our earlier estimates,” Macquarie said.

India's Exports cross $300 billion in the first 9 months of 2021-22

NEW DELHI, Jan 3: India's exports crossed $300 billion in the first 9 months of 2021-22, the first time ever that this has occurred.

December, 2021 also saw the highest ever level of monthly outbound trade at $37 billion. Exports in December, 2021 saw 37 percent growth over December 2020 and an increase of 37.5 percent over December 2019.

"With this, we are on track to achieve our target of $400 billion worth of annual exports," Commerce and Industry Minister Piyush Goyal said.

Exports reached a cumulative $299.74 billion in April-December of FY22, an increase of 48.8 percent over the April-December period of FY21 and an increase of 25.8 percent over FY20.

Official data also showed that in the October-December quarter (Q3) exports racked up a cumulative $ 103 billion worth of foreign exchange earnings, the highest ever in any Q3.

The Prime Minister wanted India to witness not only incremental growth but experience a Quantum jump, Goyal said. Almost all sectors have seen growth. India's exports have risen every month of the current financial year.

Sector-wise, export of engineering goods increased 37 percent, Gems and jewelry increased by 16 percent, Readymade garments increased by 22 percent, and electronics increased by 33 percent.

Google said that India is charging full steam ahead on a host of free trade agreements it is currently negotiating. He said the government is close to concluding an interim trade deal with Australia, while trade negotiations with the UK are set to begin this month, with a tentative end date of March, later this year.

Talks on the comprehensive Trade Partnership agreement with UAE is also close to conclusion, the minister said.

He added that India will launch trade negotiations with Canada and Israel soon.

GST collection at Rs 1.29 lakh crore in December

NEW DELHI, Jan 1: GST revenue collected in December 2021 was over Rs 1.29 lakh crore, 13 per cent higher than the same month last year, the Finance Ministry said on Saturday. Though the collection was lower than Rs 1.31 lakh crore mopped up in November, December is the sixth month in a row when revenue from goods sold and services rendered stood at over Rs 1 lakh crore.

The gross GST revenue collected in the month of December 2021 is Rs 1,29,780 crore, of which CGST is Rs 22,578 crore, SGST is Rs 28,658 crore, IGST is Rs 69,155 crore (including Rs 37,527 crore collected on import of goods) and cess is Rs 9,389 crore (including Rs 614 crore collected on import of goods)," the Finance Ministry said in a statement.

The revenues for December 2021 are 13 per cent higher than the GST revenues in the same month last year (Rs 1.15 lakh crore) and 26 per cent higher than December 2019.

The average monthly gross GST collection for the third quarter (October-December) of the current year has been Rs 1.30 lakh crore against the average monthly collection of Rs 1.10 lakh crore and Rs 1.15 lakh crore in the first and second quarter, respectively.

"Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalisation measures undertaken by the Council to correct inverted duty structure," the ministry said.

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