3 PMC Bank account holders die

MUMBAI, Oct 16: With the Reserve Bank of India (RBI) placing withdrawal restrictions in Punjab and Maharashtra Co-operative (PMC) Bank following a 4,355 crore scam, at least three stressed account holders have so far died in Mumbai, according to agency reports.

Two of the deceased PMC account holders were said to be distressed following the crisis and died of heart attack while the third one committed suicide.

Last month, the RBI restricted the activities of the PMC Bank for six months and asked it to not grant or renew any loans and advances, make any investment or incur any liability, including borrowing of funds and acceptance of fresh deposits. The RBI has now increased withdrawal limits to ₹40,000, saying it will give relief to 77% of depositors.

Mumbai’s EOW DCP Shrikant Paropkari said he is trying best to ensure and return everyone’s money.

India’s fuel demand dips to lowest in over two years

NEW DELHI, Oct 16: India’s fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption.

Consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).

Diesel, the most used fuel in the country, saw demand drop by 3.2 per cent to 5.8 million tonnes, while naphtha sales were down by a quarter to 844,000 tonnes.

Bitumen, used in road construction, too saw consumption drop by 7.3 per cent to 343,000 tonnes. Fuel oil sales edged 3.8 per cent lower in September to 525,000 tonnes.

These downward trends negated the rise in cooking gas (LPG) and petrol demand.

The sale of petrol rose 6.2 per cent to 2.37 million tonnes, but sale of jet fuel or ATF fell 1.6 per cent to 666,000 tonnes.

LPG consumption surged 6 per cent to 2.18 million tonnes on the back of government’s push for the use of cleaner fuel in household kitchens in rural areas in place of firewood to check pollution and safeguard the health of women.

Kerosene, which is fast being replaced by LPG and natural gas as a cooking medium, saw demand fall almost 38 per cent to 176,000 tonnes.

Petroleum coke consumption was however 18 per cent higher at 1.73 million tonnes.

Meanwhile, Fitch Solutions revised downward its India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth.

“We now forecast demand growth to average 3.8 per cent y-o-y over the three years to 2021, down from 4.6 per cent previously,” it said, adding softening of Indian fuel demand adds to an increasingly bearish outlook for fuel demand globally.

“We had previously flagged India as the outperformer, forecast to overtake China as the global engine for growth. While the view still holds in the longer term, the near-term prospects have weakened,” it said.

More diversified demand growth will offer a level of resilience moving forward, but structurally lower demand growth in China and common Asian emerging markets’ exposure to a weaker external environment will drag to the downside.

“We have revised down our India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. In part this reflects the downward revision to the country’s GDP growth forecast,” Fitch said.

“Growth has disappointed expectations, dragged down by slowing private consumption, weakened investment and underperformance in the services sector,” it added.

In response, the government has unleashed a raft of stimulus measures, including tax cuts, a liquidity boost for the banking sector and higher spending on autos.

“Our Country Risk analysts are relatively bullish on the prospects for headline economic growth from 2020 onwards, forecasting a rebound from 6.4 per cent in real terms in 2019, to 6.9 per cent and 7.3 per cent in 2020 and 2021, respectively,” it said.

Auto sales growth is also set to recover next year, supported by low base effects and improved policy support, which will, in turn, offer a lift to oil demand, it said.

“That said, we do not expect demand growth to return to its 2018 highs, as a challenging external environment, stresses in the banking and shadow banking sectors and tight fiscal constraints on the government mar performance in several of the more energy-intensive segments of the domestic economy,” it added.

IMF slashes India’s growth rate to 6.1%

NEW DELHI, Oct 15: The International Monetary Fund (IMF) on Tuesday in its World Economic Outlook (WEO) report slashed India’s growth projection for the year 2019 to 6.1 per cent, which is a downgrade of 1.2 per cent from its April projections.

In April, the IMF had said the country will grow at 7.3 per cent in 2019, and barely three months later it has again revised its projection figures.

Amid the US-China trade war and hard Brexit talks, the IMF also warned that the world economy is slowing to its weakest pace since the 2008 global financial crisis.

“With a synchronised slowdown and uncertain recovery, the global outlook remains precarious,” International Monetary Fund chief economist Gita Gopinath said in her introduction to the latest forecasts.

“A notable feature of the sluggish growth in 2019 is the sharp and geographically broad-based slowdown in manufacturing and global trade,” the IMF said, which in addition to the higher tariffs and trade uncertainty is the result of the contracting auto industry.

That slowdown has had an impact in Germany, China and India, the report said.

Indian, however, retains its rank as the world’s fastest-growing major economy, tying with China, despite an almost one per cent cut in the forecast.

However, the WEO projected India’s economy to pick up and grow by 7 per cent in the 2020 fiscal year.

Explaining the cut in growth projection for India, the WEO said: “India’s economy decelerated further in the second quarter, held back by sector-specific weaknesses in the automobile sector and real estate as well as lingering uncertainty about the health of non-bank financial companies.”

It added that “corporate and environmental regulatory uncertainty” were other factors that weighed on demand.

IMF’s projected growth rate of 6.1 per cent for 2019-20 is consistent with the Indian Monetary Policy Committee’s forecast.

WEO said India’s growth in 2019 is sharply lower than the 6.8 per cent in 2018 “for idiosyncratic reasons, but is expected to recover in 2020”.

The reduction in India’s growth projection for this year “reflects a weaker-than-expected outlook for domestic demand”, WEO said.

India’s future “growth will be supported by the lagged effects of monetary policy easing, a reduction in corporate income tax rates, recent measures to address corporate and environmental regulatory uncertainty, and government programs to support rural consumption”, it added.

In the medium term, the IMF expects India’s growth to stabilise at about 7.3 per cent over the medium term, based on continued implementation of structural reforms.

The IMF suggested that India should use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence.

It said: “A credible fiscal consolidation path is needed to bring down India’s elevated public debt over the medium term. This should be supported by subsidy-spending rationalisation and tax-base enhancing measures.”

Other measures it suggested included reducing the public sector’s role in the financial system, reforming the hiring and dismissal regulations that “would help incentivise job creation and absorb the country’s large demographic dividend”, and land reforms to expedite infrastructure development.

The auto sector is one of the areas seriously affected globally, according to the WEO.

“The automobile industry contracted in 2018 for the first time since the global financial crisis, contributing to the global slowdown since last year,” it said.

Global car sales fell by three per cent last year, while the number of automobile units manufactured declined by 1.7 per cent, in value terms it fell by 2.4 per cent, WEO said.

The number of auto units produced by China fell by four per cent, its first decline in more than two decades, according to the WEO.

It said the two main reasons for the decline of the auto sector were the removal of tax breaks in China and the rollout of new carbon emission tests in Europe.

The auto industry, it noted, had a large global footprint and vehicles and related parts are the world’s fifth largest export product, accounting for about 8 percent of global goods exports in 2018.

Effect of global economic slowdown ‘more pronounced’ in India: IMF chief

WASHINGTON, Oct 8: Kristalina Georgieva, the new chief of International Monetary Fund, has said the global economy is witnessing “synchronized slowdown” and its effect is “more pronounced” in emerging markets like India.

In her speech, ahead of the IMF-World Bank autumn meetings next week, Georgieva said slower growth is expected this year in nearly 90% of world economies.

The IMF boss said growth in 2019-2020 will fall to its lowest rate since the beginning of the decade due to widespread deceleration. “In the United States and Germany, unemployment is at historic lows…In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year,” she said.

Georgieva took over from Christine Lagarde as the head of the IMF earlier this month.

The Indian economy is facing a slowdown. The gross domestic product (GDP) growth slowed to 5% in the quarter ended June, the slowest pace it has grown since March 2013, when it expanded 4.7%.

This was the fifth straight quarterly decline in growth. Slowing household demand, which took its toll on other sectors, was one of the major factors for the decline in growth.

In July this year, IMF had projected a slower economic growth for India and cut its projection by 0.3 percentage points for both 2019 and 2020. It said India’s GDP will grow at 7 and 7.2 per cent in 2019 and 2020.

The world economy had been projected to grow by 3.2 percent in 2019 and 3.5 percent in 2020 but Georgieva said on Tuesday that the IMF is cutting its forecasts. The IMF is expected to release details in its updated World Economic Outlook on October 15.

The IMF chief also warned that there could be a loss of around $700 billion by 2020 due the effect of the trade conflicts. “This amount is approximately the size of Switzerland’s entire economy,” she said.

Amid economic slowdown, India's GST collection dips to 19-month low

NEW DELHI, Oct 1: Collections of the Goods and Services Tax (GST) have dropped to a 19-month low of Rs 91,916 crore in September, amid an economic slowdown triggered by very low consumer demand despite the approaching festive season.

This is the second straight month of a drop in GST collections, according to official data released by the Ministry of Finance.

The tax collections at Rs 91,916 crore in September was lower than Rs 98,202 crore that had been collected in August and Rs 94,442 crore collected in the same month last year.

GST, introduced from July 1, 2017, amalgamated 17 different central and state levies, including excise duty, service tax and the Value Added Tax, is a reflection of economic activity and such a drop in collections indicates a downturn.

Experts, however, hoped for an upturn in October on the back of increased demand during the festival season.

The gross GST collections comprised of Rs 16,630 crore collections through Central-GST (CGST), Rs 22,598 crore in State-GST and Rs 45,069 crore through Integrated-GST (IGST). As much as Rs 7,620 crore was collected as cess levied on luxury goods.

“The revenue during September 2019 declined by 2.67 per cent in comparison to the revenue during September 2018. During April-September, 2019 compared to 2018, the domestic component has grown by 7.82 per cent while the GST on imports has shown negative growth and the total collection has grown by 4.90 per cent,” the statement said.

India’s GDP slowed to more than a six-year low of 5 per cent in April-June, prompting the government to take an array of steps to boost the economy, including a steepest ever cut in corporate tax rate which would cost Rs 1.45 lakh crore.

During April-September, the GST collections totalled Rs 6.06 lakh crore. In comparison, tax collections in the same period of the previous fiscal were Rs 5.78 lakh crore.

The finance ministry said returns filed for August were 75.94 lakh. Returns filed during September would be known by the end of this month.

Also, the government has settled Rs 21,131 crore to CGST and Rs 15,121 crore to SGST from IGST as regular settlement. The total revenue earned by the central government and the state governments after regular settlement in September 2019 is Rs 37,761 crore for CGST and Rs 37,719 crore for the SGST, the statement said.

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