Mumbai : Finance Minister Arun Jaitley appeared to address former Reserve Bank of India governor Raghuram Rajan’s recent comment that the Indian economy was slowing down by saying that India has made some “monumental economic changes” over the last four years and that “you will always have critics who will come up and say it has slowed down India’s growth”. Jaitley, who did not mention Rajan in his address, admitted that steps such as demonetisation and the Goods and Services Tax (GST) slowed down growth for two quarters but described that as a “response to any monumental reform”.
“For two quarters, growth got impacted, and after two quarters, we again resumed 7%, 7.7% and 8.2% growth respectively,” Jaitely said, comparing it with 5%+ and 6%+ which existed between 2012 and 2014.
Jaitley said that India for the fifth year is the fastest-growing major economy in the world. “In a phase where we are passing through high oil prices, where India naturally gets impacted as a net buyer of oil; the strengthening of the dollar impacting almost every other currency in the world; and in a phase where there is periodic slowdown in the world; to retain a pivotal position as the fastest-growing economy is in fact an achievement,” the finance minister said through video conference at an event to celebrate 100 years of the Union Bank of India.
Rajan said last Friday that the November 2016 move to ban high-value currency notes and the rollout of GST the following year dealt “really, really hard blows” to India’s economy at a time when global growth was “peaking up”. His comments came a day after the second anniversary of the demonetisation decision, which has become an issue for the Opposition to renew criticism of the government.
Rajan demitted office on September 3 in 2016, about two months before the government’s currency ban announcement.
Jaitley contended that between 2008 and 2014, there was an attempt to artificially bring up growth by excess lending into projects that were not capable of delivering results. “I have repeatedly said, during 2008 to 2014, indiscriminate lending took place. Particularly post-2008, after the Lehman crisis, globe growth slowed down.
Growth in India also indicated to be slowed down. In that system, one of the principal challenges we have ahead of us was how to restore the health of the public sector banks and how to increase their lending ability.”
He said that India saw a stage where it experimented with various schemes for restructuring. “Post-2012, when NPAs in the banking system started showing up, a number of them were corrupt and concealed. But they couldn’t be indefinitely concealed. None of the schemes was showing results because a number of investments were made in projects that were not viable,” he said, adding that it was a fatal mistake to conceal NPAs.
Jaitley credited the National Democratic Alliance (NDA) government for “cleaning up” the NPA mess.
“After the asset quality review done by the Reserve Bank in consultation with the government of India, the real health of the banks was honestly made public. Then started a series of steps that were taken in order to make sure that the recovery starts. That banks discipline themselves. Therefore, we are able to restore the health of the bank. The most significant step has been the Insolvency and Bankruptcy Code. Coupled with this we have also amended the securitization law in order to remove the rough edges. We have amended the laws relating to DRT [debt recovery tribunals] in order to make sure that the recovery process becomes faster,” Jaitley said, describing banking as the backbone of the economy.
Tirthankar Patnaik, chief strategist and head of research, India, Mizuho Bank, said: “Post-demonetisation and post-GST implementation there was a slowdown in growth. Just to be clear, growth rate had started easing well before the announcement of demonetisation already. Demonetisation was announced in the third quarter of FY17 fiscal. Whereas growth had started slowing down right after the first quarter after the asset quality review announcement by RBI. Bank credit had started slowing down.
In FY18 growth slowed down after implementation, post which growth starting coming back up. A large part of it was base effect.”
US to eliminate Iran oil sanctions waiver for India, 7 others:Report
Washington: The United States is expected to announce that all importers of Iranian oil will have to end their imports shortly or be subject to US sanctions, a source familiar with the situation told Reuters.
The source confirmed a report by a Washington Post columnist that the administration will terminate the sanctions waivers it had granted to some importers of Iranian oil late last year.
US President Donald Trump has been clear to his national security team over the last few weeks that he wants the waivers to end, and national security adviser John Bolton has been working the issue within the administration.
The US reimposed sanctions in November on exports of Iranian oil after Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers Washington is pressuring Iran to curtail its nuclear program and stop backing militant proxies across the Middle East.
Along with sanctions, Washington has also granted waivers to eight economies that had reduced their purchases of Iranian oil, allowing them to continue buying it without incurring sanctions for six more months
They were China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece.
But on Monday, Secretary of State Mike Pompeo will announce “that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate,” the Post’s columnist Josh Rogin said in his report, citing two State Department officials that he did not name
Frank Fannon, US Assistant Secretary of State for Energy Resources, repeated the administration’s position that “Our goal is to get to zero Iranian exports as quickly as possible.
“Other countries have been watching to see whether the United States would continue the waivers. Last Tuesday, Turkish presidential spokesman Ibrahim Kalin said that Turkey expects the United States to extend a waiver granted to Ankara to continue oil purchases from Iran without violating US sanctions.
Turkey did not support US sanctions policy on Iran and did not think it would yield the desired result, Kalin told reporters in Washington.
Washington has a campaign of ‘maximum economic pressure’ on Iran and through sanctions, it eventually aims to halt Iranian oil exports and thereby choke Tehran’s main source of revenue.
So far in April, Iranian exports were averaging below 1 million barrels per day (bpd), according to Refinitiv Eikon data and two other companies that track such exports and declined to be identified.
That is lower than at least 1.1 million bpd as estimated for March, and down from more than 2.5 million bpd before sanctions were reimposed last May. Brent crude futures , the international oil benchmark, were up nearly 2 per cent at USD 73.25 a barrel, on the report that the waivers were to end.
Maruti drives in Baleno with BS VI compliant petrol engine
New Delhi: The country’s largest carmaker Maruti Suzuki India (MSI) Said it has launched its premium hatchback Baleno with BS VI emission norms compliant petrol engine, priced between Rs 5.58 lakh and Rs 8.9 lakh (ex-showroom Delhi).
The auto major has also introduced two variants of the car with smart hybrid technology. The trim with 1.2 litre DUALJET, DUAL VVT petrol engine is priced at Rs 7.25 lakh, while the Zeta variant is tagged at Rs 7.86 lakh. As per the company, the models with smart hybrid technology would deliver a fuel efficiency of 23.87 km/litre.
“At Maruti Suzuki, we strive to bring newer, better and environment friendly technologies to our products. Baleno Smart Hybrid with BS VI stands testament to the same. We are confident that the premium hatchback Baleno will present a complete package in line with aspirations of evolving customers,” MSI Senior Executive Director Marketing & Sales R S Kalsi said in a statement.
The company said in order to achieve the stringent emission regulation requirement, it has upgraded both engine hardware and software along with exhaust system.”Baleno is country’s first premium hatchback to be offered with Smart Hybrid technology,” it added.
MSI has sold over 5.5 lakh Baleno units since its launch in 2015. It sold more than 2 lakh units of the hatchback in the last fiscal year.
SpiceJet, Emirates sign MoU for code share partnership
Mumbai: Budget carrier Spicejet announced signing of an initial pact for code share partnership with Gulf carrier Emirates.
The reciprocal partnership will allow opening of new routes and destinations for passengers of the two airlines, SpiceJet said in a statement.
“I am delighted to announce that as part of SpiceJet’s international expansion strategy, we have signed a Memorandum of Understanding (MoU) for a code share agreement,” SpiceJet Chairman and Managing Director Ajay Singh said in the statement.
SpiceJet passengers from 51 domestic destinations will be able to access Emirates’ network across the US, Europe, Africa and Middle East, it added.
Code-sharing allows an airline to book its passengers on its partner carriers and provide seamless travel to destinations where it has no presence.