Mumbai :India’s factory activity expanded at the fastest pace in five years in December, a private sector survey showed , buoyed by a rise in output and new orders, which allowed firms to raise prices.
Data firms up views that business in Asia’s third-largest economy continues to recover but also highlights risks that rising price pressures will keep the Reserve Bank of India (RBI) from slashing interest rates further.
The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 54.7 in December from November’s 52.6, marking its fifth straight month above the 50 level that separates expansion from contraction.
“India’s goods-producing economy advanced on its recovery path, with operating conditions improving at the strongest pace since December 2012,” said Aashna Dodhia, an economist at IHS Markit.
“Strong business performance was underpinned by the fastest expansions in output and new orders since December 2012 and October 2016, respectively. Anecdotal evidence pointed to stronger market demand from home and international markets.”
The country’s manufacturing sector witnessed higher payroll figures in December while the rate of job creation rose to its highest since August 2012.
The latest survey showed the new orders sub-index, a proxy for domestic demand, also rose to 56.8 in December, the highest since October 2016.
Foreign demand also expanded at its quickest pace since June.
“Challenges remain as the economy adjusts to recent shocks, but the overall upturn was robust compared to the trend observed for the survey history. This outlook was shared by the manufacturing community as sentiment picked up to the strongest in three months amid expected improvements in market conditions over the next 12 months,” Dodhia added.
At the same time, stronger demand allowed firms to raise prices at the fastest pace in 10 months to make up for rising input costs, suggesting overall inflation could remain above the central bank’s medium-term target of 4% in the coming month.
India’s retail inflation in November breached the central bank’s medium-term target of 4%, which could put pressure on it to raise policy rates in the coming months.
Minutes from the RBI’s December meeting show bank members are becoming increasingly concerned about inflation.
Clearing backlog of defence purchases to be priorities for future: Jaitley
New Delhi: Finance Minister Arun Jaitley said the government’s priority for the future would be infrastructure development and clearing backlog of defence procurement, among others.
Development of rural India and improvement of healthcare and education would be the other priority areas, he said at the Hindu Business Line award function here.
“In future may be four priorities– rural India, backlog of defence procurement, healthcare and education and of course infrastructure,” he aid.
“I foresee a better quality of life in urban slums, rural India and the policies must be aimed at allowing these people to aspire and get into at least neo middle class. Two areas where we seriously need to concentrate is healthcare and education,” he said.
There are some areas which are growing and some require support from the government for improving capacity like rural sector, he said, adding higher resources would help the government to spend more on infrastructure development.
The effort of the government has been to maximise resources with lowering of the tax rate by following the theory of lower taxation higher compliance, he said. In the last five years, there has not been a single incidence of increase in tax rate and rates in both direct and indirect taxes have been lowered, he said.
Talking about Ayushman Bharat programme, he said 16 lakh people have benefited from this cashless insurance scheme of the government in the first four months of its launch. With this scheme suddenly 78 per cent of the population came under the health insurance cover, he said.
The ambitious scheme launched in September 2018 aims at providing coverage of Rs 5 lakh per family annually, benefiting more than 10 crore poor families. Eligible people can avail the benefits in the government and listed private hospitals.
The scheme targets poor deprived rural families and identified occupational category of urban workers’ families, 8.03 crore in rural and 2.33 crore in urban areas, as per the latest Socio-Economic Caste Census (SECC) data. It has provided cover of around 50 crore people.
Pak owes China USD 10 million for Gwadar port: US
Washington: Pakistan owes its “all weather friend” China at least USD 10 billion for the construction of the Gwadar port and other projects, a top US general said as he underlined Beijing’s “predatory economics” to expand its global influence.
The strategic Gwadar Port in Balochistan province is being built by China under the multi-billion China-Pakistan Economic Corridor (CPEC) and is considered to be a link between Beijing’s ambitious One Belt, One Road (OBOR) and Maritime Silk Road projects.
“Let us look at just a few examples. Saddled with predatory Chinese loans, Sri Lanka granted China a 99-year lease and 70 per cent stake in its deep-water port,” General Joseph Dunford, Chairman of US Joint Chiefs of Staff, told a Senate Armed Services Committee on Thursday.
The Maldives owes China roughly USD 1.5 billion–about 30 per cent of its GDP – for construction costs, he said.
“China is diligently building an international network of coercion through predatory economics to expand its sphere of influence,” he said, adding that nations around the globe are discovering the hard way that China’s economic “friendship” via OBOR can come at “a steep cost” when promises of investment go unfulfilled and international standards and safeguards are ignored.
General Dunford warned that if China’s predatory debt tactics are left unaddressed, it will have serious implications on the US military.
Alleging that China is extending its reach by increasing its overt military and coercive activities through its neighbours, Dunford said China’s increasingly provocative behaviour in the Indo-Pacific, particularly the South China Sea (SCS), should concern all.
Between 2013 and 2018, China increased its air and sea incursions into the SCS twelve-fold. Within those five years, it also increased deployments of offensive and defensive weapons systems to the SCS by the same order of magnitude, he said.
Jet Airways pilots seek Centre’s help to recover unpaid salaries
New Delhi: Cash-strapped carrier Jet Airways’ pilots union has for the first time sought the government’s help to recover pending salaries and dues from the airline after their pleas to the management have fallen on “deaf ears.”
In a letter to Labour Minister Santosh Gangwar, National Aviators Guild, which represents the majority of Jet’s pilots, has asked that the airline immediately pay their outstanding salaries and allowances till date with interest.
“This situation is leading to extreme tension and frustration amongst our members, hardly an ideal situation for pilots in cockpit,” captain Karan Arora, president of the union, said in the letter dated March 6, seen by news agency Reuters.
Jet has delayed payments to its pilots, suppliers and lessors for months and defaulted on loans after racking up over USD 1 billion in debt. The airline is in talks with state-backed banks for a rescue deal and emergency funds.
The pilots in August were given a staggered schedule of payments for salaries but Jet has not kept up, the union said, adding the airline still owes the pilots most of the salary for December, and all of January and February.
Jet did not immediately respond to a request for comment.