Washington: India’s economic growth in recent years had been “too much” driven by domestic demand and its exports were about one third of its potential, a World Bank official said, asserting that the next government needed to focus on export-led growth.
Praising attempts to liberalise markets within India, Hans Timmer, World Bank Chief Economist for the South Asia Region, said, “That is what is needed to become more competitive.”
“At the same time, you’ve also seen of the last couple of years that the current account deficit widened–an indication that increasingly growth came from the non-tradable sector–from the domestic sector, and that makes it difficult to export more,” Timmer told PTI in an interview.
The polling for the first phase of seven-phase parliamentary polls in the country is scheduled to take place on April 11, with the last phase on May 19 and the results will be announced on May 23.
In the last five years, he said, India’s overall growth was “too much” driven by domestic demand, which resulted in double digit growth of imports, and four to five per cent growth in exports.
“In more recent months, that turned around somewhat. But the broader picture was that that’s a minus,” he said.
“The pluses were that we had seen the GST trying to create more flexibility within the country, so that it’s easier to trade between states. That’s what you need if you also want to trade with foreign countries,” he said.
Responding to a question, the World Bank official said the focus of the next government should be on reducing the stimulus of domestic demand.
“That would be one. I think looking at trade liberalisation on the import side–that would be another to create more competition. I would look at what people feel as impediment in the labour market. Is it difficult to go to those new jobs? What about the startups of young people–do they feel restrictions or not?” he said, adding that it is also about female labour force participation.
“I think the most important thing is the understanding that you need export-led growth because that’s where you increase productivity when you compete in international markets; that’s where you gain knowledge by interacting with competitors and with customers abroad. And so, it is that mindset,” the top World Bank official said.
India, Timmer said, is exporting only 10 per cent of its GDP.
“What they should have exported is 30 per cent of the export of GDP, given all their characteristics. India is a big country, so normally a big country doesn’t export that much in per cent of their GDP because when you’re small you’re a lot more open.
“But even for India, 30 per cent would have been normal if you look at the experience of other countries. It’s only 10 per cent. So that’s an enormous gap. And the gap is widening in the last couple of years,” he told PTI.
Customer complaints against banks surge 25% in FY18: RBI report
Mumbai: More people are complaining about banking services than before even as the Reserve Bank of India (RBI) claims to have increased its efficiency in resolving plaints.
The 21 offices of the banking ombudsman received 163,590 complaints in 2017-18 (FY18), marking an increase of 24.9 per cent over the previous year. Most of the complaints were against nationalised banks, followed by State Bank of India and its associates (now merged). This is not surprising, considering these bans also account for 70 per cent of the banking industry.
Disposal rate was 96.5 per cent, compared to 92 per cent in the previous year, according to the annual report of the banking ombudsman scheme of the central bank. This is also the first ombudsman report that takes into account complaints against mobile banking and electronic banking services, with the services being brought into ambit under the scheme in July 2017.
The central bank now plans to float a separate ombudsman for digital banking. It has already started an ombudsman scheme for deposit taking non-banking finance companies (NBFCs) in February 2018 that would be extended to other NBFCs as well, said RBI’s Deputy Governor and appellate authority M K Jain in the foreword of the report.
RBI’s financial year runs from July 1 to June 30. In FY18, the RBI doubled the award that an ombudsman office can offer to Rs 20 lakh, and allowed a compensation of Rs 1 lakh towards “harassment and mental anguish.” Earlier, this provision was available only for credit card complaints. Importantly, 65.8 per cent of the complaints were resolved by agreement and through mediation, compared with 42.4 per cent a year ago. The report said that 148 awards were issued in the year, compared to 31 awards issued in the previous year.
“The major grounds of complaints received during the year were non-observance of fair practices code (22.1 per cent), automated teller machine and debit card issues (15.1 per cent), credit card issues (7.7 per cent), failure to meet commitments (6.8 per cent), mobile and electronic banking (5.2 per cent),” according to a statement attached with the report.
Complaints received on grounds such as problems relating to ‘Pension’, ‘Levy of Charges without Notice’, ‘Loans and Advances’, ‘Remittance’, ‘DSA and Recovery Agents’ and ‘Mis-selling’ each accounted for 5 per cent or less of the total complaints received.
The most complaints came from New Delhi and Mumbai. Zone-wise, North recorded 44 per cent of the complaints, while East accounted for only 15 per cent of the complaints. Half of the complaints came from urban areas, the report showed.
With increased expansion of grounds on which appeal can be filed against the decision of the ombudsman, the appellate authority received 125 appeals, a sharp rise from previous year’s 15 appeals. Awareness was also built up due to campaigns and outreach activities in rural and semi-urban areas, the RBI said.
“RBI’s SMS handle ‘RBISAY’ was extensively used for sending text messages on topics such as fictitious offers of money, secured use of electronic banking facilities, banking ombudsman scheme, etc. An integrated voice recognition service facility (by giving a missed call on 14440) was also made available to the public by the RBI for getting more information on the above,” the central bank said.
Voda Idea rights issue receives bids for 1109 crore shares: NSE data
New Delhi: Vodafone Idea’s rights issue entailing 2,000 crore shares received bids for 1,109 crore shares, according to data available on the NSE.
The country’s largest telecom operator through the rights issue, which ran between April 10 and April 24, offered 2,000 crore new shares at Rs 12.50 apiece.
As per the data, the rights issue had received bids for 11,09,28,57,339 shares at 2000 hours and showed the status as “active”.
When contacted, the company remained tight-lipped about the final numbers saying it is bound by applicable compliance norms and guidelines.
To a separate query, the company said its interactions with investors suggest there is a “strong demand for the rights issue”.
“Axiata’s renunciation has been fully taken up with a strong demand. Hence, we have good reason to believe that the issue will be fully subscribed,” Vodafone Idea said in an e-mail response.
The company added that it expects allotment to be made on or around May 6, 2019, as mentioned in the offer document.
Data on the BSE showed that 492 crore bids were received as on 2000 hours.
The company had earlier said its rights issue entitlement worth about Rs 2,000 crore renounced by Malaysia-based Axiata Group was fully subscribed on strong demand.
Promoter shareholders — Vodafone Group and Aditya Birla Group — have reiterated to the board that they intend to contribute up to Rs 11,000 crore and up to Rs 7,250 crore, respectively, amounting to a total of Rs 18,250 crore, as part of the Rs 25,000-crore rights issue.
Boeing suffers $1 billion hit from 737 Max crisis, abandons 2019 financial outlook
London: Boeing Co abandoned its 2019 financial outlook, halted share buybacks and said lowered production due to the grounding of its fastest-selling 737 MAX jet after two fatal plane crashes in five months had cost it at least $1 billion so far.
The world`s largest planemaker is facing one of the biggest crises in its 103-year history following the disasters on Lion Air in Indonesia on Oct. 29 and another on Ethiopian Airlines on March 10, which together killed all 346 on board.
Chicago-based Boeing is now reckoning with a blow to its reputation and the financial cost of getting the planes back in the air. It met sharply lowered Wall Street profit estimates for the first quarter, largely due to stopping deliveries of the money-spinning 737 MAX jets and a slowdown in production.
The production dip alone has cost it $1 billion so far, the company said, because the lower rate means the planemaker has to pay more for parts, which are priced according to the volume Boeing buys.
Boeing also booked unspecified charges related to developing a software fix for an anti-stall system that Boeing has acknowledged played a role in both crashes, and pilot training.
Chief Executive Dennis Muilenburg told analysts on a conference call that Boeing has confidence in its software fix and expects a certification flight with the U.S. Federal Aviation Administration in the “near term” after completing more than 135 test and production flights.
He did not give a timeline for when the MAX would fly again commercially, saying the timing “will continue to be paced” by global regulators and airlines. He defended the company`s aircraft development process but indicated he was open to improvements.
“If there`s something that we can do to make airplane development programs or the certification process better and safer, we will pursue it,” Muilenburg said.
Reuters reported that Boeing told some 737 MAX owners it was targeting FAA approval of its software as early as the third week of May, and the ending of the grounding around mid-July, when it could resume building 52 aircraft per month.
A fuller picture of how much the grounding will cost Boeing and how it plans to repair its image with the flying public will not emerge until the end of the second-quarter as 737 production cuts did not begin until mid-April.
“Boeing had little new to provide on how exactly the 737 MAX situation is likely to pan out,” said Vertical Research Partners analyst Robert Stallard. “We think a return to flight in August is probably optimistic, but September is possible.”
Muilenburg said the company did not see any changes to the underlying certification process for its all-new 777X twin-aisle jetliner in light of the MAX crashes and said the programme remained on track for delivery in 2020. Boeing continues to work “in parallel” on plans for a potential new mid-sized airplane, although Muilenburg stressed the 737`s return was a higher priority.
He also defended his role as both CEO and chairman of Boeing after calls from some shareholders that the jobs be divided.
Boeing shares closed up 0.4 percent at $375.46. They are still down about 10 percent since the Ethiopian Airlines crash, wiping almost $25 billion off the company`s market value.