RBI Announcement - No major change (Feb 2016)

Reserve Bank of India (RBI) kept key rates – repo, reverse repo and the cash reserve ratio (CRR) – unchanged in its sixth bi-monthly monetary policy review.

RBI announcement - No major change in Key rates

The Reserve Bank of India (RBI) kept benchmark repo rate unchanged at 6.75 percent.

It has also left CRR and SLR unchanged at 4 percent and 21.5 percent, respectively.

The RBI has also kept economic growth projection unchanged at 7.4 percent for FY16.

The central bank has also kept the reverse repo rate under the LAF unchanged at 5.75 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 7.75 percent.

Some Numbers and Major Initiatives

• AMRIT scheme: This is the initiative to provide chepaer lifesaving drugs. 1st AMRIT outlet at AIIMS for life saving drugs at 50-60% cheaper will cover 202 Cancer, 186 Cardio drugs & 148 types of cardiac implants
• MUDRA scheme: The drivers of Indian economy, are not big corporates but so called "Unorganized" sector. Small businessmen have to take credit at a very high rate. This scheme is the first initiative to assist. 7. 53 lac people have availed loans of upto 50000 under MUDRA & 10 lac people availed loans of 50k to 5 lacs , approx 20000 Cr under MUDRA
• India's Current Account Deficit in July 2013 (21,772) ,CAD in July 2015 (6200) Cr 2 BSNL loss in 2013 to profit of 672 cr profit in 2015
• India won't need coal imports by 2017
• FDI in India increased by 15% in the first six months of the year to $20.5 billion with services, construction and IT the main recipients

PM Modi's speech at Guildhall London

A summary of new economic measures taken by India is best explained by this speech by PM. In every foreign visit he showcases what India has to offer.

This speech at Guildhall is a must for any MBA student who would like to update himself.

https://www.youtube.com/watch?v=fLYTzdNnUSE

Indo African summit and its importance

Source: https://www.myind.net/significance-india-africa-forum-summit

Despite minimal coverage by English MSM on path breaking Africa Summit, Policy makers believe that this is one of the most important engagements witnessed in decades. 54 heads of state from across Africa attended this India-Africa Forum Summit.

Following are the reasons why it is important:

1. India has extended invitation to all the 54 countries of Africa and it is biggest diplomatic outreach program of India so far. It will be largest gathering of international leaders since Indira Gandhi’s efforts to host NAM Summit in 1983 when 51 leaders from 91 countries have participated.

2. Issues of major focus would be boosting trade, strengthening security cooperation to combat terrorism and extending cooperation on poverty alleviation programs and disease eradication.

3. Realizing the potential of largely untapped resources countries like the US, EU, China and Japan started making huge investments to flag off their enterprises. India is yet to capitalize on its long history and deep social networks. Bilateral trade was a modest $1 billion in 1995 slowly risen to $38 billion in 2008 is now $70 billion. While Indian exports to Africa are increasing at a rate of 23.6% Africa has managed to record trade surplus with India registering a 32.2% increase annually. The top six countries Nigeria, South Africa, Angola, Egypt, Algeria and Morocco makeup for 89% of total Indian imports that include oil, natural gas, ores and Gold and contribute to Africa’s trade surplus. 

4. India imports 15% of its oil from Nigeria. A better relationship will reduce dependency on Middle East. 

5. Note that China’s investment is booming in Africa and its bilateral trade volume has reached $210.2 billion. China knows Africa's significance. It is home to 30 % of all minerals found in the World and as such is a tremendous resource partner. 

6. One positive aspect is that while Beijing’s investment are perceived to be an opportunistic, mercantile exercise espousing traces of racial discrimination. Indian engagement with Africa has been different and its contribution towards capacity building, providing skill enhancement to youth, IT training programs and providing scholarships has been hailed by African community. 

Make in India Campaign - FDI in Manufacturing increases

The manufacturing sector in India witnessed a sharp jump of 50 per cent in foreign direct investment (FDI) in the year 2014-15, thereby reflecting the traction received by the government’s ‘Make in India’ initiative.

The manufacturing sector continued to be the largest beneficiary and accounted for 38 per cent of the total FDI received and rose to $9.6 billion.

It is the first time in 3 years that FDI in manufacturing has witnessed an expansion. While it stood at $9.3 billion in 2011-12, it declined in the following two years to $6.5 billion and $6.3 billion in FY13 and FY14, respectively. However, as a result of the government’s push on manufacturing in India and ease of doing business initiative, the FDI in manufacturing has witnessed a boost. 

Source: http://indianexpress.com/article/business/business-others/govt-initiatives-help-revive-fdi-inflow-after-3-year-slump-up-54-in-fy15/

FDI Inflow improves

India has emerged as the most favoured destination for foreign direct investment (FDI) in 2015 so far, outpacing China and the US, London-based business daily Financial Times (FT) said in a report on Tuesday.

FDI inflows into India during January-June stood at $31 billion, ahead of China’s $28 billion and the US’s $27 billion. 

India also jumped 16 notches to 55 among 140 countries in the World Economic Forum’s Global Competitiveness Index that ranks countries on the basis of parameters such as institutions, macroeconomic environment, education, market size and infrastructure among others.

According to data from FDI Markets, an FT data service, FDI inflow into India grew 47% to $24 billion in 2014.

India’s Foreign Investment Promotion Board, the nodal authority that scrutinises overseas investment proposals, cleared 18 proposals worth about Rs 5,000 crore.