Union Cabinet approved the Fugitive Economic Offenders Bill, 2017

The Union Cabinet on Thursday approved the Fugitive Economic Offenders Bill, 2017 that particularly seeks to protect the interest of lenders left high and dry by absconding corporate defaulters. Once voted into law, the new legislation will empower investigating agencies to confiscate, and vest with themselves, any property of the absconding offenders without encumbrances. The Bill is likely to be tabled in Parliament in the second the part of the Budget session that starts March 6. The government, stung by the twin absconding cases of Nirav Modi and Vijay Mallya, would be hoping for a smooth passage of the Bill in the two Houses.

India regains title of world’s fastest-growing major economy

India has regained its title as the world’s fastest-growing major economy, after figures confirmed it grew more than 7 per cent on an annualised basis in the three months to December, overtaking China after a year of lagging behind. Data released on Wednesday show the Indian economy grew at an annual rate of 7.2 per cent in the final quarter of last year, continuing its bounceback from a sharp slowdown in the middle of 2017. The Chinese economy grew 6.8 per cent on an annualised basis in the same period.

Depreciating Rupee creating trouble for importers

With the rupee continuing to depreciate, importers are feeling the pinch and have started delaying payments. While bigger companies said they were still protected, smaller players said they are under severe pressure.
At 48-levels (to the dollar), importers are facing pressure for making payments for goods imported at 44. Most of them are delaying paym.ents by six months, availing buyers’ credit on the expectation that the rupee will be stronger next year.

It closed at 48.33, a 23-month low, after touching 48.35 during intra-day trade today.
The rupee has lost 8.9 per cent against the USDDollar since August on the back of global risk aversion. Following Italy’s downgrade by ratings agency Standard & Poor’s, the euro fell to a 10-year low against the yen on Tuesday. Italy has Europe’s second-largest debt burden.
The markets are now eagerly awaiting announcements from the Federal Open Market Committee (FOMC) meeting (of the US Federal Reserve), scheduled the coming Wednesday.

“With the weakening of the rupee, all importers will get hit. For oil marketing companies, the under-recovery in the (price) controlled products like diesel, PDS kerosene and domestic LPG will go up further. With every rupee depreciation, for BPCL alone, the under-recovery on these three products will be an additional Rs 2,000 crore per annum. For the entire industry, the under-recovery go up by Rs 9,500 crore per annum,” said a senior official from Bharat Petroleum Corporation.

IMF downs India's growth forecast to 7.8%

Expecting further monetary tightening measures to control inflation, the International Monetary Fund (IMF) has scaled down India’s economic growth to 7.8 per cent this year, against the earlier estimates of 8.2 per cent. The revision is attributed by the IMF partly to slower economic expansion in world output and to recent corporate governance issues.

Similarly, growth projections for India has been revised downwards to 7.5 per cent in 2012, against the earlier forecast of 7.8 per cent.

In its latest World Economic Outlook, IMF said India along with Argentina and Russia requires higher monetary tightening than other countries which are in a position to postpone such a move. This was so because consumer prices are estimated to rise at an elevated level of 10.6 per cent on an average in 2011 year-on-year, even though it is less than the 12 per cent a year ago. However, the rates were expected to rise at 8.6 per cent in 2012.

The Reserve Bank of India has tightened policy rates 12 times since early 2010 to cool down inflation.

IMF said activity in India is expected to be led by private consumption. “Investment is expected to remain sluggish, reflecting, in part, recent corporate sector governance issues and a drag from the renewed global uncertainty and less favourable external financing environment.”

Credit Policy: RBI hikes repo rate by 25 bps to 8.25%

The Reserve Bank of India (RBI) has raised the Repo and Reverse Rates by quarter of a percent point on Friday(16th sept 2011), while keeping cash reserve ratio (CRR) rate unchanged.
The decision comes as the authorities struggle to control near double-digit
inflation, which is uncomfortably high for more than two years. The repo rate now stands at 8.25%, while the reserve repo gets adjusted to 7.25%. The CRR remains unchanged at 6%.
This was 12th rate hike in the last 18 months by the country's central bank.

Petrol to be dearer by Rs 3.14/litre

State-owned oil companies are all set to hike petrol prices by around Rs 3 per litre which will be effective from midnight(15 sept 2011)
Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindsutan Petroleum Corp (HPCL) now lose Rs 2.61 per litre due to high international crude oil prices and with rupee touching two-year low against the US dollar, the losses have increased the cost of importing crude oil.
Petrol price was freed from the government control in June last year but the retail rates have not moved in line with cost as high inflation rate forced the oil companies to seek 'advice' from parent oil ministry before revising rates.
IOC, BPCL and HPCL have lost Rs 2,450 crore this fiscal on selling petrol below the cost.
Rupee fell to 48 per dollar yesterday(14th sept) for the first time since September 2009. "Every rupee depreciation, the under-recovery (revenue loss) increases annually by around Rs 9,000 crore.

Inflation at 13-mth high adds to RBI dilemma

Inflation climbed to 9.78 per cent in August from 8.87 per cent in the corresponding month of last year and 9.22 per cent in July 2011 on the back of food prices heading northwards.

RBI has already hiked policy rates 11 times since early 2010 to tame inflation, but has in fact moderated economic growth.

India’s economic growth fell below 8 per cent for the second quarter in a row at 7.7 per cent during April-June, 2011 against 8.8 per cent in the first quarter of the last fiscal.