• Finance Ministry has planned 16 key performance indicators (KPIs) at the branch,
    region, State and national level to address the continuing decline in the share of public
    sector banks (PSBs) in Indian banking.
  • The 16 KPIs that the Ministry will be tracking include credit for infrastructure, farm sector,
    blue economy, housing, MSMEs, Stand-Up India scheme, education, exports, green
    economy, cleanliness activities, financial inclusion and women’s empowerment; and
    others such as direct benefit transfer, digital economy, ATM usage and performance,
    ease of living and corporate social responsibility.
  • The Ministry also wants bankers to come up with answers to questions such as the
    reasons for the decline in loans to corporates, the rise in lending to NBFCs amid a
    decline in direct lending to businesses (corporates and MSMEs), the number of loan
    applications accepted and rejected under the retail, MSME and corporate categories
    between April 2014 and March 2019, the steep rise in bad loans in 2015-19, and the
    possibility of co-origination of MUDRA loans with NBFCs.
  • Given the economic slowdown, lower spending is expected to drag growth in
    infrastructure investments to a CAGR of ~6% over the next thtee fiscals compred with
    10% in the lst hree fiscals, CRISIL has said. India’s infrastructure investments as a
    percentage of GDP may fall to 15-year low between fiscals 2018 and 2022, it added.

  • The government is weighing a raft of measures — including “full reimbursement” of
    various imposts on exports and relaxed lending norms to improve credit flow — to
    reverse a slide in the growth of outbound shipments in recent months.
  • While the commerce ministry has already circulated a Cabinet note to phase out the
    flagship Merchandise Exports from India Scheme (MEIS) with a more WTO-compatible
    regime under which various state and central levies on inputs consumed in exports will
    be reimbursed, the government will likely top it up with an assurance that all embedded
    taxes borne by exporters will be fully refunded.
  • “The new scheme will be a dynamic one, so that all sorts of embedded taxes will be
    reimbursed once exporters bring them to notice. A government panel will examine their
    demand and take appropriate action. The idea, as we have stated, is that exports must
    be zero-rated as per the global best practices,” a source said.
  • Though the goods and services tax (GST) regime has subsumed a plethora of levies,
    some still exist (petroleum and electricity are still outside the GST ambit, while other
    levies like mandi tax, stamp duty, embedded central GST and compensation cess etc
    remain unrebated). Similarly, the Reserve Bank of India (RBI) is willing to ease priority-
    sector lending guidelines for exporters.
  • According to Fieo president Sharad Kumar Saraf, for our exporters to become
    competitive, the government needs to ensure that transaction costs are cut drastically,
    embedded taxes are fully offset, raw materials are made available at reasonable prices
    and credit is extended at cheaper rates. “Land acquisition needs to be made easier and
    companies must not be dragged into unnecessary legal hurdles,” he added.
  • Tata Steel is looking at an over 33% reduction in capex across indian and European operations, following the global economic slowdown and reduced cash flows. The capital expenditure, which was estimated at Rs.12,000 crore for this fiscal, will be reduced to Rs.8,000 crore.
  • The US’ recent announcement to levy 10% tariff on another $300 billion worth of goods
    being imported from China, and the latter’s retaliatory move to halt the import of
    agricultural produce from the US, gave jitters to the whole world which is already reeling
    under a slowdown.
  • Base metal prices, which are quick to react to any global uncertainties, did react much.
    The drop in the LME (London Metal Exchange) prices of the metals after the tariff
    announcement was not as alarming as the manic price movements in gold and crude oil.
  • It’s likely that the metal prices had already factored in the impact of the worst possible
    fallout of the trade negotiations.
  • Despite a strong supply-demand dynamics for the metals, a further rise in the LME
    prices are capped by the signs of the global economic slowdown.
    Experts believe that a recession in the US is imminent and would be caused mainly by
    its own import tariffs and weak global activity.
  • The government said it will soon address issues affecting the real estate sector after
    industry bodies and homebuyers met Finance Minister Nirmala Sitharaman to flag their
    concerns regarding liquidity crunch, demand slowdown and stalled projects.