The rupee pared initial losses and settled 16 paise up at 71.04 against the US dollar on Monday (December 9, 2019) amid softening crude oil prices and weakening of the greenback vis-a-vis other currencies overseas.
Fresh foreign fund inflows and positive developments on the US-China trade front also propped up the local unit, forex traders said.
Global rating agency Moody’s said it expects an overall supportive business environment for the power sector in India and has maintained a stable outlook for the industry.
The agency noted that the tariff reforms allowing timely recovery of costs are seen to be incentivising private investment in the sector.
Moody’s also noted that “easing constraints on fuel supply” have also helped Indian electricity generators. Currently, power plants are sufficiently stocked with coal which can last them for as many as 16 days.
The Confederation of Indian Industry (CII) and Aditya Birla group Chairman Kumar Mangalam Birla pitched for an expansionary fiscal policy to pull the economy out of slowdown.
In a pre-Budget interaction with Revenue Secretary A B Pandey, a CII delegation recommended widening the fiscal deficit by 0.5-0.75 percentage points from the target, which will give the government additional fiscal space of about Rs 1.1 trillion to Rs 1.6 trillion.
According to Birla, the best way to get out of slowdown is only through a fiscal stimulus. If the GST (goods and services tax) rate is brought down to 15%, that would be a huge stimulus.
The utilisation level at coal-based power plants remained muted in November amid the slowdown in electricity usage. The average plant load factor (PLF) of these power plants was 51.4%, against 60.5% in the corresponding month last year. The falling electricity usage had pushed PLFs to an all-time low of 48.9% in October.