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 Hindustan Times, October 14, 2020 Russia’s foreign minister warned Tuesday that Moscow could freeze its contacts with the European Union in response to its sanctions over the poisoning of Russian opposition leader Alexei Navalny — an unprecedented threat that reflects a bitter Russia-EU strain. The tough statement from Sergey Lavrov comes a day after the EU foreign ministers agreed to impose sanctions on Russian officials and organizations blamed for Navalny’s poisoning with a Soviet-era nerve agent. “We probably simply have to temporarily stop talking to those people in the West who are responsible for foreign policy and don’t understand the need for mutually respectful dialogue,” Lavrov said at a foreign policy conference attended by experts in Moscow. He specifically pointed at European Commission President Ursula von der Leyen’s recent statements ruling out a partnership with Russia, saying that scenario will play out if that’s what the EU wants. “Russia wants to understand wh...

 Financial Express, October 14, 2020 The trend of rising dues to power plants continues despite the Union power ministry implementing the letter of credit (LC) mechanism since August 2019 to compel discoms to become more disciplined in meeting payment obligations. The Union power ministry’s proposal to reduce late payment surcharge for state-run power distribution companies could potentially provide a relief of about Rs 6,000 crore annually to these distressed entities, given their current level of over-dues to gencos, analysts said. In the draft Electricity Late Payment Surcharge Rules, 2020, recently released by the ministry, it has proposed to reduce the rate of late payment surcharge from the existing 18%, to a graded payment linked to the “bank rate” which is 500 basis points (bps) more than SBI’s marginal cost of funds-based lending rate. Discoms’ over-dues — payment default of 45-60 days or more — to power plants increased 52% annually to Rs 1.19 lakh crore at August end. Th...

 Financial Express, October 13, 2020 Batting for more fiscal spending, chief economic adviser Krishnamurthy V Subramanian said a boost to infrastructure and employment-related programmes like creation of an urban job guarantee programme would help pep up consumption demand. The Covid-ravaged economy will likely shrink by a record 9.5% in the current fiscal, Subramanian said on Tuesday, as he agreed with the central bank’s latest assessment of the magnitude of growth slump. However, elevated inflation will still drive up nominal GDP. Monetising the fiscal deficit in a year like this can’t be ruled out as one of the financing options for the government, the CEA told CNBC-TV18. “We have time-one can do it within the borrowing programme itself-short-term borrowing so as not to increase the yields,” he said. “We might be looking at about 1.7- 1.8% of GDP ($50 billion) of current account surplus (in FY21),” he noted. With net tax revenues declining 30% on year in April-August (the budget...

 Business Standard October 14, 2020 A day after the goods and services tax (GST) Council meeting ended in a deadlock, the Centre on Tuesday allowed 20 states to borrow an additional Rs 68,825 crore through the market to make up for the compensation shortfall amid inadequate cess collection. Meanwhile, dissenting states like Kerala, West Bengal, Punjab and Chhattisgarh said they are exploring legal options, including moving the Supreme Court, to counter the Centre’s move. Twenty states had picked the finance ministry’s first option of raising up to Rs 1.1 trillion to make up for revenue loss estimated on account of GST implementation alone, but not for losses due to the pandemic. Under this option, the entire principle and the interest will be repaid through compensation cess collection, which has been extended beyond June 2022. “Additional borrowing permission has been granted at 0.50 per cent of the gross state domestic product (GSDP) to those states that have opted for Option 1 o...

 The Hindu, October 13, 2020 The Ministry of Home Affairs (MHA) has asked all NGOs seeking foreign donations to open a designated FCRA account at the State Bank of India’s New Delhi branch by March 31, 2021. The MHA order reiterated that NGOs registered under FCRA shall not receive any foreign donations in any other bank account from April 1, 2021. In September, the Foreign Contribution (Regulation) Act, 2020 was amended by Parliament and a new provision that makes it mandatory for all non-government organisations and associations to receive foreign funds in a designated bank account at SBI’s New Delhi branch was inserted. An order specifying the process of opening the FCRA bank account was issued by the MHA on Tuesday. As of now there are 22,434 such NGOs and associations active under the FCRA. The order said an NGO will have to report the amount and source of foreign remittance received to the authorities. The order said the Centre has notified the New Delhi Main Branch (NDMB) of...

 The Hindu Business Line,  October 14, 2020 Mexico’s experience bears out that foreign ownership will not boost credit growth in the economy The paper ‘Indian Banks: A Time to Reform?’ by Raghuram Rajan and Viral Acharya outlines a three-part process towards privatisation of public sector banks (PSBs). First, move to state-linked banks where government stakes are brought down below 50 per cent, re-privatisation by “bringing in private investors who have both financial expertise as well as technological expertise”, and subsequent further dilution of ownership by capital expansion. This change in ownership, along with other reforms, according to the authors, will result in rapid credit growth without the “boom-and-bust cycle view of credit”, in the country. Really? Even as I make the case for continued majority ownership by the state in PSBs, I agree with the commentary often heard that these banks are in need of efficiency-enhancing operational changes and should be permitted t...

 Business Standard, October 14, 2020 Bangladesh is set to beat India in terms of per capita gross domestic product (GDP) this calendar year, thanks to a sharp contraction in the Indian economy due to Covid-19 and the economic lockdown. According to International Monetary Fund (IMF)-World Economic Outlook (WEO), Bangladesh’s per capita GDP in dollar terms is expected to grow 4 per cent in 2020 to $1,888. India’s per capita GDP, on the other hand, is expected to decline 10.5 per cent to $1,877 – the lowest in the last four years. The GDP figure for both countries is at current prices. This makes India the third poorest country in South Asia, with only Pakistan and Nepal reporting lower per capita GDP, while Bangladesh, Bhutan, Sri Lanka, and Maldives would be ahead of India. The WEO database suggests that the Indian economy will be the worst hit from the pandemic in South Asia after Sri Lanka, whose per capita GDP is expected to shrink 4 per cent in the current calendar year. In comp...

The Indian Express,  October 14, 2020 The IMF on Tuesday predicted a deep global recession this year and the world growth to be – 4.4 per cent, asserting that the global economic crisis is far from over mainly due to the impact of the coronavirus pandemic. In its latest World Economic Outlook report, the International Monetary Fund also said the swift recovery in China has surprised on the upside while the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks. “This crisis is however far from over. In our latest World Economic Outlook, we continue to project a deep recession in 2020. Global growth is projected to be -4.4 per cent, an upward revision of 0.8 percentage points compared to our June update,” Gita Gopinath, the Chief Economist of the IMF, said. This upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partly by downgrades in some emerging and develo...

 The Indian Express, October 14, 2020 Just three days ago, a consumer confidence survey by the Reserve Bank of India said discretionary spending was expected to remain low in the near future even though people expected an improvement not just in economic situation but also in employment conditions and income scenario. Finance Minister Nirmala Sitharaman’s announcement on measures to boost consumer spending is clearly an acknowledgement that people going out and spending is key to a faster turnaround of the economy. But then, two things stand out in the announcement: One, much of it (the consumer spending part) is front-loading of expenditure, or in other words, repurposing of government spending, and the size of the overall package is nothing much to talk home about (compared with the Prime Minister’s Garib Kalyan Yojana and the AtmaNirbhar Bharat package); and, two, by specifying how and where to spend, the Finance Ministry just doused any excitement among the 35 lakh-odd Central ...

 The Indian Express, October 14, 2020 Financial markets are a key artery of modern economies. Banks along with bond and equity markets oversee the matching of savers with borrowers. Without the matchmaking services of financial markets, businesses would be restricted to investing out of retained earnings alone. The tasks performed by these markets are non-trivial. They have to satisfy the return appetites of savers by looking for projects with the highest returns while simultaneously doing due diligence to minimise their risk exposure. As can be imagined, these two goals are often contradictory which makes the regulatory oversight of these markets a fundamental element of a country’s financial infrastructure. Two recently published books reveal the sustained hollowing out of the financial architecture in India over the past five decades, a process that continues unabated. In “Quest for Restoring Financial Stability in India”, the former deputy governor of the Reserve Bank of India ...

 The Indian Express,  October 14, 2020 Attorney General K K Venugopal on Tuesday told the Supreme Court that comments by the print and electronic media in sub judice matters are causing “great damage to the institution” and suggested that the court also look into this while considering certain questions of law in the 2009 contempt case against advocate Prashant Bhushan and journalist Tarun Tejpal. “The question of sub judice also needs to be considered. Today, print media and electronic media are freely commenting on pending matters, seeking to influence the judges and public perception. This is causing great damage to the institution,” he told a bench of Justices A M Khanwilkar, B R Gavai and Krishna Murari. Venugopal sought time to reformulate the questions already pending consideration. He submitted that nowadays, when bail applications are about to come up for hearing in big cases, TV channels reports these news, which are very damaging for the accused who Is seeking relie...

 The Indian Express, October 14 ,2020 Shyam Saran, former Foreign Secretary and former chairman of the National Security Advisory Board, discusses China’s position in the new age of global conflict, in the context of the standoff at the LAC and the pandemic. He spoke before a nationwide audience on Zoom in this edition of explained On what China wants out of the ongoing standoff in Eastern Ladakh We are dealing with a subject that is today uppermost in people’s minds, that is how to really deal with the China challenge and this is not only in terms of what is happening at the India-China border… The important thing to do is try and locate what is happening today in a broader context. So let me make two or three points. One is that at least since the global financial and economic crisis of 2007-2008, two things happened. One is that the power gap between China and the US, both in economic and security terms, narrowed substantially. China recovered faster from the crisis. Secondly, w...

 The Indian Express, October 14, 2020 FOURTEEN MONTHS after she was arrested, former Chief Minister of Jammu and Kashmir Mehbooba Mufti was released Tuesday after the J&K government revoked her detention under the Public Safety Act (PSA). The decision came two days before her daughter Iltija Mufti’s petition challenging her detention was scheduled to be heard in the Supreme Court. In an audio message posted on Twitter after being released, she said the people of Jammu and Kashmir cannot forget the “robbery and humiliation” of August 5 and demanded release of all prisoners lodged in different jails of the Union territory and outside. “Now, all of us have to reiterate, we will have to take back what New Delhi snatched from us illegally, undemocratically and unconstitutionally. In addition to this we will have to continue our struggle for the resolution of Kashmir issue for which thousands of people sacrifices their lives. I agree that this path would not be easy but I have belief...

The Eurasian Times, October 13, 2020 Pakistani Prime Minister Imran Khan’s government’s move to take federal control over twin islands near Karachi has rocked the Sindh Province with protests.  The government passed the ordinance to establish Pakistan Islands Development Authority (PIDS) under which the development of Bundal and Buddo islands will take place. Critics of the move have alleged that it is backed by China and the development and construction work will be carried out under the China Pakistan Economic Corridor (CPEC). On 11th October, massive protests erupted in the Sindh Province. Various Pakistan’s Sindh-based political parties, mainly the Sindh Taraqi Pasand Party (STTP) participated in the rally against Imran Khan’s government, reported Economic Times. Bilawal Bhutto Zardari, Chairman of Sindh’s ruling Pakistan Peoples Party compared the “illegal annexation” of Sindh’s islands with Indian Prime Minister Narendra Modi’s move in Jammu and Kashmir last year when the Mod...

The Hindu Business Line October 13, 2020 India joins six nations to highlight the importance of action against illegal content and activity India, along with six other countries, has released an international statement calling on technology companies to provide backdoor encryption access to law enforcement agencies under certain circumstances. India, along with Japan joined members of the intelligence sharing alliance Five Eyes, comprising the United States, the United Kingdom, Canada, Australia, and New Zealand to detail their stance on encryption and public safety in a statement released over the weekend. The seven signatories in their statement, began by highlighting the importance of end-to-end encryption (E2EE) in protection privacy and safety of an individual, citing a report by UN Human Rights Council. “Encryption is an existential anchor of trust in the digital world and we do not support counterproductive and dangerous approaches that would materially weaken or limit security ...

 The Hindu Businessline October 13, 2020 State Bank of India (SBI) on Tuesday said all delivery channels (except ATMs and POS machines) will be affected as intermittent connectivity issues have delayed making its Core Banking System (CBS) available to its customers. SBI has a multi-channel delivery model, which includes digital, mobile, ATM, internet, branches and business correspondent (BC) outlets. CBS is an IT platform that networks all the operations of a bank, including branches, ATMs, POS, etc., enabling a customer to transact from any branch of the bank or seamlessly transact digitally. “We regret the inconvenience caused and request you to bear with us. Normal service will resume soon,” SBI said. As at March-end 2020, SBI had 44.89 crore customers. The bank had a network of 22,141 branches, 58,555 ATMs & ADWMs (Automated Deposit & Withdrawal Machines, CDMs & Recyclers) and 61,102 BC outlets. Reference:  https://www.thehindubusinessline.com/money-and-banking...

 Eurasian Times October 12, 2020 China has granted a $90 million in aid to the debt-strapped island nation of Sri Lanka for the purpose of ‘medical care, education, water supplies’. This has come at a time when Beijing has attained a negative image over its ‘debt trap’ strategy aimed at gaining influence in the region. Following a visit by the Chinese delegation, led by former foreign minister Yang Jiechi on the request of Sri Lankan President Gotabaya Rajapaksa, Beijing decided to help out its strategic neighbour.  Reportedly, the grant is a way to disprove China’s image of investing huge sums of money in mega projects through its Belt and Road Initiative (BRI) to later gain control over its strategic partners by piling debt obligations on them.  “Many geopolitical analyses interpret this project as a ‘debt trap’ set up by China to gain control over Sri Lankan affairs. I want to prove that it is not the case and that this large-scale project will help improve the living ...

 The Telegraph Online October 13, 2020 In a double whammy for the economy, industrial production declined 8 per cent in August, while retail inflation rose to an eight-month high of 7.34 per cent in September, further delaying a rate cut by the central bank to bolster the shrinking economy. Lower output in the manufacturing, mining and power generation sectors dragged down industrial output, which had contracted 1.4 per cent in August 2019. Production of the manufacturing sector fell 8.6 per cent, while the output of the mining and power segments was down 9.8 per cent and 1.8 per cent, respectively. “It may not be appropriate to compare the IIP in the post pandemic months with the IIP for months preceding the pandemic,” the ministry of statistics and programme implementation said in a statement. The output of capital goods, which is a barometer of investment, fell 15.4 per cent in August against a contraction of 20.9 per cent earlier. Consumer durables output also declined 10.3 per...

 WION News October 13, 2020 If you see less of our content on your Facebook feed, it is because the social media giant is now censoring WION. If a user tries to share some of WION’s stories on Facebook, they may see a prompt saying the following: “False information: Checked by independent fact checkers". Why are we bringing this up? Facebook has rated one of our interviews as “fake news”. The interview in question was with Dr Li-Meng Yan, a virologist from China who claimed that COVID-19 was manufactured in a lab, and shed light on the discreet underpinnings of the pandemic in China. The Chinese virologist had made world headlines with a sensational claim of the origins of COVID-19. On October 12, Facebook sent out a message to us regarding a piece that ran on our website - wionews.com about the interview with Dr Yan. During the interview, Dr Yan had told WION that Chinese virologists in Wuhan were forced into silence about the outbreak. The report was shared on Facebook. A few we...

 The Indian Express October 13, 2020 On Monday, the Royal Swedish Academy of Sciences awarded this year’s Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — popularly, albeit incorrectly, referred to as the Nobel Prize for Economics — to Paul R Milgrom and Robert B Wilson. Both winners are currently with Stanford University, where they teach in different departments. In its announcement, the Academy said the pair were receiving the award for “for improvements to auction theory and inventions of new auction formats”. They will equally share the 10 million Swedish kronor award money — roughly Rs 8.33 crore. What is auction theory? Essentially, it is about how auctions lead to the discovery of the price of a commodity. Auction theory studies how auctions are designed, what rules govern them, how bidders behave and what outcomes are achieved. When one thinks of auctions, one typically imagines the auction of a bankrupt person’s property to pay off his creditors. I...

 The Indian Express  October 13, 2020 The Quad, or the quadrilateral security dialogue between India, US, Japan and Australia, is now emblematic of the geopolitical churn in the eastern hemisphere. Less noted but equally significant is its geo-economic agenda that has drawn South Korea, Vietnam and New Zealand into the post- pandemic  consultations in the so-called “Quad Plus” format. In both the domains, China is the natural focus. The policy discourse is about blunting Beijing’s ambition to exercise regional hegemony and preventing it from bending the global economic order in China’s favour. India finds itself at the frontline on both. Confronting an expansive Chinese aggression on its frontiers and Beijing’s growing strategic influence in the subcontinent and the Indian Ocean, Delhi is ready to explore security coalition-building with its Quad partners. India has also been a pioneer in economic decoupling from China — recall its withdrawal from the  Regional Compr...

 The Indian Express October 13, 2020 Just three days ago, a consumer confidence survey by the Reserve Bank of India said discretionary spending was expected to remain low in the near future even though people expected an improvement not just in economic situation but also in employment conditions and income scenario. Finance Minister Nirmala Sitharaman’s announcement on measures to boost consumer spending is clearly an acknowledgement that people going out and spending is key to a faster turnaround of the economy. But then, two things stand out in the announcement: One, much of it (the consumer spending part) is front-loading of expenditure, or in other words, repurposing of government spending, and the size of the overall package is nothing much to talk home about (compared with the Prime Minister’s Garib Kalyan Yojana and the AtmaNirbhar Bharat package); and, two, by specifying how and where to spend, the Finance Ministry just doused any excitement among the 35 lakh-odd Central g...

 The Indian Express October 13, 2020 T HE STANDOFF between Opposition-ruled states and the Centre over compensation shortfall in Goods and Services Tax continued at the GST Council meeting Monday with both sides failing to arrive at a consensus on the borrowing options made available. The Centre stated its intent to facilitate borrowing under Option 1 — Rs 1.1 lakh crore through a special window facilitated by the RBI and Finance Ministry — for the 21 states that agreed to this route while the other states termed the process as illegal. Stating that borrowing by the Centre will lead to a rise in G-sec yields and borrowing costs for states and the private sector, Union Finance Minister Nirmala Sitharaman said that borrowing falls under Article 293 of the Constitution, and it is “a state’s right to decide what they want to do”. No consensus has been arrived on options presented to states in meeting the GST compensation shortfall…While concluding, I said that while I respect there is ...