In this issue of Economy Matters, we analyse the recent Fed rate hike and Euro Zone economic prospects, in the section on Global Trends. We have covered data trends in GDP, IIP, Inflation, Monetary Policy and Trade in the Domestic Trends section. Find out the results of 2QFY16 In Corporate Performance section. Taxation section covers the views of Sumit Dutt Mazumder, former Chairman of CBEC on GST. The Sectoral Spotlight for this issue is on Financial Conditions Index for 3QFY16. Read Focus of the Month, to know about ‘Skilling India’, wherein experts from diverse areas present their views.
Euro Area is recovering slowly, with its major member countries registering lower-than-expected growth rates in the third quarter. Major Asian economies have shown diverse growth trends in the last few quarters. We cover this in the section on Global Trends in this month’s issue of Economy Matters.
In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on GDP, Current Account, IIP and Inflation data during the month of December 2013.
The Sectoral spotlight for this issue is on Electricity, which remains an important contributor to GDP growth. We evaluate the impact of the Electricity Act, 2003 on the sector’s performance.
In the Special Article, we provide a snapshot of India’s exports sector along with analyzing the important sectors in exports such as services and tourism.
This monthly briefing highlights how the world economy is struggling to gain momentum, emerging economies facing policy dilemma in trying to stabilize currencies and the G20 meeting making a call for new measures to lift growth and create jobs.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
In the current issue of Economy Matters, we analyse the economic prospects of US economy and the India-Mauritius tax pact in the section on Global Trends. In Domestic Trends, we analyse the trends emanating out of the recent releases on IIP, Inflation, Trade and Currency. Sector in Focus section discusses the prospects of e-commerce industry in India. In Focus of the Month, we discuss the impact of monsoons on the Indian economy. Special Feature carries an article on growth and job creation by Ms. A. Srija, Director, NITI Aayog.
US GDP growth slowed down once again in first quarter of 2016 amid signs of a global economic slowdown. Both consumers and businesses cut back on spending and US exports were hurt by economic weakness in overseas markets. Continued economic weakness, subpar inflation and global pressures are likely to cause the Federal Reserve to slow its pace of rate hikes this year from what had been expected. Closer home, in a significant move, India and Mauritius signed a landmark tax pact, aimed at tackling black money. The government expects the Protocol to tackle treaty abuse and round tripping of funds, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.
Euro Area is recovering slowly, with its major member countries registering lower-than-expected growth rates in the third quarter. Major Asian economies have shown diverse growth trends in the last few quarters. We cover this in the section on Global Trends in this month’s issue of Economy Matters.
In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on GDP, Current Account, IIP and Inflation data during the month of December 2013.
The Sectoral spotlight for this issue is on Electricity, which remains an important contributor to GDP growth. We evaluate the impact of the Electricity Act, 2003 on the sector’s performance.
In the Special Article, we provide a snapshot of India’s exports sector along with analyzing the important sectors in exports such as services and tourism.
This monthly briefing highlights how the world economy is struggling to gain momentum, emerging economies facing policy dilemma in trying to stabilize currencies and the G20 meeting making a call for new measures to lift growth and create jobs.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
In the current issue of Economy Matters, we analyse the economic prospects of US economy and the India-Mauritius tax pact in the section on Global Trends. In Domestic Trends, we analyse the trends emanating out of the recent releases on IIP, Inflation, Trade and Currency. Sector in Focus section discusses the prospects of e-commerce industry in India. In Focus of the Month, we discuss the impact of monsoons on the Indian economy. Special Feature carries an article on growth and job creation by Ms. A. Srija, Director, NITI Aayog.
US GDP growth slowed down once again in first quarter of 2016 amid signs of a global economic slowdown. Both consumers and businesses cut back on spending and US exports were hurt by economic weakness in overseas markets. Continued economic weakness, subpar inflation and global pressures are likely to cause the Federal Reserve to slow its pace of rate hikes this year from what had been expected. Closer home, in a significant move, India and Mauritius signed a landmark tax pact, aimed at tackling black money. The government expects the Protocol to tackle treaty abuse and round tripping of funds, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.
In the current issue of Economy Matters, we discuss China’s GDP release for Q2:2016, policy stance of Bank of England and IMF’s latest global growth forecast in the section on Global Trends. In Domestic Trends, we present analysis of the trends emanating out of the recent releases on Monsoon progress, IIP, Inflation, Trade and CII’s Business Outlook Survey Results for Q1FY17. In Policy Focus, we present the highlights of the key policy documents released during June-July 2016. In Focus of the Month,the topic ‘Transforming Healthcare in India' has been covered.
The world's second largest economy, China, is slowly recovering. Even more importantly, the latest forecasts by the World Bank suggest that high-income economies appear to be finally turning the corner. We cover this in the section on Global Trends in this month’s issue of Economy Matters.
In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on GDP, IIP, Inflation, trade, and monetary policy.
The Sectoral spotlight for this issue is on Manufacturing, which remains an important sector for realizing the higher growth potential of the economy.
The section on Taxation dwells on BEPS and carries an interview with Mr. Akhilesh Ranjan, Joint Secretary, Ministry of Finance, Government of India on some critical international taxation issues.
In the Special Article, we provide a snapshot of Central Government’s fiscal health along with a detailed Q&A of Mr. R. Seshasayee, Past President & Chairman Economic Policy Council, CII, on the subject.
The section on Special Feature carries an article titled “The Tradeoffs for Policy Makers in India Today”, by Dr. Pronab Sen, Chairman, National Statistical Commission, Government of India.
Index of Industrial Production (IIP), on the domestic front, moved into the positive territory in November 2014, signalling improvement in growth momentum. We hope that going forward, the incipient signs of revival would transform into a firm recovery especially as there is some progress in investment intentions and business confidence is on the ascendant. On the global front, slowing growth in Japan and Euro Area has increased the uncertainties in global growth.
In the current issue of Economy Matters, we analyse the economic data coming out of Japanese and Euro Area economies, in the section on Global Trends. In Domestic Trends, we analyse the trends emanating out of the recent releases on IIP, Inflation, and Balance of Payments. The Sectoral Spotlight for this issue is on the topic “Enabling 'Make in India' Through Effective Tax Reforms”. In Focus of the Month, we look at the year gone by and list out the challenges which await us in 2015.
Appended below is the link to download the November-December 2014 of Economy Matters for your ready reference:
This monthly briefing highlights that financing conditions improve in euro area peripheral countries and in emerging economies, that the US economy bounces back after a difficult first quarter and that China’s first-quarter GDP growth is the slowest in two years.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
The SVB Asset Management Economic Report, Q2 2017, is a review of and outlook on economic factors that impact global markets and business health.
In this edition, the team discusses the U.K.’s Article 50 notice and the FOMC’s current path towards normalization. The report also examines the Trump Administration’s first 100 days in office and current business sentiment.
This monthly briefing highlights that global manufacturing production has improved. Economic recovery is slowly strengthening in developed economies; and public fiscal stimulus programmes have been a determinant factor in economic growth in many developing countries.
For more information:
http://www.un.org/en/development/desa/policy/index.shtml
Dear Investors,
September saw a spillover of the previous month’s equity
market correction. The main reason for this was the continuing
bleak global events, which also negated domestic macro greenshoots to a large extent. In the West, the possibility of a US Fed
rate hike lingers, keeping investors globally on their toes.
Amidst this global weakness, uncertainties of global markets
with respect to the Euro have reduced after Alexis Tsipras’
Syriza party returned to power once again in Greece, this time
with a majority. The Chinese government is also taking
initiatives like tightening trading rules on forex and stock
market to stabilize their economy. The slowdown in China in a
way has been India’s gain, which has led to India emerging as
the top destination for FDI investments, attracting $30 billion
by the end of June 2015.
Closer home, better looking green-shoots portray a recovering
economy. Industrial growth has been above 4% for the past 2
months, whereas retail inflation continues to remain lower.
Although there has been a double digit deficit in the rainfall
this year, RBI is not too much worried about the pressure on
the food prices given the comfort it has derived from the
actions by the government to manage supply. An addition to
these positives was RBI increasing the foreign investment limit
in central government securities. This will help create a new
pool of money to compensate for the lowering SLR imposed on
banks.
Markets rejoiced at the bonnes nouvelles (good news) of the
50 basis points rate cut by RBI at the fourth bi-monthly
meeting. The main objective behind this was to enhance
growth in the economy. Mr. Raghuram Rajan hopes that
investment should respond more strongly after some certainty
about the extent of monetary stimulus in pipeline, even if the
transmission is low. With this transmission, investments in the
real economy would increase. This announcement was then
followed by a highly ‘dovish’ stance, with the RBI repeating
that it would remain in an ‘accommodative mode’. The rate cut
has increased the cumulative rate cut this year to 125 bps. It is
hearting that banks like SBI has cut its base rate by 40 bps.
All in all, the month saw events that were unexpected, events
that created a yin-yang sentiment among investors and events
that made India shining more convincing. RBI has taken the
first bold step on its part. The question now is what the
government will do on its part to grow our economy!
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera progressivement enrichie avec nos indicateurs quantitatifs.
Toutes nos analyses sont disponibles sur www.finlightresearch.com
In the current issue of Economy Matters, we discuss China’s GDP release for Q2:2016, policy stance of Bank of England and IMF’s latest global growth forecast in the section on Global Trends. In Domestic Trends, we present analysis of the trends emanating out of the recent releases on Monsoon progress, IIP, Inflation, Trade and CII’s Business Outlook Survey Results for Q1FY17. In Policy Focus, we present the highlights of the key policy documents released during June-July 2016. In Focus of the Month,the topic ‘Transforming Healthcare in India' has been covered.
The world's second largest economy, China, is slowly recovering. Even more importantly, the latest forecasts by the World Bank suggest that high-income economies appear to be finally turning the corner. We cover this in the section on Global Trends in this month’s issue of Economy Matters.
In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on GDP, IIP, Inflation, trade, and monetary policy.
The Sectoral spotlight for this issue is on Manufacturing, which remains an important sector for realizing the higher growth potential of the economy.
The section on Taxation dwells on BEPS and carries an interview with Mr. Akhilesh Ranjan, Joint Secretary, Ministry of Finance, Government of India on some critical international taxation issues.
In the Special Article, we provide a snapshot of Central Government’s fiscal health along with a detailed Q&A of Mr. R. Seshasayee, Past President & Chairman Economic Policy Council, CII, on the subject.
The section on Special Feature carries an article titled “The Tradeoffs for Policy Makers in India Today”, by Dr. Pronab Sen, Chairman, National Statistical Commission, Government of India.
Index of Industrial Production (IIP), on the domestic front, moved into the positive territory in November 2014, signalling improvement in growth momentum. We hope that going forward, the incipient signs of revival would transform into a firm recovery especially as there is some progress in investment intentions and business confidence is on the ascendant. On the global front, slowing growth in Japan and Euro Area has increased the uncertainties in global growth.
In the current issue of Economy Matters, we analyse the economic data coming out of Japanese and Euro Area economies, in the section on Global Trends. In Domestic Trends, we analyse the trends emanating out of the recent releases on IIP, Inflation, and Balance of Payments. The Sectoral Spotlight for this issue is on the topic “Enabling 'Make in India' Through Effective Tax Reforms”. In Focus of the Month, we look at the year gone by and list out the challenges which await us in 2015.
Appended below is the link to download the November-December 2014 of Economy Matters for your ready reference:
This monthly briefing highlights that financing conditions improve in euro area peripheral countries and in emerging economies, that the US economy bounces back after a difficult first quarter and that China’s first-quarter GDP growth is the slowest in two years.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
The SVB Asset Management Economic Report, Q2 2017, is a review of and outlook on economic factors that impact global markets and business health.
In this edition, the team discusses the U.K.’s Article 50 notice and the FOMC’s current path towards normalization. The report also examines the Trump Administration’s first 100 days in office and current business sentiment.
This monthly briefing highlights that global manufacturing production has improved. Economic recovery is slowly strengthening in developed economies; and public fiscal stimulus programmes have been a determinant factor in economic growth in many developing countries.
For more information:
http://www.un.org/en/development/desa/policy/index.shtml
Dear Investors,
September saw a spillover of the previous month’s equity
market correction. The main reason for this was the continuing
bleak global events, which also negated domestic macro greenshoots to a large extent. In the West, the possibility of a US Fed
rate hike lingers, keeping investors globally on their toes.
Amidst this global weakness, uncertainties of global markets
with respect to the Euro have reduced after Alexis Tsipras’
Syriza party returned to power once again in Greece, this time
with a majority. The Chinese government is also taking
initiatives like tightening trading rules on forex and stock
market to stabilize their economy. The slowdown in China in a
way has been India’s gain, which has led to India emerging as
the top destination for FDI investments, attracting $30 billion
by the end of June 2015.
Closer home, better looking green-shoots portray a recovering
economy. Industrial growth has been above 4% for the past 2
months, whereas retail inflation continues to remain lower.
Although there has been a double digit deficit in the rainfall
this year, RBI is not too much worried about the pressure on
the food prices given the comfort it has derived from the
actions by the government to manage supply. An addition to
these positives was RBI increasing the foreign investment limit
in central government securities. This will help create a new
pool of money to compensate for the lowering SLR imposed on
banks.
Markets rejoiced at the bonnes nouvelles (good news) of the
50 basis points rate cut by RBI at the fourth bi-monthly
meeting. The main objective behind this was to enhance
growth in the economy. Mr. Raghuram Rajan hopes that
investment should respond more strongly after some certainty
about the extent of monetary stimulus in pipeline, even if the
transmission is low. With this transmission, investments in the
real economy would increase. This announcement was then
followed by a highly ‘dovish’ stance, with the RBI repeating
that it would remain in an ‘accommodative mode’. The rate cut
has increased the cumulative rate cut this year to 125 bps. It is
hearting that banks like SBI has cut its base rate by 40 bps.
All in all, the month saw events that were unexpected, events
that created a yin-yang sentiment among investors and events
that made India shining more convincing. RBI has taken the
first bold step on its part. The question now is what the
government will do on its part to grow our economy!
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera progressivement enrichie avec nos indicateurs quantitatifs.
Toutes nos analyses sont disponibles sur www.finlightresearch.com
Time Management for Project Managers - Lessons from BillFrancis Wade
This presentation was given to the Project Management Institute's Dr. Bird Chapter in Kingston Jamaica. It describes the journey undertaken by the protagonist in the book "Bill's Im-Perfect Time Management Adventure." In the third part of the book he must find a way to improve the skills of his team-members so that they can fulfill their mandate, and also avoid being laid off due to low productivity. He's forced to take some risks to realize this goal that brings him into direct confrontation with company policies and an employee who wants to see him fail. http://perfect.mytimedesign.com
Update: Several months after this speech was delivered, I gave a speech at the PMISCC conference in Trinidad. The link to the contents (audio, slides and paper) are available here - http://perfect.mytimedesign.com/calling-all-project-managers/
SynergyO2 es una fórmula coloidal altamente concentrada y súper mineralizada con la combinación exacta de aminoácidos, sílica de origen vegetal, electrólitos y minerales esenciales, todos combinados para proporcionar al cuerpo un proceso e limpieza, reconstrucción, nutrición y regeneración, brindando mejor equilibro, optimizando los niveles de energía y generando mayor vitalidad. Es reconocido mundialmente por su eficacia y por ser un portador de la salud.
At an event at its central London Headquarters, chaired by The Times’ Economics Editor Philip Aldrick, Resolution Foundation Chief Economist Matthew Whittaker presented new analysis on the impact of monetary policy during the downturn. Former MPC member Kate Barker and Chief Economics Commentator at the Financial Times Martin Wolf then debated the future role of monetary policy, before taking part in a wider Q&A.
In the July-August 2014 Issue of Economy Matters, we track the economic developments in US and China in Global Trends. In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on IIP, Inflation, Fiscal, Trade & Monetary Policy. The Sectoral spotlight for this issue is on the Implications of Jobless Growth. In Focus of the Month, the spotlight is on Textiles Sector. Special Feature discusses the importance of Hospitality Sector in India.
Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.
In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.
CII’s flagship monthly publication Economy Watch has been now revamped and rechristened as ‘Economy Matters’. Apart from encompassing all the key features of the old version, the new issue also carries a new section on Corporate Profitability to keep readers abreast about the latest trends in corporate performance. The ‘Economy Matters’ brought out by CII Research seeks to provide an in-depth update on current trends in the domestic and international economy and helps in tracking policy developments and understanding industry dynamics.
In the June / July 2014 issue of Economy Matters, we track the economic developments in the major advanced economies in Global Trends. In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on IIP, Inflation and Monsoon. Additionally, the recent Economic Survey and Railway Budget are also covered. The Sectoral spotlight for this issue is on the Warehousing Industry. In Focus of the Month, the spotlight is on Union Budget 2014-15. Special Feature discusses the importance of Chemical Industry for economic growth.
"Highlights":
Wage growth continues
Private consumption behind GDP growth
Situation in lending is improving
"In Focus":
The right moment to put the budget in order. Press conference of the Governor of Latvijas Banka (summary) – Ilmārs Rimšēvičs
1Introduction My name is Yinan Hong. I am your port.docxaryan532920
1
Introduction
My name is Yinan Hong. I am your portfolio manager from Trailblazer
Investment Advisors. I am a CFA charter holder, equipped with sufficient financial
knowledge. I will help my customers manage their wealth and try my best to gain??
as much as possible. There are three objectives for my clients, Sam and Amy
Kratchman who have recently inherited … and have current savingswith
$1,100,000(on an after-tax basis) inheritance. The first one is having enough money
for their life after retirement at age 65. The second objective is raising college tuition
for their two children. The last one is to buy a beach house with newfound inheritance.
Ending summary
Economic Analysis
2014
GDP Growth
The economic recovery of United States in 2014 became a light brightspot in
global economy after the 2009 recession. The low price level do you mean low infl?
If so that isn’t really a great thing at the current time, decreasing unemployment rate,
better development of the what is the estate?estate and manufacturing industry made
the economy continuously recover although at a much lower rate than prev recoveries.
However, some important indexes like the investment of the real estate, income of
amy kratchman � 2016/10/16 12:32 PM
已设置格式: ⾏行行距: 1.5 倍⾏行行距
2
residents residents?, manufacturing have not reached to the same level as it performed
before the recession in 2014 – true – but RE was performing very well and is a strong
area of growth in 14. The percentage change in Real Gross Domestic Product in 2014
increased in the former three quarters and then decrease in the Q4.not true
In the first quarter, the change of GDP was 2.1% not correctnegative growth1.
The most important factor was the abominable weather. The personal consumption
expenditures for nondurable goods decreased because 1what is this? the inconvenient
of buying your table (footnoted) does not imply a decrease. The Gross private
domestic investment decreased 6.6% because of the huge lower equipment
investment1. The exports decreased extremely and the imports increased. They all led
to the negative growth.
Figure12 : CCI Index in 2014
The GDP growth reached to 4.0% in the second quarter. By analyzing the
components that affected overall GDP growth, personal consumption expenditures
1http://bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&904=2013&903=1&9
06=q&905=2016&910=x&911=0
2 FactSet
3
and gross private domestic investment played an important role in this significant
growth. Consumption contributed 2.56% change in GDP. After the severe weather,
the private inventory investment, exports, fixed investment, and non-federal
government spending increased.this is a rebound in pretty much all areas However, 5%
more imports negatively impact GDP and offset those positive contributors.
Purchasing Managers’ Index (PMI) also ...
The SVB Asset Management Economic Report, Q1 2017, is a review of and outlook on economic and market factors that impact global markets and business health.
In this edition, the team discusses the Fed's recent activity and its intentions to raise benchmark interest rates three times in 2017. The report also focuses on how the new U.S. administration will impact domestic and global economies.
The May edition of the Multilateral Newsletter highlights the key deliberations from the Forum and provides the key recommendations made by the OECD stakeholders. In addition, the edition covers major happenings at the World Bank, Asian Development Bank (ADB), B20 and International Labour Organisation (ILO).
Micro, Small and Medium Enterprises (MSMEs) sector is the backbone of the national economic structure and has acted as the bulwark for the Indian economy, providing it resilience to fend off global economic shocks and adversities. The development of the sector is extremely critical to meet the national imperatives of financial inclusion and generation of significant levels of employment across urban, rurban and rural areas and to catalyse socio-economic transformation.
Easy access to credit and finance remains one of the many challenges faced by the sector. Hence, in view of the sector's importance in the overall economic landscape, it is critical the MSME sector develops through the concerted efforts of various stakeholders, including banks and financial institutions, equity funds, industry majors and MNCs, regulators across various ministries at the Center and in the States, and trade associations, together, to create a forward-looking framework and ecosystem. The competitiveness of the MSME sector is critical for sustaining economic growth.
It’s a matter of concern that 600 million people in India face high to extreme water stress in the country. About three-fourths of the households in the country do not have drinking water at their premise. With nearly 70% of water being contaminated, India is placed at 120th amongst 122 countries in the water quality index. It’s a fact that water is a State subject and its optimal utilization and management lies predominantly within the domain of the States. This index is an attempt to budge States and UTs towards
efficient and optimal utilization of water and recycling thereof with a sense of urgency.
GST, the single taxation regime, was implemented a year back and though there were some initial implementation issues, as is the case with any system for the first time, it is safe to say that the GST has been the biggest tax reform of Independent India.
Cyberspace is rapidly transforming our lives – how we live, interact, govern and create value. With the JAM (Jan Dhan, Aadhaar and Mobile) trinity, India is at the forefront of global digital transformation. “Digital India” is being hailed as the world's largest technology led programme of its kind.
While internet, smartphones and modern information and
communication devices have been great force multipliers, endless connectivity and proliferation of IoT devices is giving rise to vulnerabilities, risks and concerns. Cyber security is today ranked among top threats by governments and corporates. Heightened concerns about data security and privacy have resulted in a spate of regulations in India and across the world. India is in the process of discussing and enacting its own comprehensive data security and privacy regulation, as well as vertical specific ones. Cyber security is an ecosystem where laws, organisations, skills, cooperation and
technical implementation would need to be in harmony to be
effective.
Overall, a robust regulatory framework based on global and
country-specific regulations, development of a holistic cyber
security eco-system (academia and industry as well as
entrepreneurial) and a coordinated global approach through
proactive cyber diplomacy would help to secure cyber space and promote confidence and trust of key stakeholders including
citizens, businesses, political and security leaders.
CII has been actively working in the cyber security space. The CII Task Force on Public Private Partnership for Security of the Cyber Space has been set up to bring about improvements in the legal framework to strengthen and maintain a safe cyberspace ecosystem by capacity building through education and training programmes. We would facilitate collaboration and cooperation between Government and Industry in the area of cyber security in general and protection of critical information infrastructure in particular, covering cyber threats, vulnerabilities, breaches, potential protective measures, and adoption of best practices.
Delhi, the capital of India, has emerged as a major commercial capital and industrial hub of India. It is home to a wide range of industries including textiles, electrical and electronics, IT &ITeS services, hotel and tourism, which have contributed immensely to the economic and industrial growth of the country. Nearly 88% of the SMEs in Delhi revealed that this cluster is as an attractive destination for conducting business. Delhi has become an attractive business and tourist destination. This is driven by its improved infrastructure, good connectivity with other Asian and western regions, ease of access to market and availability of skilled labor among others. Consequently, it has emerged as
one of the most preferred investment and business destinations.
The state government of Maharashtra has been at the forefront in creating a conducive business environment that fosters globally competitive firms. Business reforms introduced both by the Central as well as the state government have played a critical role in India’s 30 spots improvement in the Doing Business ranking for 2018.
The State, under the Business Reforms Action Plan (BRAP) 2016, has implemented over 90 per cent reforms in 7 out of 10 parameters, including labour registration, utility connections, single window system, environment registration, among others. These policy reforms have significantly helped in the reduction in time and cost of doing business for the industry, thereby
establishing Maharashtra as one of the top investment destinations in the country.
This report provides the key highlights of the select initiatives on ease of doing reforms in Maharashtra. With a view to provide on-ground impact of these initiatives, the Report also captures industry views on various aspects of business reforms.
The March-April edition of the Multilateral Newsletter gives insights on the key happenings at the various multilateral institutions and highlights the key discussions and deliberations at the informal WTO Ministerial Meeting held in New Delhi.
WTO plays a vital role by bringing stability and predictability to the multilateral trading system. It is a collective responsibility of WTO members to address the challenges faced by the system and putting the economies back on steady and meaningful way forward.
Several proposals and initiatives on investment facilitation were tabled at the WTO in the run-up to the 11th Ministerial Conference. The proponents advocated discussions on Investment Facilitation within the WTO framework. However, there was no consensus on initiating negotiations, or even establishing a Work Programme, on Investment Facilitation. A clear need of more work to look at all aspects of a potential multilateral rules on Investment, particularly on its impact on domestic policy space was stated.
In order to deepen the understanding between the member it is important that an open, transparent and inclusive approach of decision making for the various interventions. The informal WTO Ministerial gathering in New Delhi saw convergence of around 53 members representing a broad spectrum of the WTO membership.
CII, as an Industry Institution is cognizant of the need for India to engage constructively in some of the new issues being discussed under the WTO framework.
Businesses are gradually recognizing that ethics means good business. It is believed that well-run and trustworthy
companies are more likely to attract greater investment opportunities, which enables them to innovate and expand, and
generate wealth and jobs. Good corporate governance practices are regarded as providing an 'extra' edge to companies
to enhance their image and stay ahead in an intensely competitive business environment. This would help them imbibe
universally accepted values of ethics and good governance—accountability, transparency, responsibility and
responsiveness to stake holders. Besides, it would also mean looking beyond achieving mere economic sustainability to
include social and environmental sustainability as well. Many corporates are adhering to sustainable business practices
and many more are likely to follow suit in the time to come.
On the domestic front, CII expects economic growth to bounce back to 7.3-7.7 per cent in FY19 from the estimated 6.6
per cent in FY18. The prognosis of improved rural consumption and a recovery in private investment will support
growth, even as the debilitating effects of demonetisation and GSTimplementation will fade away
The Commuique May 2018 edition discusses the cover story
on 'Resolving Insolvency in India'
The Insolvency and Bankruptcy Code (IBC) 2016, is one of
the biggest regulatory reforms corporate India has witnessed
in recent times.
It also features 'UK-India CEO Forum Meeting ', 'CII CEOs Delegation to 11th Commonwealth Business Forum 2018', 'Four Transformations of the Global Energy Market', Economy pieces on 'The Innovation Paradox' & 'Can the Lion Conquer the Forest?' along with a piece on 'India-Africa Economic Partnership'.
The government of India has, in the past few years, accorded an utmost priority to the Ease of Doing Business (EoDB). The accent is on simplification of regulations and use of technology to make the compliance more efficient for businesses. Apart from the Centre, the States are also being encouraged to implement business reforms in the spirit of competitive federalism, to foster reforms at the sub-national level. The measures are aimed at creating a conducive business environment, which is a key to facilitating growth and creating jobs. Thanks to these measures, India’s EoDB ranking, captured by the World Bank, has improved by 42 spots since 2014 to touch the 100th position now. The Prime Minister envisions India among the top 50 nations in the next couple of years.
While business reforms are being undertaken at a rapid pace and large scale, cutting across Central as well as state levels, it is imperative that awareness about these developments is created among stakeholders and regular feedback is generated to address the gaps in the implementation of reforms. Identification of pending issues and suggesting possible solutions are equally vital. It is also important to identify the best practices within and outside the country, which are considered for implementation by the needy states.
The report reflects on the role of broadband connectivity and the multiplier effect it has on the larger ecosystem. India is ripe for a Digital rethink, with both government and industry aligning their efforts toward a broadband powered Digital India. Broadband has the power to enable the gigabit society that is always connected. Broadband connectivity has changed the way people
communicate, socialise, create, sell, shop and work. India’s digital consumption patterns highlights the evolution. On an average Indians spend 200 minutes on mobile every day, with the second highest app downloads globally. Almost 79% of the web traffic in India is on mobile.
To realise the Digital India dream, there is a need to strengthen the broadband backbone, which forms a key pillar of this transformation. This report highlights the need for future ready and robust broadband infrastructure and the requisite efforts for expediting its reach.
South Africa and India share a rich past and bright future. India has transitioned from being South Africa’s political ally to being a vibrant economic partner. Despite challenges, the opportunity for increasing the value of bilateral trade between the two countries is growing exponentially each year.
South Africa and India have nurtured a bilateral relationship since the 1860s, when the first Indians arrived in South Africa. India was one of the first countries that rallied at the United Nations in support of the anti apartheid movement in South Africa. The strong bond established between the two countries during the struggle for democracy in South Africa became further entrenched in post-apartheid South Africa.
Most global businesses recognise South Africa as the most favourable destination in Africa for making long-term investments. The country offers a stable political and economic environment with established institutions. Policies and procedures are well articulated and consistent, and it offers a free and competitive environment with open-minded consumers. South Africa provides the most stable and technologically viable environment for Indian companies wishing to establish a base from which to expand across the continent. As a gateway to Africa, it is renowned for its infrastructure, skills pool and expertise.
Our world is changing at an unprecedented pace, driven by a new digital economy. Companies across sectors are keen to become more efficient, disruptive, and differentiated, by using new technologies and supported by an ecosystem of customers, partners, and technology leaders. New-age technologies such as Artificial Intelligence (AI), Augmented Reality (AR), Blockchain, Machine Learning, 3D printing, and IoT are gaining more and more importance and acceptance.
India has all the ingredients in place to leverage this innovation and technological advantage in the long run, including university graduates, public institutes and corporates. However, India’s gross expenditure on R&D as a proportion of GDP (GERD) is less than 0.7% as of 2014-15 and within this, the share of industry is just 30%. Further, the vast SME sector needs to scale up technology infusion for higher productivity.
This is the fifth edition of the Grant Thornton India meets Britain Tracker, developed in collaboration with the Confederation of Indian Industry. The India Tracker identifies the fastest-growing Indian companies in the UK, as well as the top Indian employers. It provides insight into the evolving scale, business activities, locations and performance of the Indian-owned companies who are making the biggest impact in the UK.
This year, our research identified approximately 800 Indian companies operating in the UK, with combined revenues of £46.4 billion (£47.5 billion in 2017). Together, they paid £360 million in corporation tax (£275.7 million in 2017) and employed 104,932 people (105,268 in 2017). This shows the continued importance of the contribution that Indian companies make to the UK economy.
The Make in India initiative of the government which lays emphasis on domestic manufacturing, indigenization and import substitution, is expected to pave the way for making the Indian defence sector self-sufficient.Encouragingly, the Indian industry is now actively engagedand is partnering with the government in building a modern and best-in-class defence systems, equipment and components which should strengthen our forces and make the country more self-reliant. The formation of the Society of Indian Defence Manufacturers (SIDM) as an apex body of the Indian defence industry is critical in this regard. SIDM is expected to play a proactive role as an advocate, catalyst and facilitator for building the growth and capability of the defence industry in India. Given the rising importance of buttressing the Make in India programme for expanding the capacity of the Indian defence sector, in this issue of Economy Matters, a few SIDM office bearers and defence experts present their insights into this crucial topic.
As India integrates deeper into the global economy, it is becoming increasingly clear that the country needs to focus both on meeting international competition and its own developmental challenges.
The Government launched several initiatives last year, such as Make in India, Skill India, and Digital India, among others, towards make the vision of integrated inclusive development a reality.
For industry, grappling with the challenges of disruptive technologies, restrictive trade laws, environmental responsibilities and more demanding and discerning customers, the imperative is for sharper focus on producing excellent goods and services, along with building skills, generating jobs, and mainstreaming the marginalized.
Personal and freight mobility are important aspects of economic development and therefore create a significant footprint on the natural environment, especially on the ambient air quality. Vehicular emissions have been identified as one of the sources of air pollutants, specially PM 2.5, as per source apportionment study of IIT-Kanpur commissioned by Government of NCT of Delhi in the year 2015 (Sharma and Dikshit, 2016). Although there are other contributors to air pollution but the vehicular pollution remains a major non-point source. Efforts are needed for reducing the overall impact of the same. Another distinguishing feature of Delhi’s transportation system is the medium and heavy commercial vehicles (MHCVs) which are 2.5% of the total vehicular population but are responsible for over 65% of the total vehicular pollution as well as fuel consumption.
Under CII-NITI Aayog 'Cleaner Air Better Life Initiative', the task force on clean transportation has undertaken a consultative process to identify seven areas of action towards mitigation of air pollution in Delhi and National Capital Region (NCR). To begin with, it proposes mobility reforms to induce a more fundamental change from private vehicle towards sustainable means of transportation such as public and shared transportation. Further, limiting high-mileage polluting vehicles, strengthening Pollution-Under-Control (PUC) regime, allowing retailing of bio-fuels, promoting electric-mobility, decongesting traffic hotspots and retrofitting solutions are recommended by the task force, as elaborated.
Confederation of Indian Industry (CII) takes immense pleasure in presenting the third edition of Annual CSR Tracker 2017. Similar to the last two editions, this is the most comprehensive analysis of CSR disclosures of Bombay Stock Exchange (BSE-listed) companies obligated to practice CSR as per the Companies Act, 2013.
The Annual CSR Tracker 2017 is based on disclosures of 1,522 companies as compared to 1,270 companies in 2016 and 1,181 in 2015. Disclosures are broken into approximately, 41 indicators spread across six aspects of CSR legislation: governance, policy, financials, spends as per Schedule VII, spend channels, and spend locations. Also included is beneficiary data that companies voluntarily disclose in their annual reports.
At CII Indian Women Network, we are driven by the imperative that Indian women become a core critical mass of the workforce to bring about the transformational change in attitude and behavior. We have also recognized the importance of some amazing women role models who can inspire the future generation into believing that there are no limits to what a woman can achieve. One critical aspect is our own self-belief and innermost conviction that will ultimately help us triumph in our relentless struggle for gender equality. It is a pleasure to share this comprehensive report with you that captures the universe of several variables that will impact our future progress.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
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how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
3. 1
FOREWORD
NOV-DEC 2015
A
s anticipated, the US Federal Reserve raised interest rates for the first time in almost a dec-
ade, signalling that the pace of subsequent hikes will be gradual and will depend on how
the economy moves forward. More importantly, the Fed said that its stance of monetary
policy would remain accommodative after this increase, thereby supporting further improvement
in labor market conditions and a return to 2 per cent inflation. The impact of the Fed rate hike on In-
dia’s exchange rate and stock market was minimal as a rate increase had already been factored in by
the markets. However, the Fed rate hike settles one issue—that asymmetric monetary policy across
developed economies is now a hard reality. Conforming to this trend was the European Central Bank
(ECB), which announced further measures to stimulate the Euro zone economy by extending quanti-
tative easing until at least March 2017.
Domestic GDP data grew at higher rate of 7.4 per cent in the second quarter of FY2016, indicating
that the recovery has gained strength, as we had anticipated. GDP growth is likely to exceed 7.5 per
cent for the full year. In a year when external demand remains a drag on the economy, this would
be considered a strong performance. The acceleration in the manufacturing sector shows that the
government’s policy direction is bearing fruit. The Make in India campaign with its objective of
raising the growth rate in the manufacturing sector has begun to make an impact. Policy measures
need to focus on a revival in project execution in manufacturing, real estate and infrastructure. An ac-
commodative monetary policy is also critical for pushing up growth. In this regard, the RBI’s decision
to maintain status-quo in its policy review held in early December was in line with our expectations,
given that there has already been a reduction of 50 bps in the last policy. The focus has now shifted
to the transmission of lower policy rates to banks’ lending rates. Banks need to be ready to finance a
pick-up in credit growth and RBI should ensure that high level of non-performing assets do not con-
strain banks from financing higher growth. We are happy to note that the RBI intends to maintain an
accommodative policy stance.
Favourable demographics position India to fill the void created by countries with an ageing popula-
tion, and become a major player in global business. The manner in which India uses this opportunity
will determine whether it will reap its demographic dividend. Apart from tackling spatial challenges
arising from a remarkable disparity in the demographics of its States, India will have to address the
critical issues of creating jobs and preparing its youth to participate in its economic growth. India
will need to alter its policy framework and give incentives for creating sufficient jobs and alleviating
workforce skill-mismatch. If status-quo persists in India policy framework for education & training
and workforce management, economic growth will soon hit a speed breaker. Hence, it’s critical to
create an educated workforce and job opportunities for realising the demographic dividend.
Chandrajit Banerjee
Director General, CII
6. EXECUTIVE SUMMARY
ECONOMY MATTERS 4
Global Trends
Cheer continues to make its way in the Euro zone
countries. While France, Germany, Italy and Spain
have mirrored the leaping growth in the Euro zone,
Greece is still stuck in a dicey situation. In the third
quarter of current fiscal, the growth in GDP doubled
to 1.6 per cent, on the back of private and state ex-
penditure. This mirrored the stimulus measures that
have been announced by the European Central Board
in the recent past. After ECB’s hawkish cut, the Fed
has delivered a dovish hike. Economic activity in the
US has been expanding at a moderate pace. The
growth in GDP in the third quarter of 2015 softened
to 2.2 per cent. Given the economic outlook, the Fed-
eral Open Market Committee which met on 15th-16th
December decided to raise the target range for the
federal funds rate to 0.25 per cent to 0.5 per cent.
Previously, it was between 0 per cent and 0.25 per
cent, a level it had been at for seven years. The stance
of monetary policy remains accommodative after this
increase, thereby supporting further improvement in
labor market conditions and a return to 2 per cent in-
flation.
Domestic Trends
GDP growth rose to 7.4 per cent in Q2FY16 from 7.0
per cent in the previous year and was broadly in line
with expectations. Gross value added (GVA at basic
prices) also rose to a similar reading of 7.4 per cent
during the quarter. Even though the GVA and GDP
remained robust during the quarter, the correspond-
ing nominal growth slowed down to 5.2 per cent and
6.0 per cent respectively. Looking ahead, a tentative
economic recovery is underway, but is still far from
robust. GDP growth is likely to exceed 7.5 per cent
for the full year. Industrial output jumped to a 5-year
high of 9.8 per cent in October 2015 as compared to
3.8 per cent in the previous month mainly due to fes-
tive demand and low base of last year. All the major
components of the IIP performed well in October
2015. Inflation on the other hand has remained sub-
dued except for occasional spurt in CPI inflation in the
last few months. On the external front, global weak-
ness has translated into our merchandise exports fall-
ing for the twelfth consecutive month in November
2015.
Corporate Performance
The corporate results at the end of the second quar-
ter of current fiscal continued to remain weak as the
financial performance of Indian companies, espe-
cially manufacturing sector firms showed only mild
improvement. Net sales on an aggregate basis con-
tracted by 5.7 per cent while for manufacturing firms
it showed contraction to the tune of 12.5 per cent
during the second quarter of the current fiscal. There
was deceleration witnessed in profitability on an ag-
gregate basis as PAT declined to 1.4 per cent. While
the growth in expenditure costs stood somewhat
curbed, the fading growth of net sales, as well as de-
cline in PAT, added to the problems.
Sector in Focus : Financial Conditions
Index in 3QFY16
The CII – IBA Financial Conditions Index came at 70.3
for Q3 FY 2015-16, thus showing healthy improve-
ment in the overall financial conditions in the Indian
economy vis-à-vis the previous quarter (67.8) owing
to expectations of leading banks and financial insti-
tutions of reduction in cost of funds, strong liquid-
ity position, better external financial linkages and an
uptick in economic activity. The reading of the Index
was significantly above the 50 mark implying a strong
majority of the respondent banks and financial insti-
tutions reporting improvement or no change in the
overall financial conditions as against deterioration
vis-à-vis the previous quarter. The scale of improve-
ment in the financial conditions index for the current
quarter will provide the necessary comfort to the RBI
in continuing and further extending the accommo-
dative monetary policy stance for supporting higher
economic growth.
Focus of the Month : Skilling India
Evolving demographics clearly point out that India
will remain a young nation and the largest contributor
to the global workforce over the next few decades.
This is in sharp contrast to the rapidly aging popula-
tion in the Western countries. Although, investment,
reforms and infrastructure are likely drivers of India’s
economic growth, no growth driver is as certain as
the availability of people in the working age group. A
young population is India’s demographic dividend. It
gives India the potential to become global production
hub as well as large consumer of goods and services.
Further, since the age- group of 45-60 years is the key
contributor to household savings, India’s saving rate,
which has increased rapidly in the last decade, will get
a further boost thereby supporting investment. The
rise in its working-age population, however, is neces-
sary but not sufficient for India to sustain its economic
growth. If India does not create enough jobs and its
workers are not adequately prepared for those jobs,
its demographic dividend will become a liability.
7. 5
GLOBAL TRENDS
US Federal Reserve Bites the Bullet,
Raises Rate
NOV-DEC 2015
E
conomic activity in the US has been expanding at
a moderate pace. Household spending and busi-
ness fixed investment have been increasing at
solid rates in recent months, and the housing sector has
improved further; however, net exports have been soft.
The growth in GDP in the third quarter of 2015 softened
to 2.2 per cent as compared to 2.9 per cent in the com-
parable quarter in the previous year. This was mostly
led by a sharp fall in gross fixed capital formation and
exports. Growth in fixed capital declined to 3.5 per cent
as compared to 4.8 per cent in the third quarter of 2014.
Growth also moderated in government consumption
expenditure to 0.1 per cent as compared to 0.3 per cent
in the comparable quarter in the previous year. Margin-
al improvement in the growth in private consumption
to 3.2 per cent, as compared to 3.0 per cent previously,
was witnessed. Growth in exports fell to 1.2 per cent, as
compared to 3.7 per cent in the July-September quar-
ter of previous fiscal year. Growth in imports, which are
subtracted from the GDP, rose sharply to 5.6 per cent,
from 3.1 per cent previously. Consumer prices, though,
as a relief have been constantly declining, both for food
and energy. Inflation has continued to run below the 2
per cent longer-run objective, partly reflecting declines
in energy prices and in prices of non-energy imports.
Market-based measures of inflation compensation re-
main low; some survey-based measures of longer-term
inflation expectations have edged down. Further, a
range of recent labor market indicators, including ongo-
ing job gains and declining unemployment, shows fur-
ther improvement and confirms that underutilization of
labor resources has diminished appreciably since early
this year.
8. ECONOMY MATTERS 6
GLOBAL TRENDS
The Fed has a dual mandate of promoting “maximum
employment” and stable prices. On the jobs front, much
has improved since the depths of the Great Recession.
The U.S. jobless rate stands at 5 per cent, down sharply
from a crisis-era high of 10 per cent. Inflation, however,
remains stubbornly low, partly due to the collapse in en-
ergy prices. But in general, the US economy is on much
better footing and, as per the Fed’s assessment, can
9. 7
GLOBAL TRENDS
NOV-DEC 2015
withstand a higher cost of borrowing. “The Committee
judges that there has been considerable improvement
in labor market conditions this year, and it is reasonably
confident that inflation will rise over the medium term
to its 2-per-cent objective,” the Fed’s rate-setting com-
mittee said in its policy statement.
Given the economic outlook, and recognizing the time
it takes for policy actions to affect future economic
outcomes, the Federal Open Market Committee which
met on 15th-16th December 2015 decided to raise the
target range for the federal funds rate to 0.25 per cent
to 0.5 per cent. Previously, it was between 0 per cent
and 0.25 per cent, a level it had been at for seven years.
The stance of monetary policy remains accommodative
after this increase, thereby supporting further improve-
ment in labor market conditions and a return to 2 per
cent inflation.
US banks and other depository institutions are required
by law to keep a certain level of funds in reserve. If a
bank doesn’t have sufficient reserves, it can borrow
from a bank holding excess funds. These short-term
loans take place in the federal funds market. The cost
of borrowing in this market is the federal funds rate.
But the Fed doesn’t set the rate. It can, however, try
to push the fed funds rate toward its target. To do so,
the Fed buys and sells government securities – an activ-
ity known as open market operations – to either raise
or lower the supply of reserves in the banking system,
which in turn affects rates. If there are less reserves to
lend out, for instance, rates should climb higher. This is
still however important because it influences other in-
terest rates – including those that truly hit home.
The hike was expected; as of the morning of the Meet-
ing, the implied probability of a hike was 76 per cent,
according to Bloomberg data and according to many,
failing to raise interest rates would have damaged the
Fed’s credibility. The figure was as high as 97 per cent
in a Wall Street Journal poll. More hikes are expected.
But Federal Reserve chair Janet Yellen has long said
the pace of rate hikes would be slow and gradual. “An
abrupt tightening would risk disrupting financial mar-
kets and perhaps even inadvertently push the economy
into recession,” she said earlier this month.
The Committee is maintaining its existing policy of rein-
vesting principal payments from its holdings of agency
debt and agency mortgage-backed securities in agency
mortgage-backed securities and of rolling over matur-
ing Treasury securities at auction, and it anticipates
doing so until normalization of the level of the federal
funds rate is well under way. This policy, by keeping the
Committee’s holdings of longer-term securities at siz-
able levels, should help maintain accommodative finan-
cial conditions.
In a related action, the Board of Governors of the Fed-
eral Reserve System voted unanimously to approve a
0.25 percentage point increase in the discount rate (the
primary credit rate) to 1.0 per cent.
As far as the equity markets are concerned, in the past,
equities in developed markets have reacted pretty well
to Fed tightening. For consumers, if the Fed, presum-
ably, continues to hike its target rate in the coming
months and years, interest rates on everything from
mortgages to car loans will also rise. Savers should
eventually see more favorable rates on their deposits,
too. As far as currencies are concerned, the U.S. dollar –
already riding a strong 2015 – is expected to get a boost
as the Fed begins normalizing rates. That’s not neces-
sarily good news. An even stronger dollar will weigh on
exports and dissuade some travelers from heading to
the States. U.S. companies with sizable foreign-curren-
cy sales would see a hit to their earnings. Also, foreign
companies with U.S.-denominated debt will face even
steeper debt-servicing costs if the U.S. currency climbs
higher.
The latest policy statement has shed further light on the
path forward: “The Committee expects that economic
conditions will evolve in a manner that will warrant only
gradual increases in the federal funds rate; the federal
funds rate is likely to remain, for some time, below levels
that are expected to prevail in the longer run. However,
the actual path of the federal funds rate will depend on
the economic outlook as informed by incoming data. ”
10. ECONOMY MATTERS 8
GLOBAL TRENDS
The growth was largely driven by more than two-fold
rise in growth of private consumption expenditure to
the tune of 1.7 per cent, as compared to a growth of
0.8 per cent in the third quarter of 2014. Significant rise
was also seen in the growth of government consump-
tion expenditure which stood at 1.6 per cent in the third
Growth in exports declined slightly to 4.4 per cent, as
compared to 4.6 per cent in the third quarter of the pre-
Cheer continues to make its way in the Euro zone coun-
tries (Austria, Belgium, Cyprus, Estonia, Finland, France,
Germany, Greece, Ireland, Italy, Latvia, Lithuania, Lux-
embourg, Malta, the Netherlands, Portugal, Slovakia,
Slovenia, and Spain). After a solid performance in the
second quarter, in the third quarter of current fiscal
quarter of current fiscal as opposed to a 0.9 per cent
growth previously. Both segments have been seeing an
ascending trend for the past five quarters. Fixed capital
formation also witnessed improved growth, with the
figure standing at 2.2 per cent as compared to 0.7 per
cent in the comparable quarter in 2014.
vious fiscal. Growth in imports, on the other hand, rose
marginally to 4.9 per cent as compared to 4.4 per cent
previously.
as well, the growth in GDP doubled to 1.6 per cent, on
the back of growth in private and state expenditure, as
compared to a growth of 0.8 per cent in the compara-
ble quarter in the previous fiscal year. This mirrored the
stimulus measures that have been announced by the
European Central Board in the recent past.
Euro zone Economies Recovering, Thanks to Stim-
ulus Measures
11. 9
GLOBAL TRENDS
NOV-DEC 2015
While France, Germany, Italy and Spain have mirrored
the leaping growth in the Euro zone, with Italy, in fact,
climbing out of the negative territory, Greece is still
stuck in a dicey situation. In France, the growth in the
third quarter of the current fiscal stood at 1.2 per cent as
compared to a meagre 0.1 per cent growth in the third
quarter of 2014. In Germany, the growth in GDP im-
proved marginally to 1.7 per cent in the third quarter of
2015 as compared to the July-September quarter of the
previous fiscal. In Greece, the growth slipped into the
negative territory and the country witnessed a contrac-
tion in GDP to the tune of 1.1 per cent as compared to a
decent growth of 1.1 per cent in the comparable quarter
previous fiscal year. Italy, on the contrary, crept out of
the negative territory posting a GDP growth figure of
0.8 per cent in the third quarter of 2015 as compared to
a de-growth of 0.4 per cent previously. Finally, Spain re-
ported a two-fold increase in its growth rate to the tune
of 3.4 per cent in the July-September quarter in 2015
over a growth of 1.7 per cent in the comparable quarter
previous fiscal year.
In the 3rd December 2015 meeting, President Mario
Draghi announced further measures to stimulate the
Euro zone economy after the central bank revised
downwards its inflation projections. The Governing
Council of ECB decided to extend quantitative easing
until at least March 2017. The size of asset purchase
program remains unchanged while local government
bonds were added to program for the first time. The
Council decided that the interest rate on the deposit
facility will be decreased by 10 basis points to -0.30 per
cent. The interest rate on the main refinancing opera-
tions and the interest rate on the marginal lending facil-
ity will remain unchanged at 0.05 per cent and 0.30 per
cent respectively. Markets were, however, generally
disappointed by lack of more stimulative measures.
In December 2015, the ECB handed 18.3 billion euros
($20 billion) to Euro area lenders in the sixth round of
its long-term loan program aimed at channeling money
into the real economy. The take-up compares with the
15.5 billion euros the ECB lent in a similar operation in
September and the 74 billion euros handed out in June.
Banks have now taken a total of 419 billion euros since
the first offer was made in September 2014. Draghi an-
nounced the Targeted Longer-Term Refinancing Opera-
tions (TLTROs) as part of a package aimed at boosting
euro-area inflation and supporting lending to fuel the
12. ECONOMY MATTERS 10
GLOBAL TRENDS
The European Central Bank should reach its inflation
target “without undue delay” after easing its policy this
month, and there are no limits to what it can do to stim-
ulate price growth if necessary, its president said on 15th
December 2015. With inflation hovering just above zero,
the ECB has been loosening monetary policy this year
to fuel price growth, fearing that delays in achieving its
target rate for inflation of just below 2 percent could
damage its credibility. Draghi defended the bank’s lat-
est package of measures, which included a deposit rate
cut and an extension of its asset-buying program but
fell short of market expectations.
Earlier in October 2015, the ECB had left interest rates
on hold, with President Draghi saying that the bank will
reassess whether to extend its massive bond-buying
program by the end of the year. Draghi and ECB mem-
bers had left the door open for more monetary stimulus
but stopped short of announcing any new policy meas-
ures. He had remarked that the bank’s bond-buying
program will need to be “re-examined in December” as
inflation remains stubbornly low amid emerging market
weakness. That sent the euro sharply lower and stocks
markets higher.
recovery. While the TLTROs are now dwarfed by a bond-
buying program that will see the ECB and national cen-
tral banks spend at least 1.5 trillion euros, they give a sig-
nalof banks’ willingnessto bet onthe region’seconomic
upswing. Excess liquidity in the euro area has jumped to
almost 600 billion euros from less than 71 billion euros
in November 2014, giving banks easier access to market
financing. Lending is growing amid a steady, if fragile,
economic recovery. Loans to non-financial corporations
in the region rose 0.5 per cent in October from a year
earlier, the fastest pace since early 2012. The TLTROs
are directly tied to loan growth. Under current opera-
tions, banks can borrow as much as three times their
net lending to companies and households, excluding
mortgages over a set period. Since March, the ECB has
offered the TLTRO funds at the main refinancing rate of
0.05 per cent, abolishing the premium of 10 basis points
it charged in the first two rounds. The operations are
quarterly, and all the loans mature in September 2018.
13. 11
GLOBAL TRENDS
NOV-DEC 2015
Other Global Developments During the Month
• The Bank of England (BoE) Monetary Policy Committee (MPC) voted 8-1 to keep interest rate unchanged at
0.5 per cent in its meeting held on December 10, 2015. Meanwhile, the stock of asset purchases was kept un-
changed at GBP 375 billion. The BoE said that in light of persisting headwinds to the economy, any increase
in the Bank rate would be gradual and would terminate at a lower level as compared to earlier cycles. They
also mentioned that there were no links between the recent ECB easing and the rising probability of Federal
Reserve action this month and that monetary policy in the UK would solely be driven by the inflation outlook.
The committee observed that markets expected the BoE to hold rates steady for a further period of time.
• US non-farm payrolls (NFP) came in higher than expected, increasing by 211K in November 2015. The October
print was revised higher to 298K (from 271K earlier). The September print was revised up as well, taking the
total September-October revisions to +35K. The less volatile three-month average NFP print picked up to 218K
(prior: 199K). The above 200K print indicates the continued recovery in the labour market. Decomposition of
the payrolls data shows that private service-providing segment posted the steepest losses in November 2015,
recording a 111K decline over the October number.
• China’s annual inflation rate came at 1.5 per cent in November of 2015, up from 1.3 per cent in the previous
month and above market consensus. The politically sensitive food prices increased by 2.3 per cent while non-
food cost rose at a slower 1.1 per cent.
• UK’s jobless rate decreased to 5.2 per cent in the three months to October of 2015, lower than 5.3 per cent in
the previous period. The unemployment rate fell for the fourth straight period to its lowest since May of 2008.
14. ECONOMY MATTERS 12
DOMESTIC TRENDS
GDP Growth Grows at a Higher Rate in
Q2FY16
G
DP growth rose to 7.4 per cent in Q2FY16 from
7.0 per cent in the previous year and was broad-
ly in line with expectations. Gross value added
(GVA at basic prices) also rose to a similar reading of
7.4 per cent during the quarter. Even though the GVA
and GDP remained robust during the quarter, the corre-
sponding nominal growth slowed down to 5.2 per cent
and 6.0 per cent respectively. Higher real growth print
vis-à-vis nominal growth indicates deflation in the price
index. Sector wise analysis shows deflationary trend in
sectors such as mining, manufacturing, construction,
trade along with financial and real estate services.
Looking ahead, a tentative economic recovery is under-
way, but is still far from robust. GDP growth is likely to
exceed 7.5 per cent for the full year. There are a number
of factors that can be attributed to the initial signs of
recovery in the economy. Though oil prices have picked
up from their recent lows, they still remain low, thus
helping to partially offset the major stress points in the
economy namely inflation and twin deficits. To top it,
a multi-dimensional reform agenda enunciated by the
government has also reignited the ‘feel good’ factor
which in turn has raised the business prospects of the
economy.
15. 13
DOMESTIC TRENDS
NOV-DEC 2015
On the supply side, surprising on the upside, agriculture
growth was the highest since Sept-14 at 2.2 per cent as
compared to 1.9 per cent in the previous quarter. While
a below normal monsoon (14 per cent deficient from its
LPA) allowed only a meager increase in Kharif produc-
tion as compared to last year, the downside in agricul-
ture appears to have been cushioned by the ‘allied-agri’
sector. Accounting for nearly 51 per cent of the sector’s
GVA, growth in livestock products, forestry and fisheries
was over 6.0 per cent in Q2FY16. Industry growth rose
to 6.8 per cent in Q2FY16 as compared to 6.5 per cent in
the previous quarter driven by robust growth posted by
manufacturing and electricity. Manufacturing grew at a
robust pace of 9.3 per cent in the second quarter of the
current fiscal as compared to 7.2 per cent in the previ-
ous quarter and also significantly higher than 4.6 per
cent growth registered in IIP. Services sector growth
stood at 8.8 per cent in Q2FY16 as compared to 8.9 per
cent in the previous quarter. Among its sub-sectors,
trade, hotels component growth softened to 10.6 per
cent in Q2FY16 as compared to 12.8 per cent posted in
the previous quarter. While the passenger vehicle sales
supported the sector, muted railways transport indi-
cators weighed on overall growth. In fact, the perfor-
mance would have been worse if not for the deflation-
ary trend in the sectoral price index.
16. ECONOMY MATTERS 14
DOMESTIC TRENDS
Going forward, in the short-run, growth will receive a
boost from the cumulative impact of economic reforms
and improved inflationary expectations. In its recent
evaluation of the Indian Economy, Ministry of Finance
has downscaled its growth forecast of the economy
from 8.1-8.5 per cent to 7.0-7.5 per cent for the current
fiscal on the back of declining global demand hurting ex-
ports, which fell for the 12th straight month in Novem-
ber, down 24 per cent from a year ago. Four successive
years of drought and poor monsoon in the current fis-
cal have hit agriculture. The mid-year review raised a
red flag for fiscal year 2016-17, saying that the economy
was giving off mixed signals and it was riding on just pri-
vate consumption and public spending, with private in-
vestment yet to gather momentum. Declining nominal
GDP (gross domestic product) growth could dent gov-
ernment revenue. Its prescription for a medium-term
growth trajectory includes supply-side reforms and de-
mand management.
Outlook
GDP data showing growth of 7.4 per cent in the second quarter of FY2016 indicates that the recovery has gained
strength, as we had anticipated. GDP growth is likely to exceed 7.5 per cent for the full year. In a year when external
demand remains a drag on the economy, this would be considered a strong performance. The acceleration in the
manufacturing sector shows that the government’s policy direction is bearing fruit. The Make in India campaign
with its objective of raising the growth rate in the manufacturing sector has begun to make an impact. Policy meas-
ures need to focus on a revival in project execution in manufacturing, real estate and infrastructure.
At market prices, private consumption expenditure
growth weakened to 6.8 per cent in Q2FY16 as com-
pared to 7.4 per cent in the previous quarter, with the
slowing nominal GDP growth weighing on consumption
demand. In contrast, government consumption expend-
iture growth picked up to 5.2 per cent as compared to
growth to the tune of 1.2 per cent posted in the previous
quarter. This is in line with the pickup in public admin-
istration services growth at the sectoral level. Mean-
while, capex recovery has maintained pace with gross
fixed capital formation rising to a 5-quarter high of 6.8
per cent. The investments growth is primarily driven
by public spending in sectors such as roads. The frag-
ile global economic situation is weighing on domestic
economy as well. In fact, the export and import data
prints have been consistently in the negative territory
over the last few quarters.
17. 15
DOMESTIC TRENDS
NOV-DEC 2015
Industrial output jumped to a 5-year high of 9.8 per
cent in October 2015 as compared to 3.8 per cent in the
previous month mainly due to festive demand and low
base of last year. All the major components of the IIP
performed well in October 2015. Manufacturing and
capital goods showed strong recovery; consumer du-
rables provided robust support. It will be interesting to
watch if the momentum of industrial production is able
In contrast to the healthy performance of the overall in-
dustrial sector, output of the eight core industries rose
by a tepid 3.2 per cent in October 2015 on a y-o-y ba-
sis, unchanged from last month. The core sector index
comprises 38 per cent of the total weightage of items
included in the Index of Industrial Production (IIP). The
index’s cumulative growth from April to October 2015-
16 stood at 2.5 per cent, as compared to 5.6 per cent
during the corresponding period of 2014-15. Out of the
eight core industries -- fertilisers, cement, electricity and
coal reported healthy output numbers. However, pro-
duction of refinery products, crude oil, natural gas and
steel dwindled in the period under review.
Electricity generation, which commands the highest
weightage at 10.3 per cent in the IIP, rose by 8.8 per
to sustain, given the volatile nature of the data series.
On a cumulative basis, industrial production growth has
improved at higher pace of 4.8 per cent in April-October
2015 compared with 2.1 per cent in the corresponding
period last year. In FY16, we expect industrial produc-
tion to grow at a higher rate as compared to the pre-
vious fiscal on the back of improving global conditions
and policy aided domestic upturn.
cent during the month under review, whereas steel
production, the second most important component as
per weightage, contracted by 1.2 per cent. Distilling of
refinery products, the third most important component
as per weightage, declined by 4.4 per cent in October
2015. Crude oil output, fell by 2.1 per cent during the
month under review in comparison to the data for Octo-
ber 2014. Coal mining output, increased by 6.3 per cent
during the month under review. Cement manufacturing
output, having a weightage of 2.4 per cent, was higher
by 11.7 per cent. The sub-index for natural gas output,
slipped by 1.8 per cent in the month under considera-
tion. The fertilisers manufacturing which has a weight-
age of only 1.25 per cent rose exponentially by 16.2 per
cent in October 2015.
IIP Growth Springs up a Positive Surprise in
October 2015
18. ECONOMY MATTERS 16
DOMESTIC TRENDS
On the sectoral front, growth of manufacturing sector,
which constitutes over 75 per cent of the index, deceler-
ated to 2.6 per cent in September 2015 compared with
6.6 per cent growth in the previous month. In terms of
industries, seventeen (17) out of the twenty two (22) in-
dustry groups (as per 2-digit NIC-2004) in the manufac-
turing sector showed positive growth during the month
of October 2015 as compared to the corresponding
month of the previous year. The industry group ‘Furni-
ture; manufacturing n.e.c.’ grew at the highest positive
growth of 138.9 per cent, followed by 48.4 per cent in
‘Office, accounting & computing machinery’ and 47.5
per cent in ‘Radio, TV and communication equipment
& apparatus’. On the other hand, the industry group
‘Publishing, printing & reproduction of recorded media’
showed the highest negative growth of (-) 10.2 per cent,
followed by (-) 6.8 per cent in ‘Medical, precision & opti-
cal instruments, watches and clocks’ and (-) 2.9 per cent
in ‘Coke, refined petroleum products & nuclear fuel’.
Electricity output continued to grow at robust rate, al-
beit its growth rate moderated to 9.0 per cent in Oc-
tober 2015 as compared to 11.4 per cent in September
2015, in part due to a high base of last year. Mining out-
put growth increased to 4.7 per cent, from 3.0 per cent
growth in the previous month. The recent auction of
coal mines by the government could provide some im-
petus to coal production in the months to come.
The details in the use based segment are fairly encour-
aging. Capital goods growth continued to stay in expan-
sionary territory for the fourth consecutive month and
this seems to lend credence to a nascent turn around in
the capex cycle in the economy. This would also help to
significantly underpin overall growth prospects in the
second half of the fiscal. Capital goods output grew by
16.1 per cent in the month under review as compared to
10.3 per cent in the previous month. Consumer durables
have been on a strong footing for quite a few months
now and the October 2015 print was very robust at 42.2
per cent. This component has remained positive for
five months in a row now and has been aided by con-
tinuous improvement in sectors such as passenger cars.
The strength in consumer durables helped overall con-
sumer goods to post a strong growth of 18.4 per cent.
Consumer goods have been positive for a while now
but performance has mostly been tepid on account of
weakness in consumer non-durables. For the month of
October 2015, the non-durables sector registered posi-
tive growth of 4.7 per cent after three months of con-
traction. This could be an indicator of improving con-
sumption demand in the economy.
19. 17
DOMESTIC TRENDS
NOV-DEC 2015
Wholesale price deflation, dropped to 2 per cent in No-
vember 2015 from 3.8 per cent in the previous month.
This is the eleventh consecutive month deflation in
wholesale prices. India has been witnessing a deflation-
ary trend in wholesale prices for over a year. WPI has
been experiencing deflation on annual basis from No-
vember last year. Sustained decline in WPI is good news
for corporate as WPI is input price for manufacturing
process. In contrast to WPI, rising prices for some food
products and firm demand during the festival season
pushed up retail inflation (CPI) to high of 5.4 per cent
in November 2015 as compared to 5.0 per cent in the
previous month. In part, the uptick in CPI inflation could
also be attributed to a low base effect of last year. Infla-
tion in CPI fuel & light prices remained unchanged at 5.3
per cent in November 2015 from the previous month.
The miscellaneous group in the consumption basket
witnessed a rise in inflation to 3.8 per cent from 3.5 per
cent. Going forward, the expected reversal in prices
of some perishables and pulses; the likely softness in
global crude oil prices and, consequently, domestic fuel
prices; as well as the waning of the adverse base effect
would contribute to keeping CPI inflation largely steady
at current levels during the remainder of FY 2015-16.
Outlook
Industrial production growth accelerated sharply in October 2015 on the back of higher growth in manufactur-
ing, capital goods and consumer goods sector. It will be interesting to see if this trend sustains for the remaining
months of this fiscal. The numerous Government policies, in terms of expeditious project clearances, simplification
of procedures and new investment announcements as well as the ‘Make in India’ initiative would help to improve
the order book position, revive demand and help effect a turnaround in the investment cycle in the future. In FY16,
we expect industrial production to grow at a higher rate as compared to the previous fiscal on the back of improv-
ing global conditions and policy aided domestic upturn.
CPI Inflation Shows a Spike in November 2015
20. ECONOMY MATTERS 18
DOMESTIC TRENDS
Rising food prices, pushed primary products prices into
the positive territory, after a gap of 6 months in Novem-
ber 2015. Inflation in primary articles stood at a high of
2.3 per cent in November 2015 as compared to deflation
to the tune of 0.4 per cent in the previous month. Infla-
tion in the prices of food articles rose to 5.2 per cent
in November 2015 from 2.4 per cent in the preceding
month. This is the third consecutive month of y-o-y rise
in prices of food articles. This was mainly due to rise in
prices of vegetables, especially onions and tomatoes,
and prices of pulses. Tomato prices rose y-o-y by 137.6
per cent in November 2015 as compared to the 9.3 per
cent rise recorded in the preceding month. Prices of on-
ion recorded an inflation of 52.7 per cent as compared
to 85.7 per cent in the previous month. According to
media reports, this dramatic rise in tomato prices was
due to lower production and consequent short-supply
of the vegetable. Reportedly, supplies of the two com-
modities from the southern States were disrupted due
to severe, unprecedented rainfall witnessed in Novem-
ber. Price of pulses recorded a rise in inflation to 58.2
per cent in November 2015 from 53 per cent in the pre-
vious month. All types of pulses recorded a y-o-y rise in
their prices. Prices of pulses have risen due to shortage
in production. Normally, food prices moderate with the
onset of rabi harvesting season. But, due to intermit-
tent unseasonal rainfalls and affect of El Nino resulting
into drought in some areas and flood in some major agri
commodities growing regions, the food prices remain
elevated.
Deflation in fuel sector stood at 11.1 per cent in Novem-
ber 2015, thus marking the fifth consecutive month of
double-digit deflation as compared to deflation to the
tune of 16.3 per cent in the month before. This fall was
on the back of y-o-y fall in prices of petrol and high-
speed diesel. Even though prices of petrol and diesel
were hiked on 15 November by 36 paisa per litre and 87
paisa per litre respectively, the prices showed a fall on
y-o-y basis. This was due to a high-base effect for both
petrol and diesel.
Manufacturing products prices recorded a deflation
of 1.4 per cent in November 2015 compared to 1.7 per
cent in the previous month. This was the ninth straight
month of y-o-y fall in manufacturing prices. The fall was
on account of deflation in the prices of textiles, chemi-
cals & chemical products and basic metals, alloys &
metal products. Textile prices recorded a y-o-y fall of 1.6
per cent mainly due to fall in global crude oil and cotton
prices. Prices of chemical & chemical products recorded
a deflation of 1.7 per cent, while prices of basic metals,
alloys & metal products fell y-o-y by 7.8 per cent. Non-
food manufacturing or core inflation, which is widely
regarded as the proxy for demand-side pressures in the
economy remained subdued at -1.9 per cent during the
month as compared to -2.1 per cent during the previous
month.
21. 19
DOMESTIC TRENDS
NOV-DEC 2015
Outlook
The WPI index has declined for the eleventh consecutive month in November 2015 indicating slackness in economic
activity across sectors. In sharp contrast, retail inflation measured by the consumer price index (CPI) increased for
the fourth successive month in November 2015, pushed up by a surge in the monthly momentum. Food inflation
rose sharply in November, driven especially by pulses and vegetables. Its however interesting to note that though
CPI inflation has shown a spike in the last few months, it still remains more-or-less range bound in RBI’s target
range. Going forward, we expect subdued demand conditions to keep CPI inflation capped with only transient
episodes of rise due to surge in food prices.
India’s merchandise exports fell for the twelfth con-
secutive month in November 2015 this year. Exports
contracted by 24.5 per cent in November 2015 which
was more than the previous month’s decline. Contrac-
tion remained widespread, with petroleum products,
iron ore, oil seeds, rice and cereals posting the steep-
est declines (on a year-on-year basis). Meanwhile, tea,
jute manufactures, drugs and pharmaceuticals record-
ed positive growth, even as their growth rates have
slowed over the last few months. The overall weak
export growth is indicative of weak global demand as
well as sharp correction in commodity prices. Cumula-
tively, April-November 2015 saw exports dropping by
18.5 per cent. Given the recent trend, exports are likely
to fall below US$300 billion mark, for the first time since
FY2011. India aims to take exports of goods and services
to US$900 billion by 2020 and raise the country’s share
in world exports to 3.5 per cent from 2 per cent now.
Exports in the past four fiscal years have been hovering
at around US$300 billion.
Imports also contracted by a sharp 30 per cent in No-
vember 2015, led by a 63 per cent decline in fertiliser
imports, and a 45 per cent dip in oil imports. Pulses,
electronics and fruits and vegetables were the only
commodities to see an increase in imports. During
April-November 2015, India’s cumulative imports were
US$261 billion. This is a 17 per cent drop from US$316 bil-
lion, the cumulative figure for the same period last year.
The oil import bill dropped 45 per cent in October to
US$6.4 billion, following global cues of plunging crude
oil prices. Compared to this, US$11.7 billion was the com-
parative cost in November last year. Non-oil imports,
too, dropped 4.4 per cent to an estimated US$23 billion.
Gold was down 36 per cent at 3.5 billion dollars. Non-
oil, non-gold imports, taken as a reflection of domestic
demand and a broad gauge for industrial recovery, de-
clined by 0.22 per cent in November 2015.
Exports Contract for the 12th
Consecutive Month
22. ECONOMY MATTERS 20
DOMESTIC TRENDS
In its fifth bi-monthly monetary policy review, RBI chose
to keep the key policy repo rate unchanged at 6.75 per
cent; as per the expectations, after front-loading the
rate cut of 50 bps on September 29. The decision of the
Central Bank was based on the fact that inflation has
remained within target range of RBI this year so far. It,
however, cautioned vigil on core inflationary pressures,
which could see some uptick as consumer demand and
inflationary expectations perk up due to Seventh Cen-
tral Pay Commission payouts next fiscal. RBI in its mon-
etary policy statement stressed on the fact that the rate
Trade deficit remained steady at US$9.8 billion in No-
vember 2015 and US$88 billion during April-November
2015.The trade deficit for April-November 2014 stood at
US$103billion.Thoughimprovingdomesticcompetitive-
reduction cycle that commenced in January, less than
half of the cumulative policy repo rate reduction of 125
bps has been transmitted by banks. The median base
lending rate has declined only by 60 bps. The apex bank
has lined up a host of measures like examining linking
small savings interest rates to market interest rates etc
to ensure that the monetary transmission is strength-
ened in the future. Easing interest rates will be key to
support a consumption-led growth pick-up. For this to
happen, transmission of repo rate cuts to bank lending
rates must improve.
ness through structural reforms is crucial to improve ex-
ports performance, we believe that can only materialize
in the medium-term. In the near-term, a weaker Rupee
can act as a catalyst to revive competitiveness.
RBI Presses the Pause Button
23. 21
DOMESTIC TRENDS
NOV-DEC 2015
RBI noted that the economy is in nascent stages of re-
covery, though the leading indicators portray mixed
performance. While Q2FY16 GDP data indicated robust
manufacturing growth, the outlook was likely to be
weighed down by weak rural and external demand. Ser-
vices growth was flat, while agriculture sector growth
remains under pressure on vagaries of monsoon. On
the consumption front, while urban consumption was
showing signs of a pick-up in some areas such as passen-
ger vehicles sales, rural demand has been weakened by
two consecutive deficient monsoons and slowing con-
struction activity. Nevertheless, new project announce-
ments as measured by the Centre for Monitoring Indian
Economy grew more strongly in the second quarter. It
remains to be seen whether growing public investment
can crowd in private investment on a sustained basis,
despite the still-low capacity utilisation.
The RBI has set itself an inflation target of 6 per cent
by January 2016. Notwithstanding the increase in retail
inflation in the last few months, RBI expects inflation
to remain within the target range. Though it has set it-
self a 5 per cent inflation target for 2016-17 end, payouts
under the Seventh Central Pay Commission (CPC) could
cause a transitory increase in inflation. Its impact on
domestic demand is likely to be offset by the Govern-
ment’s commitment towards fiscal consolidation. The
RBI is likely to track the Budget to garner details on ex-
ecution of the Pay Commission and assess quantum and
quality of fiscal consolidation.
In the external sector, exports contracted for the
twelfth month in a row to November, indicative of the
persisting weakness in global trade. Excluding petro-
leum products (PoL), however, the decline in exports
was more moderate and early signs of a turnaround
are visible in respect of readymade garments, drugs
and pharmaceuticals and electronics. With global com-
modity prices, especially those of crude, softening fur-
ther, both PoL and non-PoL exports continued to con-
tract, with the latter shrinking for the fifth consecutive
month. The decline in bullion imports despite the festi-
val season helped narrow the trade deficit in November
as well as over the financial year so far, moderating the
current account deficit further.
The RBI has maintained a balanced approach in this pol-
icy. Going forward, the Central Bank is likely to track a
variety of factors affecting inflation along with progress
on transmission while considering future decisions.
While further rate cuts are still on the cards, bar for the
same has been raised higher.
Outlook
The RBI’s decision to maintain status-quo was in line with our expectations, given that there has already been a
reduction of 50 bps in the last policy. The focus has now shifted to the transmission of lower policy rates to banks’
lending rates. Banks need to be ready to finance a pick-up in credit growth and RBI should ensure that high level of
non-performing assets do not constrain banks from financing higher growth. The projections made by the RBI on
GDP growth and CPI inflation are in line with our expectations. However, the RBI needs to note that WPI inflation
as well as the GDP deflator continues to be negative, indicating deflationary trends in large parts of the economy.
We are happy to note that the RBI intends to maintain an accommodative policy stance.
24. ECONOMY MATTERS 22
CORPORATE PERFORMANCE
Corporate Profitability Remains Subdued in Q2FY16
T
he corporate results at the end of the second
quarter of current fiscal continued to remain
weak as the financial performance of Indian
companies, especially manufacturing sector firms, did
not show much improvement. While the growth in ex-
penditure costs stood somewhat curbed, fading growth
of net sales as well as decline in PAT added to the prob-
lems. The analysis factors in the financial performance
during the second quarter of 2015-16 of a balanced pan-
el of 2318 manufacturing companies (excluding oil and
gas companies) and 1250 service firms extracted from
the Ace Equity database.
Net sales on an aggregate basis contracted by 5.7 per
cent at the end of the second quarter of 2015-16, as com-
pared to a growth of 3.6 per cent in the same quarter a
year ago. In fact the growth in net sales has been decel-
erating now for the past six quarters straight now. The
net sales for manufacturing firms showed contraction
by as high as 12.5 per cent during the quarter as com-
pared to a growth of 1.7 per cent in the same quarter a
year ago. Firms in the service sector showed moderate
improvement, with their net sales growing at a pace of
7.9 per cent in the second quarter of current fiscal as
compared to a growth of 7.6 per cent in the same quar-
ter in the previous year. The low net sales of firms were
reflective of the lack of ample demand in the economy.
The slowing demand in the external markets has been
doing no good either.
25. 23
CORPORATE PERFORMANCE
NOV-DEC 2015
On an aggregate basis, total expenditure contracted
sharply by 12.1 per cent in the reporting quarter as
against a growth of 4.5 per cent in the corresponding
period of 2014-15. This was mostly led by a contraction
in the cost of services and raw materials. While costs
for the manufacturing sector contracted by 20.5 per
cent as compared to a growth of 2.2 per cent in the
same quarter a year ago, those in the service sector too
dropped to 7.4 per cent as compared to 10.2 per cent in
the second quarter of 2014-15. This came as a breather
and fairly cushioned the severe impact of lower net
sales growth during the quarter. Amongst the various
components of total expenditure, the growth in wages
and salaries stood at 7.5 per cent in the second quarter
While moderation in growth of expenditure has to some
extent mitigated the impact of the current bout of eco-
nomic crisis characterized by falling growth in net sales,
the reduction was not large enough to provide cush-
ion to the bottom-line of the corporate. Consequently,
there was deceleration witnessed in profit after tax
(PAT) in the second quarter of 2015-16 on an aggregate
basis as PAT declined to 1.4 per cent in the July-Septem-
ber quarter of 2015 as compared to a growth of 11.4 per
cent in the second quarter of 2014-15. PAT actually im-
proved for manufacturing firms by 4.6 cent in the sec-
ond quarter of current fiscal as compared to a growth
of 2.4 per cent in the same quarter of last year. This was
led by sharp double-digit contraction in the cost of ser-
vices and raw materials in the sector. The service sector
of current fiscal as compared to 7.2 per cent recorded
in the corresponding period of 2014-15. Encouragingly,
growth in interest costs decelerated to 6.6 per cent
in the reporting quarter as against 10.0 per cent in the
same quarter of 2014-15. This mirrors the reduction in
the interest rates by the RBI in the recent months. The
brightest spot for the companies came from the fact
that growth in raw material cost contracted by as high
as 23.1 per cent in the reporting quarter as compared
to a positive growth of 2.0 per cent seen in the same
quarter of 2014-15. Since, raw material cost has the larg-
est share in total expenditure cost, its decline is indeed
a good news for the firms.
also lagged behind as PAT witnessed de-growth by 0.4
per cent in the reporting quarter as against a growth
of 17.4 per cent seen in the corresponding quarter of
last year. Operating profits (PBDIT) too followed fairly
similar trends and on an aggregate level, de-growth was
witnessed in operating profits to the tune of 12.1 per
cent in the second quarter of 2015-16 against a growth
of 4.5 per cent over the corresponding period of 2014-
15. The figures were worse for the manufacturing sec-
tor, wherein, operating profits contracted by 20.5 per
cent as compared to a positive growth of 2.2 per cent a
year ago. For the service sector, operating profits wit-
nessed only a marginal decline to 7.4 per cent as com-
pared to 10.2 per cent in the same quarter in 2014-15
26. ECONOMY MATTERS 24
CORPORATE PERFORMANCE
Our analysis shows that both net and gross margins did
not witness major falls, and even improved in some cas-
es across sectors and on an aggregate basis. This does
not appropriately mirror the contraction in operating
profits and decelerating profitability because of the
denominator effect in play. While PAT and PBDIT fell,
the fall in net sales was even larger, and the maintained
Over the past nine quarters, while net sales and expend-
iture has mostly followed a downward trend, profitabil-
ity has displayed wide fluctuations. A period of positive
growth which lasted four quarters saw PAT growing to
as much as 39.1 per cent in the first quarter of previous
margins are thus attributed to the denominator effect.
Falling profitability is still a cause of worry. For the sec-
ond quarter in the current fiscal, while the net margin
stood at 7.2 per cent on an aggregate basis, up from 6.7
per cent in year on year terms, for manufacturing and
services, it stood at 11.8 per cent and 4.3 per cent re-
spectively.
fiscal year, only to drop in the negative territory where-
in it has been hovering in double digit negative figures
for the next two quarters, much to the concern of the
industry. While the bottom-line has crept back into
the positive domain for the last two quarters, meagre
growth is still a worry.
27. 25
CORPORATE PERFORMANCE
NOV-DEC 2015
Efforts are in force by firms to improve their own pro-
duction efficiencies and employ cost effective measures
to tide over the current difficult times. Simultaneously,
there are also expectations of some serious economic
reforms, some of which have already come in form of
necessary rate cuts by the RBI, that would elevate the
economy, help pick up sales and raise the profitability
for the Indian corporate in the months to come.
28. ECONOMY MATTERS 26
TAXATION
GST – Not to Lose Heart – It’s Unputdownable!
T
he winter session of the Parliament could not
fetch us the much expected Goods and Services
Tax (GST) for reasons beyond economics. The
GST Constitution Amendment Bill will now have to wait
for the Budget Session of 2016 for its passage in Rajya
Sabha. But one must not lose heart on GST. Its introduc-
tion is just a matter of time. But for a few differences in
its structure, the GST is being supported by all political
parties. The issues raised by the Congress, the main op-
position party have now narrowed down to three.
First, the Congress has demanded that the provision for
the levy of an additional tax of one percent over and
above the Integrated GST (IGST) on supply of goods in
the course of interstate trade be scrapped. It may be
recalled that GST being a destination based tax, the
state’s share of GST will accrue to the destination state
in the case of inter-state movement of goods and servic-
es. Therefore, the predominantly manufacturing states
have been complaining about the loss of revenue in the
GST regime. In order to please them, this provision of
origin based additional levy has been proposed in the
Bill so that these states can retain this tax with them.
This additional origin based tax is against the principles
of destination based GST. Besides, non-availability of In-
put Tax Credit (ITC) for this additional tax would lead to
cascading of taxes. Further, this tax would entail addi-
tional compliance costs. In fact, this method of compen-
sating the states was not necessary since the Bill itself
envisages compensation by the Centre to the states for
five years in case of revenue loss in the GST regime.
The second demand of the Congress for an independ-
ent Dispute Settlement Authority (DSA) has its origin
in the 115th Constitution Amendment Bill presented by
Mr. Pranab Mukherjee, then Finance Minister in March
2011.That Bill had proposed an independent GST DSA
headed by a retired Supreme Court judge, to adjudicate
any dispute arising out of a deviation from the recom-
mendation by the GST council comprising Finance Min-
isters of all states and chaired by the Union Finance
Minister. But the Standing Committee of Finance led
29. 27
TAXATION
NOV-DEC 2015
by Mr. Yashwant Sinha recommended for making a
provision empowering the GST council itself to decide
about the modalities to resolve disputes, having regard
to the concern of the states about interference by the
DSA with the state’s fiscal autonomy. It was however
recorded by the committee that the Attorney General
had opined that the supremacy of the legislatures over
the finance would not be effected by the creation of
one independent DSA.
To bring fairness and transparency to the dispute settle-
ment process, it is necessary that the dispute is settled
by a body independent of the GST council. In fact, even
the present provision at clause 12 of the Bill says that the
GST council may ‘decide about the modalities to resolve
disputes arising out of its recommendations.’ (Emphasis
supplied). Therefore this issue can be resolved by spell-
ing out the ‘modalities to resolve disputes’ in specific
in the GST Bill itself, notwithstanding what Mr. P. Chid-
ambaram, then Finance Minister had reportedly written
in file on the issue, as claimed by Mr. Arun Jaitley, the
Union Finance Minister. This will be elaborated soon.
The third demand of Congress is with respect to cap-
ping the GST rate at 18 per cent and putting it in the Con-
stitution itself. The concern of the Congress seems to
be that unless capped constitutionally at 18 per cent, in
the coming years, the Centre with the support of the re-
quired number of states could go on increasing the GST
rate, thus adding to continuous inflation and resultant
sufferings of the common man. The point to be noted
is that the rate of duty is dynamic and it will need to be
changed at different times depending upon various fac-
tors. Once the GST rate is inscripted in the Constitution,
the Government would have to go through the arduous
route of constitution amendment each time the GST
rate needs to be raised beyond the capped one. There-
fore, a constitutional provision for capping the GST
would not be a sound step. The Congress would need
to be persuaded not to insist on this demand of cap-
ping, particularly since the Expert Panel headed by Mr.
Arvind Subramanian, the Chief Economic Advisor, in its
report released in early December, has recommended
the standard rate that would be applicable to most of
the goods, to be between 17 to 18 per cent. This is at par
with what the Congress had demanded.
Now, a few words about the report of the panel headed
by the Chief Economic Advisor on GST Revenue neutral
rate (RNR) and the GST rate (s). The panel has deter-
mined the RNR to be between 15 - 15.5 per cent. There-
fore, if the Government was to charge GST in a single
rate, the GST rate would have been in this range of 15
to 15.5 per cent .But, there will be multiple rates of GST,
as recommended by the panel also. The first Discussion
paper released in November 2009 had also indicated
multiple rates of duty.
Considering that there will be multiple rates, the panel
has recommended for a standard rate of 17 to 18 per
cent and a merit rate of 12 per cent for goods of use by
common man, broadly speaking, Then, there will be a
much higher rate 40 per cent for goods and other de-
merit goods like cigarette and tobacco, luxury cars and
other specified luxury items. There will also be a special
very low rate of around 2 per cent for precious metals
like gold, silver etc. Then, there will be total exemption
from GST in respect of goods for use by the poor and
also essential in other respects. The panel has also rec-
ommended to cut down the list of exemptions by doing
away with excessive selectivity and discretion.
Besides the GST rates, the panel has made a few recom-
mendations with respect to the GST structure as well. It
has called for minimizing the burden on small tax payers
by increasing the threshold for GST at Rs. 40 lakhs of an-
nual turnover. Currently negotiations are on with Centre
insisting on a threshold of Rs. 25 lakhs while the states
demanding that of Rs. 10 lakhs. The panel’s other rec-
ommendation is to bring Petroleum, Alcohol, Electricity
and Real Estate within GST. The panel apprehends that
these exclusions may lead to economic distortions, and
denial of credit for taxes paid on inputs from the GST
domain. The panel has also recommended scrapping of
the aforesaid additional one percent tax.
As the passage of the GST bill in Rajya Sabha was get-
ting difficult, the Union Finance Minister addressed an
assembly of top five chambers of Trade and Industry
who had joined together on the 16th December to ex-
press their views on the introduction of GST. The Presi-
dents of the five chambers like CII, FICCI, ASSOCHAM,
PHD Chambers of Commerce & Industry and Confed-
eration of All Indian Traders (CAIT) who addressed the
30. ECONOMY MATTERS 28
TAXATION
meeting unequivocally supported the Government’s ef-
forts in early introduction of GST. The Chief Economic
Advisor highlighted the unique character of the Indian
GST-its principle of cooperative federalism and biparti-
san approach of all political parties. He also explained
the importance of GST in the GDP growth of the country
and referred to certain nuances of his recently submit-
ted report on the GST rates. In the concluding speech of
the meet, the Finance Minister spoke about the contro-
versies surrounding the issues raised by the Congress
on the GST Bill and explained the Government’s posi-
tion on these issues. On the first issue of additional 1 per
cent tax, he conceded that it was a fairly arguable issue
and could be considered if the states agreed. On the
second issue of independent Dispute Settlement Au-
thority, Mr. Jaitley pointed out that the states did not
agree to the idea of a separate DSA and that Mr. P Chi-
dambaram as Finance Minister during 2012-14 had also
expressed views similar to those in the Bill. However, he
seemed amenable to this demand of Congress as well.
But he stoutly opposed the scripting of a capped GST
rate in the constitution for the reasons explained herein
before. The Finance Minister concluded by urging the
Trade and Industry to build up pressure in favour of ear-
ly clearance of the GST bill in Rajya Sabha since they all
are waiting for GST.
During his speech, the Finance Minister had also stated
that if he cannot introduce GST because of the per-
ceived weakness of the present Parliamentary system,
he will have to think of an alternative. He did not elabo-
rate on this point. One hopes that having reached on
the cusp of the biggest indirect tax reform through in-
troduction of GST, he is not thinking now of introducing
central GST that would subsume merely three central
indirect taxes viz Central Excise duty, Service Tax and
Countervailing Duty of Customs. This will not eliminate
the ills of cascading of taxes in the distribution chan-
nel of goods. Further, the multiplicity of indirect taxes
of the states and different state VAT rates across the
states will continue. In addition, the cross border com-
pliance requirements of Central Sales Tax (CST), entry
tax will continue. Consequently, the idea of a common
economic market in the country will remain a far cry. It
is therefore sincerely hoped that in national interest, all
political parties will come together and clear the GST bill
with whatever further necessary changes in the next
Budget Session of early 2016 so that we can have our
GST by say October 2016. The time for GST has indeed
come.
(The author is former Chairman Central Board of Excise & Customs. He is also the author of the book “GST in India”.
Views are personal)
31. 29
SECTOR IN FOCUS
Financial Conditions Index: October – December 2015
NOV-DEC 2015
T
he CII – IBA Financial Conditions Index at 70.3 for
Q3 FY 2015-16 shows healthy improvement in the
overall financial conditions in the Indian econ-
omy vis-à-vis the previous quarter (67.8) owing to ex-
pectations of leading banks and financial institutions of
reduction in cost of funds, strong liquidity position, bet-
ter external financial linkages and an uptick in economic
activity. According to the CII – IBA Financial Conditions
Index for Q3 FY 2015-16, there was a significant rise in
the expectation of banks and financial institutions for
an improvement in the overall financial conditions index
leading to an increase in the external financial linkages
index, the cost of funds index and the economic activity
index on a quarter-on- quarter basis. Also, even as there
was a relative decline in the funding liquidity index from
the previous quarter, it was recorded at the highest lev-
el among the four sub- indices.
The reading of the CII – IBA Financial Conditions Index
for Q3 FY 2015-16 at 70.3 was significantly above the
50 mark implying a strong majority of the respondent
banks and financial institutions reporting improve-
ment or no change in the overall financial conditions as
against deterioration vis-à-vis the previous quarter.
32. ECONOMY MATTERS 30
SECTOR IN FOCUS
For Q3 FY 2015-16, the Funding Liquidity Index recorded
at 74.7, was at the highest level among the sub-indices,
contributing the maximum share (26.5 per cent) in the
overall Financial Conditions Index, followed by the Cost
Among the sub-indices, the External Financial Linkages
Index witnessed the maximum improvement to reach
at 68.4 in Q3 FY 2015-16 from 59.0 in the previous quar-
ter. This reflects the strong degree of optimism in the In-
dian financial sector to withstand any potential shocks
emerging from the US Fed interest rate hike anticipated
in December 2015.
Even as there was a mixed response from banks and fi-
nancial institutions in terms of changes in the exchange
of Funds Index (69.4) contributing 24.7 per cent, Eco-
nomic Activity Index (68.8) contributing 24.4 per cent
and External Financial Linkages Index (68.4) contribut-
ing 24.3 per cent.
rate, majority of them (63.9 per cent) expects net capi-
tal inflows by FIIs to increase in the current quarter. Fur-
ther, majority of the respondents (75.0 per cent) expect
India’s position on foreign exchange reserves to im-
prove further in the current quarter whereas more than
half of the respondents (52.8 per cent) expect that the
mobilization by Indian companies through global equity
& debt markets is not likely to change significantly dur-
ing the current quarter.
33. 31
SECTOR IN FOCUS
NOV-DEC 2015
The Cost of Funds Index at 69.4 witnessed moderate
improvement from 68.6 in the previous quarter. With
the RBI reducing the repo rate by 50 basis points just
before the beginning of the current quarter, majority of
the respondent banks and financial institutions expects
the overall cost of funds to decline in the current quar-
ter.
Among the cost of funds indicators, 58.3 per cent of
the respondents expects the banks’ base rate to de-
cline whereas the short-term interest rates (the inter-
bank call rate & 3 month bank certificate of deposit
rate) and the long-term interest rate (yield on 10 year
government bond) was expected to decline by 50.0 per
cent and 63.9 per cent of the respondents respectively.
Further, maximum number of respondents (47.2 per
cent) expect the corporate Bond Spread (between top
rated 10 year corporate bond & government bond) to
improve.
The Funding Liquidity Index was recorded at 74.7,
a modest decline from the previous quarter (75.3).
Though the number is significantly higher than the 50
mark, still signaling a strong expectation of improve-
ment in the funding liquidity in the Indian financial sys-
tem, the decline on a quarter on quarter basis may not
be favourable for the overall financial conditions going
forward.
While there has been a noticeable drop in the percent-
age of respondents expecting improvement in liquid-
ity through RBI’s management of the Liquidity Adjust-
ment Facility (LAF) operations as well as the term repos
34. ECONOMY MATTERS 32
SECTOR IN FOCUS
and reverse repos window, majority of the respondent
banks and financial institutions expect improvement in
mobilization in the money market through commercial
papers & certificate of deposits, issuance in the corpo-
rate bond market as well as mobilization from equity
market in the current quarter.
The Economic Activity Index with a standing at 68.8
witnessed a moderate increase from 68.3 in the previ-
ous quarter. The overall expectation of improvement in
the economic activity augurs well for underpinning the
financial conditions in the prevailing macroeconomic
scenario.
The CII – IBA Financial Conditions Index is based on a
survey of major banks and financial institutions on their
expectations of key financial and economic variables
determining financial conditions in the Indian economy.
A total of 36 leading banks and financial institution par-
ticipated in the survey for the current quarter.
In terms of different category of respondents, 21 Public
Sector Banks, 7 Private Sector Banks, 4 Foreign Banks,
2 Cooperative Banks and 2 NBFCs participated in Round
3 of the Financial Conditions Expectation Survey. Based
on their responses, the CII – IBA Financial Conditions
The rise on a quarter on quarter basis was led by the
expectation of improvement in growth rate of real GDP
and the Non-Food Bank Credit in the current quarter
by a strong majority of respondents (77.8 per cent and
83.3 per cent respectively). However, the performance
on the inflation (Consumer Price Index) front was ex-
pected to deteriorate by half of the respondent banks
and financial institutions. Further, the maximum num-
ber of respondents (52.8 per cent) expects no signifi-
cant change in the asset prices (stock and housing mar-
ket) vis-à-vis the previous quarter.
Index was derived for the October – December 2015
quarter.
The CII - IBA Financial Conditions Index was launched
in the first quarter of 2015-16 to - (i) Serve as a key in-
dicator in assessing the short term financial conditions
in the Indian economy, (ii) Provide effective monitoring
of current financial conditions for facilitating regulatory
and policy decisions, (iii) Provide early signals on turn-
ing points in financial conditions, and (iv) Help tracking
credit flow conditions for industry & service sectors
from various channels.
35. 33
FOCUS OF THE MONTH
Skilling India
NOV-DEC 2015
E
volving demographics clearly point out that India
will remain a young nation and the largest con-
tributor to the global workforce over the next
few decades. This is in sharp contrast to the rapidly
aging population in the Western countries. Although,
investment, reforms and infrastructure are likely driv-
ers of India’s economic growth, no growth driver is
as certain as the availability of people in the working
age group. A young population is India’s demographic
dividend. It gives India, the potential to become global
production hub as well as large consumer of goods and
services. Further, since the age- group of 45-60 years is
the key contributor to household savings, India’s saving
rate, which has increased rapidly in the last decade, will
get a further boost thereby supporting investment. The
rise in its working-age population, however, is neces-
sary but not sufficient for India to sustain its economic
growth. If India does not create enough jobs and its
workers are not adequately prepared for those jobs, its
demographic dividend will become a liability.
Apart from creating jobs, it is important to also create
the requisite skill set among the labour force as well.
The current mismatch in India’s workforce demand and
supply is as much in jobs that require basic vocational
skills as it is in jobs that require well-qualified manpow-
er. If the current trends in nature of labour demand
and supply continue, skill mismatch would continue to
plague the Indian labour market. The mismatch would
stem from skill shortages, where there are not enough
people with a specific type of skill to meet demand. A
new generation of educated and skilled people, who
are in short supply, will be required to spearhead India’s
transition to a knowledge based economy. Given the
importance of skilled labour force, this month’s Focus
of the Month dwells on this issue. Experts from varied
areas have presented their views on this crucial topic.
36. ECONOMY MATTERS 34
FOCUS OF THE MONTH
Towards Creating a Skill Ecosystem
I
ndia sits at the forefront of the new economic para-
digm. It is one of the fastest growing economies with
GDP growth targeted at 9 per cent.
Most analysts expect the Indian economy to grow at
sustained high rates during the coming decades and
emerge as one of the largest economies in the world.
According to Goldman Sachs, India is projected to be-
come the second largest economy in the world by the
year 2050.
One of the main reasons behind the positive wave of
the Indian economic growth emerges from its demo-
graphic profile. India’s current population of 1.2 billion
is expected to enlarge to 1.8 billion by 2045. The signifi-
cant aspect of this increase relates to the expansion in
the size of its working age (15-64 years) population. The
emerging demographic dynamics of the country en-
sures that it will have one of the youngest populations
in the world, with the bulk of the population belonging
to the working age category. By the year 2026, 64.8 per
cent of the Indian population is expected to be in the
working age bracket.
Demographics as well as growth figures portray India’s
future as perfectly aligned, however its success is any-
thing but guaranteed.
Circa 2000, inspite of a demographic advantage the im-
pact of ‘employability’ on the overall demand-supply sit-
uation indicates that India could face a huge issue with
a shortage of skilled people, that is, engineers (~6 lakh),
graduates (~39 lakh) and vocationally trained personnel
graduates (~7 lakh) in the next five years. Today, India
is poised at a stage where its status as a break-through
economy depends on its focus and attention on build-
ing its human capital.
For our economy to grow at 8-9 per cent, secondary
tertiary sectors will need to grow at 10-11 per cent with
agriculture sector at 4 per cent. Large migration from
agriculture (primary) to secondary/tertiary is imminent.
Hence a large skill gap will exist requiring skilling devel-
opment. The Projected demand of skilled workforce is
400 million workforce by 2022, with 150 million required
in the manufacturing and services sector alone.
If this issue is not addressed effectively, the economic
and social implications will be drastic. The role of the
government, private sector, skill training providers and
society cannot be overemphasised as it is mandated
to imparting the necessary skills to the workforce. It
is equally important for the business sector to engage
with sincerity and enthusiasm in the dialogue of skill
enhancement to make the “Make in India” mission a
reality.
The last one year has seen a positive move from the
Government with the creation of a dedicated Ministry
of Skill Development & Entrepreneurship. In support,
we at CII have been working towards creation of a
demand-responsive eco-system for Skill Development
with a multi-pronged approach.
First, we have recognised the need to create awareness
on vocational training through policy advocacy and
competitions such as WorkSkills and WorldSkills Inter-
national. CII believes that there is a need for a frame-
work to ensure career progression. The National Skill
Qualification Framework (NSQF) has been meticulously
37. 35
FOCUS OF THE MONTH
NOV-DEC 2015
planned to ensure seamless mobility between the edu-
cation and technical training system.
Second, we believe that it is necessary to utilise the
existing training institutions and ensure that they can
scale themselves to match demand. CII has made a
conscious effort towards creation of Public Private
Partnership (PPP) to rejuvenate institutions such as the
Industrial Training Institutes (ITIs) with CII members
adopting and upgrading 398 ITIs. A blue book to guide
Institute Management Committee (IMCs) members has
been brought out. An impact study of 100 ITIs has been
conducted to assess the performance of the ITIs with
suggestions for improvements. We have initiated pilot
projects to create appropriate standards for these In-
stitutes. Industry has embarked on flexi MoUs with the
Ministry of Labour & Employment giving companies the
flexibility to design training programmes at ITIs tailored
to industry needs.
Third, quality assurance has to be emphasised when
delivering and assessing trainees. CII is a National As-
sessing Body for the Modular Employable Skills Scheme
(MES) and the recently launched Prime Minister’s
Kaushal Vikas Yojana (PMKVY).
Fourth, creation of additional Sector Skill Councils
(SSC): providing industry participation in setting stand-
ards and certification approach. CII has promoted SSCs
Beauty & wellness; BFSI; Furniture & Fittings; Green
Jobs; Healthcare; Infrastructure Equipment; Life Scienc-
es; Logistics; Paint & Coatings; Person With Disabilities;
Strategic Manufacturing; Tourism & Hospitality
Fifth, the policy level recommendations submitted by
CII have been instrumental in creation of Apprentice-
ship Act 2014. The industry needs to realize the benefits
of bringing in a robust apprenticeship regime as this
will enable lifelong learning and ensure generations of
trained and skilled labour.
Sixth, we need to promote many more skill develop-
ment Institutions in rural and urban areas. Opportuni-
ties for training are prevalent in the urban areas how-
ever, there are lesser avenues in rural areas. With a
specific focus on skilling the rural youth, CII in partner-
ship with Pan IIT has created Skill Gurukuls with 100 per
cent placement in remote districts of India.
Lastly, there is a need to create employment exchanges
to link training to employment and to create a skill re-
pository to link trainees to jobs. For this, CII is working
closely with Ministry of Labour & Employment to con-
vert the existing employment exchanges to Model Ca-
reer Centres.
CII strongly believes that Recognition of Prior Learning
(RPL) is imperative to engage the large skilled uncerti-
fied labour force. CII supports the RPL initiative by the
Government of India which will train workers in the
Construction sector and utilise construction sites as
training centres.
To ensure that the economy grows at a sustainable rate
with rise in industrial growth, industry has to create an
enormous pool of skilled workforce. CII, as an organisa-
tion, that has witnessed the power of training to cre-
ate an industry, believes that this timely focus on skills
development in India at present is critical and highly
welcome.
38. ECONOMY MATTERS 36
FOCUS OF THE MONTH
Ms. Sunita Sanghi, Adviser, Education, Skill Development & Employment, NITI Aayog
&
Ms. A. Srija 1
, Director, Skill Development & Employment in NITI Aayog
Introduction
1
The authors wish to acknowledge the contribution of Mr. Shrinivas Shirke, former Research Officer of NITI Aayog in preparation of
the Tables derived from unit level data of NSSO.
Linkages between skill development, pro-
ductivity and employment potential: theo-
retical perspective
Skill development is an important driver to address pov-
erty reduction by improving employability, productivity
and helping sustainable enterprise development and in-
clusive growth. It facilitates a cycle of high productivity,
increased employment opportunities, income growth
anddevelopment.However,thisisjustonefactoramong
many affecting the productivity whose measurement
differs for individuals, enterprise and economy. The
increase in productivity could be due to availability of
skilled & healthy manpower; technological up gradation
and innovative practices; and sound macroeconomic
strategies. The manifestations of improved productivity
can be in the form of improvement in real gross domes-
tic product (economy), increased profit (enterprises)
and higher wages (workers). In this section, we are
looking into the relationship between skill development
and productivity with focus on India. However, to be-
gin with it is necessary to understand what constitutes
productivity and how it is measured at different levels.
Productivity which explains an input-output relation-
ship is a crucial factor whose benefits can be distribut-
ed in a number of different ways such as better wages
and working conditions to workforce; increased profits
and dividend to shareholders; environmental protec-
tion; and increase in revenue to Governments. This
helps both the enterprise and country to remain com-
petitive in the domestic and global market respectively.
The increase in productivity can be attributed to varied
reasons such as new technology, new machines, better
management practices; investment in plant and equip-
ment and technology, occupation safety improvement
in the skill level of workers; macro-economic policies,
labour market conditions, business environment and
public investment in infrastructure and education.
Therefore, it is evident that skill development is just
one factor necessary for the productivity growth and it
needs to be an integral part of the development poli-
cies. The policies should address the levels of develop-
ment and need and requirement of various sectors.
Besides this the skill policy should focus on improving
access, quality and relevance of training for different
segments and sectors. The evidence from developed
countries suggests that investment in education and
skillshelpseconomytomovetohighgrowthsectorsand
break the low wage, low skill development syndrome.
Different countries at different levels of development
face different challenges. In the context of developing
economies like India the challenge is to meet the skilled
manpower requirement of the high growing sectors on
the one hand through better synergy between employ-
ers and the training providers, increased investment in
the training infrastructure and also to ensure that the
informal economy also have skilled manpower wherein
the informally trained skills are recognised and certified
and that entrepreneurship training is provided for mov-
ing to formal sector. The workplace training plays an im-
portant role in productivity enhancement but in the de-
veloping economies the huge informal economy poses a
challenge which could be addressed by developing clus-
ters or lead firm taking the initiative which would help
achieving economies of scale in the skills development;
development of competencies within and between
firms and availability of lead firm facilities. This would
make available skilled manpower by the lead firm as
per its requirement and the small enterprise would im-
prove their productivity. The Government can facilitate
linkages among various companies and stimulate adop-
Skill Development and Productivity of the Workforce
39. 37
FOCUS OF THE MONTH
NOV-DEC 2015
tion of technologies and skill upgrading programmes.
The linking of skills and productivity would not only
benefit the enterprise and economy but would also
facilitate different segments of the population particu-
larly the marginalised sections of the society to reap the
benefits of the economic growth through skill develop-
ment. The lack of access to education and training or
the low quality or relevance of training keeps the vulner-
able and marginalized sections into the vicious circle of
low skills and low productive employment. The National
Skill Policy provides a framework to ensure access to
various target groups to realise their potential for pro-
ductive work and contribute in economic and social de-
velopment. However, different approaches need to be
adopted which may overlap as groups are not mutually
exclusive such as improving agriculture marketing ex-
tension; investing in rural infrastructure; making avail-
able quality education; on the job and targeted training
for the disabled and identifying the requirement of mi-
grant workers. The question is how one links the skill
development to future challenges so as to address the
demand of the growing economies. The National Skill
Development policy provides for integration of skill de-
velopment into the national development polices such
as developing infrastructure, reducing poverty and de-
cent work agenda. The diagram below explains the re-
lationship between skill development strategy for pro-
ductivity, employment and sustainable development.
It emerges that coordination among various stake-
holders, coherence in sectoral, macro and skill policies,
knowledge sharing and effective participation of trade
unions and employers along with technology develop-
ment is central to any development strategy. The par-
ticipation by all stakeholders would strengthen move
towards skilled economy. It would also ensure that
small enterprises get access to training services and
developing their managerial capabilities for growth. It
also emerges that while coherence is necessary, it is
also necessary (repetition) to ensure gender equality,
upgrade technology, and diversify production struc-
ture, building up individual competencies and collecting
/dissemination of information on future requirements
as also available supply. This would improve availability
of skilled manpower and reduce the supply mismatch.
In this back drop an attempt has been made to see
where India stands and how its skill polices can be inte-
grated with macro and the sectoral policies to achieve
increase employability.
40. ECONOMY MATTERS 38
FOCUS OF THE MONTH
Labour Market
As compared to other developed and developing coun-
tries, India has a unique window of opportunity for an-
other 20-25 years called the “demographic advantage”.
IfIndiaisabletoskillitspeoplewiththerequisitelifeskills,
job skills or entrepreneurial skills in the years to come
the demographic advantage can be converted into the
dividend wherein those entering labour market or are
already in the labour market contribute productively to
economic growth both within and outside the country.
But meeting this objective is a daunting task as India
faces the challenge of skilling large labour force that
is largely illiterate or below primary and unskilled. The
structural transition from the agricultural to the non-ag-
ricultural sector has seen rapid decline in the contribu-
tion of farm sector to the GDP to 16 per cent but a very
slow decline in the workforce participation level to 48
per cent resulting in the low level of productivity in the
agriculturalsector.Thenatureofjobscreatedisinformal
(91 per cent of the workforce) and the status of employ-
ment is self-employed. Further, there is the high degree
of unemployment among the youth due to aspirational
mismatch or skill mismatch, declining participation of fe-
males in the labour force and an economic environment
wherein jobs are not created commensurate with the
economic growth. The distribution of the workforce by
sector and status of employment shows that in agricul-
ture sector where almost 32 per cent is self-employed
majority is operating as own-account worker or unpaid
helper (Table-1). After agriculture the proportion of
those working as self-employed is Trade (7 per cent) and
manufacturing (6 per cent). In these two sectors also
the proportion of workforce working as own account
workers are more than those working as employers.
Where does India Stand
41. 39
FOCUS OF THE MONTH
NOV-DEC 2015
The proportion of those working as casual labour is
higher in agriculture (17 per cent) followed by construc-
tion (9 per cent) and manufacturing (2 per cent). On
the whole, about 52 per cent of the total workforce
was self-employed, of which own-account workers ac-
counted for 33 per cent and the unpaid helper 18 per
cent. The proportion of workforce with regular wage or
salary was just 18 per cent and 30 per cent were casually
employed. When we talk about productivity it only cov-
ers those who are in the regular wage or salaried em-
ployment. The self-employed operating as own account
workers are mostly household enterprises assisted by
unpaid helpers. In this type of employment the pro-
ductivity levels are low, working conditions poor, wage
employment is totally absent. On the other hand if the
own account workers can be upgraded to becoming
an employer by providing skill development and other
logistic support, it leads to creation of further wage
employment and enhancement of their productivity.
Relationship between literacy and pov-
erty reduction
The preponderance of self-employment mainly in agri-
culture is mostly due to their low education and skill lev-
els stimulated by their poor economic background. The
proportion of population upto the poverty line i.e. the
extremely poor and poor increased from 21.8 per cent in
2004-05 to 25.3 per cent in 2011-12. But the proportion of
the marginally poor and the vulnerable decreased from
19.0 per cent to 16.5 per cent and from 36.0 per cent
to 30.7 per cent between 2004-05 and 2011-12. On the
whole 72.5 per cent of the population fall in the catego-
ry of poor and vulnerable in 2011-12 as compared to 76.7
per cent in 2004-05, a decrease of 4.2 points. (Table-2)
Table-3 shows the distribution of the unorganized work-
ersacrossdifferentexpenditureclass.Itmaybeseenthat
76.28 per cent belong to the poor & vulnerable category
in 2011-12 as compared to 78.70 per cent in 2004-05, a de-
clineof2.42points.Thisrelativelylowleveloflivingofthe
workforce brings out the quality of employment which
calls for a look at their educational and skill qualification.
42. ECONOMY MATTERS 40
FOCUS OF THE MONTH
Linkages between skill development, pro-
ductivity and employment potential
Skill development is the focus area of the government
policy. It is central to accessing employment in the for-
mal sector and enhancing productivity in the informal
economy for reducing poverty and risk of underemploy-
ment. The National Policy on Skill Development aims to
train about 104.62 million people afresh and additional
460 million are to be reskilled, up-skilled and skilled by
20222
. Considering that majority of these labour force
would be self or casual employed, the challenge is to
how to improve the skill levels of these workforce.
These categories cut across various target groups or
vulnerable sections of the society. The groups are not
mutually exclusive and there are overlaps because the
workers in the self-employed category are a hetero-
geneous lot while the casual employed may be inter-
mittently employed and in different unskilled works.
The lack of access to good education and training
keeps the vulnerable and the marginalized sections
into the vicious circle of low skills; low productive em-
ployment and poverty. The marginalized group which
includes rural poor, youth, persons with disabilities,
migrant workers and women constitute the high-
est number of poor. In India 70 per cent of the labour
force reside in rural areas and depend on low produc-
tive agricultural activity where there is huge underem-
ployment leading to low level of productivity. The high
proportion living in poverty among women in India is
due to their concentration in low productivity work.
The skill strategy needs to focus on strategy of skill de-
velopment should be aimed at addressing the skill needs
of the self-employed as well as the casual employed. To
quote Economic Survey 2013-14, “India can increase its
long-termtrendgrowthbyunleashingtheentrepreneur-
ial spirit of millions across the country by strengthening
the economic freedom of the people.” In accordance,
the National Policy on Skill Development & Entrepre-
neurship 2015 emphasises on entrepreneurship devel-
opment as the pathway for creating more wage em-
ployment and in turn growth of the economy. The policy
has identified following policy strategy for promoting
entrepreneurship viz; (i) educate and equip potential
and early stage entrepreneurs across India (ii) connect
entrepreneurs to peers, mentors and incubators (iii)
support entrepreneurs through Entrepreneurship Hubs
(E-Hubs) (iv) catalyse a culture shift to encourage en-
trepreneurship (v) encourage entrepreneurship among
the under-represented groups (vi) promote entrepre-
neurship amongst women (vii) improve ease of doing
business (viii) improve access to finance and (ix) foster
social entrepreneurship and grassroots innovations.
Skill development of the self-employed is essential
to make the transition from own account workers to
employers or entrepreneurs. The success of the major
programmes of the current Government viz; Make in
India, Digital India, Smart City, Namami Gange, Swachh
Bharat depends on the success of the Skill India Mission
in skilling and reskilling 460 million by 2022. The skill de-
velopment programmes to promote entrepreneurship
are also equally important namely-(i) SETU- the Self-Em-
ployment and Talent Utilization scheme which is a Tech-
no-Financial, Incubation and Facilitation Programme to
support all aspects of start-up businesses, and other
2
National Policy for Skill Development and Entrepreneurship, 2015.
43. 41
FOCUS OF THE MONTH
NOV-DEC 2015
self-employment activities, particularly in technology-
driven areas, (ii) Atal Innovation Mission AIM an inno-
vation promotion platform involving academics, entre-
preneurs, and researchers drawing upon national and
international experiences to foster a culture of innova-
tion, R&D in India and (iii) Start Up India to promote
bank financing for start-ups and offer incentives to
boost entrepreneurship and job creation in the country.
Current and future skill requirements for
India
Nearly 56 per cent of the workforce in 2011-12 had basic
education upto primary and the proportion of low lit-
Asregardsskilltraining,75.8percentoftheworkforcedid
nothaveanyskilltrainingduring2011-12whilethepropor-
tion of workforce with formal training was only 3.05 per
eracy levels was high among the female workforce (75
per cent below primary) as compared to the males. The
proportion of total workforce with educational qualifi-
cation secondary was just 11.5 per cent while for the fe-
maleworkforceitwasstilllowerat5.4percent.(Table-4)
cent. The proportion of workforce that received training
through informal modes was 12.46 per cent. (Table-5)
44. ECONOMY MATTERS 42
FOCUS OF THE MONTH
Some estimates of skill gaps in different
sectors
Inanalysingtheskillgap,thereexisttwotypesoflowed-
ucated labour force entering the labour market due to
their poor economic conditions and remaining unskilled.
Oneistheeducatedlabourforcewhoarenotabletofind
jobs matching their qualification due to lack of technical
or soft skills. This is the reason for the high rate of edu-
cated unemployment among the youth. To reduce the
skill gap among the educated there is the need for bet-
ter quality education, knowledge of english language,
on the job training as well as better job information.
Aashish Mehta argues that ‘India’s skill gaps rests on
weak conceptual foundations. While some industries do
sufferfromrealskillgaps,othersareconstrainedbycom-
From Table-4 and Table-5 the education and vocational
profile of the workforce throws light on the challenge
that India faces if the labour force consisting of existing
and new entrants are to be provided age appropriate
skill training which might include skilling, reskilling and
upskilling.
mercialdifficultiesthatmaybebetteraddressedthrough
policies other than skill development programmes’3
.
The India Skills report 2015 quotes Dr. Rajendra Kumar
Pandey4
as saying that India has to achieve the target of
skilling/upskilling 150 million people by 2022. He further
explains skill gap as ‘the phrase skill gap refers to rede-
fining the relationship between education, industry and
business.’ In simple terms a skill gap can be defined as
the difference between the skills needed for a job ver-
sus those skills possessed by a prospective worker5
.
The Ministry of Skill Development & Entrepreneurship
has estimated the estimated incremental human re-
source requirement across 24 sectors as 109.73 million
by 2022. The Institute of Applied Manpower Research
in their Occasional Paper ‘Estimating Skill Gap on a Re-
With such low skill levels the profile of our enterprise is
such that nearly 95 per cent of the units are micro in size
engaging less than 5 workers. The challenge therefore
lies in expanding the size of the enterprises to beyond 5
in number so that the progression of growth of the en-
terprises from being a single employer to that of being
a partnership or private corporate entity takes place.
Unless this transition is in place the productivity levels
will not improve and neither will employment. (Table-6)
2
How serious are India’s manufacturing skill gaps? Column by Aashish Mehta, University of California, 13th October,2015, http://www.
ideasforindia.in/article.aspx?article_id=1437
3
President, NIIT University Neemrana
4
A Better Measure of Skills Gaps: Utilizing Act Skill Profile and Data for Strategic Skill Research