High oil prices, trade deficit widen India's current account deficit | WeForNews | Latest News, Blogs - Part 262338245760 High oil prices, trade deficit widen India’s current account deficit – Page 262338245760 – WeForNews | Latest News, Blogs
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High oil prices, trade deficit widen India’s current account deficit

According to the RBI data, the CAD for last fiscal widened to 1.9 per cent of the GDP (Gross Domestic Product) from 0.6 per cent in 2016-17.

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Reserve Bank of India RBI

Mumbai, June 13 (IANS) A rise in trade deficit due to higher crude oil prices widened India’s current account deficit (CAD) for 2017-18, Reserve Bank of India’s (RBI) data showed on Wednesday.

According to the RBI data, the CAD for last fiscal widened to 1.9 per cent of the GDP (Gross Domestic Product) from 0.6 per cent in 2016-17.

The current account is the net difference between inflows and outflows of foreign currencies.

Accordingly, the country’s trade deficit increased to $160 billion in 2017-18 from $112.4 billion in 2016-17.

“Net invisible receipts were higher in 2017-18 mainly due to increase in net services earnings and private transfer receipts,” the RBI said in a statement on “Developments in India’s Balance of Payments”.

In terms of inflows, gross FDI (Foreign Direct Investment) into India increased to $61 billion in 2017-18 from $60.2 billion in 2016-17.

However, net FDI inflows in 2017-18 fell to $30.3 billion from $35.6 billion in 2016-17.

As per the RBI data, portfolio investment recorded a net inflow of $22.1 billion in 2017-18 as compared with $7.6 billion a year ago.

“In 2017-18, there was an accretion of US$ 43.6 billion to the foreign exchange reserves (on a BoP basis),” RBI said.

On the quarterly basis, the data showed that the country’s CAD rose to $13 billion during the fourth quarter (January-March) of 2017-18 from $2.6 billion in the like quarter of 2016-17.

“The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit ($41.6 billion) brought about by a larger increase in merchandise imports relative to exports,” the statement said.

The Q4 CAD accounted for 1.9 per cent of the GDP as against 0.4 per cent of the GDP in the like quarter of 2016-17.

“Net services receipts increased by 8.8 per cent on a y-o-y basis mainly on the back of a rise in net earnings from software services and other business services,” the statement said.

“Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.1 billion, increasing by 15.1 per cent from their level a year ago.”

In the financial account, net FDI stood at $6.4 billion in Q4 of 2017-18 higher than $5 billion in Q4 of 2016-17.

The data disclosed that net inflow of portfolio investment was just $2.3 billion as against net inflow of $10.8 billion during Q4 2016-17; on account of moderation in net purchases in both the debt and equity markets.

“Net receipts on account of non-resident deposits amounted to US$ 4.6 billion in Q4 of 2017-18 as compared with US$ 2.7 billion a year ago,” the statement said.

In Q4 of 2016-17, foreign exchange reserves (on BoP basis) increased by $13.2 billion as against an accretion of $7.3 billion during the like period of 2016-17.

ICRA’s Principal Economist Aditi Nayar said: “The deterioration in India’s current account deficit to $13.0 billion in Q4 FY2018, is in line with our forecast of around $12-14 billion.”

“The size of the current account deficit in Q4 FY2018 nearly rivalled the full year deficit recorded in FY2017, underscoring the impact that rising commodity prices have on the external balances of net importers such as India.”

Nayar pointed out that despite the contraction in gold imports, the merchandise trade deficit worsened in Q4 FY2018.

“Around half of the magnitude of this deterioration is attributable to the larger oil import bill, following the rise in crude oil prices,” Nayar said.

India Ratings Chief Economist Devendra Kumar Pant said: “Nearly 46 per cent deterioration in trade deficit in FY18 was due to oil. However, higher services exports and remittances in FY18 reduced ballooning of CAD. Despite widening of CAD, strong capital and financial account flows resulted in US$43.6 billion increase in foreign exchange reserves, which provided strength to currency.”

“Going forward current account situation in FY19 is likely to worsen and this coupled with weak capital flows will exert pressure on currency. Deteriorating current account and fiscal slippage does not augur well for macro fundamentals.”

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BS-IV vehicles needed for public utility services & purchased up to March 31 be registered: SC

The issue of pollution from vehicles had cropped up before the apex court which is hearing a matter related to air pollution in the Delhi-national capital region (NCR).

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New Delhi, Sep 18 : The Supreme Court Friday said BS-IV vehicles, which were purchased on or before March 31 this year and are necessary for municipal corporation in Delhi to carry out essential public utility services, should be registered.

The apex court had in October 2018 said that no BS-IV compliant vehicle would be sold or registered in India from April 1, 2020.

In 2016, the Centre had also announced that India would skip the BS-V norms and adopt BS-VI by 2020.

BS emission norms are standards instituted by the government to regulate output of air pollutants from motor vehicles.

The matter came up for hearing before a bench headed by Chief Justice S A Bobde which dealt with applications related to registration of three types of vehicles — CNG , BS-IV and BS-VI compliant — for being used for essential public utility services.

“Insofar as CNG vehicles are concerned, there cannot be any valid rejection to the vehicles, as the emission from these vehicles is within the limits. Therefore, we direct that these vehicles may be registered,” said the bench, also comprising Justices A S Bopanna and V Ramasubramanian.

It noted that BS-VI norms came into force on April 1, 2020 and vehicles purchased up to March 31 this year were BS-IV compliant.

“Admittedly the emission from BS-VI compliant vehicles is within the norms and hence the vehicles purchased on or after April 1, 2020 and which are BS-VI compliant, should also liable to be registered,” it said.

The top court noted in its order that BS-IV compliant vehicles purchased up to March 31 this year must have been registered with the E-Vahan portal of the government before the cut-off date to establish the date of purchase.

“If the purchase had been made on or before March 31, 2020 and these vehicles are BS-IV compliant, such vehicles necessary for the municipal corporation to carry essential public utility services should also be registered. But such cases shall be scrutinized by the Environment Pollution Control Authority (EPCA),” the bench said.

The bench said to avoid repeated applications being filed before the court just for the purpose of getting registration, “we direct that the EPCA shall scrutiny the pending cases and submit a report to this court so that a common order could be passed without the necessity for several interlocutory applications.”

The issue of pollution from vehicles had cropped up before the apex court which is hearing a matter related to air pollution in the Delhi-national capital region (NCR).

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Most of additional budget spending for people-centric schemes: FM Sitharaman

The government expenses have increased of late and are likely to increase further due to the coronavirus pandemic and the eventual economic slowdown.

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Nirmala Sitharaman

New Delhi, Sep 19 : Finance Minister Nirmala Sitharman on Friday said that the majority of the additional resources in the first batch of the Supplementary Demands for Grants would be spent on people-centric schemes amid the coronavirus pandemic.

In her reply to the debate on the Supplementary Demands for Grants for 2020-21 and the Demands for Excess Grants for 2016-17 in the Lok Sabha, she said it is probably for the first time that the government has sought such a huge amount in the first batch of the Supplementary Demands for Grants.

Late on Friday evening, the Lok Sabha approved the supplementary demands for additional spending of Rs 2.35 lakh crore, including a cash outgo of Rs 1.66 lakh crore.

The Centre has sought Rs 40,000 crore for providing grants for the creation of capital assets under the Mahatma Gandhi National Rural Employment Guarantee Scheme and for the transfer of funds to the National Employment Guarantee Fund.

It has sought an additional expenditure of Rs 30,956.98 crore for providing Grants-in-Aid General for Direct Benefit Transfer to Pradhan Mantri Jan Dhan Yojana’s women bank account holders.

Further, to meet the expenditure towards recapitalisation of the Public Sector Banks through the issue of government securities, it has sought an approval for the expenditure of Rs 20,000 crore.

Approval for expenditure of Rs 4,000 crore has been sought for meeting an additional expenditure towards Grants-in-Aid General to National Credit Guarantee Trustee Company Ltd (NCGTC) for the Guarantee Emergency Credit Line (GECL) facility to eligible MSME borrowers.

The first batch of Supplementary Demands for Grants for financial year 2020-21, among other things, included a sum of Rs 46,602.43 crore required for providing additional allocations under the Post-Devolution Revenue Deficit Grant (Rs 44,340 crore) and Grants-in-Aid General for States Disaster Response Fund (Rs 2,262.43 crore) as per the accepted recommendations for the 15th Finance Commission.

The government expenses have increased of late and are likely to increase further due to the coronavirus pandemic and the eventual economic slowdown.

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Paytm App Removed From Google Play Store

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Google has pulled the popular Indian financial services app Paytm from the Play Store for violating its gambling policies. Paytm is India’s most valuable startup and claims over 50 million monthly active users. Its marquee app, which competes with Google Pay in India, disappeared from the Play Store in the country earlier Friday.

Google said that Play Store prohibits online casinos and other unregulated gambling apps that facilitate sports betting in India. Paytm, which has promoted fantasy sports service within its marquee app, repeatedly violated Play Store’s policies, two people familiar with the matter told TechCrunch. Paytm’s fantasy sports service, called Paytm First Games, was also available as a standalone app and it has been pulled from the Play Store, too.

The Android-maker, which maintains similar guidelines around gambling in most other markets, additionally noted that if an app leads consumers to an external website that allows them to participate in paid tournaments to win real money or cash prizes will also be deemed in violation of its Play Store policies.

In an email Google has sent to many firms in India, and was reviewed by TechCrunch, the company has asked developers to pause all advertising campaigns in their apps to drive users to websites that offer installation files of sports betting apps.

Google’s Pay app currently dominates the payments market in India, and Android commands about 99% of the smartphone market share in the country.

The announcement today from Google is also a preemptive attempt from the company to remind other developers about its gambling policies ahead of the popular cricket tournament Indian Premier League, which is scheduled to kick off tomorrow.

Previous seasons of IPL, which last for nearly two months and attract the attention of hundreds of millions of Indians, have seen a surge in apps that look to promote or participate in sports betting.

While sports betting is banned in India, fantasy sports, where users select their favorite players and win if their preferred teams or players play well, is not illegal in most Indian states.

A person familiar with the matter told TechCrunch that Google has also asked Disney+ Hotstar, one of the most popular on-demand video streaming services in India, to display a warning before running ads about fantasy sports apps.

“We have these policies to protect users from potential harm. When an app violates these policies, we notify the developer of the violation and remove the app from Google Play until the developer brings the app into compliance,” wrote Suzanne Frey, Vice President, Product, Android Security and Privacy, in a blog post.

“And in the case where there are repeated policy violations, we may take more serious action which may include terminating Google Play Developer accounts. Our policies are applied and enforced on all developers consistently,” she added.

In a televised interview with CNBC TV18, Paytm co-founder and chief executive Vijay Shekhar Sharma accused Google of not allowing Paytm to acquire new users.

He acknowledged that Google had reached out to Paytm before and raised concerns about Paytm First Games, but the incident with Paytm’s main app, he said, is over “nothing but” paying cashback to customers.

The cashbacks were issued in ways of cricket-themed scratch cards, he said, adding that if Paytm isn’t allowed to issue cashback to customers, the same rule should be applied to every player. Google Pay, as well as Walmart’s PhonePe give customers similar incentives in India.

“This is the problem of India’s app ecosystem. So many founders have reached out to us… if we believe this country can build digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations,” he said.

In an interview with TechCrunch, Madhur Deora, President of Paytm, said Google did not raise any issue about Paytm First Games app today. He said Paytm had rolled out the cricket-themed sticker for cashbacks early Friday. Hours later Google raised objection about it and suspended the app.

Meanwhile, the Federation of Indian Fantasy Sports (FIFS), an “industry body” that represents some fantasy sports firms, claims it complained to Google to take action on companies that distribute or promote fantasy sports through Play Store.

Dream Sports, the parent firm of India’s most popular fantasy sports app Dream 11, is the founding member of FIFS. Dream11 app is not available on the Play Store. In a message to their members, FIFS said the following:

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