As part of pre-Budget deliberations, India's finance minister Nirmala Sitharaman held a meeting with state FMs, who suggested steps to revive growth and boost revenue collection against the backdrop of the Covid crisis. Sitharaman noted the importance of the meet as a sign of cooperative federalism. Most participants thanked the FM for financially supporting their states/UTs during the worst months of pandemic, by enhancing borrowing limits and providing back-to-back loans to states, the finance ministry said. According to sources, state ministers expressed their suggestions on growth, investment, resource requirement and fiscal policy.
India's exports grow 11% in first half of January
India’s exports rose around 11% to $11.8 billion during the first fortnight of 2021, while imports went up about 6.6% to $18 billion, resulting in a trade deficit of over $6 billion. Exports climbed 5.6% during the second week of January after an over 16% rise during the previous seven-day period, led by a jump of more than 20% in the shipments of drugs, pharma and engineering goods - two traditional strong points for the country. In fact, engineering goods contributed over 82% of the increase during the second week, led by a surge in exports to the US and the UK. But a large chunk of the rise was offset by a fall in export of petroleum products, which fell 91% due to lower demand from the UAE and the Netherlands. During the second week, imports grew 12.3% or by $1 billion due to a surge in gold consignments, which shot up by 144%, partly due to higher prices. The yellow metal contributed to 44% of the increase.
India took decisive steps to deal with Covid: IMF
India has taken very decisive action to deal with the Covid-19 pandemic and its economic consequences, the IMF chief has said, indicating that the agency’s World Economic Outlook update would show a better picture for the country’s economic performance. The IMF will release the update to its World Economic Outlook on January 26. In its previous estimate it had estimated the economy to shrink by 10.3% in the current fiscal year that ends in March and rebound strongly next year. The Indian economy has been hit hard by the lockdown imposed to ward off the spread of Covid-19 infection and GDP had shrunk by 23.9% in the June quarter. Since the lifting of the lockdown several economic indicators have shown a sharp recovery and official estimates peg GDP to contract 7.7%, much less than previously estimated. Economists expect growth to return to the positive territory in the third or fourth quarter.
