Monthly Summary for Cabinet August 2022

No. A-45O 1 1 / 3 | 2o22 - Admll.llr Government of India MinistrY of Finance (Department of Economic Affairs) *** New Delhi, 10s October 2O22 OFFICE MEMORANDUM The undersigned is directed to circulate herewith the unclassified portion of MonthlY Summary on important policy decisions in respect of Department of Economic Affairs lbr the Month of August, 2022. t tL lo I './ (Ravinder Kumar) Director(Ad.IV & Coordination) Tel No. 2309-5244 To 1. Members of the Union Council of Ministers' Government of India' A11 New Delhi. 2. Vi,." Chu.i.*rn, Niti Aayog, Yojna Bhawan' New Delhi' 3. Cabinet Secretary, Cabini't Seiretariat' Rashtrapati Bhavan' New Delhi. 4. Secretary to the President of India, Rashtrapati Bhavan' New Delhi' 5. Secretary to tire Vlcelpresident of india' 6' Maulana Azad Road' New Delhi. 6. Principal Secretary to the Prime Minister' PMO' South Block' New Delhi 7. Chairman, Union I']ublic Service Commission' Dholpur House' New Delhi. 8. eti vt.-U.." of Niti Aayog, Yojna Bhawan' New Delhi' g. Secretaries to all the triinlstriesT Oepartments, Government of India' New Delhi. .Fa\ D.cr l0.PStoMOS(F),PPStoFinanceSecretary'PPStoSecretary(EA)'PPS to Secretary (Revenue), PPS to Secretary (Expenditure)' PPS to Secretary (DIPAM). Shri V. Anantha Nageswaran, Chief Economic Adviser' DEA' 11. Rashtrapati Bhavan' New iiai,il""i S"c.etaryl Cabinet'secretariat' 12. Delhi. 13. Shri Manoj SahaY, AS&FA(Finance)' ,IA fti".-ft4""i"ir" Sinha, AS(Admn', C&C and OMI) ;il Fi;;J" of Divisions in Department of Economic Affairs' 15. iSdriVl.i*rl !sgnv1 /;slbudget) / All Advisers/ cAAA sliTni."i, Maihotra, bc titaacl, M7o Fit'tt'tt' North Block' New 16. Delhi' 17. Guard File - 2022'lll No. A-45O11/ 312O22'Adtro,o" MinistrY of Finance Affairs DePartment of Economic to policy decisions Pertairing on important Monthly Summary Subject: fo" the month of August' 2O22 of ocono'nil-Ot*"" 1Oeel Department ts during I. Important policy decisions taken and major achievemel the month: Overview: Macroeconomic uponrecoveryr:::",?3^y?;3,x?i.?"r9i1"",:!t*.1:1,!!I"ii[rlri ffi :l1li; ii'i::l H"-ri ffi ':'i "* :; fJ :H"'["J :,.= of. , 2l 0, 1: 9? -2, 0? ' 'I thfi u ] s "mJ arking a str" o ng n i]e Ea iir tl iv ., .4 n % i" a t-h .'oe ia u'd " go 't o i *t t" n ll ;' ''" iu' sJ el 'p t r vo l in c'n et" n sii "n s pi e" oi cl tv tt o-e p rt a in sd le ikm ei lc v p toha ds re i' ve growth in 2022-23 The contaclintensive :lf:tfu ::i. i;;;i;;:{ ,rl}::-::U*:ffi :S[lf: I3::i ffi b u d n s o-n lff m';:f'],n :".T il'#x.o*l ;il ;;;';n i n tn u m o nih s a h ead and higher' capacity utilization in the current lncrease in private consumption rate in o1 of reinvigo;;",#:;;"x cycte-to,tr[J]rr"'inu".tment vear has further 2022-23tooneofitsnigil:.ii","r.i"tn.itastoecaaeThecrowdinogf -thineo gfpovrievranmteent investment has also o""ll' #7 "" .t ' #itt ;" i-u i6y Vri "s i rn ,ig "g c .'a "ip ti tta ul n*J x itp l"e nditure level of last that untit August 2022-2a "ott"sponding "i1:1*l; v [*e ra "r ; G ;l;o vernm"nt'' 'p gu rn ow'J ti hn gis" l e" x" p"a eci" tr e d to rema J:Jl[:X"i""i:."tX'J'["::':: *." 'evenue Q1 of 2022-23is refrected in :[".-"r::::tJii,Ln eco-nomic in EPFo doubled in '" inJo",or.".] itYt'".ttv ^p1"y.Y^r:oi"tst 'rJoitions improvements in "*pro,yo."'inr,i" .oro.ponding perioj iJ y"r, The Periodic Labour ai.zozz_zlcompared iq lffi J'irtir ll: F fo o u rc rte h s c u o r nv se ey c ut p t ir v. r e s q r u s a i ro tl eJ r Io De at q '" J ., i ; / u" tr',t" , f, O 1 ,, n Oet M- G1 Nt: Ri E"# GS" hi. a : s" J b een J::",ltiffi zo2i compa red to the imrmg x.::",ril' :ru" ll;'g';i possible reduction in the iitJpi"ulo" two years' period ot "ign'li;t" corresponding ,n"tnifoY,"nt rate in rural areas' t susg::#t:i:lr"r',?;':"3'ffi [tl'] rhe srowth m omentum of Q h as' fg::}ilT*"!il? ill",:::l :: J: if i#'\i lli6'[i i s s n a t t i n g r s h a rp ',"J,T' "" pace2 of expansion. However, in contrast, the Global composite PMI has entered the contractionary phase declining to 49.3 in August 2022 with slowdown mainly evident in advanced economies. The relatively bright outlook on lndia's economic groMh and its improving employment levels is also mirrored in the country's relatively strong position in the e)dernal sector. High foreign exchange reserves, sustained foreign direct investment, and strong export earnings have provided a reasonable buffer against the monetary policy normalization in advanced economies and widening of current account deficit arising from the geo-political conflict. lnflation has been a common phenomenon across both advanced economies (AE) and emerging market economies (EME). However, the triggers for the two have been somewhat different, which also explains why inflationary pressures in AEs have been stubborn and pre-date the Russia-Ukraine conflict. The extraordinary measures adopted by AEs in response to the COVID-19 outbreak involved a significant injection of liquidity by the central banks of these countries which financed their massive fiscal package. Now, as the monetary authorities of the AEs rush to cap inflation and grapple with a liquidity overhang, they face an unenviable task of absorbing excess liquidity in a calibrated manner. lndia is in a better position to calibrate its liquidity levels without abruptly stalling growth. While persistently high liquidity may partly explain the stubbornness of inflation in AEs, inflation in lndia, a net commodity-importing country, has been a by- product of externally situated exogenous pressures. lncrease in international prices was reflected in an uptick in domestic prices, though increase in domestic prices was relatively modest on account of the timely interventions taken by the government. Further, as these external pressures ease, inflationary pressures in lndia are also likely to subside. several indicators are already pointing to the easing of external pressures. lndustrial metals and edible oil prices after peaking in March 2022, have softened, led by recessionary fears in AEs. Crude prices have dropped 1g.1 o/o by August since the peak in the month of June 2022. supply chains are getting restored with decline in port congestion. The impact is already reflected in the decline in cpl- c and wPl inflation since April 2022. cPl-c inflation stood at 7 % in August 2022 as compared to 7 .8 o/o in April 2022. Similarly, WPI lnflation has dropped from 15.4 % in April to 12.4 o/o in August. Overall, inflationary pressures in lndia appear to be on a decline with a pre-emptive set of administrative measures by the government, agile monetary policy and easing of international commodity prices and supply-chain bottlenecks. In times when slowing growth and high Inflation are afflicting most of the major economies of the world, lndia's growth has been robust and inflation in control. A rapid coverage of vaccination and well-calibrated short-term policy measures have skilfully navigated the economy through turbulent times, preparing a strong foundation to build a prosperous nation in the years ahead. Downside risks to growth will persist insofar as lndia is integrated with the rest of the world. Nor is there room for complacency on the inflation front as lower crops- sowing for the Kharif season calls for deft management of stocks of agricultural commodities and market prices without unduly jeopardising farm exports. Further as balance sheets of Fed starts shrinking, it may heiald a new phase of risk aversion in3 flows ln addition' lndia's imports are global capital caoital markets, impeding will have to be accorded $'"'"to'3'"tl#n"iig'ihem growing faster and, #il";ft;i"".1"d "o'nt"rtably on energv securrtv rn hiqh prioritv ln wrnter g""oporiticall l tt e" nfi s'] io:n nsa , l tf eo sc tiu ngs lndia's astute handling ad]vanced nations could "r"uuiu. of its energY needs so far' and credible monetary policy will r oe om rica vin W w ea is ,st c eeh nnf atu ia bl t r a etn o bd r e tp n nr ou cid a he l mn ot ;tf r'i r ks tic 1ra " ;i rl i t ;m ;g a*a i nt "n l ;a if ig ch pe o ' m isa "t te s s epn 't :t i or -a r 1 t ti *ho "en Js ;o ioB Tvo ,e it lh r 'n J t mh 'Je e lns Je t ' L ap 1nill 'da : ir rts h " "eo ; f ? pp r :iu 'v ,b :a :l ti iec !".ij, to decrine tacrritatiig'iJii' :ll' * i:; m g"J:"H, :"J.$ ?L ::f 5, lJ ::J::",f-' il * i u i' io i'o p a n d c red it rating of lndia to imProve lmportant DeveloPments : 2 (i) All cotton futures contracts on the Multi Commodit iy o nE tx rach ca t n sg pe e co iff i cl an td ioia n sL td w e t to' were suspendeo 'o'iti't;;;;;ii'";J '"vise " 29th August 2022' were signed with multilateral and bilateral (ii) Following loan/grant agreements agencles' develoPment (a) Loan of USD 96 3 million from th.e Asian Developm ane dn t LB iva en lihk o f oo dr iiiitrti"g water lmprovement Himachal Pradesrr"Ru;;i Project' ( \vb ,) , Loan of USD 190 million from the.World Bank for Second Tamil Nadu Hou.ingSectorstrengthening-DPL Development Bank for (c) Grant of Euro 20 million from KFW-Ger Pm ra on je ct in Tamil Nadu 'Municipal r "t'"t't"ti'?'o"'"roprn"nt was negotiated with the for USD 359 ln addition, a t olo 'a n a ng ere jie .lm "le en ct toi pioiect' Sy' -] sll tr eo mn s Reform Endeavours tor World Bank ' aJnjevJ'""t iii Gujarat (SRESTHA-G)' Transformed Heartn (iii) Following line of credit were approved during this month' (a) USD 100 million to Government of Maldives for financing development projects. (b) USD 1OO million to Government of Armenia for Defence related projects and other Purposes' (iv) Following meetings at the ofiicial level were held or attended' rirst meeting " 111-::.';1]ffi fi:ilfli:ffi 5:,"::1il*'i'L?-:1 (a) proposals seeking financ Bilateral Agencies cts preparation MeetingwiththeWorldBanktoreviewthepipelinepro;e (b)4 (c) Meeting of Financial Stability Board (FSB)'s Working Group on Climate Risk (WGCR) to discuss draft final report on supervisory and regulatory approaches to climate-related risks (d) 4th round of discussion between lndia and Saudi Arabia on Bilateral lnvestment Treaty (BlT) (e) Preliminary discussion on Bilateral lnvestment Treaty (BlT) between lndia and Uruguay (0 6th Round of negotiations between lndia and UK on Bilateral nvestment Treaty (BlT)/l nvestment Chapter I (g) Discussion with Canada on Bilateral lnvestment promotion and Protection Agreement (BIPA) (h) 42nd Empowered Committee (EC) meeting to consider proposal of Govt. of UP for setting up of medical college in the six districts of Up under PPP mode (i) Asian lnfrastructure lnvestment Bank (AllB) Board of Directors meeting to consider investment operations & investment operations quarterly monitoring reporVpipeline update. 3 Minimum Government, Maximum Governance The use of ICT in submission of information is being encouraged. 4. Non-Compliance of ACC directions/orders ACC appointment of Shri Ananth Narayan Gopalakrishnan as Whole Time Member, SEBI - Notification effecting the appointment is underway. 5. Details of FDI proposals cleared during the month and status of FDI proposals awaiting approval in the Department: Number of proposals cleared Nit Awaiting Approval in the Department 07