**Executive Summary**
This document is an office memorandum circulating the unclassified portion of the Monthly Summary on important policy decisions concerning the Department of Economic Affairs (DEA) for December 2021. It highlights the macro-economic overview, important developments, significant meetings held during the month, and information on FDI proposals and implementation of reforms. The document is dated March 3, 2022, and is addressed to various government officials and departments.
**Key Points / Main Content**
* **Macro-Economic Overview:**
* India's economic recovery is expected to strengthen, with HFIs crossing pre-pandemic levels.
* Major agencies project India's growth between 8%-10% in 2021 (FY 21-22).
* IMF projects India's growth at 9.5%, the fastest among major countries.
* A rise in Omicron cases across states poses a risk to economic recovery.
* **Important Developments:**
* Two notifications issued under the Securities Contracts (Regulation) Act, 1956:
* 'Bullion spot delivery contract' and 'bullion depository receipt with underlying bullion' declared as securities.
* 'Electronic Gold Receipts' declared as securities.
* A Line of Credit of US$ 200 million extended to the Government of Kyrgyzstan through EXIM Bank.
* Loan/Grant Agreements signed with multilateral and bilateral development agencies:
* Euro 250 million loan for Agra Metro Rail Project from European Investment Bank.
* Euro 442.26 million loan for Surat Metro Rail project from KfW.
* Euro 140 million loan and Euro 2 million grant for Energy Reform Programme, Madhya Pradesh from KfW.
* USD 125 million loan for Uttarakhand Integrated and Resilient Urban Development Project (tranche 1) from Asian Development Bank (ADB).
* USD 150 million loan for Inclusive, Resilient and Sustainable Housing for Urban Poor Sector Project in Tamil Nadu Project from ADB.
* USD 350 million loan for Sustainable Urban Development and Service Delivery Program (tranche 1) Project from ADB.
* USD 112 million loan for Assam Skill University Project from ADB.
* USD 150 million loan for Chennai City Partnership: Sustainable Urban Services Program from World Bank.
* USD 160 million loan for Shimla-Himachal Pradesh Water Supply and Sewage Services Improvement Program from World Bank.
* USD 80 million loan for Himachal Pradesh Rural water supply project was signed from New Development Bank.
* USD 125 million loan for West Bengal Building State Capability for Inclusive Social Protection from World Bank.
* **Important Meetings Held:**
* Roundtable interaction of Hon'ble Prime Minister with Venture Capital and Private Equity Funds.
* International seminar during the First G20 Finance and Central Bank Deputies meeting.
* Meeting between Hon'ble Finance Minister and Ms. Gita Gopinath, IMF.
* Recommendation for Sonnagar-Gomoh Section development on DBFOT model during the 106th PPPAC Meeting.
* Recommendation for Development of Bharat Net through PPP during the 107th PPPAC Meeting.
* Final approval for VGF support for food grain silos by FCI.
* International Development Association-20 Replenishment 4th meeting.
* Proposals for financing from Multilateral Development Banks / Bilateral Agencies considered.
* Asian Infrastructure Investment Bank Board of Directors' meeting to consider policy review and investment operations, including approval of USD 250 million for India Gujarat Education Infrastructure program.
* New Development Bank Board of Directors' meeting to consider policy review and investment operations.
* First G-20 Finance and Central Bank Deputies meeting.
* Second round of negotiations on Investment Chapter under the proposed India UAE Comprehensive Economic Partnership Agreement.
* Financial Stability Board's Standing Committee on Standards Implementation (SCSI) meeting.
* Meeting with MIGA, World Bank, IFC, and various other entities to discuss the contour of engagement for MIGA guarantee under projects implemented by Public Sector Undertakings.
* Annual General Meeting of NIIFTL and Board meetings of NIIFTL and National Investment and Infrastructure Fund Limited were held.
* Exploratory discussions on Bilateral Investment Treaty (BIT) with Myanmar.
* Fourth round of negotiations on BIT with Uzbekistan.
* **Other Information:**
* ICT use in submission of information is encouraged.
* 12 FDI proposals are awaiting approval in the Department.
* Reforms to increase efficiency in decision-making are ongoing, including reviewing channels of submission, implementing E-office version 7.0, and using IT tools/platforms.
**Impact Analysis**
**All Members of the Union Council of Ministers, Government of India, Niti Aayog, Cabinet Secretary, Secretaries, PS to PM, Chairman UPSC, Chief Economic Advisor, Additional Secretaries, All Heads of Divisions in Department of Economic Affairs, etc.**
* **Impact:** Informed about the key policy decisions and economic developments within the DEA for December 2021.
* **Action Required:** Review the provided information and take appropriate action based on their respective roles and responsibilities.
Key Entities Referenced
Department of Economic Affairs (DEA): Primary department concerned; document summarizes policy decisions pertaining to it for December 2021.
Ministry of Finance: Parent ministry of the Department of Economic Affairs; responsible for the overall financial health of the country.
Securities Contracts (Regulation) Act, 1956: Act under which notifications were issued declaring bullion related instruments as securities.
International Financial Services Centres Authority Act, 2019: Act enabling trading of bullion related instruments in international financial services centres.
Niti Aayog: Mentioned in list of addressees.
No. A-45O1 1 / 4 I 2O2l-Adlmtl.ttt
Government of India
Ministry of Finance
(Department of F,conomic Affairs)
*IH
Delhi,
New 3'd Marc}:,2022
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 for the Month of December, 2021.
I
(Arup Shyam C ury)
Deputy Secretary to the Governmen of India
Tel No. 23095091
To
All Members of the Union Council of Ministers, Government of India,
1
New Delhi.
2 Vice Chairman, Niti Aayog, Yojna Bhawan, New Delhi.
c Cabinet Secretary, Cabinet Secretariat, Rashtrapati Bhavan, New Delhi.
4 Secretary to the President of India, Rashtrapati Bhavan, New Delhi.
5 Secretary to the Vice-President of India, 6, Maulana Azad Road, New
Delhi.
6 Principai Secretary to the Prime Minister, PMO, South Block, New Delhi
7 Chairman, Union Public Service Commission, Dholpur House, New
Delhi.
.q A11 Members of Niti Aayog, Yojna Bhawan, New Delhi.
9 Secretaries to all the Ministries/ Departments, Government of India,
New Delhi.
10 PS to MOS (F), PPS to Finance Secretary, PPS to Secretary (EA), PPS to
Secretary (Revenue), PPS to Secretary (Expenditure), PPS to Secretary
(DTPAM).
11 Chief Economic Adviser, DEA.
t2 Additional Secretary (Shri A. Giridhar) Cabinet Secretariat, Rashtrapati
Bhavan, New Delhi.
13. Ms.Meera Swarup, AS&FA(Finance).
14. Shri A.M. Bajaj, Additional Secretary (FM), DEA
15. Shri Rajat Kumar Mishra, Additional Secretary (Budget), DEA.
t6. Shri Sanjeev Sanyal, Principal Economic Adviser, DEA
t7. A11 Heads of Divisions in Department of Economic Affairs.Sr.Adviser (c&C/FSLR/FS&CS)/JS (IPP)/(ISD)/JS(Budget)/JS (C&C)/
JS(Inv)/ Advisor(BC) /Adviser (Admn)/ Advisor (Investment) /
Advisor (Economic Division) / Advisor (IER) / Advisor (IPP) / CAAA.
18. Shri Rajesh Malhotra, Addl.DG (M&C), M/o Finance, North Block, New
Delhi.
19. Guard File - 2021.No.A-450 1 | I 4 I 2O2 | - Adrnn.lll
Government of India
Ministry of Finance
(Department of Economic Affairs)
Subject: Monthly Summary on important policy decisions pertaining
to Department of Economic Alfalrs (DEA| for the month of
December,2O21.
1.
Macro-Economic Overview
India's economic recovery is expected to gain strength in the current
quarter of the financial year, as evident from High Frequency Indicators (HFIs)
crossing their pre-pandemic levels in the corresponding months of 2019. Major
multi-lateral and credit rating agencies expect India to grow between 8%-lO%
in 2021 (FY 2l-22) and so does the Government. IMF has projected India's
growth at 9.5o/o to be the fastest among major countries. However, the rise in
Omicron cases across states is a risk to economic recovery. The sector wise
growth rates are given in the Annexure.
2. ImportantDevelopments:
(i) Two notifications under the relevant provisions of the Securities
Contracts (Regulation) Act, 1956 were issued (i) declaring 'bullion spot delivery
contract', 'bullion depository receipt with underlying bullion' as securities
enabiing them to be issued and traded in international financial services
centres under the International Financial Services Centres Authority Act, 2019
and (ii) declaring 'Electronic Gold Receipts'as securities.
(ii) A Line of Credit of US$ 200 million was extended to Government of
Kyrryzstan through EXIM Bank.
(iii) The following agreements were signed with multilateral and bilateral
development agencies:
(a)
A loan of Euro 250 million for Agra Metro Rail Project from European
Investment Bank;
(b)
A loan of Euro 442.26 million for Surat Metro Rail project from KfW;
(c)
A loan of Euro 140 million and a grant of Euro 2 million for Energr
Reform Programme, Madhya Pradesh from KfW;
(d) A loan of USD 125 million for Uttarakhand Integrated and
Resilient Urban Development Project (tranche 1) from Asian
Development Bank (ADB);(e) A loan of USD 150 million for Inclusive, Resilient and Sustainable
Housing for Urban Poor Sector Project in Tamii Nadu Project from
ADB;
(0
A loan of USD 350 million for Sustainable Urban Development and
Service Delivery Program (tranche 1) Project from ADB;
(e) A loan of USD 112 million for Assam Skill University Project from
ADB;
(h)
A loan of USD 150 million for Chennai City Partnership: Sustainable
Urban Services Program from World Bank;
(i) A loan of USD 16O million for Shimla-Himachal Pradesh Water
Supply and Sewage Services Improvement Program from World Bank.
(,)
A loan of USD 80 million for Himachal Pradesh Rural water supply
project was signed from New Development Bank; and
(k)
A loan of USD 125 million for West Bengal Building State Capability
for Inclusive Social Protection from World Bank.
3. The following important meetings were held during the month of
December,2O21:
A roundtable interaction of Hon'ble Prime Minister with a select group
of investors representing Venture Capital and Private Equity Funds
was held.
An international seminar was heid on the side-lines of the First G20
11.
Finance and Central Bank Deputies meeting in which Hon'ble Finance
Minister participated virtually in a high level discusslon on G-20's
current theme under Indonesia's Presidency: "Recover Together,
Recover Stronger".
Hon'ble Finance Minister met Ms. Gita Gopinath, First Deputy
111
Managing Director, International Monetary Fund during her visit to
India and discussed issues relating to international and Indian
economy.
lv. A proposal for development of Sonnagar-Gomoh Section (261 .358 1
Km) of Eastern Dedicated Freight Corridor on Hybrid-Design-Build-
Finance-Operate-Transfer (DBFOT) model on Public Private
Partnership (PPP) mode was recommended during the 106fr PPP
Appraisai Committee (PPPAC) Meeting.
A proposal for Development (Creation, Upgradation, Operation,
Maintenance and Utilisation) of Bharat Net through PPP was
recommended during the 107ft PPPAC Meeting.vl. Viability Gap Funding support for development of food grain silos at
Kaimur and Buxar (Bihar) on DBFOT (Design, Build, Finance,
Operate and Transfer) basis on PPP mode by Food CorporaLion of
India was granted linal approval during the 39fr Executive Committee
Meeting.
vii. International Development Association-2O Replenishment 4s meeting
was held virtually with World Bank ED (India).
viii. Proposals for seeking financing from Multilateral Development Banks
/ Bilateral Agencies were considered during the 123'd meeting of DEA
Screening Committee.
ix. Asian Infrastructure Investment Bank Board of Directors' meeting was
held to consider various policy review & investment operations and
USD 250 million for India Guj arat Education Infrastructure and
Technolog., Modernization Program was approved.
x. New Development Bank Board of Directors' meeting was held to
consider various policy review and investment operations.
xi. The first G-20 Finance and Central Bank Deputies meeting under the
Indonesian Presidency was held in Bali.
xii. The second round of negotiations on Investment Chapter was held
under the proposed India - UAE Comprehensive Economic
Partnership Agreement.
xiii. The Financial Stability Board's Standing Committee on Standards
Implementation (SCSI) meeting was held to discuss SCSI work plan,
thematic peer reviews and Monitoring Non-banking linancial
institution reforms.
xiv. A meeting with Multilaterai Investment Guarantee Agency (MIGA),
World Bank, International Finance Corporation, Ministry of New and
Renewable Energ,, Dedicated Freight Corridor Cooperation of India
and State Bank of India was held to discuss the contour of
engagement for MIGA guarantee under projects implemented by
Public Sector Undertakings.
xv. Annual General Meeting of National Investment and Infrastructure
Fund Trustee Limited (NIIFTL) and Board meetings of NIIFTL and
National Investment and Infrastructure Fund Limited were held
during the month.
xvi. An exploratory (first) round of discussions on Bilateral Investment
Treaty (BIT) was held with Myanmar.
xvii. Fourth round of negotiations on BIT was held with Uzbekistan.
4. Minimum Government, Maximum Governance
In particular, use of ICT in submission of information is being
encouraged.
5.
Non-Compliance of ACC directions/ordersNi1
6. FDI proposals cleared during the month and status of FDI proposals
awaiting approval in the Department:
Awaiting Approval in the Department: 12
7. Progress of implementation of reforms to increase efliciency in
decision making in Government:
i. Channels of submission have been reviewed and changes are being
implemented.
ii. Due to shortage of staff at various levels, several officers are working on
Desk Officer pattern.
iii. E-office version 7.0 has been implemented in DEA
iv. Pending matters are being followed up.
v. Several IT tools and IT platforms are being used/implemented thereby
increasing the efficiency in the Department. 907o of liles in the Department are
e-files.Annexure
Table 1: Real Growth in demand slde of GDP and its components (per cent)
Growth Growth Recovery
Comporrents over Q2 over Ql over H1
of 2O2O-2L of 2O2L-22 of 2Ol9-2O
Total Consumption 92.7
8.6 4.8
Government Consumption 94.7
4.7 l-) 14.2
Private Consumption 92.3
8.6 9.2
Gross Fixed Capital Formation 1 1.0 i 1.8 91.8
Change in Stock to2.7
2.7 7.4
Valuables 155.1
183.3 603.6
Exports 113.O
19.6 8.4
Imports 104.8
40.6 16.8
GDP 95.6
8.4 10.4
Source: National Statistical Office, MoSPI
Table 2: Real Growth of GVA and its components on the supply slde (per centf
Growth Recovery
Sectors oG vr eo rw Qth
2
oo fv e 2Or Q 2L1
-
oo fv e 2r
O
H L9l
-
of 2020-2L
22 20
Agriculture & Allied Sectors 4.5 (-l 16.2 108.O
Industry
6.9 5.9 98.6
Mining & quarrying 15.4 (-) 14.0 102.5
Manufacturing
5.5 7.9 99.9
Electricity, gas, water supply & other utility to7.2
qo
servlces 8.9
Construction 7.5 8.7 92.t
Services LO.2 L6.2 92.6
Trade, Hotels, Transport, Communication ald 80.1
8.2 24.9
Services related to Broadcasting
Financial, Real Estate & Professional Services 7.8 7.O 98.2
Public administration, defence and other 101.1
t7.4 24.7
SCTVlCCS
GVA at basic prices
8.5 7.9 96.3
Source: National Statisticat Office, MoSpI.Table 3: INFLATION - CPI-C, WPI (in Pcr Centl
November 2O2O October 2O21 November 2O21
CPI.C 6.93 4.48 4.91
UIPI 2.29 12.54 14.23
Source: NSO for CPI-C and OEA, DPIIT for WPI
Note : WPI inflation for last two months and CPI-C inflation for last one month is
provisional.
4:
Table MONBTARY DEVELOPMENT
Item L7.L2.202L
Policy Repo Rate 4.O
lo-Year G-Sec Par Yield (FBIL) 6.45
Bank Credit Year-on-Year growth ,
Note: # as on 03.12.2021
Table 5: Merchandise Trade Performance (Customs Basis) (fa US$ btllton)
Imports
E rports Trade Balance
I
November 2O2O 23.6 s3.8 (-) 10.2
November 2O21 30.0 52.9 l-l 22.9
Table 6: Seryices Trade Performance (ln US$ bttltonl
October 2O21 t9.9 1 1.6 8.2
Source: Provisional data as per tJre Press Release dated 74.12.2021 of the Department of
Commerce, Ministry of Commerce and Industry.
Table 7: Balance of Pa5rments
2o/2o-21 2021-22
Items (April- (April-Septemberl
Septemberf lPl
Curreat Account Balance (in US$ btllton) 34.4 (-) 3.o
Current Account Balance / GDP (Per cent) 3.0 (-) 0.2
Source: Reserve Balk of India.Table 8: Foreign Drchange Resenres (in US$ billion)
End-March, 2O21 577.O
24.t2.2021 635.1
Source: Reserve Bank of India
Table 9: E*change Rate ofthe Indian Rupee (RuPee Per unit of forelgn currency)
US Dollar Pound Sterling Euro Japanese yen
2L.L2.202L 75.5925 99.9020 85.2497 66.4500
Source: Reserve Bank of India
Table 1O: External Debt (US$ Billton)
as at end of as at end of Percentage
September 2O2O September 2O21 variation
PR P It2trt-
(rt
t2l u*1oo
Total External debt
556.8 593.1 6.5
outstanding
Source: Quarterly Report on External Debt as at end September 2021, DEA.
Table 11: Industrial Production Highlights
Monthly Growth (YoY) in per cent
August 2O2O September October 2O2O
Index of Industrial Production
H 7.r 4.5
1
(rrP)
August 2021 September October 2O21
i i.9 3.1 3.2
Table 12: Eight Core Industries
Monthly Growth (YoY) in per cent
September October 2O2O November
2020 2020
0.6 (-) 0.s ( )1.1
Eight Core Industries (lCI)
September October 2O21 November
2rl21 2rl21
4.5 4.4 3.1