**Executive Summary**
This Office Memorandum, issued by the Ministry of Finance, Department of Economic Affairs on April 8, 2022, circulates the unclassified portion of the Monthly Summary on important policy decisions taken by the Department of Economic Affairs (DEA) for February 2022. The report includes macroeconomic overviews, important developments like signed agreements and loans, and information on policy initiatives.
**Key Points / Main Content**
* **Macroeconomic Overview:**
* Real GDP growth for 2021-22 is estimated at 8.9%.
* The Consumer Price Index indicates moderating inflation.
* Cumulative growth in the Index of Industrial Production (April-December 2021-22) stood at 15.2%.
* Growth rate of eight infrastructure sectors (April-January this fiscal) came in at 11.6%.
* Credit growth to industry rose by 7.6% YoY in December 2021.
* **Important Developments:**
* Renewed Bilateral Swap Arrangement (BSA) between India and Japan for another three years, effective February 28, 2022.
* Government of Japan pledged JICA Official Development Assistance (ODA) for 7 projects, with a total commitment of JPY 312.25 billion under FY 2021-22.
* Signed a USD 115 million loan with IBRD for the "Rejuvenating Watersheds for Agricultural Resilience Through Innovative Development (REWARD) Project".
* Negotiated a USD 2 million loan with ADB for the 'Nagaland Urban Infrastructure Development Project'.
* Negotiated a USD 2 million loan for Infrastructure Development of Industrial Estates in Tripura with Govt. of Tripura, Tripura Industrial Corporation Limited (TIDCL) and ADB.
* **International Financial Services Centres Authority (IFSCA) Act, 2019:**
* Issued Insurance Web Aggregator Regulations, 2022.
* Issued Fin Tech Incentive Scheme, 2022.
* Issued Annual Report and Returns and Statements and Other Particulars Rules, 2022.
* Form of Annual Statement of Accounts Rules, 2022.
* **Meetings Attended by the Hon'ble Finance Minister:**
* Meeting with Australian Minister of Trade, Tourism and Investment regarding taxation of offshore income of Indian firms in Australia.
* 25th meeting of the Financial Stability and Development Council (FSDC).
* Meeting of the G20 Finance Ministers and Central Bank Governors under the Indonesian G20 Presidency.
* Review meeting of the National Investment and Infrastructure Fund.
* **Other Meetings:**
* Meeting of the G20 Finance and Central Bank Deputies.
* First meeting of BRICS Finance and Central Bank Deputies under the Chinese Presidency.
* 126th meeting of the DEA Screening Committee.
* FSB Plenary meeting.
* Two rounds of discussion between India and Australia on Comprehensive Economic Cooperation Agreement (CECA).
* 8th round of discussion between India and UAE on BIT.
* Meeting of AIIB Board of Directors, which approved Assam Electricity Distribution System Enhancement Project for a loan amount of USD 386 million for India.
* 45th Governing Council meeting of the International Fund for Agricultural Development.
* **Miscellaneous:**
* The use of ICT in submission of information is being encouraged.
* Nil Non-Compliance of ACC directions/orders.
* 06 FDI proposals cleared during the month.
* 10 FDI proposals awaiting approval in the Department.
**Impact Analysis**
**All Ministries/Departments of the Government of India, and Council of Ministers**
* **Impact:** Informed about key economic indicators and policy decisions impacting various sectors.
* **Action Required:** Review and consider the implications of the reported information for their respective domains.
**Department of Economic Affairs (DEA) Divisions**
* **Impact:** Internal awareness and alignment on key policy decisions and their outcomes.
* **Action Required:** Align their operations and strategies with the reported policy decisions and macroeconomic outlook.
**Reserve Bank of India (RBI)**
* **Impact:** Provides context for monetary policy decisions based on GDP growth, inflation, and other economic parameters.
* **Action Required:** Monitor and adapt monetary policy based on the economic data and developments reported.
Key Entities Referenced
Department of Economic Affairs (DEA): The primary subject of the memorandum, responsible for economic policies and decisions.
Ministry of Finance: The parent ministry of the Department of Economic Affairs, overseeing financial matters.
Financial Stability and Development Council (FSDC): Council that discussed various mandates and major macro financial challenges arising in view of global and domestic developments.
International Financial Services Centres Authority (IFSCA) Act, 2019: Act to which new rules/regulations/schemes have been issued.
Reserve Bank of India: Referenced for consumer price index and data related to India.
No. A4501 1/3/2022-Admn.lll
Government of lndia
Ministry of Finance
(Department of Economic Affairs)
New Delhi,Bhp rll,2022
OFFICE MEMO N UM
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 February,2022.
t\"'tt
(Aru p s hyam c$owF'n u rvl
Deputy secretary to the
""i:ni::!i8f#i
To
1. All Members of the Union Council of Ministers, Government of lndia, New Delhi.
2. Vice Chairman, Niti Aayog, Yojna Bhawan, New Delhi.
3. Cabinet Secretary, Cabinet Secretariat, Rashtrapati Bhavan, New Delhi.
4. Secretary to the President of lndia, Rashtrapati Bhavan, New Delhi.
5. Secretary to the Vice-President of lndia, 6, Maulana Azad Road, New Delhi.
6. Principal Secretary to the Prime Minister, PMO, South Block, New Delhi
7. Chairman, Union Public Service Commission, Dholpur House, New Delhi.
8. All Members of Niti Aayog, Yojna Bhawan, New Delhi.
9. Secretaries to all the Ministries/Departments, Government of lndia, 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. Shri V. Anantha Nageswaran, Chief Economic Adviser, DEA.
12. Additional Secretary, Cabinet Secretariat, Rashtrapati Bhavan, New Delhi.
13. Shri Manoj Sahay, JS&FA(Finance).
.
14. ShriA.M. Bajaj, Additional Secretary (FM), DEA
15. Shri Rajat Kumar Mishra, Additional Secretary (Budget), DEA.
16. Shri Sanjeev Sanyal, Principal Economic Adviser, DEA
17. All Heads of Divisions in Department of Economic Affairs.
SrEconomicAdviser(C&C/FSLR/FS&CSyJS(C&C and
OM l))/JS(Bud get)/JS(l PP/JS(lSD)/JS(lnv)/All Advisers/CAAA
18. Shri Rajesh Malhotra, DG (M&C), M/o Finance, North Block, New Delhi.
19. Guard File -2022.4450'l'l 1312022-Adm n. ll I
Ministry of Finance
Department of Economic Affairs
***
Subject: Monthly Summary on important policy decisions pertaining to
Department of Economic Affairs (DEAI for the month ot February,2022
t. lmportant policy decisions taken and major achievements during the
month
1. Macroeconomic Overview:
The real GDP growth estimated for 2021-22 at 8.9 % is likely to be realized and
provide the economy the full recovery of real GDP from the level of 2019-20, while also
serving as a launch pad for a near 8 % growth projected in the Economic Survey,
Budget 2022-23 and RBI's Monetary Policy Committee (MPC) meeting of February,
2022.
The Consumer Price lndex has moderated over the last two months, indicating a
slowing momentum in inflation. According to surveys of the Reserve Bank of lndia, the
gap between households' current inflation perceptions and future inflation perceptions
has reduced, indicating that inflation is expected to be more range-bound around the
current levels.
The cumulative growth in lndex of lndustrial Production for the period April-
December 2021-22 stood at 15.2 o/o as compared to (-)13.3 % in April-December 2020-
21. The growth rate of the eight infrastructure sectors - coal, crude oil, natural gas,
refinery products, fertilizers, steel, cement and electricity came in at 11.60/o during April-
January this fiscal as against a contraction of 8.6% during the comparable period last
fiscal. The strong comeback in Electricity, Steel, Coal, and Cement production (and
recently in refinery products) portends well for an industrial revival, pumped up by the
Government's Capex push and improving market conditions. Credit growth to industry
rose steeply by 7.6 oh YoY in December 2021 compared to 3.8 % in the preceding
month with a double-digit growth of 86.5 % to medium industries and 20.5 % growth to
micro and small industries.Overall economic activity remained resilient during the third wave of COVID-19;
this is reflected in robust performance of several high frequency indicators like power
consumption, PMI manufacturing, exports, e-way bill generation. The sector wise
growth rates are given in the Annexure. However, the geopolitical tension involving
Ukraine and Russia has led to elevated global commodity prices especially of crude oil,
edible oil and coal. lf this situation persists for a prohacted period, it is likely to have an
adverse impact on growth and inflation.
2 lmportant Developments:
(i) The following agreements were signed/loans negotiated with multilateral and
bilateral development agencies:
(a) Bilateral Swap Arrangement (BSA) between lndia and Japan was renewed for
another three years w.e.f. 28.02.2022.
(b) Government of Japan has pledged Japan lnternational Cooperation Agency
(JICA) Official Development Assistance (ODA) for 7 projects with a total
commitment ot JPY 312.25 billion (approx. Rs. 20,408.63 crore) under FY 2021-
22.
(c) A Loan of USD 115 million was signed with lnternational Bank for Reconstruction
and Development (IBRD) of the World Bank for "Rejuvenating Watersheds for
Agricultural Resilience Through lnnovative Development (REWARD) Project".
(d) A loan of USD 2 million was negotiated with ADB for 'Nagaland Urban
lnfrastructu re Development Project.
(e) A loan of USD 2 million was negotiated for lnfrastructure Development of
lndustrial Estates in Tripura" with Govt. of Tripura, Tripura lnduskial Corporation
Limited (TIDCL) and ADB for Project Readiness Financing(PRF).
(ii)
The following rules/regulations/schemes have been issued pertaining to
lnternational Financial Services Centres Authority (IFSCA) Act, 2019:
(a) lnsurance Web Aggregator Regulations, 2022
(b) Fin Tech lncentive Scheme, 2022
(c) Annual Report and Returns and Statements and Other particulars Rules, 2022(d) Form of Annual Statement of Accounts Rules, 2022
(iii)
Hon'ble Finance Minister attended the following meetings during the month:
a A meeting with Australian Minister of Trade, Tourism and lnvestment
wherein both sides highlighted the importance of an early resolution of on-
going issue of taxation of off-shore income of lndian firms in Australia;
a 25th meeting of the Financial Stability and Development Council (FSDC) to
discuss various mandates of the FSDC and major macro financial
challenges arising in view of global and domestic developments;
a Meeting of the G20 Finance Ministers and Central Bank Governors meeting
held under the lndonesian G20 Presidency and a high-level discussion on
"Strengthening Global Health Architecture" on the side-lines; and
a Review meeting of National lnvestment and lnfrastructure Fund
(iv)
Other Meetings during the month:
.
Meeting of the G20 Finance and Central Bank Deputies held virtually;
a First meeting of BRICS Finance and Central Bank Deputies under Chinese
Presidency;
a 125th meeting of the DEA Screening Committee for consideration of proposals
seeking financing from Multilateral Development Banks/ Bilateral Agencies
held on February 25, 2022 under the Chairmanship of Additional Secretary,
DEA;
a FSB Plenary meeting to discuss financial stability issues and Crypto-Assets
and Central Counter Party (CCP) financial resources for resolution;
Two rounds of discussion between lndia and Australia on Comprehensive
Economic Cooperation Agreement (CECA);
a 8th round of discussion between lndia and UAE on BIT;
a Meeting of AllB Board of Directors, in which the Board approved Assam
Electricity Distribution System Enhancement Project for a loan amount of
USD 386 million for lndia; and
a 45th Governing Council meeting of lnternational Fund for Agricultural
Development.
3.
Minimum Government, Maximum GovernanceThe use of ICT in submission of information is being encouraged.
4 Non-Compliance of ACC directions/orders
Nit
5. Details of FDI proposals cleared during the month and status of FDI
proposals awaiting approvat in the Department:
Number of proposals cleared 06
Awaiting Approval in the Department 10An nexu re
Table 1 : INFLATION- CPI-C, WPI (in percent)
January
January 2021 December 2021
2022
cPt-c 4.06 5.66 6.01
wPt 2.51 13.56 12.96
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.
Table 2 : MONETARY DEVELOPMENT
Item 11.2.2022
Policy Repo Rate 4.0
'10-Year G-Sec Par Yield (FBIL) 670
Bank Credit Year-on-Year growth 7.9
Table 3 : Merchandise Trade Performance (Customs Basis) (in US$ billion)
Exports lmports Trade Balance
January 2021 27.5 42.0 (-)14.5
January 2022 34.5 519 (-)17.4
Table 4: Services Trade Performance (in US$ billion)
December 2021 25.3 14.9 10.4
Source: Provisional data as per the Press Release daled 13.1 .2022 of the Department of
Commerce, Ministry of Commerce and lndustry.
Table 5: Balance of Payments
2020-21 2021-22
Items
(April-September) (April-September)Current Account Balance (in US$ billion) 34.4 G) 3.0
Current Account Balance / GDP (Per cent) 30 (-) o.2
Source: Reserve Bank of lndia
Table 6 : Foreign Exchange Reserves (in US$ billion)
End-March, 2021 577.0
11.2.2022 630.2
Source: Reserve Bank of lndia
Table 7: Exchange Rate ofthe lndian Rupee (Rupee per unit of foreign currency)
US Dollar Pound Sterling Euro Japanese yen
't8.2.2022 74.9223 101 .9653 85.1627 65.04
Source: Reserve Bank of lndia
Table 8 : External Debt (US$ Billion)
as at end of as at end of
Percentage
September 2020 September 2021
variation
PR P
(2/l)-11.100
(1) (2)
Total External debt outstanding 556.8 593.1 6.5
Source: Quarterly Report on External Debt as at end September 2021, DEA
Table 9 : lndustrial Production Highlights
Monthly Growth (YoY) in per cent
October 2020 November 2020 December 2020
lndex of
4.5 (r1.6 2.2
lndustrial Production
October 2021 November 2021 December 2021
(ilP)
4 1.4 0.4
:
Table 10 Eight Core lndustries
Monthly Growth (YoY) in per cent
November 2020 December 2020 January 202'l
(r1I
0.4 1.3
Eight Core lndustries
November 2021 December 2021 January 2022
(rcr)
3.4 4.1 3.7