**Executive Summary**
This office memorandum, issued by the Department of Economic Affairs (DEA) on February 25th, 2021, circulates the unclassified monthly summary of important policy decisions for January 2021. It is addressed to various government officials and departments. The aim is to provide an overview of key economic activities and developments within the DEA.
**Key Points / Main Content**
* **Macro-Economic Overview:**
* India's real GDP is estimated to contract by 7.7% in FY2020-21.
* Agriculture remained a positive sector, while services, manufacturing, and construction were negatively affected.
* Government consumption and net exports helped to cushion the economic decline.
* **Other Important Developments:**
* A Credit Facility Agreement/ Loan Agreement for the Surat Metro Rail Project was signed with Agence Française de Développement (AFD) for Euro 250 Million on January 28th, 2021.
* A loan agreement for the "COVID-19 Crisis Response Support Loan for Social Protection" for JICA ODA amounting to JPY 30 billion was signed with Japan on January 8th, 2021.
* Gazette notifications were issued for the release of commemorative coins for the 125th Birth Anniversary year of Netaji Subhas Chandra Bose (Rs. 125) and Srimat Swami Pranavanandaji Maharaj (Rs.100, Rs.50 and Rs.10) on January 20th and 22nd, 2021 respectively.
* Two projects for Andhra Pradesh were signed on January 6th, 2021, concerning Mandal Connectivity and Rural Connectivity Improvement, and Road and Bridge Reconstruction.
* A policy paper on the rate transition of Asian Development Bank's Sovereign Operation Loans LIBOR was signed with ADB on January 27th, 2021 and circulated to State Governments, EAs, PIAs, and line ministries.
* **Meetings:**
* Various meetings were held during January 2021 on topics including National Infrastructure Pipeline projects, Financial Stability and Development Council, Sustainable Finance for India, Screening Committee for externally aided projects, Gold Monetisation Scheme, and IFC issues.
* **Other Points:**
* Use of ICT in submission of information is being encouraged.
* 16 FDI proposals are awaiting approval in the Department.
* Tables are included with information of the Growth of GVA at Basic Prices, Annual Real Growth in Demand Side of GDP, Inflation, Trade performance, Balance of Payments, Foreign Exchange Reserves, Exchange Rate, External Debt and Industrial Production Highlights
**Impact Analysis**
**Union Council of Ministers, Government of India; Vice Chairman, Niti Aayog; Cabinet Secretary, Cabinet Secretariat; Secretaries to the President & Vice-President of India; Principal Secretary to the Prime Minister; Chairman, Union Public Service Commission; Secretaries to all Ministries/Departments, Government of India; Chief Economic Advisor, DEA; Additional Secretary, Cabinet Secretariat; Additional Secretaries (FS & CS, Admn. & Investment, FM, Budget), DEA; AS&FA(Finance); Principal Economic Adviser, DEA; Heads of Divisions in Department of Economic Affairs.**
* **Impact:** Informed of key policy decisions, economic developments, and required actions within the Department of Economic Affairs.
* **Action Required:** Review the circulated summary and take appropriate actions based on the information provided.
**State Governments, EAs, PIAs, and Line Ministries**
* **Impact:** Receive a policy paper related to the transition of ADB's loan rates (LIBOR).
* **Action Required:** Take necessary action related to the policy paper on the rate transition of ADB's Sovereign Operation Loans London Interbank Offer Rate (LIBOR).
Key Entities Referenced
Department of Economic Affairs: Primary subject of the memorandum, responsible for policy decisions discussed in the monthly summary.
Ministry of Finance: The department is a part of this Ministry
Niti Aayog: Important policy think tank that is being addressed in the office memorandum
Surat Metro Rail Project: Loan agreement was signed between Government of India and Agence Française de Développement (AFD).
Atmanirbhar Bharat Mission: Mentioned as having placed the economy firmly on the path of revival
No. 4-450 I ll 4 12021- Admn.III
Government of India
Ministry of Finance
(Department of Economic Affairs)
New Delhi, 25tl' February,202l
OFFICE MEMORANDUM
The undersigned is directed to circulate herewith the v
Summary on important policy decisions in respect of Department of the
Month of January, 2021.
( ir Singh)
Deputy Secretary to the of India
Tel No. 093592
To
1.. All Members of the Union Council of Ministers, Government of India, 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 India, Rashtrapati Bhavan, New Delhi.
5. Secretary to the Vice-President of India, 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 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 (DIPAM).
11. Chief Economic Adviser, DEA.
t z. Additional Secretary (Shri A. Giridhar) Cabinet Secretariat, Rashtrapati Bhavan, New
Delhi.
13. Dr. C.S. Mohapatra, Additional Secretary (FS &CS), DEA
1a. Shri K. Rajaraman, Additional Secretary (Admn. & Investment), DEA-
L5. Ms.Meera Swarup, AS&FA(Finance).
16. Shri A.M. Bajaj, Additional Secretary (FM), DEA
17. Shri Rajat Kumar Mishra, Additional Secretary (Budget), DEA'
18. Shri Sanjeev Sanyal, Principal Economic Adviser, DEA
19. All Heads of Divisions in Deparlment of Economic Affairs.
Sr. Adviser(c&c/F s LR/FS&c s)iJS(BC&lER)/.IS(Inv)/Advi ser (IER)icAAA.
20. Shri Raiesh Malhotra, Addl.DG (M&C), M/o Finance, North Block, New Delhi.
21. Guard File - 2021.No.A-450 1 1 I 412021 -Admn.lll
Government of India
Ministry of Finance
(Department of Economic Affairs)
**1.
Subject: Monthly Summary on important policy decisions pertaining to Department
of Economic Affairs (DEA) for the month of January,2021.
l. Macro-Economic Overview
India's real Gross Domestic Product (CDP) is estimated to contract by 7.7% in FY2020-
21. cor-nposed of a sharp 15.7o decline in first half and a modest 0.1o/ofall in the second half.
Sector-wise. agriculture has remained the silver lining while contact-based services,
marrufacturing. constructiorr were hit hardest. and have been recovering steadily. Government
consumption and net exporls have cushioned the growth from diving further down. The
fr.urdamentals of the economy remain strong as gradual scaling back of lockdowns along with the
astute support of Atmanirbhar Bharat Mission have placed the economy firmly on the path of
revival. The sector-wise growth rate is given in a tabular form at Annexure.
2. Other lmportant Developments
2.1 (a) The Credit Facility Agreementl Loan Agreement for Surat Metro Rail Project was signed
between Government of India and Agence Frangaise de Ddveloppement (AFD), France on
28tl' January 2021 for an amount of Euro 250 Million.
(b) Note fbr "COVID-I9 Crisis Response Support Loan fbr Social Protection" for JICA ODA
loan amounting to.lPY 30 billion (around Rs.2ll3 crore) was signed and exchanged between
Govemment of lndia and Govemment of .lapan on Stl' January, 2021.
2.2 (a) A Gazette notification was issued on 20tl'January, 2021 for release of a commemorative
coin of Rs. 125 to commemorate the occasior.r of 125t1'Birth Anniversary year of Netaji Subhas
Chandra Bose.
(b) A Gazette notification was issued on 22"d January, 2021 for release of a commemorative coin
of Rs.100. Rs.50 and Rs.l0 to commemorate the occasion of 125t1' Birth Anniversary of Srimat
Swami Pranavananda.l i Mahara.j
.
2.3 Government of India has signed two projects of Andhra Pradesh on 6tl'January, 2O2l on
Andhra Pradesh Mandal Connectivity and Rural Connectivity Improvement Project (AP
MCRCIP) and Andhra Pradesh Road and Bridge Reconstruction Project (APRBRP).
2.4 (a) A policy paper related to rate Transition of Asian Development Bank's Sovereign
Operation Loans London Interbank Offer Rate (LIBOR) has been signed with ADB on
27't'January,202l and also circulated to all tlie State Government, EAs, PIA. including line
rninistries for their necessarv action on it.
Contd./-.2
(b) Loan of USD 105 million has been signed with the World Bank on 5tr' January , 2021 for
West Bengal lnland Water Transport, Logistics and Spatial Development Project.
(c) The new Bilateral Borrowir-rg agreement between International Monetary Fund (lMF) and
Reserve Barik of India (RBI) got approval in IMF Board.
2.5 Follorving important meetings were held during the month of January,202l:
i. Hon'ble Finance Minister, Ms. Nirrnala Sitharaman chaired a Review meeting on 6'l'January,
2021 to monitor the progress of projects under National Infrastructure Pipeline (NIP) of Ministry
of Health 8. Family Welfare (MoHFW) and Deparlment of Water Resources, River
Developrnent and Ganga Reiuvenation (DoWR, RD & GR).
ii. Secretary (EA) alongwith Chief Economic Adviser Dr. K. Subramanian and Senior Economic
Adviser & Secretary, Financial Stability and Development Council (FSDC), Dr. Shashank
Saksena attended the 26rt'Meeting of the Sub-Committee of the FSDC chaired by Governor, RBI
on l3tl'January 2021 through video conf'erence.
iii. Additional Secretary chaired the first meeting of the Task Force on Sustainable Finance for
lndia on 19'l' January 2021.
(iv) Additional Secretary chaired the I l4tr'meeting of the DEA Screening Comrnittee for
externally aided projects on 29'l'January,2021. Total 26 projects were taken up for consideration
and 10 proiects were approved.
(v) Additional Secretary attended the virtual mid-year Screening Comrnittee meeting of
International Monetary Fund - South Asia Regional Training and Technical Assistance
Center (lMF - SARTTAC; on lgtl'January, 2021.
(vi) Additional Secretary had a virtual meeting with Mr.Alfonso Garcia Mora, Vice.President
(Asia and Pacific), International Finance Corpoiation (IFC) regarding IFC issues on 28th January,
2021.
(vii) Additional Secretary chaired a meeting on Gold Monetisation Scheme with Gems &
Jewellery Export Promotion council (GJEPC) on 5tl' January, 2021.
(viii) Additional Secretary chaired a meeting on 13'r' January , 2OZl with State Bank of India
(SBI) and Indian Banks' Association (lBA) to review action taken on proposals related to
revamping of Gold Monetisation Scheme (GMS).
(ix) Joint Secretary chaired a meeting on International Bullion Centres Recommendations -
LBMA (London Bullion Market Association) on 5th January,2021.
(x) DEA participated in the First G20 Finance and Central Bank Deputies meeting under the
2021.
Italian Presidency was held virtually on25-26th January,
Contd./_J
(xi) The 21't meeting of the Early Warning Group (EWG) was held on l gtl' January 2021 under
the Chairpersonship of Member, SEBI through video conference in which Director (FS&CS)
attended on behalf of this Department.
(xii) Meeting regarding 'single point of contact' as a follow up to Virtual Global Investor
Roundtable (VGIR) was held on 5'l' .lanuary, 2021.
(xiii) Virtual Tripartite Portfolio Review Meeting (TPRM) was held with ADB and Project
lmplenienting Authorities (PIAs) on l5tl' January, 2021 for ADB financed projects.
(xiv) Virtual Tripartite Portfolio Review Meeting (TPRM) was held with the World Bank and
Project Implementing Authorities (PlAs) on 2O-22nd January, 2021 for World Bank financed
projects.
(xv) The first meeting of the India-UK Sustainable Finance Forum was held on 21't January
2021 between India and the UK. The Forum consists of representatives from various
rn i ni stries/departments and re gulators from botli sides.
(xvi) A Review rneeting of Capital Infusion in National Investment and Infrastructure Fund
(NIIF) Debt platform was held on 22"d lanuary.2021 .
(xvii) A meeting with Shri Shalabh Tandon, acting Director, IFC and Mr. Jun Zhang, Country
Director, IFC regarding lnternational Finance Corporation (lFC) IFC issues was held on
28tr' January,2O2l .
Minimum Government, Maximum Governance
-1.
In particular, Lrse of ICT in sr.rbmission of infbrmation is being encouraged
1 Non-Compliance of ACC directions/orders
Nil
5. FDI propos:rls cleared during the month and status of FDI proposals awaiting
approval in the Department:
Awaiting Approval in the Department: 16An nexurc
Table l: Growth of GVA at Basic Prices by Economic Activity antl GDP at Market Prices
(Per Cent)
Grorvth Rate at Constant (201I-12) I'rices (Per Cent)
Sectors 2017-18 201tt-l9 lu o r q-zo
rc
2''r RE I'I RE
lr''
Agriculturc, forestry & fishing
2.6 ,1.3 1...
ndustrr
I
5.3 -1.2 l".u
N4 in ing & cltrrrr'l ing
0.1 -2.5 l-,, o
ManLrfacturing t,, *.
-l.,1"1 l-o
l,
L,lectricity. gas. water sLrpply & other utilitv selvices
ti.0 2.1
Construction
lo, I 0 l-,,0
Sen,ices
1.2 7.2 l-r.t
Trade, Hotel. Transport Storage t, 6.4 t,, ,
,
Financial. Real Estate & Prot'. Scrvices l.)
1.3 1,,,
I'ublic Adrninisnation. Det'ence and othel Serviccs
t.,,
1.1 8.3
GVA at Basic Prices
l'., .l.l
1".,
G DI' nt Markct I'rices
lo., ,1.0 1",
Source: National Statistical Office (NSO).
Notes:2nd RE: Second Revised Estirnates, l"RE: First Revised Estimates, lst AE: First Advance
Estinrates
'I'lblc 2: Annual Real (irou'tlr in Dernand Side of (lDl'nnd its Clonrponcnts (I'cr Ccnt)
lzorz-ra lzortr-rs
nn nn l2or9-20
"'' lr" lr'' ae
lu
'fotal
C onsrrnrpl ion '7 .1 5.9 -6.9
Covernrnent Consunrption
6.3 1.9 l, *
l)rivate Consumptiol
7.6 Ilr.) -9.5
Gross Fixed Capital Fonnation
9.9 l..* -14.5
Expofts
t 2.3 -6. )
lnrports
lt.6 -0.8 -20.5
CDI' at nra lliet priccs t_
l().f, l*.0 -7 .7
Source: National Statistical Office (NSO).
Notes:2''d RE: Second Revised Estirnates. l'' RE: First Revised Estimates. I st AE: First Advance
EstilnatesTable 3: INFLATION- CPI-C, WPI (in Per Cent)
Nov - 20 Dec -20
loec-rs
CPI-C ;s 6.93 4.59
lz
WPI to 1.55 1.22
lz
Source: NSO for CPI-C and OEA, DPIIT for WPI
Note: WPI inflation for last two rrronths and CPI-C inflation for last one month is provisional
Table 4: MONETARY DBVELOPMENT
Item 22.1.202t
Policy Repo Rate 4.0
l0-Ycar {-}-Scc Par Yicld (i'8I1,) 5.95
Bank Credit Y*ar-on-Year grorvth # 6.4
Note: # as on Jannary 75'1',2021
Table 5: Merchandise Trade Performance (Customs Basis) (in US$ billion)
mporls lrru,t" Balance
lE*por,, lr
ber 2019 lr, , 9.6 12.5
ecernber 2020 1.2 6 15.4
Table 6: Services Trade Performance (in US$ billion)
Novernber, 2020 t1 .1 10.1 0
Source: Provisional data as per the Press Release dated 15.1.2021 of the Department of Commerce,
Ministry of Commerce and Industry.
Table 7: Balance of Payments
020-21
tems 0 r9-20 H r
w
lry
Current Accouut Balance (in US$ billion)
urrent Account Balance / GDP (Per cent) 1.6 1
Source: Reserve Bank of India.Table 8: Foreign Exchange Reserves (in US$ billion)
March. 2020 l+n.t
22.t.202t lsss:
Source: Reserve Bank of lndia
Table 9: Exchange Rate of the Indian Rupee (Rupee per unit of foreign currency)
lr, ,o,,u. Pound Sterling E,uro lJapanese
1v",,
25.1.2021 100.0255 88.8187 ;zoo
ltz.ozot lzo
Source: Reserve Bank of India
Table 10: External Debt (US$ Billion)
as at end of September'lPercentage
lu, ut of
",',d 2020 P lvarratron
20 re PR itzt
t-
[i.,ot""o"' (2) Irl*roo
l'otal Extemal debt outstanding 51.6 s56.2 0.2
I'
Source: QLrarterly Repoft on E,xternal Debt as at end Septernber 2020, DEA
Table l1: Industrial Production Highlights
Monthly Growth September - l9 -19 ovember
l)l9
lo.toue,"
Indr-rstrial Production GroMh Rate (llP) -4.6 luu 1,,
20
Monthly Growth Septerrber - 20 IIo ctober - November
lzo
IndLrstrial Productior-r Growth Rate (llP) 0.5 lo, t,,
Table 12: Eight Core Industries
Monthly Growth l":11: December
loctober-rt
-
19
Growth of Eight Core Industries L', lo, 3.t
Monthly Growth - 20 f""'"1-' December
-20
loctober
Growth of Eight Core Industries loo t 1.4 -1.3
*+*