Monthly Summary for Cabinet October 2021

No. A4501 1 /r+/2021 -Admn.lll Government of lndia Ministry of Finance (Dopartment of Economic Affairs) New Delhi, 13th January,2022 OFFICE MEMORANDU M The undersigned is directed to crrculate herewith the unclassified portion of Monthly Summary on important policy decisions in respect of Department of Economic Affairs for the Month of October, 2021 I q \,- (Arup Shya Chdwdhury) Deputy Secretary to the Government of lndia Tel No. 23095091 To 1. All Members of the Union Council of Ministers, Government of lndia, New Delhi. 2. Vice Chairman, Niti Aayog, Yojna Bhawan, New Delhi. J. Cabinet Secretary, Cab;net 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. A Principal Secretary to the Prime Minister, PMO, South Block, New Delhi 7. Chairman. Union Public Service Commission, Dholpur House, New Delhi. n Al! Members of Niti Aayog, Yojna Bhawan, New Delhi. 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 (DIPAM). 11 Chief Economic Adviser, DEA. 12 Additional Secretary, (:abinet Secretariat, Rashtrapati Bhavan, r.lew Delhi. '13 Ms. Meera Swarup, Special Secretary. 14 Shri A.M. Bajaj, Additicnal Secretary (FM), DEA 15 Shri Rajat Kumar Mishia, Additional Secretary (Budget), DEA. 16 Shri Sanjeev Sanyal, Principal Economic Adviser, DEA 17 All Heads of Divisions in Department of Economic Affairs. Sr.Advise(C&C/FSLR/FS&CSyJS(BC&lERyJS(lnv)/Adviser (rERycAAA 18 Shri Rajesh Malhotra, DG (M&C), M/o Finance, North Btock, New Delhi. 19 Guard File.A4501 1 l4l 2021 -Adm n. ll I Ministry of Finance Department of Erconomic Affairs Subject: Monthly Summary on important policy decisions pertaining to Department of Ecoromic Affairs (DEAI for the month of October,2021. Macro-Economic Overview 1 lndia is well-placed on the path to swift recovery with growth impulses visibly transmitted to all sectors of the economy. Agriculture exhibited consistent performance and industry witnessed sharp rebound with manufacturing output almost at pre- parrdemic level. While resumrtion of activity in services sector is gradual, it is improving steadily on the strength of rapid progress in vaccination and policy measures. Moreover, high frequency economic qctjyity indipators have swiftly recovered after the second wave disruptions to reach or surpass pre-pandemic levels in October, 2021. lndian economy is, therefore, expected to surpass pre-pandemic output level by end of FY 2021-22. lndia is also poised for stronger g rowth in the long term on the back of stronger macro-economic fundamentals supported by structural reforms that enable enhanced efficiency and productivity. ln addition, Government's capex push to crowd-in private inv€stment and financial s.ec{or clean-up will further support growth. Rapidly increasing vaccination coverage and richer experience with pandemic ,:ranagement provide confidence for a solid recovery. 2. Other lmportant Developments (i) Following Amendments have been made in Foreign Exchange Management (Non-debt lnstruments) Rules: (a) Foreign lnvestment uo tc 1C0o/o undei the automatic route is allowed in case an "in-principle" apprc.ral for stretegic disinvestment of a PStJ has been granted by the Government - S.O. 109i (E) dated SthOctob er, 2021 . (b) All telecom services and such other services as may be permitted by the Department of Telecommunications - 5.O.4242 (E) dated l2thOctober, 2021. (il Following regulations have been issued on 21't october, 2021 by lnternational Financial Services Centres Authority (IFSCA):a. lnternational Financial Services Centres Authority (Registration of lnsurance Business) Regulations, 2021 . b. lnternational Financial Services Centres Authority (lnsurancelntermediary) Regulations, 2021. c. lnternational Financial Services Centres Authority (Capital Market lntermediaries) Regulations, 2021 . (iii) Following loan agreements were signed and negotiations were held in with multilateral and bilateral deveiopment agencies. a) Loan agreement with the Asian lnfrastructure lnvestment Bank (AllB) for financing USD '105 million for Punjab Municipal Services lmprovement Project; b) Loan agreement with the Asian lnfrastructure lnvestment Bank (AllB) for financing USD 356.67 million for Chennai Metro Rail Project, Phase 2 Corridor 4; c) Loan agreement with World Bank (lnternational Bank for Reconstruction & Development) for financing USD 40 million for Meghalaya Health Systems Strengthening Project; d) Loan agreement with Asian Development Bank (ADB) for financing USD 100 million [Ordinary Capital Resources](OCR) for Maharashtra Agribusiness Network Project (MAGNET); e) Loan agreement with Asian Development Bankfor financing USD 4.s million for Aizawl Sustainable Urban Transport Project; f) Loan agreement with ADB for financing USD 251 .O million for lntegrated Urban Flood Management for the Chennai - Kosasthalaiyar Basin project; S) Negotiations with World Bank for financing of USD 135 million for West Bengal Electricity Grid Modernisation project; h) Negotiations with AllB and ADB for financing of USD 1500 million for Responsive COVID-1J Vaccines for Recovery project ui.ler the Asia pacific Vaccine Access Facility negotiations; andi) Negotiations for finarrcing of USD 500 million for Accelerating State Education Program. 3. Following important meetings were held during the month of October, 2021: Hon'ble Finance Minister Smt.Nirmala Sitharaman attended the following i meetings during the month: a. Represented lndia MoF in the Fourth G20 Finance Ministers and Central Bank Governors (FMCBG) meeting held on l3thOctober, 2021 on the sidelines of Annual Meeting of World Bank / IMF in Washington DC. Secretary(EA)along with Adviser accompanied Hon'ble FM in the meeting. b. Led an lndian delegation in the 2021 Annual meetings of the lnternational Monetary Fund (lMF) and World Bank and other related meetings/events during 11th - 18th October, 2021 in Boston, New York and Washington DC, USA. During 2021 Annual Meetings of World Bank and lMF, following meetings were i;elu: a Held a Bilateral Meeting with lnternational Finance Corporation (lFC) MD in Washington DC on 14th October,2021. a Attended the World Bank Development Committee Meeting in Washington as lndian Governor of the World Bank DC on 1sth October,2021. a Held a Bilateral Meeting with World Bank Group President in Washington DC on sth Octobe , 2021 1 r . c. Attended the lnternational Monetary Fund (lMF) Breakfast meeting held on 14th October, 2C21-'followed by a Plenary session of lnte.national Monetary & Financial Committee (IMFC). d. Led a delegation to attend the Eighth Cabinet level lndia-USA Economic & Financial Partnership Dialogue held on 14th October, 2021 at Washington D.C., USA on the sidelines of the Annual Meetings of the World Bank / lMF, 2021 . e. Also met Rt Hon Mary Elizabeth Truss, Foreign Secretary of United Kingdom on 22nd October, 2021 at New Delhi. lnvestments in green energy, infrastructure, i !at:rnal Monetizatioll Pipeline, FinTenh and iFSCA were identified as key areas of collaboration between the two countries. f. Met Mr. Frans Timmermans, Executive Vice President of the European Commission, on 22ndOctober, 2121al New Delhi. The meeting covereddiscussions or.. croperation on climate action and to understand the responsiveness of lndia to EU's encouragement to raise climate ambition. g. Held a meeting with Global lnvestors 11-16th October, 2021 during her visit to USA h. Attended the Asian lnfrastructure lnvestment Bank (AllB) Board of Governors 6th Annual Meeting by virtual means on 28th october, 2021. Represented lndia MoF in the G20 Joint Finance and Health Ministers meeting held on 2gthOctebe', 2021 in Rome, ltaly. The ltlinisters endorsed the Joint Finance and Health Ministers Communique during this meeting. ii. Secretary(EA) attencied the following meetings during the month of October, 2021: a. Bilateral Meeting with World Bank Group MD (Operations) on 14th October, 2021 in Washington DC. b. Bilateral Meeting with Vice President & Chief Executive Officer, Multilateral ..t I nvestment Guarantee-Agency (M IGA) on 1 4tt' Octobe r, 2O2i in Washington D. C. c. Represented lndia as lndia's Finance Deputy in the Fifth G20 Finance and Central Bank Deputies meeting under the ltalian Presidency was held virtually on 7th - BIh october, 2021. d. Held a meeting with Regional Vice President of lnternational Finance Corporation (lFC) held on 27th October,2021. e. chaired a meeting coordinated on 6th october, 2021 in pursuance to the direction given in the 24th FSDu meeting to suggest measures to irrorove the lnsolvency and Bankruptcy Code (lBC), 2017, in which reforms needed in IBC were identified. iii. Additional secretary, DEA chaired ilre l2lstmeeting of the DEA screening committee for consideration oi proposals seeking financing from Multilateral Development Banks / Bilateral Agencies held on 29th October, 2021.iv. Additional Secretary also attended the lnternational Development Association-20 (lDA-20) Replenishment 3'd meeting alongwith World Bank ED (lndia) on 2O-22nd October, 2021. v. The meeting of Standing Committee on Standards lmplementation (SCSI) of the Financial Stability Board (FSB) was held on 6th October, 2021 to discuss FSB's annual report on implementation and effects of reforms, and monitoring the use of flexibility and consistency of COVID-19 responses with international standards. The representative of the Government on SCSI participated in the said meeting. vi. The FSB's Plenary meeting was held on 18th October 2021 lo discuss the Lessons learnt from COVID-19 for financial stability policy; Progress report on non-bank financial intermediation, and Glasgow Financial Alliance for Net Zero. The representative of the Government participated in the said meeting. vii. A meeting was held on Bl'October,2021 , in presence of officers of PMO, to review the functioning of Single Point of Contacts (SPOCs), created by the Department of Economic Affairs to address the issues raised by Global invesrr;rs during the Virtual Global lnvestor Roundtable (VGIR) 2020. viii. First and Second round of discussion on draft Bilateral Investment Agreement (BlA) between India and raiwan (lndia Taipei Association & Taipei Economic and Cultural Center) were held on 14th& 28th October, 2021. ix. Fifth & Sixth round of discussion between lndia and USA on lnvestment lncentive Agreement were held on i2th October & 2gth Octobe r,2021 . x. seventh round of discussion on Bilateral lnvestment rreaty (Blr) between lndia and UAE held on 27th October. 202i. xi. senior officers of DEA participated in the AllB Board of Directors meeting held virtually on 13th october and 21"t october, 2021 to discuss various policy issues and investment operations.3. Minimum Government, Maximum Governance ln particular, use of ICT in submission of lnformation is being encouraged. 4. Non-Compliance of ACC directions/orders NitAnnexure Table 1: Quarterly Real Growth in demand side of GDP and its components (per cenq Growth Growth Recovery over Q'i over Qzi Gomponents over Ql of 202O- of 202O- of 2019-20 21 21 Total Consumption 13.8 91.2 (-) 15.7 (-)76 Government Consumption c)4 8 107.4 Private Consumption 19.3 BB.1 (-) 17.4 Gross Fixed Capital Formation 55.3 82.9 (-) 23.6 Change in Stock 45.9 98.0 (-) 16.0 Valuables 456.1 38.8 (-) 7e.1 Exports 39.1 108.7 0.8 lmports 60.2 94.7 (-) 7.1 GDP 20.1 90.8 (-) 16.e Source: National Statistical Office, MoSPl. Table 2: Quarterly Growth of GVA at constant (201'l-121Prices (per cent) Growth Growth Recovery over Ql over Q4 Sectors over Ql of 2O2O- ol 2020- ot 20'19-20 21 21 Agriculture & Allied Sectors (-) 10.7 4.5 108.2 lndustry 46.1 93.8 (-) 17.1 Mining & quarrying 18.6 98.2 (-) 10 8 Manufacturing (-)13.e 49.6 95.8 Electricity, gas, water supply & other utility 14.3 103.0 3.1 Construction (-) 30.3 68.3 85.1 Services (-)11.8 11.4 87.5 Trade, Hotels, Transport, Communication and (-) 35.3 34.3 69.8 Services related to Broadcasting Financial, Real Estate & Professional Services 18.8 3.7 98.5 Public administration, defer-rce and other oEn (-) 1e.3 5.8 GVA at basic prices (-) 13.3 18.8 92.2 Source: National Statistical Office, MoSPITable 3: INFLATION - CPI-C, WPI (in Per Cent) September 2020 August 2021 September 2021 cPt-c 7.27 5.30 4.35 wPt 1.32 4 { ao 10.66 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 4: MONETARY DEVELOPMENT Item 't5.10.2021 Policy Repo Rate 4.0 10-Year G-Sec Par Yield (FBIL) 635 Bank Credit Year-on-Year growth # 65 Note: # as on 8.10.21 Table 5: Merchandise Trade Performance (Customs Basis) (in US$ billion) Exports I tmports Trade Balance September 2020 27.6 30.5 (, 3.0 September 2021 JJ.6 56.4 (-) 22.6 Table 6: Services Trade Performance (in US$ billion) Au ust2021 19 6 11.5 8,1 Source: Provisional data as per the Press Release daled 14.10.2021 of the Department of Commerce, Ministry of Commerce and lndustry Table 7: Balance of Payments 2020-21 2021-22 Items (AprilJune) (April.June) (P) Current Account Balance (in US$ billion ) 19.1 6.5 Current Account Balance / GDP (Per cent ) J.t 0.9 Source: Reserve Bank of lndia Table 8: Foreign Exchange Reserves (in US$ billion) End-March, 2021 577.0 22.10.2021 640.1 I Source: Reserve Bank of lndiaTable 9: Exchange Rate of the lndian Rupee (Rupee per unit of foreign currency) US Dollar Pound Sterling Eu ro Japanese yen 9.9.2021 73.6887 101 .4900 87.1266 66.9400 Source: Reserve Bank of lndia Table 10: External Debt (US$ Billion) as at end June as at end June Percentage 2020 PR 202'.t P variation (1) (2) (2/1)-11.100 Total External debt outstanding 555.2 571.3 2.9 Source: Quarterly Report on External Debt for quarter ending June 2021, Reserve Bank of lndia. Table 11: lndustrial Production Highlights Monthly Grovuth (YoY) in per cent June 2020 July 2020 August 2020 lndex of lndustrial Production (llP) (-)16.6 (-) 10.5 o7 1 June 2021 July 2021 August 2021 13.6 11 .5 11 o Table'12: Eight Core lndustries Monthly GroMh (YoY) in per cent I July 2020 August 2020 September c) 7.6 c) 6.e 0.6 Eight Core lndustries (lCl) July 2021 August 2021 September 9.9 11.5 4.4