Monthly Summary for Cabinet September 2021

No. A-45O1 1 /4/2O2 1-Admn.III Government of India Ministry of Finance (Department of Economic Affairs) *** New Delhi, LlJ anuaq, 2O22 OFFICE MEMORANDUM The undersigrred is directed to circulaie herewith the unclassified portion of Monthly Summar5r on imp,rrtant policy decisions in respect of Department of Economic Affairs for the Month of September, 2O2 1. r*,o.n h"\K,on,or Deputy Secretary to the Government of India Tel No.23095091 To All Members of the Union Council of Ministers, Govemment of India, New 1 2. Vice Chairmal, Niti Aayog, Yojna Bhawan, New Delhi. J. Cabinet Secretary, Cabinet Secretariat, Rashtrapati Bhavan, Nelv Delhi. 4. Secretary to lhe President of India, Rashtrapati Bhavan, New Delhi. 5. Secretary to the Vice-President of India, 6, Maulana Azad Road, New Delhi. 6. Principal Secretaqr to the Prirne Minister, PMO, South Block, New Delhi 7. Chairmal, Union Public Sen'ice Commission, Dholpur House, Nelv Delhi. 8. All Members of Niti Aayog, Yojna Bhawan, New Delhi. 9. Secretaries to all the Ministries/ Departments, Governmcr.t of India, New Delhi. 10 PS to MOS (h-), PPS to Finance Secretary, PPS to Secretary (EA), PPS to SecretarSz (Revenue). PPS to Secretary (Expenditure), PPS to Secretary (DTPAM). 11. Chief Economic Adviser, DEA. 12. Additional Secretary, Cabinet Secretariat, Rashtrapati Bhavan, New Delhi. 13. Ms.Meera Swamp, Special Secretary, DEA. 14. Shri A.M. Bajaj, Additional Secretar.v (FM), DEA 15. Shri Raj at Kumar Mishra, Additional Secretary (Budget), DEA. 16. Shri Sanjeev Sanyal, Principal Economic Adviser, DEA 17. Al1 Heads of Divisions in Department of Economic Affairs. Sr.Adr.iser(C&C/FSl R/FS&CS) /JS(BC&IER) /JS(Inv) /Adviser (rER)/CAAA. 18. Shri Rajesh Malhotra, DG (M&C), M/o Finance, North Block, New Delhi.No. A450{ 1/4/2021 -Admn.lll Government of lndia Ministry of Finance Department of Economic Affairs Subject: Monthly Summary on imoortant policy decisions pertaining to Department of Economic Affairs (DEAI for the ntcnth of September,2O21. L Macro-Economic Overview lndia's macroeconomic funciamentals remain strong on the back of fiscal consolidation measures and structural reforms Agriculture sector continues to grow strong. The sharp rebound in manufacturing and construction sectors places them firmly as growth drivers demonstrating the structural strengthening of the lndian economy. While revival in contact intensive services sector remains gradual, it is poised to gain pace on the back of rapid inoculation and Government's targeted relief measures for the stressed sectors. A broad based rebound rn several leading macroeconomic indic.riors in July, August and September offers bright prospepts for lndia:s continued economic recovery. With Government and RBI's unflinching commitment to put the economy back on track, lndia is poised for an even faster recovery in the next three qLrarters of 2021-22. Rapidly increasing vaccination coverage and richer experience with pandemic management provide the confidence that the recovery can be continued even in the event of a third urave. As per the latest quarterly bulletin of PLFS for the period October-Decembet 2020 released on 9th September 2021 lor urban areas as per Current Weekly Status (CWS), labour force participation rate, i.e. supoly of labour, increased from 37.00/o in July - September 2020 to 37.3o/o in October-December 2020; the lvorker population ratio, i.e. labour force that was employed, improved frcm 32.1'% in July-September 20201o 33.5% in October-December 2020, wt';ile the unemployment r?te decreased from 13.3% to 10.3% over the same period. The sector-wise grovvth rates are given in the talrle at A.nnexure. 2. Other lmportant Develoi:rnents (i) ln pursuance to the Union Budget announce,'nents of 2018-19 and 2021-22, Securities Exchange Board of lndia (SEBI) has finalized a framework for establishing gold spot exchanges, in its Board meeting held on 28th September 2021. Gold spot trading is conceived as the trading of Electronic Gold Receipt (EGR) which will be a "security" issued against the physical gold deposited in the vaults registered with SEBI and held in demat form with the SEBI registered depository. SEBI will also be regulating gold vaults through its proposed SEBI (Vault Managers) Regulations, 2021. The Gold Sxchange would be a national platform for buying and selling EGRs with underlyinE standardized gold'in lndia and ilso create an efficient and transparent national pricinv rjiiucture fcr. gold with benefits such ar investment liquidity, assurance in the quality of gcilcl 'etc. (ii) ln order to bolster the Fini;ch e{rosystem at GIFT-IFSC (Gujarat lnternational Finance tec-City-lnternational Financial Services Centre), the government has approved the 'Fintech lncentive Scheme' with a budgetary ou{lay of Rs 45.75 crores over three years. The scheme envisages customrzed incerrtives to support Fintech start-ups based in IFSC through variousstages in their life-cycle such as ideation, incubation, proof of concept, commercialization and up scaling. (iii) Secretary (EA) had reviewed Capex Outlays, expenditure & monthly targets with Ministry of Railways. n/inistry of Road, Hrghways and Transport, Department of Atomic Energy, . Department of Space, Ministry of Home Affairs, Ministry of Civil Aviation on 23'o Sept 2021. (iv) Loan assistance of USD 500 million has been signed on Sept 10,2021 with the Asian lnfrastructure lnvestment Bank (AllB) for financing Government of lndia's Creating a Coordinated and Responsive lndian Social Protection System Program (CCRISP). (v) A loan agreement of the Jharkhand Urban lnfrastructure Develcr.nent Company Limited was signed on 8tn September,2021 between Governnrent of lndia and ADB for an amount of USD 12 million. 1 (vi) The loan for Maharashtra Rural Connectivity lmprovement Project Additional financing an amount of loan of USD 3OO million (OCR) was signed with ADB on 8th September, 2021. (vii) Loan negotrations for: a. Aizawl Sustainable Urban Transport Project were held on 14rh September, 2021 for an amount of USD 4.5 million. b. Agartala City LJrban Development Project were held on 16th September, 2021 lor an amount of USD 61 million. (viii) Approval for overseas sale of Corhmemorative Coin of all themes minted by Security Printing and Minting Corporation of lndia (SPMCIL), subject to approval of Reserve Bank of lndia has been conveyed to SPMCIL. 3. Following important meetings were held during the month of September, 2021: i. Hon'ble Finance Minister chaired the '1 'lth Ur.-lndia Economic and Financial dialogue held on 2nd September 2021 virtually through video conferencing. The UK delegation was led by Mr. Rishi Sunak, Chancellor of the Exchequer of UK. ii. tle Hon'ble Finance Minisier alsc chaired 24th rneeting of Financial Stability and Development Council (FSDC) -rganiseci on 3'd Seplen:ber, 2021. iii. Secretary (EA) chaired the !"ourldtable bn'Accelbrating Greenfield infrastructure Projects through PPPs" which was held on 30t September, 2(j21. iv. Additional Secretary, DEA met the French delegation led by l-lE Mr. Emmanuel Lenain, the French Ambassador to India in the 11th DEA-AFD (French Agency for Development) Annual Negotiation Meeting on 27rh September 2021 through virtual ptatform. The AFD team was led by Mr. Philippe ORLIANGE. Director of Asia Department. v. Additional Secretary, DEA and the Chairman of the Task Force on Sustainable Finance took an update of the work of Task Force in a meeting with the co-chairs of various working orouos on 28rh Seotembbr 2021. - ,i .. i1, : . ; ,:;, ,,_ , vi. Additional Secretary, DEA chaired a pipeline review meeting held virtually on 8th September, 2021 with the \l/ijr!d Bank and the ProjEct lrir$lementing Agencies (PIAs) for review of pipeline projects which are to be implemented with the World Bank financing.vii. Additional Secretary, DEA also chaired the 120th meeting of the DEA Screening Committee for consideration of proposals seeking financing from Multilateral Development Banks / Bilateral Agencies held on 17th September, 2021. viii. Additional secretary, DEA attended the ltuFC (lnternational Monetary Financial committee) Deputies Meeting held virtually on 21"1 september , 2021 and presented lndia's perspective on issues of global outlook, policy priorities, MD's Global Policy Agenda (GPA)' the building blocks of the IMFC communique and arrangements for Annual Meetings 2021 ix. Additionat Secretary, DEA chaired a Tripartite Portfolio Review Meeting held virtually with the World Bank and PlAs on 29th September, 2021 lor the review of World Bank financed projects. x. As lndian Director for New Development Bank (NDB), Additional Secretary, DEA participated in the NDB Board of Directors meeting held on 23'd September,2O2l to inter-alia discuss various policy issues. xi. As a Director of Executive Board of IFAD, Joint Secretary, DEA participated in the 133'd meeting of Executive Board of lnternational Fund for Agricultural Development (IFAD) which was held during 13th -16rh September 202'l to discuss various policy issues. xii Joint Secretary, DEA par-ticipated as lndian Alt Director for A,llB in the AllB Board of Directors meeting on 22nd - 23d September, 2021 lo discuss various policy issues and in','3stment operations. The AllB Board appioved sovereign-backed loan of USD500 million for Chennai lrletro Rail Phase-2 Corridor 4 project. xiii. Fourth G-20 Finance and Central Bank Deputies Meeting under the ltalian Presidency was held virtually on 13-14th September,2O21. Advisor (lER) as lndia's Deputy's Deputy and RBI Deputy Governor represented lndia in the meeting. xiv. First rounci of technical discussion between lndia and Chile on Biiateral lnvestment Treaty was held on 3'd September, 2021 . xv. A meeting of FSB SCSI (Financial Stability Board Standing Committee on Standards lmplementation) attended by DEA representatives was held on 16th September, 2021 lo discuss (i) 2021 Annual Report to the G2Q; (ii) Monitoring the use of flexibility and consistency oi'COVID-l9 responses with inteinationai standarCs; (iii) Compensatirn monitoring; (iv) SCSI 2022 woik priorities. xvi. Fourth meeting of G20 Sustainable Finance Working Group (SFWG) was attended by DEA virtually on 1 7th Septemb et; 2021 to discuss the final draft of a multi-year G20 Sustainable Finance Roadmap and ihe Synthesis Report. xvii. Fourth round of discussion between lhdia and USA on lnvestment lncentive Agreement was held on 21'r September.2O2l. xviii. The Plenary meeting of Financial Stability Board was held on 28rh September,2O2l lo discuss (i) Policy proposals to enhance Money l,rarket Funds' resilience; (ii) Cross-border payments roadmap (iii) Develcpments in crypto-asset markets; and (iv) 2021 Status Report from the Task Force on Cliniat6'Related Finar-rcial Disclosures.Xix. Board meeting of Natiorlal lnvestment and lnfrastructrrre Fund Trustee Limited held on 28r" September, 2021 . xx. Sixth round of discussion on Bilateral lnvestment Treaty (BlT) between lndia and UAE held on 30th September, 2021 through VC. 3. Minimum Government, Maximum Governance ln particular, use of ICT in submission of lnformation is being encouraged. 4. Non-Compliance of ACC d irections/orders Nit 5. FDI proposals cleared during the month and status of FDI proposals awaiting approval in the Department: Disposed during the month 6 Awaiting Approval in the Department 18Annexure Table l: Quarterly Real Growth in demand side of GDP and its components (per cent) Growth Recovery Growth Components over Q{ over Qi over Q4 ot 2020-21 of 2019-20 ol 2O2O-21 Total Consumption (-) 15.7 3.8 91.2 1 Government Consumption (-)48 107.4 c)76 Private Consumption (-) 17.4 19.3 88 1 Gross Fixed Capital Formation 829 (-) 23.6 Change in Stock (-) 16 0 45.9 98.0 Valuables (-)7e 456.1 38.8 1 Exports 08 39.1 108.7 lmports (-) 7.1 60.2 94.7 GDP (-)16.s 20.'l 90.8 Source. National Statistical Offlce, MoSPl. prices Table 2: Quarterly Growth of GVA at constant (2011-12) (per cent) Growth Recovery Growth Sectors over Q1 over Q1 over Q4 of 2020-21 ol 2019-20 of 2020-21 Agriculture & Allied Sectors (-) 10.7 4.5 108.2 lndustry l-l 17.1 46.'l 93.8 Mining & quarrying 18.6 982 (-) 10 B Manufacturing (-) 13.e 49.6 95.8 Electricity, gas, water supply & other utility services 3.1 14.3 103.0 Construction (-) 30.3 68.3 8s.1 Services (-)11.8 11.4 87.5 Trade, Hotels, Transport, Communication and Services (-) 35.3 34.3 698 related to Broadcasting Financial, Real Estate & Professional Services '18.8 3.7 96.5 Public administration, defence and other services (-) 1e.3 95.0 I !VA at basic prices -) 13.3 18.8 92.2 ource: National Statistical Office, MoSPI Table 3: INFLATION - CPI-C, WPI (in Per Cent) August 2020 July 2021 August 2021 CPI-C 669 559 5.30 WPI 0.41 11.16 1'1.39 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 17.9.2021 Policy Repo Rate 4.0 10-Year G-Sec Par Yield (FBIL) 6.19 Bank Credit Year-on-Year growth # 6.7 Note: # as on 10.9.2021 Table 5: Merchandise Trade Performance (Customs Basls) (in US$ billion) Exports lmports Trade Balance August 2020 22.8 31 0 c) 8.2 August 202't 33.3 47.1 (-) 13.8 Table 6: Services Trade Performance (in US$ billion) Jul 2021 '18.5 '11.1 Urce Pro S ona data aS per th-. PreSS Re eaSE dated 14 I 202 1 of the Departm nt of Comm rce n Stry of Comme and ndustry Table 7: Balance of Payments Items 2019-20 2020-21(Pl Current Account Balance (in US$ billion (-) 24 6 240 urrent Account Balance / GDP (per cent! G) 0.e 0.9 urce: Reserve Bank ef lndia Note: P - ProvisionalTable 8: Foreign Exchange Reserves (in US$ biltion) March 2021 577.O 17.9.2021 639.6 Source: Reserve Bank of lndia Table 9: Exchange Rate of the lndian Rupee (Rupee per unit of foreign currency) US Dollar Pound Sterling Euro .lapanese yen 09.9.2021 73.6887 '101.4900 87.1266 66.9400 Source: Reserve Bank of lndia Table 10: External Debt (US$ Billion) as at end of as at end of March Percentage March 2020 2021 variation PR P [(2rl)-1r100 (1) t2t otal External debt outstanding 558.4 570.0 2.1 Source: Quarterly Report on External Debt as at end l\Iarch 2021, Reserve Bank of lndia Note: PR - Partially Revised. P - Provisional Table {{: lndustrial Production Highlights Monthly Grourth (YoY) in per cent May 2020 June 2020 July 2020 lndex of lndustrial Production (llP) (-) 33.4 (-) 16.6 (-) 10.5 May 2021 June 202i July 2021 28.6 13.6 115 Table '12: Eight Core lndustries Monthly Growth (YoY) in per cent June 2020 July 2020 August 2020 (-) 12.4 c) 7.6 c)6 e Eight Core lndustries (lCl) June 2021 July 2021 August 2021 9.3 9.9 11 t)