18 Nov, 2017
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Moody’s upgrades India’s credit rating to Baa2 in boost to Narendra Modi govt
Livemint: November 17, 2017
New Delhi: Credit rating agency Moody’s Investors Services on Friday upgraded India’s sovereign ratings to Baa2 from its lowest investment grade (Baa3) giving credit to the Narendra Modi government for its “wide-ranging program of economic and institutional reforms”. It has now changed the outlook for India’s rating to stable from positive.
“The decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term. In the meantime, while India’s high debt burden remains a constraint on the country’s credit profile, Moody’s believes that the reforms put in place have reduced the risk of a sharp increase in debt, even in potential downside scenarios,” it said.
Moody’s has also raised India’s long-term foreign-currency bond ceiling to Baa1 from Baa2, and the long-term foreign-currency bank deposit ceiling to Baa2 from Baa3. The short-term foreign-currency bond ceiling remains unchanged at P-2, and the short-term foreign-currency bank deposit ceiling has been raised to P-2 from P-3. The long-term local currency deposit and bond ceilings remain unchanged at A1. It has also upgraded India’s local currency senior unsecured rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3.
The rating agency, however, warned that India’s rating could be downgraded if its fiscal metrics and the outlook for general government fiscal consolidation deteriorates materially. “The rating could also face downward pressure if the health of the banking system deteriorated significantly or external vulnerability increased sharply,” it said.
The other two key global rating agencies—Standard and Poor’s and Fitch Ratings—have assigned India lowest investment grade rating with stable outlook.
Finance secretary Hasmukh Adhia tweeted: “The path that Government has chosen for long term reforms and fiscal consolidation is well recognised by investors already. The rating agency too has now confirmed it formally, which is welcome.”
Credit Suisse in a statement said the rating upgrade for India is positive for bonds, especially for near-term sentiment, which has been weak. “But it might not translate into large inflows with most foreign investors already actively investing in India and bond market inflows limited by quotas,” it added.
A rating upgrade for India comes at a time when rating agencies Standard and Poor’s (S&P) and Moody’s have cut China’s sovereign rating. Moody’s cut China’s long-term local and foreign currency issuer ratings to A1 from Aa3 on 24 May on concerns that the country’s financial strength would erode in the coming years. S&P followed by cutting China’s long-term sovereign credit ratings one notch to A+ from AA- on 21 September, holding that its prolonged period of strong credit growth had increased economic and financial risks.
The upgrade came after Moody’s said the Indian government is mid-way through a wide-ranging program of economic and institutional reforms such as the recently-introduced goods and services tax (GST) that promotes productivity by removing barriers to inter-state trade. “While a number of important reforms remain at the design phase, Moody’s believes that those implemented to date will advance the government’s objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth. The reform program will thus complement the existing shock-absorbance capacity provided by India’s strong growth potential and improving global competitiveness,” it added.
Among other things, it acknowledged improvements to the monetary policy framework; measures to address the overhang of non-performing loans (NPLs) in the banking system, and measures such as demonetisation, the Aadhaar system of biometric accounts and targeted delivery of benefits through the Direct Benefit Transfer (DBT) system intended to reduce informality in the economy. “Other important measures which have yet to reach fruition include planned land and labor market reforms, which rely to a great extent on cooperation with and between the States,” it said.
However, the rating agency maintained that most of these measures will take time for their impact to be seen, and some, such as the GST and demonetisation, have undermined growth over the near term. Moody’s expects real GDP growth to moderate to 6.7% in the fiscal year ending in March 2018. “However, as disruption fades, assisted by recent government measures to support SMEs and exporters with GST compliance, real GDP growth will rise to 7.5% in FY2018 (2018-19), with similarly robust levels of growth from FY2019 (2019-20) onward. Longer term, India’s growth potential is significantly higher than most other Baa-rated sovereigns,” it said.
Govt planning ‘rent a roof’ policy in solar power push
Livemint: November 16, 2017
New Delhi: The Union government is working on a “rent a roof” policy to support its ambitious plan to generate 40 gigawatts (GW) of power from solar rooftop projects by 2022, said Anand Kumar, secretary in the ministry of new and renewable energy. The government is also planning to bid out wind power contracts totalling 24.5 GW over the next two years.
“We are planning a ‘rent a rooftop’ policy,” said Kumar in his first interview after assuming charge at the ministry.
While investors have been enthused by India’s large ground-mounted, grid-connected solar parks, the solar rooftop market hasn’t gained much traction. “We are now trying to work out a new programme called ‘rent a roof,’ wherein the developer will take rooftops on rent and will offer lease to each household, and then feed the power to the grid,” added Kumar.
Of India’s ambitious target of 175GW of clean energy capacity by 2022, 100GW is to come from solar projects. Of these, while 60GW is targeted from ground-mounted, grid-connected projects, 40GW is to come from solar rooftop projects. Wind power projects are to contribute 60GW.
Such a policy comes in the backdrop of India’s nascent net-metering market. In a net-metering system, a consumer is only billed for the electricity consumed after deducting the power generated from one’s solar rooftop panels that is supplied to the grid.
The country offers a big opportunity given its 750GW potential as it records around 300 sunny days a year, with an average solar radiation range of 4-7 kilowatt-hours per square metre.
“Under ‘rent a roof’, anyone can take a roof. Right now, net metering is happening but it is for the individual household to go for it on its own. After this, all the responsibilities such as maintenance will be with the developer. We are working on the policy,” Kumar said.
For India’s solar power targets to be met, the rooftop piece will have to take off. However, there are concerns as India is not expected to achieve even half of the solar rooftop targets by December 2021, according to consulting firm Bridge To India.
Also, a parliamentary panel has said that the 40GW target of grid-connected rooftop solar by 2022 is “unrealistic”, Mint reported on 1 August.
“We are doing it precisely for the same reason. Rooftops also are of small sizes. It is happening in educational institutions and at other places but is not happening at the household level,” Kumar said.
The industry welcomed the move. “We welcome the ‘rent a roof’ policy by the government wholeheartedly. This will empower the solar energy industry to penetrate at the grassroots level and give every home a chance to be energy independent. However, it is essential that the government defines the framework clearly as there would be many stakeholders involved in the process,” said Anmol Singh Jaggi, director at Gensol Group, a solar advisory firm.
India’s green energy play is expected to grow substantively with federal policy think tank NITI Aayog projecting 597-710 GW capacity by 2040 in its new draft energy policy.
The central government is also firming up its strategy to expedite bidding out wind power contracts. India has an installed wind power capacity of 33GW. The country has auctioned 2GW of wind power contracts that saw tariffs fall to a record low of Rs2.64 per unit in the October auction conducted by state-run Solar Energy Corp. of India.
“States will be bidding out around 500 megawatts (MW). In addition, we will be bidding out around 4,500MW by March. It will be followed by bids for 10GW next year followed by another 10GW in the year after. So, by March 2020, we want to finish our bidding so that we are able to achieve our target by March 2022,” Kumar said.
This is in sync with India’s plan to invite bids for setting up 20GW of solar power capacity, the world’s largest solar tender, at one go, as Mint reported on 10 November.
“So, whatever additional capacity we plan to have over and above this 60GW (of wind power) will come in the offshore. We will try to do more than 60GW. This will also provide an impetus to our local manufacturing industry. We would like to strengthen our manufacturing base,” said Kumar.
Employability: IIT-Delhi among top 150 varsities
Business Standard: November 16, 2017
The premier Indian Institute of Technology-Delhi (IIT-D) has made a debut to the list of top 150 universities to the basis of recruitment by top companies.
Times Higher Education ranked IIT-D 145th, ahead of the Indian Institute of Technology-Bombay (IIT-B) at 148th position in its Global University Employability Ranking 2017. Though IIT-B has featured on the list of top 150 universities in the past, its ranking is on the decline.
Times hadn’t ranked IIT-B last year. The same agency has ranked this premier institution at the 90th position in 2015.
The Times rankings, which were released on Thursday, caught attention as both IIT-D and IIT-B had recently slipped on the graduate employability rankings conducted by a similar agency the QS Quacquarelli Symonds. The QS list of the world’s 500 leading universities, announced in September, had kept IIT-D and IIT-B in the category of 191-200 universities. Last year, IIT-D and IIT-B were in the category of top 101-150.
The contradiction in rankings by these two agencies was evident in the case of another premier institute, too — the Indian Institute of Science (IISc), Bangalore. The Times ranked IISc 29th this year, showing an improvement from the previous year’s 38. IISc was ranked 20th by Times in 2015. QS had kept IISc in the category of 301-500 top universities this year.
Both Times and QS don’t provide specific reasons behind changes in rankings of institutes.
Simon Baker, data editor, Times Higher Education, said in a statement that Asian universities, mainly those in China, Taiwan and South Korea, have made good progress this year. “This extends a trend that has been building for several years, with more universities from the region becoming household names in the minds of global graduate recruiters,” Baker added.
Boeing and HAL discuss building F/A-18 fighter
Business Standard: November 17, 2017
New Delhi: The Boeing Company (hereafter Boeing), which is a vying strongly to supply the Indian Navy with 57 “multi-role carrier borne fighters” (MRCBF), has entered talks with Hindustan Aeronautics (HAL) to explore the co-manufacture of its F/A-18E/F Super Hornet fighter in India, say credible sources in the defence ministry. Along with HAL, Boeing also intends to involve the Mahindra Group in building Super Hornets in India.
Boeing and HAL have already held exploratory discussions in Bengaluru in September and are scheduled to meet on Friday in Bengaluru for another round of talks. They will also finalise a “non-disclosure agreement” that binds all sides to keep their negotiations confidential.
Contacted for comments, a Boeing spokesperson responded: “HAL has been a key partner of Boeing for over two decades and today manufactures components for our commercial and defense platforms, including for the F/A-18 Super Hornet. We are continually exploring ways to expand that relationship. Needless to say, we cannot comment on specific discussions with our partners.”
The defence ministry and Mahindras did not respond to requests for comments. Boeing seeks to leverage HAL’s long experience in licence-producing aircraft in India, most recently the Hawk trainer, and Jaguar and Sukhoi-30MKI fighters; and to present the defence ministry with a clear plan for co-producing the Super Hornet in India with a high indigenous content.
This would provide the US aerospace giant valuable advantage over rival vendors who partner private sector firms that are novices in aerospace manufacture.
Furthermore, Boeing’s partnership with HAL — which already has an airfield and manufacturing hangars in Bengaluru — would significantly reduce the price of each Super Hornet. In contrast, a vendor that partners a private Indian firm would need to factor aerospace infrastructure into its pricing. Boeing has already expressed public reservations about the private sector’s inexperience in aerospace. As Business Standard reported (September 8, Boeing flags inexperience of private sector ‘strategic partners’) Boeing India chief, Pratyush Kumar, stated in New Delhi that the Indian private sector is not yet capable of manufacturing complex military aircraft under transfer of technology (ToT).
Urging India to co-opt public and private enterprise, Kumar said he “could not find a single example [of successfully building an aircraft under ToT] where it was just the brand new private enterprise with limited aerospace experience. Look at Turkey, look at Japan, look at Brazil, look at multiple countries. In all cases there is a fine balancing act of co-opting the capabilities of both public and private enterprise.” Now Boeing is doing exactly that, by seeking to co-opt HAL and the Mahindra Group into co-producing Super Hornets.
Boeing’s public-private strategy contrasts with the approach being followed by Lockheed Martin and Saab in a separate procurement of 114 single-engine fighters, which is expected to gather momentum shortly. Since the defence ministry requires the single-engine fighters to be built in India under the “strategic partner” (SP) policy, Lockheed Martin and Saab have both partnered private sector firms – Tata Advanced Systems Ltd (TASL) and the Adani Group respectively – to build in India. In contrast, the “request for information” (RFI) for the MRCBF acquisition, which the navy issued in January, predates the SP Policy that was promulgated only in June. Unlike Lockheed Martin and Saab in the single-engine fighter procurement, Boeing is not restricted to partnering only a private sector company.
The RFI for the MRCBF specifies: “GoI (Government of India) is desirous of license production of the aircraft after acquiring ToT in the case (sic).” While this appears to place the procurement in the “Buy and Make” category, the “request for proposals” (RFP) is likely to clarify this issue. Industry experts say the RFP might conceivably shift the acquisition into the SP category. The Super Hornet, which is the US Navy’s main carrier borne fighter, is likely to face competition in India’s MRCBF tender from French company Dassault’s Rafale-M fighter; Swedish company Saab’s Gripen Maritime, and the Russian MiG-29K/KUB that already flies off the navy’s lone carrier, INS Vikramaditya.
The India Navy has already bought 45 MiG-29K/KUB fighters from Russia to equip its current aircraft carrier, INS Vikramaditya, and the second aircraft carrier, the indigenously built INS Vikrant, which is expected in service by 2021. A new, more capable MRCBF was envisaged for the second indigenous carrier, INS Vishal, which is expected in service by 2030 or so. However, unacceptably low serviceability rates of the MiG-29K/KUB are making the MRCBF vital for the navy in a much shorter time frame. Furthermore, Boeing is looking at the supply of “Made in India” fighters to the Indian Air Force (IAF) too, beyond the supply of 57 Super Hornets to the navy.
The IAF, which is down to 32 squadrons of fighters against its requirement of 42 squadrons, had hoped to procure six-to-nine squadrons of medium multi-role combat aircraft (MMRCA) over the last decade. The Rafale was eventually selected, but then only two squadrons were procured, leaving a void that Boeing hopes to fill by establishing a Super Hornet manufacturing line in India.
India and Singapore are partners in progress and sustainable development: Vice President
Press Information Bureau: November 17, 2017
Interacts with Singapore Minister of Trade and Industry
New Delhi: The Vice President of India, Shri M. Venkaiah Naidu has said that India and Singapore are partners in progress and sustainable development. He was interacting with the Minister of Trade and Industry, Singapore, Mr. S. Iswaran, who called on him, here today.
The Vice President said that India admires Singapore’s emergence as a shining example of a harmonious, multicultural and multiracial society. He further said that a number of Indian states have developed productive partnership with Singapore. We believe in cooperative and competitive federalism and states are focussing on socio-economic development in a concerted manner, he added.
The Vice President said that that both India and Singapore are important to each other’s progress and prosperity. He further said that Singapore is an important partner in India’s development priorities. India is at the cusp of a major transformation an all spheres including the ease of doing business, he added.
The Vice President expressed his happiness that a Singapore consortium has started developing the start-up area in the new capital city Amaravati of Andhra Pradesh. This can very well develop as a future model for new projects all over India.
The Swedish newspaper was recently asked it to delete the reference made by President Pranab Mukherjee to the Bofors scam in an interview to it, as a claim protested by the Indian Government on 27 May 2015. India has expressed disappointment over the disrespect shown to the President, the newspaper has defended its right to publish what was said during the interview.
Know, who is Vijay Kelkar and what is PPP !
Vijay Kelkar is a renowned economist and a former Finance Secretary. He was appointed head of newly constituted committee to give recommendations to recast the model of Public-Private-Partnership (PPP) model in India. India is one of the largest PPP market with over 900 projects. The Kelkar committee will review the PPP policy, suggest a better risk-sharing mechanism between private developers and the government after analysing such projects.
Know, who is Yaduveer Krishnadatta Chamaraja Wadiyar !
Yaduveer Krishnadatta Chamaraja Wadiyar was crowned as the new Maharaja of of Mysuru (Mysore) royal family. He is the 23-year old grandson of Princess Gayathri Devi, who was the eldest daughter of the last Maharaja of Mysore, Sri Jayachamarajendra Wadiyar. The coronation was held at Mysuru’s famous Amba Vilas Palace, which was decked up for the occasion.
Know about Sepp Blatter!
Swpp Blatter, was re-elected as FIFA president for a fifth term at the 65th Annual Congress of FIFA held at Zurich for four year term.
Prince Ali bin al-Hussein of Jordan stood against Blatter in this election. It is worth mentioning that FIFA is going through a major controversy regarding corruption in the organisation with two FIFA vice presidents and a recently elected FIFA executive committee member still in custody.