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WEEKLY MEDIA UPDATE 06 February, 2017 Monday Issue 279 WEEKLY MEDIA UPDATE 06 February, 2017 Monday (This document comprises news clips from various media in which Balmer Lawrie is mentioned, news related to GOI and PSEs, and news from the verticals that we do business in. This will be uploaded on intranet and website every Monday.) Economy to grow more than 7% next Mauled By Note Ban, Economy To fiscal: Shaktikanta Das Grow 6.8% In FY17: Ficci Stepping up the growth pitch, Economic Affairs The Indian economy will grow 6.8 per cent this Secretary Shaktikanta Das on Saturday expressed fiscal due to a slowdown in services and confidence that the economy will grow upwards of infrastructure post demonetisation, according 7% next fiscal. “For this year’s GDP growth, we to Ficci's Economic Outlook Survey. The annual have to wait till March-end. But next year, it will median GDP growth forecast of 6.8 per cent is be upwards of 7%,” he said. Drawing on Finance sharply lower than the 7.3 per cent projected Minister Arun Jaitley’s statements, the secretary in the previous round of the survey. The survey said there will be transient impact of was conducted in the months of December demonetisation on the economy, but it will not spill 2016/ January 2017 and drew responses from over to the next fiscal. A large part of economy is leading economists representing industry, moving towards digital transactions, he noted. banking and financial services sector. The Despite the global headwinds, Das said India’s Central Statistical Organisation had estimated growth remains much stronger. “It has stayed a GDP growth of 7.1 per cent for 2016-17 afloat. Not only stayed afloat, but also doing well. earlier in January. According to the Ficci Our commitment is to push growth momentum,” survey, the agriculture sector is expected to he explained. Listing various reforms measures as witness an uptick in 2016-17 on the back of a announced in the Budget, Das spoke of gains for good monsoon which is expected to support farmers from integration of spot and derivative agricultural production. However, both industry market in commodity. He also dubbed and services sectors are anticipated to announcement on contract farming and UGC as moderate. Industry and services sector are very big reforms. expected to grow by 5.7 per cent and 8.5 per The Hindu - 04.02.2017 cent, respectively in 2016-17. http://www.thehindu.com/business/Economy/Eco Millennium Post - 31.01.2017 nomy-to-grow-more-than-7-next-fiscal- http://www.millenniumpost.in/business/news- Shaktikanta-Das/article17192781.ece 181519 Note ban shaved 0.25-0.5% off GDP Eight core industries grow by 5.6% in growth: Survey December The Economic Survey admitted that Eight core industries register a growth of 5.6 demonetisation has had the effect of creating per cent in December 2016 on the back of uncertainty and pushed for an "early elimination healthy output recorded by refinery products of withdrawal limits" to help build confidence. and steel. The growth rate of eight "Unless people have confidence that money infrastructure sectors — coal, crude oil, natural deposited in bank accounts is freely convertible gas, refinery products, fertilisers, steel, into cash, and vice versa...they will hoard it," the cement and electricity — was 2.9 per cent in Survey warned, adding that the poor would be December 2015. It stood at 4.9 per cent in worst hit in such a situation since the affluent November 2016. The core sectors, which would corner the limited currency available. About contribute 38 per cent to the total industrial the immediate adverse impact of demonetisation, production, expanded 5 per cent in April — the Survey noted that there have been reports of December 2016 compared to 2.6 per cent job losses, declines in farm incomes, and social growth in the same period last financial year, disruption, especially in the informal, cash- according to data released by the commerce intensive parts of the economy. However, it said and industry ministry today. Refinery products "a systematic analysis cannot be included here and steel production jumped 6.4 per cent and due to paucity of macro-economic data". It 14.9 per cent, respectively during the month acknowledged that the cash crunch must have under review. However, crude oil, fertiliser, affected the informal economy, which could natural gas and cement output reported account for 50% or more of the overall economy. contraction. Coal output declined by 4.4 per The formal economy too would have suffered cent in December 2016 from 5.3 per cent in because workers laid off in the informal economy the same month previous year. Similarly, have bought fewer products (such as fast moving electricity generation too dipped by 6 per cent consumer goods or two wheelers) from the formal as compared to 8.8 per cent in December economy. 2015. The Times of India - 01.02.2017 The Hindu - 01.02.2017 http://timesofindia.indiatimes.com/business/econ http://www.thehindu.com/business/Industry/ omic-survey/demonetisation-created- Eight-core-industries-grow-by-5.6-in- uncertainty-economic- December/article17123511.ece survey/articleshow/56902341.cms January services PMI contracts for third Banks ask govt to amend draft GST month, rebound likely law India's services languished, with new business Under the current structure, transactions orders falling for the third straight month, amid between two branches of same bank will muted inflationary pressure that could offer RBI trigger a tax, which could prove to be much room to remain accommodative in its next cumbersome. Indian banks have approached policy meet next week, says a monthly survey. the government to amend the draft Goods and The Nikkei India Services Purchasing Managers' Services Tax (GST) law under which Index (PMI), which tracks services sector transactions between two branches of a bank companies on a monthly basis, came in at 48.7 in will trigger a tax. This tax could be January, from 46.8 in December 2016, signalling cumbersome because of the enormous number that the sector is heading towards stabilisation. A of financial transactions being carried out and print above 50 denotes expansion and one below, because it will be impossible for banks and contraction. "India's pivotal services sector finance institutions to value services provided remained in contraction territory in the opening by one branch to another and then pay GST on month of 2017, with both new business and that. Banks have written to the government to activity falling for the third straight month," said amend the GST law involving such `self- Pollyanna De Lima, economist at IHS Markit, and supply' of services. According to people in the author of the report. The survey further noted that know, the government may be looking to make input cost inflation slowed since December this change within a month. The problem is whereas average selling prices shrank again, this: if a bank branch located currently in which may prompt the Reserve Bank to go in for Mumbai provides a service, or is perceived to an "accommodative" monetary policy. "PMI price provide a service to another branch in New indicators point to relatively muted inflationary Delhi, GST will be applicable on such a service. pressures in the private sector economy. As such, So, if a Mumbai resident withdraws money there is room for accommodative monetary from a New Delhi ATM, the bank would first be policy," Lima said. required to value this service and then pay GST The Economic Times - 04.02.2017 on that. http://economictimes.indiatimes.com/news/econ The Economic Times - 31.01.2017 omy/indicators/january-services-pmi-contracts- http://economictimes.indiatimes.com/news/e for-third-month-rebound- conomy/policy/banks-ask-govt-to-amend- likely/articleshow/56948923.cms draft-gst-law/articleshow/56887680.cms ‘GST rollout vital for logistics sector’ Government e-marketplace set to be mandatory for all departments The Finance Minister has made a number provisions for the port and logistics sector, The government is set to make it mandatory including plans for 2,000-km coastal roads in the for all its departments to procure goods and Union Budget but experts feel that more details services through its Amazon-like e- about the GST roadmap and its impact on the marketplace, which will also introduce sector should have been shared with the market. preference for domestic players. Mandatory Allcargo Logistics Ltd Executive Director and COO, use of GeM (the government e-marketplace) Prakash Tulsiani said the Finance Minister has only could be in place in a few weeks and is part of mentioned about IT systems for GST rollout but the amendments to the General Financial Rules the GST roadmap has not been spelled out. The (GFR) being worked out by the ministry of budget has made provision for the sector but commerce and industry, sources told TOI. The connections between GST and budgetary finance ministry is revising the GFR that all provisions have not been explained, he said. Arif government spending, including procurement. Patel, Vice-Chairman of Patel Roadways, said the While there are no firm estimates of budget provisions for logistics sector should have government purchases, procurement of goods been synchronized with the implementation of and services are estimated at around 10% of GST. If the GST does not get implemented, it will spending, which will add up to around Rs 2 lakh have repercussions on the sector, he warned. crore. Going by current trends, the savings Tulsiani said the Budget has been focused on rural could be Rs 20,000 crore or so. Since its launch and agriculture development, which will spur the in August, purchases done through GeM have consumption in the country.
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