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Data shows improvement in the performance of agriculture and manufacturing sectors India’s GDP grew at 7.2% in 2018-19, according to the first advanced estimates released by the Central Statistical Office on Monday, the fastest rate of growth since 2016-17, marking a recovery in economic activity from the twin disruptions of demonetisation and Goods and Services Tax.  To be sure, these figures are forecasts, as the first advanced estimate figures are based on about two quarters of actual economic data. While the 2018-19 growth is 55 basis points more than the 2017-18 figure, it is 20 basis points less than the RBI’s forecast of 7.4% and 7 basis points less than the International Monetary Fund’s forecast of 7.3% for the current year. One basis point is one hundredth of a percentage point. India continues to be the fastest growing major economy in the world according to the latest figures.  These figures also show that India’s economic growth under the Narendra Modi govern...

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday dealing with issues of liquidity was one of the central bank’s biggest priorities. However, any infusion would be strictly based on the need to ensure that it was not seen as “easy money” by the markets. This comes a day before Das meets the representatives of non-banking financial companies (NBFCs) in Mumbai. Addressing a media briefing, Das did not rule out the central bank paying interim dividend to the Centre, but said no decision had been taken yet on the amount to be given. “The situation is something the RBI is constantly monitoring and will take steps whenever a liquidity deficit is noticed. The RBI will not like a situation where liquidity becomes a kind of loose money. Any infusion of liquidity will have to be carefully considered and has to be need-based,” Das said. “Therefore, caution and care have to be exercised by the RBI so that excess liquidity, which sometimes has adverse consequences, is not crea...

Current norms in conflict with domestic laws of several countries The Securities and Exchange Board of India (Sebi) is working on new data privacy norms for foreign portfolio investors (FPIs). The move comes as the regulations are said to be in conflict with the domestic laws of several countries, especially European nations and Canada, which together account for 40% of total FPI flows into India. The concerns of FPIs relate mostly to the compatibility of Sebi’s new know-your-customer (KYC) requirements with data localisation norms applicable in their home countries. Exemptions for publicly pooled funds along with the creation of a high-end encrypted platform for data exchange and storage are some of the key measures under the regulator’s consideration, said two people aware of the development. The process assumes significance as Sebi had set a March 2019 deadline for FPIs to submit KYC documentation as per the revised rules. The Economic Times, 8th January 2019

Says liquidity infusion should be need-based, idle cash in the system won’t be encouraged Reserve Bank of India (RBI) governor Shaktikanta Das struck a note of caution on farm loan waivers, saying open-ended forgiveness would affect credit culture and the behaviour of borrowers. He also said the central bank is open to taking more steps to infuse liquidity if the need arises but it doesn’t want too much cash sloshing around in the banking system.  “Liquidity needs of the economy are regularly monitored and whatever steps are required will be taken,” Das said at a press briefing in Delhi. “RBI would not like a situation where liquidity becomes a kind of loose money.” Any infusion of liquidity will have to be based on requirements. Das met representatives of micro, small and medium enterprises (MSMEs) in the capital on Monday and will meet executives of nonbanking finance companies (NBFCs) in Mumbai on Tuesday to get a perspective on liquidity needs. He said MSME representative...