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Small saving schemes account for 20.9% of government borrowing in FY18 Centre took Rs 1,002 bn from here in 2017-18, sharply up from Rs 904 bn a year before and Rs 123.6 bn in FY14 There has been a sharp rise in government borrowing from small saving schemes in the past five years; also, the contribution of market borrowing was a 17-year low in 2017-18. According to data from the Reserve Bank of India (RBI), small savings schemes such as post office deposits, National Savings Certificate (NSC), and Kisan Vikas Patras (KVP) accounted for a little over a fifth (20.9 per cent) of all central government borrowing in FY18, up from 17.2 per cent a year before and 2.4 per cent in FY14. This is the highest contribution from small savings in 19 years (see chart). The share from here in total government borrowing has been largely growing at the expense of the bond market (market borrowing); the latter’s share declined to 72.8 per cent in FY18, from 94.2 per cent in FY14. This, analysts

 Ind-Ra revises up growth forecast to 7.4% for FY19 on strong agri growth Agriculture, industry to boost growth India Ratings and Research (Ind-Ra) has scaled up its projections for economic growth to 7.4 per cent, from the earlier 7.1 per cent, for 2018-19 on expectations of strong agricultural and industrial growth. This is somewhat different from IHS Markit, a compiler of the purchasing managers’ index, which had recently lowered its FY19 growth projection to 7.3 per cent, from 7.4 per cent earlier, on account of weak dema Earlier, the International Monetary Fund had projected India’s economy to grow at 7.4 per cent in FY19, while the World Bank expects the economy to grow at 7.3 per cent in FY19. The Economic Survey had pegged economic growth at 7-7.5 per cent for the year. The second Advance Estimates released by the Central Statistics Office (CSO) had pegged FY18 growth at 6.6 per cent, down from 7.1 per cent in the previous financial year. The Union Budget for 2018-19

 Relief ahead for banks as deadline for resolving 10 major NCLT cases nears The pruned second NCLT list comprises 25 companies whose loans have turned into NPAs The coming weeks will be important for the banking sector, especially the government-owned ones. For, the last date for resolving 10 of the 12 major cases of bad loan accounts referred to the National Company Law Tribunal (NCLT) is within the next month. These 12 cases were in the first list of such cases which the Reserve Bank of India (RBI) had ordered to be sent to NCLT for resolution under the Insolvency and Bankruptcy Code (IBC). The final resolution date for eight of these 12 (commonly referred to as the NCLT-1 list) is between April 14 and April 30; another two are between May 4 and May 6. Another is mid-November. The 12th, Jyoti Structures, had its last date on March 31. The pruned second NCLT list comprises 25 companies whose loans have turned into non-performing assets (NPAs). The more important point is if

RBI gives provisioning relief to stressed banks  The Reserve Bank of India has temporarily relaxed provisioning norms for lenders to defaulters undergoing bankruptcy resolution in a move that could help banks bolster their financial results for the year and quarter ended March.  Provisions for accounts referred to the National Company Law Tribunal (NCLT) have been reduced to 40% of dues at the end of March for secured loans, down from 50% earlier, RBI told banks in a circular issued to them on Wednesday.  However, the regulator said in the note, which ET has seen, that provisions will go back up to 50% for secured loans at the end of the June quarter. Provisions are money that banks have to set aside from their gross profit as a cushion against the failure to recover dues from borrowers. There’s no change on provisions for unsecured loans, which stand at 100% as soon as a case is referred to bankruptcy court.  A bank chief welcomed the move but wasn’t too sure about its effect.

Updated Insolvency Code may cover rebidding cases too  Amendments to the Insolvency and Bankruptcy Code, which are proposed to be prospective and relevant only to fresh cases, will also apply in instances of rebidding once the changes take effect.  “If the character of the bid has changed, then it is a new bid and the new rules will apply,” Injeti Srinivas, secretary in the Ministry of Corporate Affairs, said on Wednesday.  The government has no intention of interfering in ongoing cases being scrutinised by committees of creditors, Srinivas said at the venue of a conference on insolvency law organised by the Confederation of Indian Industry. “We have to respond to the emerging challenges. The ultimate objective is to rescue the company while maintaining the sanctity of the framework,” he added. Srinivas said the government is considering increasing the minimum benchmark for individual insolvency to Rs 10,000 from Rs 1,000. “The number of cases can become enormous since even a c

DeMon, GST will benefit economy in long run: FM Finance minister Arun Jaitley on Thursday told the Rajya Sabha that the structural economic reforms undertaken by the Modi government may entail some cost in the short term but would end up benefiting the economy in the medium and long term. Responding to concerns expressed by members during a short-duration discussion on the state of economy, particularly the impact of demonetisation and GST, Jaitley said that “after making such major structural changes it is natural to feel some impact for one, two or three quarters...there may be some criticism for 2-3 months but then benefits shall follow”. “Structural reforms entail some cost...but then it bottoms out and the curve starts moving...such indications are now becoming visible,” he stated. Jaitley mentioned that India was the fastest-growing economy for last three years and even after the structural reforms, the IMF/World Bank foresaw its ranking as second highest. “This has restore

Securities scanner: CAs, valuers and CSs could come under Sebi ambit  Chartered accountants and company secretaries may soon come under the ambit of the capital markets regulator. The Securities and Exchange Board of India will issue rules that will put the onus on chartered accountants, company secretaries, cost accountants, valuers and monitoring agencies to get companies to comply with securities regulations and act in the interests of public shareholders. Currently, most of them are not regulated by Sebi.  The proposal was taken to the regulator’s board on March 28 and a discussion paper will be issued soon, said a Sebi board member.  “Investor confidence is fundamental to the successful operation of the securities market. That confidence depends on investors having credible and reliable financial information when making decisions about capital allocation,” Sebi said in an internal note to its board.  SEBI has observed that auditors have been negligent while auditing books