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India's debt:GDP ratio is much lower than US, Japan, France, UK: Sitharaman

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New Delhi, May 13 (IANS) Finance Minister Nirmala Sitharman said on Monday that India has fared relatively well compared with other countries as far as the government debt to GDP ratio is concerned and the country is the third least indebted nation among low- and middle-income countries (LMIC).

India had a debt-to-GDP ratio of 81 per cent in 2022. This is significantly lower than economies like Japan (260.1 per cent), Italy (140.5 per cent), the USA (121.3 per cent), France (111.8 per cent), and the UK (101.9 per cent) in the same period. On the other hand, several countries have faced the risk of sovereign default in recent years. The number of countries facing high debt levels increased from 22 in 2011 to almost 60 in 2022, she said.

The Finance Minister said that in a comparative analysis with other LMICs, India’s external debt scenario is robust. Considering the ratio of total external debt to Gross National Income (GNI), India emerges as the 3rd least indebted country among all LMICs. This is a vital indicator of a country’s ability to handle its external debt. The ratio of India’s total external debt to its exports is 91.9 per cent, positioning it as the fifth least indebted country among LMICs in this aspect.

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India’s share of short-term debt in the total external debt is 18.7 per cent. This is lower than that of other LMICs like China, Thailand, Turkey, Vietnam, South Africa, and Bangladesh, which have higher percentages, she added.

A lower proportion of short-term debt is beneficial as it implies less immediate repayment pressure.

Regarding Central government debt, it is also important to note that it is overwhelmingly rupee-denominated, with external borrowings (from bilateral & multilateral sources) contributing a minimal amount (less than 5 per cent of total debt), which signifies that exposure to volatility in exchange rates tend to be on the lower end.

Domestically issued debt of the Central government, which is mostly raised through government securities, has a weighted average maturity of roughly 12 years, which indicates low rollover risk. This indicates the sustainability of the Central government debt. Therefore, the risk profile of India’s government debt stands out as safe and prudent in terms of accepted parameters of indicator-based approach for debt sustainability, she said.

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India’s government external debt as a percentage of GDP (2020) was just 6.7 per cent compared to 24.4 per cent of Mexico, 28.6 per cent of Pakistan, 20.6 per cent of Indonesia, and 15.8 per cent of Turkey.

Criticising the erstwhile Congress-led UPA amid the ongoing Lok Sabha poll campaign, the Finance Minister said that during its tenure, India’s external vulnerability had shot up because of over-dependence on External Commercial Borrowings (ECBs). Between 2004-14, ECBs rose at a deplorable CAGR of 21.1 per cent, whereas in the 9 years from FY14 to FY23, they grew at an annual rate of 4.5 per cent.

“UPA’s legacy of fiscal shortsightedness and hidden debts contrasts sharply with our era of transparent, strategic, and transformative investments. Under PM Modi-led Govt, we are building a legacy of growth, transparency, and responsibility,” she added.

–IANS

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India’s growth momentum to continue in April-March quarter of 2024-25: FinMin report

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New Delhi, May 25 (IANS) The Indian economy closed the financial year 2023-24 strongly despite strong external headwinds, and early indications suggest that the growth momentum will continue during the current April-June quarter of 2024-25, according to a Finance Ministry report released on Friday.

“The emerging robust trends in key high-frequency indicators of growth like GST collections, e-way bills, electronic toll collections, sale of vehicles, purchasing managers’ indices, and the value and number of digital transactions attest to the growing strength of the economy,” the Finance Ministry said in its monthly economic review for April.

The industrial and service sectors of the Indian economy are performing well, backed by brisk domestic demand and partially by tentative external demand. This can benefit India’s manufacturing firms as part of the China Plus One strategy.

The EXIM Bank of India has forecast that merchandise exports will post a double-digit growth in Q1 of FY25, the report pointed out.

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The report expects domestic manufacturing to receive stronger export orders due to improved economic activity and consumer sentiment in Europe and a steady US economy. It cites an uptick in India’s exports in April to support the point.

It admits that geopolitical tensions and volatility in global commodity prices, especially of petroleum products, present substantial challenges. “Nonetheless, the expectation is that the macro-economic buffers will help the Indian economy navigate these challenges reasonably smoothly,” the report added.

Factors like the ongoing recovery in the hotel and tourism industry, increased credit flow to transport and real estate segments, policy support, and robust investments in physical and digital infrastructure and logistics will help the services sector. The strong export growth in April 2024 indicates that the momentum in services trade has been carried forward into FY25, it said.

On the inflation front, the report cites the good rabi harvest of wheat and the prediction of a normal Southwest Monsoon as factors that will lead to higher food production and easing of price pressures during 2024-25. The RBI has forecast a 4.9 per cent retail inflation for FY25’s first quarter.

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According to the report, Government initiatives to stabilise the prices of essential food items, including their open market sale, stock monitoring and trade policy measures are helping to stabilise food prices.

“The positive indications in the farm sector should help India firewall against any adverse pressures that may arise from geopolitical tensions and global commodity prices. Likewise, the strong macro-economic buffers of India should help the real sectors of the economy navigate the external headwinds smoothly and continue the growth momentum of the previous year,” the report added.

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RBI fines Hero FinCorp for breach of norms

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Mumbai, May 24 (IANS) The Reserve Bank of India (RBI) has imposed a penalty of Rs 3,10,000 on Hero FinCorp Limited for breach of norms related to the fair practices code for NBFCs.

An RBI inspection has revealed that Hero FinCorp did not convey the terms and conditions of loans in writing to the borrowers in the vernacular language understood by them.

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2023.

Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions.

After considering the company’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, the RBI found, inter alia, that the charge against the company was sustained, warranting imposition of monetary penalty.

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The RBI also said: “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.”

–IANS

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India's forex reserves soar to lifetime high of $648.7 billion

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Mumbai, May 24 (IANS) India’s foreign exchange reserves surged by $4.55 billion to touch a new lifetime high of 648.7 billion mark during the week ended May 17, according to the latest data released by the RBI on Friday.

This is the third consecutive week during which the country’s forex kitty has expanded which augurs well for the macroeconomic fundamentals of the economy as an ample supply of dollars helps to strengthen the rupee.

The country’s forex reserves had increased by $2.56 billion to $644.15 billion during the week ended May 10 and had recorded $3.66 billion rise for the week ended May 3.

India’s foreign exchange reserves had earlier touched a lifetime high of $648.562 billion in April after which they had declined for three weeks in a row by $10.6 billion as the RBI actively intervened in the market to buy dollars to stabilise the rupee.

An increase in the foreign exchange reserves gives the RBI more headroom to stabilise the rupee when it turns volatile.

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This is because the RBI intervenes in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall.

Conversely, a declining forex kitty leaves the RBI less space to intervene in the market to prop up the rupee.

India’s forex reserves, including the central bank’s forward holdings, can now cover more than 11 months of imports, which is a two-year high.

RBI Governor Shaktikanta Das recently referred to the record foreign exchange reserves as a reflection of the strength of the Indian economy.

“It is our prime focus to build a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns,” he remarked while unveiling the first monetary policy review of the current financial year that began on April 1.

–IANS

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At 'Illness to Wellness' awareness session, experts warn undetected thyroid diseases can lead to major health complications

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New Delhi, May 24 (IANS) The ASSOCHAM CSR Council, under the Illness to Wellness initiative, hosted a panel discussion on the eve of World Thyroid Day titled ‘Thyroid Matters: In Health & Disease’ with the primary goal of increasing awareness about thyroid diseases and the need to encourage early treatment of thyroid dysfunctions.

The panel comprised Dr. (Prof.) Chandrakant Sambhaji Pandav, Member, National Council on POSHAN Abhiyan and Former Head, Centre for Community Medicine, All India Institute of Medical Sciences, Delhi; Dr. Subhash K Wangnoo, Senior Consultant – Endocrinologist & Diabetologist, Indraprastha Apollo Hospitals, New Delhi; and Dr. Mudit Sabharwal, Consultant Diabetes & Endocrinology, Fortis La Femme Multi Specialty Hospital and Director and Consultant, Diabetologist, Dharma Diabetes and Metabolic Clinics, Delhi & NCR.

The session was moderated by Dr. Rajesh Kesari, Founder and Director, Total Care Control, Delhi-NCR, and EC Member, RSSDI.

Dr. Pandav explained the importance of awareness in tackling the rise in thyroid diseases. He also mentioned that adequately iodised salt is needed to stave off thyroid diseases.

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“Without awareness, you cannot move forward. Awareness is necessary to ensure early detection of thyroid diseases and can prevent major ailments. Historically, iodine deficiency has been a major cause of thyroid disorders. Although iodization programmes have reduced goiter prevalence, iodine deficiency still exists in some regions,” he said.

Anil Rajput, Chairperson, ASSOCHAM National CSR Council, said: “The increase in the prevalence of thyroid-related health issues warrants heightened awareness and pro-active measures to be put in place with a greater sense of urgency to effectively address this challenge of significant proportions.

“Thyroid ailments affect both men and women with the latter reporting a higher incidence necessitating the need for gender-sensitive approaches to be looked at in greater detail. On World Thyroid Day, it is important to galvanise public awareness about thyroid disorders across all age groups and I am confident that together we can empower individuals, families, and communities to effectively address thyroid ailments and move towards a healthier and more resilient nation.”

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Talking about the symptoms, Dr. Sabharwal said there are two types of thyroid disorders — Hypothyroidism (symptoms include- fatigue, weight gain, dry skin, cold intolerance) and Hyperthyroidism (symptoms include weight loss, heat intolerance, increased appetite)

“A simple exercise like Surya Namaskar can help control/prevent hyperthyroidism. After Covid-19, we have seen a rise in cases of hyperthyroidism. We must remember that cholesterol and diabetes are also linked to thyroid, therefore, people should ensure a healthy lifestyle to prevent health issues like thyroid ailments,” he said.

Dr. Wangnoo said unexpected weakness, postpartum depression in women, and lethargy are signs of thyroid dysfunction to watch out for.

“Thyroid does a lot of work to help metabolise and maintain blood pressure, body temperature and heart rate. Pregnant women also need to be very careful. Postpartum depression is something that women are vulnerable to due to thyroid issues. The intelligence quotient in babies may be affected if there is late detection,” he said.

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–IANS

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Adani Ports to join Sensex from June 24 after BSE rejig

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Mumbai, May 24 (IANS) Adani Ports and Special Economic Zone (SEZ) will be included in the S&P BSE Sensex from June 24.

The BSE benchmark will drop from the index on the same day.

The Asia Index Pvt. Ltd. on Friday announced the reconstitution results for its indices, effective from June 24.

The Adani Ports and Special Economic Zone stock was down 1.83 per cent on Friday at Rs 1,416.90 per share.

An IIFL Alternative Research report said earlier this week that Adani Enterprises is expected to replace Wipro in the benchmark Sensex.

On Friday, positive action was seen in the Adani Group stocks. The Adani Enterprises stock was almost flat at Rs 3,381 apiece on the BSE, while Adani Green Energy shares went up by 1.8 per cent, Adani Total Gas increased by 2.5 per cent, and Adani Energy Solutions rose by 0.50 per cent.

Indian stock indices traded in a sideways range on Friday. At close, Sensex was at 75,410, down 7 points, while Nifty was at 22,957, down nearly 10 points.

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–IANS

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