FCA was up by $5.66 billion to $473.26 billion in the reporting week, the data showed.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. The gold reserves were up by $495 million in the reporting week to $34.02 billion, the RBI data showed.

The special drawing rights with the International Monetary Fund (IMF) rose $4 million to $1.45 billion. The country’s reserve position with the IMF also increased $259 million to $4.526 billion during the reporting week, the data showed.

“Borrowing by the central government is upon the security of Consolidated Fund of India… Borrowing by the state governments is upon the security of consolidated fund of states. So whether you have any other entity to borrow… any borrowing by the government must reflect in general government debt. Whatever be the modality you cannot skip that,” said Singh. The commission held meetings with the Economic Advisory Council (EAC) in the past two days, during which council members noted that while the government’s tax collections were likely to be severely affected due to the pandemic, the impact would be asymmetric.

Their discussions covered the important issue of setting a base year for the commission’s projections of the five-year period. Usually, the commission uses the first year of its award period, but given the situation, there are issues with selecting FY21 as the base year. “One suggestion is to look at the first six months of the subsequent year, leaving 2020-21 out, but take 2021-22 and make that into a base year,” said Singh. “The other option is to look to the past few years and make some assumptions based on that on what the trend growth is… The average growth rate of the past 25-30 years is around 6.5-7%.”

India is also rated as ‘largely compliant’ by this OECD (Organisation for Economic Cooperation and Development) body. The Global Forum review said Switzerland has made “significant improvements in the areas of availability of legal ownership information, exchange of information on deceased persons and requests based on stolen data”.It, however, said some challenges remain with regard to availability of beneficial ownership information and proper implementation of rights and safeguards to ensure effective exchange of information and confidentiality requirements.

While the issue of alleged black money parked by Indians in Swiss banks has been a political hot potato in India for many years, Switzerland has been trying hard for a long time now to ward off a widely-prevailing perception about its financial institutions being used to hide undeclared wealth by people from various countries.

Read full text https://m.economictimes.com/news/economy/finance/india-among-switzerlands-top-3-partners-for-info-exchange-on-tax-matters-global-forum/amp_articleshow/76671272.cms

Sitharaman said the Centre was also looking at why benefits of interest rate reductions were not being passed on to customers, Business Standard reported. The finance minister said at a webinar organised by the Chennai International Centre (CIC) that the proposal for a one-time loan restructuring option was being discussed by the Centre and the RBI.

The banking sector is likely to witness a major spike in non-performing assets (NPAs) going forward on account of the impact of COVID-19 on industries, which will, in turn, impact the cash flows of companies and make the recovery process even more difficult.

This is why banks are pushing for the idea of a one-time loan restructuring option, even as the central bank seems wary. For this very reason, the banking sector, led by the Indian Banks’ Association (IBA), was pushing for a ‘bad bank’ to deal with the problem of non-performing assets.

Promoters in turn will infuse this amount in the MSME unit as equity and thereby enhance the liquidity and maintain debt-equity ratio. 90 percent guarantee coverage for this sub-debt will be given under the Scheme and 10 percent would come from the concerned promoters. There will be a moratorium of 7 years on payment of principal whereas maximum tenor for repayment will be 10 years. As part of Atmanirbhar Bharat package, Finance Minister had on May 13 announced this scheme of sub-ordinate Debt to the promoters of operational but stressed MSMEs. After completion of necessary formalities including approval of CCEA and consultation with Finance Ministry, SIDBI and RBI among others, the scheme was formally launched today.

It is expected that this scheme would provide much required support to around 2 lakh MSMEs and will help in reviving the economic activity in and through this sector. It will also help in protecting the livelihoods and jobs of millions of people who depend on them. Promoter(s) of MSMEs meeting the eligibility criteria may approach any scheduled commercial banks to avail benefit under the scheme. The scheme will be operationalised through Credit Guarantee Fund Trust for MSEs (CGTMSE),” the release said.

The UN Conference on Trade and Development (UNCTAD) said in a report on Monday that a lower but positive economic growth in India in the post-COVID19 pandemic period and India’s large market will continue to attract market-seeking investments to the country.

The World Investment Report 2020 by the UNCTAD said that India was the 9th largest recipient of FDI in 2019, with 51 billion dollars of inflows during the year, an increase from the 42 billion dollars of FDI received in 2018, when India ranked 12 among the top 20 host economies in the world.

Full text at https://m.economictimes.com/news/economy/finance/india-9th-largest-recipient-of-fdi-in-2019-will-continue-to-attract-investments-un/amp_articleshow/76400237.cms

“About 1.75 crore transactions were done directly into the bank accounts of the workers through direct benefit transfer (DBT) with benefits ranging from Rs 1000 to Rs 6000 per workers,” the labour ministry said in a statement on Tuesday, adding some of the states have also provided food and ration to their workers over and above the cash support.

Read full text https://m.economictimes.com/news/economy/finance/states-release-rs-4957-crore-for-construction-workers/amp_articleshow/76526071.cms

Big contributor of foreign investments is Mukesh Ambani owned Reliance Jio. It is expected to bring in more dollar flows.

Read more at: https://www.bloombergquint.com/economy-finance/indias-forex-reserves-surge-past-500-billion

States — Andhra Pradesh, Assam, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Sikkim, Tamil Nadu, Tripura, Uttarakhand and West Bengal.

As you tourism and traveling was restricted during lockdown in mostly all of COVID-19 impacted countries, obviously there will great loss for them for that period and aviation industry have gone downward. However now government of many countries have started operating in restricted manner, we hope that aviation sector can recover their essential expenses and we see the sector not going downward now. I think it will recover by making ” U shape ” post Corona virus vaccine.

Hospitality industry have gone downward too but their Expenses are not like aviation industry, so the decreasing trend line in not so steeper. Also during restricted opening, hospitality industry are mostly closed, we will see continued decreasing trend. However, this industry cannot be predicted much because it will depend on people mindset. If people are afraid to travel and enjoy vacation even after government of all countries opens everything after COVID-19 graph gets flattened, the decreasing trend may stop but recovery will be not so soon.

We have to also note that manufacturing depends upon sales. So if there is no sales, manufacturers won’t produce to keep so much stock.
Essential goods sector like FMCG, pharma and related are least impact during COVID-19 and neither it is expected to decrease so much. Manufacturing related to other sector are suffering a lot and will continue even after opening lockdown.
It will show sign of recovery only after vaccine.

Moratorium:
The EMI moratorium is not FREE. It has costs attached to it. Since the RBI has allowed lenders to charge interest during the moratorium period, there will be an interest-on-interest effect. The end result is after the 3-month moratorium period, either your EMI will go up or your existing loan tenure will get longer. This is the bad part.

Credit cards are also included as part of the moratorium.

All these will offcourse impact the business of banks and I am tensed that it will increase their NPA after moratorium. This is because their is anyway increase in unemployment and losses to many businessess. If they didn’t earn enough money it will impact their EMI paying capability.

All these are linked government should do some effective planning and implementation for recovery overall economy, so that everything turns good slowly.