Friday, June 28, 2013



India’s external debt stands at around US$ 390 billion at end-March 2013

The high current account deficit witnessed during 2012-13 and it’s financing increasingly through debt flows particularly by trade credit resulted in significant rise in India ’s external debt during 2012-13. However, magnitude of increase in external debt was offset to some extent due to valuation change (gain) resulting from appreciation of US$ against Indian rupee and other international currencies.

India’s external debt, as at end-March 2013, stands at around US$ 390 billion with a Y-O-Y increase of 12.9% as compared to US$ 376.3 billion, with a with a Y-O-Y increase of 8.9% at end-December 2012. The increase in total external debt during financial year 2012-13 was primarily on account of rise in short-term trade credit. There has been sizeable rise in external commercial borrowings (ECBs) and rupee denominated Non-resident Indian deposits as well. In terms of major components, the share of external commercial borrowings (US$ 120.9 billion) continued to be the highest at 31% of total external debt, followed by short term debt (24.8%) and NRI deposits (18.2%). Excluding the valuation change (gain) due to the movement of US$ (appreciation) against major international currencies and Indian rupee, the external debt as at end-March 2013 would have increased by US$ 55.8 billion over end-March 2012.

Composition of India ’s external debt
Source: Ministry of Finance, Government of India & Reserve Bank of India
Components of external debt -- Almost all the major components of the external debt recorded a rise during the year except bilateral, IMF, exports credits and rupee debt. External debt on account of commercial borrowings increased by US$ 16.1 billion during 2012-13 as compared with US$ 16.3 billion in 2011-12. Trade credit components of external debt (both long-term and short-term) showed an increase of US$ 20.3 billion as at end-March 2013 over end-March 2012. The short-term debt increased by US$ 18.5 billion to US$ 96.7 billion as at end-March 2013 from US$ 78.2 billion as at end-March 2012 mainly on account of rise in short-term trade credit.
NRI deposits increased by US$ 12.2 billion to US$ 70.8 billion as at end-March 2013 over the level as at end-March 2012 primarily on account of increase in rupee denominated NRI deposits reflecting the impact of deregulation of interest rates on these deposits in December 2011. The loans under external assistance (multilateral and bilateral debt) declined by around US$ 0.6 billion during 2012-13 as compared with an increase of US$ 3.2 billion in the preceding year.
Currency composition of India’s external debt --The US$ denominated debt continued to be the largest components of India’s external debt with a share of 57.2% as at end-March 2013, followed by Indian rupee (24%), SDR (7.5%), Japanese Yen (6.3%) and Euro (3.5%).
Government and non-government external debt -- Government (Sovereign) external debt stood at US$ 81.7 billion as at end-March 2013 as against US$ 81.9 billion as at end-March 2012. The shares of Government and non-Government external debt in the total external debt were 20.9% and 79.1%, respectively, as at end-March 2013.
India’s key external debt indicators
Source: Ministry of Finance, Government of India & Reserve Bank of India


Warm Regards,

Dr. S P Sharma
Chief Economist

Global FDI declined by 18% in 2012: UNCTAD

(Developing countries received majority of investment in 2012, led by the BRICS nations which saw an increase in flows from US$7 billion in 2000 to US$145 billion in 2012, accounting for 10% of world total. FDI inflows to India declined by 29% to US$26 billion in 2012, however future prospects remain bright.)

According to World Investment Report 2013 published by UNCTAD, the global foreign direct investment (FDI) fell by 18% to US$1.35 trillion in 2012, mainly due to economic fragility and policy uncertainty prevalent in a number of major economies. In contrast to this sharp decline, other key economic indicators such as GDP, international trade and employment all registered positive growth at the global level.

For 2013, the report projects that FDI will remain close to the 2012 level, with an upper range of US$1.45 trillion. With improving macroeconomic conditions and increasing investor confidence in the medium term, transnational corporations (TNCs) may convert their record levels of cash holdings into new investments. FDI flows may then reach the level of US$1.6 trillion in 2014 and US$1.8 trillion in 2015. However, the report warns that significant risks to this growth scenario remain. Factors such as structural weaknesses in the global financial system, the possible deterioration of the macroeconomic environment, and significant policy uncertainty in areas crucial for investor confidence might lead to a further decline in FDI flows.

Compared to the developed economies, the report finds that FDI flows to developing economies proved to be much more resilient, recording their second highest level- even though they declined slightly (by 4%) to US$703 billion in 2012. They accounted for a record 52% of global FDI inflows, exceeding flows to developed economies for the first time ever, by US$142 billion. The global rankings of the largest recipients of FDI also reflect changing patterns of investment flows: 9 of the 20 largest recipients were developing countries. Among regions, flows to developing Asia and Latin America remained at historically high levels, but their growth momentum weakened. Africa saw a year-on-year increase in FDI inflows in 2012. Moreover, outflows from developing economies’ reached US$426 billion, a record 31% of the world total. Asian countries remained the largest source of FDI, accounting for three quarters of the developing-country total. FDI outflows from Africa tripled while flows from developing Asia and from Latin America and the Caribbean remained at the 2011 level.

Developed nations witnessed a decline of 32% in their FDI inflows and fell to US$561 billion. Both Europe and North America saw their inflows fall, as did Australia and New Zealand . The European Union alone accounted for almost two thirds of the global FDI decline. However, inflows to Japan turned positive after two successive years of net divestments. Outflows from developed economies too fell by 23% to US$909 billion. Both Europe and North America saw large declines in their outflows, although Japan bucked the trend, keeping its position as the second largest investor country in the world.

Trends in India ’s FDI

The BRICS countries ( Brazil , the Russian Federation , India , China and South Africa ) have emerged as not only major recipients of FDI but also important outward investors. Their outward FDI rose from US$7 billion in 2000 to US$145 billion in 2012, or 10% of world flows.

However, during 2012, FDI flows to developing Asia decreased by 7% to US$407 billion in 2012. This decline was reflected across all sub-regions, particularly in South Asia , where FDI inflows fell by 24%. India continued to be the dominant recipient of FDI inflows to South Asia in 2012. However, FDI inflows to India declined as well by 29% to US$26 billion in 2012 as high inflation rate increased risks for both domestic and foreign investors, which adversely impacted investor confidence and led to decline in FDI inflows to India . A number of other factors, however, positively influenced FDI prospects in the country. Inflows to services are likely to grow, thanks to ongoing efforts to further open up key economic sectors, such as retailing. Flows to manufacturing are expected to increase as well, as a number of major investing countries, including Japan and South Korea, are establishing country- or industry-specific industrial zones in India


Warm regards,

Dr. S P Sharma
Chief Economist
US Senate passes landmark immigration bill

The United States Senate has passed the landmark comprehensive immigration reform bill that will provide a pathway to citizenship to some 11 million illegal immigrants, including over 240,000 Indians.

The landmark legislation of the Obama administration received bipartisan support as it passed on Thursday with 88 votes for and 32 votes against it.
The bill now moves to the House of Representatives before it can be sent to US President Barack Obama to sign it into law.

However, the bill retained killer provisions when it comes to H-1B Visas that would badly hit Indian companies in the United States.

"Today with a strong bipartisan vote, the United States Senate delivered for the American people, bringing us a critical step closer to fixing our broken immigration system once and for all," Obama said in a statement.

"If enacted, the Senate bill would establish the most aggressive border security plan in our history," he said.

"It would offer a pathway to earned citizenship for the 11 million individuals who are in this country illegally a pathway that includes passing a background check, learning English, paying taxes and a penalty, and then going to the back of the line behind everyone who''s playing by the rules and trying to come here legally," Obama further said.

"It would modernise the legal immigration system so that it once again reflects our values as a nation and addresses the urgent needs of our time. And it would provide a big boost to our recovery, by shrinking our deficits and growing our economy," he said.

However, the Speaker of the House of Representatives, John Boehner, said on Thursday that any immigration legislation must win the support of a majority of his conference to move forward.
"For any legislation, including a conference report, to pass the House, its going to have to be a bill that has the support of a majority of our members," he said.

Boehner''s comments cast doubt on the chances legislation will quickly reach Obama''s desk.

Thursday’s meeting of the Senate was presided over by Vice President Joe Biden.
"According to the non-partisan Congressional Budget Office, modernising our immigration system and bringing these hard working immigrants out of the shadows and into our economy will improve our nation''s balance sheet by nearly a trillion dollars over the next 20 years," said Biden.

 

UN demands halt to all military activity in Golan Heights

The UN Security Council is demanding a halt to all military activity by the Syrian government and the opposition in the Golan Heights and calls for measures to protect UN peacekeepers who have been caught in crossfire. A resolution adopted by the council Thursday extends the mandate of the UN force monitoring the disengagement of Israeli and Syrian forces in the Golan Heights until December 31. The council warned that military activity can escalate Israeli-Syrian tensions.

US government watchdog advises against Afghan bulk aircraft buy

A government think tank has warned that it is wasteful to spend more than three-quarters of a billion dollars to buy up Russian-made helicopters and other aircraft for an Afghan aviation unit which does not have enough troops or experience. It means the purchased technology "could be left sitting on runways in Afghanistan, rather than supporting critical missions, resulting in waste of US funds," Media reports  the special inspector general for Afghanistan Reconstruction as saying in Friday’s report. The think tank recommended putting the plans to buy on hold until Afghan aviation develops the capacity to operate and maintain the equipment. The US Defense Department announced in June it will buy 30 Russian-made MI-17 military helicopters for $572 million along with 18 PC-12 cargo aircraft from the Sierra Nevada Corp. of Sparks, Nevada, for $218 million.

Turkish Interior Minister orders police to warn protesters before using tear gas

Turkish Interior Ministry has ordered police forces nationwide to warn protesters before using tear gas to disperse crowds, Anadolu Agency reports. Forces should also use pressurized water before releasing tear gas and prior to that give protesters enough time to distance themselves. The notice says that forces should restrain themselves from using tear gas after crowds have dispersed, and bans anyone other than assigned officers from using tear gas.

Peacekeepers to remain in Golan Heights for six more months

The UN Security Council has approved a resolution extending its peacekeeping force in the Golan Heights for another six months. The resolution calls for increased protection for the UN contingent patrolling the territory, which is disputed between Syria and Israel. The peacekeepers, who were previously only allowed to carry guns, may now be equipped with body armor, armored personnel carriers, and machine guns, Interfax reported. Austria earlier announced the withdrawal of its troops from Golan Heights, following an increased number of attacks on UN Disengagement Observer Force (UNDOF) outposts amidst the ongoing war in Syria.

4 dead in Syria suicide bombing – State TV

Four people have been killed and several others wounded in a suicide attack in the Christian quarter of Damascus, according to Syrian state TV. The bomb went off in Bab Touma, in the capital’s center on Thursday. While injuries were reported, no precise numbers were given.

Ecuador has not processed asylum request for Snowden

Ecuador’s government confirmed on Thursday that it had not processed an application for asylum for former NSA contractor Edward Snowden because he has not reached any of Ecuador’s diplomatic residences. Ecuadorian officials vehemently rejected the suggestion that the country was weighing up its national interests in making the decision of whether or not to grant asylum to Snowden. The US Senate Foreign Relations Committee said on Thursday that the US would make an effort to remove preferential trade treatment for Ecuadorian imports if the country offered refuge to Snowden, while Ecuadorian officials said they would waive preferential trading rights under an expiring treaty with the US.

Ecuador calls on US to focus on investigating crimes besides Snowden

Ecuador’s Interior Ministry has responded to criticism from the US, saying “it will not allow any pressure on [our] country.” Interior Minister Jose Serrano stressed that Ecuador is one of seven Latin American countries which ratified all conventions and agreements related to human rights and called on the US to investigate crimes with the same eagerness as they are demanding Snowden’s extradition. Earlier Ecuador’s President Rafael Correa also commented on US criticism, saying it “managed to focus attention on Snowden and on the ‘wicked’ countries that ‘support’ him, making us forget the terrible things against the US people and the whole world that he denounced.”

China and S. Korea agree to push N. Korea talks

China’s President Xi Jinping and his South Korean counterpart agreed to push for talks with North Korea as two leaders met for the first time on Thursday. Xi welcomed President Park Geun-hye as an "old friend of China," Reuters reported. "The two leaders shared a common view on denuclearizing North Korea, maintaining peace and stability on the Korean peninsula and resolving issues through dialogue and negotiations," Park's office said in a statement. Park is one of Asia's few female leaders. She took office in February amid North Korea’s war threats, while China's Xi Jinping was appointed in November and has supported tougher economic sanctions against country’s traditional ally.

Libya death toll rises to 5 with 97 wounded

Five people were killed and 97 wounded in gunfire and explosions triggered by rival militant clashes in Tripoli, Libya’s capital, on Wednesday. Tensions between heavily armed groups have plagued the country since the deposition of leader Muammar Gaddafi, and Wednesday marked the second consecutive day of violence between factions. Former rebel groups have developed increasing ambition over the two years since the old leader’s fall, and the new government has struggled to assert its control over them. In an unrelated incident late on Wednesday in the southern town of Sabha, two people were killed and 17 injured when three car bombs exploded in separate areas. Some are in a critical condition, reports Reuters.

Mandela’s condition worsens

South Africa’s anti-apartheid leader and the country's former President Nelson Mandela’s condition worsened in hospital on Thursday, Reuters reported. President Jacob Zuma was even forced to cancel a trip to neighboring Mozambique after visiting Mandela in hospital. Reports said that Mandela's condition remained critical after spending 20 days in hospital, his fourth hospitalization in six months. But, the leader’s daughter said Mandela’s condition is "stable", while officials declined to comment on reports that Mandela is on life support.

3 Femen activists freed from prison in Tunisia

Three Femen activists, two French and one German, were freed from prison in Tunisia after their arrest for a topless protest. On May 29, the three women bared their breasts outside the main courthouse in Manouba, Tunis, in support of Amina Sboui, a Tunisian Femen activist. Previously, Amina Sboui was charged for the posted her topless pictures and a video in which she painted the word ‘Femen’ near the Kajrouan mosque. The European activists were imprisoned for an attack on public morals on June 12. They received a sentence of four months and one day, though the international rights groups labeled the sentence as harsh. The freed activists left for Europe on Thursday morning.

UN team in Turkey to investigate Syria claims

A UN chemical weapons team has come to Turkey to investigate claims regarding possible use of such munitions in Syria’s civil war, Reuters quotes Turkish officials as saying. The UN is still unable to determine which side used chemical weapons in Syria’s conflict, the team stated earlier. UN experts have been on standby to investigate the alleged use of chemical weapons in April. UN says it needs to access Syria to determine where the alleged chemical weapons have been used. But Syria has thus far refused to grant them entry, citing concerns for their safety and doubts about their impartiality, as neither China nor Russia were allowed to participate.

US boss released in China hostage compensation dispute

A payout agreement has been reached and a US boss being held hostage in China by his workers at a Beijing plant for nearly a week was released. The deal was reached overnight, a co-owner of Florida-based Specialty Medical Supplies Chip Starnes told AP. The company paid dozens of workers severance packages similar to the ones paid out to other workers who were dismissed after their division was closed down. The company insisted that the rest of the workers would not be laid off, but employees still believed that the medical supply plant was going to be shut down because the company did not pay out salaries to some workers and equipment was getting ready to be shipped off. Starnes was being kept hostage by 80 workers in the plant since last Friday. He said workers shone bright lights and banged on office windows to deprive him of sleep.

Chile student protest turns violent

More than 100,000 students marched through the Chilean capital of Santiago on Wednesday during a protest which was marred by smaller pockets of violence. Protesters hurled Molotov cocktails, stoned cars, blocked traffic and set up flaming barricades as police in riot gear responded with water cannons and tear gas, reports the AP. The demonstration is the latest in a series of huge marches throughout the country over the past two years, with students continuing to demand reforms to the education system, which critics say suffers from lack of affordable access to higher education. Chile itself, though one of the most stable and prosperous economies within Latin America, is still seen as maintaining serious income inequality. Protesters are also seeking fairer distribution of Chile’s copper wealth, with the country being the world’s top copper producer. Students continue to press for reform, with education remaining a key issue ahead of the country’s November presidential election.

Mongolian president wins second term

Mongolia’s incumbent president has won a second term, receiving a narrow majority of votes cast in Wednesday’s polls. Fifty-year-old Tsakhia Elbegdorj took home the victory despite worries surrounding Mongolia’s faltering economy and growing role of foreign mining firms. Elbegdorj, who is pushing for more controls on foreign mining investments, beat former pro wrestling champion Bat-Erdene Badmaanyambuu of the Mongolian People’s Party and health minister Udval Natsag of the Mongolian People’s Revolutionary Party. Elbegdorj’s win preserves the dominance of the Mongolian Democratic Party.

Fighter jet crashes in Arizona suburb, pliots survive

An F-16 fighter jet crashed in suburban Phoenix, Arizona Wednesday not far from Luke Air Force Base. Both pilots survived after ejecting safely and are reported to be in stable condition at a local hospital. There has been no official confirmation on the cause of the crash, although a bird strike on the jet engine may have brought the aircraft down, according to KPNX-TV in Phoenix. Eyewitnesses told reporters they saw two explosions and the engine fall from the Fighting Falcon. Luke Air Force Base is the largest F-16 training base in the world, located in Glendale, about 15 miles away from Phoenix.

Queen Elizabeth II’s income set to rise 

Britain’s Queen Elizabeth II is set to receive a 5% increase in her income as the Sovereign Grant, which funds the Head of State’s income, increases in value in 2014 to some £37.89 million (about $58 million) from the current £36.1 million ($55 million). That grant is calculated as a percentage of profits accrued by the Crown Estate, a real estate holding that includes properties such as Windsor Park, as well as most of the UK’s coastline. The total value of the Crown Estate’s profits have risen by 5% to over £252.6 million (about $387 million), with the remaining revenue going into the country’s treasury and contributing to the UK’s finances. As the Crown Estate also includes seabed surrounding the island nation, it also profits from offshore windfarms, which are currently expanding, in addition to a collection of large swaths of urban property in London, Birmingham, Manchester, Oxford and Cambridge. The value of the Crown Estate's energy and infrastructure portfolio alone rose by 8.2% in 2012 to 2013.

Conviction overturned for soldier accused of executing Iraqi policeman

The highest court in the US military threw out the case against Sgt. Lawrence Hutchins III Thursday. The Court of Appeals overturned a murder conviction against Hutchins after he served about half of an 11-year sentence for leading a group of eight men into the home of a retired Iraqi police officer who he then killed execution-style in a ditch in April 2006. Hutchins claimed his Constitutional rights were violated when he was held in solitary confinement for the duration of his seven-day interrogation in Iraq without access to a lawyer. He was scheduled to be released in July 2015 at the earliest but Hutchins’ lawyer said he could be released within days. The Navy may now appeal to the Supreme Court or let the ruling stand.



Pune, June 27, 2013: Shamim Khan of Delhi carded a resolute four-under-68 to emerge leader in round three of the PGTI Players Championship being played at the Oxford Golf & Country Club in Pune. ShamimⳠtotal moved to 10-under-206 after his superb third round effort. Rahil Gangjee of Kolkata returned the dayⳠbest score of five-under-67 to be placed second. Gangjee is now breathing down ShamimⳠneck with a nine-under-207 total.
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Shamim Khan (71-67-68), who was overnight tied third and one stroke off the lead, earned successive birdies on the fifth and sixth holes to make a move up the leaderboard. The 35-year-old reigning Rolex Rankings champion sank a 40-feet birdie putt on the fifth. A poor chip resulted in a bogey for Shamim on the seventh but he picked up a birdie on the ninth to make the turn at two-under.
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ShamimⳠback-nine featured a chip-in for birdie on the 13th, two birdie conversions from a range of 12 to 15 feet on the 14th and 17th as well as a birdie on the closing 18th. The professional from the Delhi Golf Club also dropped bogeys on the 11th and 15th as a result of a couple of three-putts. He thus ended up with seven birdies and three bogeys.
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㉠had a steady first round but my game picked up from round two onwards. Iⶥ been putting much better and have also hit my irons closer over the last two days as compared to round one. I rate the sixth as a very tough hole since one canⴠsight the fairway from the tee and the green is also very tight. I was therefore delighted to make a birdie on the sixth today. Iⶥ not been finishing my rounds well in the last few events. But I feel Iⶥ managed to improve that aspect of my game this week,䊳aid Shamim, a winner of nine professional titles.

Rahil Gangjee (72-68-67), climbed from overnight tied eighth to second place after shooting the dayⳠbest score of 67. GangjeeⳠeventful round included seven birdies against two bogeys. Rahil, a former winner on the Asian Tour, rolled in birdie putts from 40 and 20 feet on the seventh and 17th respectively. The 34-year-old landed his approach shots within five feet to set up birdies on the first and 18th and also produced two excellent chip-putts for birdies on the fourth and 11th. His two bogeys on the sixth and eighth were a result of three-putts on both occasions.

Gangjee said, ㉒ve gotten to know this course more with each passing round and have accordingly adjusted my game. I now have a better understanding of the green speed and the distance the ball carries in the air. This in turn has helped me play better. My putting stroke was also a lot smoother than the previous two rounds.伯span>

KolkataⳠShankar Das (67-70-71), the overnight joint leader, slipped to third place after returning a 71 on Thursday. His total stands at eight-under-208.

Anirban Lahiri (70-68-71) of Bengaluru is in fourth place at seven-under-209. Sri Lankan Mithun Perera (70-70-70) is a further stroke back in fifth position.

DelhiⳠRashid Khan, the overnight joint leader, slipped to tied sixth at five-under-211 after firing a 74 in round three. He shares sixth place along with fellow Delhi golfers Chiragh Kumar, Himmat Singh Rai and Vinod Kumar.

Moinuddin Malak (77-69-72), with a total score of two-over-218, is currently the highest-placed Pune golfer. He is placed tied 32nd.

DIRECTOR-GENERAL CONDEMNS THE MURDER OF BLOGGER YAMEEN RASHEED IN THE MALDIVES Posted on  April 26, 2017 Paris, 26 April—The Direct...