Covid-19: India gets $5.9 mn US aid; assures Bhutan, Seychelles of help

The State Department and the US Agency for International Development have now committed nearly $508 million in emergency health, humanitarian, and economic assistanc

The United States has provided nearly $5.9 million in health assistance to India to slow the spread of Covid-19, the State Department said Thursday.

The amount is being used to help India hinder the spread of the disease by providing care for the affected, disseminating essential public health messages to communities and strengthen case-finding and surveillance, the State Department said.

The assistance is also being used to mobilize innovative financing mechanisms for emergency preparedness and response to this pandemic.

"This builds on a foundation of nearly $2.8 billion in total assistance, which includes more than $1.4 billion in health assistance, the United States has provided to India over the last 20 years," it said in a update of the US efforts in response to the Covid-19 pandemic.

The State Department and the US Agency for International Development have now committed nearly $508 million in emergency health, humanitarian, and economic assistance. This is on top of the funding the US has already provide to multilateral and non-governmental organizations (NGOs) that are helping communities around the world deal with the pandemic.

In South Asia, America's Covid-19 assistance has gone to Afghanistan ($18 million), Bangladesh ($9.6 million), Bhutan ($500,000), Nepal ($1.8 million), Pakistan ($9.4 million) and Sri Lanka ($1.3 million). The IMF on Thursday approved nearly $1.4 billion in emergency aid to Pakistan to help it weather the impact of the coronavirus pandemic.

"While uncertainty remains high, the near-term economic impact of Covid-19 is expected to be significant, giving rise to large fiscal and external financing needs," the international lender said in a statement.

Covid-19: Recession for world economy; India, China likely exceptions: UN

The report did not give a detailed explanation as to why and how India and China will be the exceptions as the world faces a recession and loss in global income that will impact developing countries.

The world economy will go into recession this year with a predicted loss of trillions of dollars of global income due to the coronavirus pandemic, spelling serious trouble for developing countries with the likely exception of India and China, according to a latest UN trade report.

With two-thirds of the world's population living in developing countries facing unprecedented economic damage from the COVID-19 crisis, the UN is calling for a $2.5 trillion rescue package for these nations.

According to the new analysis from United Nations Conference on Trade and Development (UNCTAD), the UN trade and development body titled 'The COVID-19 Shock to Developing Countries: Towards a 'whatever it takes' programme for the two-thirds of the world's population being left behind', commodity-rich exporting countries will face a $2 trillion to $3 trillion drop in investments from overseas in the next two years.

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The UNCTAD said that in recent days, advanced economies and China have put together massive government packages which, according to the Group of 20 leading economies (G20), will extend a $5 trillion lifeline to their economies.

"This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically," it said.

It added that while the full details of these stimulus packages are yet to be unpacked, an initial assessment by the UNCTAD estimates that they will translate to a $1 trillion to $2 trillion injection of demand into the major G20 economies and a two percentage point turnaround in global output.

"Even so, the world economy will go into recession this year with a predicted loss of global income in trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India," the UNCTAD said.

IMF asks Pakistan to reduce 'trade and commerce reliance' on China

The development comes as the mission has extended its stay in Pakistan for making more efforts to strike a consensus on the staff-level agreement.

The visiting IMF mission has asked Islamabad "to reduce its trade and commerce reliance on Beijing" and look for other international options by signing free trade agreements (FTA) with other countries too, a media report said on Friday.

The development comes as the mission has extended its stay in Pakistan for making more efforts to strike a consensus on the staff-level agreement as both sides so far persisted with their respective differences on "immediate measures" for reducing the revenue-expenditure gap and fixing cash bleeding energy sector, The News International said in the report.

Official sources confirmed to The News International on Thursday night that both sides were busy ironing out differences over revenue generation efforts as the Federal Board of Revenue (FBR) wants a further reduction in its revised target of 5,238 billion Pakistani rupees but the International Monetary Fund (IMF) desires to see the plan aimed at removing distortions and expanding narrowed tax base on a permanent basis.

According to senior Finance Ministry sources, the issue of discord between the IMF and financial authorities is the former's insistence to cut down heavily of Pakistan's reliance on trade and commerce ties with China and contract FTAs with other international partners.

This is a position Islamabad is not prepared to even consider.

Although, the Ministry of Finance and other officials claimed in their background discussions that there was no "deadlock" and the staff-level agreement would be finalized anytime soon.

But when they were asked to share details, they were non-committal saying that the talks were underway, so nothing could be stated with credence.

The mission arrived in Islamabad on February 2 for an 11-day second review of Pakis­tan's performance under the $6 billion bailout package signed in July 2019 amid a massive revenue shortfall in the first seven months of the current fiscal year, Dawn news said in a report last week.

IMF, Gopinath will draw govt's ire, warns Chidambaram after growth forecast

"I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath," Chidambaram said.

BS : With the IMF lowering India's economic growth estimate for the current fiscal to 4.8 per cent, senior Congress leader P Chidambaram on Tuesday claimed an attack on the world body and its chief economist Gita Gopinath by government ministers was imminent.

He also alleged that the growth figure of 4.8 per cent given by the International Monetary Fund (IMF) is after some "window dressing" and he won't be surprised if it goes even lower.

"Reality check from IMF. Growth in 2019-20 will be BELOW 5 per cent at 4.8 per cent," Chidambaram said in a series of tweets.

"Even the 4.8 per cent is after some window dressing. I will not be surprised if it goes even lower," the former finance minister said.

IMF Chief Economist Gopinath was one of the first to denounce demonetisation, he noted.

"I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath," Chidambaram said.

The IMF lowered India's economic growth estimate for the current fiscal to 4.8 per cent and listed the country's much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years.

In October, the IMF had pegged India economic growth at 6.1 per cent for 2019.

Listing decline in rural demand growth and an overall credit sluggishness for lowering of India forecasts, Gopinath, however, had said the growth momentum should improve next year due to factors like positive impact of corporate tax rate reduction.

IMF says India's growth 'much weaker' than expected; cuts FY20 projection

The economic growth slowed to a seven-year low to 5 per cent in April to June quarter from 8 per cent a year ago, as per the government data.

International Monetary Fund (IMF) on Thursday said that India's economic growth is "much weaker" than expected due to corporate and environmental regulatory uncertainty and "lingering weakness" in some non-Bank financial companies.

"Again, we will have a fresh set of numbers coming up but the recent economic growth in India is much weaker than expected, mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-Bank financial companies and risks to the outlook are tilted to the downside, as we like to say," IMF spokesman Gerry Rice told reporters at a news conference.

The economic growth slowed to a seven-year low to 5 per cent in April to June quarter from 8 per cent a year ago, as per the government data.

The International Monetary Fund (IMF) has cut its projection for India's economic growth by 0.3 percentage points to 7 per cent for the fiscal year 2019-20 owing to the "weaker-than-expected outlook" for the domestic demand.

The growth is expected to rise to 7.2 per cent points in FY21, down by the projected growth rate of 7.5 in the earlier report.

The slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output, said the Ministry of Statistics and Programme Implementation in a statement.

The previous low was recorded at 4.9 per cent in April to June 2012-13. Consumer demand and private investment have weakened amid global trade frictions and dampening business sentiment.

Business Standard

Why finding an ATM in India is getting tougher even as people use them more

India already has the fewest ATMs per 100,000 people among BRICS nations, according to the International Monetary Fund.

Business Standard : Finding an ATM in India is getting tougher even as dependence on cash persists, thanks to tighter regulations that make it more costly to run the machines.

The number of automated teller machines in the country shrank in the past two years despite an increase in transactions, Reserve Bank of India figures showed Saturday. India already has the fewest ATMs per 100,000 people among BRICS nations, according to the International Monetary Fund.

The drop may continue as banks and ATM operators struggle to absorb the cost of software and equipment upgrades mandated by the central bank last year to bolster security. That risks undermining Prime Minister Narendra Modi’s campaign of increasing financial inclusion in a nation where cash remains king less than three years after he pulled most banknotes from circulation.

“Declining numbers of ATMs will impact a large segment of the population, especially those who are socio-economically at the bottom of the pyramid,’’ said Rustom Irani, managing director at Hitachi Payment Services Pvt. Ltd., a provider of the machines. “Penetration in the country is already very low.”

As security costs swell, ATM operators are being squeezed because the fees they rely on for revenue remain low and can’t rise without the approval of an industry committee. ATM operators – which include banks as well as third parties – charge a so-called interchange fee of 15 rupees to the lender whose debit or credit card is used for cash withdrawals.

“Interchange fees are the biggest factor behind muted growth of ATMs. They have to reflect ground reality,” said R. Gandhi, a former RBI deputy governor. “Banks are finding it cheaper to pay interchange fees to other banks rather than operating their own ATMs.”

Yet not everyone agrees that increasing fees is the solution. If they are raised, banks might pass the higher charges on to customers, according to R. Subramaniakumar, chief executive officer at Indian Overseas Bank.

Access to basic financial services including ATMs has become more crucial after Modi added 355 million people to the banking system since taking office in 2014. Many Indians opened accounts when the prime minister made 86% of banknotes illegal in November 2016. That boosted direct transfers of welfare benefits to people’s accounts, increasing reliance on ATMs.

Branch rationalization by some public-sector lenders is another factor behind the drop in ATMs.