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Foreign investors have withdrawn nearly Rs 20,000 crore from Indian stock markets in just five trading days (November 4–8), continuing a trend of large-scale selling that began last month. Experts say investors are now moving their money to China, largely due to the high valuations presently prevailing in Indian markets. In early November, FPIs have offloaded as much as Rs 19,994 crore in Indian markets. The month prior, i.e., October, was one of the worst months in terms of foreign outflows, with FPIs making a net withdrawal of Rs 94,017 crore. Before this, Indian markets faced such a situation during the pandemic, when FPIs withdrew Rs 61,973 crore from equities in March 2020. <h2>Why Are Investors Leaving? </h2>According to Himanshu Srivastava of Morningstar Investment Research India, two main factors are driving this exodus. First is China's renewed appeal due to lower stock valuations and new economic stimulus measures. In a bid to nudge the domestic economy and bail state governments, China recently approved a 10-trillion yuan (US $1.4 trillion) package. Per reports, approximately 60% of this stimulus focuses on allowing local governments to refinance the mountain of debt on them. Srivastava explains foreign investors are also flocking to US dollar and Treasury yields, which have appreciated significantly in the recent past, leading FPIs to anticipate a stronger US economy going ahead. Moreover, high valuations in Indian markets are discouraging foreign investors from putting more money in the economy. As a result, over the past week, the selling pressure eroded Rs 74,563 crore in market value for Reliance Industries, while Bharti Airtel and ICICI Bank lost Rs 26,274 crore and Rs 22,254 crore, respectively. The combined market valuation of six of the top 10 most-valued firms dipped by Rs 1,55,721.12 crore last week. <h2> Silver linings</h2>Despite the ongoing outflux of funds since last month, November also saw unprecedented applications of about 40–50 new FPI registrations, which are eyeing to enter the Indian market. This was due to markets SEBIs recent relaxation to NRIs, permitting them to participate up to 100% and announcing measures for ease of entry and operations in India. On the other hand, FPIs invested Rs 599 crore in the debt general limit and Rs 2,896 crore in the debt voluntary retention route (VRR) during the period under review. So far this year, FPIs have invested Rs 1.06 lakh crore in the debt market. <li class="whitespace-normal break-words"></li>Going ahead, investors will be looking for certain macroeconomic cues, which include corporate earnings reports, India's inflation (CPI) and industrial production (IIP) data on November 12, the US inflation report on November 13, and wholesale price index (WPI) data on November 14.

FPIs withdraw nearly Rs 20,000 crore from equities in the last 5 trading sessions, make a beeline for China and US

<ul><li><keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword>’s (RBI) governor Shaktikanta Das today announced another round of <keyword id="9218795" type="UNKNOWN" weightage="20" keywordseo="covid-stimulus-package">COVID stimulus package</keyword> worth ₹50,000 crore. </li><li>Indian banks – public, private as well as small finance banks – have responded positively to the announcement. </li><li>Here’s a look at the top gainers among banks and small finance banks.</li></ul>India’s largest public and private sector banks have responded positively to the Reserve Bank of India’s (RBI) COVID stimulus package worth ₹50,000 crore. As part of the <a href="https://www.businessinsider.in/policy/news/rbi-governor-shaktikanta-das-says-covid-patients-can-get-bank-loans-for-treatment/articleshow/82399526.cms">stimulus package</a>, RBI has allowed banks to lend money to hospitals, manufacturers, importers and sellers of vaccines, oxygen concentrators, medical oxygen and COVID drugs. The banking sector – apart from the broader market – has responded positively to RBI’s stimulus package announcement. The <keyword id="151330" type="COMPANY" weightage="20" keywordseo="Bank-Nifty">Bank Nifty</keyword> index comprising the most liquid and largest Indian banks dropped marginally by 0.2% immediately when RBI governor Shaktikanta Das began his speech. However, since then, the index recovered to trade 1% above its previous close of 32,270. Here’s how the top 5 private and public banks have responded to the announcement: <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Price as at 11:50 am </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Previous close </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Change </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">HDFC Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,399.8 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,388.35 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">ICICI Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹595 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹591.55 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">0.6% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Kotak Mahindra Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,756 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,732.65 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">1.3% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">State Bank of India </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹355.3 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹351.5 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">1.1% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Axis Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹713 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹700.35 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">1.8% </td></tr></tbody></table>Source: <keyword id="6354646" type="COMPANY" weightage="20" keywordseo="nse">NSE</keyword>, May 5, 2021 Amongst small finance banks, Ujjivan has been the biggest gainer with a 3.3% uptick in its share price: <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Price as at 11:50 am </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Previous close </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Change </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">AU Small Finance Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹931 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹915.5 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">1.7% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Equitas Small Finance Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹57.95 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹56 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">3.5% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Ujjivan Small Finance Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹29.4 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹28.75 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">2.2% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Suryoday Small Finance Bank </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹246.6 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹246.3 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">0.1% </td></tr></tbody></table>Source: NSE, May 5, 2021 Some of the highlights of RBI’s announcement are: <ul><li>Banks can now create a separate COVID-19 loan book, and money borrowed from RBI for this purpose will be lent at 3.75%, instead of the current repo rate of 4%. </li><li>Small finance banks can opt for additional funds of up to ₹10,000 crore to lend up to ₹10 lakh to each borrower. </li><li>Micro, small and medium enterprises who have loans outstanding up to ₹25 crore can get them restructured. </li></ul>SEE ALSO: <a href="https://www.businessinsider.in/policy/news/rbi-governor-shaktikanta-das-says-covid-patients-can-get-bank-loans-for-treatment/articleshow/82399526.cms">COVID patients can get bank loans for treatment after Indian central bank’s fresh set stimulus measures</a> <a href="https://www.businessinsider.in/business/auto/news/triton-ev-founder-says-its-planning-for-an-ipo-soon-in-the-us/articleshow/82398780.cms">EXCLUSIVE: Triton EV founder says it is planning for an IPO soon in the US as the company gears up for its first car launch in India</a> <a href="https://www.businessinsider.in/business/telecom/news/airtel-healthy-subscriber-growth-and-jios-disappointing-performance-send-the-stock-rallying/articleshow/82380913.cms">Airtel shines as price hikes, healthy subscriber growth and Jio’s disappointing performance send the stock rallying</a>

Banks respond positively to Indian central bank’s COVID stimulus package – check out the list of top gainers

Mumbai, Mar 27 () Analysts were unanimous in welcoming RBI's rate cuts, forbearance on loans and liquidity easing measures, saying the economy requires stimuli in the present circumstances. Some of them also said that the Reserve Bank of India (RBI) may have to deepen the rate cut if the COVID-19 crisis prolongs. The RBI, which advanced a meeting of the rate setting panel by a week, announced a 0.75 per cent cut in its policy rates, infusion of Rs 3.76 lakh crore of liquidity through moves like a cut in cash reserve ratio and also allowed banks to not treat any term loans as NPAs for three months if there is no repayment. "RBI, very correctly so, announced a comprehensive bazooka covering all aspects of the economy by taking measures system-wide both through liquidity, rates and regulatory forbearance (retail as well as for industry) and also targeted measures to manage the corporate bond markets," Kotak Mahindra Bank's senior economist Upasana Bharadwaj said. She said the measures should help in tiding issues which many banks/institutions were fearing and will go a long way in cushioning the dislocations in various markets. The bank expects additional scope for 0.40-0.50 per cent cut depending on the nature of spread of COVID-19, she added. Singaporean lender DBS's economist Radhika Rao said RBI has pulled out all stops with the aggressive rate cut and said the intention seems to be to reduce cost of funds while lowering incremental capital burden on banks. The central bank has also addressed banks' reticence in buying commercial paper by making it possible to hold them under the hold to maturity portfolio rather than mark to market, which affects their earnings, she said. "While India has limited fiscal space, monetary policy continues to do the heavy lifting at a time when growth is at a severe risk in the near term," SBI Mutual Fund's chief investment officer Navneet Muhnot said. He said we need to explore unconventional measures on fiscal, administrative and regulatory fronts on the lines of lead taken by RBI. Consulting firm Deloitte's partner Himanish Chaudhuri said the announcement is welcome and has allayed a lot of concerns which the industry was having. Industry lobby CII's director general Chandrajit Banerji welcomed the RBI moves but added that it expects the central bank to extend the repayment moratorium if the crisis prolongs. Domestic rating company Acuite's president Suman Chowdhury said while the rate cut of 75 bps is indeed sharp and goes beyond the market expectations, the extent of the transmission by the banking system will have to be seen. AA SHW DRR

Analysts welcome RBI stimulus measures

<ul><li>The <keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) has announced a ₹50,000 crore lending programme, as part of a larger stimulus plan</li><li>Banks have been allowed to lend money to <keyword id="8764262" type="COMPANY" weightage="20" keywordseo="covid">Covid</keyword> patients who need money for treatment, aside from hospitals, dispensaries, manufacturers, importers and sellers of oxygen and concentrators.</li><li>The window for such loans will shut on March 31, 2022, as of now, said the RBI Governor Shaktikanta Das.</li></ul>The Reserve Bank of India (RBI) has announced a ₹50,000 crore lending programme, as part of a larger stimulus plan, to ease the devastating impact of the second wave of the COVID-19 pandemic. As part of this ₹50,000 crore liquidity facility, banks have been allowed to lend money to Covid patients who need money for treatment, aside from hospitals, dispensaries, manufacturers, importers and sellers of medical oxygen and oxygen concentrators. The tenure of these loans will be a maximum of 3 years and the interest rate will be the same as the repo rate (the rate at which banks borrow money from the RBI). The window for such loans will shut on March 31, 2022, as of now, said the RBI Governor Shaktikanta Das. “The immediate objective is to save human lives and livelihoods,” he said in his unscheduled address to the media on May 5. "The announcements from RBI will also provide much needed liquidity to the emergency healthcare sector to battle the proliferating spread of the virus. A new term liquidity facility for healthcare sector at the repo rate will aid in ramping up covid related healthcare infrastructure and production and supply of essential healthcare products such as vaccines, oxygen and ventilators. It will also benefit patients burdened by unaffordable covid related medical bills," said Aashit Shah, Partner, J Sagar Associates. Some of the other announcements made by the RBI Governor are as follows: Banks have been allowed to create a separate COVID-19 loan book that will meet the needs of emergency funding. The money that banks borrow from the central bank for this purpose will be given at a rate 25 basis points (bps) less than the current repo rate of 4%. 100 basis points make a percentage. The surplus funds (money not lent at any point) in that loan book can be parked with the RBI at a rate that’s 40 bps more than the reverse repo rate i.e., 3.35% (the usual rate that banks get for parking money with the RBI). "This will ensure that banks accelerate the provision of liquidity for emergency healthcare services so that India is better equipped financially to deal with the pandemic," Shah explained. Micro, medium and small enterprises (MSME), who have borrowed ₹25 crore or more from banks, can get the repayment schedule restructured, if they want to, before September 31, 2021. "The additional restructuring guidelines for to MSMEs, small businesses and individuals will assist them tide over the uncertainties caused due to the second wave. These guidelines as well as the recently introduced pre-arranged insolvency resolution process will enable MSMEs to restructure their debts without the looming fear of losing or liquidating their businesses," said Shah. Small finance banks can get additional long-term funds from the RBI (up to a total of ₹10,000 crore) to make fresh loans to borrowers up to ₹10 lakh per borrower. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/triton-ev-founder-says-its-planning-for-an-ipo-soon-in-the-us/articleshow/82398780.cms">EXCLUSIVE: Triton EV founder says it is planning for an IPO soon in the US as the company gears up for its first car launch in India</a> <a href="https://www.businessinsider.in/tech/news/indian-government-gives-the-nod-for-5g-trials-chinese-companies-kept-out-for-now/articleshow/82398249.cms">Indian government gives the nod for 5G trials, Chinese companies kept out for now</a>

COVID patients can get bank loans for treatment after Indian central bank’s fresh set stimulus measures

<ul><li>Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> on May 18 announced the last tranche of the ₹20 lakh crore stimulus package. </li><li>The economic stimulus package included measures like free food grains, hike in foreign direct investment for defence, liquidity measures for MSMEs, amended in Essential Commodities Act, increase in public expenditure in health, among others. </li><li>While the Narendra Modi government promised to allocate 10% of the GDP, the Reserve Bank of India’s measures accounts for nearly half the economic package. </li></ul>Finance Minister Nirmala Sitharaman on May 18 announced the last tranche of the ₹20 lakh crore Atma Nirbhar Bharat Abhiyan economic package to fight the coronavirus pandemic led economic slowdown in the country. However, while the Narendra Modi government promised to allocate 10% of the GDP, nearly half of the stimulus package is spent by the Reserve Bank of India. Global investment bank <keyword id="6361649" type="UNKNOWN" weightage="20" keywordseo="Goldman-Sachs">Goldman Sachs</keyword> said that most of the reforms announced by the Indian government will have an impact in the medium term while the short term may see a "deeper recession", and added that the country's real GDP growth may fall 5% in the current financial year ending March 2020. The economic stimulus package included measures like free food grains, hike in foreign direct investment for defence, liquidity measures for MSMEs, amendments in Essential Commodities Act, increase in public expenditure in health, among others. Whereas, the RBI package included measures like moratorium on loan repayments for all borrowers,and interest rate cut etc. “RBI has announced ₹9 lakh crore plus, but the actual money utilised (so far) is ₹8 lakh crore,” FM Nirmala Sitharaman said while explaining the break-up of the stimulus package. PM Narendra Modi said the package was <a href="https://www.businessinsider.in/india/news/pm-modi-promises-to-please-everyone-with-his-stimulus-package/articleshow/75701113.cms">designed keeping in mind</a> factors like land, labour, liquidity and laws. Here’s a breakdown of India’s ₹20 lakh crore stimulus package: <div type="image" title="overall" msid="75798397" hostid="261"></div> The first tranche worth ₹5.94 lakh crore provided a credit line to small businesses and support to shadow banks and electricity distribution companies <div type="image" title="tranche 1" msid="75798413" hostid="261"></div> There <a href="https://www.businessinsider.in/policy/economy/news/breaking-down-modi-20-lakh-crore-stimulus-rbi-and-finance-ministry-steps-land-and-labour-laws/articleshow/75709001.cms">were 15 measures,</a> of which 6 were for MSMEs. The definition of SMEs was changed and the investment limit to qualify as MSMEs was raised. During the first tranche, Sitharaman announced ₹3 lakh crore collateral-free automatic loans for businesses. Apart from this, the government also increased the deadline for<a href="https://www.businessinsider.in/business/news/benefits-for-real-estate-sector-in-finance-minister-20-lakh-crore-stimulus-package/articleshow/75719588.cms"> real estate projects. </a> The second tranche included free foodgrains to stranded migrant workers for two months and credit to farmers, totalling ₹3.10 lakh crore <div type="image" title="tranche 2" msid="75798427" hostid="261"></div> There were <a href="https://www.businessinsider.in/policy/economy/news/finance-minister-nirmala-sitharaman-top-news-and-highlights-may-14/articleshow/75736580.cms">nine announcements in all in the second tranch</a>e of the stimulus package which focussed on migrant workers, small traders, small farmers etc. The government announced free food grain supply to migrant workers for 2 months. A National portability of ration cards — One Nation, One Ration card — was announced which allowed people to take ration from any public distribution unit in the country. The third tranche was worth ₹1,50,000 crore and focused on farming and related activities <div type="image" title="tranche 3" msid="75798441" hostid="261"></div> Sitharaman promised to allocate money and quickly ramp up policies in these spaces. The government allocated ₹1 lakh crore to strengthen farm-gate infrastructure. The government said the Essential Commodities Act <a href="https://www.businessinsider.in/policy/economy/news/finance-minister-nirmala-sitharaman-live-updates-from-third-tranche-modi-20-lakh-crore-stimulus/articleshow/75756781.cms">will be amended</a> to deregulate prices of cereals, edible oils, oilseeds, pulses, onions, potatoes etc. <a href="https://www.businessinsider.in/policy/economy/ashok-gulati-interview-on-essential-commodities-act-and-apmc-changes/articleshow/75760364.cms">According to Ashok Gulati</a>, former chairman of Commission of Agricultural Costs and Prices (CACP), this will allow market prices to prevail over essential commodities. The government also removed stock limit imposed on processors or value chain participants or any exporter subject to export demand, The fourth and fifth tranches that dealt mostly with structural reforms were worth ₹48,100 crore <div type="image" title="tranche 4 and 5" msid="75798458" hostid="261"></div> The <a href="https://www.businessinsider.in/policy/economy/news/finance-minister-nirmala-sitharaman-live-updates-from-third-tranche-modi-20-lakh-crore-stimulus/articleshow/75756781.cms">reform</a>s focused on coal, minerals, defence production, civil aviation, power distribution in Union Territories, space and atomic energy. India opened up more of its airspace for airlines, and also decided to put 6 airports up for auction. The government said<a href="https://www.businessinsider.in/stock-market/news/indigo-spicejet-adani-gmr-gvk-share-price-may-gain-after-civil-aviation-reforms/articleshow/75775888.cms"> airlines will fly on shorter routes</a> which would save ₹1,000 crore a year. Separately, the government allowed startups in the space sector to use resources of Indian Space Research Organisation. In the fifth <a href="https://www.businessinsider.in/policy/economy/news/finance-minister-nirmala-sitharaman-final-stimulus-plan-to-boost-gdp-of-india/articleshow/75784571.cms">tranche the government added ₹40,000 crore budget allocation</a> in the Mahatma Gandhi Rural Employment Guarantee Act (MNREGA). However, according to a financial services company Nomura, the minimum wage job may be a temporary relief and once the lockdown is over, urban businesses will struggle with the shortage of labour. Several experts have criticised the government’s latest economic package and said it is inadequate to provide immediate relief to the distressed part of the society. “The package may fall short of mitigating the near-term existential crisis for businesses and workers, but is better designed to improve India’s medium-term growth potential and attract long-term risk capital. As a consequence, we maintain our GDP growth projection for 2020 at -5% y-o-y,” Noaura, a global market research firm said. SEE ALSO: <a href="https://www.businessinsider.in/india/news/india-among-58-nations-questioning-who-on-covid-19-response/articleshow/75797251.cms">India among 58 nations questioning WHO on COVID-19 response</a> <a href="https://www.businessinsider.in/india/news/lockdown-4-0-india-issues-new-guidelines-allowing-states-to-decide-the-red-green-and-orange-zones/articleshow/75790707.cms">Lockdown 4.0 ⁠— India issues new guidelines allowing states to decide the red, green, and orange zones</a>

Here's a breakup of Narendra Modi's ₹20 lakh crore stimulus⁠— RBI measures make up for nearly half of it

New Delhi, Nov 29 () Indian industry on Friday said it expects the economic slowdown to bottom out soon and the growth would rebound in the next quarter on the back of a string of steps taken by the government.
 India's growth falling to a more than six-year low of 4.5 per cent in the second quarter of 2019-20 is sub-optimal and below the potential of the economy, the industry pointed out.
 ''We expect the slowdown to be bottoming out'', said Assocham Secretary General Deepak Sood.
 "My hope stems from the fact the private final consumption at about 5 per cent growth does indicate resilience in consumer demand. But we need to be shoring up the consumer sentiment, for sure," Sood explained.
 Biocon CMD Kiran Mazumdar-Shaw opined that few pragmatic policies can help put India on the top again.
 "We can quickly rise to the top again with a few pragmatic policies," Mazumdar-Shaw tweeted.
 FICCI President Sandip Somany stated that the growth dipping to 4.5 per cent in July-September is a concern but the decline was on the expected line as lead indicators of the economy were showing signs of weakness.
 "Private consumption and investment demand continue to remain weak although some improvement was noticed during the recent festive season," he said.
 "The government has taken a series of measures in recent months to infuse greater energy into the economy and we are hopeful that in the second half of the current fiscal things would improve," he added.
 PHD Chamber of Commerce and Industry President D K Aggarwal also said that the string of reforms undertaken during the last few months will refuel the growth trajectory of the country.
 "We are very much hopeful that growth will rebound in the next quarter," he said.
 Somany suggested that it was important is to address the problems in the rural sector where more income enhancing measures are required as this would propel demand.
 India's GDP growth hit an over six-year low of 4.5 per cent in July-September 2019. The deceleration in manufacturing output and subdued farm sector activity dragged the country's economic growth, according to official data released on Friday.
 The Gross Domestic Product (GDP) growth was recorded at 7 per cent in the corresponding quarter of FY 2018-19. In the previous quarter of the ongoing fiscal, the economic growth was 5 per cent. RSN MR

India Inc expects growth to rebound in next quarter on stimulus measures

Mumbai, May 5 () Global ratings agency S&amp;P on Tuesday said additional financial stimulus is "necessary" in India to fight the COVID-19 pandemic, despite the country's weak fiscal position. The stimulus is necessary to support the vulnerable segments of the society and also to prevent additional structural damage to the economy amid the lockdown which has suddenly stopped the business activity, S&amp;P said in a report. In March, the government announced a Rs 1.7 lakh crore relief package focusing on providing food security to the poor and providing money in their hands to fight COVID-19. Many industry watchers have said the package was too less, while some have backed the Centre for not front-loading the package, saying the longevity of the pandemic is not known. The quantum of a new stimulus package is a highly speculated aspect, with some industry watchers advocating caution and others pushing for more spending given the unprecedented nature of the pandemic. "In our view, the Indian government is likely to introduce additional fiscal stimulus measures, which could be broader in scale relative to efforts so far," the agency, which has a 'BBB-/Stable/A-3' rating on the sovereign, said. It added that apart from the direct fiscal transfers to the affected individuals, government officials have indicated a willingness to use a range of options available in their policy toolbox which may include additional support for the corporate and the financial sector as well. The agency said India's fiscal position has been weak for a long time now and is a major factor constraining sovereign credit rating along with the government debt. "Though the fiscal space is limited owing to the government's already-elevated deficit, additional measures could be necessary to support the vulnerable segments of the society, and to prevent additional structural damage to the economy amid the recent sudden-stop in the business activity," it said. S&amp;P added that India will show a "powerful recovery" in the economy in 2021-22, if it is assumed that the pandemic is contained and there is a significant improvement in the global economic conditions. However, if the damage to India's domestic economy is not sufficiently mitigated, the fallout could weigh on the recovery and result in downward pressures on the sovereign and Indian banks, it warned. The agency said systemic pressures for Indian banks could rise owing to the recently announced extension of the nationwide lockdown to check the COVID-19 spread. It said the Rs 1.7 lakh crore relief package along with liquidity easing moves from the Reserve Bank through the targeted long term repo operations will help temper economic risks. Amid speculation of an extension in the three-month moratorium, it said such a move can help borrowers suffering from temporary liquidity issues. Drawing from the commentary and data from Axis Bank, which announced its results last month, the agency said a fourth of the lender's borrowers by loan quantum opting for loan moratorium suggests that some of the stronger borrowers are also opting to conserve liquidity in these tough times. The agency said it will compare the same numbers with the commentary from other banks to assess Axis Bank, but maintained that its Rs 1,400 crore loss for the March quarter reflects a "rise in systemic risk". As of now, its negative outlook on the lender is reflective of the economic risks for the bank, and the Indian economy at large, remaining high, S&amp;P said. The bank will maintain its strong market position and adequate capitalisation over the next 18 months, it said, warning that a large unanticipated asset quality shock can result in a downgrade of the bank's rating. AA ANUANU

More fiscal stimulus measures necessary in India to fight COVID-19: S&P

“Hope is being able to see that there is light despite all of the darkness.” Those are the golden words of the anti-apartheid activist and African hero <keyword id="169984" type="General" weightage="20" keywordseo="desmond-tutu" source="Orion">Desmond Tutu</keyword> who in Barack Obama’s words could “find humanity in his adversaries”. Tutu <a href="https://www.businessinsider.in/international/news/south-africas-archbishop-emeritus-and-nobel-peace-prize-laureate-desmond-tutu-has-died-at-90/amp_articleshow/88503678.cms">passed away this week</a>, but he has left us inspired to seek hope. Let’s set the anxieties aside for a moment and look at all the things that we already know are gonna be better in 2022. <div type="image" title="There are a few things you can take for granted in 2022" msid="88570942" hostid="261"></div>No one knows what variants COVID-19 will throw up, but we can expect ⁠— in fact, we should demand ⁠— that our political leaders will know better than to downplay the effects of the pandemic and take precautionary measures. Let’s pray there are no election rallies helping the virus mutate further. <div type="image" title="O Micron &amp;amp; O Mitron" msid="88570990" hostid="261"></div>More people are likely to be vaccinated curbing the growth of the virus. We already have one drug for COVID-19 treatment and India has <a href="https://www.businessinsider.in/india/news/govt-panel-allows-emergency-use-of-mercks-new-drug-molnupiravir-for-treatment-of-mild-to-moderate-covid-19-cases/articleshow/88536179.cms">approved its use</a> in case of emergencies. As the virus becomes less severe, more people are likely to travel both for leisure and for work. It may not show up in January or February but over the course of the year, everyone from hotel owners to travel operators, from railways to tour guides and local vendors at tourist destinations can expect a better year, even if it is just a little bit better. Global trade is more likely to pick up pace next year and that would mean the global shortage in everything from <a href="https://www.businessinsider.com/decoding-the-global-shipping-crisis-and-everything-shortage-2021-12">chips and ships to cars and containers</a>, may ease. Again, the darned virus has to remain contained. By the way, did you know, there is a Nutella shortage, as we speak? <div type="image" title="Worldwide shortage of Nutella" msid="88571227" hostid="261"></div>Students craving for the campus feels, particularly those waiting to join foreign universities, people waiting for their <a href="https://www.businessinsider.in/business/auto/news/top-cars-and-suvs-with-the-longest-waiting-period-in-india/slidelist/88393252.cms">new cars</a>, and sales guys waiting to network at ground events have something to look forward to in 2022. Once the movement of people and products eases, the cost of production may ease and corporate profits can then expand without adding to the cost on the consumer. But not everything is getting better. Globally, food prices are very high and they are likely to get worse before they get better. So much so that <keyword id="3149670" type="General" weightage="20" keywordseo="jeffrey-kleintop" source="Orion">Jeffrey Kleintop</keyword>, chief investment strategist at financial services firm <keyword id="149621" type="General" weightage="20" keywordseo="charles-schwab" source="Orion">Charles Schwab</keyword>, has recently argued that the world may even see some social unrest because of this, much like the early part of the 2010s, when food prices were sky high, and we saw it mutate into upheavals in many parts of the world including the Arab Spring. <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">Inflation</keyword> is a worldwide issue now and whenever that happens, <a href="https://www.businessinsider.in/personal-finance/news/investing-in-gold-if-you-dont-want-[%E2%80%A6]-several-ways-to-do-it-digitally/articleshow/85421865.cms">it is safer to invest in gold</a> than other riskier stuff like equities. Many argue that cryptocurrencies are as good as gold, but honestly, the jury is still out on that. Those with more dollars than rupees in their kitty will be better off because the greenback is going to get stronger as America tries to tame inflation. <div type="image" title="Inflation in US" msid="88571280" hostid="261"></div>Unlike in countries like India with large populations of poor people, the current bout of inflation in America and other developed countries, is not entirely bad news. While high inflation hurts poor people in every country, moderate increase in prices that is well managed can actually be a good thing. Why, you may ask? Here’s a short explanation. <div type="image" title="Few things you can take for granted in 2022" msid="88571346" hostid="261"></div>

SIMPLY PUT: There are a few things you can take for granted in 2022

<ul><li>Former <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword> <keyword id="6358908" type="DEFINITION" weightage="20" keywordseo="raghuram-rajan">Raghuram Rajan</keyword> believes that the government’s top priority should be allocating financial resources towards medical supplies required to fight the <keyword id="8829783" type="UNKNOWN" weightage="20" keywordseo="coronavirus-pandemic">Coronavirus pandemic</keyword>.</li><li>He told India Today in an interview that the second priority should be providing assistance to <keyword id="6903191" type="UNKNOWN" weightage="20" keywordseo="poor-households">poor households</keyword>.</li><li>Only when those two things are taken care of should the government think about introducing a monetary or fiscal stimulus to help the economy, Rajan said.</li></ul>Former RBI governor Raghuram Rajan believes that the government’s top priority should be procuring medical supplies to fight the <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">Coronavirus</keyword> pandemic. He said that no expense should be spared in its battle to control the spread of Covid-19. “We need to spend money on medical supplies, ventilators, and masks — on getting protective equipment for medical workers. This means getting resources from private, public, defence, retirement — every resource — and quickly,” Rajan said speaking to India Today. . Rajan explained that even though temporary income support would make sense, the government’s resources are already very limited. “This is not the time to discuss that,” he said about a possible economic and monetary stimulus that the economy might need. However, the finance minister Nirmala Sitharaman on March 24 said that an economic stimulus package would be announced “sooner than later”. She also announced a list of compliances that have been relaxed including delaying IT return filing et cetera. As per Rajan’s list of priorities, the second step should be to address the marginalised sections of the community. Making sure that the livelihoods of poor households — both rural and urban — have enough to sustain themselves. Only when these two critical issues have been addressed, should the government allocate finances towards fixing the economy, according to Rajan. How should the government handle the Coronavirus’ impact on the <keyword id="6356076" type="DEFINITION" weightage="20" keywordseo="indian-economy">Indian economy</keyword>? According to Rajan, everyone is looking at China right now to see if their preventive measures against the spread of Coronavirus will hold. It has already reported a dip of 10% in its GDP during the first quarter. The estimates for Europe and the US also indicate a double-digit fall during the second quarter. When it comes to India, it’s important to make sure that the temporary pandemic shock on the economy doesn’t become a permanent feature, according to Rajan. The downturn of the economy leads to a slowdown in cash flow and takes away the income of workers. He points out that if this carries on for long enough, it could lead to substantial layoffs and firms closing down. “When the Coronavirus is under control, there won’t be a lot of economic activity because those businesses won’t start up again,” said Rajan. He said that even though the government can’t necessarily offer financial support — it can offer partial guarantees and incentivise banks to continue extending credit. See also: <a href="https://www.businessinsider.in/finance/news/no-minimum-balance-use-any-atm-all-the-changes-for-bank-customers-in-india-amidst-coronavirus-related-lockdown/articleshow/74791418.cms">No minimum balance, use any ATM⁠— all the changes for bank customers in India amidst Coronavirus-related lockdown</a> <a href="https://www.businessinsider.in/policy/economy/finance-minister-nirmala-sitharaman-speech-highlights-and-updates/articleshow/74789836.cms">The big announcements from India's Finance Minister Nirmala Sitharaman</a> <a href="https://www.businessinsider.in/india/news/coranavirus-cases-in-delhi-news-and-updates/articleshow/74773842.cms">The third stage of coronavirus spread in India can be delayed but not stopped, says ICMR</a>

Raghuram Rajan says save people before saving the economy

<ul><li>CLSA believes that in the next 18 months, RBI might cut 75 basis points or 0.75% in interest rates. </li><li>It already cut its base lending rate by 1.35% this year. </li><li>CLSA expects base rate to come down to 4.4% by early FY21. </li></ul>The Reserve Bank of India (RBI) will have to take up an extra responsibility—of pushing the slowing growth in the country. In the last few months, central government too had played its part by reducing corporate taxes and other moves. But the sluggish economy might need more impetus, and the government may not have the cash for it. Research firm CLSA believes thatRBI might end up cutting 75 basis points or 0.75% in interest rates in the next 18 months. This will help banks lend more at lower interest rates, which will help push the economy. The banking regulator has consistently cut the rate at which it lends to banks at every monetary policy since February this year. In all, it reduced its repo rate by 135 basis points to 5.15%. But as per CLSA, it will have to come down to 4.4% by early FY21. “Absent fiscal options, the onus for stimulus remains with monetary policy. The government’s fiscal position has already been stretched by the corporate tax cut, which will widen the fiscal deficit by around 0.7% of GDP,” the CLSA report said. To provide a fiscal boost, the government had reduced corporate tax rate to 21.1% from 34.2%. While this came as good news to many companies, the exchequer has to pay for it. It will also translate to tightened budgets of state governments, which will spend less as tax revenue falls. Government is one of the largest spenders across schemes and measures, and is a key driver of the economy. Added to that, private entities are also not keen on expanding as capital goods imports have almost remained steady. Apart from the existing banking crisis which is leaving them weary of lending, corporates too are wary of growth in times when consumption is shrinking. In fact, large FMCG companies are resorting to price cuts to reverse the slowing trend. “Consumption prospects are clouded by declining rural real wage growth. On RBI’s estimate of sticky 3.8% nominal wage growth for rural labourers over the last 12 months, the rising inflation measure for rural labourers means their real wage growth has turned negative,” the CLSA report said.

India is fast running out of cash to boost the economy-- putting the onus on RBI

<ul class="summary-list"><li><keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s gross domestic product may rebound to 8.5% in 2022 before suffering a "deep contraction" in this fiscal year, according to <keyword id="30287" type="CITY" weightage="60" keywordseo="SP">S&amp;P</keyword> Global Ratings.</li><li>Despite India's $264 billion economic <keyword id="45304" type="COMPANY" weightage="60" keywordseo="Stimulus">stimulus</keyword>, or about 10% of its GDP, the country's migrant laborers and struggling communities are enduring critical troubles.</li><li>A direct cash-transfer benefit reform enabled Prime Minister Narendra Modi's government to deliver stimulus funds to the needy, but tens of thousands amongst those deprived do not have access to digital payments accounts.</li><li>Meanwhile, a forgotten social community has been wiped off of India's <keyword id="48933" type="PERSON" weightage="60" keywordseo="population">population</keyword> data and has failed to secure a government representative on the presumption that their numbers have dwindled to a mere 296.</li></ul>India's economy is likely to rebound by 8.5% in 2022 after suffering a deep contraction in the current fiscal year, according to S&amp;P Global. However, the world's fifth-largest economy is faced with both a migrant crisis of epic proportions and community distress as tens of thousands struggle to persevere during the pandemic in one of the world's most populous nations. The credit ratings agency affirmed a "BBB-" rating on India which represents a relatively low-risk investment and held its "stable" outlook.Real gross domestic product will shrink 5% by the end of fiscal 2021, S&amp;P said. In 2020, GDP fell to an 11-year low of less than 5%. Aspects that will support India's economic rebound include the country's "wide range of structural trends, including healthy demographics and competitive unit labor costs," S&amp;P said. If implemented efficiently, economic reforms could support the rebound.<h2>Downside risks</h2>On the other hand, India's recovery could be hampered by "a serious local epidemic, enduring financial and corporate distress in India, and long-lasting global economic malaise." A sharp rise in national debt is expected this year as the government reels out more stimulus to address the pandemic while dealing with weak revenue generation, but S&amp;P expects its fiscal position to return once a global recovery stabilizes.<h2>Focus on containment and mitigation </h2>In May 2020, the Indian government announced a <a href="https://www.businessinsider.com/goldman-sachs-india-economy-recession-gdp-decline-45-percent-q2-2020-5">$264 billion stimulus package</a>. Out of that, S&amp;P said direct government spending will be less than 1% of GDP, while maximum relief will be directed by India's banking sector through loan guarantees and credit support.S&amp;P expects India's trade position to remain unchanged in the next 12 months as the economy sees a collapse in exports, a steep fall in the central bank's foreign exchange reserves, and a sustained rise in the current account deficit. A direct benefit transfer reform enabled Prime Minister Narendra Modi's government to deliver stimulus funds to over 300 million at-risk individuals, but many more still struggle to avail of the benefits. Particularly so for migrant laborers who do not own digital payments accounts. Many villagers who migrated to cities for higher-paid jobs were <a href="https://www.bbc.co.uk/news/world-asia-india-52672764">forced to travel back home to rural areas</a> once the nationwide lockdown rendered their daily jobs redundant. More recent governmental measures are aimed at supporting non-bank financial institutions and small-and-medium enterprises, S&amp;P has said.<div type="image" title="GettyImages 1220015157" height="683" width="1024" msid="76492591" hostid="261"></div><h2>Social conditions dependent on labor <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword></h2>S&amp;P says prominent incidents of social unrest related to "high-profile legislative decisions" in the past two years have not "materially" dented support for the ruling national political party.Laborers in the economy live and work in dense networks of people. For this reason, the government has addressed the threat of a widespread outbreak amongst these workers, but even if that's achieved, S&amp;P says both the informal and formal labor markets will find it arduous to restore swiftly. S&amp;P projects that if unemployment remains elevated for a long time, "pockets of social unrest could emerge" and dampen India's investment and growth. <h2>Crises persist for a social community left in the lurch</h2>In another troubling sign for India's employment numbers, one considerably-large social group in the country is noticeably unidentifiable on its population data: the Anglo-Indian community.With its distinct line of ancestry built during the time of colonial rule, the minority Anglo community is eliminated on paper and stripped of its identity within India's demographics.A sizable number of Anglos in North East India have been significant contributors to the oil, railways, and tea industries of the region. They also helped set up well-recognized academic institutions across the country.Over the decades, those who could afford to migrate to other countries did so and left behind thin numbers, leading to an almost hidden presence.Consequently, many remain homeless and rely on sundry charity for survival. A lack of government attention has made Anglo families perish. To make sure the community did not suffer harsh neglect post-independence, the government made a provision to nominate two members of the Anglo community to parliament. That came to an <a href="https://www.deccanherald.com/national/no-more-anglo-indian-to-be-nominated-to-ls-assemblies-784146.html">end in January 2020</a>. <div type="image" title="GettyImages 1216711988" height="681" width="1024" msid="76492592" hostid="261"></div><h2>Lack of political representation for the lost group</h2>Representing a mix of British and Indian heritage, the Anglo Indians no longer have a government representative on the assumption that their <a href="https://www.telegraphindia.com/india/anglo-indian-appeal-on-nominated-members/cid/1725605">numbers have dwindled to a mere 296</a>. Owing to their geographic dispersion all over the country and since the community has <a href="https://www.theguardian.com/world/2019/apr/16/the-two-mps-of-british-descent-who-do-not-have-to-stand-in-indian-election">never been counted separately</a> under the <keyword id="6372870" type="UNKNOWN" weightage="60" keywordseo="census">census</keyword>, no one is certain of the true number. A plea to count members of the Anglo community separately was earlier made, and ignored by a bureaucratic quirk. Census information is handy for when governments and health providers need to trace people that require help when disasters such as the coronavirus hit the economy.Anglo-Indian families have been uprooted and are left out of the "New India," according to Geoffrey Farnham, a member of a local Anglo community group in north-east India. Relief meant for welfare and upliftment never reached their community in the north-east region, he said.Their alienation by the central government is so complete, that members of the Anglo community in the North East had no idea they had political representation at all, said Farnham, whose grandfather fought in the 1916 Battle of the Somme as a major in the British Army.Although a bill for the extension of political representation exists, the plea has been held off on grounds of other pressing matters to be dealt with.<h2>Road ahead</h2>With the pandemic still in the early stages, the scale and duration of the crisis remain uncertain, S&amp;P said. Similarly, India's social, health, and economic progress is unpredictable. If containment measures against the virus prove successful, the country could solidify its political and social stability, according to the ratings agency. "In our view, India's economic outlook remains bright, so long as emerging weaknesses are addressed before growth rates fall much further," Andrew Wood, director of S&amp;P's Asia Pacific sovereign ratings said. "The course of India's pandemic will play an important role in determining the strength of its economic recovery."

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FPIs withdraw nearly Rs 20,000 crore from equities in the last 5 trading sessions, make a beeline for China and US

BI India Bureau

Banks respond positively to Indian central bank’s COVID stimulus package – check out the list of top gainers

Rounak Jain

Analysts welcome RBI stimulus measures

PTI

COVID patients can get bank loans for treatment after Indian central bank’s fresh set stimulus measures

Sriram Iyer

Here's a breakup of Narendra Modi's ₹20 lakh crore stimulus⁠— RBI measures make up for nearly half of it

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India Inc expects growth to rebound in next quarter on stimulus measures

PTI

More fiscal stimulus measures necessary in India to fight COVID-19: S&P

PTI

SIMPLY PUT: There are a few things you can take for granted in 2022

Raghuram Rajan says save people before saving the economy

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India is fast running out of cash to boost the economy-- putting the onus on RBI

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India's GDP is likely to rebound to 8.5% in 2022, S&P says, but a forgotten community struggles to find any glimmer of hope

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