December 2019: Manufacturing PMI Rises to 52.7

India’s manufacturing activity in December expanded to the highest level in the past seven months as a rise in factory orders boosted production and employment.

Despite a strong finish to the year, the degree of optimism was at its weakest in just under three years, reflecting worries about the pace of recovery.

The IHS Markit India Manufacturing Purchasing Managers’ Index rose to 52.7 in December from 51.2 in November. The figure matched the reading for May and was the ‘joint-strongest’ in the past 10 months. The index reading was 54.3 in February last year.

A reading of over 50 on this survey-based index indicates expansion, while a lower figure signifies contraction.

This is first set of upbeat data in many months for the Indian economy, which expanded at a six-year low of 4.5% in the July-September quarter.

However, due to a weak performance in October and November, the average reading for the third quarter was the lowest since the three months ended September 2017, the report showed. Capital goods, an indicator of investment activity, remained in contraction.

The manufacturing indicator comes before the government releases the first advance estimates of economic growth for 2019-20 on January 7. At the sub-sector level, growth was led by consumer goods, though intermediate goods also made a stronger contribution to the headline figure.

The PMI is based on a survey of purchasing executives in more than 400 companies, which are divided into eight broad categories — basic metals, chemicals & plastics, electrical & optical, food & drink, mechanical engineering, textiles & clothing, timber & paper, and transport.

The survey report showed that goods producers resumed hiring efforts in December, buoyed by strengthening underlying demand.

New Delhi: Central Vista Redo to Free up 75 Acres of Public Space

The initial contours of Central Vista redevelopment plan reveal 75 acres of land would be freed up in the heart of Delhi to be developed as aesthetic public space. The redevelopment could mean razing 10 government buildings, including Shastri Bhawan, Udyog Bhawan, Krishi Bhawan, Vigyan Bhawan, Vice-President’s House and Lok Nayak Bhawan.

The project to redevelop Lutyens Delhi will include construction of a common central secretariat complex, a new Parliament building and redevelopment of Central Vista with an underground metro line connecting all the complexes. Here’s a look at the rough draft of the plan:

The first draft indicates that rather than occupying more space, the new plan would free up about 75 acres of land for public use. A common central secretariat complex of 8-10 buildings would come up on either side of Rajpath with entries opening towards Rajpath side. The ministry of housing and urban affairs, the nodal ministry for the mega project, has clarified that no heritage building would be touched to make way for the project.

The government is holding stakeholder consultations to take everybody on board. The biggest hitch is razing old buildings. There is absolute clarity on razing buildings like Shastri Bhawan, Udyog Bhawan, Krishi Bhawan, Vigyan Bhawan, Vice-President’s House and Lok Nayak Bhawan. However, there is much debate on the relatively new Jawaharlal Nehru Bhawan housing the ministry of external affairs. It was inaugurated in 2011. The ministry is still debating over National Museum, opposite Jawaharlal Nehru Bhawan. The architects and conservationists have been pointing out that National Museum is a heritage building and should not be razed.

As per government’s estimates, it is paying ₹1,000 crore as rent annually for its offices spread across Delhi. This is the main logic for a common central secretariat. The complex is being planned with separate sevenfloor buildings. All buildings would have access to the underground metro with pedestrian subways. The first draft also indicates that the government would not have to bring any changes in Lutyens Bungalow Zone provisions or the Master Plan as the height of the new buildings would not be higher than India Gate.

The first draft of the plan envisages a triangular shaped Parliament building. Lok Sabha would have the capacity to seat 900 MPs. It is being planned as the House which would host a joint sitting of both Houses of Parliament (which now take place in Central Hall). Each MP would have his own chambers with space for researchers and staff. Right opposite this would Prime Minister’s residence and office. Close to the entire complex would be Vice-President’s House.

The project is being likened to opening up palaces to the common people. “More public space would be created,” a senior official involved with the project said. While North and South Blocks would be made into museum, hutments behind South Block and next to Rashtrapati Bhawan would be removed to give way to a bio diversity park.

The government is moving with alacrity on the project. Though it had earlier planned to float tenders in May 2020, now it would start the tendering process next month. Simultaneously, it would begin the clearances process. It would need clearances from environment ministry, Delhi Urban Arts Commission, New Delhi Municipal Council, traffic police, Delhi Fire Service and other authorities.

First Railway fare hike in 5 years

In its first fare hike in five years, the railways announced an increase in passenger charges that will see ticket prices rise by Rs.55-60 if you travel between Delhi and Mumbai or Kolkata on a Rajdhani from Wednesday. However, suburban train fares were not touched.

Though the fare increase is modest, in the range of 1-4 paise per km for different classes of travellers, the railways expects to generate about Rs.2,300-crore additional annual revenue at a time when its finances are under acute stress.

A hike had become pressing considering revenue shortfall during this fiscal (up to November-end) was close to Rs.20,000 crore. The operating ratio increased to 121% till November-end during the current fiscal as compared to 113% in the same period in 2018-19. Operating ratio is the amount spent to earn Rs.100, a higher ratio indicating poor financial health. However, suburban passengers and season ticket holders have been excluded from the hike.

With nearly two-thirds of the passenger traffic accounted for by suburban rail, the segment accounts for a large share of losses for the state transporter.

Those who have already pre-booked the tickets won’t have to pay extra. “Long- distance passengers travel more occasionally and since the hike is minimal, it won’t pinch them in a big way,” said a railway ministry official. The railways claimed suburban passengers have been left out, keeping the “affordability concerns of daily commuters”.

According to a statement, the increase in fare per km is 1 paisa for ordinary non-suburban classes (second class ordinary, sleeper class ordinary, first class ordinary) and 2 paise for mail/ express trains in non-AC class (second class mail/ express, sleeper class mail/ express, first class mail/ express).

The hike for all AC tickets across trains will be 4 paise per km applicable for Rajdhani, Shatabdi, Duronto, Vande Bharat, Tejas, Garib Rath, Antodaya and Jan Shatabdi trains.

GST collection over ₹1 lakh cr in December

For a second time in a row, the GST revenue collection remained above the Rs.1 lakh crore mark with December mop-up at Rs.1.03 lakh crore indicating a pick-up in consumption.

GST collection in November stood at Rs.1,03,492 crore. Before that it was in July when the mop-up crossed the Rs.1 lakh crore mark at Rs.1.02 lakh crore. The GST collection stood at Rs.94,726 crore in December 2018, as per an official statement.

According to official sources, the GST revenue last month reflects a pick-up in consumption and improvement in compliances. “The GST revenue during the month of December 2019 from domestic transactions has shown an impressive growth of 16 per cent over the revenue during the month of December 2018,” the statement said.

If we consider Integrated Goods and Service Tax collected from imports, the total revenue during December 2019 has increased 9 per cent in comparison to the revenue same month a year ago, it said. In December 2019, it said, the IGST on import of goods has seen a negative growth of 10% , but is an improvement over 13 per cent de-growth in November, it added.

Of the gross Rs 1,03,184 crore last month, CGST is Rs.19,962 crore, SGST is Rs.26,792 crore, IGST is Rs.48,099 crore (including Rs.21,295 crore collected on imports) and Cess is Rs.8,331 crore (including Rs.847 crore collected on imports), the statement said.

110 tigers died during 2019

The country lost 110 tigers in the year just gone by. The year also saw death of 491 leopards, as per figures compiled by Wildlife Protection Society of India. While poaching was the key reason behind tiger mortality, road and rail accidents accounted for most of the leopard deaths.

In case of tigers, there is a marginal rise in numbers compared to 2018 when 104 tiger deaths were recorded including 34 due to poaching.

In 2019 too, 38 of the 110 deaths have been attributed to poaching. Like last year, Madhya Pradesh continues to lead the tally with 29 tiger deaths followed by Maharashtra with 22. In 2018 MP saw deaths of 23 tigers followed by 19 in Maharashtra.

However, the official database of National Tiger Conservation Authority differs with the figures. NTCA has recorded 92 tiger deaths in 2019 while it was 102 in 2018. Tito Joseph, programme coordinator of WPSI, which works for wildlife crime enforcement, says poaching and seizure of body parts of tigers had slightly increased since last year.

The difference in NTCA data may be due to non-inclusion of figures derived from seizure of body parts. “We calculated the number of tigers depending on seizures, which may not necessarily belong to one individual only,” Joseph said.

For example, in Maharashtra official figures record deaths of 18 tigers but it doesn’t include three tigers poached in Tumsar range under Bhandara division in July 2019. The arrested accused confessed they killed three tigers there. This may be the case elsewhere.

“There are certain corrections which will be communicated to the headquarters after verification from divisions concerned. Some mortalities were not communicated by states to the NTCA,” NTCA officials said. “As far as Tumsar tigers were concerned, the number has been split in MP and Maharashtra as some body parts were seized in MP,” they said.

Of the 110 deaths in 2019, 38 were attributed to body parts seizure and poaching, 26 were found dead, 36 died due to infighting, three due to road/rail accidents and six during rescue. “Improving intelligence-led enforcement, addressing impact of linear intrusions and conflict management can help keep viable populations of tigers,” Joseph said.

The year saw a marginal drop in number of leopard deaths. Though NTCA doesn’t have a database on leopard deaths, WPSI data shows in 2018, 500 leopards had died countrywide which included 169 due to poaching. There was no let-up in poaching of leopards in 2019 too as 127 of 491 deaths were attributed to this reason.

Maharashtra this year accounted for 97 leopard deaths. As many as 31 of these were in road and rail accidents.

Car sales dip most in 2 decades in 2019

Indian auto industry wrapped up one of its most difficult periods in the year 2019 as sales of cars and SUVs went into a free fall, witnessing the biggest decline in over two decades as rising uncertainties, difficult financing, and the economic slump kept buyers away despite heavy discounts. Such had been the pressure that the numbers fell despite the entry of new brands such as Kia Motors and MG Motor, which surprisingly managed a strong opening even in a difficult market.

According to numbers sourced from the industry, sales of passenger vehicles — a cumulative of cars, vans and SUVs — fell below the psychological 3-million mark in 2019, after crossing the figure for the first time in 2017. The decline was led by the top brands that included Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors, Honda and Toyota.

The recipe for slowdown has been in the making since the middle of 2018 when numbers had actually started falling. The declines began to get deeper, and sharper, in the coming months and rather got more pronounced in 2019 as economic growth came under pressure and political uncertainties, with relation to the national elections, started growing. And, as liquidity pressures started mounting after the NBFC crisis and issues such as unemployment became severe, the industry started collapsing. Adding to the conundrum was the confusion around the migration to BS6 emission regime from April 2020 from the existing BS4.

Maruti — which also flags rising vehicle prices as a depressant — was able to hold on to its 50% share of the market, but feels that the industry still remains “cautiously optimistic”.

Modi greets neighbourhood leaders on New Year

On the first day of the new year, Prime Minister Narendra Modi reiterated India’s commitment to its “neighbourhood first” policy and a “vision of shared peace and prosperity” in telephonic conversations with leaders of all countries in the region — with the exception of Pakistan PM Imran Khan.

The Prime Minister spelled out a commitment to prosperity and progress for all of India’s “friends and partners in the region”.

Sources said the current circumstances in bilateral ties between India and Pakistan didn’t lend themselves to a similar call to Khan though they didn’t rule out an exchange of greetings in some form later.

India’s already stuttering ties with Pakistan further dipped after the abrogation of Jammu & Kashmir’s special status last August, which led to Islamabad launching a diplomatic offensive.

Khan attacked India for the “anti-Muslim” measure and spoke of nuclear conflict in an effort to attract global attention. India’s counter-offensive sent bilateral ties into a deep freeze.

One of the first leaders Modi spoke to was Bangladesh PM Sheikh Hasina, whom he congratulated on being re-elected as president of the Awami League for the next three years. Modi also expressed his condolences on the untimely demise of former high commissioner of Bangladesh to India Syed Muazzem Ali. “He also mentioned the upcoming birth centenary of Bangabandhu and 50 years of the liberation of Bangladesh and establishment of bilateral diplomatic ties besides important milestones to further the progress in close India-Bangladesh ties, a priority of his government,” said an official statement.

The conversation is important in the context of heated politics over the Citizenship (Amendment) Act which has seen frequent references to illegal migrants from Bangladesh and the “persecution” of Hindus in that country.

In his conversation with PM K P Oli of Nepal, Modi expressed satisfaction at the progress of relations in 2019, with the completion of several projects. He specifically noted the completion of the Motihari (India)-Amlekhgunj (Nepal) petroleum product pipeline in record time. They also agreed on early inauguration of the integrated checkpost in the city Biratnagar and the housing reconstruction project in Nepal. Oli tweeted about his conversation in which he said there was mention of the need to address pending issues.

Modi also spoke to Bhutan King Jigme Khesar Namgyel Wangchuck, PM Lotay Tshering, and Lankan President Gotabaya Rajapaksa and PM Mahinda Rajapaksa, and also Maldives President Ibrahim Solih. “The prime minister conveyed his New Year greetings and good wishes on behalf of the people of India and on his own behalf,” added the statement. In his conversation with the Bhutan king, Modi spoke of important achievements that led to further consolidation of ties between India and Bhutan. “The PM fondly recalled his last visit to Bhutan and the love and affection he received from the people there. He also emphasised the need to enhance youth exchanges between the two countries. The PM also mentioned that he was looking forward to forthcoming visit of the king to India,” said the government.

Gotabaya was said to have warmly reciprocated Modi’s wishes and expressed confidence that India and Sri Lanka would further enhance friendly ties in 2020. The two reiterated their commitment to closely work together towards this end. With Mahinda, Modi reiterated India’s commitment to further expand close and extensive cooperation with Sri Lanka. PM Rajapaksa reciprocated the wishes warmly and expressed a keen desire to further enhance relations between the two countries.