At 9.9%, India to be Fastest Growing Asian Economy in 2021: Nomura

Global investment bank Nomura has projected India to be the fastest growing Asian economy in 2021, with an estimate of 9.9% GDP growth in the coming calendar year.

The brokerage turned positive on India’s cyclical outlook saying near-term risks of a resurgent pandemic unlikely to derail growth, Nomura’s chief India economist, Sonal Varma, said.

“We have a positive view on India's cyclical outlook, we are pencilling in a GDP growth rebound to 9.9% (in 2021) versus -7.1% in 2020. Near term, virus resurgence is a risk but we don't think this would derail the cycle, which we believe is set to accelerate further,” Varma said during a conference call on Wednesday.

Nomura believes India is on the cusp of a cyclical recovery as it projected GDP growth at 32.4% in the first quarter of the coming fiscal on the back of a low base that will ease to 10.2% in the next quarter, its Asia 2021 Outlook report released on Tuesday said.

Three factors supported the positive outlook that was last changed to negative at the end of 2018, according to Varma. “One, the lag effects of easy financial conditions. Second, the synchronised global recovery and third, the vaccine pivot point, which for India, we think, will come in the third quarter (July-September) of next year.”

“These factors in our view should lead to pent-up activity and catch-up in some of the lagging sectors like consumption and services as the year progresses,” Varma added.

Nomura defined the vaccine pivot point as the point at which vaccines start to become more widely available and show demonstrative success.

China gave 5 differing reasons for deploying troops: Jaishankar

External affairs minister S Jaishankar said China had given India as many as 5 “differing explanations” for heavy deployment at the LAC and that the Sino-Indian relationship was passing through the “most difficult phase” because of Beijing’s violation of bilateral agreements. He also said the Galwan clashes in June, which resulted in the death of 20 Indian soldiers, had completely changed the national sentiment.

“We are today probably at the most difficult phase of our relationship with China, certainly in the last 30 to 40 years,” Jaishankar said during an online interactive session organised by Australian think tank Lowy Institute. The relationship this year has been very significantly damaged, he said.

Jaishankar said the “very big issue” now was how to get the relationship back on track. “We are very clear that maintaining peace and tranquillity along the LAC is the basis for the rest of the relationship to progress. You can’t have the kind of situation you have on the border and say let’s carry on with life. It’s just unrealistic,” he said.

“We have this problem because from 1988, our relationship had its hiccups, we had our issues and differences but the direction of the ties broadly were positive,” he added. He said the relationship progressed in trade, travel and various other domains as both sides inked several pacts to maintain peace and tranquillity along the LAC.

He said multiple agreements were inked from 1993 with a commitment that both parties will not bring a large number of troops to the border areas. “Now for some reason, for which the Chinese have given us five differing explanations, the Chinese have violated it ...Naturally the relationship would be profoundly disturbed by this,” he said.

November 2020: Services Expand But a Tad Lower Than in October

India’s service sector expanded for the second month in a row in November, although at a slower pace than the previous month, and employment rose for the first time in nine months.

The IHS Markit India Services Business Activity Index was 53.7 in November, above the critical 50 mark that separates growth from contraction, but lower than 54.1 in October.

The overall level of positive sentiment climbed to the highest since February amid predictions that market conditions would normalise once a vaccine for Covid-19 is rolled out.

“The Indian service sector continued to recover from the coronavirus-induced contractions recorded from March through to September... There was also an improvement in business confidence, which bodes well for employment over the coming months,” said Pollyanna De Lima, economics associate director at IHS Markit.

The upturn in total new work was driven by the domestic market, with new export orders decreasing sharply again in November. The latest fall in international sales, the ninth in consecutive months, was attributed to subdued global demand and travel restrictions.

Sub-sector data showed the transport & storage category as the best-performing in November, with output and sales growth rates surpassing those in consumer services and finance & insurance. Information & communication and real estate & business services saw a reduction in new orders and activity, according to the survey.

A sister survey showed the IHS Markit India Manufacturing Purchasing Managers’ Index falling to a three-month low of 56.3 in November from an over 12-year high of 58.9 in October.

Put together, Indian private sector activity rose for the third straight month in November, but the pace of growth softened from October’s near nine-year high. The Composite PMI Output Index was down to 56.3 from 58 in October as rates of increase eased at manufacturers and service providers.

Spice King & MDH founder Gulati passes away

In January last year, when Mahashaya Dharampal Gulati found out that he had been awarded the Padma Bhushan, the king of spice celebrated with rabri and milk. It was a rare indulgence in an otherwise disciplined lifestyle. Gulati attributed the secret of his long life to spartan food habits, regular exercise and laughing often and hard. On Thursday morning, the resounding laughter fell silent when the 97-year-old passed away in a Delhi hospital following post-Covid complications.

“Mahashaya ji was diagnosed with Covid on November 2 and he recovered. But his cough persisted so we admitted him to hospital again. He suffered a heart attack on December 2 and multi-organ failure soon after,” said Rajinder Kumar, executive vice-president of Mahashian Di Hatti, the spice brand created by Gulati. Gulati was in good spirits and spent his time making video calls to family.

Cap on domestic flights hiked to 80%

The Civil Aviation Ministry on Thursday increased the cap on domestic flight capacity from 70 per cent to 80 per cent.

India had suspended flights from March 25 as part of a stringent lockdown. On May 25, airlines were allowed to resume domestic operations with 33 per cent capacity, while international commercial operations are still suspended. “The industry can now operate 2,508 flights daily. Passenger numbers will also cross 3.4 lakh,” said Ameya Joshi, founder of aviation website Network Thoughts.

Farm laws: No breakthrough in talks

Talks between three union ministers and a representative group of thousands of agitating farmers failed to yield any resolution on Thursday, as the union leaders stuck to their demand for the repeal of new farm laws and even refused the lunch, tea and water offered to them during almost eight-hour-long hectic parleys.

On its part, the government assured the group of nearly 40 farmer leaders that all their valid concerns would be discussed and considered with an open mind, but the other side flagged several loopholes and deficiencies in the laws, which they said were passed hastily in September.

Agriculture Minister Narendra Singh Tomar, who led the government side at the fourth round of talks at Vigyan Bhawan, later told reporters that the next meeting will take place on Saturday at 2 pm which he hoped would take the matter to a decisive stage and towards a resolution.

He also said there is “no ego involved” and the government has agreed to “discuss and consider with an open mind” some major points of concerns among farmers about the three new laws, including on strengthening of the APMC (Agriculture Produce Marketing Committee) mandi system, tax parity with proposed private mandis and freedom for farmers to approach higher courts for any dispute resolution.

He said the Narendra Modi government is committed to continuing, improving and expanding the procurement process at MSP (Minimum Support Price).

Union leaders, who came out of the meeting venue shouting slogans, said the talks remained deadlocked and some of them threatened to boycott any further meetings if no solution was found at Thursday’s meeting.

“Discussions are over from our side. Our leaders have said they will not attend further meetings if a solution is not given today by the government,” said Pratibha Shinde, AIKSCC (All India Kishan Sangharsh Coordination Committee) working group member and president of Lok Sangharsh Morcha, which represents farmers of Maharashtra and Gujarat.

They also did not accept tea and water offered to them during the meeting.

The previous round of talks took place on December 1, but had ended in a stalemate as farmers rejected the government’s suggestion of a new committee to look into their issues.

Akali Dal stalwart and former Punjab Chief Minister Parkash Singh Badal on Thursday returned his Padma Vibhushan award in protest of the new farml aws.

Dissident Akali leader and Rajya Sabha member Sukhdev Singh Dhindsa also said he will return the Padma Bhushan conferred on him last year.

Badal’s move follows over two months after his Shiromani Akali Dal pulled out of the BJP-led NDA at the Centre, protesting against the three laws which deregulate the sale of crops.

Spelling more trouble for the BJP, its coalition partner JJP demanded the withdrawal of cases registered in Haryana against farmers who participated in “Delhi Chalo” march.

Jannayak Janta Party leader Digvijay Singh Chautala said the cases must be withdrawn to ensure that the situation does not worsen and no mistrust is crated between farmers and the government.

Meanwhile, agitated farmers on Delhi-Uttar Pradesh border near Ghazipur failed to enter the national capital by breaking the barricades after the police used lathis to disperse the crowd that tried to break through ad climb over barricades.

Thousands of farmers protesting against the Central farm laws have laid siege at Ghazipur border and on the Delhi-Meerut Expressway in a bid to enter the national capital. The crowd swelled after around 100 tractors reached the protest site at noon.

Police on Thursday closed routes on two national highways connecting Ghaziabad to Delhi as farmers stayed put at the national capital’s borders with Haryana and Uttar Pradesh.

Mumbai: To build MTHL, 454 trees to face the axe

Mumbai’s dwindling green cover is set to suffer another blow. At least 454 trees will be chopped—and 550 others will be transplanted—to make way for the Mumbai Trans Harbour Link that will connect Sewri with Nhava Sheva in Navi Mumbai via a 22-km, six-lane bridge over the sea.

The BMC’s Tree Authority gave permission to the MMRDA on Wednesday to cut the trees. The MMRDA had approached the Tree Authority for this in June 2018. The paperwork for it was completed two months ago.

The initial proposal was to axe 1,172 trees, but the number was later dropped to 1,004. MMRDA officials said they will plant 2,000 trees in three villages of Vasai in lieu of the 1,004. Sources said the 454 trees that will be cut include species like peepal, Ashoka, gulmohar, cherry and tamarind.

The sources said the cutting of trees is likely to begin early next year.

Transplantation procedures aren’t always successful. Physical damage, downsizing and a new environment can cause ‘stress’ in trees and saplings and can reduce their growth considerably. So, it’s too early to say how the 550 trees that will be transplanted would fare.

Environmentalist D Stalin accused state agencies of launching concerted efforts to “butcher” trees.

The MTHL’s construction is expected to be completed by September 2022.

Recently, the MMRDA awarded a contract to build an elevated corridor over railway lines and a few bridges for Rs.1,276 crore, which will connect with the MTHL at Sewri on the east and the coastal road in Worli.