Business Economics & Services Team (Best)
Economics
& Investment Highlights (4)
1. 1.
Trade deficit Widens
Trade deficit of India has widened to a 16
month record level riding on the back of increased import of gold. Exports for
the month of November 2014 grew by 7.2% after 8.5% contraction in October 2014 mainly
due to increased exports of textiles, garments,
gems and jewelry etc. At the same time,
imports were up 26.8% in November 2014 to US $ 42.8 billion , leaving a trade deficit
of US$ 16.9 billion. This increased trade deficit will widen the current
account deficit of the third quarter of the current fiscal year. At the same
time, one has to fact in the steady slide of the oil prices, which the experts
predict may continue for some more time, offsetting the increased trade
deficit.
2. 2.
New arbitration Clause to inserted in Indian
trade treaties
Concerned by increasing number of arbitration
cases that the individuals and companies are resorting to, the Government of
India is likely to incorporate a provision to the effect that it will not allow
foreign companies to drag India to arbitration on issues settled by a judicial authority.
A draft cabinet note has been circulated by the finance ministry for changing the
draft guidelines for the bilateral investment treaties.
3. 3.
Inflation falls to zero level in November 2014
Triggered by dramatic fall in the whole sale
prices of food and fuel, the whole sale inflation has flattened to zero level,
according to the government sources. Many feel that it is the ideal time for
the RBI governor to revisit the demand of the industry to cut the interest rate
to jump starts the economy, when he reviews the monetary policy in the first
week of February 2015. But many feel that the RBI governor will have to take cognizance
of many factors including inflationary expectation, oil prices at that time,
current account deficit and most importantly, fiscal deficit.
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