1. Centre Grants Rs 17,000 Cr to States to Tackle COVID-19 Crisis
The Centre on Frida, 3 April, released Rs 17,287 crore to different states to augment their financial resources to combat the coronavirus crisis.
While the home ministry approved an advance release of Rs 11,092 crore to all states under the State Disaster Risk Management Fund (SDRMF), in line with the assurance given by PM Narendra Modi to CMs on Thursday, the finance ministry said Rs 6,195 crore was transferred on account of “revenue deficit grants”, which were part of the 15th Finance Commission recommendations for 14 states, including Andhra Pradesh, Kerala, Punjab, Tamil Nadu, and West Bengal.
(Source: The Times of India)
2. Rupee Falls to Near Record Low Against US Dollar
The Indian rupee fell against the US dollar on Friday, 3 April, dragged down by selling pressure in domestic equity markets. Domestic bond yields also spiked after the government announced aggressive borrowing plan for the first half of this year.
The rupee fell to 76.37 at day's low before closing at 76.19 after opening weaker at 76.05 per US dollar. The rupee had settled at 75.60 against the US dollar on Tuesday. Forex markets in India were closed on April 1 for the annual closing of banks and on 2 April on account of Ram Navami.
Domestic stock market index Sensex fell nearly 700 points today weighed down by selling pressure from foreign investors, who moved out record money out of Indian markets in March.
3. Power Sector on Alert to Ensure Grid Stability After PM Modi Address
Ending many hours of suspense, Prime Minister Narendra Modi addressed the nation through a video message at 9 am on Friday, 3 April, urging the public to switch off the lights for 9 minutes at 9 pm on April 5 and light candles instead. If not candles, torches and mobile flashlights too can be used across balconies and gates to show solidarity in the fight against coronavirus.
While the PM’s appeal may have dashed many hopes, it sent the power ministry into a huddle as this could lead to a significant drop in electricity demand. However, the power ministry said the event would not impact the national power grid much and that planning would be done in advance.
(Source: Business Standard)
4. RBI Changes Timings For Currency, Debt Markets From Next Week
The Reserve Bank of India on Friday, 3 April, announced changes in timings for currency and debt markets with effect from Tuesday due to outbreak of coronavirus (COVID-19). Currency and debt markets will open at 10:00 am and close at 2:00 pm till 17 April, the Reserve Bank of India said in an official notification.
"The unprecedented situation created by the COVID-19 outbreak has necessitated lockdowns, social distancing, restrictions on movement of people and non-essential activities, work from home arrangements and business continuity plans. The resultant dislocations have adversely impacted the functioning of financial markets. Staff and IT resources have been severely affected, posing operational and logistic risks. The thinning out of activity is impacting market liquidity and increasing volatility of financial prices," RBI said in the notification.
Currently, currency and debt markets open at 9:00 am and close at 5:00 pm.
5. India Seeks $6 Billion in Loans from ADB, AIIB to Fight COVID-19
India is seeking as much as $6 billion of loans from multilateral institutions such as the Asian Development Bank to bolster its efforts to fight the coronavirus outbreak, people with knowledge of the matter said.
The World Bank has already committed $1 billion, while Prime Minister Narendra Modi’s government is in talks with Asian Infrastructure Investment Bank and ADB, the people said, asking not to be identified because the details haven’t been finalised.
India needs to rapidly scale up testing for the virus to head off the disease from infecting more people in the world’s most populated nation after China. Proceeds including from the World Bank will be used to acquire testing kits and ventilators, turning hospital beds into intensive care unit beds as well as for buying personal protective equipment for health care workers.
6. Startups Face Slump in Sales Amid Lockdown
Startups in fast-growing consumer categories such as fashion, beauty and furniture are struggling with a slump in demand as consumers pare discretionary spending while the ongoing nationwide lockdown disrupts operations.
The 21-day nationwide lockdown by the government to contain the outbreak of the novel coronavirus has upset the supply chains of e-commerce and other companies that are slowly starting to resume normal business. Only essential products such as groceries and medicines are currently being sold on most platforms.
7. First Time in 20 Years: Direct Tax Mop-Up Declines Over 8%
Amid the ongoing economic slowdown, the government’s net direct tax collections have missed the downward revised target for 2019-20 by Rs 1,42,000 lakh crore at Rs 10,27,000 lakh crore, a decline of over 8 percent from previous year’s receipts.
The contraction in direct tax collections in the financial year, coming just ahead of the COVID-19 spread in India and resultant lockdown impacting business operations across the country, has been witnessed after a gap of 20 years. The Centre’s direct tax receipts had last seen a year-on-year decline in 1998-99, when collections recorded a contraction of 3.5 percent in that financial year.
(Source: The Indian Express)
8. Fitch Sees India GDP Growth In FY21 At 2%
India may post GDP growth of 2 percent in financial year 2021, the slowest pace since the economy was liberalised 30 years ago, Fitch Ratings said on Friday, 3 April, as it joined a chorus of international agencies that have made a similar cut in growth estimates in recent days on concerns about the fallout of COVID-19 outbreak.
Asian Development Bank (ADB) sees India's economic growth slipping to 4 percent in the current fiscal (April 2020 to March 2021), while S&P Global Ratings earlier this week further slashed its GDP growth forecast for the country to 3.5 percent from a previous downgrade of 5.2 percent.
India Ratings & Research too has revised its FY21 forecast to 3.6 percent from 5.5 percent earlier.
9. US Economy Sheds 7 Lakh Jobs In March Amid Pandemic
The US economy shed 701,000 jobs in March amid the damage inflicted by the coronavirus shutdowns, while the unemployment rate surged to 4.4 percent, the Labor Department reported Friday, 3 April.
That was the worst job loss since March 2009 during the depths of the global financial crisis, and the biggest jump in the jobless rate in more than 45 years, the report said.
However, the Labor Department acknowledged it "cannot precisely quantify the effects of the pandemic on the job market in March."
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