(Current Affairs) Economy & Energy | OCTOBER : 2017


Textile exports may be hit by lower duty drawback rate

  • The sharp reduction drawback rates announced by the government for textile and clothing products may slow down exports of these goods, according to the industry.
  • The drawback rate announced for garments is 2% as against 7.7% earlier. In the case of made-ups, it was 7.3% and has been reduced to 2% now.
  • The Excise and Service Tax components have been subsumed under the Goods and Services Tax and only the basic Customs Duty is refunded under the drawback scheme. This was on expected lines. But, the reduction in drawback rates is steep and the GST system is not working as expected, said industry sources. There is a delay in refund of the input tax under GST.
  • Annual textile exports have been stagnant for the last three years at about $37 billion. The reduction in drawback rates will become another contributing factor to slow down exports, said sources.
  • The government should extend the transitional provision for duty drawback and Rebate of State Levies (ROSL) till the end of March next year, said industry representatives.
  • Currently, the ROSL scheme provides for refund of State levies on export goods for garments and made-ups.
  • However, the scheme does not cover the embedded State levies, such as electricity tax and market cess, from fibre to made-ups, he said.

Interest rates, rupee hurting growth

  • Lower interest rates, better exchange rate management and a demand push are imperative to cope with the present economic slowdown that has been led by a slump in the manufacturing sector, a top government official said, hinting that the Reserve Bank of India needed to align its monetary policy to push growth as inflation targets are well under control, despite a spike last month.
  • The remarks assume significance in the backdrop of growth slowing to 5.7% in the first quarter, with the slowdown blamed on the lingering effects of demonetisation and de-stocking by producers ahead of the Goods and Services Tax regime’s roll-out in July.
  • Industry bodies have indicated that a turnaround is only likely in the second half of this year.
  • Once the effect of demonetisation and GST wears off, we should expect to see those sectors picking up. But those sectors have also been affected by the appreciation of the currency. So it’s a combination of one-off factors — demonetisation, GST plus the appreciation of the currency.
  • Pointing to the central bank’s heavy interventions in the foreign exchange market over the last three months to prevent excessive appreciation of the rupee, the official said that the real competitiveness of the currency has improved a little bit because the Chinese yuan has also been strengthening against the U.S. dollar.
  • The Centre’s reservations on the monetary policy adopted by the central bank were articulated in the Economic Survey’s second volume released in August, where it was pointed out that the RBI’s inflation projections have been over-estimated by at least one percentage point for six of the 14 previous quarters and actual inflation had been below target for over ten months (till August).
  • The Survey had said there was room for a 50 basis points to 100 basis points cut in policy rates by the RBI.

Global pact on Trade Facilitation in Services to tap services potential

  • India, which has proposed a global pact on ‘Trade Facilitation in Services’ (TFS) has called for tapping the full potential of the services sector to boost the world economy.
  • Commerce Minister Suresh Prabhu, representing India at the ‘Asia-Europe Meeting’ (ASEM) Economic Ministers’ meeting in Seoul, said Asia and Europe must look at ways to boost services trade, which has a multiplier effect on job creation.
  • India had submitted to the World Trade Organisation (WTO) a proposal for the TFS, aimed at easing norms, including those related to the movement of skilled workers across borders for short-term work, to boost global services trade growth. India is keen that the TFS proposal gains traction before the WTO’s Ministerial Conference in December in Argentina.

SBI unveils bond index at LSE

  • The State Bank of India has introduced the FTSE SBI Bond Index series in partnership with the global index provider FTSE 100, which the bank hopes would give investors from India, U.K. and globally, tools to analyse India’s government bond market, and drive growth in this market.
  • “With the launch of this index along with FTSE Russell, our intention is to give people a benchmark on which they can make investment calls,” said Arundhati Bhattacharya, chairman, SBI, at the unveiling at the London Stock Exchange.
  • “With respect to the Indian government bond market, we didn’t have any international indices on which international investors could take a call as to whether they would like to come in and invest,” she said.
  • There is a lot of capital wanting to come into India. But what we lacked was enough depth in terms of the various types of products it is important to have benchmarks on which people can rely; so, this index, launched in collaboration with the London Stock Exchange, will ensure that international investors have a benchmark that is transparent, well governed and something they can easily rely on.
  • “We have a few products in mind and we are sure that given that India is a very good destination at this point of time for investors that there will be enough interest in in and that people will innovate and have products based on this.”
  • She anticipated products emerging in the next three to five months following necessary approvals. “Even though there may not be products in the interim, we expect it to be used by international investors.”
  • WaqasSamad, CEO of fixed income and multi asset at FTSE Russell said they would be working to develop index products that could “create greater awareness and foster liquidity across the Indian domestic fixed income spectrum.”

Centre to speed up GST refunds

  • The Centre termed as “wild estimates,” exporters claiming that working capital was getting blocked due to delay in Goods and Services Tax (GST) refunds. However, it was working out a mechanism to expedite the refund process.
  • “There are various figures also being discussed on the blockage of such (working capital) funds (post-GST), which are wild estimates.... (and) not based on facts,” an official statement said.
  • Virtually rejecting claims by exporters that about $10 billion worth of funds is estimated to be a blocked (till December 2017) due to the delay in refunds, the Centre said in respect of 66% value of exports, exporters had preferred duty drawback scheme instead of taking actual refund of input taxes in the pre-GST regime.
  • On the mechanism for expediting refunds, it said, “We are trying to find a way of giving refund by linking form (GST Return) GSTR 1 with form GSTR 3B and, therefore, for the month of July, where form GSTR 1 is already filed, the authorities would be in a position to process the refund applications.”
  • Allowing refund based on GSTR-3B and GSTR-1 submission will ease up working capital and business issues for exporters who have had their funds locked up.
  • The Centre said while the GSTN application for refund was getting ready, the Centre was in the process of finding other ways of giving refund, if necessary, through a manual procedure.
  • In the meantime, the State and Union government authorities have been asked to clear the pending refund claims of Central Excise and VAT for the pre-GST period so that exporters will get immediate relief.

SAT pulled up SBI Life for refund delay

  • The Securities Appellate Tribunal (SAT) has pulled up SBI Life Insurance for delaying hearing of the matter related to a refund of Rs. 275.29 crore to policy holders.
  • In March 2014, Insurance Regulatory and Development Authority of India (IRDAI) ordered SBI Life to refund Rs. 275.29 crore which, according to the regulator, was the quantum of excess commission collected from holders of Dhanaraksha Plus Limited Premium Paying Term policy.
  • In 2015, SAT had granted interim relief to SBI Life by directing IRDAI not to take any coercive action to recover Rs. 275 crore till the tribunal passed final orders in the matter. The appellate body imposed costs of Rs. 10,000 on SBI Life for dragging the matter for more than two years after having received a reprieve in the form of a stay on the IRDAI order. The tribunal posted the matter to October 31 for hearing.
  • While the policy had two premium payment options single premium and two-year premium paying plan the regulator found that the corporate agents of SBI Life, that mostly included State Bank of India and its associate banks, did not reveal to the policy holders the availability of single premium option.
  • The share of commission was less in a single premium option when compared with the two-year premium plan.
  • Senior advocate Janak Dwarkadas along with DMD Advocates appeared for SBI Life while IRDAI is being represented by Suvan Law Advisors along with senior counsel KevicSetalwad.
  • Meanwhile, the public issue of SBI Life Insurance, which closed was subscribed 3.58 times with bids received for 31.55 crore shares as against 8.82 crore shares on offer, in the price band of Rs. 685 to Rs. 700.

Mobile operators unhappy with cutting termination charge

  • Terming telecom regulator TRAI’s decision to cut mobile termination charges by 57% “retrograde”, leading telecom operators Bharti Airtel and Vodafone said the move would benefit just one operator and would worsen the financial health of the already stressed industry.
  • They are extremely disappointed with the latest regulation on the IUC, especially at a time when the industry is facing severe financial stress.
  • Bharti added that the interconnect usage charges (IUC) rate of 6 paise fixed by TRAI had “been arrived at in a completely non-transparent fashion and benefits only one operator which enjoys a huge traffic asymmetry in its favour.”
  • The sharp drop in the rate would only help transfer part of “its [the beneficiary operator’s] cost to other operators, thereby further worsening the financial health of the industry.”
  • “This is yet another retrograde regulatory measure that will significantly benefit the new entrant alone while adversely affecting the rest of the industry as a whole,” Vodafone said in a statement. Unless mitigated, the decision would have serious consequences for investment in rural coverage, undermining the government’s vision of Digital India, Vodafone added.
  • While Reliance Communications welcomed the move.
  • With voice calling becoming free, TRAI’s move will provide a level-playing field , Reliance said.
  • While the top operators had pitched for doubling mobile termination charges (payable by the operator whose subscriber makes a call to the operator whose subscriber receives the call) “to recover their cost,” the newer rival had suggested zero charges and shifting to the bill-and-keep regime.
  • Asked about the impact the move may have on the stressed telecom sector, Finance Minister Arun Jaitley said, “I have not had the benefit of reading the full reasoning, so it wouldn’t be appropriate for me to comment... It is for the concerned players to explore whatever remedies are there for them.”

69 anchor investors got shares from SBI

  • SBI Life Insurance Company has allotted 3.18 crore equity shares aggregating to Rs. 2,226 crore as part of the anchor allocation. The shares were allotted at the upper end of the price band at Rs. 700.
  • The anchor allocation saw participation of a total of 69 investors that included HDFC Mutual Fund, Canada Pension Plan Investment Board, ICICI Prudential Mutual Fund, Government of Singapore, Abu Dhabi
  • Investment Authority, Wells Fargo Emerging Markets Equity Fund, Aranda Investments Pte, Reliance Mutual Fund, Birla Sun Life Mutual Fund and Kuwait Investment Authority Fund among others. A total of 14 mutual funds applied through 49 schemes for the anchor portion.
  • Meanwhile, the public issue of SBI Life, which opened, was subscribed 0.9 times on the first day with bids received for 83.66 lakh shares against 8.82 crore shares on offer in the price band of Rs. 685 to Rs. 700 per share. The IPO will close for subscription on Friday.
  • At the upper end of the price band, the issue will mop up Rs. 8,400 crore. Post the public issue, the promoter stake will come down to 84.1% from the current 96.1%.
  • Since 2010, SBI Life has been the country's largest private life insurer, in new business premium generated each fiscal. According to HDFC Securities, in fiscal 2016-17, the company had a market share of individual rated premium of 20.69% among private life insurers and 11.16% of the entire life insurance industry in India.

Peer-to-peer lending platforms will be treated as NBFCs’

  • Peer-to-peer lending (P2P) platforms will be treated as non-banking financial companies (NBFCs) and thus regulated by the RBI.
  • P2P lending is a form of crowd-funding used to raise loans which are paid back with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans.
  • The Reserve Bank of India specifies a non-banking institution that carries on ‘the business of a peer to peer lending platform’ to be an NBFC.
    As per the RBI, the business of a P2P lending platform is defined as the service of loan facilitation, via online medium or otherwise, to “the participants who have entered into an arrangement with that platform to lend on it or to avail of loan facilitation services provided by it.”
  • The RBI had floated a consultation paper in April 2016 on such lending platforms.

Significant oil discovery by ONGC in Arabian sea

  • State-owned Oil and Natural Gas Corp. (ONGC) has made a significant oil discovery to the west of its prime Mumbai High fields in the Arabian sea.
  • The discovery in the well WO-24-3 is estimated to hold an in-place reserve of about 20 million tonnes.
  • Mumbai High, India’s biggest oil field, currently produces 205,000 barrels of oil per day (just over 10 million tonnes per annum) and the new find would add to that production in less than two years time.
  • In all, nine objects or zones were tested and all of them were found to be hydrocarbon bearing. The last object tested flowed 3,300 barrels of oil.
    ONGC is carrying out a further appraisal of the discovery and has intimated upstream regulator Directorate General of Hydrocarbons.
  • This is a mid-sized discovery but a significant one.The new find, which comes almost 50 years after ONGC began production in Mumbai High, will help the company maintain production levels from the basin for a longer time than currently estimated.

Strategy to revive investment

  • The Centre will ‘very soon’ disclose its strategy to revive moribund private investment, Finance Minister Arun Jaitley said. Mr. Jaitley has held several discussions with top officials and ministers on tackling the slowdown in the economy.
  • The Finance Minister, who is expected to brief Prime Minister Narendra Modi soon on the options available for revitalising the economy’s growth momentum, conceded that ‘there is a problem’ of private investment.
  • “The government is seized of the issue and very soon, you will hear from us. From day one, this is a proactive government,” Mr. Jaitley said addressing the India Investor Summit 2017 organised by J.P.Morgan in the capital.
  • Stressing that the impact of the Goods and Services Tax (GST) on inflation had been contained so far, Mr. Jaitley said among the sectors currently excluded from GST, real estate could be brought under the new indirect tax regime ‘most easily’.
  • The Minister’s comment suggests that the inclusion of other products currently outside GST’s purview, such as petroleum and alcohol, would take more time.
  • Petroleum Minister Dharmendra Pradhan had recently said his Ministry had proposed bringing petroleum products under the purview of GST in ‘consumer interest’ to ensure a uniform tax mechanism, instead of the current dispensation where States levy a value-added tax (VAT) and the Centre levies excise.
  • Claiming that corruption had become ‘a thing of the past’ in the Union government, Mr. Jaitley said the same was happening in States as well. “The government has taken quick decisions, whether it is implementing GST or targeting subsidies.”
  • The Minister said the government ‘never had any reservations about privatisation’ and had an ambitious target for disinvestment this year. The ministerial group on ailing national carrier Air India’s sale had held a meeting on Thursday, Mr. Jaitley informed investors.
  • “In last few years, market was quite volatile at times, so the government has to wait for the right time for the disinvestment,” he said.
  • Mr. Jaitley said while he was ‘personally in favour of’ a Universal Basic Income, the only reservation he had about implementing such a programme was ‘the level of political maturity’ in India.

$5 bnworth Exhibition cum convention convention centre project

The Union Cabinet will soon take up the proposal for a “$5 billion-worth world-class and state-of-the-art” Exhibition-cum-Convention Centre (ECC) in the national capital — billed as the largest such facility in Asia when completed by 2021.

By this month-end, the Cabinet will consider for discussion a “note on approval of the project and formation of a Special Purpose Vehicle (SPV) to implement the same.

Part of the $100 billion Delhi Mumbai Industrial Corridor (DMIC) project, it would be developed on Public-Private Partnership model using viability gap funding of the Centre, if required.

The SPV will be given the rights to activities, including sub-leasing of land parcels, sub-contracting project components, granting long term concessions to private developers as well as fixing lease rentals.

The project became necessary as “India lacked an integrated world class facility that can meet the requirements of global ECC operators in terms of space, project facilities and transportation linkages,” the Centre had said.

Though the size of the global Meetings, Incentives, Conferences, Exhibitions (MICE) market is about $280 billion and that of Asian MICE market about $60 billion, India did not benefit due to lack of world class ECCs, it said.

Rupee weakened amid fiscal stimulus speculation

  • The rupee weakened by more than 50 paise, or 0.8%, against the dollar amid growing speculation that the Centre was considering a fiscal stimulus package to rekindle economic growth a move that could widen the fiscal deficit and possibly risk fanning inflation.
  • The rupee ended at a two-and-a-half month low, at 64.81 a dollar. The yield on the 10-year benchmark government bond rose 10 basis points to 6.68%, its highest close since May 24.
  • The Federal Reserve’s decision on Wednesday to start unwinding its balance sheet starting October and signals that it would raise U.S. interest rates one more time this year also lifted the dollar globally.
  • “There was some speculation that government is considering stimulus package, for which the fiscal deficit could miss its target,” said Anindya Banerjee, currency analyst at Kotak Securities. “Rupee weakened against all major global currencies,” he added.
  • Currency dealers said a fiscal stimulus could result in the government likely missing this year’s fiscal deficit target of 3.2% of GDP.

Finance Minister to chair economy review meet

  • Amid worries about the state of India’s slowing economy, Finance Minister Arun Jaitley chaired a high-level meeting to take stock of the headwinds stalling growth and consider mechanisms to revive economic activity.
  • Commerce and Industry Minister Suresh Prabhu, Railway and Coal Minister Piyush Goyal participated in the deliberations with top finance and commerce ministry officials that went on for over two hours, but everyone remained tight-lipped about the discussion and its outcome at its conclusion.
  • India’s economic growth tumbled for the fifth successive quarter to 5.7% in April-June this year, from 7.9% in the same period last year.

Tax officials should make every effort to bring all traders into GST net

  • Tax officials should make every effort to bring all traders, including smaller businesses with turnover of less than Rs. 20 lakh, into the Goods and Services Tax (GST) net, Prime Minister Narendra Modi told taxmen.
  • Currently, traders with less than Rs. 20 lakh annual turnover have to register under GST only if they are supplying goods to other States.
  • PM said that in order to enable all traders to take the maximum benefit of GST, we should work towards ensuring that all traders, including even relatively smaller traders with a turnover of below Rs. 20 lakh, should register with the GST system.
  • Urging tax officials to fix clear targets for sprucing up tax administration by 2022, the PM said his government was creating an environment that shattered the confidence of the corrupt, while creating trust among honest taxpayers.
  • He asked the officers to use data analytical tools to pro-actively track and determine undeclared income. Mr. Modi also asked taxmen to improve their work-culture and inculcate a “sense of urgency” and “measurability” in their performance.

Greater use of technology to help the farmers

  • Commerce secretary Rita Teaotia called for greater use of mobile app technology and integrated traceability systems to identify the farmers and laboratories from where farm produce is sourced and tested.
  • Ms. Teaotia was speaking at the unveiling of a new mobile application with an integrated traceability system ‘Hortinet’.
  • The app was developed by Agricultural and Processed Food Products Export Development Authority for facilitating farm registration, testing and certification of fruits and vegetables for export from India to regions such as the European Union.
  • The mobile app will allow farmers to apply online to facilitate their farm registration.

GDP growth is slow

  • India’s GDP grew at 5.7% between April to June 2017 — the slowest pace recorded in 13 quarters or since the NDA government assumed office in May 2014 — led by a sharp decline in industrial activity that officials ascribed largely to an inventory drawdown by firms ahead of the rollout of GST from July 1.
  • GDP growth in the last quarter of 2016-17 was 6.1%, marking a steady decline from the 7.9% clocked in the April to June quarter. The gross value added (GVA) in the economy grew at 5.6%, same as the previous quarter but sharply lower than the 7.6% growth in the first quarter of the last year. Economist Ajit Ranade pointed out that this is the sixth continuous quarter marking a decline in growth.
  • “The principal decline in growth is on account of industry, which comes in at 1.6% compared to 7.4% last year,” Chief Statistician TCA Anant said.
  • Industrial output grew by 3.1% in the previous quarter. Analysts reckoned this to be the worst quarter for the manufacturing sector in five years, with growth at 1.2% compared to 5.3% in the previous quarter and 10.7% in the same quarter last year. That mining activity also shrank by 0.7%, compared to a 6.4% growth last quarter, didn’t help.
  • Dr. Anant stressed that a large part of this dip was due to a rise in input costs as well as an unprecedented “high level of inventory de-accumulation” in the first quarter as firms were worried if the GST regime would grant them input tax credits for output generated before its implementation.
  • The numbers are consistent with the longer run narrative of decline and since the WPI effect is now working itself out of the system, subsequent periods would restore to more normal levels of growth and you will not see a downfall in growth, which you saw from the second quarter of last year, going ahead,” he said.
  • While the services sector did fairly well, growing at 8.7% compared to 9% in the same quarter last year, the gross value added by the agriculture sector dipped from 2.5% in the first quarter of last year to 2.3%.
  • “Even though the crop production side has seen an increase compared to last year, overall agriculture comes in marginally lower because of the other elements of agriculture, which is principally animal husbandry that is slightly lower,” the Secretary in the Statistics and Programme Implementation Ministry said.
  • The Finance Minister also said that manufacturing has ‘bottomed out,’ services have improved and gross fixed capital formulation has turned positive. Gross fixed capital formation, which reflect the investments into the country, stood at a four-quarter high of 29.8% of GDP, but was still lower than the 31% clocked in the same quarter of 2016-17.
  • Rating agency Crisil said the growth data suggests that the gains to the tax base from demonetisation may have been overemphasised in haste.
  • “The difference in GDP and GVA growth is net product taxes. So given that GDP growth at 5.7% is only 10 basis points more than the GVA growth of 5.6%, claims of real tax gains from enlarging tax base after demonetisation seems a too-early conclusion. However, this may see pick-up going ahead as the government firms up its accounting exercise,” Crisil said in a note.

Telecom sector to form Panel for providing relief

  • ‘The Inter-Ministerial Group (IMG), formed to look into the financial woes of the telecom sector, on submitted its report after over three months of deliberations.
  • It is learnt that the IMG, in its report which had not been made public, had made some suggestions for providing relief to the sector while pointing out that “green shoots” of recovery were visible in the sector.
  • The report, which was finalised after discussions with stakeholders, including banks and telecom firms, would now be placed before the Telecom Commission, which was the highest decision making body in the Department of Telecom.
  • One of the recommendations made by the IMG is to extend the timeline for deferred spectrum payment by telecom companies to 16 years instead of the 10 at present, a source said.
  • The Telecom Commission’s next meeting is scheduled to be held on September 8 and is likely to take up the IMG report.

WTO- farm subsidies

  • India and China have jointly submitted a proposal to the World Trade Organisation (WTO) calling for the elimination of the most trade-distorting form of farm subsidies by the developed countries as a prerequisite for consideration of other reforms in domestic support negotiations.
  • This is an important proposal by India and China in view of the ongoing negotiations for the upcoming 11th Ministerial Conference (MC) of the WTO to be held in Buenos Aires in December 2017.
  • It counters the efforts by some countries to target the subsidies of the developing countries while letting the developed countries retain their huge farm subsidies
  • The MC is the WTO’s highest decision making body. As per the joint paper, developed countries, including the U.S., the EU and Canada, had been consistently providing trade-distorting subsidies to their farmers at levels much higher than the ceiling applicable to developing countries, the statement said.

Core sector output grew 2.4%

  • Core sector output grew 2.4% year-on-year in July, helped by a low base in sectors including steel and electricity.
  • The production performance of eight core industries — which comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP) — in July 2017 was faster than June’s 0.8%, but slower than the 3.1% pace recorded in July 2016. Cumulative growth during April-July, 2017-18, was 2.5%.
  • Nevertheless, half of the eight constituents recorded a YoY contraction in July 2017, namely, refinery products, crude oil, cement and fertilisers.
  • There was mixed evidence of post-GST inventory rebuilding, with a robust pick-up in growth of steel output in July 2017 (9.2%) relative to June 2017 (5.8%), in contrast to the continued, albeit narrowing contraction in production of cement (-2.0% in July 2017 vs. -6.3% in June 2017).
    Cement output shrank for the eighth consecutive month.
  • Given the favourable base effect and the rebuilding of domestic inventories post-GST, we expect the IIP to revert to a YoY rise in July 2017, although the pace of growth may be subdued relative to the 5.2% recorded in July 2016.
  • Electricity generation registered a 5.4% growth in July 2017 from 2.2% in June 2017 and 2.1% in July 2016. Besides a favourable base effect, this also reflected a slight improvement in industrial demand following the introduction of the GST regime. Coal production grew by just 0.7% in July.

Centre pushes for RBI to increase dividend

  • The Centre is pushing for the Reserve Bank of India (RBI) to enhance its dividend payout to the exchequer for the year 2016-17.
  • The RBI transferred just Rs. 30,659 crore as dividend for the year gone by to the exchequer less than half the Rs. 65, 876 crore it had paid in 2015-16.
  • The government had budgeted for a Rs. 58,000 crore dividend from the RBI in its Budget for this fiscal year.
  • The RBI has calculated a surplus of Rs. 44,000 crore and has transferred Rs. 30,000 crore to the government.
  • The development assumes significance as the Centre had been downplaying the central bank’s disclosure that about 99% of the demonetised Rs. 500 and Rs. 1,000 currency notes had returned to the central bank with just about Rs. 16,000 crore remaining outside.
  • This had dispelled the hope of a large surplus transfer from the RBI to the government on account of notes that weren’t returned to the formal system for fear of attracting the taxman’s attention.
  • The government had issued an ordinance in December to extinguish the Reserve Bank of India’s liability towards honouring such notes.
  • The demonetisation exercise had hit RBI’s finances in a big way as the cost of printing new notes more than doubled to Rs. 7,965 crore in 2016-17 compared with Rs. 3,421 crore in the previous year.
  • RBI’s income for the period declined to Rs. 61,818 crore from Rs. 80,870 crore, while its total expenditure more than doubled to Rs. 31,155 crore, from Rs. 14,990 crore.
  • The central bank’s income was also impacted due to rupee appreciation and liquidity mop up.
  • Expenditure also increased due to higher printing and freight charges for notes and higher provisions for the contingency fund.

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