Tag: package

India may need to pump $20 billion into coronavirus-hit state banks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

India may need to inject up to 1.5 trillion rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic, three government and banking sources told Reuters.

The government initially considered a budget of around 250 billion rupees for bank recapitalisations but that has risen significantly, a senior government source with direct knowledge of the matter said, with loan defaults likely to rise as businesses take a severe hit from nationwide lockdowns to tackle the coronavirus.

“The situation is very grim,” the source said, adding that banks would require fresh funds soon.

All the sources asked not to be identified as the discussions are private. India’s finance ministry did not respond to a request for comment during working hours on Wednesday.

The capital plans were still being discussed and a final decision could be taken in the second half of the fiscal year, a second government source said. India’s fiscal year runs from April 1.

Indian banks were already saddled with 9.35 trillion rupees of non-performing assets at the end of September 2019, or roughly 9.1 percent of their total assets at the time.

Reuters reported earlier this month that bad loans would likely rise to 18-20 percent of total assets by the end of the fiscal year next March, as 20-25 percent of outstanding loans are considered at risk of default.

A nationwide lockdown entering its third month is expected to lead to a contraction in economic growth in the current financial year, according to several global rating agencies, which have also changed their outlook on the banking sector to negative. Economic recovery is likely to take a long time.

One banking source said it was unlikely the federal government would be able to fund the entire capital injection itself and may rely on indirect measures such as issuing bonds as a means of recapitalisation, a method which it has used previously.

“The amount could also be partly funded through monetisation of the fiscal deficit by the central bank,” the first government source said, adding that finance ministry officials were in talks with the Reserve Bank of India (RBI).

The RBI did not respond to a request for comment.

The government has already pumped in 3.5 trillion rupees to shore up state-owned banks in the last five years. India’s federal budget in February for the 2020-21 financial year made no provision for further capital injections, with lenders encouraged to tap capital markets to raise money instead.

Despite a fall in new loans being made because of the crisis, a senior Indian banker said that the government wanted the banking sector to maintain lending growth of at least 6-7 percent for this financial year to boost the economy, but raising money from capital markets wasn’t easy in the current environment.

“There will be a ripple effect of the slowing economy that banks will feel and we will need capital to sustain and grow,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rs 6,000 crore employment push using CAMPA Funds: FM Nirmala Sitharaman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Finance minister Nirmala Sitharaman has announced that Rs 6000 crore will be pushed using CAMPA Funds to generate employment. The FM said that plans worth the amount, that are aimed at creating job opportunities in rural and semi-urban areas will be soon approved.

The jobs will be aimed at the tribal population of the country and will include jobs such as afforestation among others, the FM said during the press conference.

Compensatory Afforestation Fund Management and Planning Authority (CAMPA) was set up under the Compensatory Afforestation Fund Act, 2016.

The fund deals with all compensatory afforestation process made mandatory by the government to counter the losses incurred in the country due to the diversion of forest land for other purposes.

Earlier, PM Narendra Modi had announced a cumulative package of Rs 20 lakh crore to provide relief to various segments of the economy that suffered due to the general lockdown and the coronavirus pandemic. This included Rs 1.7 lakh crore package comprising of free foodgrains and cash to poor for three months announced in March, and Rs 5.6 lakh crore stimulus provided through various monetary policy measures by the Reserve Bank of India (RBI).

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Eight crore migrant workers to get free food for next two months: FM Nirmala Sitharaman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Finance minister Nirmala Sitharaman has announced that the government will supply food to eight crore migrants in the country for the next two months.

“Free food grain supply for migrants for the next two months. For non-card holders (national food security act or state-level cards) will receive 5 kg of wheat or rice and 1 kg chana per family. We are engaging with state governments to approach and identify the migrants. Close to 8 crore migrants will benefit from this and the Centre will bear the cost. Rs 3,500 crore will be spent on this intervention,” Sitharaman said.

The minister further added that the state governments will be responsible for the implementation of the measures including the identification of migrants, distribution and for providing detailed guidelines.

The finance minister, in her press conference, stated that second tranche of the economic stimulus package will be for the benefit of migrant workers, street vendors and small farmers.

Earlier, PM Narendra Modi had announced a cumulative package of Rs 20 lakh crore to provide relief to various segments of the economy that suffered due to the general lockdown and the coronavirus pandemic. This included Rs 1.7 lakh crore package comprising of free foodgrains and cash to poor for three months announced in March, and Rs 5.6 lakh crore stimulus provided through various monetary policy measures by the Reserve Bank of India (RBI).

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Trump announces $19 billion relief for farmers amid COVID-19 epidemic

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

President Donald Trump has announced a $ 19 billion financial rescue package to help the agriculture industry weather the staggering economic downturn sparked by measures to defeat the coronavirus.

Trump told a press conference on Friday that the government “will be implementing a $ 19 billion relief program for our great farmers and ranchers as they cope with the fallout of the global pandemic.”

The program will include direct payments to farmers, ranchers and producers who Trump said have experienced “unprecedented losses during this pandemic.”

Agriculture Secretary Sonny Perdue said US farmers have been hit hard by a sharp shift in demand, as schools and restaurants close and more Americans eat at home. That has disrupted the food supply chain, forcing farmers in many places to destroy dairy output and plough under crops that no longer have buyers.

“Having to dump milk and plough under vegetables ready to market is not only financially distressing, but it’s heartbreaking as well to those who produce them,” Perdue said.

Perdue said some $ 3 billion of the money would go to buying produce and milk from such farmers, and redistribute it to community food banks. Millions of Americans have recently turned to food pantries for meals and groceries after losing their jobs.

The US farm and food industry has been hit in numerous ways by the coronavirus epidemic. Farmers are having trouble finding seasonal labourers to prepare and harvest crops; some meatpacking plants have been hit hard by COVID-19 outbreaks.

But the change in the way consumers eat has had a huge impact. “Shuttered schools, universities, restaurants, bars and cafeterias are no longer buying milk, meat, fruits, vegetables and other food, causing a downward spiral in crop and livestock prices,” the American Farm Bureau said recently.

Perdue praised farmers, who have enjoyed billions of dollars in support payments over the past two years due to the impact of Trump’s trade war with China, as “heroic.”

“Our farmers have been in the fields planting and doing what they do every spring to feed the American people, even with a pandemic, as we speak.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Coronavirus: ADB announces USD 6.5 bn package for developing member countries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Asian Development Bank (ADB) on Wednesday announced a USD 6.5 billion package for its developing member countries to fight the coronavirus pandemic.

The initial package has been announced to address the immediate needs of developing member countries (DMCs) as they respond to the Covid-19 pandemic, ADB said in a statement.

Manila-headquartered ADB works towards sustainable development and poverty eradication in Asia and the Pacific region.

“This pandemic has become a major global crisis. It requires forceful action at national, regional and global levels,” ADB President Masatsugu Asakawa said.

“With our developing member countries, we are formulating an aggressive set of actions to combat the pandemic; to protect the poor, the vulnerable, and wider populations across the region; and to ensure economies will rebound as swiftly as possible.

“Based on close dialogue with our members and peer institutions, we are deploying this USD 6.5 billion rescue package to meet the immediate needs of our members,” he added.

Asawaka said ADB stands ready to provide further financial assistance and policy advice down the road whenever the situation warrants.

The multilateral funding agency said the pandemic demands a coordinated response and strong collaboration among countries and organisations.

ADB will further strengthen its close collaboration with the International Monetary Fund, the World Bank, regional development banks, the World Health Organization and major bilateral funding agencies, including the Japan International Cooperation Agency.

It will also include the US Centers for Disease Control and private sector organisations, to ensure effective implementation of its COVID-19 response.

ADB said it will seek adjustment in its financing instruments and business processes to provide the support package for its developing member countries (DMCs) as quickly and flexibly as possible.

“Subject to approval by ADB’s board of directors, this will include faster access to emergency budget support for economies facing severe fiscal constraints, streamlined procedures for policy-based lending, and universal procurement with flexible and faster processes,” the release said.

This initial package of USD 6.5 billion includes around USD 3.6 billion in sovereign operations for a range of responses to the health and economic consequences of the pandemic and USD 1.6 billion in non-sovereign operations for micro, small and medium-sized enterprises, domestic and regional trade, and firms that are directly impacted.

ADB said it will also mobilise about USD 1 billion in concessional resources through reallocations from ongoing projects and assessing possible needs for contingencies.

“ADB will make available USD 40 million in technical assistance and quick-disbursing grants.” it added.

Since its first response to the COVID-19 situation on February 7, ADB already provided more than USD 225 million to meet urgent needs of both governments and businesses in DMCs.

The funding agency will publish estimates of the economic impact of the pandemic in its Asian Development Outlook 2020 on April 1, 2020.

Earlier on March 6, it had published an initial economic analysis for the region, and said the global economy may suffer losses of USD 77-347 billion due to the virus outbreak and Asia may be impacted significantly.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Cabinet likely to approve agri-package for farmers on Monday

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The cabinet on Monday is likely to approve a package for farmers to boost their income and address distress in the farm sector, sources said, adding that the move will come ahead of the general elections.

“The cabinet meeting is scheduled tomorrow (Monday) and the agriculture ministry’s proposal on addressing income deficit syndrome of small and marginal farmers is on the agenda,” a highly placed source said.

The agriculture ministry has recommended several options to provide both short and long term solutions to address agrarian distress. However, a final call will be taken in the cabinet meeting as a huge cost is involved, the sources said.

One of the options proposed is waiving interest on crop loans for farmers who pay on time, costing an additional Rs 15,000 crore to the exchequer, the sources stated.

There is also a proposal to completely waive premium for taking insurance policy for food crops. The centre is also evaluating the scheme followed by the Telangana and Odisha governments wherein a fixed amount is transferred directly into the bank account of farmers, the sources added.

Agriculture Minister Radha Mohan Singh had recently indicated that the government would announce an agriculture package before the 2019-20 Budget, to be presented on February 1.

Experts said the government has less time to implement any new scheme. The measure has to be such that it can be implemented faster to reap the political gains during the election.

It may be noted that the central government has taken farmers’ issues seriously after the ruling BJP was defeated in Madhya Pradesh, Rajasthan and Chhattisgarh in the recent state polls, where rural distress was a key factor.

Farmers are in distress owing to fall in prices of most crops in view of bumper crop.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Relief package for farmers soon: Minister Parshottam Rupala

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Minister of State for Agriculture Parshottam Rupala on Thursday said a big relief package for the country’s farmers will soon be announced.

“You will not have to wait any longer (for the package). It will be announced very soon,” he told reporters on the sidelines of the National Conference on Agriculture Summer Campaign here.

However, he refused to reveal if the package will be announced before the budget.

According to sources, Direct Investment Support of up to Rs 15,000 per hectare annually, interest free loans up to Rs 1 lakh and reduction in the premium in the crop insurance scheme are likely to be the major takeaways of the package.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow