Morning Brief: Urjit Patel Seeks More Powers For RBI; India To Grow At 7.3 Per Cent: World Bank; Saudi Turns To Nuclear Power
Good morning, dear reader! Here’s your morning news and views brief for today.
RBI Needs More Powers To Monitor State-Run Banks: Urjit Patel
Reserve Bank of India (RBI) Governor Urjit Patel on Wednesday sought more powers to monitor state-run banks. He said RBI had “very limited authority” over state-run banks and called for reforms to give the regulator more powers to police such lenders in the wake of $2 billion alleged Punjab National Bank fraud. Patel said there were numerous limitations in the RBI’s powers, such as its inability to remove directors, replace management, force a merger or initiate liquidation. While the RBI regulates all banks in India, state-run banks are also regulated by the government, which owns majority-stakes in them. This has, in effect, led to a system of “dual regulation”, said Patel, adding that this “fault line is bound to lead to tremors such as the most recent fraud”. State-run lenders, sometimes referred to as PSBs, or public sector banks, own two-thirds of India’s banking assets, but are much less profitable than nimbler private sector rivals.
India’s GDP To Grow At 7.3 Per Cent In The Next Fiscal: World Bank
India’s gross domestic product (GDP) will grow at 7.3 per cent in the next financial year, and accelerate further to 7.5 per cent in 2019-20, the World Bank said in its report on Wednesday. The report observed that a growth of over 8 per cent will require “continued reform and a widening of their scope” aimed at resolving issues related to credit and investment, and enhancing competitiveness of exports. “The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors – that is, to about 7.5 per cent a year,” the report said. The World Bank’s biannual publication, India Development Update: India’s Growth Story, expects the economy to clock a growth rate of 6.7 per cent in the current fiscal ending 31 March.
SC Rejects All Pleas To Intervene In Ram Temple-Babri Masjid Dispute
The Supreme Court on Wednesday rejected all interim pleas seeking to intervene as parties in the sensitive Babri Masjid-Ram Temple land dispute case. A special bench comprising Chief Justice Dipak Misra and justices Ashok Bhushan and S A Najeeb accepted the contention that only original parties to the dispute be allowed to advance arguments in the case. The apex court also rejected the plea of Bharatiya Janata Party leader Subramanian Swamy seeking to intervene in the ongoing matter. The court, however, ordered the revival of Swamy’s disposed off writ petition in which he had sought enforcement of his fundamental right to worship at Ram Temple. A three-judge bench of the Allahabad High Court, in a 2:1 majority ruling, had in 2010 ordered that the land be partitioned equally among three parties – the Sunni Waqf Board, the Nirmohi Akhara and Ram Lalla.
Wholesale Price Inflation At Seven-Month Low
Lower inflation in fuel and food helped ease India’s wholesale inflation in February to a seven-month low of 2.48 per cent, data released on Wednesday showed. Wholesale price inflation (WPI) was 2.84 per cent last month and 5.51 per cent in February 2017. “The rate of inflation based on WPI Food Index consisting of ‘food articles’ from primary articles group and ‘food product’ from manufactured products group decreased from 1.65 per cent in January 2018 to 0.07 per cent in February 2018,” Commerce and Industry Ministry said. Inflation in vegetables softened to 15.26 per cent compared with 40.77 per cent in January, while in onions it reigned high at 118.95 per cent albeit lower than 193.89 per cent rise registered in the first month of the calendar year. However, core inflation or the inflation in non food manufactured products rose sharply.
Government Planning To Build 14,460 Bunkers Along J&K Border
To mitigate the hardships faced by people living at the border, as many as 14,460 bunkers will be constructed along the Line of Control and the International Border in Jammu and Kashmir, Union Minister of State for Home Hansraj Gangaram Ahir informed the Rajya Sabha on Wednesday. He said the Ministry of Home Affairs had approved a pilot project for construction of 60 bunkers at a cost of Rs 3 crore during the year 2016-17, which has since been completed. Following the recent visit of Home Minister Rajnath Singh to the state, the centre had approved construction of another 14,460 bunkers at a cost of Rs 415.73 crore, he said in reply to a written question. Ahir added that the steps have been taken to mitigate the hardships faced by people living on the International Border and Line of Control due to cross border firing.
US Launches WTO Challenge Against India Over Export Subsidies
The US launched a challenge against India’s export subsidies at the World Trade Organisation (WTO), arguing the programmes give Indian companies an unfair advantage. The challenge covers Indian programmes including the merchandise exports from India scheme, the export oriented units scheme and the electronics hardware technology parks scheme, US Trade Representative Robert Lighthizer said Wednesday. “These export subsidy programmes harm American workers by creating an uneven playing field on which they must compete,” Lighthizer said. The complaint against India shows that, at least for the time being, the US Trade Representative sees the WTO dispute-settlement body as a viable forum for ensuring fair trade for US producers.
PNB Fraud: ED Seeks Interpol RCN Against Nirav Modi And Mehul Choksi
India's Enforcement Directorate (ED) has sought a red corner notice (RCN) against diamond traders Nirav Modi and Mehul Choksi from Interpol in connection with the Rs 12,700 crore Punjab National Bank fraud. The agency had sought issuance of the Interpol warrant against the two, based on court-issued non-bailable warrants obtained by it in a money laundering case, officials said. A special court in Mumbai had issued non-bailable warrants early this month on the request of the ED. The investigative agency had earlier issued summons to Modi and Choksi – the key accused in the scam – asking them to appear before it in Mumbai. However, both of them expressed their inability to depose citing business engagements. The Central Bureau of Investigation is also probing the case.
Shedding Oil Addiction: Saudi Arabia Turns To Nuclear Power
Saudi Arabia is speeding up its nuclear energy programme to reduce its dependence on oil. The nuclear energy policy was approved by the Cabinet just days before powerful Crown Prince Mohammad bin Salman visits Washington. Saudi Energy Minister Khalid Al Falih said earlier that the nuclear programme would start by building two reactors, each producing between 1.2 and 1.6 gigawatts of electricity. Saudi Arabia, the world’s largest exporter of oil, has framed its nuclear project as driven purely by economics. The kingdom is struggling to meet fast-rising energy demand and crude prices remain far below their peaks reached before the 2014 market crash.
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