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The government plans to introduce the ‘Press and Registration of Periodicals Bill, 2022’ during the monsoon session of Parliament beginning Monday.

“The Bill seeks to replace the Press and Registration of Books (PRB) Act, 1867 by decriminalization of the existing Act, keeping the procedures of the extant Act simple from the view point of medium/small publishers and uphold the values of Press Freedom,” a government communication to the Parliament read.

The government had first released the draft Press and Registration of Periodicals Bill in 2017 that sought to ease the process of registration of newspapers and dispense with the penal provisions under the PRB Act.

The PRB Act has provisions to impose a penalty on publishers for not printing the name of the printer in the newspaper or periodical or not making a declaration before the magistrate about operation of printing presses.

The proposed Bill has provisions to set up a press registrar general and bring the digital media in its ambit.

The 2019 draft bill had defined “news on digital media” as “news in digitised format that can be transmitted over the internet, computer, mobile networks and includes text, audio, video and graphics.” The Bill sought to enable the central government and the state government to frame appropriate rules to regulate the criteria or conditions for issuing government advertisements in newspapers, accreditation of newspapers, and suchlike facilities for newspapers.

The rupee closed at 79.88 against the dollar on Thursday to hit a new low, weakening 0.3 per cent against the greenback, as a sharper-than-expected rise in US inflation stoked speculation of the Federal Reserve hiking interest rates by 100 basis points (bps) at its meeting this month.

The domestic currency, which had closed at 79.64/$ at its previous close, slipped to a low of 79.92/$ intraday.

“Rupee delayed the level of eighties, but for the time being. We expect it to break sooner,” HDFC Securities Research Analyst Dilip Parmar told Business Standard. “With markets now considering 100-bp (hike) by the Fed in July, a decisive break of parity by EUR/USD and 6.90 in Chinese yuan will lead to sharp depreciation in the Indian Rupee,” he said.

The data released on Wednesday showed that US consumer prices rose a faster-than-forecast 9.1 per cent in the year through June to a fresh forty-year high. Investors bet that the Fed was now more likely to raise interest rates by 100 bps when it meets on July 26-27. A possible 100-bp hike would be the largest increase since the Fed started directly using overnight interest rates to conduct monetary policy in the early 1990s. The US central bank has already raised interest rates by 150 bps so far in 2022.

Also Read: As rupee falls, spread between India and US bond yields tightens

“Everything is in play,” Atlanta Fed President Raphael Bostic told reporters in St. Petersburg, Florida, on Wednesday. Asked if that included raising rates by a full percentage point, Bostic replied, “it would mean everything.”

Cleveland Fed President Loretta Mester, speaking on Wednesday in an interview on Bloomberg Television, declined to say if she favoured going bigger at the July meeting, noting there were important data releases between now and then. But she said there was “no reason” for raising rates by less than the 75 bps that policymakers delivered last month.

Speaking in a separate interview with the New York Times also on Wednesday, San Francisco Fed Chief Mary Daly said that “My most likely posture is 0.75, because of the data I’ve seen,” adding that she had expected the CPI number to be high.

The Fed has turned aggressively against inflation, after being blamed for its initially slow response, roiling financial markets and increasing the risk that its actions could tip the US economy into recession.

Given the acceleration in monthly inflation, economists at Nomura Securities International too expect a full percentage-point increase in the Fed’s benchmark rate at the upcoming policy meeting.

“Incoming data suggests the Fed’s inflation problem has worsened, and we expect policymakers to react by scaling up the pace of rate hikes to reinforce their credibility,” Nomura said in a note.

Fed Chair Jerome Powell had told reporters last month after the central bank raised rates by 75 bps, to a range of 1.5 per cent to 1.75 per cent, that either a 50- or 75-bp increase was likely in July. A majority of his colleagues since then have either echoed his line or endorsed the bigger move.

While likely dollar sales by the Reserve Bank of India around 79.90-79.91 per dollar level had kept the rupee from breaching the psychologically significant 80/$ mark, currency traders see the local unit breaking past that level in the coming days.

Providing technical analysis, Parmar from HDFC Securities said that the breach of the 80 per dollar mark could open the path for the rupee to head to 80.90/$.

In the current week, the Indian currency has given up 0.8 per cent versus the dollar, taking the depreciation for 2022 as a whole, so far, to 6.9 per cent.

Higher US interest rates typically lead to global capital flowing out of emerging markets such as India, as investors prefer higher returns from the world’s largest economy.

So far in 2022, foreign portfolio investors have sold a net of $30.83 billion worth of Indian assets, the highest outflow on record and more than three times the net overseas sales in 2008, the year of the global financial crisis, the NSDL data showed.

Investors have flocked to the safety of the US dollar as the protracted war in Ukraine and the Fed’s aggressive rate hike plans have sparked fears of a global economic downturn.

The US dollar index, which measures the currency against six rival currencies, was last at 108.56, a twenty-year high, the Bloomberg data showed. The previous close for the index was 107.96.

While the RBI has recently announced a slew of measures to attract overseas flows and ease pressure on India’s current deficit, traders said that it would take time for foreign inflows to materialise, given the sheer scale of the global flight to the US dollar.

The Indian advertising market is forecast to grow by 16 per cent in 2022 to reach USD 11.1 billion (Rs 88,639 crore), becoming the fastest growing market globally, a report said.

This would lead to over 14.5 per cent growth by TV and 31.6 per cent on the digital side, said Dentsu Global Ad Spend Forecasts July 2022.

The easing of lockdown restrictions has opened up categories such as travel and hospitality, which were not spending during the pandemic. Besides, categories like edtech, fintech, gaming and cryptocurrency have shown growth on Over-The-Top (OTT) platforms.

"Digital, at a 33.4 per cent share of spend, will be the key medium for digital-first brands and consumer tech companies in 2022. TV continues to garner a 41.8 per cent share in 2022 and has recovered fully, boosted by the airing of new content and sports events such as the Indian Premier League," it said. The digital ad space is estimated to grow twice as fast as ad spending through television.

In 2022, the US will be both the top ad spending region at USD 329.6 billion and the most dynamic region with spending increasing by 13.1 per cent.

In terms of growth, however, India (+16.0 per cent YOY growth) will stay ahead of the United States (+12.8 per cent) and Brazil (+9.0 per cent) as the fastest growing market," said Dentsu Global Ad Spend Forecasts.

According to the report, looking ahead, "significant growth" is forecast in OTT, connected TV, online gaming and e-commerce. "The India advertising market is forecast to grow by 16 per cent in 2022 to reach USD 11.1 billion led by TV (+14.5 per cent) and digital (+31.6 per cent)," it said.

In 2021, the Indian advertising market was around USD 9.6 billion. It is projected to grow by 15.2 per cent in 2023 to USD 12.8 billion and by 15.7 per cent to USD 14.8 billion in 2024. While globally, advertising spending would increase by 8.7 per cent in 2022 to USD 738.5 billion.

Ad spending in the Asia Pacific is anticipated to reach USD 250 billion, with digital accounting for much of this amount. In the region, China advertising market is forecast to grow by a further 5.6 per cent in 2022 to reach USD 130.2 billion.

Dentsu international CEO Media APAC Prerna Mehrotra said the latest Dentsu Ad Spend July 2022 points to a continued recovery despite another year of economic uncertainty, with APAC 2022 ad spend of USD 250 billion, based on a growth forecast at 5.1 per cent.

"However, continued lockdowns in key markets, geopolitical tension and ongoing supply logistics issues could add pressure on businesses with a cascading impact on marketing spends," she said.

Kerala, with its diaspora all over the world, stands to gain from the continuing depreciation of the rupee against the dollar and West Asian currencies, which is expected to bolster remittances to the state and reverse a trend of slowing growth of such deposits, experts said.

A recent notification allowing non-resident Indians to send up to Rs 10 lakh to relatives in India without informing the government is another factor that may support this trend.

Kerala used to account for 19 percent of total remittances to India a few years ago. Though remittances to India grew to $87 billion last year from $83 billion in 2020, as per World Bank data, inflows to Kerala suffered after the outbreak of Covid-19 because of widespread job losses and the return of workers from the Gulf countries, which account for almost 90 percent of 3.4 million Keralites living abroad.

The World Bank report projected that remittances to India will grow 3 percent to $89.6 billion in 2022, with the slower pace reflecting the drop in overall migrant stock. But will the depreciating rupee change the trend?

Remittances to Kerala have started rising as the rupee drops to new lows. Although the increase is not much now, the inflows may pick up further. Additionally, growth of NRI deposits in Kerala’s banks has slowed, suggesting that people appear to be spending remittance money more instead of retaining them in banks. This trend may change as interest rates rise.

Marginal increase

There is a marginal increase in the volume of remittances, partly due to the holiday season in the Gulf countries and partly on account of weakness in the rupee, a senior executive of Lulu Financial Holdings said. The rupee closed at 79.60 to the dollar on July 12, a new low.

“Under the prevailing situation, the trend might continue for some more time. People are waiting for further depreciation of the rupee. This includes high net worth individuals whose transactions are of higher value and investors who might be waiting for the rupee to test the Rs 80 mark,” the executive said.

Non-resident Keralites in the US and Europe are also cashing in on the situation.

“They don’t usually remit money regularly, but occasionally send money to their families. They have also begun to remit money now. We have seen them pledging gold for money to send to India on earlier occasions,” said Bijimon, head of the money transfer division at Muthoot Finance.

The Kerala government said last year that about 1.5 million non-residents had returned to the state following the outbreak of the pandemic. Experts said many of them have since returned.

In their paper Kerala Return Emigrant Survey 2021: What Next for Return Migrants of Kerala?, S Irudaya Rajan, founder chairman of the International Institute of Migration and Development, and Balasubramanyam Pattath, a research fellow at the institute, said about 50 percent of distressed return emigrants to the state wanted to re-emigrate, while 32 percent decided to seek work in Kerala or retire, possibly due to the negative experience encountered during Covid-19.

Remittances are crucial to Kerala as they account for 36.3 percent of the state’s GDP, unlike other states, which may have more migrants overseas.

According to a survey in the paper, 75 percent of return emigrants sent remittances home, the most common reason being debt payments (30 percent), followed by household expenses (25 percent), periodic investments (21 percent), and maintenance (12 percent).

The survey found an overall increase in monthly remittances since Covid-19 started, indicating resilience among more than 70 percent of the sample. However, the number of distressed emigrants sending remittances waned at larger amounts pre- and post-Covid-19 lockdowns, indicating a cash crunch due to job losses, withholding of wages, and the use of savings towards repatriation.

Gulf situation better

However, the situation is improving in the Gulf countries. The Lulu Financial Holding executive said economic activities are picking up in the Gulf region.

“The stimulus of the UAE government has been a big support for businesses to make a comeback. Even the Expo 2020 and resulting tourism and business deals have played a vital role in the recovery and we can see great signs of steady growth and 2022 would be a remarkable year,” he said.

Remittance flows from the US and Europe have been affected more by the Russia-Ukraine conflict than the pandemic. In recent times, there has been a slight increase in euro remittance volumes. However, people may be waiting for the euro to weaken further before remitting money home, he said.

The executive reckoned the recent amendment to the Foreign Contribution Regulation Act (FCRA) that allows NRIs to send as much as Rs 10 lakh instead of Rs 1 lakh to relatives in India without informing the government will facilitate the free transfer of funds. If the amount exceeds the limit, individuals have three months to inform the government instead of 30 days earlier.

Earlier, a large chunk of remittances went to banks as NRI deposits. However, the growth of NRI deposits in Kerala slowed last year, probably because of economic distress.

Total NRI deposits in banks grew 3.7 percent year-on-year to Rs 2,38,408 crore in FY22, following a 10 percent increase to 2,29,636 crore in FY21.

“Moreover, the outflow from banks has increased. People are not keen to retain money in the banks. Maybe they are using it for business purposes,” said Ajayakumar, AGM, NRI, at State Bank of India.

He said the trend will likely reverse as banks have started revising interest rates upwards for both rupee and foreign currency non-resident accounts.

“The rupee depreciation and the hike in interest rates may bring more NRI deposits to banks in the second half of the year,” he said.

The rupee weakened to a fresh low against the US dollar on Tuesday as the greenback surged to a 20-year high globally and domestic equities suffered losses, dealers said.

The rupee was Tuesday morning trading at 79.61 against the US dollar versus its close of 79.44 on Monday.

The US dollar index, which measures the unit against six major currencies, was at 108.42 this morning, as against 107.67 on Monday. The index was at levels last seen around August 2002, Bloomberg data showed.

At 10:40 am IST, the BSE Sensex and the NSE Nifty were trading 0.3 per cent and 0.4 per cent lower, respectively.

The dollar has been on a strengthening spree of late as worries over slowing global economic growth amid an energy crisis in Europe and aggressive rate hikes by the Federal Reserve have sent investors rushing to the safety of the US currency.

In 2022, the US dollar index has gained 13 per cent. The rupee has depreciated 6.6 per cent versus the dollar over the same period.

The broad dollar strength comes at a time when record outflows of overseas investment and elevated crude oil prices have rendered the outlook on India’s current account deficit unfavourable.

The Reserve Bank of India (RBI) has announced a slew of measures to ease pressure on the rupee, but currency traders predict an unfavourable near-term outlook for the domestic currency amid global headwinds.

The RBI, on Monday, permitted the international trade settlement in rupees, a move that could be aimed at facilitating transactions with Russia, analysts said. Last week, the central bank announced relaxations in overseas investment in government securities as well as sums raised abroad through External Commercial Borrowings.

“In the recent past, RBI has taken steps that could ease the pressure on the rupee viz-a-viz country’s deficit. However, so far the positive impact of the same hasn’t yet been translated into the USDINR pair given by overpowering glooms and the risk-averse environment globally,” said Amit Pabari, managing director at CR Forex Advisors, in a note.

“The given fundamentals shall likely sustain its pressure on the rupee keeping the upside open well in place. As the pair breaks its crucial 79.50 levels, it’s a little far from the next big figure 80.00 levels that could be seen in the short run,” he said.

Japan plans to provide support to India to drive the transition to clean energy, expanding a programme it launched last year for Southeast Asian nations, Industry Minister Koichi Hagiuda said on Wednesday.

Japan's 'Asia Energy Transition Initiative' initially targeted supporting countries in the Association of South East Asian Nations (ASEAN) pushing towards net-zero carbon emissions, including $10 billion in finance for renewable energy, energy efficiency and liquefied natural gas (LNG) projects.

"Specific support includes support for ASEAN countries in the Asian roadmap towards carbon neutrality, which will be expanded to include India," Hagiuda said at the Sydney Energy Forum, co-hosted by the Australian government and the International Energy Agency.

Hagiuda said the region needs to work on diversifying where it gets its energy from, in light of the ongoing energy crunch due to loss of Russian energy supplies.

"Against that backdrop, considering the current energy crisis, stable energy supply and market stability are critical as the basis for promoting a transition towards carbon neutrality," Hagiuda said.

For that we must engage in improving our energy independence through things such as a further push for diversification of energy sources of supply."

Ahead of his trip to Sydney for talks with Quad partners Australia, India and the United States, Hagiuda said on Tuesday he would press the United States and Australia to boost LNG output and stable supply to Japan.

He made no comment in his speech about the outcome of those talks which took place earlier on Wednesday.

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