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India's finished steel exports fell more than a third in the 2018/19 fiscal year after the United States and Europe, the world's two biggest buyers of the alloy, imposed safeguard duties in the past one year.

Finished steel exports between April 2018 and March 2019 fell 34 percent from the previous year to 6.36 million tonnes. Finished steel imports by India, the world's fastest growing market, rose 4.7 percent to 7.84 million tonnes, leaving India as a net importer, preliminary government data showed on Friday.

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Looking for reasons for the slowdown in the Indian economy? The International Monetary Fund’s latest edition of its flagship publication -- World Economic Outlook -- provides us an important clue. It says falling commodity and crude oil prices provided an opportunity for the Indian economy in 2015 and 2016. These windfall gains amounted to a cumulative 4.3 percent of GDP in the two years.

In 2017 and 2018, though, commodity and crude oil prices edged higher, resulting in a cumulative drag of 2.3 percent of GDP on India’s growth. The forecast for 2019 and 2020: happy days are back, crude prices will weaken and India’s windfall gain will be an average of 0.34 percent of GDP for these years. And guess what -- India’s GDP growth went up in 2015 and 2016, fell in 2017 and 2018 and is projected to be higher again in 2019 and 2020.

The correlation with the ups and downs of crude oil prices is clear. Sure, there are a host of factors affecting growth, but what the data underlines is the importance of low crude oil prices for the Indian economy.

What else does the World Economic Outlook say about India? It says real GDP growth will move up to 7.3 percent in the current fiscal from 7.1 percent in 2018-19. Investment demand will see a minor recovery to 31.7 percent from 31.6 percent of GDP in 2018-19. That is nowhere near the 39 percent investment peak rate seen in 2011 and well below the 34 percent investment-to-GDP rate seen in 2014-15. There doesn’t seem to be much hope of a rapid turnaround in capital expenditure. The details are given in the accompanying chart.

Inflation is expected to average 3.9 percent this fiscal, higher than last fiscal, but still below RBI’s target of four percent. That will keep interest rates low.

Interestingly, the IMF feels that the overall fiscal deficit, including that of states, is going to rise this fiscal to 6.9 percent from 6.7 percent last fiscal. Inflation is expected to remain under control in spite of the higher deficit.

In line with the IMF’s forecast that trade restrictions will lower global growth rates, India’s volume of exports of goods and services is expected to grow more slowly in 2018-19. Import volume growth, though, is expected to increase, probably as a result of higher growth.

One big reason why inflation will remain subdued is because average crude oil prices are forecast to be 13.4 percent lower this year. That kind of precision in predicting oil prices is impossible, but at least the IMF thinks they will be lower, which, as we have seen above, is a big relief for India. Non-fuel commodity prices too are expected to be soft this fiscal.

The IMF says, “Growth in India is expected to stabilise at just under 7.34 percent over the medium term, based on continued implementation of structural reforms and easing of infrastructure bottlenecks.” What do we need to do to sustain that growth rate? Says the WEO, “Continued implementation of structural and financial sector reforms with efforts to reduce public debt remain essential to secure the economy’s growth prospects. In the near term, continued fiscal consolidation is needed to bring down India’s elevated public debt. This should be supported by strengthening Goods & Services Tax compliance and further reducing subsidies.

“Important steps have been taken to strengthen financial sector balance sheets, through accelerated resolution of non-performing assets under a simplified bankruptcy framework. These efforts should be reinforced by enhancing governance of public sector banks. Reforms to hiring and dismissal regulations would help incentivise job creation and absorb the country’s large demographic dividend. Efforts should also be enhanced on land reform to facilitate and expedite infrastructure development.”

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The Income Tax department said Thursday it added 1.07 crore new taxpayers while the number of ‘dropped filers' came down to 25.22 lakh in 2017-18, showing the positive impact of demonetisation.

In a statement, the Central Board Of Direct Taxes (CBDT) said 6.87 crore Income Tax Returns (ITRs) were filed during FY 2017-18 as compared to 5.48 crore ITRs filed during FY 2016-17, translating into a growth of 25 per cent.

Also, during FY 2017-18, the number of new ITR filers increased to 1.07 crore as compared to 86.16 lakh new ITR filers added during FY 2016-17, it added.

“Demonetization had a phenomenal positive impact on the widening of tax base and direct tax collections,” CBDT said.

Dropped Filers, which is defined as a person who was earlier in the filer base but has not filed return in any of the last three financial years, declined in 2017-18 to 25.22 lakh from 28.34 lakh in 2016-17.

"The net direct tax collections for 2017-18 amounted to Rs 10.03 lakh crore, which is 18% higher than the collections for 2016-17. The growth rate of 18 per cent for 2017-18 is the highest in the last seven financial years. A substantial part of this growth is attributed to the impact of demonetization,” CBDT said.

The government had in November 2016 demonetised high value currency notes of 500 and 1000 denominations to crack down on black money.

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With Gautam Buddh Nagar in Uttar Pradesh going to polls on April 11, BJP's Mahesh Sharma is a busy man these days, addressing meetings and public outreach programmes round the clock.

"Now one minute for me means 10 votes, and this ratio is only growing bigger," he said, settling for an early morning interview with PTI even as scores of people thronged his residence to meet him before he left for campaigning.

Sharma, 59, a native of Alwar in Rajasthan, has been living in Noida for 37 years now and finds himself emotionally connected with the people in Gautam Buddh Nagar, which elected him to the Lok Sabha with 5.99 lakh votes in 2014.

He is again contesting from the seat with rivals from the Samajwadi Party (SP) and Bahujan Samaj Party (BSP) alliance and the Congress, among others in the fray for the nearly 23 lakh votes.

"What is it that the people expect from their leader? The first is the candidate's party and the second is who is leading the party.

"This election is not about an MLA or an MP. This election is about deciding the leadership of the country, Sharma said alluding to Prime Minister Narendra Modi being a major factor among voters.

Modi is leading the country and the prime minister has taken the pride of India and Indians to new heights and to a stature that was imagined of it by sants and mahapurush", he said.

Certainly no other leader in India matches Modi in stature and I believe, world over he is among the few leaders who have made an identity for themselves, Sharma said.

Noting that his constituency has 1,186 villages, and around 400 colonies and housing societies, the Union minister for culture boasted of being one of the most approachable MPs.

Sharma is banking for votes on the exemplary development works done in the region in the last five years, including an international airport that is coming up in Jewar.

I think nobody else is as approachable as I am. I meet people till as late as 11-12 in the night and then in the morning again. I have never denied meeting anybody who comes to me.

"The work that I have done for my constituency in last five years, and what my party has done for the nation, are exemplary. I have been successful in getting projects worth Rs 50,000 crore in this region," he said.

The country's biggest airport, a Rs 12,000 crore power plant in Khurja, the first power plant in 15 years in UP. An elevated corridor for Rs 650 crore, a wide-network of metro rail which will reach up to Jewar, and also connect Ghaziabad and Faridabad are coming up here, the BJP leader said.

He also listed other projects in Noida and Greater Noida, including India's first botanical garden post Independence, works at Okhla bird sanctuary, the first museology institute outside Delhi, the country's first food craft institute and the Deendayal Upadhyay Institute of Archaeology, as achievements.

What is more significant is that we not only laid foundation stone of the projects, but inaugurated them as well, he remarked, adding his government has been quick.

However, he said a lot more is to be done and has plans to address problems related to law and order, road traffic, flat builders and buyers, and fee structure in schools, issues that have plagued the region adjoining Delhi for long.

Development is a process in continuity. Lot of work has been done but a lot more remains to be achieved, he said.

Sharma said farmers' issues lingering for 40 years are now getting resolved and so are those related to builders and buyers, as he squarely blamed the previous governments for causing distress to the two communities.

These are problems created by the last two governments. We constituted committees and RERA (Real Estate Regulation Authority) and empowered it (to take action), roped in the (state-run construction firm) NBCC to tackle all these problems.

"The guilty builders are either behind bars or being brought to justice, he said.

Sharma said there is a need to have a long-term solution for traffic problems. Private agencies are being roped in to identify the problems and come up with solutions, he said.

People have been demanding restoring of gram panchayats and establishing municipal corporation in cities, claiming approaching officers of Noida, Greater Noida or Yamuna Expressway authorities is not possible for locals.

My constituency has 1,186 villages, around 400 colonies. We make efforts to find solutions to everybody's problems. Nagar Nigam (municipal corporation) is subject of deep deliberation. It's not possible to instantly say if I support it or not, he said.

On employment, Sharma said with the law and order situation improving, the airport coming up and 40 corporate firms, which have already got land, set to arrive, one lakh job opportunities will be created in the region.

"These developments will also pave way for foreign investment. We will provide good governance and single-window clearance to enable industries set up business, he said, adding no big industry has come here in last 15 years, but today there is a conducive environment.

There are 13 candidates in the fray this time from Gautam Buddh Nagar, but Sharma is confident that with the work he has done he can ask people for votes.

On one side is the BJP, on the other are the SP and BSP in an alliance. They have robbed this region with open hands, the third is a Congress candidate who has come from Aligarh and has studied in the US.

"When all analysis is done, I think with the work done by my party and me, we are miles ahead of the competition, he added.

The SP-BSP have jointly named Satveer Nagar (37) as candidate and the Congress have fielded Arvind Kumar Singh (30) for the seat.

On if he thought he would win again and if yes would his vote margin increase, a confident and smiling Sharma gestured upwards with both hands (God) to say, Over 5 lakh new voters have joined the electoral role and the number has gone up close to 23 lakh.

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The Supreme Court’s (SC) judgement quashing RBI’s 12th February circular has come as a bolt from the blue. The circular was aimed at early recognition and resolution of stressed assets and making the Insolvency and Bankruptcy Code, 2016 (IBC) pivotal in the entire framework.

Post the February 12 circular, all pre-existing categorization of standard stressed assets – SDR, S4A, CDR restructuring, and flexible restructuring under 5:25 scheme stood abolished, leaving IBC as the only resolution mechanism.

Prior to the 12th February circular, the Banking Regulation Act was amended and under Section 35AA, the Reserve Bank of India (RBI) got the authority to direct banks to initiate insolvency resolution process in respect of a default, under the provision of the Insolvency and Bankruptcy Code (IBC), 2016.

Before assessing the probable impact of the SC judgement, it is important to understand the nuances of RBI’s February 12 circular.

RBI’s February 12 circular

The circular directed banks to identify incipient stress in loan accounts immediately on default, by classifying stressed assets as special mention accounts (SMA) as per the following categories, SMA-0 (1 to 30 days), SMA1 (31 to 60 days) and SMA-2 (61 to 90 days). Lenders were required to report SMA to Central Repository of Information on Large Credits (CRILC) on all borrower entities having aggregate exposure of Rs 5 crore and above on a monthly basis and all defaulting entities on a weekly basis.

While encouraging lenders to go for resolution, bankers felt that the conditions attached with the resolution plan (RP) were onerous. An RP was deemed to be ‘implemented’ only if the borrower entity was no longer in default with any of the lenders. For restructuring, the relevant documentation had to be completed by all lenders and the new capital structure had to get duly reflected in the books of all the lenders and the borrower.

For large accounts, post restructuring, the residual debt required independent credit evaluation by credit rating agencies authorised by the RBI.

For large accounts with aggregate exposure of over Rs 2000 crore, a reference day was set on March 1, 2018. If a resolution was not implemented within 180 days of the reference day or default day (if default day was later than reference day), lenders were required to file insolvency application under IBC within 15 days from the expiry of the said timeline.

Why the need for the February 12 circular?

Even in the face of mounting bad assets, banks were initially reluctant to refer even defaults to IBC and were resorting to different types of restructuring that in most cases made little sense. It neither nurtured the borrowing entity to health nor did it do any good to the lender except for postponing the problem.

The February 12 circular had put a definitive timeline by pushing defaulting cases to IBC. However, under the IBC framework, promoters cannot bid if he/she has furnished personal guarantee and if the period from default to admission into IBC exceeds one year. Section 29A under IBC virtually closed the doors of defaulting promoters to gain access to their companies.

Section 29A was introduced to ensure that persons who were responsible for the default of a company, or certain undesirable persons, did not acquire or regain control of a company by participating in the resolution process.

It is interesting to note that recently the Supreme Court has upheld all provisions of IBC including Section 29A, but it has quashed the February 12 circular.

The way forward

What this essentially means is that banks have more time to restructure a loan. However, the Supreme Court judgement doesn’t prevent a bank from referring a defaulter to IBC should it wish to do so.

For a defaulting promoter, it perhaps gives more time to enter into a restructuring arrangement with the lender without the onerous timeline of 180 days. For companies that have been impacted by adverse macro developments, this could provide some respite.

Finally, while the first list of NCLT cases has met with reasonable success, the same cannot be generalised for the long list of stressed companies. Many of them would be without tangible assets to find takers and for many smaller companies, there would be no takers beyond the promoter, as the real value of the business is best understood by the promoter. The normal IBC route would have resulted in liquidation of many smaller firms, with the attendant impact on jobs.

Whether the SC judgement provides a genuine breather remains to be seen. The follow-up action from RBI, should it come out with fresh guidelines on resolution and restructuring outside the IBC, would be keenly awaited.

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GST collection in March 2018-19 has been the highest ever since the introduction of the indirect tax regime with the government recording a 15.6 percent growth in revenue over 2017-18.

The total GST collections for March stood at Rs 1,06,577 crore. Of this, the total Central Goods and Services Tax (CGST) stood at Rs 20,353 crore, State Goods and Services Tax (SGST) collected was Rs 27,520 crore and Integrated Goods and Services Tax (IGST) was at Rs 50,418 crore.

IGST included Rs 23,521 crore worth of imports. Cess collected stood at Rs 8,286 crore. This included Rs 891 crore collected on imports.

The total revenue earned by the central and the state governments after regular and provisional settlement in the month of March was Rs 47,614 crore for CGST and Rs 51,209 crore for the SGST.

The total number of GSTR 3B returns, a tax return form necessary to be filed for GST registrants, filed for the month of February till March 31 was 75.95 lakh.

The revenue collected in March 2018 was Rs 92,167 crore. An average revenue of Rs 98,114 crore was collected each month in the financial year 2018-19, which was 9.2 percent higher than that collected in 2017-18.

"These figures indicate that revenue growth has been picking up in recent months, despite various rate rationalisation measures," Finance Ministry said in a statement on April 1.

Revenue collected in the last quarter of 2018-19 was 14.3 percent higher than that collected in the same period a year ago.

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Within the next three months, a new government will gather the reins of power. Once again, government officials will try and resume work on economic issues that have been put on the backburner. Unfortunately, elections tend to have this impact. Overall, the tamasha is so compelling that innocent bystanders are sucked in to watch the acrobatics, all the while trying to make sense of the events being played out.

Three issues will immediately grip the attention of policymakers. The first will be jobs. India needs them urgently.

The second will be the worsening financial situation – especially when it comes to banks. They have been buffeted by loan waivers on one hand, while on the other they have been pressured to give away imprudent loans. Despite war cries against corruption, there is enough evidence that suggests the old corrupt ways continue. Bank managements continue to be arm-twisted to bail out airlines and favour industrialists.

The third challenge will be to find out ways in which the worsening balance of payments (BoP) situation can be remedied.

This article is an attempt to suggest how the third objective can be achieved, and in doing so, how the first objective could be addressed.

But a caveat is needed here. There are many ways to cope with the looming BoP problem. There are short-term solutions, long-term, and more sustainable solutions. But if a solution can meet the short-term requirement and unleashes long-term benefits, that would be wonderful.  That is what this article explores.

Let's take a look at the country's balance of payments. The author has deliberately opted to look at data offered by the last Economic Survey for two reasons. The rupee figures given by the government and RBI recently could be misleading, because the rupee has depreciated significantly since then. It is better to stick to dollar-denominated numbers instead.

The second reason is that the numbers show how imports have now begun growing faster than exports. And this trend is likely to continue in the coming years. There is a global economic slowdown that is beginning to take firmer roots than ever before.

Moreover, trade barriers are being raised by countries to which India had conventionally exported substantial quantities. This includes the US, and the EU. India will have to refocus its attention on countries in Africa, South East Asia, or even Russia and China.

This is because the latter two countries could enjoy synergies with India that the rest of the world may not offer. Singapore may have a role to play here. But more on that another time.

It is these three countries that could be primarily responsible for actually causing the centre of gravity for global trade to shift to the East.

However, India will have to adopt other strategies as well. At a time when export growth cannot be pushed up easily, the country will have to find ways to reduce its import bills, without sacrificing growth. And this is where the author has been constantly pushing the case for boosting rooftop solar and converting waste to energy.

There's money in waste

Waste to energy alone has the potential of generating methane (which is similar to LNG or PNG as cooking or vehicle fuel). Just human and animal waste being converted into methane has the potential to generate around Rs 18 lakh crore worth of methane. Agro-waste has the potential to generate two or three times this amount.

One needs to look at the work Swedish commercial vehicles manufacturer Scania has done in Karnataka. It has set up small digestors in a few villages and has trained villagers to operate and maintain them. They are encouraged to sell rotten vegetables to the digestor at Re 1 per kg. The volumes collected produce enough methane to offer free cooking gas to households in the village on a daily basis. This way, farmers get money for vegetables as well, which could not be marketed earlier. And households can cook food without breathing in noxious fumes from burning cool can cause respiratory ailments.

If one goes by the Economic Survey of  2016-17 (Vol 2, para 5.22, the "negative impact on the respiratory system, cardiovascular diseases, neurological effects, etc" by just coal is tremendous.

Moreover, the report said, "The annual number of deaths linked to coal-based power plants pollution is estimated to be around 115,000 and the total monetary cost is around $4.6 billion." Multiply this by a factor of 10 because of the widespread nature of burning firewood, and the economic cost to India can be appreciated.

Now take a third of the potential for methane generation that India has through agro-waste and human and animal waste, and you then begin to realise that India can reduce its fuel import bills almost entirely. It could generate revenues of over a quarter trillion dollars. Surplus methane can be compressed, bottled and sold to other South East Asian and African countries. The savings on healthcare costs is a big bonus.

The sun is a healer

Nothing is a better antiseptic than sunlight - that is what most people often say. For India, the sun could improve its economic health. As pointed out in a recently-published column, there is no better solution for transforming India into rooftop solar.

What is interesting is that adopting the rooftop solar power strategy could create almost 80 million jobs within a few years. In fact, it has sometimes taken chief ministers to actually lobby with the Union power minister to let them adopt rooftop solar power in their respective states.

Now look at the other table. It is about the country's principal imports.  Watch the number for petroleum, oil and lubricants. This number is easily the biggest import bill that India has to pay.

What is amazing is that both waste to energy or methane generation and solar power can help India reduce this bill significantly. Moreover, the scale of operations that rooftop solar will involve would easily allow India to master technologies relating to smart micro-grids and solar power management. These are skills that much of South East Asia and almost all of the African continent will be looking for. India could begin positioning itself as an exporter of such technology besides exporting methane.

That would take care of two of the biggest headaches the new government will have to confront – employment and balance of payment.

But what about the poor finances of banks and the financial system. Unfortunately, that has less do with strategy and more to do with the venality of India's policymakers. If only there were a short cut solution to integrity, and transparency.

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The commerce ministry has called a meeting of stakeholders including export promotion councils and other government departments to discuss ways to increase exports to China, an official said. Officials from the agriculture ministry, Agricultural & Processed Food Products Export Development Authority (APEDA), and representatives from export promotion councils would participate in the meeting.

Growth in exports to China is beneficial for India as it has huge trade deficit with the neighbouring country.

Trade deficit with China increased to $63.12 billion in 2017-18 from $51.11 billion in 2016-17.

India is taking several steps to promote shipments to China. Recently, it has managed to export agricultural goods such as non-basmati rice to China.

India is seeking greater market access for various agricultural products, animal feeds, oil seeds, milk and milk products, pharmaceuticals in light of the potential of these products/services in the Chinese market.

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The Income-Tax (I-T) Department will begin compiling comprehensive profiles on taxpayers from April 1. The move, which is a part of Project Insight, aims to track compliance of tax paying individuals and bring more people under the tax net, the paper said.

The department will collect information on taxpayers, including relationships, social networking, ITR status and asset details, the report said.

The database will also help identify errant taxpayers after demonetisation, and those with pending demands of above Rs 10 lakh. The tax department had on March 15 given instructions officials instructions to access the insight portal, The Economic Times reported.

The information on the portal will be segregated into various segments and include an integrated information management system, the report said.

One segment will have the taxpayer’s master profile, which includes address, signature and tax returns. The second segment, a business intelligence hub, will contain parameters to identify non-compliant taxpayers.

“The objective of this system is to leverage machine learning in organising, creating, sharing and using it for getting the right perspective at the right time,” an official told the publication.

The portal will also provide details of an individual’s movable and immovable assets to speeden recovery in cases where the pending dues exceed Rs 10 lakh.

Officials will also be able to monitor the status of cases where large sums of cash were deposited during demonetisation, the report added.

Project Insight, launched in 2017, uses data analytics to collect information from social media sites to identify mismatches between income declaration and spending patterns.

The Income Tax Department also has an agreement with L&T Infotech to help improve tax compliance.

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The Election Commission of India (EC) on March 10 announced the schedule for the upcoming Lok Sabha polls. The poll panel also announced the Assembly election schedule for four states.

Polling will be held in seven phases starting April 11 and will conclude on May 19. Counting of votes will take place on May 23.

The election, to be conducted in April-May, is being pegged as the largest election exercise in history.

The poll panel also announced Legislative Assembly election schedule for the states of Andhra Pradesh, Arunachal Pradesh, Odisha and Sikkim. The two polls — Lok Sabha and Assembly — will happen simultaneously in these states.

Here are some of the key facts about the election:

> Approximately 10 lakh polling stations will be set up. The number is up from 9 lakh in 2014.

> Voter-Verified Paper Audit Trail (VVPATs) will be used with all Electronic Voting Machines (EVMs) at all polling stations.

> The total electorate will be around 90 crore. The number has risen from 81.4 crore in 2014.

> 1.5 crore voters belong to the 18-19 years age bracket.

> Photographs of candidates will be added to the EVMs.

> Social media now comes under the purview of the Model Code of Conduct.

Seven-phase voting

> Phase 1 voting: April 11 (91 constituencies in 20 states)

> Phase 2: April 18 (97 constituencies in 13 states)

> Phase 3: April 23 (115 constituencies in 14 states)

> Phase 4: April 29 (71 constituencies in 9 states)

> Phase 5: May 6 (51 constituencies in 7 states)

> Phase 6: May 12 (59 constituencies in 7 states)

> Phase 7: May 19 (59 constituencies in 8 states)