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Daily Financial News Analysis – 4th Nov’19 | PDF Download

Scrap open-ended procurement

  • Commission for Agricultural Costs and Prices (CACP) recommendation: scrap open-ended grain procurement policy.
  • Buffer requirement: 30.8 mt of wheat and rice.
  • 01-10-2019: total central pool stock, including stock in transit, stood at 64.2 million tonnes (mt).
  •  109% more than the requirement.
  •  The government has taken steps to liquidate 15 mt of stocks, but hasn’t met much success here.
  • CACP, in its latest report for rabi season, has batted for direct procurement by private players, as envisaged under the Private Procurement Stockist Scheme.
  • While the purpose of open-ended procurement was to provide support to farmers.
  • MSP hikes has seriously weighed down the government’s finances.
  •  The Centre has made the Food Corporation of India shoulder this burden.
  • Long-term debt levels for FCI stand at Rs 200,000 crore, with an additional Rs 80,000 crore of short-term debt.
  • CACP suggestion is worth serious consideration.
  • Government should re-think about MSP as its primary tool for farm support.
  •  Why will a private player buy grains for MSP, if he/she can get it at a much lower market rate.
  • MSP regime also hinders the liquidation of stocks through export. MSP benefits only a small pool of farmers from a handful of states while distorting agricultural production in favour of a few crops.
  • Per-acre support in combo.
  •  Farmer will be able to make choices based on market requirement.
  •  It will promote judicious use of resources.
  •  the success of Punjab’s experiment with water and DBT shows how well the plan can work.
  • A fixed per-acre support scheme will help cut down wastage.
  • FCI can still maintain its buffer stock, but the PDS can be disbanded.
  • NITI Aayog study shows that people tend to graduate to a higher quality of grains once they are allowed freedom and flexibility to choose.


  •  India clearly stated its conditions
  • liberty to settle its differences bilaterally with any of the members and negotiate accordingly even after the current summit.
  • Safeguard mechanism
  • Tariffs
  • Rules of origin
  • Services trade
  • India’s merchandise trade deficit with China stood at $53.6 billion in FY19.
  •  Its deficit with potential RCEP members (including China) was as much as $105 billion in FY19.
  • China will divert massive supplies from the US to tide over the trade war.
  • 25% of GDP 30% of trade 26% of FDI flows 45% of population

 PM Modi invites investors

  • Ease of Doing Business
  • Ease of Living
  • FDI is rising
  • Our Forest Cover is rising
  •  Number of patents and trademarks are rising
  •  Productivity and efficiency are rising
  •  Pace of infrastructure creation is rising.
  •  Number of people getting top quality
  •  healthcare is rising. Number of
  •  taxes are falling.
  •  Tax rates are falling.
  •  Red-tapism is falling.
  • Cronyism is falling.
  • Corruption is falling.

 WhatsApp fallout

  • The government is approaching RBI and National Payments Corporation of India (NPCI) over the risks in allowing social media platforms such as WhatsApp into the digital payments space.
  • The move comes as the hacking issue is being monitored at the highest levels of government.
  •  The latest development could mean further delays in the launch of WhatsApp’s payment feature, which is yet to pass the test of compliance with India’s financial authorities.
  • The government said WhatsApp did inform CERT-IN about the hacking incident.

IMF on India & South Asia

  •  For IMF, South Asia includes India, Bangladesh, Nepal, Sri Lanka, Bhutan, and Maldives.
  •  Led by India, South Asia is moving towards becoming center of global growth.
  •  Region could contribute about onethird of the world’s growth by 2040.
  •  Supported by stepped-up efforts to improve infrastructure.
  •  Successfully harness South Asia’s young and large workforce.
  • More than 150 million people in the region are expected to enter the labour market by 2030.
  • Young and large workforce can be South Asia’s strength, if supported by a successful high-quality and job-rich growth strategy.
  •  IMF sees India needing a multipronged approach that leverages the advantages that the country already has.
  • The country has already an excellent tertiary education system, built a on high value-added services.
  •  But it needs to be complemented with areas like the manufacturing sector, wherein India is below what would one expect from a country with that level of development.
  • India, needs to create a better environment for private sector growth



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