IMF calls for 'urgent' action by India amid slowdown

Jan 6: India’s Finance Ministry has delivered a challenge to its revenue collectors: meet tax targets despite $20 billion of corporate tax cuts.

Through a video conference on Dec. 16, officials were exhorted to meet the direct tax mop-up target of 13.4 trillion rupees ($187 billion), a government official told reporters. Collection in the eight months to November grew at 5% from a year earlier, against the desired 17%.

The missive shows Prime Minister Narendra Modi’s urgent need to buoy public finances in a slowing economy where April-November tax collections were half the amount budgeted. Authorities withheld some payments to states and have capped ministries’ expenditure as the fiscal deficit ballooned beyond the target.

The government’s efforts to maintain its deficit goal goes against advice from some quarters, including central bank Governor Shaktikanta Das, who urged more spending to spur economic growth.

It’s uncertain though how much room Modi’s administration has to boost expenditure, given that it may already be borrowing as much as 540 billion rupees through state-run companies, a figure that isn’t reflected on the federal balance sheet. Uncertainty about public finances pushed up sovereign yields in November and December, compelling Das to announce unconventional policies to keep costs in check.

“This is not a time to conceal the fiscal deficit by off-budget borrowing or deferring payments,” said Indira Rajaraman, an economist and a former member of the Reserve Bank of India’s board. “If they were to stick to the target, that would be catastrophic because there is so much pump-priming that is needed right now.”

GDP grew 4.5% in the quarter ended September, the slowest pace in more than six years as both consumption and investments cooled in Asia’s third-largest economy. Only government spending supported the expansion, piling pressure on Modi to keep stimulating.

S&P Global Ratings warned in December it may downgrade India’s sovereign ratings if economic growth doesn’t recover. Government support seems to be waning now, with ministries asked to cap spending in the final quarter of the financial year at 25% of the amount budgeted rather than 33% allowed earlier. This new rule will hamstring sectors including agriculture, aviation and coal, where not even half of annual targets have been disbursed.

As the federal government runs short of money, it’s been delaying payouts to state administrations.

Private hospitals have threatened to suspend cash-less services to government employees over non-payment of dues, while a builder informed the stock exchange about delayed rental payments from no less than the tax office itself.

India is considering a litigation-settlement plan that will allow companies to exit lingering tax disputes by paying a portion of the money demanded by the government, the Economic Times newspaper reported Saturday.

The move will help improve the ease of doing business besides unlocking a part of the almost 8 trillion rupees ($111 billion) caught up in these disputes. The step, which is being considered as part of the annual budget, could also bridge India’s fiscal gap.

Finance Minister Nirmala Sitharaman has refused to comment on the deficit goal before the official budget presentation due Feb. 1.

A deviation from target, if any, “will need to be balanced with a credible consolidation plan further-out,” said Radhika Rao, an economist at DBS Group Holdings Ltd. in Singapore.

As the deadly coronavirus has spread worldwide, it has carried with it xenophobia -- and Asian communities around the world are finding themselves subject to suspicion and fear.

When a patient on Australia's Gold Coast refused to shake the hand of her surgeon Rhea Liang, citing the virus that has killed hundreds, the medic's first response was shock.

But after tweeting about the incident and receiving a flood of responses, the respected doctor learned her experience was all too common.

There has been a spike in reports of anti-Chinese rhetoric directed at people of Asian origin, regardless of whether they have ever visited the centre of the epidemic or been in contact with the virus.

Chinese tourists have reportedly been spat at in the Italian city of Venice, a family in Turin was accused of carrying the disease, and mothers in Milan have used social media to call for children to be kept away from Chinese classmates.

In Canada, a white man was filmed telling a Chinese-Canadian woman "you dropped your coronavirus" in the parking lot of a local mall.

In Malaysia, a petition to "bar Chinese people from entering our beloved country" received almost 500,000 signatures in one week.

The incidents are part of what the Australasian College for Emergency Medicine has described as "misinformation" which it says is fuelling "racial profiling" where "deeply distressing assumptions are being made about 'Chinese' or 'Asian-looking' people." Disease has long been accompanied by suspicions of foreigners -- from Irish immigrants being targeted in the Typhoid Mary panic of 1900s America to Nepali peacekeepers being accused of bringing cholera to earthquake-struck Haiti in the last decade.

"It's a common phenomenon," said Rob Grenfell, director of health and biosecurity for Australia's science and research agency CSIRO.

"With outbreaks and epidemics along human history, we've always tried to vilify certain subsets of the population," he said, comparing the behaviour to 1300s plague-ridden medieval Europe, where foreigners and religious groups were often blamed.

"Sure it emerged in China," he said of the coronavirus, "but that's no reason to actually vilify Chinese people." In a commentary for the British Medical Journal, doctor Abraar Karan warned this behaviour could discourage people with symptoms from coming forward.

Claire Hooker, a health lecturer at the University of Sydney, said the responses from governments may have compounded prejudice.

The World Health Organisation has warned against "measures that unnecessarily interfere with international travel and trade", but this has not stopped scores of countries from introducing travel bans.

The tiny Pacific nation of Micronesia has banned its citizens from visiting mainland China altogether.

"Travel bans respond largely to people's fears," said Hooker, and while sometimes warranted, they often "have the effect of cementing an association between Chinese people and scary viruses".

Abbey Shi, a Shanghai-born student in Sydney, said the attitude shown by some of her peers has "become almost an attack on students who are Chinese".

While Australia's conservative government has banished its citizens returning from Wuhan -- the central Chinese city at the epicentre of the virus -- to a remote island for quarantine, thousands of students still stuck in China risk their studies being torpedoed.

"Right now it looks like they have to miss the semester's start and potentially the whole year, because of the way the courses are set up," Shi said.

According to Hooker, studies in Toronto on the impact of Severe Acute Respiratory Syndrome, or SARS -- another global coronavirus outbreak in 2002 -- showed the impact of xenophobic sentiment often lasted much longer than the public health scare.

"While there may be a cessation of direct forms of racism as news about the disease dies down, it takes quite a bit of time for economic recovery and people continue to feel unsafe," she said.

People may not rush back to Chinese businesses or restaurants, and may even heed some of the more outlandish viral social media disinformation -- such as one popular post imploring people to avoid eating noodles for their own safety.

"In one sense you might think the effects lasted from the last coronavirus to this one because the representation as China being a place where diseases come from has been persistent," Hooker said.

Wellington, Mar 25: New Zealand has declared a state of emergency as it prepares to go into an unprecedented lockdown late Wednesday for about a month.

The declaration temporarily gives police and the military extra powers. And Prime Minister Jacinda Ardern says any New Zealanders returning home from overseas who show symptoms of COVID-19 will be put in isolation at an approved facility.

“I have one simple message for New Zealanders today as we head into the next four weeks: ‘stay at home,’” Ardern said. “It will break the chain of transmission and it will save lives.”

Ardern said exceptions include people working crucial jobs, those leaving to pick up essentials like groceries, and those engaging in solitary exercise.

The country has 205 reported cases of the virus, although Ardern said that number could rise into the thousands before it begins to recede even with the strict measures being taken.