Finance Minister announces Rs 3 lakh crore collateral free automatic loan for businesses

Mumbai, Aug 6: Former Reserve Bank of India governor Raghuram Rajan said on Thursday that overly focusing on what sovereign rating agencies think can take one's eyes off what needs to be done for the economy.

"It is also important to convince both domestic and international investors that after the crisis associated with the pandemic is over, we will return to fiscal responsibility over the medium term, and the government should do more to convince them of that," Rajan told the Global Markets Forum.

India was placed under one of the strictest lockdowns in the world in late March for more than two months to stem the spread of the coronavirus, but cases have continued to rise steadily since the government eased restrictions in June, stymieing hopes of an economic recovery.

The government has announced several initiatives to help the poor and small- and medium-size businesses, but actual cash outgo from the government's measures has been estimated at just about 1% of GDP.

Several attribute the fiscal prudence to fear of a downgrade after Moody's cut India's rating and outlook in early June followed closely by a change in outlook from Fitch.

The central bank on its part too has reduced the key lending rate by 115 basis points on top of the 135 bps last year and is widely expected to cut rates by another 25 bps later on Thursday.

"The RBI and government have certainly been cooperating, but it seems like it is elsewhere, the ball is in the government's court to do more," Rajan said.

He said the RBI needs to focus on whether credit is reaching the stressed areas of the economy and also if the viable firms were able to access credit and not the unviable ones.

"And I think that's where it has to focus its attentions, because resources, as you well know, are limited in India today."

Recently analysts, however, have cited the growing possibility the RBI may prefer to pause and cut rates only at its October meeting.

Government officials too have suggested the possibility of any more fiscal stimulus being announced, would only come in the second half of the fiscal year, once a recovery has taken root and coronavirus cases have peaked.

"What India should focus on at this point is protecting its economic capabilities, so that when it has dealt with the virus it can go resume activity in a reasonable way. That should be the focus," Rajan said.

"And if it does that, there is no reason why the rating agencies will not see that as an appropriate policy".

New Delhi, Jul 30: Preparing for a long haul in the Eastern Ladakh sector in extreme winters, the Indian Army has an edge over the Chinese as it has deployed 35,000 troops there who have already done tenures in high altitude and cold conditions.

The Indian troops deployed there are mentally prepared for tackling the weather and terrain.
In contrast, the Chinese troops deployed along the Line of Actual Control (LAC) are not used to these conditions as they have been brought from mainland China and are not accustomed to high altitude extreme cold weather conditions.

"We are preparing to provide extreme cold weather portable cabins for around 35,000 troops that have been deployed in the Eastern Ladakh sector," government sources said.

"Our soldiers deployed there have already done a tenure or two in Siachen, Eastern Ladakh or Northeast and they are physically and mentally prepared for a longer deployment there," they said.

The Chinese soldiers deployed on the Indian front include mainly conscripts who join the PLA for a period of 2-3 years and then return to their normal lives, sources said.

Indian and Chinese troops are engaged in a standoff situation all along the LAC in Eastern Ladakh from sub-sector north with both sides having deployed around 40,000 troops against each other over there.

The two sides have disengaged at three friction points including Patrolling Point 14, PP-15 and PP-17 and PP-17A.

At PP-17 and 17A, the Chinese have now maintained a small element of close to 50 troops and the remaining elements have gone back into their permanent locations.

The sources said the Army is also not much bothered about the Chinese build-up along the LAC as it has got more than two additional divisions from outside Ladakh sector.

India Army has more troops than what the Chinese have brought there, they said.

For the winter deployment, the Army already has a sizeable stock of clothes and habitat for troops as the Indian army deploys troops at the world's highest battlefield Siachen glacier and is prepared.

For additional requirements, the force is in the process of placing orders for additional tents and shelters from indigenous as well as foreign vendors.

The time for summer stocking is on and we are going to get the additional cabins and tents by that time, the sources.

Months of June, July, and August are considered to be the best time for stocking winter rations and ammunition. The snowfall is expected to start soon in the Eastern Ladakh area where the temperature is already low.

Prime Minister Narendra Modi's government has given financial powers of Rs 500 crore per procurement to the defence forces to address any type of shortages of weapons, ammunition, and habitat.