India seems to be recovering from demonetisation and GST roll-out: IMF

Agencies
March 11, 2018

Washington, Mar 11: The Indian economy now seems to be on its way to recovering from disruptions caused by demonetisation and roll-out of goods and services tax, the IMF said on Sunday.

At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems.

India's economy has expanded strongly in recent years, thanks to macroeconomic policies that emphasise stability and efforts to tackle supply-side bottlenecks and structural reforms. Disruptions from demonetisation and the rollout of the goods and services tax (GST) did slow growth," Tao Zhang, Deputy Managing Director of IMF, told PTI in an interview. Zhang will be travelling to India and Bhutan from March 12 to March 20.

"However, with the economy expanding by 7.2 percent in the latest quarter, India has regained the title of the fastest-growing major economy, Zhang said.

Calling this development a "welcome change", Zhang said the growth prospects remain positive.

"That said, the Indian economy would benefit from further reforms, such as enhancing health and education, encouraging private and public investment, and improving the efficiency of the banking and financial systems. This would support durable and inclusive growth and enable India to move towards the income levels of wealthier countries, the top IMF official said ahead of his visit to India.

Given the dominance of cash in everyday transactions in the Indian economy, it was inevitable that demonetization would temporarily affect economic activity, said Zhang.

The rollout of the GST last year was a landmark accomplishment that can be expected to enhance the efficiency of intra-Indian movement of goods and services, create a common national market, enhance tax buoyancy, and boost GDP growth and job creation, he said.

Yet the complexities and glitches in GST implementation also resulted in short-term disruptions. As I mentioned earlier, the economy now seems to be on its way to recovering from those disruptions, Zhang said in response to a question.

When asked about the latest Indian budget, which many critics say is protectionist in nature, Zhang said IMF research indicates that tariffs are broadly contractionary, reducing output, investment, and employment.

Trade tariffs may give limited relief to industries and workers that directly compete with affected imports. However, they can raise costs to consumers and other businesses that use the protected products. Tariffs also would reduce incentives for businesses to compete and improve efficiency, he cautioned.

Since the opening of the economy starting in the early-1990s, India has benefitted from trade liberalization, he observed.

Further supply-side reforms aimed at improving the business climate could enhance these benefits, the top IMF official asserted.

Noting that the IMF and India have close relations, and the two have always been good partners, Zhang said his visit is a reflection of this partnership, as is the newest regional capacity development centre, SARTTAC, based in New Delhi.

The centre partners with India and its South Asian neighbours to build strong institutions and implement policies that promote growth and poverty reduction in the region, he said.

My visit is an opportunity to exchange views with the Indian authorities, senior RBI officials, and representatives from the Indian business community, civil society, and others, he said.

Zhang will also have a presentation on financial technology that will take place on Monday at the National Stock Exchange of India.

We will go over the latest trends in financial technology and their effects on the global economy and India, said the top IMF official.

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News Network
March 6,2020

New York, Mar 6: A 23-year-old Indian with a student visa in the US has pleaded guilty to sexual enticement of a minor girl, prosecutors have said.

Sachin Aji Bhaskar faces a maximum penalty of life in prison.

He pleaded guilty before Senior US District Judge William M Skretny to sexual enticement of a minor.

The charge carries a minimum penalty of 10 years in prison, a maximum penalty of life in prison, a fine of USD 250,000 or both, US Attorney James P Kennedy said.

Prosecutors alleged that Bhaskar communicated by text and email with an 11-year-old girl for the purpose of engaging in sexual activity.

Through those communications, Bhaskar enticed the victim to engage in a sexual activity with him in August, 2018, they said.

The sentencing in the case is scheduled for June 17.

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News Network
February 9,2020

Wuhan, Feb 9: President Xi Jinping strode onstage before an adoring audience in the Great Hall of the People in Beijing less than three weeks ago, trumpeting his successes in steering China through a tumultuous year and promising "landmark" progress in 2020.

"Every single Chinese person, every member of the Chinese nation, should feel proud to live in this great era," he declared to applause on the day before the Lunar New Year holiday. "Our progress will not be halted by any storms and tempests."

Xi made no mention of a dangerous new coronavirus that had already taken tenacious hold in the country. As he spoke, the government was locking down Wuhan, a city of 11 million people, in a frantic attempt to stop the virus spreading from its epicenter.

The coronavirus epidemic, which has killed more than 800 people in China as of Sunday and sickened tens of thousands, comes as Xi has struggled with a host of other challenges: a slowing economy, huge protests in Hong Kong, an election in Taiwan that rebuffed Beijing and a protracted trade war with the United States.

Now Xi faces an accelerating health crisis that is also a political one: a profound test of the authoritarian system he has built around himself over the past seven years. As the Chinese government struggles to contain the virus amid rising public discontent with its performance, the changes that Xi has ushered in could make it difficult for him to escape blame.

"It’s a big shock to the legitimacy of the ruling party. I think it could be only second to the June 4 incident of 1989. It’s that big," said Rong Jian, a writer about politics in Beijing, referring to the armed crackdown on Tiananmen Square protesters that year.

"There’s no doubt about his control over power," he added, "but the manner of control and its consequences have hurt his legitimacy and reputation."

Xi himself has recognized what is at stake, calling the outbreak "a major test of China’s system and capacity for governance."

Yet as China’s battle with the coronavirus intensified, Xi put the country’s No. 2 leader, Li Keqiang, in charge of a leadership group handling the emergency, effectively turning him into the public face of the government’s response. It was Li Keqiang who traveled to Wuhan to visit doctors.

Xi, by contrast, receded from public view for several days. That was not without precedent, though it stood out in this crisis, after previous Chinese leaders had used times of disaster to try to show a more common touch. State television and newspapers almost always lead with fawning coverage of Xi’s every move.

That retreat from the spotlight, some analysts said, signaled an effort by Xi to insulate himself from a campaign that may falter and draw public ire. Yet Xi has consolidated power, sidelining or eliminating rivals, so there are few people left to blame when something goes wrong.

"Politically, I think he is discovering that having total dictatorial power has a downside, which is that when things go wrong or have a high risk of going wrong, then you also have to bear all the responsibility," said Victor Shih, an associate professor at the University of California San Diego who studies Chinese politics.

Much of the country’s population has been told to stay at home, factories remain closed, and airlines have cut service. Experts warn that the coronavirus could slam the economy if not swiftly contained.

The government is also having trouble controlling the narrative. Xi now faces unusually sharp public discontent that even China’s rigorous censorship apparatus has been unable to stifle entirely.

The death of an ophthalmologist in Wuhan, Dr. Li Wenliang, who was censured for warning his medical school classmates of the spread of a dangerous new disease in December, has unleashed a torrent of pent-up public grief and rage over the government’s handling of the crisis. Chinese academics have launched at least two petitions in the wake of Li’s death, each calling for freedom of speech.

State media still portray Xi as ultimately in control, and there’s no sign that he faces a serious challenge from within the party leadership. The crisis, though, has already tainted China’s image as an emerging superpower — efficient, stable and strong — that could eventually rival the United States.

How much the crisis might erode Xi’s political standing remains to be seen, but it could weaken his position in the long run as he prepares to take a likely third term as Communist Party general secretary in 2022.

In 2018, Xi won approval to remove the constitutional limits on his term as the country’s president, making his plan for another five-year term seem all but certain.

If Xi comes out of this crisis politically insecure, the consequences are unpredictable. He may become more open to compromise within the party elite. Or he may double down on the imperious ways that have made him China’s most powerful leader in generations.

"Xi’s grip on power is not light," said Jude Blanchette, the Freeman Chair in China Studies at the Center for Strategic and International Studies.

"While the ham-fisted response to this crisis undoubtedly adds a further blemish to Xi’s tenure in office," Blanchette added, "the logistics of organizing a leadership challenge against him remain formidable."

In recent days, despite a dearth of public appearances, state media have portrayed Xi as a tireless commander-in-chief. This week they began calling the government’s fight against the virus the "people’s war," a phrase used in the official readout of Xi’s telephone call with President Donald Trump on Friday.

There are increasing signs that the propaganda this time is proving less than persuasive.

The Lunar New Year reception in Beijing where Xi spoke became a source of popular anger, a symbol of a government slow to respond to the suffering in Wuhan. Xi and other leaders appear to have been caught off guard by the ferocity of the epidemic.

Senior officials would almost certainly have been informed of the emerging crisis by the time national health authorities told the World Health Organization on Dec. 31, but neither Xi nor other officials in Beijing informed the public.

Xi’s first acknowledgment of the epidemic came Jan. 20, when brief instructions were issued under his name. His first public appearance after the lockdown of Wuhan on Jan. 23 came two days later, when he presided over a meeting of the Communist Party’s top body, the Politburo Standing Committee, which was shown at length on Chinese television. "We’re sure to be able to win in this battle," he proclaimed.

Back then, the death toll was 106. As it rose, Xi allowed other officials to take on more visible roles. Xi’s only appearances have been meeting foreign visitors in the Great Hall of the People or presiding over Communist Party meetings.

On Jan. 28, Xi met with the executive director of the World Health Organization, Dr. Tedros Adhanom Ghebreyesus, and told Tedros that he "personally directed" the government’s response. Later reports in state media omitted the phrase, saying instead that Xi’s government was "collectively directing" the response.

Since nothing about how Xi is portrayed in state media happens by accident, the tweak suggested a deliberate effort to emphasize shared responsibility.

Xi did not appear on official broadcasts again for a week — until a highly scripted meeting Wednesday with the authoritarian leader of Cambodia, Hun Sen.

There is little evidence that Xi has given up power behind the scenes. Li Keqiang, the premier in formal charge of the leadership group for the crisis, and other officials have said that they take their orders from Xi. The group is filled with officials who work closely under Xi, and its directives emphasize his authority.

"The way the epidemic is being handled now from the top just doesn’t fit with the argument that there’s been a clear shift toward more collective, consultative leadership," said Holly Snape, a British Academy Fellow at the University of Glasgow who studies Chinese politics.

The scale of discontent and the potential challenges for Xi could be measured by repeated references online to the nuclear accident at Chernobyl. Many of them came under the guise of viewer reviews of the popular television miniseries of the same name, which is still available for streaming inside China.

"In any era, any country, it’s the same. Cover everything up," one reviewer wrote.

The Soviet Union of 1986, however, was a different country than China in 2020.

The Soviet state was foundering when Chernobyl happened, said Sergey Radchenko, a professor of international relations at Cardiff University in Wales who has written extensively on Soviet and Chinese politics.

"The Chinese authorities, by contrast, are demonstrating an ability to cope, a willingness to take unprecedented measures — logistical feats that may actually increase the regime’s legitimacy," he added.

Radchenko compared Xi’s actions to those of previous leaders in moments of crisis: Mao Zedong after the Cultural Revolution or Deng Xiaoping after the Tiananmen Square crackdown.

"He’s doing what Mao and Deng would have done in similar circumstances: stepping back into the shadows while remaining firmly in charge."

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News Network
March 10,2020

Tehran, Mar 10: Twenty-seven people have died from methanol poisoning in Iran after rumours that drinking alcohol can help cure the novel coronavirus infection, state news agency IRNA reported on Monday. The outbreak of the virus in Islamic republic is one of the deadliest outside of China, where the disease originated.

Twenty have died in the southwestern province of Khuzestan and seven in the northern region of Alborz after consuming bootleg alcohol, IRNA said.

Drinking alcohol is banned in Iran for everyone except some non-Muslim religious minorities. Local media regularly report on lethal cases of poisoning caused by bootleg liquor.

A spokesman for Jundishapur medical university in Ahvaz, the capital of Khuzestan, said 218 people had been hospitalised there after being poisoned.

The poisonings were caused by "rumours that drinking alcohol can be effective in treating coronavirus," Ali Ehsanpour said.

The deputy prosecutor of Alborz, Mohammad Aghayari, told IRNA the dead had drunk methanol after being "misled by content online, thinking they were fighting coronavirus and curing it." If ingested in large quantities, methanol can cause blindness, liver damage and death.

Iran has been scrambling to contain the spread of the COVID-19 illness which has hit all of the country's 31 provinces, killing 237 people and infecting 7,161.

According to IRNA, 16 out of 69 confirmed cases have died of coronavirus infection in Khuzestan as of Sunday.

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