The Reserve Bank of India, in its Monetary Policy Report, has sharply altered the outlook for India's economic recovery underlining the pandemic's deepening impact on South Asia's engine of growth. Prior to the outbreak of COVID-19, the outlook for growth for 2020-21 was looking up owing to bumper rabi harvest and higher food prices during 2019-20, improved transmission of past reductions in the policy rate to bank lending rates and reductions in the goods and services tax (GST) rates. The COVID-19 pandemic has drastically altered this outlook.

Optimism in the manufacturing sector for the quarter ahead had improved in the January-March 2020 round of the Reserve Bank's industrial outlook survey, reflecting expectations of higher production, order books, capacity utilisation, employment conditions, exports and overall business situation, In view of the intensification of COVID-19, a quick survey with select parameters was specially conducted during March 18-20 to capture business sentiments. From the limited responses received, a considerable worsening of the key demand indicators is seen in the outlook for Q1:2020-21.

The global economy is expected to slump into recession in 2020, as post-COVID projections indicate. The sharp reduction in international crude oil prices, if sustained, could improve the country's terms of trade, but the gain from this channel is not expected to offset the drag from the shutdown and loss of external demand. India has not been spared from the exponential spread of COVID-19 and by April 7, more than 4,700 cases had been reported. While efforts are being mounted on a war footing to arrest its spread, COVID-19 would impact economic activity in India directly through domestic lockdown. Second round effects would operate through a severe slowdown in global trade and growth. More immediately, spillovers are being transmitted through finance and confidence channels to domestic financial markets. These effects and their interactions would inevitably accentuate the growth slowdown, which started in Q1:2018-19 and continued through H2:2019-20.

The Ministry of Corporate Affairs (MCA) is fully cognizant of the difficulties faced by companies on account of the ongoing nation-wide lockdown and social distancing due to COVID 19. Taking stock of the situation, the MCA had earlier allowed all meetings of the Board of directors upto 30thJune 2020, to be conducted through Video Conferencing (VC) or other audio visual means (OAVM) vide its notification date 19.03.2020, including meetings on items where the physical presence of directors is otherwise required.

In furtherance of the Government’s objective of facilitating corporate compliances during the current lockdown period and other restrictions on account of COVID 19, the Ministry has today issued a circular allowing companies to hold Extraordinary General Meetings (EGMs) through VC or OAVM complemented with e-Voting facility/simplified voting through registered emails, without requiring the shareholders to physically assemble at a common venue. The Companies Act, 2013 allows ordinary and special resolutions to be passed through postal ballot/e-voting route without holding a physical general meeting. However, in present lockdown/social distancing conditions due to COVID 19, postal ballot facility cannot be utilized by the companies.

Accordingly, the General Circular No. 14/2020 dated 08.04.2020 issued by the MCA allows listed companies or companies with 1,000 shareholders or more which are required to provide e-voting facility under the Companies Act, 2013 to conduct EGM through VC/ OAVM and e-Voting. For other companies, a highly simplified mechanism for voting through registered emails has been put in place for easy compliance.

Associated Chambers of Commerce and Industry of India (ASSOCHAM) proposes several radical measures to keep the country’s economy’s subsistence through its fight with COVID-19 pandemic. With a sentiment that to tackle the unprecedented times, exceptional measures are essential, apex industry body, ASSOCHAM has recommended a 16-point agenda and a stimulus package of at least $200-$300 billion. The Chamber believes that in keeping up with most economies of the world to institute stimulus measures with 10 percent of the Gross Domestic Product (GDP), the Indian economy would need a transfusion of over $200 billion with an ability to go up to $300 billion, over the next 12-18 months. He stated that out of the corpus, $50-100 billion cash needs to be infused in the system over the next three months, to arrest the loss of jobs and compensate for loss of income.

Such an infusion would help businesses and workers tide over the challenging situation. It will be critical to ensure we proceed with three objectives i.e. immediate assistance to employees and labour through direct transfers and through employers, ensuring that companies have enough cashflow to survive the downturn, and finally stimulating demand and investment to revive the economy through fiscal and tax measures.

Some of the key recommendations to the Finance Ministry includes, the one-time loan restructuring to all corporates assuming a principal repayment start date moving upwards from March 2021, NCLT provisions to be held in abeyance for 6 months and a further reduction of interest rate/repo-rate by another 100 bps by the Reserve Bank of India. ASSOCHAM has also recommended the reduction in GST across the board by 50% for 3 months and 25% for the fiscal.

Ministry of Textiles has given dilution to the maximum permissible limit i.e. 1.80 lakh bales on 26th March, 2020 and further for 0.82 lakh bales on 6th April, 2020, for HDPE/PP bags to tide over the emergent crisis of packaging of foodgrains due to closure of jute mills during lock down and with a view to protect the produce of wheat farmers by providing them alternate packaging bags.

This move has been taken mainly to protect the interest of the wheat farmers as the grains are likely to ready for packing mid-April’20 onwards. However, Government has considered the dilution with the proviso that whenever the production of jute bags in the jute mills resumes after the lock down period is over, priority will be given to the jute bags for packaging of food grains. To help jute farmers during the lock down period, Ministry of Textiles has written to the all jute growing State Governments to allow movement, sale and supply of the jute seeds, fertilizers and other farming aids. Government is committed to protect the interest of the jute farmers and workers through provisions of the Jute Packaging Materials Act (JPM), 1987 and it provides about 100 percent reservation for packaging of foodgrains in jute bags.

The COVID-19 related lockdown has affected the working in the jute mills thereby disrupting the production of jute bags. Since jute millers are not in a position to cater to the requirements of the State Procurement Agencies (SPAs) and the Food Corporation of India (FCI) who are engaged in the Public Distribution System (PDS), Government is, therefore, constrained to proactively intervene and engage in trouble shooting by taking alternate measures.

Food Corporation of India (FCI) has sent enough stocks to states throughout the country to implement PM Garib Kalyan Ann Yojana (PMGKAY) wherein 5 kg foodgrain per person per month for next three months has to be distributed free to all National Food Security Act (NFSA) beneficiaries. Many states like UP, Bihar, Telangana, Assam, Himachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Maharashtra, Gujarat, Haryana, Kerala, Mizoram have already started lifting foodgrains from FCI under this scheme. In course of next few days other states will also start lifting the foodgrains for distribution under PMGKAY. FCI is working tirelessly and has ensured that enough food grain stocks are made available in every part of the country during countrywide lockdown. In last 14 days since 24.03.2020 when the lockdown was announced to fight the COVID-19 pandemic, FCI moved an average of 1.44 Lakh MT food grain per day as against the pre-lockdown daily average of about 0.8 Lakh MT. A total of 658 rakes carrying about 18.42 Lakh MT food grains have been transported across the country till 06.04.2020..

In addition to meeting the regular requirements of food grains under NFSA and additional allocation under PMGKAY, FCI is providing wheat and rice directly to State Govts without going through the e-auction route, at Open Market sale rates to ensure continuous supply of food grains. Wheat is given for meeting the requirements of manufacturers of wheat flour and other wheat products based on the assessment of requirements done by the respective District Magistrates. So far FCI has allotted 1.38 LMT Wheat in 13 states and 1.32 LMT Rice in 8 states under this model.

The government of India (GoI) has announced the sale (issue/re-issue) of three dated securities for Rs 19000 crore. These include New GS 2022 3,000, 6.45% GS 2029 10,000 and New GS 2060 6,000. Subject to the limit of Rs 19,000 Cr, being total notified amount, GoI will have the option to retain additional subscription up to Rs 2,000 Cr each against any one or more of the above security. The amounts so retained may be within the notified amount, by setting-off under other securities in the same auction, or may be over and above the notified amount. The total amount retained over and above the notified will not exceed Rs 20,000 crore in first half of FY 2020-21 and will be set-off in second half year. The sale will be subject to the terms and conditions spelt out in this notification (called 'Specific Notification'). The auction will be yield based (for new securities) and price based (for other securities), using multiple price method. Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Firms responded by reducing their workforces as intakes of new business were insufficient to maintain payroll numbers. That said, input costs rose at the slowest rate in six months as market prices for food and fuel were cut by suppliers.

The IHS Markit India Services Business Activity Index recorded 49.3 in March, down from February's 85-month high of 57.5. The headline figure fell by over 8 points, undoing the strong gains in growth momentum seen throughout 2019 so far. According to panel members, business activity was reduced in response to weaker demand. The global COVID-19 pandemic reportedly led a fall in new orders from clients, particularly overseas. That said, the decrease in output was mild overall. March data were collected between 12-27 March.

Latest survey data pointed to the first fall in order book volumes at Indian service providers since September 2019. Although the drop in demand was modest, it was the sharpest for just over two years. There were widespread reports of new business receipts struggling due to the COVID-19 outbreak, deterring discretionary spending. A number of firms also mentioned lower sales as a result of liquidity issues.

Poor conditions in overseas markets led to the sharpest deterioration in foreign demand since exports data were first collected in September 2014. The global COVID-19 pandemic had a far-reaching impact on the ability of firms to source new work intakes from abroad.

In response to reduced business requirements, the level of employment across the Indian services sector fell as firms cut workforce numbers to keep operating costs tight. That said, the rate of job shedding was mild as the large majority of firms (93%) left payroll counts unchanged.

There was nonetheless some evidence of capacity pressures being generated, albeit to a lesser degree. Backlogs of work rose at a slight, but weaker rate in March.

Looking further ahead, latest data showed firms were still optimistic that activity levels would rise over the next 12 months as the extreme measures to curb the spread of COVID-19 are lifted and global demand begins to recover. That said, the level of confidence dipped to a five-month low.

Lastly, input costs facing Indian service providers increased at the slowest rate for six months during March. Anecdotal evidence suggested that lower market prices for food and fuel contributed to a weaker rate of inflation. There were reports of suppliers cutting fees due to low demand. Consequently, output charges rose at a pace that was softer than in February and below its long-run average.

The Composite PMI Output Index fell to 50.6 in March, down 7 points from February's 57.6 to signal a sharp slowdown in private sector output growth and bringing an abrupt end to the recent strong upward-moving expansion trend. Overall, the index was consistent with a marginal rate of increase in private sector output.

The expansion was upheld by the manufacturing sector, which observed a solid rise in production volumes over the month. This contrasted with a shallow decline in services activity. That said, overall new order intakes fell marginally in March as the fastest drop in demand for services for over two years pulled aggregate sales into negative territory.

Meanwhile, employment levels broadly stagnated across India's private sector economy as slight growth in manufacturing was offset by a mild drop in staffing levels across the service sector.

Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said: The impact of the global COVID-19 pandemic on India's services economy has not been fully realised yet. March PMI data showed business activity falling mildly. Crucially however, the survey data collection (12-27 March) was concluding just as Prime Minister Modi ordered a complete lockdown of the country.

Strong growth momentum seen so far in 2019 was halted in March as demand conditions deteriorated, particularly overseas, leading to a reduction in business activity. Clearly the worse is yet to come as nationwide store closures and prohibition to leave the house will weigh heavily on the services economy, as has been seen elsewhere in the world. Pressure now fully lies on the government to combat the economic challenges the lockdown will cause.

Within the foreign exchange reserves, the foreign currency assets moved up to US$ 439.66 billion in the week ended 27 March 2020 from US$ 437.10 billion a week ago.

The gold asset also increased to US$ 30.89 billion from US$ 27.86 billion a week ago.

SDRs were flat at US$ 1.42 billion in the week ended 27 March 2020.

India's foreign exchange reserves increased by US$ 62.69 billion over March 2019, while jumped US$ 63.66 billion over a year ago level.

The resultant dislocations have adversely impacted the functioning of financial markets. Staff and IT resources have been severely affected, posing operational and logistic risks. The thinning out of activity is impacting market liquidity and increasing volatility of financial prices.

In order to minimise these risks and to ensure that market participants maintain adequate checks and supervisory controls while optimising thin resources and ensuring safety of personnel, it has been decided to revise trading hours to 10 am to 2 pm for various markets as under:

Call/notice/term money

Market repo in government securities

Tri-party repo in government securities

Commercial paper and Certificates of Deposit

Repo in Corporate Bonds

Government Securities (CentralGovernment Securities, State Development Loans and Treasury Bills)

Foreign Currency (FCY)/Indian Rupee (INR) Trades including Forex Derivatives

Rupee Interest Rate Derivatives

These arrangements will become effective from 7 April 2020 and continue up to 17 April 2020.

All regular banking services for customers, including RTGS, NEFT, e-kuber and other retail payments systems will continue to be available as per extant timings.

RBI announced further measures for dealing with the COVID-19 pandemic. Here is a list of latest steps.

Extension of realisation period of export proceeds

Presently value of the goods or software exports made by the exporters is required to be realized fully and repatriated to the country within a period of 9 months from the date of exports. In view of the disruption caused by the COVID-19 pandemic, the time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 15 months from the date of export. The measure will enable the exporters to realise their receipts, especially from COVID-19 affected countries within the extended period and also provide greater flexibility to the exporters to negotiate future export contracts with buyers abroad.

Review of Limits of Way and Means Advances of States/UTs

Reserve Bank had constituted an Advisory Committee (Chairman: Shri Sudhir Shrivastava) to review the Ways and Means limits for State Governments and Union Territories (UTs). Pending submission of the final recommendations by the Committee, it has been decided to increase WMA limit by 30 percent from the existing limit for all States/UTs to enable the State Governments to tide over the situation arising from the outbreak of the COVID-19 pandemic. The revised limits will come into force with effect from April 1, 2020 and will be valid till September 30, 2020.

Implementation of countercyclical capital buffer

The framework on countercyclical capital buffer (CCyB) was put in place by the Reserve Bank in terms of guidelines issued on February 5, 2015 wherein it was advised that the CCyB would be activated as and when the circumstances warranted, and that the decision would normally be pre-announced. The framework envisages the credit-to-GDP gap as the main indicator, which is used in conjunction with other supplementary indicators. Based on the review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB for a period of one year or earlier, as may be necessary.

Regional economic growth in developing Asia will decline sharply in 2020 due to the effects of the novel coronavirus (COVID-19) pandemic, before recovering in 2021, according to the Asian Development Outlook (ADO) 2020, the Asian Development Bank's (ADB) annual flagship economic publication.

The report forecasts regional growth of 2.2% in 2020, a downward revision of 3.3 percentage points relative to the 5.5% ADB had forecast in September 2019. Growth is expected to rebound to 6.2% in 2021, assuming that the outbreak ends and activity normalizes. Excluding the newly industrialized economies of Hong Kong, China; the Republic of Korea; Singapore; and Taipei, China, developing Asia is forecast to grow 2.4% this year, compared to 5.7% in 2019, before rebounding to 6.7% next year.

In the People's Republic of China (PRC), a sharp contraction in industry, services, retail sales, and investment in the first quarter due to the COVID-19 outbreak will pull growth down to 2.3% this year. Growth will rebound to an above normal 7.3% in 2021 before reverting back to normal growth. In India, measures to contain the spread of the virus and a weaker global environment this year will offset the benefits from recent tax cuts and financial sector reforms. Growth in India is forecast to slow to 4.0% in fiscal year (FY) 2020 before strengthening to 6.2% in FY2021.

Underpinning much of the weakness across Asia is a deteriorating external environment, with growth stagnating or contracting in the major industrial economies of the United States, Euro area, and Japan. Some commodity and oil exporters, such as those in Central Asia, will be hit by a collapse in commodity prices. Brent oil prices are expected to average $35 per barrel this year, down from $64 in 2019.

All of developing Asia's subregions will see growth weaken this year because of weak global demand, and in some economies because of domestic outbreaks and containment policies. Subregions that are more economically open like East and Southeast Asia, or tourism-dependent like the Pacific, will be hard hit. Economic activity in the Pacific subregion is expected to contract by 0.3% in 2020 before recovering to 2.7% in 2021.

A special section of the report provides an update on the likely economic impact of the COVID-19 outbreak on developing Asia's economies, and on sectors within these economies. The global cost of the pandemic could range from $2.0 trillion to $4.1 trillion, equivalent to a loss of between 2.3% to 4.8% of global gross domestic product. These estimates, which update earlier ADB research released on 6 March, reflect the now-global nature of the pandemic, the extensive use of containment policies and travel bans worldwide, and data on how the outbreak affected activity in the PRC.

India's manufacturing Purchasing Managers' Index, or PMI, decreased to 51.8 in March from 54.5 in February, due to a softer rise in output and new business amid the global coronavirus or COVID-19 outbreak, survey results from IHS Markit showed on Wednesday. The reading signalled the slowest expansion since November 2019. Any reading above 50 indicates expansion in the sector. Output and new orders rose at a slower pace in March. New export business declined at the fastest pace since 2013 amid widespread lockdowns.

The government has settled Rs 19718 crore to CGST and Rs 14915 crore to SGST from IGST as regular settlement. Inaddition, Centre has also apportioned unsettled balance IGST of Rs 6000 crore on ad-hoc basis in the ratio of 50:50 between centre and States/UTs.The total revenue earned by Central Government and the State Governments after regular settlement in the month of March 2020 is Rs 41901 crore for CGST and Rs 43516 crore for the SGST.

The GST revenues during the month of March 2020 from domestic transactions has shown anegative growth of 4% over the revenue during the month of March 2019. Taking into account the GST collected from import of goods, the total revenue during March, 2020has also decreasedby 8% in comparison to the revenue during March 2019. During this month, the GST on import of goods has shown a negative growth of (-) 23% as compared to March 2019.

For the full financial year, 2019-20, the GST for domestic transaction has shown a growth rate of 8% over the revenues during last year. During the year, GST from import on goods fell down by 8% as compared to last year. Overall, gross GST revenues grew at 4% over the last year's GST revenue.

The NPPA vide Notification dated 31 March, 2020 in pursuance of Notification No. SO 648(E), dated 11 February, 2020, stated that all medical devices shall be governed under the provisions of the Drugs (Prices Control) Order, 2013 (DPCO, 2013)w.e.f. 1 April 2020.

Thus, with effect from 1 April, 2020, all Medical Devices shall be regulated by the Government as Drugs for quality control and price monitoring. Therefore, the Maximum Retail Prices (MPRs) of all the Medical Devices would be monitored by the Governmentunder the provisions of Para 20(1) of the DPCO, 2013 to ensure that no manufacturer/importer increases the MRP of a drug more than ten percent of MRP during preceding twelve month and where the increase is beyond ten percent of maximum retail price, it shall reduce the same to the level of ten percent of maximum retail price for next twelve months.

Further, as per Para 20(2) of the DPCO, 2013 read with the Essential Commodities Act, 1955, the manufacturer/importer shall also be liable to deposit the overcharged amount along with interest thereon from the date of increase in price in addition to penalty.