Non-resident Indians will now earn a higher return for deposits in non-resident foreign currency accounts as well as on non-resident (external) deposits.
Reuters file photo
The rupee has weakened significantly in recent weeks. Are measures taken to reduce volatility?
The Indian rupee weakened mainly due to large outflows of dollars by foreign portfolio investors who sold their securities in India after the US Federal Reserve raised interest rates. To meet this challenge, the Reserve Bank of India has allowed banks to offer higher returns on foreign currency deposits. This would be done by exempting such deposits from the requirement to maintain reserves with the Reserve Bank of India. Inflows into the debt securities portfolio were encouraged by the expansion of the basket of securities available to foreign portfolio investors. Rules governing corporate external commercial borrowing have been eased, with the automatic lane limit being doubled to $1.5 billion. In addition, the ceiling on borrowing costs was raised by one percentage point. Therefore, non-resident Indians will now earn a higher return for deposits in non-resident foreign currency accounts as well as on non-resident (external) deposits. The previous limit on interest rates has been removed for new deposits made at a later date. This relaxation will be available until October 31, 2022.
India’s fast-moving consumer goods industry appears to be doing very well, as evidenced by the results of India’s leading FMCG companies. Will this growth be sustainable in the months to come?
The increase in turnover and profitability of companies manufacturing consumer goods is mainly due to the increase in the purchasing power of farmers and rural dwellers. Farmers’ income increased by about 1.7 times compared to the 2017-18 financial year. This is mainly due to farmers shifting to growing cash crops and engaging in allied off-farm ventures. According to a recent study, the increase in the purchasing power of farmers over the past four years is explained by the increase in the minimum support price which is linked to market determined prices. The agricultural sector is currently undergoing significant structural change due to a plethora of government policies. In addition, exports of agricultural products recorded a substantial increase in 2021-22, which led to a substantial increase in non-taxable income of farmers. In the current financial year, India’s fruit exports, especially grapes, are expected to register an unprecedented increase due to the fires in Southern Europe which have led to the destruction of their agricultural products.
With a severe heat wave affecting many countries around the world, the study of geoengineering technologies becomes imperative. My son wants to study in this field. I need information about this.
Geoengineering is a term for various experimental technologies designed to modify the climate system, which would reduce the impact of global warming. The two technologies involved are solar radiation modification (SRM) and carbon dioxide removal (CDR). SRM technologies are currently attracting the most attention from scientists. The goal is to reduce the amount of solar radiation reaching the earth by reflecting sunlight back into space, thereby reducing surface temperatures. Scientists are experimenting with different techniques such as making clouds brighter, thereby reflecting sunlight. In fact, cloud engineering is nothing new and countries like China have seeded clouds to generate more rain. This is also done in India. The latest technology currently being tested is stratospheric aerosol injection (SAI). SAI aims to mimic large volcanic eruptions that have a cooling effect on the globe. Several modeling studies indicate that IAS will reduce some of the worst effects of climate change. Therefore, the opportunities in this field are huge and your son should be encouraged to pursue studies in this field.
HP Ranina is a practicing lawyer, specializing in tax management and foreign exchange laws of India. The opinions expressed are his own and do not reflect the policy of the newspaper.