Three things to know:
1) India's June infrastructure output contracts 15% YoY
The output of eight core sector industries contracted by 15% in June, marking the fourth straight month of decline. However, the numbers are better, indicating recovery from the 22% fall in May. During April-June 2020-21, the sector’s output dipped by 24.6% from 3.4% growth in the same period previous year.
Steel sector continues to remain the worst performer, with a 33% YoY drop. Cement production fell almost 7%, albeit improved from the 22% contraction seen in May. Coal production fell 15.5% and crude oil and natural gas production dropping 6% and 12% respectively.
Petroleum refinery production, which carries the greatest weight in the core sector index, saw a contraction of almost 9%, while electricity generation dropped 11%.
2) More relief for MSMEs
The government widened the scope of Rs 3-lakh crore MSME credit guarantee scheme by doubling the upper ceiling of loans outstanding to Rs 50 crore. It has also added professionals like doctors, lawyers and chartered accountants for business purposes under its ambit.
The tweaking of the Emergency Credit Line Guarantee Scheme (ECLGS)was done based on demand from trade bodies and in line with the new MSME definition approved by the Union Cabinet in June.
3) Loan restructuring on the way, FM confirms
Finance Minister Nirmala Sitharaman confirmed that the government is working with the RBI on restructuring of loans. The exercise is being carried to help industry tide over the impact of COVID-19.
The Finance minister further added that the Finance Ministry is actively engaged with the RBI on this. In principle, the idea that restructuring is required, is well taken.