Indians in America see relief as draconian policy of H-1B visa is shelved

Jonathan Withington, Media Relations Chief at US Citizenship and Immigration Services (USCIS) informed Hindustan Times that the Trump administration was not going to consider the proposal that could lead to deportation of H-1B visa holders, including 500,000 to 750,000 Indians. Officials in USCIS stated that even if there should be any changes in section 104(c) of AC 21, they would not be compelled to leave the country. After they complete the 6-year limit, the employers can seek extensions based on section 106(a)-(b) of AC 21.

The earlier proposal to end a visa grant was formulated based on the policy of, “buy American, hire American” by Donald Trump to create jobs for the American population. This initial policy had led to increased anxiety among the Indian IT firms in America. Now this reconsideration has come as a major relief to the community who could have been deported earlier.

“This is a significant development. We are delighted about this news. We are grateful to USCIS for this,” stated an official in Immigration Voice. They hailed their efforts to protect H-1B visa holders from India.

India Today mentioned that this move happened due to increased displeasure that is seen in the business community. The Department of Homeland Security said that they did not consider the change and will not deport foreign workers.

Sources-Hindustan Times, India Today

Raghuram Rajan’s Parting Gift to Indian Economy

With just days to go before he steps down as the RBI Governor, Raghuram Rajan on Thursday, August 25, unveiled the changes in policy that he had promised in a statement on August 9. These changes, aimed specifically at the corporate bond market, will widen and deepen it, raising it to meet global standards and give it maturity. They will also eliminate the risk that banks run of exposure to large borrowers.

RBI has suggested the creation of a new segment of borrowers called “specified borrower”, one who already has more than a specified aggregate borrowing. These borrowers, when returning to borrow more, will attract additional provisional and higher risk weights. This will force large borrowers towards market borrowings, reducing the risk of bank funds being concentrated in the hands of a few corporate houses. The burden will be taken off the banking system by allowing lower-rated corporates to access the corporate bond market. In order to increase the depth of the corporate bond repo market, RBI will also be opening it up and allow brokers to participate in it, which will improve liquidity.

The RBI’s measures will increase market development, enhance participation and create greater market liquidity. The RBI and the SEBI have also agreed on allowing Foreign Portfolio Investors to directly access the market, rather than go through brokers. However, greater leeway has been will be available for residents. According to The Economic Times, other changes include making overseas rupee-dominated long-term masala bonds available to banks in order to shore up their dipping capital, as well as financing infrastructure and affordable housing.


Sources: The Economic Times, Live Mint

Macroeconomic stability relies immensely on policy credibility : Raghuram Rajan

A month before the Union Budget, Reserve Bank of India Governor Raghuram Rajan warned against deviation from the fiscal consolidation path. Dr. Rajan said, this could have a negative impact on macroeconomic stability. At the time of global chaos, macroeconomic stability should not be risked, and both the central bank and the government should keep on bringing down inflation, advised Dr. Rajan.

He also warned against the spending spree to spur economic growth, as more spending will probably hurt debt dynamics.

Taking example of Brazil, he said, “As Brazil’s experience suggests, the enormous costs of becoming an unstable country far outweigh any small growth benefits that can be obtained through aggressive policies… We should be very careful about jeopardising our single most important strength during this period of global turmoil – macroeconomic stability.”

The consolidated fiscal deficit of India rose previous year to 7.2 per cent from 7 per cent.  Initially the aim was to bring down fiscal deficit to 3.6 per cent of the GDP in 2015-16, which has been postponed by a year. Now, the centre is aiming at 3.9 per cent in the current fiscal. Divergence from the fiscal consolidation path could increase the BJP led government earning from bond, both because of the superior volume of bonds to be financed and possible loss of government credibility on upcoming consolidation.

Dr Rajan stressed that macroeconomic steadiness depends enormously on policy credibility, which is the civic belief that policy will make tracks from the charted course only under tremendous necessity, and not because of ease.