While there is pressure on the Reserve Bank of India to cut policy rates to spur stagnating industrial growth rates, Pronab Sen, principal advisor to the Planning Commission, says the central bank should exercise caution till it is sure inflationary expectations are under control.
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Advance estimates on Tuesday estimated nominal GDP this financial year to be slightly less than that projected in the Budget, and this would magnify fiscal deficit as a portion of GDP.
In an interview with Business Standard, he says investments would pick up and inflation would fall in the next financial year, providing the Reserve Bank of India the room to cut rates.
Though the Centre's fiscal consolidation story is taking a hit, Plan expenditure is likely to provide some respite. In the Budget, expected to be tabled by mid-March, the Plan expenditure is likely to be scaled down in the revised estimates for 2011-12, compared to Budget estimates.
To speed up the vacation of additional 2G and 3G telecom spectrum, the government will likely make a Rs 5,000-crore (Rs 50 billion) provision in the Budget for an alternative network for defence services. The spectrum released in lieu of that would increase the availability for civilian use.
But says the airline will have to meet targets to get fund.
In what could mean a big investment opportunity for the construction industry in the years to come, the road transport ministry plans to more than double private participation in highway construction during the 12th Five Year Plan starting April 2012.
Smaller real estate entities have been active in the past six to eight months in launching big-ticket residential projects. Factors like the high debt of realty companies listed on the exchanges and small builders not having the capacity to hold on to a licence for too long have influenced launches.
Document to talk about social unrest, energy shortages, global factors.
The question is which tool it should use to shift gear.
Month-on-month stats show industrial output shrank 4 times till Oct in 2011-12.
With not much hope on robust tax collections and disinvestment, economists peg the gap between the government's expenditure and receipts to be between six and seven per cent for this financial year.
It's not just the high street across India that will feel the pinch of the weakening rupee against the dollar.
Critics have slammed a bloated subsidy that has been proposed for the food security bill, but officials in the government strongly believe that the resultant additional burden will not be above Rs 27,000 crore to meet the commitments under the proposed legislation.
Cabinet had earlier this week deferred a decision on the much-discussed issue on this ground.
Economists and industry chambers are divided whether the Indian economy is headed towards the same slow growth as was the case during the time of global financial crisis.
Industrial growth has entered the negative zone in October, two years after the global financial crisis. But Prime Minister's Economic Advisory Council chairman C Rangarajan pins hopes of a revival in the fourth quarter.
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