The world's biggest lockdown that shut a majority of the factories and businesses, suspended flights, stopped trains and restricted movement of vehicles and people, may have cost the Indian economy Rs 7-8 lakh crore during the 21-day period, analysts and industry bodies said.
'It may sound like sacrilege, but does it really matter if the global raters downgrade India for fiscal slippage?' asks Tamal Bandyopadhyay.
Stating that an economic recession gripped global economy following the lockdowns due to COVID-19 pandemic, Fitch Ratings on Friday said the initial disruptions to regional manufacturing supply chains in China have now broadened to include local discretionary spending and exports.
Such cold-shoulder by banks also indicates a credit freeze that is hard to overcome, unless the government comes out with credit guarantee schemes for loans given by banks. Since that is not happening, and there is no indication of that too, banks are not willing to listen to RBI prodding.
'If the government spends Rs 10 lakh crore this year then you would be looking at a GDP growth of minus 5 per cent.' 'If you do not do this, you will be looking at GDP growth between minus nine and minus 10 per cent.'
Out of the total potential loss, the share of state-run banks will be Rs 24,800 crore in FY18, while that of the private sector banks will be Rs 5,700 crore
This move was triggered by a whistleblower complaint sent to Sebi against senior management interference in ensuring good ratings specifically in IL&FS and its subsidiaries.
Without disclosing reasons, ICRA informed the stock exchanges on Thursday, 'The board, after due consideration and taking into account the best interests of the company and its various stakeholders, has decided to terminate the employment of Takkar with immediate effect.'
According to data compiled by the World Bank, the UK's economy grew to $2.82 trillion and the French economy expanded to $2.78 trillion in 2018, against India's $2.73 trillion, showed the data.
Despite the 3 per cent gain in September 2019, the FPI sell-off during the quarter has seen the benchmark indices - the S&P BSE Sensex and the Nifty 50 register negative returns in Q3CY19.
As per the 2011 census, 31 per cent population in the country lives in urban areas.
'Our government's claim that there are no undetected cases of infection that happened within our bustling cities because of exposure to infected international travellers are not credible,' notes Rahul Jacob.
While the COVID-19 pandemic has completely halted production and new orders, exporters say that payments have also been delayed for the shipments sent before the lockdown. Exporters say some customers are not taking delivery of the shipments because they have shut shop. Ready-made garment players had been hoping for a revival in demand in China but with the virus spreading to Europe, the US and other major markets, there are no orders coming from the major retailers.
'There is a fiscal crisis building up, which might become apparent when the Finance Commission presents its report,' warns T N Ninan.
It was 55.3 per cent for the same period last year, and data shows the fiscal deficit for April-May was kept in reasonable check in spite of heavy frontloading of expenditure.
While the UN report said that FDI inflows rose 6 per cent in 2018 to $ 42 billion, the government's own data for the entire FY19 period has shown that inbound equity investments declined for the first time in six years in FY19.
It came on the back of tepid dispatches in the March quarter as consumer sentiment took a knocking, owing to uncertainty ahead of the general election.
It had upped India's rating to Baa2 from Baa3 and changed its rating outlook to 'stable' from 'positive', saying the reforms would help stabilise rising levels of debt.
For the week, the Sensex climbed 28.24 points, or 0.08 per cent, while the Nifty shed 38.15 points, or 0.36 per cent.
'One must remember that a dragon has a forked tongue,' warns Vivek Gumaste.
The WTO's quarterly outlook indicator, comprising seven trade parameters, stood at 96.3, the lowest since March 2010 and down from 98.6 in November. Exports from India would be hit if there is a slowdown in world trade.
The amount of loans that carry a high risk of slippage into the NPA category over the next few quarters is about Rs 2.8 trillion.
India Ratings on Friday downgraded the outlook of domestic construction sector to 'Negative' due to challenges faced in the execution of projects on account of delays in environment clearances and other issues.
The rating agency also expects merchandise exports to grow by 8-10 per cent in the next fiscal year.
Retaining India's sovereign rating at the lowest investment grade, global agency S&P on Tuesday warned that a downgrade is likely for the country if its political climate worsens and pace of fiscal reforms slows down.
By no means do economists see the Reserve Bank of India stop at just a 25-bp cut. Some of the economists such as Soumyakanti Ghosh of State Bank of India are of the firm view that rates have room to fall by a total of 75 bps in the current financial year, starting with 25 bps in the August 7 policy.
'The history of Moody's India ratings tells its own story,' points out T N Ninan.
$10 billion TAPI pipeline unlikely before 2020
If Reliance has to pay about one percentage point more for short-term money, the bond market could be out of bounds for many lower-rated firms after some time.
The venue for Saturday's meeting was shifted at the last minute from the headquarters of the India Banks' Association in Cuffe Parade to avoid media glare.
The economy is likely to grow at about 5.6 per cent in 2014-15 and fiscal and current account deficits no longer pose a threat to macroeconomic stability, India Ratings said on Friday.
Post office savings deposit, recurring deposit accounts and the senior citizen savings scheme account have shown the highest growth in the current financial year.
For the first eight months of the current financial year, the figure stood at Rs 7.17 trillion.
According to Soumya Kanti Ghosh, chief economic advisor of the State Bank of India group, a 50 bps rate cut is a possibility, but 25 bps is more likely.
In the next quarter, the country will also start gearing up for various Assembly elections could put the government as well as the OMCs under pressure
Economists have said if a stimulus is needed it should be different from what was provided in 2008-09, when the economy faced the ripple effects of a global meltdown following the Lehman Brothers collapse.
Perhaps the way forward could be the introduction of uniform rating standards - on the lines of accounting standards for the accounting profession - with a separate regulating authority for enforcing those standards, says Sudipto Dey.
Economic affairs secretary S C Garg said that all macroeconomic parameters are performing well.
While the farmers are not getting remunerative prices for their produce, at the same time they are forced to pay high prices for items they consume.
The agency said the move on liquidity will lead to an ease in the situation.
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