After a contraction in the current financial year, India's economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said on Wednesday. The coronavirus pandemic will lead to shrinking of the already slowing economy in 2020-21 that started in April. Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing financial year.
'As we expect the economy to continue to grow above the trend line, we expect capex decisions to be taken next year when there is more certainty about the cost of funding and the economy.'
The revision of the consumer price index and GDP base years from 2011-12 and 2012, respectively, were dependent on the outcomes of the consumer expenditure survey of 2017-18 that the government decided to junk recently.
Finance Minister Nirmala Sitharaman on Tuesday met IMF managing director Kristalina Georgieva and discussed a range of issues, including impact of geopolitical situation on global growth.
Sitharaman's Budget missed deficit target for the third year in a row, pushing shortfall to 3.8 per cent of GDP in the current fiscal as compared to 3.3 per cent previously planned.
UPA-II has yielded a 7.5 per cent average annual growth rate
Welcoming the latest round of stimulus announced by Finance Minister Nirmala Sitharaman on Thursday, experts said the measures will support the economic recovery boosting demand, job creation and by providing funds to the MSME and stressed sectors. The fiscal impact of the stimulus is likely to be around 0.25-0.6 per cent of GDP in the current fiscal, they said.
More than 80 per cent of Indians live in districts vulnerable to climate risks. Among these, Assam, Andhra Pradesh, Maharashtra, Karnataka, and Bihar are the most vulnerable states to extreme climate events.
Brokerage firm Ambit Capital has cut FY17 growth estimate to 3.5 per cent from 6.8 per cent and saaid there was even a possibility of growth contracting during the December quarter
India's GDP may turn positive at 1.3 per cent in the third quarter of 2020-21, having witnessed contraction in the previous two quarters due to the coronavirus pandemic, as the number of cases is falling and public spending has started rising, according to a report. The government will release the GDP numbers for the October-December quarter of the current fiscal on Friday. Projecting that the gross domestic product (GDP) may have returned to the black in the last quarter of the calendar year 2020, DBS Bank in the report said the full-year growth in real terms may be at a negative 6.8 per cent.
If this turns into reality, India's gross domestic product (GDP) growth will be the lowest since 2012-13, which could severely hit job creation and income growth in the near term.
GDP growth of 7.7 per cent in the first half of this fiscal has "left sceptics gasping and woefully behind the curve", an RBI article said on Wednesday. It also stressed the buildup in the growth momentum is likely to be sustained. The article on the state of the economy published in the Reserve Bank's December Bulletin on Wednesday also said CPI-based retail inflation is expected to ease to 4.6 per cent in the first three quarters of 2024-25 from 5.6 per cent in November.
The chambers said that the situation calls for urgent policy measures both by RBI and the government to salvage industry from further decline in industrial output.
Moody's Investors Service on Friday slashed its estimate of India's GDP growth during the 2020 calendar year to 2.5 per cent from an earlier estimate of 5.3 per cent, on account of the rising economic cost of the coronavirus pandemic.
The EIU said in a report on Wednesday forecast that the real GDP grew by 1.6 per cent quarter-on-quarter in India, but noted that this uptick was largely owing to base effect.
While the ratio determines the extent to which the government is able to finance its expenditure, it is also an indicator of tax compliance. Developed countries have a higher contribution of tax to their GDP.
Asked when the economy will revive, Das said it is difficult to make an estimate as there are many things which are still playing out.
Moody's Investors Service on Thursday said India is likely continue to face challenges in raising longer-term growth potential and creating enough jobs for its young population in the absence of higher trade openness. In its report on South Asia sovereigns, Moody's said compared with other South Asian economies, India appears to be in a better position to deepen its integration in global value chains, attract FDI and increase exports. The country has better macroeconomic fundamentals, more stable politics and a more developed export sector.
There is a vocal constituency of educated, well-to-do, articulate Indian elites who would rather go with the idea that too much democracy is a liability. That India needs a spell of benevolent dictatorship. Of course, they have never lived under one, points out Shekhar Gupta.
The FM said an announcement with regard to the additional steps will be made after consulting Prime Minister Narendra Modi.
As he projected a grim outlook for the economy, RBI Governor said that amidst this encircling gloom, agriculture and allied activities have provided a beacon of hope on the back of an increase of 3.7 per cent in foodgrains production to a new record.
For 2020 calendar year, it reduced the estimate by a similar measure to 6.7 per cent.
'The long-term impact of elections is minimal.'
It is a classic case of extremes: The worst contraction in GDP along with the highest-ever levels of cash in the economy; and a severe dent in consumption together with strong growth in bank deposits and digital payments.
'The prime minister's comment on 'revdi culture' was welcome. But I am disappointed he did not follow up on that.' 'All political parties, including the BJP, have been guilty of this.' 'Now, Modi's guarantees, the Congress's 'nyay' path and both ruling and Opposition parties are vying with each other for freebies in my home state Andhra Pradesh.'
For the current fiscal which ends on March 31, it put the real GDP estimate at 5 per cent. It estimated a 7 per cent growth in 2022-23 and 2023-24 fiscal years. The inflation rate was seen moderating to 4.4 per cent in the next fiscal from 4.7 per cent in the current.
The slowdown is especially pronounced in rural areas, which have suffered two consecutive dry years.
The real requirement for the finance minister's explanatory speech is to explain the measures taken in the Budget to influence inflation and growth not just through the announcement of a deficit goal, but more broadly through the impact on money supply, consumer demand, foreign trade and investment, explains Nitin Desai.
The International Monetary Fund has reduced India's contribution to world gross domestic product in purchasing power parity terms to 4.6 per cent in 2007 from the earlier estimate of 6.4 per cent.
But Indians work less than smaller countries with small populations like Bhutan, the Congo, Lesotho and Gambia.
'What happened to Andhra Pradesh? It is the perfect example of the transientness of Federal Units.' 'Federalism is a transient thing in this country.'
The BSE mid-cap and small-cap stocks have outperformed the benchmark Sensex in 2023-24 with about 62 per cent returns, reflecting buoyant investors' sentiment amid robust macroeconomic conditions in the country and impressive quarterly earnings reported by various firms. As per an analysis, the BSE mid-cap gauge jumped 15,013.95 points or 62.38 per cent in the 2023-24 fiscal, while the small-cap index climbed 16,068.99 points or 59.60 per cent. In comparison, the 30-share BSE Sensex raked in a gain of 14,659.83 points or 24.85 per cent during the fiscal under review.
While most economies contracted in the second quarter of 2020, the Chinese economy grew by 3.2 per cent.
'What happens in the real estate market is that once the prices go up it goes on to stay at that level.' 'It might not increase and at the same time the prices will not come down too.'
Of the seven surveys presented under Modi govt, predictions of three were quite close to the actual GDP growth rate, one saw the base year change in between, but the last three were way off the mark.
India grew at 7.6% in 2015-16 and at 7.2% in 2014-15.
Rajan had said that there was lack of clarity about the new method.
Rating firm Crisil revised downwards its GDP growth forecast to 5.5 per cent this fiscal from its earlier estimate of 6 per cent, citing reduced likelihood of monetary easing going forward due to falling rupee.
'I expect fourth quarter GDP growth to be sharply down.' 'I would imagine it would shave off at least one percentage point, if not more, as compared to the third quarter.'
Hospitality and travel sector players on Tuesday demanded infrastructure status for the hotel industry besides measures such as tax exemption on LTA annually to boost domestic tourism ahead of the Union Budget. They also recommended removal of the current TDS levied on automated bookings for internal or closed user groups such as business travel platforms and reducing the total number of licenses required to establish a hotel. "A full-blown infrastructure status for the hotel sector and further rationalisation of the Goods and Services Tax (GST) and a Central single window clearance for hotel projects are some of the major expectations from the Budget 2024," Roseate Hotels & Resorts CEO Kush Kapoor said in a statement.
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