'They have started becoming an important player, but not at the same level as they were in the earlier part of the decade.'
Modi's Atma Nirbhar Bharat Abhiyan or Self-reliant India Mission is about 10 per cent of India's GDP in 2019-20 and would rank behind Japan, the US, Sweden, Australia and Germany. But unlike most of the relief packages announced globally, Rs 20 lakh crore is not entirely in new spending and includes Rs 1.7 lakh crore package the government had announced in March as well as the steps taken by the Reserve Bank of India (RBI) such as liquidity enhancing measures and interest rate cuts.
On one hand, South Indian states have been complaining about denial of a proportionate portion of the sharable funds from the Centre, based on population. On the other hand, they stand to lose Lok Sabha and Rajya Sabha seats that again are based on population, points out N Sathiya Moorthy.
'If you want it to grow well and serve the true needs of the economy, it needs a lot of freedom and flexibility, which comes in terms of the reform objective set by the regulator.'
Finance Minister Ishaq Dar, who presented the budget in the National Assembly, the lower house of parliament, said the government will target a growth rate of 3.5 per cent in the coming fiscal year.
Rajan also said the outlook for agriculture is subdued, in view of both rabi and kharif prospects being hit by monsoon vagaries.
Why did Karnataka's economic prosperity fail to influence the nature of electoral promises made by political parties in the run-up to the assembly elections? asks A K Bhattacharya.
India's macroeconomic fundamentals are strong to deal with global challenges and the central government is committed to sticking to the fiscal deficit target of 6.4 per cent of the GDP for the current fiscal, official sources said on Monday. The government is taking steps to deal with the spiralling crude oil prices in the international market, the sources said. India meets nearly 85 per cent of its oil demand through imports and a weaker rupee makes imports costlier.
Maybe the new methods of measuring GDP helped us get an accurate picture.
Much of the Q3 data will simply not be available for the CSO to factor in its calculation.
India's economy continues to be robust, but downside risks such as rising crude oil prices, adverse weather conditions, and the global banking crisis outweigh the upside potential in gross domestic product (GDP) growth in the current financial year (FY24), the finance ministry said on Tuesday in its Monthly Economic Review for March. "We reiterate that downside risks to our official forecast of 6.5 per cent for real GDP growth in FY24 dominate upside risks," the review said. "Opec's surprise production cut has seen oil prices rise in April, off their lows of low-seventies per barrel in March.
The Union government could target a fiscal deficit of 5.8-6 per cent of nominal GDP for 2023-24, and it should continue its capital expenditure push and look to simplify the personal income tax regime, economists recommended Finance Minister Nirmala Sitharaman and her team during their pre-Budget interaction on Monday. Starting last week, Sitharaman had eight pre-Budget consultations this time. More than 110 invitees representing seven stakeholder groups participated in these meetings, the finance ministry said in a statement. The stakeholder groups included representatives and experts from agriculture and agro-processing industry; industry, infrastructure & climate change; financial sector and capital markets; services and trade; social sector; trade unions and labour organisations; and economists.
The Reserve Bank of India's rate-setting panel will go for a 0.35 per cent hike in the key repo rate at its meeting next week, an American brokerage said on Wednesday. The hike will be accompanied by a change in the policy stance to "calibrated tightening", Bofa Securities said in a report published ahead of the Monetary Policy Committee (MPC) resolution which is set to be announced on August 5. RBI has hiked the rate by a cumulative 0.90 per cent in two tightening moves in May and June, responding to the runaway headline inflation which has consistently overshot the upper end of the target set for the central bank for many months.
The external environment has worsened further. While the Finnish economy entered into a recession, Swedish economic growth also dipped. The Finnish gross domestic product (GDP) dropped 0.6 per cent in October-December, 2022. It was the second quarter of negative growth, which is a technical definition of recession.
The Indian services sector expanded at the strongest rate in 12 years in February supported by favourable demand conditions and new business gains, a monthly survey said on Friday. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 57.2 in January to 59.4 in February -- its highest level in 12 years. For the 19th straight month, the headline figure was above the neutral 50 threshold. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
The employment situation remains dire. Whatever can be done to promote greater low-skill employment should be pursued aggressively, advises former chief economic adviser Shankar Acharya.
The increased amount, defence sources say, will be consumed mostly by the allocation for employees-related expenses, salaries and allowances of servicemen.
GST stabilisation, DTC implementation and banking reforms are crucial for sustaining high growth for a long period, says Rashesh Shah.
'People trust India and Indians a lot more than they trust China and the Chinese.'
The richest one per cent in India now own more than 40 per cent of the country's total wealth, while the bottom half of the population together share just 3 per cent of wealth, a new study showed on Monday.
The minders of the Modi government's economic policy believe it would take 7 to 8 quarters -- or till around late 2018 -- for the economy to reap the rewards of demonetisation.
Fitch said COVID-19 is still in India and it is very likely that the government will have to spend a bit more on fiscal measures to support the economy.
RBI lowers GDP forecast for FY16 to 7.4%
While most experts suggest the government loosen its purse strings and not worry about the fiscal deficit in a pandemic impacted year, it will be a tightrope walk for the government to increase spending without going overboard.
China's economy grew 6.7 percent in the second quarter from a year earlier.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
The government has no plan to print currency notes to tide over the current economic crisis triggered by the outbreak of COVID-19 pandemic, Finance Minister Nirmala Sitharaman informed Parliament on Monday. To a question on whether there is any plan to print currency to tide over the crisis, the finance minister said, "No Sir". Many economists and experts have suggested to the government to print more currency notes to tide over the difficult economic situation with a view to support the economy ravaged by the spread of COVID-19, and protect jobs.
India's budget for the fiscal beginning April focuses on giving a boost to the ongoing economic recovery through a sharp increase in capex spending but is short on major growth-enhancing structural reform announcements, Fitch Ratings said Wednesday. The deficit targets present in the Union budget 2022-23 by Finance Minister Nirmala Sitharaman on Tuesday "are a bit higher than our forecasts when we affirmed India's 'BBB'/Negative sovereign rating in November," said Jeremy Zook, director and primary sovereign analyst for India, Fitch Ratings. While it was widely expected that the fiscal deficit will be lower than the targeted 6.8 per cent of the GDP in the current fiscal year ending March 31, 2022, Sitharaman put the number at 6.9 per cent.
'The robust tax collections give the finance minister a fair amount of headroom for an expansionary fiscal policy.'
The richest one per cent in India now own more than 40 per cent of the country's total wealth, while the bottom half of the population together share just 3 per cent of wealth, a new study showed on Monday. Releasing the India supplement of its annual inequality report on the first day of the World Economic Forum Annual Meeting in Davos, rights group Oxfam International said that taxing India's ten-richest at 5 per cent can fetch entire money to bring children back to school. "A one-off tax on unrealized gains from 2017-2021 on just one billionaire, Gautam Adani, could have raised Rs 1.79 lakh crore, enough to employ more than five million Indian primary school teachers for a year," it added.
The economic growth slowed to a decade low of 5 per cent in the 2012-13 fiscal.
India's latest GDP numbers do not signal robust economic growth in near term.
Here are the key decisions announced by the Reserve Bank of India on Thursday.
The Indian services sector growth touched a six-month high in December, supported by a robust intake of new work and favourable market conditions, a monthly survey said on Wednesday. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 56.4 in November to 58.5 in December, highlighting the strongest rate of expansion since mid-2022. For the 17th straight month, the headline figure was above the neutral 50 threshold.
India's economy is projected to slow to 6.5 per cent in the fiscal year starting April but will remain the fastest growing major economy in the world as it fared better in dealing with the extraordinary set of challenges the globe has faced, the Economic Survey 2022-23 said on Tuesday. India's gross domestic product (GDP) growth of 6.5 per cent in 2023-24 compares with an estimated 7 per cent expansion in current fiscal year (April 2022 to March 2023) and 8.7 per cent in the previous year. Like the rest of the world, India too faced an extraordinary set of challenges in tightening financial conditions and supply chain disruptions from a prolonged war in Europe but "withstood them better than most economies", the annual document detailing the state of the economy said.
By any economic theory or doctrine, this is no Budget that supports economic recovery, whether through supporting aggregate demand, or through expansionary stimulus, declares Rathin Roy.
The report has identified some areas that need attention from India's policymakers.
The Budget oration of the finance minister and the confidence with which she delivered it, along with the measures and the recent upsurge in the economy would all contribute to unleashing the storied 'animal spirits' and help the economy run on the growth path quite smoothly. Or so the government hopes, notes Shreekant Sambrani.
The statement said that the global economy is being held back by a shortfall in demand, while addressing supply constraints is key to lifting potential growth.
India's gross tax collections soared to a record high of Rs 27.07 lakh crore in the fiscal year ended March 31, led by impressive growth in corporate tax and customs, taking the tax-to-GDP ratio to an over two-decade high of 11.7 per cent, Revenue Secretary Tarun Bajaj said on Friday.
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