Protectionism and a rollback of regulation. Defusion of tensions with Russia and a lowering of geo-political risks. Looser fiscal policy and tighter monetary policy. At least Donald Trump can't be faulted for not trying something different where existing policies have disappointed, says T T Ram Mohan.
Chief Economic Advisor V Anantha Nageswaran on Thursday said the economy is expected to grow at 6.5 per cent in the current fiscal notwithstanding deficient rains in August. India recorded economic growth of 7.8 per cent in the April-June quarter of 2023-24 against 13.1 per cent in the year-ago period. India's economy in Q1 grew at the fastest pace in a year, on the shoulders of a boost in capital expenditure both at central and state levels, along with stronger consumption demand, especially in rural areas, and improved performance in the services sector, he said.
Inflation trajectory, domestically as also globally, is what will shape the economy, and therefore the market, over the next couple of quarters.'
The recent agreement between the RBI and the Centre marks a significant step forward toward financial inclusion.
Economic affairs secretary S C Garg said that all macroeconomic parameters are performing well.
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.
Relying on the private sector to undertake infrastructure investment may not be a realistic proposition.
On the ground, rural medical infrastructure and more crucially, women's access to reproductive health services is practically non-existent in Uttar Pradesh, reports Geetanjali Krishna.
According to the QNB Group report, the growth in emerging markets -- from Brazil to Indonesia, Russia and South Africa -- is slowing down, partly reflecting the tightening of domestic policies by these countries last year to stabilise foreign exchange rates.
The advanced economies have been experiencing their longest period of slow growth in many decades.
Among the bank groups, under the baseline scenario, public sector banks' gross NPA ratios may increase to 13.2 per cent by September 2020 from 12.7 per cent in September 2019.
The Reserve Bank of India (RBI) on Wednesday announced to increase the policy repo rate by 50 basis points to 4.9 per cent, the second hike in five weeks aimed at quelling the inflation. The MPC vote was unanimous and has decided to keep stance withdrawal from accommodative, RBI Governor Shaktikanta Das said in a press conference on Wednesday. The decision was taken during a three-day meeting of the RBI's Monetary Policy Committee (MPC) to review the interest rates in the country. The MPC voted unanimously to increase the policy repo rate by 50 bps to 4.90 per cent," Das said.
The central bank dashed hopes of any steep interest rate reduction.
India's industrial production contracted by 3.6 per cent in February, official data showed on Monday. According to the Index of Industrial Production (IIP) data released by the National Statistical Office (NSO), manufacturing sector output declined by 3.7 per cent in February 2021. Retail inflation rose to 5.52 per cent in March, mainly on account of higher food prices, government data showed on Monday. The consumer price index (CPI) based retail inflation stood at 5.03 per cent in February.
IMF Chief Economist Gita Gopinath also said the pickup in global growth for 2020 remains highly uncertain as it relies on improved growth outcomes for stressed economies like Argentina, Iran, and Turkey and for under-performing emerging and developing economies such as Brazil, India, and Mexico.
'Once the lockdown is lifted, we will need the mother of all fiscal and monetary policy support to sustain the economy,' advises Akash Prakash.
Services sector activities improved further and touched a five-month high in April driven by a surge in incoming new work orders that boosted business activity and supported a renewed increase in employment, according to a survey. The seasonally adjusted S&P Global India Services PMI Business Activity Index jumped to 57.9 in April, from 53.6 in March, highlighting a sharp rate of expansion that was the fastest since last November amid mounting price pressures. For the ninth straight month, the services sector witnessed an expansion in output.
The outbreak of the Omicron variant of the coronavirus and unprecedented lockdowns in China have roiled its equity market and also that of Hong Kong. After the crisis-hit Sri Lanka, China and Hong Kong are the worst-performing stock markets in Asia on a year-to-date basis.
On gold buying occasions such as Akshaya Tritiya, Chiraj Mehta points out, investors are often confronted with the question: Should I make just a token purchase, or should I buy more towards building my allocation in the yellow metal?
'Historically, the markets tend to perform well during election years as governments aim to increase spending and call attention to growth.'
RBI Governor Raghuram Rajan wanted to improve training for staff, through initiatives such as sending them to other central banks for short stints.
'The Indian economy and the Indian financial sector today remain resilient and much better placed.'
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.
Broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up 0.8%-1%.
The Reserve Bank on Monday pitched for creation of a conducive environment for investment and faster clearances of projects to boost economic growth which slowed to a decade low of 5 per cent in the previous fiscal.
He added that the risks can increase if the Chinese slowdown gathers more speed.
Calling out the high real interest rates -- the differential between the policy rate and headline inflation -- as an impediment to investment, the SBI report said the RBI can cut rates by 0.35-0.50 per cent at its next policy announcement.
The Modi government's array of economic policy has been impressive.
RBI Governor Raghuram Rajan is regarded as credible by global financiers.
'It is important to improve the quality of spending.'
Amid an increase in localised lockdowns across the country, Reserve Bank Governor Shaktikanta Das on Wednesday said there is no need for a loan repayments moratorium at present, stating that businesses are better prepared to face the situation. It can be noted that the RBI had announced a six-month moratorium in the early days of the national lockdown last year to help borrowers impacted by a chilling in economic activity. The entire state of Maharashtra is in a lockdown for non-essential services and localised and night lockdowns are being observed in many pockets of the country, including the national capital, to restrict the surge in cases.
'In end-December 2015, Nifty would end at 8,600 and Sensex at 28,000.'
There is little scope for significant monetary easing even in the next fiscal year.
The banking regulator was uncomfortable with the runaway pace at which consumer credit was growing.
Nirmala Sitharaman is proving to be a better finance minister than her initial rookie status might have led people to expect, observes T N Ninan.
The temporary disruptions (primarily to private consumption) caused by cash shortages accompanying the currency exchange initiative are expected to gradually dissipate in 2017 as cash shortages ease, the International Monetary Fund said in its regional economic outlook.
India's inflation trajectory in the coming months will be influenced more by the geo-political situation due to the war in Europe and its impact on supply chains and commodity prices. However, the country is better placed than most to "weather the storm" and achieve growth of close to 8 per cent in the current fiscal year, the finance ministry said in its latest monthly economic report on Thursday. "Through the channel of imports, elevated global crude and edible oil prices now have a significant impact on India's inflation outlook. "Government measures to keep the prices of these commodities in check, along with the recent hike in policy rates by the RBI, are expected to temper inflationary pressures in the economy," the monthly economic report for April, drafted by the finance ministry's economic division, said.
HDFC Bank was the top loser in the Sensex pack, falling 2.99 per cent, followed by Adani Ports at 2.87 per cent.
Modi govt has a unique style of working, say experts.
The World Bank has retained India's economic growth forecast for the current fiscal at 8.3 per cent as the recovery is yet to become broad-based. As per the first advanced estimates of the national income released by the National Statistical Office (NSO) last week, the economy is projected to grow at 9.2 per cent in 2021-22, surpassing pre-COVID level in actual terms, mainly on account of improved performance, especially in farm, mining and manufacturing sectors. "India's economy is expected to expand by 8.3 per cent in fiscal year 2021/22 (ending March 2022), unchanged from last June's forecast as the recovery is yet to become broad-based.
