The Commerce and Industry Ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports
Veerappa Moily's suggestions on oil use do not inspire hope
Ashok Chawla outlined the key thrust areas of Budget 2011.
Goldman Sachs downgraded its rating on Indian stocks to 'underweight'.
Balance of payment stood at a surplus of $30.1 billion during January-March
After the government sought Parliament's nod for a second batch of supplementary demand for grants that will cause a hit of Rs 2.99 trillion to the exchequer, doubts suddenly arose about the government's ability to meet the Budget projections of reining in its fiscal deficit at 6.8 per cent of gross domestic product (GDP), or Rs 15.06 trillion, for the current financial year. Till now, many were of the opinion that the government would succeed in checking the deficit at a much lower figure than what was given in the Budget Estimates (BE). The government had sought Parliament's approval to spend Rs 3.74 trillion extra, but Rs 74,517.01 crore will be matched by equal savings on other heads.
Balance the corporate expectations while at the same time being populist, says Milan Parekh.
The Indian economy is projected to grow at 6.3 per cent in current financial year aided by investment and domestic demand. According to a World Bank report released on Tuesday, India continues to show resilience against the backdrop of a challenging global environment. In India, which accounts for the bulk of South Asia region, growth is expected to remain robust at 6.3 per cent in 2023-24, India Development Update of the World Bank said.
To help cut down on current account deficit.
Headline growth was quite weak heading into the Covid period but averaged 6.4 per cent and 6.7 per cent in the five years between FY16 and FY20 for GVA and GDP respectively, points out Abhishek Upadhyay.
According to HSBC, the volatility in Indian markets since May can be attributed to the initial talk about tapering of bond purchase by the US Federal Reserve but the catalyst for recent volatility in Indian equities was when policymakers decided to tighten liquidity to stem capital outflows.
While much attention has been devoted to interest rates and industrial revival, the bigger problem for the economy could be its external vulnerability.
The 30-share Sensex declined 590.05 points or 3.18 per cent to close at 17,968.08 and the 50-share Nifty dropped 189.05 points or 3.45 per cent at 5,287.45 levels.
Rupee has lost close to 16 per cent this year making it one of the worst Asian currencies so far.
Petrol and diesel prices on Tuesday touched fresh highs as rupee dipped to a record low of 71.54 against US dollar, making imports costlier
NRIs will abandon rupee-denominated accounts, causing a deposit crunch and worsening the current account deficit.
According to a report by German banking giant Deutsche Bank, a weaker Indian rupee has allowed India to remain the cheapest major economy in the world despite persistently suffering the highest inflation rate.
The central bank is of the view that rise in external debt a concern but rating outlook revision reassuring.
CAD, which is the difference between outflow and inflow of foreign currency, touched a historic high of 6.7 per cent in the third quarter.
The Reserve Bank of India (RBI) has slashed the repo rate by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect.
It says RBI may have to continue raising rates; prescribes floating sovereign bonds, going for NRI forex swaps again.
Also, the import tariff value -- the base price at which customs duty is determined to prevent under-invoicing -- in case of silver has been reduced to $644 per kg from $694 per kg earlier, a notification by the Central Board of Excise and Customs said.
Chidambaram on Monday sought to soothe nerves about its external finances by promising to contain the current account deficit at 3.8 percent of gross domestic product this fiscal year with a slew of measures including easing rules for raising loans abroad.
On its part, the Reserve Bank of India tried to help exporters by easing some restrictions imposed on holders of Exchange Earners Foreign Currency accounts and by giving effect to the commerce minister's announcements regarding extension of the interest subvention scheme for one more year and for more items.
Experts feel oil prices will remain volatile with an upward bias.
India Ratings on Mondy projected a 7.7 per cent growth this fiscal driven by consumption demand.
'For the next two years, we expect the bulk of earnings growth contribution from sectors like financials and energy, where the outlook remains positive, while the sectors which are linked to domestic consumption and are currently witnessing strains on margins have low salience for Nifty earnings.'
While retaining India's sovereign rating at 'BBB-' with a negative outlook, S&P said there is at least a one-in-three likelihood of a downgrade within the next 12 months.
Rajan also did his bit by taking steps to protect the currency against speculative attack as did the government in curbing gold imports and bringing the Current Account Deficit
'Probability has increased for India to have improved fundamentals'.
Bhavtosh Vajpayee, managing director and head of the Indian equities business at Barclays, the London-headquartered multinational banking and financial services company, tells Business Standard it is still too early to predict an economic recovery.
While the country imposed limits, it also eased and simplified other restriction to attract foreign inflows. This is done to plug record current account deficit.
Reserve Bank Governor Shaktikanta Das on Wednesday said in the wake of appreciating US dollar, the movement of rupee has remained least disruptive as compared to its peers, and the size of foreign exchange reserve is comfortable. On a financial year basis (from April to October 2022), the rupee has appreciated by 3.2 per cent in real terms, even as several major currencies have depreciated, he said while announcing the latest set of bi-monthly monetary policy. "The story of the rupee has been one of India's resilience and stability," the Governor said while pointing out that the appreciation of the US dollar this year, which precipitated large-scale depreciation of all major global currencies including the Indian rupee, has drawn wide attention.
The macroeconomic environment has changed dramatically for the better.
India appears poised to sustain its growth in a more durable way than before with the economy carrying the momentum from FY23 into the current fiscal year, the Annual Economic Review for 2022-23 released by the finance ministry on Thursday said. However, the report cautioned that escalation of geopolitical stress, enhanced volatility in global financial systems, sharp price correction in global stock markets, a high magnitude of El-Nino impact, and modest trade activity and FDI inflows, are factors that could constrain the pace of growth. "Should these developments deepen and dampen growth in the subsequent quarters, the external sector may challenge India's growth outlook for FY24," the finance ministry said.
Forex dealers said besides dollar's gains against the euro overseas, increased demand from importers for the US currency and a lower opening in the domestic equity market also put pressure on the rupee.
The country's CAD stood at 5.4 per cent of GDP during April-December period of financial year 2012-13 amounting to $72 billion.
For the last few years, the assumption in much of the economic discourse has been that India is on an assured path of rapid growth.
Currently, non-residents visiting India are not allowed to take out any Indian currency while leaving the country.
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