Congress party chief Sonia Gandhi has written to the government, to ask for a cut in the record import duty on gold and for other restrictions to be eased.
The low global crude prices have helped narrow the current account deficit to just 0.2 per cent of GDP in the previous January-March quarter.
The Reserve Bank of India Governor Duvvuri Subbarao's caution that the central bank will intervene if foreign inflows are 'lumpy and volatile' has calmed the rupee a bit. The local currency on Monday closed at 44.41 per dollar, compared to 44.44 per dollar on Friday. The rupee, which has gained about 5.7 per cent since the beginning of September, traded at its five-month high.
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.
Developing countries' return to high growth will require them to resume the push into tradable goods and services.
India's gold imports could pick up in the next few months after slumping 81 percent in June as falling prices spur buying, a government source said, adding to New Delhi's anxiety over a record-low rupee and a wide current account deficit.
The broader NSE Nifty too fell below the 10,100 level by dropping 100.10 points to end at 10,094.25
Global rating agency Moody's on Tuesday warned that India's over 8 per cent economic growth may not be sustainable, saying it may average to 6.5 per cent in the coming years.
The restrictions on gold imports will be reviewed by March end, Finance Minister P Chidambaram said on Monday.
Slowdown in the global economy and bearish market conditions are impacting inflow of funds from foreign institutional investors even as the current account deficit during the first quarter of 2008-09 soared to $10.7 billion, says a report by the Reserve Bank of India.
India's banking system is expected to remain unscathed from the troubles in Credit Suisse as it has a very small presence in the country, experts said. Although Credit Suisse is more relevant to India's financial system than Silicon Valley Bank (SVB), it has very limited operations, according to a report by Jefferies India. The Switzerland-based bank, the report said, "has less than Rs 20,000 crore in assets (12th among foreign banks), presence in the derivatives market and funded 60 per cent of assets from borrowings, of which 96 per cent are up to two months.
'We see mid-and small-caps as a real pot of gold.' 'From a 10-15 years perspective, mid-and small-cap are likely to outperform the larger index, as they have done in the past.'
The domestic equity market, which is on a record-breaking spree, will focus on macroeconomic data announcements, movement in global stocks and the US Fed minutes to get further direction, analysts said. Trading activity of Foreign Institutional Investors (FIIs) will also innfluence investors.From the domestic macroeconomic front, Purchasing Managers' Index (PMI) data for the manufacturing sector will be released on Monday, and that o,f the services sector on Wednesday. Investors, this week, will keenly watch major global market events, icluding the outcome of the Federal Open Market Committee (FOMC) minutes, scheduled to be out on Wednesday.
>According to the latest RBI data, PPF receipts have already experienced a decline between April 2023 and February 2024. Other schemes like the Sukanya Samriddhi Account and National Savings Certificate are also witnessing reduced inflows.
Reserve Bank Governor Raghuram Rajan on Tuesday said the government's target of reducing the current account deficit (CAD) to $70 billion or 3.7 per cent of the GDP in 2013-14 is "imminently reachable".
The Organization of the Petroleum Exporting Countries (Opec) and its partners, such as Russia, collectively termed Opec+, have decided to cut crude oil production by 100,000 barrels per day (bpd) from October onwards, at a meeting on Monday. In a step that may increase prices in India, the group has decided to reduce output quotas for October, after a fall in global oil demand outlook. The cut in output is equal to 0.1 per cent of global supply.
Large trade deficit and rupee decline against the US dollar are putting pressure on the CAD, and these steps are likely to have a positive impact on the external sector.
Don't waste the money on politically motivated social programmes.
There was net outflow of $7.2 billion from the Indian market in June of which $5.4 billion was from debt market triggered by global risk aversion and currency weakness, Deutsche Bank India Equity Strategy report said.
The decision includes suspension of sale of gold coins and other physical forms of the yellow metal, as also as an investment product across all its businesses and subsidiaries, Reliance Capital said in a statement.
Lower fuel subsidy payouts might restrict gross fiscal deficit in FY15.
A rebound in oil prices, FII outflows and concerns over current account deficit weighed on the domestic currency, pushing it to fresh life-time lows.
The challenge for the RBI in 2024 is likely to be less about containing elevated inflation and more about curbing excessive financial market exuberance and a 'problem of plenty', notes Sajjid Chinoy, Chief India Economist JP Morgan.
The Reserve Bank on Wednesday approved a Rs 2.11 lakh crore dividend payout to the central government for 2023-24, more than double the amount it paid for the previous 2022-23 financial year. The decision was taken at the 608th meeting of the Central Board of Directors of the Reserve Bank of India held under the chairmanship of Governor Shaktikanta Das.
Within three trading sessions in May, foreign portfolio investors (FPIs) have pumped in Rs 9,461 crore into Indian equities. This follows net inflows worth Rs 7,936 crore in March, and Rs 11,631 crore in April. The trend, analysts said, could continue going ahead as the US Federal Reserve may soon halt its interest rate hike cycle, which will strengthen foreign fund inflows into emerging markets, including India.
PowerGrid was the top gainer in the Sensex pack, spurting 2.76 per cent, followed by NTPC, M&M, L&T, Hindustan Unilever, HDFC, and Infosys.
According to a new report published by Switzerland-based BIS, which is also referred as 'bank for central banks', the US Federal Reserve's announcement of a possible phasing out of easy money regime has resulted in 'abrupt and sizeable' equity market losses in both advanced and emerging markets.
Hans Goetti, Director of Citigroup, says that India is not cheap, but attractive to long-term investors and has a favourable composition of imports. \n
Foreign brokerage Bank of America Merrill Lynch (BofAML) on Friday said a "dovish" Reserve Bank will slash key interest rates by 0.25 per cent at the February review meet and will do cuts of 0.75 per cent in 2015.
Post office savings deposit, recurring deposit accounts and the senior citizen savings scheme account have shown the highest growth in the current financial year.
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The trade deficit makes up an important part of the current account deficit, which had touched an all-time high of 4.8 per cent in 2012-13.
The former RBI Governor also emphasised on the need to boost economic productivity and attract investments.
India's GDP growth will slow down to 5.5 per cent in FY24 from the 6.9 per cent expected in the current fiscal 2022-23, a Swiss brokerage said on Wednesday. The slowdown was attributed to slowing global growth and tightening of monetary policies in the report by economists at UBS India. It said India will be among the "lesser affected economies" in the world, but made it clear that the world's fifth largest economy is not immune from global headwinds.
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And with prices low, the equilibrium real exchange rate will also be low, that is to say depreciated.
RBI expects the growth in the next fiscal to strengthen gradually, notwithstanding the significant headwinds.
India's manufacturing sector activity contracted for the second consecutive month in September as both output and new orders witnessed a decline, an HSBC survey said.
Foreign portfolio investors (FPIs) infused Rs 11,630 crore in the Indian equity markets in April on the reasonable valuation of stocks and appreciation in the rupee. This came after FPIs infused a net sum of Rs 7,936 crore in equities in March, mainly driven by bulk investment in the Adani Group companies by the US-based GQG Partners. However, if one adjusts for the investments of GQG in Adani Group, the net flow was negative.
The Reserve Bank of India fears that rising current account deficit in the United States could adversely impact interest rates and inflation globally and India could not be an exception.
It is important to understand that debt investors are a conservative lot and, in general, most such investments are hedged out of foreign exchange risk to simply earn an arbitrage profit, rather than carry the risk to possibly increase their yield.
On Tuesday, Economic Affairs Secretary Arvind Mayaram told reporters that economic growth this financial year would be over five per cent and the numbers in the second quarter would be better than the first quarter which yielded gross domestic product expansion of 4.4 per cent, a four-year low.
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