Economy showing mixed signals, outlook challenging: FinMin
Indian economy has a stable system to cope with frequent changes in the political arena to pursue the growth agenda, International Monetary Fund executive director Y V Reddy said.
Amid slowdown blues, the government has unveiled a raft of measures over the past few months aimed at improving liquidity in the system, moderating interest rates as well as credit growth apart from addressing stress in the NBFC sector.
He stressed that reform for him was just a way station on the long journey to the destination and the destination is the transformation of India.
In a blunt message to Pakistan, the United States has said that continued existence of terror safe havens in the country and its inability to take action against them affects their bilateral ties including security assistance.
The repo or short term lending rate remains unchanged at 6.75 per cent and the reverse repo rate at 7.75 per cent.
Alibaba's pervasive economic and social influence in China is seen as a threat to the authority of the Chinese Communist party, notes Shyam Saran.
On the present government's 'Make in India' campaign, C Rangarajan, former chairman of the Prime Minister's Economic Advisory Council, says it is important to first ask for whom it is being made.
Modi govt must implement few policy measures which it announced in Budget 2015.
"Reform is not an end in itself. Reform for me is just a way station on the long journey to the destination. The destination is the transformation of India," he said.
India's economy grew at 7.6 per cent in 2015-16.
Sanjay Mathur, managing director and head of economics research for Asia Pacific (ex-Japan), Royal Bank of Scotland, tells Business Standard that in the emerging market pack, India needs to learn lessons from Korea and Taiwan, which have managed their economic situations well.
What is killing the risk appetite of the bond buyers is the inconsistency in the central bank's approach. It needs to allow the yield to find its own level, gradually. To ensure that, the RBI may adopt a similar approach with which it handles a slipping rupee, asserts Tamal Bandyopadhyay.
In the concluding part of the series, Y V Reddy, argues that the proposal strikes at the functioning of federalism and the basic structure of the Constitution, which has served us well so far.
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The economy grew at a four year low of 4.4 per cent in the April-June quarter of current year.
Thanks to the recapitalisation by the government and measures taken by the central bank, collapse of any large housing finance company won't pose as big a risk as it had six months ago.
Although this may not be music to Raghuram Rajan and Viral Acharya's ears, the real reason in my estimation for their quitting is expatriate over-sensitivity, intolerance or arrogance, argues B S Raghavan, the distinguished civil servant.
In a bid to woo foreign investment, the government on Friday said friendly economic policies would be continued to enable the country to move on to higher growth of 6.5-7 per cent this fiscal.
Low consumer demand, a slide in investments and troubles in the banking sector should prompt the government to recalibrate taxes and expenditure. It is also important to ramp up spending on health care and education, says CII president Sumit Mazumder.
Moody's has a 'Baa3' rating for India, with a positive outlook.
The recent rupee depreciation and capital outflows could adversely impact the country's economy.
In its latest interim Economic Assessment report released today, OECD said a moderate expansion is under way in most major advanced and emerging economies.
Leading automakers Maruti Suzuki India, Hyundai Motor, Kia Motors and Tata Motors reported sales growth in the domestic market in November, aided by robust offtakes amid the festival season. While Maruti Suzuki India reported marginal growth, Hyundai logged in its highest ever monthly sales in November. Others like Honda Cars India, Toyota Kirloskar Motor, Mahindra & Mahindra and MG Motor India also reported sales growth in November as compared with the same month last year.
The chairman of mortgage giant HDFC Ltd in his annual letter to shareholders, also suggested a one-time restructuring of real estate loans, easing of external commercial borrowing rules and immediate changes in regulations to allow end-to-end execution of housing loans online.
RBI lowered economic growth for the current fiscal to 6.9 per cent from the previously projected 7.1 per cent, but saw it bouncing back in a big way to 7.4 per cent in 2017-18.
Being one of the early commentators to flag economic slowdown and caution investors on corporate earnings, Gautam Chhaochharia, head of India research, UBS Securities, in an interview with Hamsini Karthik says the markets remain in an expensive zone despite the recent correction.
It further said India is facilitating external commercial borrowings by startups in order to encourage innovation and promote ease of doing business.
Barcelona have given their full backing to Lionel Messi in the Argentina forward's tax fraud case and vowed to fight "external decisions" they say are unfairly targeting the club.
We can expect to see more Chinese wolf warrior diplomats on the prowl, in India's neighbourhood, though its mailed fist is not so visible while dealing with India, observes Colonel R Hariharan (retd).
IMF MD Christine Lagarde hailed the government's latest Budget.
The actual expenditure will only be marginally higher and hence, the multiplier effect will be muted.
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The minister, who will also be meeting foreign institutional investors whose money is key to funding CAD in the afternoon, did not speak to reporters waiting outside.
The retail inflation, which is factored in by the RBI to arrive at its monetary policy, has been on decline since last month. The previous low was 5.54 per cent in November 2019. The government has asked the RBI to restrict the inflation around 4 per cent, with a margin of 2 per cent on the either side.
The CAD has been narrowing since 2012 to an estimated 1.6% of GDP in 2014
'So far, no government has imposed a financial emergency in the country,' notes A K Bhattacharya.
ICICI Bank chief Chanda Kochhar believes, India can grow if decisions on investment policy are taken quickly.
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Amid fears of a downgrade from ratings agencies, the finance ministry is gearing up for a visit of Japan Credit Rating Agency officials on September 6.
The Reserve Bank of India had taken steps to tighten liquidity in a bid to curb volatility in the forex market after the rupee fell to a record low of 61.21 to the dollar on July 8.
Stating that open markets mean more opportunities, Modi said during the last six years the government has made many efforts to make the Indian economy more open and reform oriented.
Duvvuri Subbarao recounts how his tensions with P Chidambaram and Pranab Mukherjee, then finance ministers, over monetary policy spilled over into other issues in the central bank in this excerpt from Who Moved My Interest Rate?, his memoir of his term as Reserve Bank of India governor.
