While the situation Sitharaman finds herself in may not be that good, how does it stack up against her three immediate predecessors Pranab Mukherjee, P Chidambaram and the late Arun Jaitley?
The Centre could better its fiscal deficit at 6.6 per cent of GDP in this financial year on stronger-than-expected revenue buoyancy, even if the budgeted disinvestment target is not met, Fitch Ratings has said. The international rating agency had last week kept the sovereign rating unchanged at 'BBB-' with a negative outlook, and said that the risks to India's medium-term growth outlook are narrowing with rapid economic recovery from the pandemic and easing financial sector pressures. In an email interview with PTI, Fitch Ratings Director (Asia-Pacific Sovereigns) Jeremy Zook said the two key positive triggers that could lead to a revision of the outlook to stable are implementation of a credible medium-term fiscal strategy to lower debt burden and higher medium-term investment and growth rates without the creation of macroeconomic imbalances, such as from successful structural reform implementation and a healthier financial sector.
For India Inc, latest GDP figures signal a turnaround.
The Bank suggested reforms in infrastructure sector.
Macro data have little connect with indicators on the ground.
The April-June quarter GDP slipped to 7 per cent from 7.5 per cent.
Investors say they see large companies going through the grind, as their promoters struggle with liquidity because they are levered up at the holding company level and are starting to get margin calls thanks to the crashes in the stock market, and in the next six months, the targets that will come up for PE companies will make for a harvest season like never before.
Observing that India's worsening COVID-19 situation and the strict measures to contain it have hit the economy hard, the rating agency said productive capacity has been severely disrupted since the start of the pandemic.
The repo rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's MPC.
The 50-issue NSE Nifty in range-bound movements settled higher by 59.15 points, or 0.58 per cent, at 10,252.10.
Finance Minister Arun Jaitley on Wednesday said the country is on an "upward curve" and a good monsoon, GST passage and increased infra and rural spending will further accelerate the growth.
India's economic growth is expected to improve to 6.3 per cent in 2016 with the country leading economic recovery in South Asia, according to a United Nations report.
Pencilling in a GDP growth in third and fourth quarters, SBI Research on Wednesday revised its contraction forecast for the current fiscal year to 7 per cent. The agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers. In April-September, the economy contracted 15.7 per cent but the second half may see a surprise 2.8 per cent growth, if the SBI analysis turns out to be correct.
The Reserve Bank of India on Friday decided to keep the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy is yet to recover from the impact of the second Covid wave.
Global rating agency Fitch on Friday pegged India's growth at 5.5 per cent in the current fiscal and 6 per cent in 2015-16 and affirmed the country's rating outlook at stable level.
India's GDP estimates for 2020-21 show that the economy is expected to perform much better than earlier projections by different agencies, indicating a sustained V-shape post-lockdown recovery, experts said. The first Advance Estimates (AE) by the National Statistics Office (NSO) has projected a contraction of 7.7 per cent in the real GDP during 2020-21. This was better than the projections by certain international agencies like the IMF and World Bank.
The IMF lowered India's economic growth estimate for the current fiscal to 4.8 per cent and listed the country's much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years.
Goldman Sachs forecasts real GDP growth to accelerate to 7.9 per cent in FY17 from a projected 7.5 per cent in FY16.
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.
'The long-term impact of elections is minimal.'
'The slide in growth has arisen primarily because we have an NBFC crisis on top of a banking crisis,' points out T T Ram Mohan.
India's macroeconomic situation is improving fast and the country's GDP growth will turn positive in the third and fourth quarters of the current financial year, eminent economist Ashima Goyal said on Sunday. Goyal in an interview to PTI said the management of the COVID-19 pandemic and gradual unlocks announced by the government have helped in avoiding multiple COVID-19 peaks. The growth estimates by different agencies are being continuously revised, she said.
While weather forecasters remain divided on how the monsoons will play out in India over the next few months, analysts believe the news at the current juncture - at best - can trigger a knee-jerk reaction in the markets. They believe it is too early to say whether the sub-par monsoon on account of El Nino can seriously dent the market sentiment in the short-to-medium term. "These are just initial forecasts and we will have another round / status update from the weather forecasters a month down the line.
Stating that pushing GDP growth, which has slipped to 5-year low of 6.8 per cent in 2018-19, is the top priority, President Ramnath Kovind said Modi govt will bring more reforms and raise farm investments to boost growth.
Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. "We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. "However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields," it said in a note. The Reserve Bank of India (RBI) held its policy repurchase (repo) rate unchanged at 4 per cent at its monetary policy meeting on April 7.
The Economic Survey seems convinced that 2019-2020 saw the bottom of the economic cycle, points out Abheek Barua, chief economist, HDFC Bank.
RBI also retained its GDP growth forecast at 7.6 per cent
India, which appears to have been pushed back to being the world's sixth biggest economy in 2020, will again overtake the UK to become the fifth largest in 2025 and race to the third spot by 2030, a think tank said on Saturday. India had overtaken the UK in 2019 to become the fifth largest economy in the world but has been relegated to 6th spot in 2020. "India has been knocked off course somewhat through the impact of the pandemic. "As a result, after overtaking the UK in 2019, the UK overtakes India again in this year's forecasts and stays ahead till 2024 before India takes over again," the Centre for Economics and Business Research (CEBR) said in an annual report published on Saturday. The UK appears to have overtaken India again during 2020 as a result of the weakness of the rupee, it said.
Manufacturers said they expect the growth of manufacturing sector to be less than 7 per cent.
Markets trimmed early gains to end marginally higher on Friday as investors turned cautious ahead of the GDP data for the current fiscal to be released on Friday.
'The actions of Indian monetary authorities will depend on how quickly they want the inflation to come down to 4 per cent.'
While most economies contracted in the second quarter of 2020, the Chinese economy grew by 3.2 per cent.
With the new Indian government showing signs of economic reforms and brings in transparency in governance, the World Bank feels that the world's third-largest economy could achieve a growth rate of 5.5 per cent this year as compared to 4.7 per cent last year.
The economic impact of the Omicron variant of COVID-19 on emerging economies will depend on a mix of government restrictions, public comfort with social interactions, and capacity of governments and central banks to provide additional policy support to the private sector, Moody's Investors Service said on Wednesday. The emergence of the new variant poses new risks to the global economic growth and inflation outlook, as concerns mount about the variant's health risks and several countries have imposed new travel restrictions in recent days. These restrictions will likely increase over the coming weeks until scientists learn more about the variant, it said.
The fourth consecutive rate cut is expected to lower equated monthly instalments (EMIs) for home and auto buyers, and borrowing cost for corporate.
The wholesale price index inflation is projected at 6.4 per cent for 2017-18.
Most analysts expect the note ban to sharply hit GVA growth in Q3 and Q4, and the central bank's stance is being called into question.
The revision of the consumer price index and GDP base years from 2011-12 and 2012, respectively, were dependent on the outcomes of the consumer expenditure survey of 2017-18 that the government decided to junk recently.
It can be noted that according to official estimates, GDP growth in FY14 is expected to come in at 4.9 per cent, up from 4.5 per cent in FY13, Icra said.
As per OECD's September estimates, global growth was to be 3 per cent this year and 3.6 per cent in 2016.
