India's economic growth accelerates to 7.4% in Sept quarter
Gandhi also attacked Prime Minister Narendra Modi over the economic situation in the country, saying the PM should get his head "out of the sand" to deal with the problem facing the country.
Finance Minister Pranab Mukherjee, while speaking to media persons in New Delhi on Tuesday, said that India's economy is responding well. He also informed that the government took essential measures to tackle the adverse impact of inflationary pressure.
While there is little doubt that the emerging economies present the best chances for economic growth, not all countries will prosper at the same rate, says the Wealth Report 2012 by Knight Frank & Citi Private Bank.
After raising interest rate by a cumulative 250 basis points in 11 months, the Reserve Bank of India (RBI) on Thursday unexpectedly kept benchmark rate unchanged as global banking woes added uncertainty to the economic outlook. Five out of six members of MPC voted to remain focused on the withdrawal of accommodation to ensure inflation aligns with target while focusing on growth, RBI Governor Shaktikanta Das said on Thursday. The Monetary Policy Committee of the central bank decided to take a pause after a rate hike seen in previous six consecutive policies.
'RBI is already late in addressing inflation pressures.'
New series points to a sharp recovery since FY14.
Should you expect 15 per cent return over a period of 20 years? Dwaipayan Bose has the answer
India decisively withstood global headwinds in 2023 and is likely to remain as the world's fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rate regime and robust foreign exchange reserves. Despite widespread pessimism witnessed among the developed nations and the worsening geopolitical situation, India recorded a gross domestic product (GDP) expansion of 6.1 per cent in the March quarter. The growth moved up to 7.8 per cent in the June quarter and was 7.6 per cent in the September quarter. For the first six months of this fiscal, the growth was 7.7 per cent.
Unctad's GDP projection is broadly in line with forecasts by Indian agencies like the Reserve Bank of India and the Prime Minister's Economic Advisory Council, which have projected a growth rate of 7.9 per cent and 7.7 per cent respectively in 2008-09, as against 9 per cent recorded in 2007-08. Finance Minister P Chidambaram expects the Indian economy to expand by more than 8 per cent this year.
The Survey lists some of the challenges that might impede India's progress.
The stock markets, which had opened in the green on rate cut hopes, tumbled after the monetary policy announcement.
Analysts remain selective on cement stocks amid the likely government's capex push ahead of the scheduled general elections in May 2024. While UBS has initiated coverage on the Indian cement sector with an anti-consensus negative view and suggests investors sell select cement stocks on a rally, those at Nomura remain selectively bullish on the sector and prefer companies with large brownfield optionality and multi-region presence. In the near-term, UBS expects strong earnings of cement companies in the next two quarters to be driven by robust demand and margin tailwinds, but suggests any sharp uptick in stock prices could offer a good opportunity for booking profits in the related counters.
Market participants attribute the stability to the Reserve Bank of India's timely intervention in the foreign exchange market, both in terms of selling and buying dollars.
India's latest GDP numbers do not signal robust economic growth in near term.
So, while it is great that India's numbers look relatively good, don't raise a cheer just yet, points out T N Ninan.
India's appetite for imported crude oil may wane in fiscal year (FY) 2023 from record levels in pre-pandemic 2019-20 fiscal as higher oil prices, a spillover from the conflict in Ukraine, and increasing use of biofuels affect domestic demand for petroleum products. Brent crude surged to a nine-year high, shy of a July 2008 record $147.50 a barrel, before declining to around $100 a barrel - but the volatility in commodity rates will slow global economic growth and use of fuels. Demand for all oil products may grow at only 2-3 per cent in FY23, slower than the current fiscal and nearly half the 5.5 per cent growth estimated by the petroleum ministry, according to industry officials.
With the world's worst outbreak of COVID pandemic stalling a nascent economic recovery, the government has begun assessing the impact of the second wave of infections on different sectors and may look at providing support at an appropriate time to segments requiring fiscal help. Some of the economic indicators, including the Goods and Services Tax (GST) collections, still provide confidence and incoming data will throw some more light on the state of the economy, sources said. Services sectors like hospitality, tourism and aviation which had just started recovering were hit hard by the second wave of COVID, the sources said, adding these segments might need some support on an urgent basis from the government.
India's services sector activity expanded at the second-fastest pace in more than a decade during November, driven by sustained rise in new work and improvement in market conditions, a monthly survey said on Friday. The seasonally adjusted India Services Business Activity Index was at 58.1 in November, fractionally down from 58.4 in October. The November figure points to the second-fastest rise in output since July 2011. For the fourth straight month, the services sector witnessed an expansion in output.
The Nifty Index features 50 of the largest companies in the country and represents close to 50 per cent of total market capitalisation. It is now trading at valuations that could only be justified if India Inc grows earnings at better than thrice the GDP growth rate. This is extremely unlikely, says Devangshu Datta.
The government on Monday forecast annual economic growth to accelerate to 7.4 per cent in the fiscal year ending in March 2015
Slight recovery in growth is expected only in July-September.
'The private sector believes that some enablers in labour-intensive sectors like apparel, toys, tourism, and media retail, can unlock a lot of jobs.'
Demonetisation impact, earnings growth, central bank policies will get attention.
Fiscal situation better but spending cuts likely in FY16 too.
Three-quarters into the 10 years that Mr Modi had sought for transforming India, the 'output' numbers look impressive, but the key 'outcome' numbers don't show up much, if at all, observes T N Ninan.
On the revenue front, the finance ministry was expecting higher proceeds from non-tax revenue.
The economy could grow at 6-6.5 per cent this fiscal year (2019-20 or FY20), said Chief Economic Advisor Krishnamurthy Subramanian, revising his earlier estimate of 7 per cent in the Economic Survey. In an interaction with Arup Roychoudhury, he said supply-side measures, including corporation tax cuts, will boost consumption and demand, and non-tax revenue may make up for shortfall in tax revenues.
Global IT services spending is likely to increase at around 7-8 per cent over the medium term to $500 billion in 2007 from $470 billion in 2006.
In rupee terms, India's market cap is currently about Rs 184 trillion - 90 per cent of the GDP of Rs 203 trillion for FY20 at current prices.
The consumer price index was estimated as being up 3.5 per cent in March from a year ago, the biggest increase in 15 years. On June 6, 2007, the European Central Bank raised its key interest rate from 3.75 pe cent to 4.00 per cent, the highest level in almost four years. In terms of economic freedom, old Europe still lags behind. The Heritage Foundation has the three largest economies, Germany, France, and Italy, ranked 19th, 45th, and 60th respectively in the world.
Concerned by GDP slowdown and unrealistic tax targets, the economists urged Finance Minister Nirmala Sitharaman to implement long-term structural steps like land and labour reforms. Warning against any off-Budget financing the economists said the government should prepare a statement of intent for its social, rural and welfare sector expenditure.
Search is on for reliable indicators of underlying activity.
The economy is slated to grow by 6.3 per cent over the financial year 2004-05 and accelerate to 6.8 per cent in the next fiscal, credit rating agency ICRA said on Tuesday.
Fitch had last upgraded India's sovereign rating from BB+ to BBB- with a stable outlook on August 1, 2006.
Swiss brokerage Credit Suisse expects the economy to continue to show positive surprises and record up to 9 per cent growth in the next fiscal. For the current financial year too, the brokerage anticipates growth to be higher than the consensus forecast of 8.4-9.5 per cent, and printing in at around 10.5 per cent. As a policy, Credit Suisse does not provide absolute growth numbers in its forecast.
Encouraged by improvement in corporate earnings and decent monsoon forecasts, Citigroup has raised its BSE Sensex target to 28,800 for the fiscal year ending March 2017.
'Vaccination is very important for an economy to start functioning properly.'
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