The Indian economy, severely hit by the coronavirus pandemic, is projected to contract by a massive 10.3 per cent this year, the International Monetary Fund said on Tuesday. However, India is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China's projected growth rate of 8.2 per cent, the IMF said in its latest 'World Economic Outlook' report.
The government has created a comprehensive budget with sharp focus on sustaining economic activity and investment but more clarity is needed on areas like taxation framework for adopting remote working on a long-term basis, IT body Nasscom said on Monday. The industry association noted that the IT/ITeS (Information Technology-enabled Services) industry has been a key driver of growth and jobs in 2020 and there is an opportunity to significantly accelerate it further. "For the IT sector, one of the biggest needs ahead of us is the development of future business models, with hybrid working becoming a reality. "We look forward for the government to provide clarity on providing a framework in direct taxes and indirect taxes for the industry to adopt WFH/remote working on a long-term basis," Nasscom said in a statement.
India's economy, estimated to contract by 6.9 per cent in 2020 due to the coronavirus pandemic, is forecast to record a "stronger recovery" in 2021 and grow by 5 per cent, according to a UN report which said the country's current fiscal year budget points to a shift towards demand-side stimulus, with an uptick in public investment. The report, 'Out of the frying pan ...Into the fire?' published Thursday as an update to the Trade and Development Report 2020 by UN Conference on Trade and Development (UNCTAD) said the global economy is set to grow by 4.7 per cent this year, faster than the 4.3 per cent predicted in September 2020, thanks in part to a stronger recovery in the US, where progress in distributing vaccines and a fresh fiscal stimulus of $1.9 trillion are expected to boost consumer spending.
Global rating agency S&P forecast on Tuesday a slowdown in Indian economy to 8.6 per cent this fiscal due to high interest rates and appreciating rupee but expected no change in key rates and cash reserve ratio in RBI's credit policy on October 30. But the strong domestic demand would ensure that India maintains high growth. The moderation from last year's 9.4 per cent to 8.6 per cent this year therefore reflected a soft landing, S&P said in its mid-year review.
India retains the tag of the fastest growing country among the world's major emerging economies
'Vaccination is very important for an economy to start functioning properly.'
The Indian regulatory framework forced Citi to hibernate -- contrary to the claim that it never sleeps!
Making a case for an optimal fiscal stance, the Economic Survey on Friday said growth leads to debt sustainability and not necessarily vice-versa. "This is because debt sustainability depends on the 'Interest Rate Growth Rate Differential' (IRGD) i.e. the difference between the interest rate and the growth rate in an economy. "With the Indian context of potential high growth, the interest rate on debt paid by the Indian government has been less than India's growth rate by norm, not by exception," it said.
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.
With the government looking to divest loss-making steel assets, significant interest from secondary players is most likely this time apart from the anticipated list of large integrated primary steel producers, said industry experts. Rashtriya Ispat Nigam Limited (RINL), Neelachal Ispat Nigam Ltd (NINL), NMDC Integrated Steel Plant (NISP)-Nagarnar, Ferro Scrap Nigam Ltd and three units of Steel Authority of India (SAIL) - Alloy Steels Plant, Durgapur; Visvesvaraya Iron and Steel Plant, Bhadravati; and Salem Steel Plant, Salem - constitute the divestment list. All the three units of SAIL have been loss-making for more than five years.
Under the tagline of 'India means business', the roundtable was attended by 40 CEOs of global companies and 20 from India.
The prime minister further said that the teachings of Buddha stated that human beings should constantly strive to overcome difficult situations and urged everyone to work together during this pandemic.
Prime Minister Narendra Modi on Tuesday targeted Kerala's ruling Left Democratic Front over the gold smuggling scam, saying the Communist Party of India-Marxist-led government "betrayed" the people of the state just as Judas did to Lord Jesus for a few pieces of silver.
Moody's Investors Service on Friday projected India's growth at zero per cent for the current fiscal and said the negative outlook on sovereign rating reflects increasing risks that GDP growth will remain significantly lower than in the past. The outlook also partly shows weaker policy effectiveness to address economic and institutional issues, it noted in the update to its November 2019 rating forecast.
Moody's on Monday slashed India's growth forecast for 2020 to 5.4 per cent from 6.6 per cent projected earlier, on slower than expected economic recovery. In its update on Global Macro Outlook, Moody's Investors Service said India's economy has decelerated rapidly over the last 2 years and economic recovery is likely to be 'shallow'.
After swinging nearly 330 points, BSE Sensex finished 172.69 points or 0.43 per cent higher at 40,412.57. Similarly, the 50-scrip NSE Nifty appreciated 53.35 points or 0.45 per cent to close at 11,910.15.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Attributing the growth to an upswing in consumption and investment, the World Bank has said India will continue to be the fastest growing major economy in the world.
Stating that India's economic stimulus was not adequate, Banerjee said, the measures did not increase consumption spending of lower income people as the government was not willing to put money in the hands of the low income population.
Bajaj Finance was the top laggard in the Sensex pack, tanking up to 8 per cent, followed by M&M, Tata Steel, Bajaj Auto, ONGC, HDFC Bank and Kotak Bank. On the other hand, TCS, Tech Mahindra, HUL, Axis Bank and ITC were the top gainers.
Stating that an economic recession gripped global economy following the lockdowns due to COVID-19 pandemic, Fitch Ratings on Friday said the initial disruptions to regional manufacturing supply chains in China have now broadened to include local discretionary spending and exports.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Those who lost jobs in December were women, graduates, post graduates, salaried employees, observes Mahesh Vyas.
'Modi has presided over an ultra-nationalism that has stunted India's growth, been unable to change the country's external situation, brought foreign intervention into Indian affairs,' explains Aakar Patel.
India's public debt ratio, which remarkably remained stable at around 70 per cent of the GDP since 1991, is projected to jump by 17 percentage points to nearly 90 per cent because of increase in public spending due to COVID-19, the IMF said.
Asian Development Bank on Wednesday lowered India's economic growth forecast for FY2019 to 5.1 per cent on slowing job prospects, rural distress exacerbated by poor harvest and credit crunch. Growth in FY2020 is likely to recover thanks to this support, low oil prices, and a weakening rupee, but risks to the projections remain tilted to the downside, it said on India.
Prime Minister Narendra Modi on Saturday hard sold his government's reforms spanning from manufacturing to taxation to labour, saying they have changed the world perception about the country from 'why India' to 'why not India' and went on to quote record foreign investment during the pandemic as a testimony to that. Speaking at industry association Assocham's Foundation Week event, Modi also said agriculture reforms brought by his government six months back have started benefiting farmers. The reforms in the last six years have influenced in changing the sentiment of the industry from 'why India' to 'why not India' in investing.
Noting that external risks to global growth has increased significantly now, the Crisil report quotes its parent S&P's forecast of a recession in the US and in the Eurozone, and a record low growth in China, which is seen crashing to 2.9 per cent now, almost half of what it had said on March 5 when it has pegged the same at 4.8 per cent.
India's growth outlook has weakened sharply this year, with a crunch that started with the non-banking finance institutions spreading to retail businesses, car-makers, home sales and heavy industries.
After a contraction in the current financial year, India's economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said on Wednesday. The coronavirus pandemic will lead to shrinking of the already slowing economy in 2020-21 that started in April. Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing financial year.
The record contraction in the growth rate of eight core sectors will have its impact on IIP.
Tata Motors was the top gainer in the Sensex pack rallying 5.32 per cent. Among other prominent gainers were Bharti Airtel, IndusInd Bank, Sun Pharma, Axis Bank, Maruti Suzuki, Bajaj Auto and TCS.
'India is in a slowdown which most of us have not seen in our living memory.'
After sinking 586 points during the day, the 30-share index ended 503.62 points, or 1.29 per cent, lower at 38,593.52. The broader NSE Nifty plunged 148 points, or 1.28 per cent, to 11,440.20.
Nothing in India's recent history suggests that India can provide 8-9 million jobs a year, let alone generate 50 million jobs in any reasonable time, notes Mahesh Vyas.
While foreign currency rating was retained at Baa2 -- the second-lowest investment grade score -- Moody's also projected a fiscal deficit of 3.7 per cent of gross domestic product in the year through March 2020, a breach of the government's target of 3.3 per cent.
'In 2016, we had De-Mon and in 2017, we had GST.' 'The combined impact of these two started showing up in 2019 and 2020.' 'COVID-19 only added insult to injury.'
People are interested in the strength of India's economy, the country's stability, and the opportunities, says Stuart Tait, regional head of commercial banking, Asia-Pacific at HSBC.
For 2021-22, it projected the economy to clock a growth of 10.6 per cent.
Top losers in the Sensex pack included IndusInd Bank, Bajaj Finance, Tata Motors, Tata Steel, Hero MotoCorp, Axis Bank, M&M, Vedanta and Maruti, falling up to 3.50 per cent.
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