A careful reading of the national income accounts suggests that after a strong recovery from the pandemic, there has been a significant ebbing of dynamism over the last three quarters to more modest levels recently, note Arvind Subramanian and Josh Felman.
New investment projects announced in the manufacturing sector declined in the three months ended June 2023. The value of new projects was lower than in the March quarter, as well as the year-ago period, shows data from project tracker the Centre for Monitoring Indian Economy (CMIE). The new project announcements worth around Rs 85,000 crore in the manufacturing segment in June were a 48 per cent decline from the Rs 1.6 trillion in March and a 66 per cent decline from the Rs 2.5 trillion seen in June 2022.
While a normal rainfall signals growth and prosperity, a below normal rainfall could spell disaster making food more expensive, aggravating the power, water shortage, hitting industrial production which in turn will put more pressure on the government's kitty.
In a significant move to enhance its strategic resource security, India has officially released its first-ever critical minerals list, identifying 30 key critical minerals crucial to the nation's economic growth and technological development. This pioneering step aims at reducing import dependence, enhancing supply-chain resilience, and supporting the country's net-zero objectives. Union Minister Parliamentary Affairs, Coal and Mines Pralhad Joshi, while releasing the Critical Minerals for India report in New Delhi on Wednesday, said, "India is readying for an Atmanirbhar Bharat."
Most economists say the impact on inflation could be substantial, considering that steel prices rose by over 9 per cent in the past year.
Modi was severe in his criticism of the opposition amid the continuing logjam in Parliament and also sounded confident of the ruling dispensation retaining power at the Centre for a third term after the 2024 Lok Sabha polls.
''We have a very difficult period ahead of us.' 'Fortunately we have a popular government and a popular leader who is ideally placed to take us into confidence,' says Aakar Patel.
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.
As exporters started complaining about adverse effects of rising value of the rupee against the dollar, the government on Thursday said appreciating Indian currency reflects strength of the economy and it cannot do much so long as the unit rises and falls in a range.
Once the drought and its difficult fall-out are dealt with, good times should be round the corner, says T N Ninan.
'It's very hard to win elections on policies that don't offer much now, but promise more growth and income in the future,' Vivek Dehejia and Rupa Subramanya tell Rediff.com's Faisal Kidwai.
What is most troubling is that not a single party that is part of INDIA has talked about any kind of reform and economic sense, argues R Jagannathan.
Economist Joydeep Mukherji, who tracks India and China for Standard and Poor's, has joined the minority of economists who believe that with a little more effort India can overtake the Chinese economy.\n\n\n\n
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Eminent free market economist Arvind Panagariya has been appointed to run Indian Prime Minister Narendra Modi's new Policy Commission, set up to modernise economic strategy after decades of Soviet-style central planning.
The full-court press on India over Ukraine, the BBC 'documentary', the Oxfam report, the Hindenburg attack on Adani and obliquely on the Indian economy, and any number of other acts are signs that India is a target, warns Rajeev Srinivasan.
Inflation is down and there's every chance that crude prices will be subdued through the next year.
The recovery was led by information technology exporters.
India has already become the world's fifth largest economy in the 75th year of Independence and will reach the $3.5 trillion mark by end-March, said the Economic Survey tabled in Parliament on Tuesday. In real terms, the economy is expected to grow at 7 per cent for the year ending March 2023. This follows an 8.7 per cent growth in the previous financial year.
'It's a clear case of political patronage helping an individual grow.'
According to the report, Indian economy is headed for a "perfect storm" worse than 1991 because government's cashflow by March 2013 is threatening to be Rs 110,000 crore (Rs 1,100 billion) more in the red than the expected Rs 500,000 crore (Rs 5,000 billion).
Indian economy is poised to do better on the back of reforms undertaken by the government and is expected to clock a 6.5-7 per cent growth in the remaining part of the decade, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Tuesday. Addressing reporters here after the tabling of the Economic Survey in Parliament by Finance Minister Nirmala Sitharaman, Nageswaran said that by and large, inflation is likely to be "well behaved" in FY2023-24 barring headwinds. "My optimism is that in the coming decade, rest of the decade, the potential GDP growth, without taking into account export potential, because global economy is still rife with uncertainty, the growth rate would be around 6.5 to 7 per cent, rather than between 6 per cent and 6.5 per cent," he said.
Forty-nine per cent of Indians polled for the survey are satisfied with the current state of the economy, a seven percentage point drop from last year, while only 45 per cent of respondents are optimistic of the economy improving over the coming four quarters, 15 percentage points lower than the previous year's poll.
The value of oil imports decreased by 37.5%.
While the forecast was still lower than what we have been recording over the last few years, it instilled a false sense of comfort that India might still weather the storm better than many other countries.
Inflation has seen some moderation in the recent past, falling from double-digit figures in 2013 to 7.8 per cent year-on-year in August.
Drought looms as large this year as it did in 2009, even as attempts to play down its impact surface.
India, along with Southeast Asian countries such as Indonesia, is expected to sustain growth in the medium-term in Asia region, replacing China as the key growth driver, Morgan Stanley and Nomura said in two separate reports released on Monday. While Morgan Stanley projected a 6.2 per cent gross domestic product (GDP) growth forecast for India in FY24, Nomura estimated the Indian economy to grow at 5.9 per cent in 2023. "Even with a slowing China, we expect GDP growth in Asia to sustainably outperform other emerging markets and the US. India and Southeast Asia are set to be the fastest-growing economies this decade.
India cannot come out unscathed from the current crisis.
T C A Anant, the Union government's chief statistician, thinks global rating agency Standard & Poor's (S&P) does not fully understand our economy's structure, comprising a large unorganised sector as well.
As the storm clouds gather over the economy, is there a silver lining? Yes more than one. To see them, we have to stop looking in the rear-view mirror at all the accumulated problems and negative trends, and focus on current trends.
A global failure to respond to climate changes could result in about 8.7 per cent economic loss in India's Gross Domestic Product (GDP) by 2100, Asian Development Bank said.
Mr Modi, it came across, did not want to be seen as favouring any one business group.
Fresh formal job creation declined sequentially for a third straight month in February to fall to a 21-month low, signaling pressure in the employment market. These are the findings from the latest payroll data released by the Employee Provident Fund Organisation (EPFO) on Thursday. The number of new monthly subscribers under the Employees' Provident Fund (EPF) declined 10 per cent sequentially to 738,052 in February from 819,659 in January.
The Reserve Bank on Wednesday hiked key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation. This is the sixth time interest rate has been hiked by the Reserve Bank of India (RBI) since May last year, taking the total quantum of hike to 250 basis points. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) by a majority decided to raise the policy repo rate by 25 basis points and keep a 'strong vigil' on inflation outlook.
'Does anyone understand India?' 'Does anyone have a larger perspective for India as a whole?' 'Today we have rulers who do not understand the ruled.'
The fact is that it will take two to three years to fix the economy, and it would be advisable to say as much and manage expectations.
S&P Global Ratings on Monday cut India's economic growth forecast for current fiscal year to 7 per cent, but said the domestic demand-led economy will be less impacted by the global slowdown. S&P had in September projected the Indian economy to grow 7.3 per cent in 2022-23 and 6.5 per cent in next fiscal year (2023-24). "The global slowdown will have less impact on domestic demand-led economies such as India... India's output will expand 7 per cent in fiscal year 2022-2023 and 6 per cent in next fiscal year," S&P Global Ratings Asia-Pacific chief economist Louis Kuijs said.
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