Tag: India growth

Manufacturing activity in the country unexpectedly accelerated in January, says survey

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian manufacturing activity unexpectedly accelerated in January, helped by a strong increase in domestic demand and production, according to a private survey that also showed a marginal rise in inflationary pressure.

The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 53.9 from 53.2 in December, confounding expectations in a Reuters poll for a fall to 52.5 in January.

The index was above the 50-mark separating growth from contraction for an 18th straight month, its longest stretch of expansion since November 2015.

Manufacturers raised production at the fastest pace in 13 months, as orders also rose at the quickest rate since December 2017, primarily driven by robust domestic demand. Growth of export orders slowed for a second month.

“The manufacturing industry in January made up for ground lost at the end of 2018, with new business and production expanding at rates not seen for over a year,” said Pollyanna De Lima, principal economist at IHS Markit.

“The trend for employment remained encouraging, with job creation evident for the 10 month running. Further confidence in market conditions were shown by a rebound in business sentiment, which reached a five-month high.”

Muted inflationary pressure over the past few months has enabled firms to transfer some of the cost burden from a slight rise in input price inflation onto customers.

That should keep retail inflation below the Reserve Bank of India’s medium-term target of 4 percent. The annual pace dropped to an 18-month low of 2.19 percent in December, which should keep the central bank on track to ease monetary policy soon.

The RBI is expected to change its stance from “calibrated tightening” to “neutral” at its February 7 policy meeting and cut interest rates in June at the latest, according to economists polled by Reuters in January.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s robust economic growth to continue in 2019, says CII

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The country is expected to witness strong economic growth in 2019, after it has emerged as the fastest growing major world economy this year despite growing global vulnerabilities, industry body CII said Sunday. The positive outlook is buttressed by strong drivers emanating from services sector and better demand conditions arising out of poll spend, with the general elections slated next year, according to the chamber.

“Better demand conditions, settled GST implementation, capacity expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit offtake especially in the services sector at 24 percent will sustain the robust GDP growth in the range of 7.5 percent in 2019,” CII Director General Chandrajit Banerjee said.

The industry body observed that despite 2018 being filled with external vulnerabilities arising out of rising oil prices, trade wars between major global trading partners and US monetary tightening, India outshined as the world’s fastest growing major economy.

It has identified seven key drivers for growth that need to be fostered and suggested policy actions for robust GDP growth to continue in 2019. Among key growth drivers, CII hopes the GST Council will consider extending the tax to currently exempted sectors such as fuel, real estate, electricity and alcohol.

The chamber outlined that credit availability has been a challenge, particularly for the micro, small and medium enterprises, as credit flow to industry grew by a mere 2.3 percent in first half of the current financial year.

“CII submits that the RBI should introduce measures such as revisiting lending restrictions of PCA (Prompt Corrective Action) banks, opening of a limited special liquidity window to meet emergencies of financial institutions, including Mutual Funds besides others to improve liquidity in the system,” it said.

Besides, the process of insolvency resolution has taken shape, the chamber feels the government should consider setting up additional benches of the National Company Law Tribunal to strengthen the judicial infrastructure for easier and faster exit of distressed businesses.

The chamber believes the government will continue to place high priority on simplifying business procedures in 2019, especially in terms of working with states for grassroots improvements.

“We look forward to digitisation of land records, online single window systems in states, and enforcing contracts for even more improvements in ease of doing business,” said Banerjee.

On agriculture reforms, CII suggested that it is important to persuade states to implement the Agriculture Produce and Livestock Marketing Model Act, which has been implemented in just four states, to strengthen agriculture produce marketing.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

2019 is shaping out to be better in terms of macros for India, says A Prasanna of I-Sec PD

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rakesh Mittal, president at CII and A Prasanna, chief economist at I-Sec PD, spoke to CNBC-TV18 about the economic outlook for 2019.

Prasanna said,”In terms of macros, 2019 is shaping out to be better. Inflation is down and with oil prices coming down the current account deficit is not a worry but the only worry remains on the fiscal deficit.”

He said, “For FY19, we are looking at 7.3 percent GDP growth and FY20 7.4 percent and lower oil prices and lower interest rates should help. But though global growth is slowing down could be a big negative for India.”

When asked about his wish list from the government for the Indian Inc standpoint, Mittal said, “This year is expected to be a stable year for Indian economy including global growth, which is expected to be 3.7 percent. Moreover, oil prices stabilizing, rupee volatility reducing are huge positives, which will continue till March 2019.”

On the interest rate front, Prasanna said, “Not expecting any rate cuts at this point of time but if oil stays low around USD 55/bbl and inflation undershoots then one could see rate cut in February.”

“The Federal Reserve will likely delay its next rate action to May or June, said Prasanna. So, they may continue to tighten but not as severe as it was in 2018, which could be positive for India,” he added.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Govt bets on subsidy rollovers, higher direct tax collections to meet fiscal deficit target

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government expects  to meet this year’s fiscal deficit target through savings, rollover of subsidies and higher direct tax collections, top government officials told CNBC-TV18.

The Narendra Modi government is betting on expenditure savings of Rs 20,000 crore to Rs 25,000 crore and expects direct tax collections to be more than the budgeted target of Rs 11.5 lakh crore, which would help it meet the fiscal deficit target of 3.3 percent of gross domestic product (GDP) for 2018-19, said officials on condition of anonymity.

The government is also planning to defer oil companies’ demand for additional LPG and kerosene subsidy to March 2019 while demand for additional Mahatma Gandhi National Rural Employment Gurantee Act (MNREGA) allocation is likely to be met by internal accruals, said the officials.

Talking on additional subsidies, a senior government official said, “Rs 10,000 crore subsidy payment in second supplementary is something the government cannot afford currently as it has yet to get a fix on the revenue stream. This payment is most likely to happen in March now.”

The fiscal deficit or gap between expenditure and revenue was Rs 6.48 lakh crore or 103.9 percent of Budget Estimate (BE) during April-October of the current financial year. At end of October 2017-18, the deficit was 96.1 percent of the BE.

The government has budgeted to cut fiscal deficit to 3.3 percent of GDP in 2018-19 from 3.53 percent in the previous financial year.

There is concern that the government will miss the fiscal deficit target due to a shortfall in revenues and lower-than-targeted disinvestment proceeds, India Ratings and Research said last  Monday.

Further, the centre is worried about the FY19 GST target, “We are well below the strike rate on GST collections,” top government officials told CNBC-TV18, with the revenue trend showing a month on month gap of Rs 6,000-7,000 crore.

At this rate, the government maybe staring at a GST shortfall of Rs 72,000 to Rs 84,000 crore by the year end.

However, the centre may use the option of retaining 50 percent of the compensation cess collected this fiscal. As of October end, approximately Rs 55,000 crore was collected in the compensation cess pool and legally centre and states can divide this amount equally, at any point in time during the financial, if required.

In fact, the budget target for the compensation cess is Rs 90,000 crore for FY19. The advantage the centre enjoys with the compensation cess is after the 50:50 sharing with the states, further 42 percent devolution by the centre to the states is not required, as it’s a cess and not a tax collection.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Minority govt is a key risk for the Indian stock market, says Ridham Desai of Morgan Stanley

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s growth is picking up and the setbacks due to demonetisation, higher oil prices or weaker currency have mostly played out: That’s the view coming in from Ridham Desai, Managing Director at Morgan Stanley India.

“Growth in India was picking up and now for several quarters the revenue growth has been high and the Q2 revenue growth was at a 4-year high and will accelerate further in Q3,” Desai told CNBC-TV18 on the sidelines of their 17th Annual Asia Pacific Summit in Singapore.

“However, margins were not so good so far because of setbacks due to demonetisation, GST implementation, some idiosyncratic factors, then higher oil prices, weaker currency etc but all that is now settling and we are heading into a start of a new earnings cycle,” Desai said on Wednesday.

Desai expects domestic earnings growth to improve from hereon. “We have now come to the moment where the headline earnings growth for Nifty or Sensex will show robust numbers led largely by domestic companies and corporate banks. So we should be ready for some solid earnings growth in the coming quarters,” he said.

“Emerging market currencies, bonds, equities, are all looking good and in that context India also should be doing quite well over the course of the next few months,” said Desai.

With regards to the elections and its impact on their India outlook, he said, “Elections are hard to judge ahead and there are surprises expected in outcomes but it will clearly be a source of volatility.”

“The key risk for the Indian market is that we get a minority government and the market gives off some of its gain. However, a minority government is not necessarily a risk to the economy but does present risk to stock prices,” said Desai.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Tussle between RBI and govt should have been handled behind closed doors, says UBS

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tanvee Gupta Jain, chief India economist at UBS, spoke to CNBC-TV18 about the domestic liquidity concerns, IL&FS issue and the current friction between the government and the RBI.

“The tussle between the two should have been handled behind closed doors. One would be closely watching the announcements on November 19.”

Talking about the NBFC issue, Jain said, “The concerns that investors feel about NBFCs is not a systematic risk and is a temporary concern that should ease out in next two quarters.”

“We do expect this NBFC stress in terms of liquidity concern to be derailing or kind of disrupting discretionary consumption growth but we think it is one-off problem and should ease out over next couple of quarters and would not derail India’s macro story over the next year,” Jain said on the sidelines of UBS India Conference.

“However, the liquidity concerns could have an impact on GDP growth because lot of the NBFC credit – borrowing in short-term market and lending in long-term was supporting overall credit growth in the economy,” she added.

“If we do not hear more default concerns and if we assume IL&FS as one-off concern and not spread out and the regulator the RBI keeps a strict control on NBFCs going forward in terms of their asset liability mismatch then the risk could be contained at this point,” she said.

The GDP growth in second half is estimated to slow down to 6.7-7 percent year on year for the December and March quarter. For the full year, the house has a GDP growth expectations of 7.3 percent, which is 20 basis points below consensus.

“The lower growth expectations are on back of liquidity concerns, higher crude prices, weaker rupee,” said Jain, adding that they expect the second quarter GDP growth to be in 7.4-7.7 percent.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India jumps most places on World Bank’s ‘ease of doing business’ during Modi regime

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India is slowly becoming a hassle free place to do business.

In the World Bank’s annual ‘Doing Business 2019‘ report, India has vaulted up the rankings with wide-ranging reforms designed to give businesses and entrepreneurs fewer headaches. The nation jumped to 77th position from 100th place last year after slashing border compliance times.

India was ranked at the 142nd position among 190 nations when Prime Minister Narendra Modi’s government came to power in 2014. It rose to the 100th spot in the last ranking from 131st rank in the previous year.

India’s jump from 142nd spot to 77th spot this year is highest since 2006, based on data available. Also this is the third straight year of improvement in India’s ranking on the index.

Since Modi took charge, he has announced the country’s biggest tax reform, overhauled a century-old bankruptcy law and revived stalled projects.

The government has also tried to revive investments by easing business regulations. The Modi administration advocated lower interest rates to jump start the economy after the 2016 demonetisation-induced slowdown and as companies found themselves loaded with debt.

“The BJP-led government, since coming to the power, has reduced red-tape and corruption, and its reforms have ensured India jumps ranks from 142 to 77,” Finance Minister Arun Jaitley said on Wednesday.

However, skeptics say the spectacular rise in India’s ease of business rankings is driven more by methodological changes, and less by domestic initiatives, as research by Justin Sandfeur and Divyanshi Wadhwa of the US-based think tank, CGDev, showed.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How Asian Games 2018 is a report card on India’s true development

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s Finance Minister Arun Jaitley recently pointed out that the country was all set to pip the UK in the global economic rankings to emerge as the world’s 5^th largest economy. This is no doubt a positive outcome.

India’s winning 69 medals at the Asiad Games this year, its high haul ever, is also a testament to the nation’s growing stature in the arena of sports. But how significant are these developments? Are these reason enough for jubilation? Dig a little deeper, and the hollowness behind these claims is revealed.

Here are a few simple facts to put things into perspective. UK is nation of 66 million people spread over 2.42 lakh square kilometers. India is a nation of 1,317 million people with an area of 32.9 lakh square kilometers. India was ranked 8^th at the Asiad games. Republic of Korea, Uzbekistan, Indonesia, Iran and Chinese Taipei were ranked above it. Also, Kazakhstan and Thailand won more medals than India. Doesn’t seem like as much reason to rejoice now, does it?

The issue is that while India has made progress and moved ahead on the path of development, for a nation of its size, a lot more needs to be done to achieve greater prosperity. If you map economic and population data to medals tally, it reveals an interesting picture. India won one medal for every $38 billion of GDP, China one for every $42 billion, but Uzbekistan just one for every $1 billion. Similarly, India won one medal for every 19 million people, China one for 4.8 million and Hong Kong one for 0.6 million.

These numbers do show India and China in a relatively poorer light. The better indicators to put this into perspective are the GDP per capita and the Human Development Index. Viewed through the prism of GDP per capita reveals India’s dismal state. It ranked only above Uzbekistan ($1,491), among the top-ranked nations, with $1,983 per capita. Smaller nations like Republic of Korea, Indonesia and Iran have GDP/capita of $29,891, $3,876 and $5,305. Interestingly, Kazakhstan has a GDP/capita of $8,841 and Hong Kong $46,109.

But how could Uzbekistan with even GDP/capita lesser than India score so well. One reason could be the HDI level of 0.701, which is miles ahead of India’s 0.624.

To sum up, while India has run a few paces in the right direction on development, it has a long race ahead to achieve prosperity for all its citizens.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow