Stock markets opened on a subdued note on the first trading day of 2018, with the benchmark BSE Sensex declining over 18 points in early trade on profit-booking after recent gains.

The 30-share index, which had gained 208.80 points in the previous session, fell 18.19 points, or 0.05 per cent, to 34,038.64 in early trade on Monday.

Technology, power and metal stocks were leading the fall in early trade.

Major losers were Wipro, Hindustan Unilever, TCS, NTPC, HDFC Ltd, ICICI Bank, Hero MotoCorp and Bajaj Auto, falling up to 0.88 per cent.

However, L&amp;T, SBI, Bharti Airtel, Tata Motors, ITC Ltd, Sun Pharma, Maruti Suzuki, Infosys and Asian Paint were trading in the positive zone.

The broad-based NSE Nifty was down 12.70 points, or 0.12 per cent, to 10,518.

Traders said profit-booking emerged in stocks that logged gains recently in absence of cues from other Asian markets that were closed for public holiday today.

The US Dow Jones Industrial Average closed 0.48 per cent down on the final day of 2017 on Friday.

The 30-share index, which had gained 208.80 points in the previous session, fell 18.19 points, or 0.05 per cent, to 34,038.64 in early trade on Monday.

Stock markets opened on a subdued note on the first trading day of 2018, with the benchmark BSE Sensex declining over 18 points in early trade on profit-booking after recent gains. The 30-share index, which had gained 208.80 points in the previous session, fell 18.19 points, or 0.05 per cent, to 34,038.64 in early trade on Monday. Technology, power and metal stocks were leading the fall in early trade. Major losers were Wipro, Hindustan Unilever, TCS, NTPC, HDFC Ltd, ICICI Bank, Hero MotoCorp and Bajaj Auto, falling up to 0.88 per cent. However, L&T, SBI, Bharti Airtel, Tata Motors, ITC Ltd, Sun Pharma, Maruti Suzuki, Infosys and Asian Paint were trading in the positive zone. The broad-based NSE Nifty was down 12.70 points, or 0.12 per cent, to 10,518. Traders said profit-booking emerged in stocks that logged gains recently in absence of cues from other Asian markets that were closed for public holiday today. The US Dow Jones Industrial Average closed 0.48 per cent down on the final day of 2017 on Friday.

Sensex begins 2018 on negative note, down 18 points

India&#39;s cabinet approved a Rs 2.11 lakh crore plan on Tuesday to recapitalise its state banks over the next two years, in a bid by Prime Minister Narendra Modi to tackle a major drag on the economy that has frustrated his attempts to boost growth.

Once the world&#39;s fastest-growing major economy, India has seen its growth rate plummet to the lowest in three years, far below levels needed to create enough jobs to absorb the million Indians joining the work force every month.

Modi&#39;s government has tried to respond by stepping up public spending, but the slowdown has stressed its finances, making it imperative for private investment to pick up the slack.

Officials privately admit they have struggled to revive private investment because state-owned banks, which provide much of the credit in the economy, are saddled with a mountain of bad debt that has crimped their ability to offer new credit.

The decision to recapitalise the banks is meant to clear that bottleneck, Finance Minister Arun Jaitley said at a press conference in New Delhi.

&quot;The decision to recapitalise public sector banks with 2.11 lakh rupees will address the bank balance sheet problem and push growth forward,&quot; Jaitley said.

By some estimates, banks need as much as $65 billion in additional capital by March 2019 to fill the hole left by soured loans and to meet new regulatory capital requirements.

The official announcement, which was followed by a series of tweets from government ministers holding it up as &quot;unprecedented&quot;, comes after a flurry of activity in the government over the past few weeks, driven by the prime minister&#39;s office.

Modi, who swept to power in a landslide victory for his Bharatiya Janata Party (BJP) in 2014 promising a reform agenda to revive economic growth, faces state elections later this year and a re-election bid by 2019.

He has faced criticisms after a surprise scrapping of high-value bank notes last November and a new goods and services tax effected earlier this year disrupted businesses across the country.

People close to Modi have previously told Reuters he wants to control the political damage and ensure the economic slowdown remains temporary.

Mohan Guruswamy, an economist in New Delhi, said the government should have taken action three years ago to revive the banking sector.

&quot;Now it&#39;s more expensive, and we will not see results soon,&quot; Guruswamy said.

Fiscal consolidation

Finance ministry officials said the bank recapitalisation would be followed by a series of reforms in the sector. They said the details would come later.

Of the planned 2.11 lakh crore rupees sum, recapitalisation bonds will account for 1.35 lakh crore rupees, while Rs 76,000 crore will come from budgetary support and equity issuance, said Rajiv Kumar, India&#39;s financial services secretary.

It was not immediately clear what the impact will be on the country&#39;s fiscal deficit, which Jaitley aims to keep at 3.2 percent of GDP for the current fiscal year to March.

&quot;India&#39;s banking was the weakest link in the revival of the economy,&quot; said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think-tank partly funded by the finance ministry. &quot;The government should complete the process as early as possible.&quot;

Bhanumurthy added that the move might have an impact on the government&#39;s fiscal deficit target this year.

Twenty one state-run banks account for more than two-thirds of India&#39;s banking assets. But they also account for a bulk of the record 9.5 trillion Indian rupees ($145 billion) of soured loans.

In addition to repairing their balance sheets, the banks need billions of dollars in new capital to meet global Basel III banking rules, due to fully kick in by March 2019.

Fitch Ratings estimates Indian banks will need $65 billion of additional capital by March 2019 to meet Basel III global banking rules. Moody&#39;s expects the top 11 state lenders alone will need nearly $15 billion.

Bank stocks rallied ahead of the news conference on expectations of a recapitalisation plan. The state bank index closed 3.8 percent higher.

The recapitalisation of the banks should allow them to offer credit again. They have so far been saddled with a mountain of bad debt

India's cabinet approved a Rs 2.11 lakh crore plan on Tuesday to recapitalise its state banks over the next two years, in a bid by Prime Minister Narendra Modi to tackle a major drag on the economy that has frustrated his attempts to boost growth. Once the world's fastest-growing major economy, India has seen its growth rate plummet to the lowest in three years, far below levels needed to create enough jobs to absorb the million Indians joining the work force every month. Modi's government has tried to respond by stepping up public spending, but the slowdown has stressed its finances, making it imperative for private investment to pick up the slack. Officials privately admit they have struggled to revive private investment because state-owned banks, which provide much of the credit in the economy, are saddled with a mountain of bad debt that has crimped their ability to offer new credit. The decision to recapitalise the banks is meant to clear that bottleneck, Finance Minister Arun Jaitley said at a press conference in New Delhi. "The decision to recapitalise public sector banks with 2.11 lakh rupees will address the bank balance sheet problem and push growth forward," Jaitley said. By some estimates, banks need as much as $65 billion in additional capital by March 2019 to fill the hole left by soured loans and to meet new regulatory capital requirements. The official announcement, which was followed by a series of tweets from government ministers holding it up as "unprecedented", comes after a flurry of activity in the government over the past few weeks, driven by the prime minister's office. Modi, who swept to power in a landslide victory for his Bharatiya Janata Party (BJP) in 2014 promising a reform agenda to revive economic growth, faces state elections later this year and a re-election bid by 2019. He has faced criticisms after a surprise scrapping of high-value bank notes last November and a new goods and services tax effected earlier this year disrupted businesses across the country. People close to Modi have previously told Reuters he wants to control the political damage and ensure the economic slowdown remains temporary. Mohan Guruswamy, an economist in New Delhi, said the government should have taken action three years ago to revive the banking sector. "Now it's more expensive, and we will not see results soon," Guruswamy said. Fiscal consolidation Finance ministry officials said the bank recapitalisation would be followed by a series of reforms in the sector. They said the details would come later. Of the planned 2.11 lakh crore rupees sum, recapitalisation bonds will account for 1.35 lakh crore rupees, while Rs 76,000 crore will come from budgetary support and equity issuance, said Rajiv Kumar, India's financial services secretary. It was not immediately clear what the impact will be on the country's fiscal deficit, which Jaitley aims to keep at 3.2 percent of GDP for the current fiscal year to March. "India's banking was the weakest link in the revival of the economy," said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think-tank partly funded by the finance ministry. "The government should complete the process as early as possible." Bhanumurthy added that the move might have an impact on the government's fiscal deficit target this year. Twenty one state-run banks account for more than two-thirds of India's banking assets. But they also account for a bulk of the record 9.5 trillion Indian rupees ($145 billion) of soured loans. In addition to repairing their balance sheets, the banks need billions of dollars in new capital to meet global Basel III banking rules, due to fully kick in by March 2019. Fitch Ratings estimates Indian banks will need $65 billion of additional capital by March 2019 to meet Basel III global banking rules. Moody's expects the top 11 state lenders alone will need nearly $15 billion. Bank stocks rallied ahead of the news conference on expectations of a recapitalisation plan. The state bank index closed 3.8 percent higher.

Public sector banks to get Rs 2.11 lakh crores over next two years

Driven by strong IIP numbers and an unchanged inflation, the Sensex on Friday rallied over 211 points to 32,393, reflecting interrupted buying by domestic institutional investors.

 
The rupee appreciating 19 paise to 64.89 against the dollar today gave a leg to the rally.

 
The rest of Asia logged a mixed trend.

 
The 30-share barometer pushed higher by 211.04 points, or 0.66 per cent, to 32,393.26. The gauge had leapt 348 points in the previous session.

 
Sectoral indices turned green across the board, with metal, realty and FMCG posting sizeable gains of up to 1.90 per cent.

The NSE index Nifty was trading up by 43.25 points, or 0.42 per cent, at 10,139.65.

Buying activity picked up momentum on positive economic data after industrial production grew to a 9-month high of 4.3 per cent in August while retail inflation came in at 3.28 per cent in September, unchanged from August.

Stocks of Bharti Airtel zoomed 6.94 per cent to Rs 427.80 after the company announced that the consumer mobile business of (CMB) of Tata Teleservices Ltd and Tata Teleservices Maharashtra will merge with it in a cash-free, debt-free deal.

Stock of TCS, India&#39;s largest software services, rose 1.08 per cent to Rs 2,576.15 even as the company&#39;s net profit fell 2.1 per cent in the September quarter.

Reliance Industries shot up by 1.15 per cent to Rs 882.50 as participants raised their bets ahead of earnings, to be released later in the day.

Japan&#39;s Nikkei rose 0.23 per cent while Shanghai Composite rose up 0.09 per cent in their early deals. Hong Kong&#39;s Hang Seng, however, was down 0.16 per cent.

The US Dow Jones Industrial Average had closed 0.14 per cent lower on Thursday.

The rupee appreciating 19 paise to 64.89 against the dollar today gave a leg to the rally.

Driven by strong IIP numbers and an unchanged inflation, the Sensex on Friday rallied over 211 points to 32,393, reflecting interrupted buying by domestic institutional investors. The rupee appreciating 19 paise to 64.89 against the dollar today gave a leg to the rally. The rest of Asia logged a mixed trend. The 30-share barometer pushed higher by 211.04 points, or 0.66 per cent, to 32,393.26. The gauge had leapt 348 points in the previous session. Sectoral indices turned green across the board, with metal, realty and FMCG posting sizeable gains of up to 1.90 per cent. The NSE index Nifty was trading up by 43.25 points, or 0.42 per cent, at 10,139.65. Buying activity picked up momentum on positive economic data after industrial production grew to a 9-month high of 4.3 per cent in August while retail inflation came in at 3.28 per cent in September, unchanged from August. Stocks of Bharti Airtel zoomed 6.94 per cent to Rs 427.80 after the company announced that the consumer mobile business of (CMB) of Tata Teleservices Ltd and Tata Teleservices Maharashtra will merge with it in a cash-free, debt-free deal. Stock of TCS, India's largest software services, rose 1.08 per cent to Rs 2,576.15 even as the company's net profit fell 2.1 per cent in the September quarter. Reliance Industries shot up by 1.15 per cent to Rs 882.50 as participants raised their bets ahead of earnings, to be released later in the day. Japan's Nikkei rose 0.23 per cent while Shanghai Composite rose up 0.09 per cent in their early deals. Hong Kong's Hang Seng, however, was down 0.16 per cent. The US Dow Jones Industrial Average had closed 0.14 per cent lower on Thursday.

Sensex climbs 211 points on positive economic data points

Shares of Tata Steel rose by over<a href="http://www.wionews.com/business-economy/sensex-edges-down-tata-steel-rises-ahead-of-results-18706"> 4 per cent </a><a href="http://www.wionews.com/business-economy/sensex-edges-down-tata-steel-rises-ahead-of-results-18706">today,</a><a href="http://www.wionews.com/business-economy/sensex-edges-down-tata-steel-rises-ahead-of-results-18706"> after the company returned to profit</a> in the quarter ended June 30, 2017. 
 
After making a positive opening, shares of the company further jumped 4.15 per cent to Rs 624.95--its 52-week high--on BSE. 
 
At NSE, shares of the company gained 4.24 per cent to hit its one year high of Rs 625.50. 
 
Yesterday, Tata Steel posted a consolidated net profit of Rs 921.09 crore for the quarter ended June on the back of higher revenue from operations. 
 
The company had posted a consolidated net loss of Rs 3,183 crore in the year-ago period, Tata Steel said in a filing to BSE. 
 
&quot;Our sales were up by 28 per cent on a y-o-y basis as the smooth ramp up of our Kalinganagar facility helped us increase our volumes and increase our market share,&quot; T V Narendran, Managing Director, Tata Steel India and South East Asia said in a statement. 
 
The consolidated revenue from operations during April- June quarter was at Rs 30,973 crore, registering an increase of 19 per cent.

After making a positive opening, shares of the company further jumped 4.15 per cent to Rs 624.95

Shares of Tata Steel rose by over 4 per cent today, after the company returned to profit in the quarter ended June 30, 2017. After making a positive opening, shares of the company further jumped 4.15 per cent to Rs 624.95--its 52-week high--on BSE. At NSE, shares of the company gained 4.24 per cent to hit its one year high of Rs 625.50. Yesterday, Tata Steel posted a consolidated net profit of Rs 921.09 crore for the quarter ended June on the back of higher revenue from operations. The company had posted a consolidated net loss of Rs 3,183 crore in the year-ago period, Tata Steel said in a filing to BSE. "Our sales were up by 28 per cent on a y-o-y basis as the smooth ramp up of our Kalinganagar facility helped us increase our volumes and increase our market share," T V Narendran, Managing Director, Tata Steel India and South East Asia said in a statement. The consolidated revenue from operations during April- June quarter was at Rs 30,973 crore, registering an increase of 19 per cent.

Tata Steel shares zoom after first quarter results

Emerging markets face newer challenges in the form of inward looking policies of protectionism and increased geopolitical tension, Finance Minister Arun Jaitley said today as he pegged India&#39;s GDP growth at 7.7 per cent in 2018.

Speaking at the second annual meeting of the New Development Bank (NDB) here, Jaitley said global growth is moving upwards and is expected to improve further in 2017-18.

&quot;Indian economy is expected to grow at 7.2 per cent in 2017 and at the rate of 7.7 per cent in 2018,&quot; he said.

Jaitley said emerging market economies (EMEs) face newer challenges in the form of inward looking policies of protectionism of some economies, global financial condition, policies of the United States and increased geopolitical tension.

He said India has sought USD 2 billion loans for various projects from the NDB, which is set up by the emerging nations India, China, Brazil, Russia and South Africa.

&quot;India has huge unmet infrastructure funding needs..&nbsp;&nbsp; &nbsp;.USD 646 billion is required in next 5 years (for financing infrastructure),&quot; Jaitley said.

He said growth in emerging and developing countries is picking up and news from economies of BRICS countries is &quot;encouraging&quot;.

&quot;I hope that NDB will emerge as a development bank and help in funding of emerging economies,&quot; Jaitley added.

(PTI)

Jaitley was speaking at the second annual meeting of the New Development Bank (NDB)

Emerging markets face newer challenges in the form of inward looking policies of protectionism and increased geopolitical tension, Finance Minister Arun Jaitley said today as he pegged India's GDP growth at 7.7 per cent in 2018. Speaking at the second annual meeting of the New Development Bank (NDB) here, Jaitley said global growth is moving upwards and is expected to improve further in 2017-18. "Indian economy is expected to grow at 7.2 per cent in 2017 and at the rate of 7.7 per cent in 2018," he said. Jaitley said emerging market economies (EMEs) face newer challenges in the form of inward looking policies of protectionism of some economies, global financial condition, policies of the United States and increased geopolitical tension. He said India has sought USD 2 billion loans for various projects from the NDB, which is set up by the emerging nations India, China, Brazil, Russia and South Africa. "India has huge unmet infrastructure funding needs.. .USD 646 billion is required in next 5 years (for financing infrastructure)," Jaitley said. He said growth in emerging and developing countries is picking up and news from economies of BRICS countries is "encouraging". "I hope that NDB will emerge as a development bank and help in funding of emerging economies," Jaitley added. (PTI)

India's economy to grow at 7.2% in 2017: Arun Jaitley

India has ranked a lowly 131 among the 188 countries surveyed for human development, a new UN report has said, bracketing the third-largest Asian economy alongside its South Asian neighbours like Pakistan, Bhutan and Nepal. 
 
India has made no improvement in its ranking over the previous year, despite the Human Development Report for 2015 noting that foreign direct investment favours countries such as China and India. 
 
India&#39;s Human Development Index rank in 2014 was also 131. Pakistan ranked 147th among the 188 countries surveyed by the UN.&nbsp; 
 
However, 63 per cent Indians were &quot;satisfied&quot; with their standard of living in 2014-15, the latest report found. 
 
The report, released annually by the UN Development Programme, said India&#39;s rank of 131 puts it in the &quot;medium human development&quot; bracket, which also includes nations like Bangladesh, Bhutan, Pakistan, Kenya, Myanmar and Nepal. 
 
India&#39;s HDI rank value in 2015 stood at 0.624, which had increased from 0.580 in 2010. 
 
Its life expectancy at birth stood at 68.3 years in 2015 and the Gross National Income (GNI) per capita USD 5,663, the report said. 
 
On the perception of feeling safe 69 per cent answered &quot;yes&quot;, while on freedom of choice, 72 per cent female responders answered they were &quot;satisfied&quot; as compared to 78 per cent for male. 
 
India&#39;s score for overall life satisfaction was 4.3 on a scale of 1-10, according to the report. 
 
On perceptions about government, 69 per cent said they had trust in the national government for the 2014-15 period while 74 per cent said they had confidence in the judicial system. 
 
It lauded measures like the National Rural Employment Guarantee Programme taken in India to generate employment. 
 
&quot;Creating jobs through a public works programme targeted at poor people can reduce poverty through income generation, build physical infra- structure and protect poor people against shocks. The National Rural Employment Guarantee Programme in India and the Rural Employment Opportunities for Public Assets Programme in Bangladesh are prime examples.&quot;&nbsp; 
 
The report noted that increasing clean energy investments in India by 1.5 per cent of GDP a year for 20 years will generate a net increase of about 10 million jobs annually in the country, after factoring in job losses from retrenchments in the fossil fuel industries.

(PTI)

Majority of Indians are content with the current standard of living and have faith in the government and the judiciary

India has ranked a lowly 131 among the 188 countries surveyed for human development, a new UN report has said, bracketing the third-largest Asian economy alongside its South Asian neighbours like Pakistan, Bhutan and Nepal. India has made no improvement in its ranking over the previous year, despite the Human Development Report for 2015 noting that foreign direct investment favours countries such as China and India. India's Human Development Index rank in 2014 was also 131. Pakistan ranked 147th among the 188 countries surveyed by the UN. However, 63 per cent Indians were "satisfied" with their standard of living in 2014-15, the latest report found. The report, released annually by the UN Development Programme, said India's rank of 131 puts it in the "medium human development" bracket, which also includes nations like Bangladesh, Bhutan, Pakistan, Kenya, Myanmar and Nepal. India's HDI rank value in 2015 stood at 0.624, which had increased from 0.580 in 2010. Its life expectancy at birth stood at 68.3 years in 2015 and the Gross National Income (GNI) per capita USD 5,663, the report said. On the perception of feeling safe 69 per cent answered "yes", while on freedom of choice, 72 per cent female responders answered they were "satisfied" as compared to 78 per cent for male. India's score for overall life satisfaction was 4.3 on a scale of 1-10, according to the report. On perceptions about government, 69 per cent said they had trust in the national government for the 2014-15 period while 74 per cent said they had confidence in the judicial system. It lauded measures like the National Rural Employment Guarantee Programme taken in India to generate employment. "Creating jobs through a public works programme targeted at poor people can reduce poverty through income generation, build physical infra- structure and protect poor people against shocks. The National Rural Employment Guarantee Programme in India and the Rural Employment Opportunities for Public Assets Programme in Bangladesh are prime examples." The report noted that increasing clean energy investments in India by 1.5 per cent of GDP a year for 20 years will generate a net increase of about 10 million jobs annually in the country, after factoring in job losses from retrenchments in the fossil fuel industries. (PTI)

India fares poorly in human development index, but people are 'satisfied'

Last week&#39;s three-day Nasscom Leadership Forum actually had a funny start with key speaker Mukesh Ambani saying Trump&rsquo;s protectionist measures could be a boon in disguise for India&rsquo;s IT companies. In a way, it is ironic that the point of view of the very organiser of the forum has been put through a shredder.

&nbsp;

&ldquo;The domestic IT industry can focus on solving problems right here, which is a huge market,&rdquo; India&rsquo;s richest man told the gathering. Nasscom has already lowered its revenue growth estimate for the industry to 8-10 per cent from the 10-12 per cent figure it had predicted last February.

&nbsp;

More than 65 per cent of the Indian IT industry&rsquo;s $155 billion revenue comes from the US. But then, why is Mukesh Ambani so hopeful?

&nbsp;

I have tried my best to find a logical reason behind this and, frankly speaking, I do not see India&rsquo;s private sector to have work or the purse to meet a $100 billion shortfall if push comes to shove.

&nbsp;

However, India&rsquo;s Unique Identification (UID) project, more commonly known to Indians as the Aadhar programme, and Ambani&rsquo;s &ldquo;solving problems&rdquo; quip may act as pointers as to how the Indian IT industry may survive if the American and post-Brexit European workflow takes a nosedive.&nbsp;

&nbsp;

For this, one has to take note of the unbroken continuity of the fundamental economic roadmap that the country has embarked upon for the last decade or so. In this light, the policies of the ruling BJP government led by Prime Minister Narendra Modi do not really differ with those of the previous UPA government that was headed by Manmohan Singh.

&nbsp;

While Modi has been widely panned by critics for his proximity to big businesses and the alleged largesse the latter have enjoyed from this relationship, I think the 2010 Budget speech in Parliament delivered by then finance minister Pranab Mukherjee, who is now the President of the country, has not received enough scrutiny.

&nbsp;

The part of the speech that I refer to above reads: &ldquo;With development and economic reforms, the focus of economic activity has shifted towards the non-governmental actors, bringing into sharper focus the role of government as an enabler. An enabling government does not try to deliver directly to the citizens everything that they need. Instead it creates an enabling ethos so that individual enterprise and creativity can flourish.&rdquo;

&nbsp;

The outsourcing of Project Aadhar was possibly the first step towards realisation of this plan. Various private companies collected biometric data of residents of India. It was originally supposed to do away with multiple identity silos and duplication of cost and efforts. Its stated purpose was to make life easier for the Indian people, as Nandan Nilekani, former chairman of the Unique Identification Authority of India (UIDAI), told me in an interview way back in 2010.

&nbsp;

The project rolled over questions pertaining to infringement of civil liberties, encroachment into personal space and the lack of data protection laws such as the United States Federal Privacy Statute or the European Directive on Data Protection. It was argued that lack of identity was the central roadblock that impeded the poor and the marginalised&rsquo;s access to benefits and subsidies.

&nbsp;

Seven years down, the project has already cost the country <a href="https://uidai.gov.in/new/about-uidai/about-uidai/financials.html">Rs 8277.17 crore ($1.24 billion)</a> in cumulative expenditure and, instead of doing away with duplication of cost and efforts, has added yet another identity silo. And a look at the cost break-up will tell anyone who has gained most from the programme.

&nbsp;

If farmers&rsquo; suicide <a href="http://www.rediff.com/news/column/p-sainath-how-states-fudge-the-data-on-farmer-suicides/20140801.htm">figures</a> are any indicator, India&rsquo;s poor have <a href="http://www.thehindu.com/data/indias-new-farm-suicides-data-myths-and-facts/article7461095.ece">not benefitted</a> from Project Aadhar.

On the other hand, Aadhar has helped Reliance&rsquo;s Jio to add a million subscribers a day, as mentioned by Ambani at the Assocham meet.

I have a strong feeling that the push for &ldquo;Digital India&rdquo; and a digital economy is going to act as the safety valve for the IT industry in case the American dream falls apart. If not, it is going to add substantial revenue to the balance sheet. Only around <a href="http://www.internetlivestats.com/internet-users/india/">35 per cent</a> of Indians had access to the Internet till 2016.

&nbsp;

That leaves plenty of avenues in terms of setting up and upgrade of infrastructure, setting up backends and training the vast mass who have lived on the dark side of the digital divide.

&nbsp;

Whether that comes in the form of private-public partnership or simply outsourced contracts or a mix of both is for time to tell. But it is clear that in crucial areas of deliverance that affects real people, the government has taken a clear backseat, creating an enabling atmosphere for&nbsp;corporate takeover.

&nbsp;

In this light, Mukesh Ambani&rsquo;s optimism is clearly not misplaced but calibrated on the symbiotic relationship between India&rsquo;s political class and the industry.

&nbsp;

&nbsp;

The Indian government has taken a clear backseat in crucial areas of deliverance, creating an enabling atmosphere for corporate takeover

Last week's three-day Nasscom Leadership Forum actually had a funny start with key speaker Mukesh Ambani saying Trump’s protectionist measures could be a boon in disguise for India’s IT companies. In a way, it is ironic that the point of view of the very organiser of the forum has been put through a shredder. “The domestic IT industry can focus on solving problems right here, which is a huge market,” India’s richest man told the gathering. Nasscom has already lowered its revenue growth estimate for the industry to 8-10 per cent from the 10-12 per cent figure it had predicted last February. More than 65 per cent of the Indian IT industry’s $155 billion revenue comes from the US. But then, why is Mukesh Ambani so hopeful? I have tried my best to find a logical reason behind this and, frankly speaking, I do not see India’s private sector to have work or the purse to meet a $100 billion shortfall if push comes to shove. However, India’s Unique Identification (UID) project, more commonly known to Indians as the Aadhar programme, and Ambani’s “solving problems” quip may act as pointers as to how the Indian IT industry may survive if the American and post-Brexit European workflow takes a nosedive. For this, one has to take note of the unbroken continuity of the fundamental economic roadmap that the country has embarked upon for the last decade or so. In this light, the policies of the ruling BJP government led by Prime Minister Narendra Modi do not really differ with those of the previous UPA government that was headed by Manmohan Singh. While Modi has been widely panned by critics for his proximity to big businesses and the alleged largesse the latter have enjoyed from this relationship, I think the 2010 Budget speech in Parliament delivered by then finance minister Pranab Mukherjee, who is now the President of the country, has not received enough scrutiny. The part of the speech that I refer to above reads: “With development and economic reforms, the focus of economic activity has shifted towards the non-governmental actors, bringing into sharper focus the role of government as an enabler. An enabling government does not try to deliver directly to the citizens everything that they need. Instead it creates an enabling ethos so that individual enterprise and creativity can flourish.” The outsourcing of Project Aadhar was possibly the first step towards realisation of this plan. Various private companies collected biometric data of residents of India. It was originally supposed to do away with multiple identity silos and duplication of cost and efforts. Its stated purpose was to make life easier for the Indian people, as Nandan Nilekani, former chairman of the Unique Identification Authority of India (UIDAI), told me in an interview way back in 2010. The project rolled over questions pertaining to infringement of civil liberties, encroachment into personal space and the lack of data protection laws such as the United States Federal Privacy Statute or the European Directive on Data Protection. It was argued that lack of identity was the central roadblock that impeded the poor and the marginalised’s access to benefits and subsidies. Seven years down, the project has already cost the country Rs 8277.17 crore ($1.24 billion) in cumulative expenditure and, instead of doing away with duplication of cost and efforts, has added yet another identity silo. And a look at the cost break-up will tell anyone who has gained most from the programme. If farmers’ suicide figures are any indicator, India’s poor have not benefitted from Project Aadhar. On the other hand, Aadhar has helped Reliance’s Jio to add a million subscribers a day, as mentioned by Ambani at the Assocham meet. I have a strong feeling that the push for “Digital India” and a digital economy is going to act as the safety valve for the IT industry in case the American dream falls apart. If not, it is going to add substantial revenue to the balance sheet. Only around 35 per cent of Indians had access to the Internet till 2016. That leaves plenty of avenues in terms of setting up and upgrade of infrastructure, setting up backends and training the vast mass who have lived on the dark side of the digital divide. Whether that comes in the form of private-public partnership or simply outsourced contracts or a mix of both is for time to tell. But it is clear that in crucial areas of deliverance that affects real people, the government has taken a clear backseat, creating an enabling atmosphere for corporate takeover. In this light, Mukesh Ambani’s optimism is clearly not misplaced but calibrated on the symbiotic relationship between India’s political class and the industry.

If US orders stop, India's IT can count on the political class to bail it out

Countries with higher public debt levels like India should continue to implement their medium-term plans to reduce debt and deficits, an IMF official has said.

&quot;Countries with higher public debt levels, like India, should continue to implement their medium-term plans to reduce debt and deficits. Japan and Malaysia should develop plans in these areas,&quot; IMF deputy managing director Zhang Tao said in his address at the Asian Financial Forum, Hong Kong.

&quot;Asia continues to lead global growth. We expect the economies in the region to grow above 5 per cent both in 2017 and 2018, compared with around three-and-a-half per cent for the world in the next two years,&quot; an IMF statement quoted Tao as saying.

Noting that Asia overall managed well the market surprises in 2016, and Asian financial markets were resilient for most of the year, Tao said Asia is expected to continue to make the largest contribution to growth in the world, by generating around two thirds of global growth.

Yesterday, IMF cut India&#39;s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the &quot;temporary negative consumption shock&quot; of demonetisation, days after the World Bank also decelerated India&#39;s growth estimates.&nbsp;

(PTI)

The IMF official said that countries like India with higher public debt should continue with their plans to reduce debt and deficits

Countries with higher public debt levels like India should continue to implement their medium-term plans to reduce debt and deficits, an IMF official has said. "Countries with higher public debt levels, like India, should continue to implement their medium-term plans to reduce debt and deficits. Japan and Malaysia should develop plans in these areas," IMF deputy managing director Zhang Tao said in his address at the Asian Financial Forum, Hong Kong. "Asia continues to lead global growth. We expect the economies in the region to grow above 5 per cent both in 2017 and 2018, compared with around three-and-a-half per cent for the world in the next two years," an IMF statement quoted Tao as saying. Noting that Asia overall managed well the market surprises in 2016, and Asian financial markets were resilient for most of the year, Tao said Asia is expected to continue to make the largest contribution to growth in the world, by generating around two thirds of global growth. Yesterday, IMF cut India's growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the "temporary negative consumption shock" of demonetisation, days after the World Bank also decelerated India's growth estimates. (PTI)

Countries with higher public debt levels should bring it down, says IMF deputy managing director

India&#39;s ruling Bharatiya Janata Party on Saturday termed demonetisation as a &quot;sacred movement&quot; that was supported by the masses and said that the deposition of black money will lead to &quot;bigger and cleaner GDP&quot;.

The economic resolution passed at the party&#39;s national executive meeting accused the opposition of trying to discredit the government by criticising the move that was aimed at the &quot;poor&#39;s welfare&quot;.

&quot;In this sacred movement across the country, the common people were taking upon themselves the temporary suffering of standing in queues with full enthusiasm and positive energy, but the Opposition had become negative with destructive energy to defame the central government and trying to destroy the positive environment of the country,&quot; the resolution said.

India&#39;s finance minister Arun Jaitley asserted that black money has been returned to the banks because of the currency reform and will lead to development.

&quot;Black money has been deposited in the banks. It has lost its anonymity. The informal economy will now increasingly integrate with the formal economy. This will lead to higher revenues with the States and the Centre. It will lead to the bigger and the cleaner GDP,&quot; the resolution said.

Jaitley also claimed that state revenues had not suffered, citing figures, and in states of Uttar Pradesh and Madhya Pradesh numbers had even increased.

The resolution said demonetisation was necessary for decimating the parallel economy of black money and for the smooth functioning of the GST in near future.

BJP supported Prime Minister Narendra Modi&#39;s decision at the meeting. BJP&#39;s &#39;Kisan Morcha&#39; (farmer wing of BJP) chief Virendra Singh Mast claimed that wasteful expenditure by farmers was reduced due to demonetisation. The opposition claims that farmers have suffered the most due to cash crunch.

Union minister Nirmala Sitharaman termed the decision as &quot;bold and historic decision&quot;.

&quot;The Rs 500 and Rs 1000 notes hidden in mattresses, something people would say symbolically, is now in bank accounts. It will help development,&quot; she said.

The ruling party claimed positive reaction towards demonetisation, quoting surveys. 
&quot;This is reflected in the fact that even after 50 days, there was not a single major incident in the country. There was no loss of public property and there was no loss of people&#39;s patience anywhere in the country.&quot;

BJP dismissed allegations that demonetisation was an abrupt decision, claiming that the resolution was taken with full-fledged preparations.&nbsp;

Listing the government&#39;s efforts to curb black money leading to demonetization, the resolution cited constitution of a SIT, introduction of Income Declaration Scheme, Jan Dhan Scheme, Black Money Act, Bankruptcy Insolvency Law, DRT Amendment Law and Benami Property Act, Press trust of India reported.

The party named various efforts by the government to promote a cashless, corruption free India through UPI, USSD, AEPS and Rupay Card.

&quot;The BJP firmly believes that digital economy will stop the leakage of taxes. This Government has ended any role of middlemen from its beneficiary schemes like MNREGA, financial assistance to poor students, subsidies to marginal sections including SC/ST/OBC through digital transactions and Direct Benefit Transfers,&quot; the resolution said.

(WION with inputs from PTI)

Wasteful expenditure by farmers was reduced due to demonetisation, says party's farmer wing chief

India's ruling Bharatiya Janata Party on Saturday termed demonetisation as a "sacred movement" that was supported by the masses and said that the deposition of black money will lead to "bigger and cleaner GDP". The economic resolution passed at the party's national executive meeting accused the opposition of trying to discredit the government by criticising the move that was aimed at the "poor's welfare". "In this sacred movement across the country, the common people were taking upon themselves the temporary suffering of standing in queues with full enthusiasm and positive energy, but the Opposition had become negative with destructive energy to defame the central government and trying to destroy the positive environment of the country," the resolution said. India's finance minister Arun Jaitley asserted that black money has been returned to the banks because of the currency reform and will lead to development. "Black money has been deposited in the banks. It has lost its anonymity. The informal economy will now increasingly integrate with the formal economy. This will lead to higher revenues with the States and the Centre. It will lead to the bigger and the cleaner GDP," the resolution said. Jaitley also claimed that state revenues had not suffered, citing figures, and in states of Uttar Pradesh and Madhya Pradesh numbers had even increased. The resolution said demonetisation was necessary for decimating the parallel economy of black money and for the smooth functioning of the GST in near future. BJP supported Prime Minister Narendra Modi's decision at the meeting. BJP's 'Kisan Morcha' (farmer wing of BJP) chief Virendra Singh Mast claimed that wasteful expenditure by farmers was reduced due to demonetisation. The opposition claims that farmers have suffered the most due to cash crunch. Union minister Nirmala Sitharaman termed the decision as "bold and historic decision". "The Rs 500 and Rs 1000 notes hidden in mattresses, something people would say symbolically, is now in bank accounts. It will help development," she said. The ruling party claimed positive reaction towards demonetisation, quoting surveys. "This is reflected in the fact that even after 50 days, there was not a single major incident in the country. There was no loss of public property and there was no loss of people's patience anywhere in the country." BJP dismissed allegations that demonetisation was an abrupt decision, claiming that the resolution was taken with full-fledged preparations. Listing the government's efforts to curb black money leading to demonetization, the resolution cited constitution of a SIT, introduction of Income Declaration Scheme, Jan Dhan Scheme, Black Money Act, Bankruptcy Insolvency Law, DRT Amendment Law and Benami Property Act, Press trust of India reported. The party named various efforts by the government to promote a cashless, corruption free India through UPI, USSD, AEPS and Rupay Card. "The BJP firmly believes that digital economy will stop the leakage of taxes. This Government has ended any role of middlemen from its beneficiary schemes like MNREGA, financial assistance to poor students, subsidies to marginal sections including SC/ST/OBC through digital transactions and Direct Benefit Transfers," the resolution said. (WION with inputs from PTI)

Reaction to demonetisation positive as not single major incident of violence reported: BJP at its executive meet

India&#39;s Gross Domestic Product (GDP) is set to surpass the United Kingdom for the first time in 150 years, Forbes said in a report on December 16.

The Indian economy was set to overtake that of UK&#39;s by 2020 but declining pound in the aftermath of the Brexit accelerated the economic relegation.

India&#39;s rapid economic growth in the last 25 years, coupled with Britain&#39;s economic stagnation, has resulted in the swapping of positions. The gap between the countries is expected to increase as India is tipped to grow between 6 to 8 per cent as against Britain&#39;s 1 to 2 per cent in the next three years.

Although India has pipped the country in absolute numbers, it is just 20 per cent of Britain&#39;s per capita terms.

&quot;India may have a large population base but this is a big leap,&quot; Kiren Rijiju, India&#39;s minister of state for home affairs, said earlier this week.

A big leap it is as India was a British colony till 1947.

This is the second significant milestone India has achieved this year -- it earlier overtook China to become the fastest growing economy in the world.

US, China, Japan and Germany are the four largest economies in the world.

(WION)

&nbsp;

&nbsp;

Weakening of the Pound in the last few weeks has helped India surpass the British economy sooner than earlier predicted

India's Gross Domestic Product (GDP) is set to surpass the United Kingdom for the first time in 150 years, Forbes said in a report on December 16. The Indian economy was set to overtake that of UK's by 2020 but declining pound in the aftermath of the Brexit accelerated the economic relegation. India's rapid economic growth in the last 25 years, coupled with Britain's economic stagnation, has resulted in the swapping of positions. The gap between the countries is expected to increase as India is tipped to grow between 6 to 8 per cent as against Britain's 1 to 2 per cent in the next three years. Although India has pipped the country in absolute numbers, it is just 20 per cent of Britain's per capita terms. "India may have a large population base but this is a big leap," Kiren Rijiju, India's minister of state for home affairs, said earlier this week. A big leap it is as India was a British colony till 1947. This is the second significant milestone India has achieved this year -- it earlier overtook China to become the fastest growing economy in the world. US, China, Japan and Germany are the four largest economies in the world. (WION)

India overtakes UK to become world's sixth largest economy

The 6-member monetary policy committee (MPC) of the RBI met for the second time since its inception to decide on the key monetary policy indicators of India. The decision taken by the MPC comes as a shock to many as one of the key rates i.e. the repo rate has been kept unchanged at 6.25%. 
&nbsp; 
Repo rate is the rate at which banks borrow from the RBI. 
&nbsp; 
Most of the experts, economists and bankers had predicted that the repo rate would be cut by 25 to 50 basis points at the back of slowdown of consumer price index (CPI) and a potential slowdown of the economy due to demonetisation.

CPI is a number that refelects the average price of a basket of consumer goods such as transportation, food and medical care. It is one of the most frequently used statistics for identifying periods of inflation or deflation.

Economics behind cut in the repo rate 
&nbsp; 
If the repo rate is cut, then the banks would be able to borrow at a lesser rate and then, they can pass this to the end-consumers by reducing the lending rates. Reduced lending rates would encourage people to take loans for businesses, education, buying a house and other personal needs, thus increasing the GDP of the country and subsequently the economic growth as well. 
&nbsp; 
However, there is another side to the story. If people are borrowing more, this implies that there are higher investments in the economy. High investments imply&nbsp;increased employment and thus,&nbsp;rise in the demand for goods and services, increasing the price level in the economy.

Whenever the MPC meets, they always have to face this dichotomy of chosing between higher economic growth versus high price levels. 
&nbsp; 
Current decision of MPC 
&nbsp; 
According to the statement of India&rsquo;s central bank, Reserve Bank of India&#39;s governor Urjit Patel, the reason behind keeping the repo-rate unchanged is to meet the&nbsp;inflation targets of 5% (with a plus-minus of 2%) for the last quarter&nbsp;of the&nbsp;financial year 2016-17. 
&nbsp; 
It seems that the inflation targeting took precedence over any other consideration while deciding the repo rate. Three main reasons that seem plausible for such hawkish approach are:

<ul>
	<li>Implementation of seventh pay commission recommendations can lead to rise in inflation &nbsp;</li>
	<li>Rise in domestic food prices</li>
	<li>Rise in crude oil prices after OPEC&rsquo;s decision to cut production</li>
</ul>

&nbsp; 
In the past couple of weeks, post demonetisation several experts and prominent organisations have cut down the GDP forecast for Indian economy. Even the RBI today cut the growth forecast for this fiscal from 7.6% to 7.1%. &nbsp;Thus, experts believed that RBI would cut the repo-rate to stimulate the economy and achieve the growth targets. 
&nbsp; 
However, it is believed that with the deposit of Rs 11.55 crore in banks post-demonetisation, there is excess liquidity in banks which would anyways encourage the banks to reduce their lending rates whether the repo rate cut happens or not. 
&nbsp; 
Some private banks like ICICI, Axis bank and Bank of Baroda have already reduced their lending rates in the past week before the meeting of MPC. 
&nbsp; 
No sweat over liquidity crunch 
&nbsp; 
Post-demonetisation, the Indian economy is reeling under liquidity crunch with thousands of people queuing outside ATMs and banks each day to withdraw money.&nbsp; 
&nbsp; 
During the press conference, RBI officials showed fair amount of confidence and said that the situation is under control as far as the liquidity is concerned. According to RBI officials, the remonetisation exercise is in full throttle with all the five printing presses of both RBI and government working to full capacity to print new notes. From November 10th to December 5th, RBI has printed currency worth Rs 4 lakh crore of higher denominations like the Rs 500 and Rs 2000 and during the same period, around 19.1 billion pieces of Rs 100, Rs 50 and Rs 20 denomination notes were printed. 
&nbsp; 
The RBI officials also mentioned that they may reduce the number of notes being printed as people are increasingly moving towards digital modes of payment. &nbsp; 
&nbsp; 
Clear distinction between monetary and fiscal policy 
&nbsp; 
Going by the textbook, the main monetary policy indicators are price level and money supply and the monetary policy lies in the domain of the central bank of a country, in this case, RBI. 
&nbsp; 
The fiscal policy is the domain of the government of a country and both the monetary and fiscal policy have to work in tandem for the future growth and economic stability of a country.&nbsp; 
&nbsp; 
Today, it can be observed that the RBI stuck to its side of the policy mandate, focusing completely on inflation targeting and trusting the government to work on the GDP front.

In the coming months, one should be on the lookout for the figures of the major economic indicators to get a sense of how the demonetisation policy has worked for India.

(WION)

 
&nbsp;

Most experts, economists and bankers had predicted the repo rate would be cut by 25 to 50 basis points

The 6-member monetary policy committee (MPC) of the RBI met for the second time since its inception to decide on the key monetary policy indicators of India. The decision taken by the MPC comes as a shock to many as one of the key rates i.e. the repo rate has been kept unchanged at 6.25%. Repo rate is the rate at which banks borrow from the RBI. Most of the experts, economists and bankers had predicted that the repo rate would be cut by 25 to 50 basis points at the back of slowdown of consumer price index (CPI) and a potential slowdown of the economy due to demonetisation. CPI is a number that refelects the average price of a basket of consumer goods such as transportation, food and medical care. It is one of the most frequently used statistics for identifying periods of inflation or deflation. Economics behind cut in the repo rate If the repo rate is cut, then the banks would be able to borrow at a lesser rate and then, they can pass this to the end-consumers by reducing the lending rates. Reduced lending rates would encourage people to take loans for businesses, education, buying a house and other personal needs, thus increasing the GDP of the country and subsequently the economic growth as well. However, there is another side to the story. If people are borrowing more, this implies that there are higher investments in the economy. High investments imply increased employment and thus, rise in the demand for goods and services, increasing the price level in the economy. Whenever the MPC meets, they always have to face this dichotomy of chosing between higher economic growth versus high price levels. Current decision of MPC According to the statement of India’s central bank, Reserve Bank of India's governor Urjit Patel, the reason behind keeping the repo-rate unchanged is to meet the inflation targets of 5% (with a plus-minus of 2%) for the last quarter of the financial year 2016-17. It seems that the inflation targeting took precedence over any other consideration while deciding the repo rate. Three main reasons that seem plausible for such hawkish approach are: Implementation of seventh pay commission recommendations can lead to rise in inflation Rise in domestic food prices Rise in crude oil prices after OPEC’s decision to cut production In the past couple of weeks, post demonetisation several experts and prominent organisations have cut down the GDP forecast for Indian economy. Even the RBI today cut the growth forecast for this fiscal from 7.6% to 7.1%. Thus, experts believed that RBI would cut the repo-rate to stimulate the economy and achieve the growth targets. However, it is believed that with the deposit of Rs 11.55 crore in banks post-demonetisation, there is excess liquidity in banks which would anyways encourage the banks to reduce their lending rates whether the repo rate cut happens or not. Some private banks like ICICI, Axis bank and Bank of Baroda have already reduced their lending rates in the past week before the meeting of MPC. No sweat over liquidity crunch Post-demonetisation, the Indian economy is reeling under liquidity crunch with thousands of people queuing outside ATMs and banks each day to withdraw money. During the press conference, RBI officials showed fair amount of confidence and said that the situation is under control as far as the liquidity is concerned. According to RBI officials, the remonetisation exercise is in full throttle with all the five printing presses of both RBI and government working to full capacity to print new notes. From November 10th to December 5th, RBI has printed currency worth Rs 4 lakh crore of higher denominations like the Rs 500 and Rs 2000 and during the same period, around 19.1 billion pieces of Rs 100, Rs 50 and Rs 20 denomination notes were printed. The RBI officials also mentioned that they may reduce the number of notes being printed as people are increasingly moving towards digital modes of payment. Clear distinction between monetary and fiscal policy Going by the textbook, the main monetary policy indicators are price level and money supply and the monetary policy lies in the domain of the central bank of a country, in this case, RBI. The fiscal policy is the domain of the government of a country and both the monetary and fiscal policy have to work in tandem for the future growth and economic stability of a country. Today, it can be observed that the RBI stuck to its side of the policy mandate, focusing completely on inflation targeting and trusting the government to work on the GDP front. In the coming months, one should be on the lookout for the figures of the major economic indicators to get a sense of how the demonetisation policy has worked for India. (WION)

Why the RBI kept interest rates unchanged despite demonetisation

Indian Prime Minister Narendra Modi addressed his party&#39;s parliamentarians this morning, urging them to tell people that his decision to demonitise 500- and 1,000-rupee notes was meant to strike against black money and terror as the Opposition upped its ante in the Parliament asking for Modi to appear personally and answer the questions.

Sources told WION that&nbsp;Modi turned emotional while making his speech.&nbsp;

And Modi&#39;s Twitter handle has asked people to write in on the Narendra Modi app, telling him what they think of the demonetisation.&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
I want your first-hand view on the decision taken regarding currency notes. Take part in the survey on the NM App. <a href="https://t.co/TYuxNNJfIf">https://t.co/TYuxNNJfIf</a> <a href="https://t.co/mWv2frGn3R">pic.twitter.com/mWv2frGn3R</a>
&mdash; Narendra Modi (@narendramodi) <a href="https://twitter.com/narendramodi/status/800940663244132352">November 22, 2016</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

Prime Minister Modi, had on November 8, in a sudden and unexpected move, announced that India&#39;s two largest currency notes would cease to be legal tender starting that midnight.&nbsp;

His decision took about 86 per cent of Indian currency out there out of circulation and the country has been thrown out of gear ever since.&nbsp;

There have been long lines outside banks with people rushing to exchange their old currency for new but there hasn&#39;t been enough new currency to go around, there have been reports of people having trouble getting hold of medicine and groceries, and economic activity has dipped.&nbsp;

Up to 90 per cent of transactions in the country are carried out in cash.&nbsp;

Bringing back India&#39;s alleged black money, stashed in Swiss banks, had been a large part of Mr Modi&#39;s campaign before the national elections in 2014. &nbsp;

The motion to back the demonetisation was passed by Mr Modi&#39;s party, the Bharatiya Janata Party (BJP).&nbsp;

Indian finance minister Arun Jaitley meanwhile told his fellow partymen that the government would make more demonetisation-related announcements today, and that over the next few days, the government would look to redress grievances reported from the farm sector.&nbsp;

This is the wheat-growing season and the cash crunch has hit farmers hard with media reports saying they are having trouble finding the cash needed to buy seeds and fertiliser.&nbsp;

Meanwhile, the Opposition also met amongst themselves on Tuesday.&nbsp;

They have asked&nbsp;Modi to explain&nbsp;the rationale behind demonetisation in Parliament. They say the Prime Minister must explain his move in the Rajya Sabha or the Upper House, where the government is in a minority, while in the Lok Sabha or the Lower House, they want a debate followed by a vote.

They are reportedly also discussing a nationwide strike to protest the demonetisation&nbsp;and a march on the President&#39;s house.&nbsp;

(WION)

Over the next few days, the government is expected to redress grievances reported from the farm sector

Indian Prime Minister Narendra Modi addressed his party's parliamentarians this morning, urging them to tell people that his decision to demonitise 500- and 1,000-rupee notes was meant to strike against black money and terror as the Opposition upped its ante in the Parliament asking for Modi to appear personally and answer the questions. Sources told WION that Modi turned emotional while making his speech. And Modi's Twitter handle has asked people to write in on the Narendra Modi app, telling him what they think of the demonetisation. I want your first-hand view on the decision taken regarding currency notes. Take part in the survey on the NM App. https://t.co/TYuxNNJfIf pic.twitter.com/mWv2frGn3R — Narendra Modi (@narendramodi) November 22, 2016 × Prime Minister Modi, had on November 8, in a sudden and unexpected move, announced that India's two largest currency notes would cease to be legal tender starting that midnight. His decision took about 86 per cent of Indian currency out there out of circulation and the country has been thrown out of gear ever since. There have been long lines outside banks with people rushing to exchange their old currency for new but there hasn't been enough new currency to go around, there have been reports of people having trouble getting hold of medicine and groceries, and economic activity has dipped. Up to 90 per cent of transactions in the country are carried out in cash. Bringing back India's alleged black money, stashed in Swiss banks, had been a large part of Mr Modi's campaign before the national elections in 2014. The motion to back the demonetisation was passed by Mr Modi's party, the Bharatiya Janata Party (BJP). Indian finance minister Arun Jaitley meanwhile told his fellow partymen that the government would make more demonetisation-related announcements today, and that over the next few days, the government would look to redress grievances reported from the farm sector. This is the wheat-growing season and the cash crunch has hit farmers hard with media reports saying they are having trouble finding the cash needed to buy seeds and fertiliser. Meanwhile, the Opposition also met amongst themselves on Tuesday. They have asked Modi to explain the rationale behind demonetisation in Parliament. They say the Prime Minister must explain his move in the Rajya Sabha or the Upper House, where the government is in a minority, while in the Lok Sabha or the Lower House, they want a debate followed by a vote. They are reportedly also discussing a nationwide strike to protest the demonetisation and a march on the President's house. (WION)

India: Emotional PM tells party MPs to explain demonetisation to people, Opposition insists on explanation in Parliament

Foreign direct investment (FDI) into India grew by over 30 per cent to USD 21.62 billion during the first half of 2016-17, PTI reported.

During April-September of 2015-16, India received FDI worth USD 16.63 billion, an official told PTI.

&quot;Ease of doing business and relaxation in the FDI policy are helping attract more and more FDI. The recent easing in sectors like civil aviation and construction will help in attracting more overseas funds,&quot; the official was quoted as saying by PTI.

India receives the most FDI from Mauritius, Singapore, the Netherlands, and Japan.

Foreign investment is considered crucial for India, which needs around USD 1 trillion to overhaul its infrastructure and drive growth higher.

(WION with inputs from PTI)

'Ease of doing business and relaxation in the FDI policy are helping attract more and more FDI,' an official said

Foreign direct investment (FDI) into India grew by over 30 per cent to USD 21.62 billion during the first half of 2016-17, PTI reported. During April-September of 2015-16, India received FDI worth USD 16.63 billion, an official told PTI. "Ease of doing business and relaxation in the FDI policy are helping attract more and more FDI. The recent easing in sectors like civil aviation and construction will help in attracting more overseas funds," the official was quoted as saying by PTI. India receives the most FDI from Mauritius, Singapore, the Netherlands, and Japan. Foreign investment is considered crucial for India, which needs around USD 1 trillion to overhaul its infrastructure and drive growth higher. (WION with inputs from PTI)

India: FDI rises 30 per cent to $21.6 billion in April-Sep

Indian banks&#39; loans rose 10.4 per cent in the two weeks to September 30 from a year earlier, while deposits rose 11.3 per cent, the Reserve Bank of India&#39;s weekly statistical supplement showed on Friday.

Outstanding loans rose 2.11 trillion Indian Rupees ($31.56 billion) to 75.21 trillion Rupees in the two weeks to September 30. Non-food credit rose 2.21 trillion Indian Rupees to 74.35 trillion Rupees, while food credit fell 105.30 billion Indian Rupees to 854.60 billion Rupees.

Bank deposits rose 3.52 trillion Indian Rupees to 101.43 trillion Rupees in the two weeks to September 30.

(Reuters)

Outstanding loans rose 2.11 trillion Indian Rupees ($31.56 billion) to 75.21 trillion Rupees in the two weeks to September 30

Indian banks' loans rose 10.4 per cent in the two weeks to September 30 from a year earlier, while deposits rose 11.3 per cent, the Reserve Bank of India's weekly statistical supplement showed on Friday. Outstanding loans rose 2.11 trillion Indian Rupees ($31.56 billion) to 75.21 trillion Rupees in the two weeks to September 30. Non-food credit rose 2.21 trillion Indian Rupees to 74.35 trillion Rupees, while food credit fell 105.30 billion Indian Rupees to 854.60 billion Rupees. Bank deposits rose 3.52 trillion Indian Rupees to 101.43 trillion Rupees in the two weeks to September 30. (Reuters)

Indian banks' loans rose 10.4 per cent in two weeks to September 30 : Reserve Bank of India

Moody&#39;s Investors Service on Monday said continued reforms to enhance business environment and moderate inflation will help India achieve robust growth, but cautioned that rising contingent liability risks in the banking sector could affect its credit quality. 
 
Evidence of success in policymakers&#39; efforts to introduce growth-enhancing economic and institutional reforms would provide support for a rating upgrade, Moody&#39;s said in its Annual Credit Analysis as it forecast GDP growth at about 7.5&nbsp;per cent&nbsp;for next two years. 
 
&quot;Sustained fiscal consolidation, stable inflation at moderate levels and progress on reforms aimed at enhancing the business environment would contribute to sustained growth at robust levels. In turn, persistent income and profit growth would raise government revenues and contribute to improved fiscal metrics. However, we expect the benefits to be very gradual,&quot; Moody&#39;s said. 
 
India&#39;s credit profile is supported by strong growth potential and high private savings rate, it said. 
 
&quot;Conversely, signs of slippage in progress towards those goals or indications of rising contingent liability risks related to the banking sector could weigh on India&#39;s credit quality,&quot; Moody&#39;s added. 
 
India&#39;s strengths are balanced against a high government debt burden (67.4 per cent of GDP in 2015), regulatory and infrastructure constraints on its competitiveness,&nbsp;slow&nbsp;pace of policy reform, and the contingent liability risk to the sovereign from public sector banks&#39; high and rising non-performing loans. 
 
&quot;Looking ahead, evidence of success in policymakers&#39; efforts to introduce growth-enhancing and growth-stabilising economic and institutional reforms would provide support for a rating upgrade,&quot; it said. 
 
Moody&#39;s further said that institutional strength is apparent in robust democratic apparatus. Offsetting weaknesses include an uncertain regulatory environment, corruption, a slow-moving judicial system and, in general, inefficiencies in the delivery of government services, it added. 
 
&quot;At the current juncture, political fragmentation leads to slow and ad-hoc progress on reforms. Progress on land and labour reforms, when it has occurred has been limited and gradual,&quot; it said. 
 
Moody&#39;s said the positive outlook on India&#39;s rating reflects our expectation that policies over the next 12 to 18 months will support sustained growth, accompanied by narrower fiscal deficits, low current account deficits, increased savings and investment, and inflation that is within the central bank&#39;s target. 
 
Over the past year, it said external developments favourable to India such as lower global oil prices have combined with policy measures to move the economy towards a more stable macroeconomic development with smaller fiscal deficits, lower inflation and a narrower current account deficit.

Moody&#39;s analyses India&#39;s credit profile in terms of economic, institutional and fiscal strength and susceptibility to event risk.
&quot;We expect corporates&#39; profitability to remain muted which will continue to dampen their ability and willingness to invest in the next few quarters. We forecast real GDP growth at about 7.5&nbsp;per cent&nbsp;in the next two years,&quot; Moody&#39;s said. 
 
Material improvements to India&#39;s public finances will likely be limited in the near term, and deficit reduction will come from either cyclical upswings or tactical fiscal management, rather than a broad-based fiscal consolidation strategy. 
 
Moody&#39;s said India&#39;s susceptibility to event risk is driven by banking sector risk. As banks continue to recognise bad assets, non-performing loans will rise further, particularly for public sector banks (PSBs), albeit at a slower pace than at the end of 2015. 
 
The agency estimates the capital needs of PSBs to be notably larger than the Rs 70,000 crore of equity over the next four years proposed by the government. 
 
&quot;The authorities&#39; focus on bad asset recognition and provisioning in the banking system, as well as the recent passage of a new bankruptcy bill, would be credit positive from a sovereign perspective&nbsp;if it led to improved bank capitalisation levels, renewed loan growth and robust risk processes,&quot; Moody&#39;s said. 
 
The US-based agency said that reforms to improve the business environment will help to realise India&#39;s growth potential, but the benefits of these measures would be very gradual. 
 
The &#39;Make in India&#39; programme aims to increase the share of manufacturing to 25&nbsp;per cent&nbsp;in 2020 from the current 16&nbsp;per cent. This implies growth in manufacturing value added of 12-14&nbsp;per cent&nbsp;per year, compared with only 8.1&nbsp;per cent&nbsp;in FY2016, Moody&#39;s added. 
 
&quot;But inadequate infrastructure, limited flow of workers from the agriculture sector and, to some extent, only moderate levels of investment in innovation will hamper growth in the manufacturing sector and the economy as a whole. These factors are likely to prevent a sharp improvement in India&#39;s competitiveness,&quot; it said. 
 
(PTI)

The study estimates that capital needs of public sector banks will be larger than the proposed $10.45 billion of equity in 4 years

Moody's Investors Service on Monday said continued reforms to enhance business environment and moderate inflation will help India achieve robust growth, but cautioned that rising contingent liability risks in the banking sector could affect its credit quality. Evidence of success in policymakers' efforts to introduce growth-enhancing economic and institutional reforms would provide support for a rating upgrade, Moody's said in its Annual Credit Analysis as it forecast GDP growth at about 7.5 per cent for next two years. "Sustained fiscal consolidation, stable inflation at moderate levels and progress on reforms aimed at enhancing the business environment would contribute to sustained growth at robust levels. In turn, persistent income and profit growth would raise government revenues and contribute to improved fiscal metrics. However, we expect the benefits to be very gradual," Moody's said. India's credit profile is supported by strong growth potential and high private savings rate, it said. "Conversely, signs of slippage in progress towards those goals or indications of rising contingent liability risks related to the banking sector could weigh on India's credit quality," Moody's added. India's strengths are balanced against a high government debt burden (67.4 per cent of GDP in 2015), regulatory and infrastructure constraints on its competitiveness, slow pace of policy reform, and the contingent liability risk to the sovereign from public sector banks' high and rising non-performing loans. "Looking ahead, evidence of success in policymakers' efforts to introduce growth-enhancing and growth-stabilising economic and institutional reforms would provide support for a rating upgrade," it said. Moody's further said that institutional strength is apparent in robust democratic apparatus. Offsetting weaknesses include an uncertain regulatory environment, corruption, a slow-moving judicial system and, in general, inefficiencies in the delivery of government services, it added. "At the current juncture, political fragmentation leads to slow and ad-hoc progress on reforms. Progress on land and labour reforms, when it has occurred has been limited and gradual," it said. Moody's said the positive outlook on India's rating reflects our expectation that policies over the next 12 to 18 months will support sustained growth, accompanied by narrower fiscal deficits, low current account deficits, increased savings and investment, and inflation that is within the central bank's target. Over the past year, it said external developments favourable to India such as lower global oil prices have combined with policy measures to move the economy towards a more stable macroeconomic development with smaller fiscal deficits, lower inflation and a narrower current account deficit. Moody's analyses India's credit profile in terms of economic, institutional and fiscal strength and susceptibility to event risk. "We expect corporates' profitability to remain muted which will continue to dampen their ability and willingness to invest in the next few quarters. We forecast real GDP growth at about 7.5 per cent in the next two years," Moody's said. Material improvements to India's public finances will likely be limited in the near term, and deficit reduction will come from either cyclical upswings or tactical fiscal management, rather than a broad-based fiscal consolidation strategy. Moody's said India's susceptibility to event risk is driven by banking sector risk. As banks continue to recognise bad assets, non-performing loans will rise further, particularly for public sector banks (PSBs), albeit at a slower pace than at the end of 2015. The agency estimates the capital needs of PSBs to be notably larger than the Rs 70,000 crore of equity over the next four years proposed by the government. "The authorities' focus on bad asset recognition and provisioning in the banking system, as well as the recent passage of a new bankruptcy bill, would be credit positive from a sovereign perspective if it led to improved bank capitalisation levels, renewed loan growth and robust risk processes," Moody's said. The US-based agency said that reforms to improve the business environment will help to realise India's growth potential, but the benefits of these measures would be very gradual. The 'Make in India' programme aims to increase the share of manufacturing to 25 per cent in 2020 from the current 16 per cent. This implies growth in manufacturing value added of 12-14 per cent per year, compared with only 8.1 per cent in FY2016, Moody's added. "But inadequate infrastructure, limited flow of workers from the agriculture sector and, to some extent, only moderate levels of investment in innovation will hamper growth in the manufacturing sector and the economy as a whole. These factors are likely to prevent a sharp improvement in India's competitiveness," it said. (PTI)

Moody's: India GDP growth rate will be about 7.5% over next two years

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