<a href="https://www.wionews.com/business-economy/gold-hits-two-month-peak-on-dollar-weakness-us-strikes-270962">Gold</a>&nbsp;prices jumped to their highest in more than three months on Tuesday on a weakening dollar, with the metal on track for its best annual show in nearly a decade, while palladium leapt towards its fourth straight yearly gain.

Spot&nbsp;gold&nbsp;hit its highest since September&nbsp;25 at $1,525.20 and was up 0.6 per cent to $1,524.44 per ounce by 0727 GMT. U.S.&nbsp;gold&nbsp;futures rose 0.6 per cent to $1,527.60.

Bullion has gained nearly 19 per cent in the year, its biggest since 2010, mainly driven by a tariff war between the United States and China, which triggered monetary policy easing by major central banks.

"One of the main drivers behind&nbsp;gold's gain is the weakening in the dollar," said Margaret Yang Yan, a market analyst at CMC Markets, adding prices also rose on year-end bargain-hunting.

The dollar slipped against a basket of rivals, making&nbsp;gold&nbsp;cheaper for holders of other currencies.

"However, the upside is kind of limited because quantitative easing or rate-cutting cycle has come to an end for now and we don't see a possibility of any rate cuts in 2020," Yan said.

The <a href="https://www.wionews.com/business-economy/gold-soars-2-per-cent-after-powell-speech-trump-tweets-245351">US&nbsp;Federal Reserve</a> cut interest rates three times this year before taking a pause. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.

On the trade front, a <a href="https://www.wionews.com/world/phase-one-trade-deal-with-china-would-be-signed-very-shortly-donald-trump-269576">Phase 1 deal</a> is likely to be signed next week, White House trade adviser Peter Navarro said on Monday.

"With liquidity much reduced in Asia, there is some potential for&nbsp;gold&nbsp;to spike higher on low volume with some risk hedging added into the mix," said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA, in a note. "The next resistance is at $1,535 an ounce."

Further supporting&nbsp;gold, Asian shares slipped as investors locked in gains after a buoyant year of gains.

Speculators raised their bullish positions in COMEX&nbsp;gold&nbsp;contracts in the week to December&nbsp;24.

Elsewhere, palladium rose 0.3 per cent to $1,913.02 per ounce. Plagued by sustained supply deficit, the auto-catalyst metal extended gains into a fourth straight year.

Prices have jumped over 51 per cent so far this year, the most since 2017, which would make palladium the biggest gainer among precious metals for the year.

<a href="https://www.wionews.com/business-economy/deficit-hit-palladium-takes-aim-at-2000-ceiling-in-record-run-268725">Palladium</a>, used mainly in catalytic converters in vehicles, rose to an all-time peak of $1,998.43 on December&nbsp;17.

Silver rose 1.1 per cent to $18.10 and was poised to register its best year since 2010, rising about 17 per cent.

Platinum gained 1.4 per cent to $971.09 and was set to gain about 23 per cent for the year, its best since 2009.

Gold prices jumped to their highest in more than three months on Tuesday on a weakening dollar, with the metal on track for its best annual show in nearly a decade, while palladium leapt towards its fourth straight yearly gain.

Gold prices jumped to their highest in more than three months on Tuesday on a weakening dollar, with the metal on track for its best annual show in nearly a decade, while palladium leapt towards its fourth straight yearly gain. Spot gold hit its highest since September 25 at $1,525.20 and was up 0.6 per cent to $1,524.44 per ounce by 0727 GMT. U.S. gold futures rose 0.6 per cent to $1,527.60. Bullion has gained nearly 19 per cent in the year, its biggest since 2010, mainly driven by a tariff war between the United States and China, which triggered monetary policy easing by major central banks. "One of the main drivers behind gold's gain is the weakening in the dollar," said Margaret Yang Yan, a market analyst at CMC Markets, adding prices also rose on year-end bargain-hunting. The dollar slipped against a basket of rivals, making gold cheaper for holders of other currencies. "However, the upside is kind of limited because quantitative easing or rate-cutting cycle has come to an end for now and we don't see a possibility of any rate cuts in 2020," Yan said. The US Federal Reserve cut interest rates three times this year before taking a pause. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion. On the trade front, a Phase 1 deal is likely to be signed next week, White House trade adviser Peter Navarro said on Monday. "With liquidity much reduced in Asia, there is some potential for gold to spike higher on low volume with some risk hedging added into the mix," said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA, in a note. "The next resistance is at $1,535 an ounce." Further supporting gold, Asian shares slipped as investors locked in gains after a buoyant year of gains. Speculators raised their bullish positions in COMEX gold contracts in the week to December 24. Elsewhere, palladium rose 0.3 per cent to $1,913.02 per ounce. Plagued by sustained supply deficit, the auto-catalyst metal extended gains into a fourth straight year. Prices have jumped over 51 per cent so far this year, the most since 2017, which would make palladium the biggest gainer among precious metals for the year. Palladium, used mainly in catalytic converters in vehicles, rose to an all-time peak of $1,998.43 on December 17. Silver rose 1.1 per cent to $18.10 and was poised to register its best year since 2010, rising about 17 per cent. Platinum gained 1.4 per cent to $971.09 and was set to gain about 23 per cent for the year, its best since 2009.

Gold climbs to three-month high, poised for best year since 2010

Indian&nbsp;stocks&nbsp;slipped on Tuesday but hovered around their all-time highs as investors booked&nbsp;year-end&nbsp;profits, while the benchmark&nbsp;<a href="https://www.wionews.com/business-economy/sensex-nifty-edge-higher-in-rangebound-trade-gail-power-grid-rise-270934">Nifty&nbsp;index</a> was poised for a nearly&nbsp;13 per cent&nbsp;gain in&nbsp;2019.

On the last trading day of the&nbsp;year, the NSE&nbsp;Nifty&nbsp;50 index was down 0.36 per cent&nbsp;at 12,211.60 by 0445 GMT, while the S&amp;P BSE Sensex was trading 0.38 per cent lower at 41,401.35.

The&nbsp;Nifty&nbsp;has risen 12.5 per cent&nbsp;so far this&nbsp;year, while the Sensex has climbed 14.8 per cent. Both blue-chip indexes hit fresh record highs this&nbsp;year&nbsp;and have gained sharply more than in 2018, even as economic growth&nbsp;slipped to a five-year&nbsp;low this&nbsp;year&nbsp;amid a slowdown in demand for everything from cars to cookies.

Still, the gap between large-cap&nbsp;shares&nbsp;and their smaller peers was stark. The <a href="https://www.wionews.com/business-%26-economy/bse-to-launch-commodity-derivatives-trading-from-1-october-135458?amp">BSE</a> MidCap index has shed 3 per cent&nbsp;this&nbsp;year, while the BSE SmallCap index is down 7 per cent.

Asian equities also&nbsp;slipped on Tuesday, mirroring declines on Wall Street, as investors locked in gains made since the <a href="https://www.wionews.com/world/phase-one-trade-deal-with-china-would-be-signed-very-shortly-donald-trump-269576">United States and China deal</a> this month.

The&nbsp;Nifty&nbsp;Bank index and the&nbsp;Nifty&nbsp;PSU Bank index, which have each rallied roughly 17 per cent&nbsp;since early October, were down 0.40 per cent and 0.33 per cent, respectively.

Twelve of the 13 stocks on the&nbsp;Nifty&nbsp;PSU Bank index, which tracks state-run lenders, were in the red.&nbsp;Indian&nbsp;Overseas Bank fell 2.1 per cent.

The&nbsp;Nifty&nbsp;Auto index, which has climbed 23 per cent from a record low in July, was down 0.40 per cent. The index still lost 10 per cent this&nbsp;year&nbsp;as automakers battled a crippling slowdown that forced them to cut production and jobs.

"When the market is near an all-time high, there's a probability of a correction ... we are seeing that today," said Siddharth Sedani, head of equity advisory at Anand Rathi Financial Services Ltd in Mumbai.

The&nbsp;Nifty&nbsp;50 last hit an intraday record high of 12,293.90 on December&nbsp;20.

Indian stocks slipped on Tuesday but hovered around their all-time highs as investors booked year-end profits, while the benchmark Nifty index was poised for a nearly 13 per cent gain in 2019.

Indian stocks slipped on Tuesday but hovered around their all-time highs as investors booked year-end profits, while the benchmark Nifty index was poised for a nearly 13 per cent gain in 2019. On the last trading day of the year, the NSE Nifty 50 index was down 0.36 per cent at 12,211.60 by 0445 GMT, while the S&P BSE Sensex was trading 0.38 per cent lower at 41,401.35. The Nifty has risen 12.5 per cent so far this year, while the Sensex has climbed 14.8 per cent. Both blue-chip indexes hit fresh record highs this year and have gained sharply more than in 2018, even as economic growth slipped to a five-year low this year amid a slowdown in demand for everything from cars to cookies. Still, the gap between large-cap shares and their smaller peers was stark. The BSE MidCap index has shed 3 per cent this year, while the BSE SmallCap index is down 7 per cent. Asian equities also slipped on Tuesday, mirroring declines on Wall Street, as investors locked in gains made since the United States and China deal this month. The Nifty Bank index and the Nifty PSU Bank index, which have each rallied roughly 17 per cent since early October, were down 0.40 per cent and 0.33 per cent, respectively. Twelve of the 13 stocks on the Nifty PSU Bank index, which tracks state-run lenders, were in the red. Indian Overseas Bank fell 2.1 per cent. The Nifty Auto index, which has climbed 23 per cent from a record low in July, was down 0.40 per cent. The index still lost 10 per cent this year as automakers battled a crippling slowdown that forced them to cut production and jobs. "When the market is near an all-time high, there's a probability of a correction ... we are seeing that today," said Siddharth Sedani, head of equity advisory at Anand Rathi Financial Services Ltd in Mumbai. The Nifty 50 last hit an intraday record high of 12,293.90 on December 20.

Indian shares slip on year-end profit booking; Nifty set for 13% jump in 2019

2019 Has Not been A Good Year For Indian Economy. #Gravitas

Gravitas: Economic Slowdown: India's Biggest Challenge?

Union Home Minister Amit Shah on Friday said that the country is witnessing the "temporary effects of a global slowdown" and that Finance Minister Nirmala Sitharaman and her deputy are working day and night to fight it.

Shah stated that he believed that India will be the first one to pull out of this global economic slowdown.&nbsp;

"I believe the Indian economy will be the first to be free from the slowdown in the world," Shah said at an event today.&nbsp;

Shah's comments came while he was addressing investors at the first groundbreaking ceremony of Himachal Pradesh Global Investors Meet-2019 in Shimla, Himachal Pradesh.

Shah said the government was working to deal with the effect of the slowdown.

<div class="ui-state-default" contenteditable="false">
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<blockquote class="twitter-tweet">
<a href="https://twitter.com/hashtag/WATCH?src=hash&amp;ref_src=twsrc%5Etfw">#WATCH</a> Home Minister Amit Shah in Shimla: You are seeing temporary effects of global slowdown. Under leadership of Modi ji, Nirmala Sitharaman ji and Anurag ji are working day&amp;night to fight it. I believe, Indian economy will be the first to be free from slowdown in the world. <a href="https://t.co/eNhv2picnU">pic.twitter.com/eNhv2picnU</a>
— ANI (@ANI) <a href="https://twitter.com/ANI/status/1210515740987707392?ref_src=twsrc%5Etfw">December 27, 2019</a></blockquote>
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"What we are witnessing is a temporary effect of a global slowdown. To fight it, the government is working on different types of plans," he said.

"I am confident that within some time we will be able to come out of it and we will emerge as the first nation in the world free from the global slowdown," he said.

The minister said Finance Minister Nirmala Sitharaman and her deputy Anurag Thakur were working on working are on various plans to fight with this global slowdown under the leadership of Prime Minister Narendra Modi.

Meanwhile, the Reserve Bank of India on Friday released its '<a href="https://www.wionews.com/business-economy/indias-financial-system-stable-despite-weakening-domestic-growth-rbi-270631">Financial Stability Report</a>' and said that despite weakening domestic growth, India's financial system remains stable, news agency ANI reported.&nbsp;

The RBI stated that the banking sector's resilience has improved, however, "risks from global/domestic economic uncertainties and geopolitical developments persist".&nbsp;

(With inputs from ANI)&nbsp;

Union Home Minister Amit Shah on Friday said that the country is witnessing the "temporary effects of a global slowdown" and that Finance Minister Nirmala Sitharaman and her deputy are working day and night to fight it.

Union Home Minister Amit Shah on Friday said that the country is witnessing the "temporary effects of a global slowdown" and that Finance Minister Nirmala Sitharaman and her deputy are working day and night to fight it. Shah stated that he believed that India will be the first one to pull out of this global economic slowdown. "I believe the Indian economy will be the first to be free from the slowdown in the world," Shah said at an event today. Shah's comments came while he was addressing investors at the first groundbreaking ceremony of Himachal Pradesh Global Investors Meet-2019 in Shimla, Himachal Pradesh. Shah said the government was working to deal with the effect of the slowdown. #WATCH Home Minister Amit Shah in Shimla: You are seeing temporary effects of global slowdown. Under leadership of Modi ji, Nirmala Sitharaman ji and Anurag ji are working day&night to fight it. I believe, Indian economy will be the first to be free from slowdown in the world. pic.twitter.com/eNhv2picnU — ANI (@ANI) December 27, 2019 × "What we are witnessing is a temporary effect of a global slowdown. To fight it, the government is working on different types of plans," he said. "I am confident that within some time we will be able to come out of it and we will emerge as the first nation in the world free from the global slowdown," he said. The minister said Finance Minister Nirmala Sitharaman and her deputy Anurag Thakur were working on working are on various plans to fight with this global slowdown under the leadership of Prime Minister Narendra Modi. Meanwhile, the Reserve Bank of India on Friday released its 'Financial Stability Report' and said that despite weakening domestic growth, India's financial system remains stable, news agency ANI reported. The RBI stated that the banking sector's resilience has improved, however, "risks from global/domestic economic uncertainties and geopolitical developments persist". (With inputs from ANI)

India is witnessing temporary effects of global slowdown: Amit Shah 

<a href="https://www.wionews.com/business-economy/sensex-hits-all-time-high-of-41798-nifty-at-a-record-peak-of-12272-269276">Indian&nbsp;shares</a>&nbsp;were little changed on Tuesday as investors stayed on the sidelines for a second straight session ahead of the Christmas holiday, while&nbsp;Yes&nbsp;Bank&nbsp;and&nbsp;Indiabulls&nbsp;Real&nbsp;Estate&nbsp;gained.

Indian&nbsp;stock indexes hit record intraday highs on Friday, but with just a handful of trading days remaining in 2019, markets have since remained subdued due to a lack of significant drivers.

Optimism that a <a href="https://www.wionews.com/world/phase-one-trade-deal-with-china-would-be-signed-very-shortly-donald-trump-269576">US-China trade deal</a> would revive exports and boost corporate earnings helped Wall Street&nbsp;rise&nbsp;to record closing highs on Monday, but <a href="https://www.wionews.com/business-economy/asian-shares-near-18-month-high-bask-in-trade-deal-afterglow-269696">Asian&nbsp;shares</a>&nbsp;darted in and out of losses on Tuesday amid a holiday lull.

The Nifty was up 0.03 per cent&nbsp;at 12,266.60 by 0434 GMT, while the Sensex ticked up 0.02 per cent to 41,648.96.

"The Nifty is&nbsp;likely to stay range bound between 12,150 to 12,350 zones while stock specific action is&nbsp;likely to continue in near term," analysts at Motilal Oswal wrote in a report.

On the <a href="https://www.wionews.com/business-economy/nifty-sensex-end-flat-ahead-on-holidays-psu-banks-offset-auto-gains-269730">Nifty</a> 100 index, Zee Entertainment Enterprises Ltd was the top gainer with a 2.4 per cent&nbsp;rise, while HCL Technologies Ltd fell the most.

Shares&nbsp;in&nbsp;<a href="https://www.wionews.com/business-economy/nifty-sensex-end-higher-it-auto-stocks-gain-269174">Yes&nbsp;Bank</a>, down 26 per cent&nbsp;so far this month amid uncertainty over its plans to raise more capital, rose as much as 3.2 per cent.

Indiabulls&nbsp;Real&nbsp;Estate's stock climbed 1.4 per cent. The company announced plans late on Sunday to sell commercial assets to Blackstone Group for 8.1 billion rupees ($114 million).

Indian shares were little changed on Tuesday as investors stayed on the sidelines for a second straight session ahead of the Christmas holiday, while Yes Bank and Indiabulls Real Estate gained.

Indian shares were little changed on Tuesday as investors stayed on the sidelines for a second straight session ahead of the Christmas holiday, while Yes Bank and Indiabulls Real Estate gained. Indian stock indexes hit record intraday highs on Friday, but with just a handful of trading days remaining in 2019, markets have since remained subdued due to a lack of significant drivers. Optimism that a US-China trade deal would revive exports and boost corporate earnings helped Wall Street rise to record closing highs on Monday, but Asian shares darted in and out of losses on Tuesday amid a holiday lull. The Nifty was up 0.03 per cent at 12,266.60 by 0434 GMT, while the Sensex ticked up 0.02 per cent to 41,648.96. "The Nifty is likely to stay range bound between 12,150 to 12,350 zones while stock specific action is likely to continue in near term," analysts at Motilal Oswal wrote in a report. On the Nifty 100 index, Zee Entertainment Enterprises Ltd was the top gainer with a 2.4 per cent rise, while HCL Technologies Ltd fell the most. Shares in Yes Bank, down 26 per cent so far this month amid uncertainty over its plans to raise more capital, rose as much as 3.2 per cent. Indiabulls Real Estate's stock climbed 1.4 per cent. The company announced plans late on Sunday to sell commercial assets to Blackstone Group for 8.1 billion rupees ($114 million).

Sensex, Nifty open flat; Yes Bank, Indiabulls Real Estate rise

WION Edit: How To Revive Economic Growth In India Many Prescriptions, But No Solutions To Ongoing Slowdown In Indian Economy. #Gravitas #WIONEdit #IMF #IndianEconomy

WION Edit: How To Revive Economic Growth In India

IMF Calls For Structural Reforms To Arrest The Economic Growth Slowdown In India. #Gravitas #IMF #IndianEconomy

Gravitas: India's Economic Slowdown: IMF Raises A Red Flag

Summarising The Challenges Faced By Indian Economy. #Gravitas #IMF #IndianEconomy

Gravitas: Indian Economy: The Pain Points

India must take steps quickly to reverse the slowdown of an economy that has been one of the engines of global growth, the International Monetary Fund said Monday. #WION #IMF #EconomicSlowdown #India

IMF Calls For Urgent action by India amid economic Slowdown

The retail inflation in November accelerated to 5.54 per cent due to higher prices of food items, government data showed on Thursday.

In October, the consumer price index (CPI) stood at 4.62 per cent. Figures released by the Ministry of Statistics and Programme Implementation showed that retail inflation in rural areas was at 5.27 per cent last month and 5.76 per cent in urban areas.

Food prices grew 10.01 per cent compared to 7.89 per cent in October. Inflation rate in cereals and products went up at 3.71 per cent against 2.16 per cent a month ago.

Vegetable inflation for November stood at 36 per cent against 26 per cent in October. On the other hand, pulses and products recorded inflation of 13.94 per cent in November against 11.72 per cent in October.

Meanwhile, industrial production shrank by 3.8 per cent in October due to poor performance by power, mining and manufacturing sectors.

Factory output as measured in terms of index of industrial production (IIP) had expanded 8.4 per cent in October last year. Power generation dipped sharply by 12.2 per cent in October compared to 10.8 per cent growth in the year-ago period.

Mining output also fell 8 per cent as against 7.3 per cent growth in the corresponding period last fiscal.&nbsp;

The retail inflation in November accelerated to 5.54 per cent due to higher prices of food items, government data showed on Thursday. In October, the consumer price index (CPI) stood at 4.

The retail inflation in November accelerated to 5.54 per cent due to higher prices of food items, government data showed on Thursday. In October, the consumer price index (CPI) stood at 4.62 per cent. Figures released by the Ministry of Statistics and Programme Implementation showed that retail inflation in rural areas was at 5.27 per cent last month and 5.76 per cent in urban areas. Food prices grew 10.01 per cent compared to 7.89 per cent in October. Inflation rate in cereals and products went up at 3.71 per cent against 2.16 per cent a month ago. Vegetable inflation for November stood at 36 per cent against 26 per cent in October. On the other hand, pulses and products recorded inflation of 13.94 per cent in November against 11.72 per cent in October. Meanwhile, industrial production shrank by 3.8 per cent in October due to poor performance by power, mining and manufacturing sectors. Factory output as measured in terms of index of industrial production (IIP) had expanded 8.4 per cent in October last year. Power generation dipped sharply by 12.2 per cent in October compared to 10.8 per cent growth in the year-ago period. Mining output also fell 8 per cent as against 7.3 per cent growth in the corresponding period last fiscal.

Retail inflation up at 5.54% in November, industrial production in October down by 3.8%

Parle Biscuits, part of the Parle Products group, reported 15.2 per cent year-on-year (YoY) growth in net profit for the financial year 2018-19, with company’s FY19 net profit at Rs 410 crore against Rs 355 crore reported in the previous year. Total revenue too grew by a healthy 6.4 per cent YoY to Rs 9,030 crore.&nbsp;

Parle's good results would have ideally not caught much attention, had it not been for the raging controversy in August 2019 when the leftist eco-system indulged in viciously slanderous lies about how Parle Biscuits was on the verge of bankruptcy and was laying off staff as people in India could no longer afford to buy a packet of biscuits worth Rs 5.&nbsp;

Of course, it later came to light that vested interests that wanted a cut in the prevalent 18 per cent GST rate on biscuits were a part of the rumour mongering exercise to discredit the BJP-led NDA government. The Parle example is a befitting case of how prophets of gloom and doom have been working overtime to create a narrative that the Indian economy is falling off the cliff.

True, the economy is facing cyclical headwinds, after five excellent years of superior growth, witnessed during Narendra Modi's first term as Prime Minister. For the economy to reach the ambitious $5 trillion-mark by 2024-25, it will take the types of reform that were long-promised but never delivered by successive Congress-led UPA regimes. However, if there is any leader today who has both the vision and the will to execute that vision to put India into the global super league of nations, it is Modi whose first six months in office in his second term have shown that he means business.

Massive reductions in unwanted regulations, streamlining of labour laws, privatisation of state entities, removing swathes of bureaucracy, investments in infrastructure and of course, the courage to say no to a lop-sided trade deal like the Regional Comprehensive Economic Partnership (RCEP) are key highlights of Modi's economic agenda.

Under the inept UPA establishment, Free Trade Agreements (FTAs) that compromised India's economic interests had been the order of the day.

Between 2009-10 and 2013-14, the period during which Manmohan Singh was India's Prime Minister the Indian economy grew at 6.7 per cent and emerging market economies by 6.43 per cent. Between 2014-15 and 2018-19, the Indian economy under Prime Minister Modi grew at a superior yearly run rate of 7.4 per cent despite the emerging market space growing by 4.52 per cent. The recent 4.5 per cent GDP print for September 2019 quarter for India has, however, reignited the Modinomics versus Manmohanomics debate.

Where the Modi government has done significantly better than the Manmohan Singh regime is infrastructure. In March 2014, length of national highways stood at 91,287 kms and it had increased by March 2019 to a solid 135,676 kms, growing at &nbsp;8.25 per cent per year in Modi's first term versus a modest run rate of 5.29 per cent under his predecessor. Also, while the number of airline passengers grew by 9.2 per cent in the Manmohan years, the growth under Modi's first term was a record-breaking 15.28 per cent.

More importantly, Modinomics has managed the growth-inflation conundrum very effectively. In April 2014, retail inflation, defined by the consumer price index (CPI), stood at 7.72 per cent with food inflation at 9.21 per cent. CPI, however, averaged at just 4.3 per cent in Modi's first term, with food inflation at barely 1.59 per cent between October 2016 and October 2019. Importantly, food inflation was reined in, despite an average 24 per cent hike in MSP for Kharif crops in 2018. True, in October 2019, CPI touched 4.62 per cent, but the cumulative retail inflation in the April-October 2019 period is still benign, at just 3.47 per cent.

Coming back to the recent 'slowdown' in India, it is cyclical and not structural in nature, because the fundamentals of the economy are in fine fettle and long term growth is intact despite some short term concerns, as recently summed up by international rating giant S&amp;P while maintaining BBB minus with a stable outlook, for India. Out on bail and an accused in the INX media scam, former Finance Minister &nbsp;Chidambaram was recently heard giving bytes to the press that the current decline is structural in an obvious attempt to discredit hard facts. Mr Chidambaram is the last person, if any, who should be lecturing on the economy, given his abysmally poor track record in the past, in 2012, when S&amp;P had downgraded India's rating to BBB minus with a negative outlook, just a notch above junk status.

While one is not denying that there are short term challenges, prophets of gloom and doom are working overtime to undermine India's policymaking and policymakers. For instance, the IHS Markit India Manufacturing PMI, rose to 51.2 in November 2019, from 50.6 in October 2019, but this positive news failed to grab headlines in the 'pink' dailies.

While comparisons are often odious, India continues to decisively outperform peers. The recent sluggish pace comes against the global backdrop of 17 months of protracted US-China trade war, 6 months of massive protests in Hong Kong, leading to a 24.3 per cent decline in retail sales in October 2019, a technical recession in Singapore with GDP growth rate of barely 0.1 per cent in the September 2019 quarter, Venezuelan bankruptcy, double-dip recession in the world's 8th largest economy, Brazil, in May 2019, continued turbulence in the UK around Brexit, recession in Italy, steep slowdown in Japan amidst a trade war with South Korea and of course more importantly, industrial recession in Germany that is battling negative bond yields and its slowest growth rate since the 2011 Euro crisis. The September 2019 PMI number for Germany, the 4th largest economy globally, accounting for 28 per cent of Euro area's GDP, dropped to 49, the first time since April 2013 that Germany's PMI fell below 50.&nbsp;

Speaking of India, reduction in corporate tax from 30% to 22% and for new companies to merely 15%, hike in dearness allowance to 17% from 12%, hike in export credit limit under priority sector lending norms for small exporters, from Rs 25 crore per borrower to Rs 40 crore, corpus of Rs 25,000 crore for stalled housing projects, yearly payout of Rs 6000 to 14.5 crore farmers irrespective of landholding size,100% FDI in coal mining,sale of coal and contract manufacturing, 26% FDI in digital news media, Rs 70,000 crore recapitalisation package for public sector banks and allowing additional 15% depreciation for vehicles bought till 31st March 2020, are measures that will address the demand side of the economy, which has been tepid.

It needs to be mentioned here that passenger vehicle sales in India crossed the three-million milestone for the first time in 2016-17. Maruti Suzuki took 37 years to sell 20 million vehicles in India, with the first 10 million vehicles taking 29 long years to sell. Interestingly, the last 5 million units were sold in barely three years, between 2016-17 and 2019 and it is certainly no coincidence that this happened, with Narendra Modi at the helm! The recent sluggish pace in the auto sector this year which affected UK, Germany, China and Japan in equal measure, has been primarily been on account of stringent BS-VI emission norms. India, relatively speaking, fared much better, despite the disadvantage of a high base effect, thanks to the scorching pace of growth in the previous 5 years under Modi.

Repeated chatter that the current decline in GDP is the result of demonetisation is a myth. The number of income taxpayers jumped in 2018-19 to 8.45 crore from just 3.68 crore in 2013-14. Thanks to demonetisation, the total number of unified payment interface (UPI) transactions in October 2019 hit a record 1.15 billion. Under Manmohan Singh's tenure, the total number of digital transactions stood at a measly 93.2 crore in 2012-13; under Narendra Modi's leadership, digital transactions were a whopping 921.7 crore in volume terms in 2017-18.

Fear-mongering about the efficacy of goods and services tax (GST) is also incorrect as GST has strengthened tax compliance with the indirect tax to gross domestic product (GDP) ratio going up to 5.4 per cent post-GST, from 4.4 per cent in 2014-15.

Externally too, things under Narendra Modi look far healthier than they ever were under Manmohan Singh, with the share of short-term debt in total debt, at only 20 per cent in March 2019 versus a figure of 24.8 per cent in March 2013. Also, the ratio of short-term debt (original maturity) to foreign exchange reserves rose stood at a disturbing 33.1 per cent in March 2013, compared to 26.3 per cent in March 2019.

That the Modi government which successfully completed its first term and 6 months of the second term, with no BoP crisis till date, speaks volumes about the external debt management of the economy, despite challenging global geopolitics.

Foreign exchange reserves were, at a record $448.60 billion as on November 22nd 2019. Under Manmohan Singh's tenure, current account deficit (CAD), was consistently above 3.5 per cent, reaching a dangerous level of 6.7% in the December 2013 quarter, whereas the average CAD figure in Modi's first term, was well below 2%. Talking of foreign direct investment, while India averaged $18.2 billion in FDI annually under UPA I and, $38.4 billion under UPA II, in the Modi government's 5.5 years of tenure till date, the annual FDI figure averaged handsomely at almost $60 billion.

In terms of fiscal prudence too, the Narendra Modi regime wins hands down, with an average fiscal deficit figure of only 3.7% for the 2014-15 to 2018-19 period which is much better than the unreasonably high 5.4%, during the preceding five years, led by Manmohan Singh. That Modinomics has delivered high growth, without compromising macroeconomic stability, amidst the most globally volatile conditions, is therefore well established.

It would be apt to sum up India's future growth trajectory in Prime Minister Narendra Modi's own words from one of his recent public speeches where he so rightfully said--"Good governance with good intentions is the hallmark of our government. Implementation with integrity is our core passion".

Foreign exchange reserves were, at a record $448.60 billion as on November 22nd 2019. Under Manmohan Singh's tenure, current account deficit (CAD), was consistently above 3.5%, reaching a dangerous level of 6.7% in the December 2013 quarter, whereas the average CAD figure in Modi's first term, was well below 2%. Talking of foreign direct investment, while India averaged $18.2 billion in FDI annually under UPA I and, $38.4 billion under UPA II, in the Modi government's 5.5 years of tenure till date, the annual FDI figure averaged handsomely at almost $60 billion.

In terms of fiscal prudence too, the Narendra Modi regime wins hands down, with an average fiscal deficit figure of only 3.7% for the 2014-15 to 2018-19 period which is much better than the unreasonably high 5.4%, during the preceding five years, led by Manmohan Singh. That Modinomics has delivered high growth, without compromising macroeconomic stability, amidst the most globally volatile conditions, is therefore well established.

It would be apt to sum up India's future growth trajectory in Prime Minister Narendra Modi's own words from one of his recent public speeches where he so rightfully said--"Good governance with good intentions is the hallmark of our government. Implementation with integrity is our core passion".

(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/business/column-economy-debate-modi-s-nda-versus-manmohan-s-upa-2804970">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;

 
&nbsp;

Parle Biscuits, part of the Parle Products group, reported 15.2 per cent year-on-year (YoY) growth in net profit for the financial year 2018-19, with company’s FY19 net profit at Rs 410 crore against Rs 355 crore reported in the previous year.

Parle Biscuits, part of the Parle Products group, reported 15.2 per cent year-on-year (YoY) growth in net profit for the financial year 2018-19, with company’s FY19 net profit at Rs 410 crore against Rs 355 crore reported in the previous year. Total revenue too grew by a healthy 6.4 per cent YoY to Rs 9,030 crore. Parle's good results would have ideally not caught much attention, had it not been for the raging controversy in August 2019 when the leftist eco-system indulged in viciously slanderous lies about how Parle Biscuits was on the verge of bankruptcy and was laying off staff as people in India could no longer afford to buy a packet of biscuits worth Rs 5. Of course, it later came to light that vested interests that wanted a cut in the prevalent 18 per cent GST rate on biscuits were a part of the rumour mongering exercise to discredit the BJP-led NDA government. The Parle example is a befitting case of how prophets of gloom and doom have been working overtime to create a narrative that the Indian economy is falling off the cliff. True, the economy is facing cyclical headwinds, after five excellent years of superior growth, witnessed during Narendra Modi's first term as Prime Minister. For the economy to reach the ambitious $5 trillion-mark by 2024-25, it will take the types of reform that were long-promised but never delivered by successive Congress-led UPA regimes. However, if there is any leader today who has both the vision and the will to execute that vision to put India into the global super league of nations, it is Modi whose first six months in office in his second term have shown that he means business. Massive reductions in unwanted regulations, streamlining of labour laws, privatisation of state entities, removing swathes of bureaucracy, investments in infrastructure and of course, the courage to say no to a lop-sided trade deal like the Regional Comprehensive Economic Partnership (RCEP) are key highlights of Modi's economic agenda. Under the inept UPA establishment, Free Trade Agreements (FTAs) that compromised India's economic interests had been the order of the day. Between 2009-10 and 2013-14, the period during which Manmohan Singh was India's Prime Minister the Indian economy grew at 6.7 per cent and emerging market economies by 6.43 per cent. Between 2014-15 and 2018-19, the Indian economy under Prime Minister Modi grew at a superior yearly run rate of 7.4 per cent despite the emerging market space growing by 4.52 per cent. The recent 4.5 per cent GDP print for September 2019 quarter for India has, however, reignited the Modinomics versus Manmohanomics debate. Where the Modi government has done significantly better than the Manmohan Singh regime is infrastructure. In March 2014, length of national highways stood at 91,287 kms and it had increased by March 2019 to a solid 135,676 kms, growing at 8.25 per cent per year in Modi's first term versus a modest run rate of 5.29 per cent under his predecessor. Also, while the number of airline passengers grew by 9.2 per cent in the Manmohan years, the growth under Modi's first term was a record-breaking 15.28 per cent. More importantly, Modinomics has managed the growth-inflation conundrum very effectively. In April 2014, retail inflation, defined by the consumer price index (CPI), stood at 7.72 per cent with food inflation at 9.21 per cent. CPI, however, averaged at just 4.3 per cent in Modi's first term, with food inflation at barely 1.59 per cent between October 2016 and October 2019. Importantly, food inflation was reined in, despite an average 24 per cent hike in MSP for Kharif crops in 2018. True, in October 2019, CPI touched 4.62 per cent, but the cumulative retail inflation in the April-October 2019 period is still benign, at just 3.47 per cent. Coming back to the recent 'slowdown' in India, it is cyclical and not structural in nature, because the fundamentals of the economy are in fine fettle and long term growth is intact despite some short term concerns, as recently summed up by international rating giant S&P while maintaining BBB minus with a stable outlook, for India. Out on bail and an accused in the INX media scam, former Finance Minister Chidambaram was recently heard giving bytes to the press that the current decline is structural in an obvious attempt to discredit hard facts. Mr Chidambaram is the last person, if any, who should be lecturing on the economy, given his abysmally poor track record in the past, in 2012, when S&P had downgraded India's rating to BBB minus with a negative outlook, just a notch above junk status. While one is not denying that there are short term challenges, prophets of gloom and doom are working overtime to undermine India's policymaking and policymakers. For instance, the IHS Markit India Manufacturing PMI, rose to 51.2 in November 2019, from 50.6 in October 2019, but this positive news failed to grab headlines in the 'pink' dailies. While comparisons are often odious, India continues to decisively outperform peers. The recent sluggish pace comes against the global backdrop of 17 months of protracted US-China trade war, 6 months of massive protests in Hong Kong, leading to a 24.3 per cent decline in retail sales in October 2019, a technical recession in Singapore with GDP growth rate of barely 0.1 per cent in the September 2019 quarter, Venezuelan bankruptcy, double-dip recession in the world's 8th largest economy, Brazil, in May 2019, continued turbulence in the UK around Brexit, recession in Italy, steep slowdown in Japan amidst a trade war with South Korea and of course more importantly, industrial recession in Germany that is battling negative bond yields and its slowest growth rate since the 2011 Euro crisis. The September 2019 PMI number for Germany, the 4th largest economy globally, accounting for 28 per cent of Euro area's GDP, dropped to 49, the first time since April 2013 that Germany's PMI fell below 50. Speaking of India, reduction in corporate tax from 30% to 22% and for new companies to merely 15%, hike in dearness allowance to 17% from 12%, hike in export credit limit under priority sector lending norms for small exporters, from Rs 25 crore per borrower to Rs 40 crore, corpus of Rs 25,000 crore for stalled housing projects, yearly payout of Rs 6000 to 14.5 crore farmers irrespective of landholding size,100% FDI in coal mining,sale of coal and contract manufacturing, 26% FDI in digital news media, Rs 70,000 crore recapitalisation package for public sector banks and allowing additional 15% depreciation for vehicles bought till 31st March 2020, are measures that will address the demand side of the economy, which has been tepid. It needs to be mentioned here that passenger vehicle sales in India crossed the three-million milestone for the first time in 2016-17. Maruti Suzuki took 37 years to sell 20 million vehicles in India, with the first 10 million vehicles taking 29 long years to sell. Interestingly, the last 5 million units were sold in barely three years, between 2016-17 and 2019 and it is certainly no coincidence that this happened, with Narendra Modi at the helm! The recent sluggish pace in the auto sector this year which affected UK, Germany, China and Japan in equal measure, has been primarily been on account of stringent BS-VI emission norms. India, relatively speaking, fared much better, despite the disadvantage of a high base effect, thanks to the scorching pace of growth in the previous 5 years under Modi. Repeated chatter that the current decline in GDP is the result of demonetisation is a myth. The number of income taxpayers jumped in 2018-19 to 8.45 crore from just 3.68 crore in 2013-14. Thanks to demonetisation, the total number of unified payment interface (UPI) transactions in October 2019 hit a record 1.15 billion. Under Manmohan Singh's tenure, the total number of digital transactions stood at a measly 93.2 crore in 2012-13; under Narendra Modi's leadership, digital transactions were a whopping 921.7 crore in volume terms in 2017-18. Fear-mongering about the efficacy of goods and services tax (GST) is also incorrect as GST has strengthened tax compliance with the indirect tax to gross domestic product (GDP) ratio going up to 5.4 per cent post-GST, from 4.4 per cent in 2014-15. Externally too, things under Narendra Modi look far healthier than they ever were under Manmohan Singh, with the share of short-term debt in total debt, at only 20 per cent in March 2019 versus a figure of 24.8 per cent in March 2013. Also, the ratio of short-term debt (original maturity) to foreign exchange reserves rose stood at a disturbing 33.1 per cent in March 2013, compared to 26.3 per cent in March 2019. That the Modi government which successfully completed its first term and 6 months of the second term, with no BoP crisis till date, speaks volumes about the external debt management of the economy, despite challenging global geopolitics. Foreign exchange reserves were, at a record $448.60 billion as on November 22nd 2019. Under Manmohan Singh's tenure, current account deficit (CAD), was consistently above 3.5 per cent, reaching a dangerous level of 6.7% in the December 2013 quarter, whereas the average CAD figure in Modi's first term, was well below 2%. Talking of foreign direct investment, while India averaged $18.2 billion in FDI annually under UPA I and, $38.4 billion under UPA II, in the Modi government's 5.5 years of tenure till date, the annual FDI figure averaged handsomely at almost $60 billion. In terms of fiscal prudence too, the Narendra Modi regime wins hands down, with an average fiscal deficit figure of only 3.7% for the 2014-15 to 2018-19 period which is much better than the unreasonably high 5.4%, during the preceding five years, led by Manmohan Singh. That Modinomics has delivered high growth, without compromising macroeconomic stability, amidst the most globally volatile conditions, is therefore well established. It would be apt to sum up India's future growth trajectory in Prime Minister Narendra Modi's own words from one of his recent public speeches where he so rightfully said--"Good governance with good intentions is the hallmark of our government. Implementation with integrity is our core passion". Foreign exchange reserves were, at a record $448.60 billion as on November 22nd 2019. Under Manmohan Singh's tenure, current account deficit (CAD), was consistently above 3.5%, reaching a dangerous level of 6.7% in the December 2013 quarter, whereas the average CAD figure in Modi's first term, was well below 2%. Talking of foreign direct investment, while India averaged $18.2 billion in FDI annually under UPA I and, $38.4 billion under UPA II, in the Modi government's 5.5 years of tenure till date, the annual FDI figure averaged handsomely at almost $60 billion. In terms of fiscal prudence too, the Narendra Modi regime wins hands down, with an average fiscal deficit figure of only 3.7% for the 2014-15 to 2018-19 period which is much better than the unreasonably high 5.4%, during the preceding five years, led by Manmohan Singh. That Modinomics has delivered high growth, without compromising macroeconomic stability, amidst the most globally volatile conditions, is therefore well established. It would be apt to sum up India's future growth trajectory in Prime Minister Narendra Modi's own words from one of his recent public speeches where he so rightfully said--"Good governance with good intentions is the hallmark of our government. Implementation with integrity is our core passion". (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Economy Debate: Narendra Modi's NDA versus Manmohan Singh's UPA

Union Home Minister <a href="https://www.wionews.com/india-news/bjp-will-completely-uproot-naxalism-in-jharkhand-amit-shah-265107">Amit Shah </a>on Saturday said that the Indian economy has moved from the era of policy paralysis, scams and corruption pre-2014 to an era of bold, transparent and decisive decision-making under the Narendra Modi government since 2014.

"Indian Economy has moved from the era of policy paralysis, scams and corruption pre-2014 to one of the era of bold, transparent and decisive decision-making under Narendra Modi Government since 2014," Shah said in an address at the reputed English Daily Awards for Corporate Excellence in Mumbai.

Shah asserted that the current slowdown in economy is a "temporary phase" and the Indian industry which contributes 60 per cent of gross domestic product (GDP) to the economy will join with the vision of Modi government to make India a 5 trillion-dollar economy by 2024.

Expressing hope that the Indian industry and market will tide over this temporary crisis despite a slowdown, the home minister assured the industry that the "government is standing solidly behind them and is tackling all the challenges in a proactive fashion".

He said that the last 5 years were of the "detoxification of the economy" and in the next five years a "series of reforms" will be taken to make it one of the most powerful economies of the world.

"India is already a destination of global companies due to its huge market and FDI is at record level today. Even Sensex and nifty have breached all records," Shah added.

The home minister said that the government is committed to strengthening the industry and the trade and said: "By lowering the corporate tax ranging between 17 to 25 per cent, India has got the distinction of one of the lowest corporate tax levying country. Even fiscal deficit which was 4.5 per cent in 2013-14 has come down to 3.3 per cent and inflation has been checked at 3.3 per cent from 5.9 per cent earlier."

Emphasising on the goods and services tax (GST) and ease of doing business, he said: "The vision of one nation one tax has been realised and a series of labour reforms are in the offing."

"On the front of ease of doing business, India was at the rank of 142 in 2014 but in the last 5 years we jumped to 77 and expressed hope that by 2024, India will be somewhere at the rank of 30," the union minister said.

Shah said that the decision to not join the Regional Comprehensive Economic Partnership (RCEP) was taken in the interest of the industry as India has already free trade agreement (FTA) with China, Australia and New Zealand. "The Modi government has taken the hard decision in the interest of Indian industry," he said.

Referring to a series of measures taken in the field of infrastructure both in the rural and urban areas, he said that the Make in India and Start-up India projects are going to scale new heights in years to come. Stating that India voted to power Narendra Modi in 2014, he said:

"Not a single corruption charge was leveled against the Modi government. The governance has moved from policy paralysis of pre-2014 to one of bold and decisive government."&nbsp;

Union Home Minister Amit Shah on Saturday said that the Indian economy has moved from the era of policy paralysis, scams and corruption pre-2014 to an era of bold, transparent and decisive decision-making under the Narendra Modi government since 2014.

Union Home Minister Amit Shah on Saturday said that the Indian economy has moved from the era of policy paralysis, scams and corruption pre-2014 to an era of bold, transparent and decisive decision-making under the Narendra Modi government since 2014. "Indian Economy has moved from the era of policy paralysis, scams and corruption pre-2014 to one of the era of bold, transparent and decisive decision-making under Narendra Modi Government since 2014," Shah said in an address at the reputed English Daily Awards for Corporate Excellence in Mumbai. Shah asserted that the current slowdown in economy is a "temporary phase" and the Indian industry which contributes 60 per cent of gross domestic product (GDP) to the economy will join with the vision of Modi government to make India a 5 trillion-dollar economy by 2024. Expressing hope that the Indian industry and market will tide over this temporary crisis despite a slowdown, the home minister assured the industry that the "government is standing solidly behind them and is tackling all the challenges in a proactive fashion". He said that the last 5 years were of the "detoxification of the economy" and in the next five years a "series of reforms" will be taken to make it one of the most powerful economies of the world. "India is already a destination of global companies due to its huge market and FDI is at record level today. Even Sensex and nifty have breached all records," Shah added. The home minister said that the government is committed to strengthening the industry and the trade and said: "By lowering the corporate tax ranging between 17 to 25 per cent, India has got the distinction of one of the lowest corporate tax levying country. Even fiscal deficit which was 4.5 per cent in 2013-14 has come down to 3.3 per cent and inflation has been checked at 3.3 per cent from 5.9 per cent earlier." Emphasising on the goods and services tax (GST) and ease of doing business, he said: "The vision of one nation one tax has been realised and a series of labour reforms are in the offing." "On the front of ease of doing business, India was at the rank of 142 in 2014 but in the last 5 years we jumped to 77 and expressed hope that by 2024, India will be somewhere at the rank of 30," the union minister said. Shah said that the decision to not join the Regional Comprehensive Economic Partnership (RCEP) was taken in the interest of the industry as India has already free trade agreement (FTA) with China, Australia and New Zealand. "The Modi government has taken the hard decision in the interest of Indian industry," he said. Referring to a series of measures taken in the field of infrastructure both in the rural and urban areas, he said that the Make in India and Start-up India projects are going to scale new heights in years to come. Stating that India voted to power Narendra Modi in 2014, he said: "Not a single corruption charge was leveled against the Modi government. The governance has moved from policy paralysis of pre-2014 to one of bold and decisive government."

Amit Shah says Indian economy moved to 'bold, decisive decision-making', calls current slowdown 'temporary'

India's <a href="https://www.wionews.com/india-news/gdp-growth-rate-slump-is-temporary-prakash-javadekar-248490">Gross Domestic Product (GDP</a>) growth for quarter 2 (Q2) slipped to a six-year low, government data showed on Friday.&nbsp;

At 4.5 per cent, India's Q2 GDP for the June-September quarter slipped from 5 per cent in the previous quarter of the current fiscal year.&nbsp;

India's economic growth was measured at 7 per cent for the July-September quarter a year earlier.&nbsp;

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Meanwhile, the country's infrastructure output also contracted for the second consecutive month to 5.8 per cent in October from a year earlier, lowest since at least April 2012, news agency Reuters reported.&nbsp;

During April-October, output grew 0.2 per cent from the year-ago period, according to the data.

Infrastructure output comprises eight sectors such as coal, crude oil and electricity and accounts for nearly 40 per cent of the country's industrial output.

India's Gross Domestic Product (GDP) growth for quarter 2 (Q2) slipped to a six-year low, government data showed on Friday. At 4.5 per cent, India's Q2 GDP for the June-September quarter slipped from 5 per cent in the previous quarter of the current fiscal year.

India's Gross Domestic Product (GDP) growth for quarter 2 (Q2) slipped to a six-year low, government data showed on Friday. At 4.5 per cent, India's Q2 GDP for the June-September quarter slipped from 5 per cent in the previous quarter of the current fiscal year. India's economic growth was measured at 7 per cent for the July-September quarter a year earlier. Government of India: Quarter 2 Gross Domestic Product (GDP) showing a growth rate of 4.5% https://t.co/ysSTQ3rZAH — ANI (@ANI) November 29, 2019 × Meanwhile, the country's infrastructure output also contracted for the second consecutive month to 5.8 per cent in October from a year earlier, lowest since at least April 2012, news agency Reuters reported. During April-October, output grew 0.2 per cent from the year-ago period, according to the data. Infrastructure output comprises eight sectors such as coal, crude oil and electricity and accounts for nearly 40 per cent of the country's industrial output.

India's GDP for June-September quarter falls to 4.5%, lowest in 6 years  

India's monetary and fiscal policies have become accommodative as election-related uncertainties fade, raising the prospect of economic growth recovering to just under 6.5 per cent by next financial year (2020-21), the Organisation for Economic Cooperation and Development (OECD) has said.

India's economy grew by 6.8 per cent in 2018-19.

The OECD marginally cut its growth forecast for 2019 to 5.8 per cent but said it will pick up to 6.2 per cent in 2020 and further to 6.4 per cent in 2021.

The OECD Economic Outlook's second edition for 2019 says New Delhi's income support scheme for farmers and good monsoon are supporting private consumption.

The cut in corporate income tax will support corporate investment.

Inflation and the current account deficit will remain moderate given the relatively large spare capacity in the economy and low oil prices. However, job creation remains a challenge.

At the same time, the stress in non-banking financial companies coupled with changes in insurance regulations has affected car sales, while volatility in fuel prices is weighing on consumer confidence.

Construction has been hurt as non-banking financial companies contribute a large share to its financing, weighing on job creation, income and consumption. Industrial production and related imports have weakened. Exports have suffered from the slowdown in foreign demand.

However, they have benefitted from improvements in the Goods and Services Tax (GST) administration, enabling exporters to get faster tax refunds while efforts to improve trade infrastructure, logistics and processes are starting to pay off.

Overall, India has succeeded in seizing some of the market shares lost by other countries and exports have proved relatively resilient.

Headline consumer price inflation has remained close to the 4 per cent target and core inflation is adjusting down.

Spare capacity, a good monsoon, the steady rupee, relatively low oil prices and modest increases in minimum support prices for summer crops are all contributing to keep price pressures low.

The OECD says raising more revenue from property and personal income taxes and improving the financial situation of public banks and enterprises will be key to finance better public education and health services. To boost job creation and reduce informality, efforts to modernise labour regulations should continue.

The Reserve Bank of India has cut policy rates by 135 basis points since early 2019 and maintains an accommodative stance. Looking ahead, private investment will bounce back as capacity utilisation rises and the cost of borrowing for the corporate sector declines.

The ongoing resolution of distressed assets of non-financial corporates under the Insolvency and Bankruptcy Code is expected to unlock resources for new investment projects.

Recent reforms to improve the ease of doing business -- including measures to liberalise foreign direct investments, lower corporate income tax rates and efforts to improve judicial services and contract enforcement -- will also help.

Rural consumption will pick up, thanks to the good monsoon, the full implementation of the new income support scheme for farmers and measures to reduce liquidity stress in non-banking financial companies.

The increased ability to pass and implement reforms -- as illustrated with the recent liberalisation of FDI and disinvestment plans -- represents a positive risk to the outlook, said the OECD.

 
&nbsp;

India's monetary and fiscal policies have become accommodative as election-related uncertainties fade, raising the prospect of economic growth recovering to just under 6.

India's monetary and fiscal policies have become accommodative as election-related uncertainties fade, raising the prospect of economic growth recovering to just under 6.5 per cent by next financial year (2020-21), the Organisation for Economic Cooperation and Development (OECD) has said. India's economy grew by 6.8 per cent in 2018-19. The OECD marginally cut its growth forecast for 2019 to 5.8 per cent but said it will pick up to 6.2 per cent in 2020 and further to 6.4 per cent in 2021. The OECD Economic Outlook's second edition for 2019 says New Delhi's income support scheme for farmers and good monsoon are supporting private consumption. The cut in corporate income tax will support corporate investment. Inflation and the current account deficit will remain moderate given the relatively large spare capacity in the economy and low oil prices. However, job creation remains a challenge. At the same time, the stress in non-banking financial companies coupled with changes in insurance regulations has affected car sales, while volatility in fuel prices is weighing on consumer confidence. Construction has been hurt as non-banking financial companies contribute a large share to its financing, weighing on job creation, income and consumption. Industrial production and related imports have weakened. Exports have suffered from the slowdown in foreign demand. However, they have benefitted from improvements in the Goods and Services Tax (GST) administration, enabling exporters to get faster tax refunds while efforts to improve trade infrastructure, logistics and processes are starting to pay off. Overall, India has succeeded in seizing some of the market shares lost by other countries and exports have proved relatively resilient. Headline consumer price inflation has remained close to the 4 per cent target and core inflation is adjusting down. Spare capacity, a good monsoon, the steady rupee, relatively low oil prices and modest increases in minimum support prices for summer crops are all contributing to keep price pressures low. The OECD says raising more revenue from property and personal income taxes and improving the financial situation of public banks and enterprises will be key to finance better public education and health services. To boost job creation and reduce informality, efforts to modernise labour regulations should continue. The Reserve Bank of India has cut policy rates by 135 basis points since early 2019 and maintains an accommodative stance. Looking ahead, private investment will bounce back as capacity utilisation rises and the cost of borrowing for the corporate sector declines. The ongoing resolution of distressed assets of non-financial corporates under the Insolvency and Bankruptcy Code is expected to unlock resources for new investment projects. Recent reforms to improve the ease of doing business -- including measures to liberalise foreign direct investments, lower corporate income tax rates and efforts to improve judicial services and contract enforcement -- will also help. Rural consumption will pick up, thanks to the good monsoon, the full implementation of the new income support scheme for farmers and measures to reduce liquidity stress in non-banking financial companies. The increased ability to pass and implement reforms -- as illustrated with the recent liberalisation of FDI and disinvestment plans -- represents a positive risk to the outlook, said the OECD.

OECD hails India reforms, pegs 6.2% growth in 2020

After globalisation, trends show that foreign investors gravitate towards emerging markets and India is no exception. Since investors buy when prices are low and sell after prices increase, India’s entrepreneurship boom has attracted massive foreign investment. This, in turn, has increased liquidity in local markets and expanded India’s investor base overall.&nbsp;

Great news. Now there is a bigger question. Many critics state that this is just a temporary ‘surge’ and this amount of foreign investment will not last for long, particularly during economic slowdowns. However, there are ways that the central government can ensure that foreign investment can be long-term. Looking at some of the major determinants for current foreign investment may help give a clearer indication of what can be done for guaranteed longstanding foreign investment in the country. &nbsp;

Volatility

A major determinant of foreign investment is volatility in the Indian capital market. While volatility introduces risk for investors, it also potentially means superior returns. Experts have quoted many factors for volatility in India including the US ripple effect, a fiscal slippage (in terms of deficit target), a rise in crude oil prices (India is highly dependent on oil for its energy; rises negatively affect the entire country) and new budget proposals (especially with India’s budget session coming up in the next few weeks). Despite this, foreign investors are attracted because India proves to be a prime example of a pre-downturn emerging market. With its young population and a strong GDP, India is by far the world’s fastest-growing economy. Another strong reason attracting foreign investors is aggressive action by the Narendra Modi government. The Modi 1.0 and 2.0 government have shown that the Centre is looking at long term economic well-being and not short term gain for political capital. For example, India is the only emerging market that pays for its commodities (ie. oil) abroad in local rupees rather than using the US dollar. This means that India’s capital investment, even in the future, is not dependant on the US dollar. &nbsp;&nbsp;

The amount of foreign investment looks fantastic in the short term. In order to maintain a high level of overseas investment in India consistently, the government can take several steps to maximize long term gain. One idea is to enforce more specific regulations like applying a selective control measure for foreign investment flow. Tax measures would also keep attracting investors, especially during economic growth slowdowns. Additionally, appropriate policy rules and regulations would also prevent existing foreign companies and MNCs in India to dominate retail trade.&nbsp;

This, in turn, would encourage Indian start-ups to enter the playing field which also keeps investors interested. &nbsp;

Easing Restrictions

Another way to ensure long term foreign investment is to ease restrictions on FDI by joint ventures as well as owned subsidiaries of Indian companies. The existing legal framework under Foreign Exchange Management Act (FEMA) does not allow for FDI by an overseas joint venture or Indian wholly-owned subsidiary without RBI approval. There are also restrictions on Indian firms investing overseas in foreign firms. Overseas direct investment is crucial, especially in times of economic growth slowdown and a lack of investment by the Indian corporate sector. This would help increase foreign funds into Indian business activities. India’s investment in foreign entities would also lead to long term interests overseas which in turn helps foreign investment flow in. &nbsp;

Market Capitalisation

The capitalisation of publicly traded companies is another major determinant of foreign investment flow because it increases it. This capitalisation is important to long term because, over time, a firm increases good performance and an increase in employees. Market capitalisation can also positively and significantly impact GDP growth. But for this, India needs more clarity. Many market experts blame weak availability of domestic data as a huge blow to the stock market. To add to that, the weakening of the Indian rupee, over-taxing foreign portfolio investors and poor corporate earnings also contribute to weaker market sentiment. &nbsp;

Continued focus should be given by the government on a stock market that aims for economic development. This would help attract long term foreign investment. Examples of this are agriculture, green energy and aviation. A controlled and consistent Indian capital market would be irresistible to international portfolio investors. Development based investment is also generally aimed for long term gain and would, therefore, be mutually beneficial for India as well as for overseas investors.&nbsp; &nbsp; 
 
Conclusion

Of course, there are other determinants for foreign investment in India including unforeseen circumstances that can potentially occur. But it is promising to note that the central government is focusing on long term economic stability versus short term gains. For example, this can be seen with PM Narendra Modi’s aggressive focus on development via infrastructure, aviation, diversifying exports, expanding foreign policy, health-care, education, etc. Continued progress at the grassroots level through projects like the Awas Yojana, Ujjwala Yojana and Ayushman Bharat also eventually help the economy by developing the country. &nbsp;

Eventually, as the market becomes regulated with active foreign investors, financial policies should focus on allocating resources and maintaining a healthy financial market. With patience comes great things. As a young, working professional in India, I would rather take a few economic road bumps now in order to gain a strong, diversified and stable market in the near future. It is sad that critics and even experts in the field do not share this patience. Rather, they choose to publish their stances only considering short term conditions. &nbsp;

&nbsp;(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

After globalisation, trends show that foreign investors gravitate towards emerging markets and India is no exception. Since investors buy when prices are low and sell after prices increase, India’s entrepreneurship boom has attracted massive foreign investment.

After globalisation, trends show that foreign investors gravitate towards emerging markets and India is no exception. Since investors buy when prices are low and sell after prices increase, India’s entrepreneurship boom has attracted massive foreign investment. This, in turn, has increased liquidity in local markets and expanded India’s investor base overall. Great news. Now there is a bigger question. Many critics state that this is just a temporary ‘surge’ and this amount of foreign investment will not last for long, particularly during economic slowdowns. However, there are ways that the central government can ensure that foreign investment can be long-term. Looking at some of the major determinants for current foreign investment may help give a clearer indication of what can be done for guaranteed longstanding foreign investment in the country. Volatility A major determinant of foreign investment is volatility in the Indian capital market. While volatility introduces risk for investors, it also potentially means superior returns. Experts have quoted many factors for volatility in India including the US ripple effect, a fiscal slippage (in terms of deficit target), a rise in crude oil prices (India is highly dependent on oil for its energy; rises negatively affect the entire country) and new budget proposals (especially with India’s budget session coming up in the next few weeks). Despite this, foreign investors are attracted because India proves to be a prime example of a pre-downturn emerging market. With its young population and a strong GDP, India is by far the world’s fastest-growing economy. Another strong reason attracting foreign investors is aggressive action by the Narendra Modi government. The Modi 1.0 and 2.0 government have shown that the Centre is looking at long term economic well-being and not short term gain for political capital. For example, India is the only emerging market that pays for its commodities (ie. oil) abroad in local rupees rather than using the US dollar. This means that India’s capital investment, even in the future, is not dependant on the US dollar. The amount of foreign investment looks fantastic in the short term. In order to maintain a high level of overseas investment in India consistently, the government can take several steps to maximize long term gain. One idea is to enforce more specific regulations like applying a selective control measure for foreign investment flow. Tax measures would also keep attracting investors, especially during economic growth slowdowns. Additionally, appropriate policy rules and regulations would also prevent existing foreign companies and MNCs in India to dominate retail trade. This, in turn, would encourage Indian start-ups to enter the playing field which also keeps investors interested. Easing Restrictions Another way to ensure long term foreign investment is to ease restrictions on FDI by joint ventures as well as owned subsidiaries of Indian companies. The existing legal framework under Foreign Exchange Management Act (FEMA) does not allow for FDI by an overseas joint venture or Indian wholly-owned subsidiary without RBI approval. There are also restrictions on Indian firms investing overseas in foreign firms. Overseas direct investment is crucial, especially in times of economic growth slowdown and a lack of investment by the Indian corporate sector. This would help increase foreign funds into Indian business activities. India’s investment in foreign entities would also lead to long term interests overseas which in turn helps foreign investment flow in. Market Capitalisation The capitalisation of publicly traded companies is another major determinant of foreign investment flow because it increases it. This capitalisation is important to long term because, over time, a firm increases good performance and an increase in employees. Market capitalisation can also positively and significantly impact GDP growth. But for this, India needs more clarity. Many market experts blame weak availability of domestic data as a huge blow to the stock market. To add to that, the weakening of the Indian rupee, over-taxing foreign portfolio investors and poor corporate earnings also contribute to weaker market sentiment. Continued focus should be given by the government on a stock market that aims for economic development. This would help attract long term foreign investment. Examples of this are agriculture, green energy and aviation. A controlled and consistent Indian capital market would be irresistible to international portfolio investors. Development based investment is also generally aimed for long term gain and would, therefore, be mutually beneficial for India as well as for overseas investors. Conclusion Of course, there are other determinants for foreign investment in India including unforeseen circumstances that can potentially occur. But it is promising to note that the central government is focusing on long term economic stability versus short term gains. For example, this can be seen with PM Narendra Modi’s aggressive focus on development via infrastructure, aviation, diversifying exports, expanding foreign policy, health-care, education, etc. Continued progress at the grassroots level through projects like the Awas Yojana, Ujjwala Yojana and Ayushman Bharat also eventually help the economy by developing the country. Eventually, as the market becomes regulated with active foreign investors, financial policies should focus on allocating resources and maintaining a healthy financial market. With patience comes great things. As a young, working professional in India, I would rather take a few economic road bumps now in order to gain a strong, diversified and stable market in the near future. It is sad that critics and even experts in the field do not share this patience. Rather, they choose to publish their stances only considering short term conditions. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Ensuring long term foreign investment in India

When a regime changes, all who have benefited from the old order are suddenly deprived of their influence. They are left with little besides their litany of complaints and criticism. &nbsp;

Still, it is understandable, for those not nimble enough to change stripe, that contemplation of an interminable stretch, out of the limelight, is akin to the Roman Catholic state of purgatory. It is a suspension, in suffering, stuck indefinitely between Heaven and Hell. Except, that the old order admits to none of its sins.&nbsp;

&nbsp;Instead, it adopts a stance of indignation when a procession of their number, including the all-powerful who thought themselves beyond the law, are prosecuted for corruption. It was corruption, almost institutionalised, that was a major reason for the UPA’s humiliating rout at the hustings, not once, but twice in a row. &nbsp;

When Narendra Modi, a provincial but clean Chief Minister, with no first-hand foreknowledge of the Centre, won a majority in the Lok Sabha after 30 years, in 2014, the old guard was astounded. There were those in the capital who thought it was a massive overreaction on the part of the electorate to his spectacular oratory. Modi’s popularity would surely wane by mid-term, they said, as it had in the case of the ill-fated Rajiv Gandhi administration. And he would be shown the door at the end of his one and only five-year term. It was a flash in the pan. All one had to do was be patient and disdainful. &nbsp;&nbsp;

It was axiomatic to such people that no “communal” government, with a nebulous grip on the economy and governance, and clumsy law-making, could possibly last more than a single term. Even the avuncular, get-along Atal Bihari Vajpayee’s saffron government from a decade ago, lasted only about six years. &nbsp;

Demonetisation in Modi 1.0, they cried, and do so still, as each anniversary of the November 8, 2016 announcement approaches, was a disaster. It destroyed livelihoods of the MSME sector and the labouring classes. Then, GST bamboozled the shopkeeper. And the shortfall in its collections month after month point to both a slowing economy and its flawed architecture. Not for nothing was it kept in abeyance by the Congress for long years. &nbsp;

So, a second Modi term in 2019, despite spurious accusations of corruption in the 36 fighter Rafale purchase, in a forced re-enactment of the Bofors scenario that brough Rajiv Gandhi down, was most galling. And that too with an increased majority. What can the electorate be thinking? Do they not see the mismatch between performance and promise? &nbsp;

And now, six months into Modi 2.0, two daunting but long-promised Hindutva aspirations have been fulfilled. The first is the dramatic abrogation of Articles 35A and 370 less than three months into the second term - by simply voiding them both of all content. It was a spectacular bit of legal interpretation and execution.&nbsp;

This, and the resultant main-streaming of J&amp;K via the creation of two new Union Territories - one of Buddhist majority Ladakh, and the other by combining Jammu &amp; Kashmir. There is a new awakening of hope and ambition in both these territories. There has been very little by way of fall out. Pakistan has been reduced to near tears for the lack of support it garnered internationally. And domestically, there has been a broad acceptance of the move. Of course, most of the prospective trouble-makers were safely locked up, out of harm’s way. &nbsp;

The other major achievement within 6 months of this term, is the unanimous and positive Supreme Court verdict on the Ram Temple at Ayodhya. This will lead to the construction of the cherished temple soon, after a very long interregnum. Ayodhya itself is set to be transformed as well.&nbsp;

Other possibilities, to set right the distortions in secularism, is the promulgation of the Uniform Civil Code and the implementation of the National Register of Citizens nationally. Repossession of Gilgit-Baltistan and PoK could also come about through a fortuitous quirk of fate within this very term. &nbsp;

Even on the basis of its present successes, the NDA, increasingly becoming synonymous with the BJP till new allies come along, should be re-elected in 2024. &nbsp;

The only fly in the ointment is the Modi government’s handling of the economy. Not only is it imperative to improve performance for the sake of the hopeful masses looking for jobs and livelihood, but also to keep up with our raised international diplomacy. &nbsp;

To be taken seriously abroad, we have to spend money by way of aid, grants and ventures. Money which we patently do not have at present. Nor can we properly finance our own necessary development and welfare programmes domestically. Holding to the fiscal discipline we have set for ourselves is proving extremely difficult at a 5.5 per cent&nbsp;GDP growth rate when we need 10 per cent. &nbsp;

In today’s world, to raise one’s political profile, particularly in competition with China, without the assurance of a robust economy, simply cannot be sustained. The government will have to take many bold and reformist steps and quickly. &nbsp;

If there is anything that will upset the applecart politically from mid-term in 2021, it is a floundering economy. The cyclical and global position notwithstanding, Prime Minister Modi and his cabinet have no room for excuses or bluster in this regard. The economy is the keystone, and its neglect could bring the whole house down.&nbsp; 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) &nbsp;

When a regime changes, all who have benefited from the old order are suddenly deprived of their influence. They are left with little besides their litany of complaints and criticism.

When a regime changes, all who have benefited from the old order are suddenly deprived of their influence. They are left with little besides their litany of complaints and criticism. Still, it is understandable, for those not nimble enough to change stripe, that contemplation of an interminable stretch, out of the limelight, is akin to the Roman Catholic state of purgatory. It is a suspension, in suffering, stuck indefinitely between Heaven and Hell. Except, that the old order admits to none of its sins. Instead, it adopts a stance of indignation when a procession of their number, including the all-powerful who thought themselves beyond the law, are prosecuted for corruption. It was corruption, almost institutionalised, that was a major reason for the UPA’s humiliating rout at the hustings, not once, but twice in a row. When Narendra Modi, a provincial but clean Chief Minister, with no first-hand foreknowledge of the Centre, won a majority in the Lok Sabha after 30 years, in 2014, the old guard was astounded. There were those in the capital who thought it was a massive overreaction on the part of the electorate to his spectacular oratory. Modi’s popularity would surely wane by mid-term, they said, as it had in the case of the ill-fated Rajiv Gandhi administration. And he would be shown the door at the end of his one and only five-year term. It was a flash in the pan. All one had to do was be patient and disdainful. It was axiomatic to such people that no “communal” government, with a nebulous grip on the economy and governance, and clumsy law-making, could possibly last more than a single term. Even the avuncular, get-along Atal Bihari Vajpayee’s saffron government from a decade ago, lasted only about six years. Demonetisation in Modi 1.0, they cried, and do so still, as each anniversary of the November 8, 2016 announcement approaches, was a disaster. It destroyed livelihoods of the MSME sector and the labouring classes. Then, GST bamboozled the shopkeeper. And the shortfall in its collections month after month point to both a slowing economy and its flawed architecture. Not for nothing was it kept in abeyance by the Congress for long years. So, a second Modi term in 2019, despite spurious accusations of corruption in the 36 fighter Rafale purchase, in a forced re-enactment of the Bofors scenario that brough Rajiv Gandhi down, was most galling. And that too with an increased majority. What can the electorate be thinking? Do they not see the mismatch between performance and promise? And now, six months into Modi 2.0, two daunting but long-promised Hindutva aspirations have been fulfilled. The first is the dramatic abrogation of Articles 35A and 370 less than three months into the second term - by simply voiding them both of all content. It was a spectacular bit of legal interpretation and execution. This, and the resultant main-streaming of J&K via the creation of two new Union Territories - one of Buddhist majority Ladakh, and the other by combining Jammu & Kashmir. There is a new awakening of hope and ambition in both these territories. There has been very little by way of fall out. Pakistan has been reduced to near tears for the lack of support it garnered internationally. And domestically, there has been a broad acceptance of the move. Of course, most of the prospective trouble-makers were safely locked up, out of harm’s way. The other major achievement within 6 months of this term, is the unanimous and positive Supreme Court verdict on the Ram Temple at Ayodhya. This will lead to the construction of the cherished temple soon, after a very long interregnum. Ayodhya itself is set to be transformed as well. Other possibilities, to set right the distortions in secularism, is the promulgation of the Uniform Civil Code and the implementation of the National Register of Citizens nationally. Repossession of Gilgit-Baltistan and PoK could also come about through a fortuitous quirk of fate within this very term. Even on the basis of its present successes, the NDA, increasingly becoming synonymous with the BJP till new allies come along, should be re-elected in 2024. The only fly in the ointment is the Modi government’s handling of the economy. Not only is it imperative to improve performance for the sake of the hopeful masses looking for jobs and livelihood, but also to keep up with our raised international diplomacy. To be taken seriously abroad, we have to spend money by way of aid, grants and ventures. Money which we patently do not have at present. Nor can we properly finance our own necessary development and welfare programmes domestically. Holding to the fiscal discipline we have set for ourselves is proving extremely difficult at a 5.5 per cent GDP growth rate when we need 10 per cent. In today’s world, to raise one’s political profile, particularly in competition with China, without the assurance of a robust economy, simply cannot be sustained. The government will have to take many bold and reformist steps and quickly. If there is anything that will upset the applecart politically from mid-term in 2021, it is a floundering economy. The cyclical and global position notwithstanding, Prime Minister Modi and his cabinet have no room for excuses or bluster in this regard. The economy is the keystone, and its neglect could bring the whole house down. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Narendra Modi government 2.0 must focus on fixing economy

Moody's Investors Service on Thursday cut India's ratings outlook to "negative" from "stable", citing increasing risks that growth in Asia's third-largest economy will remain lower than in the past.

Moody's Investors Service on Thursday cut India's ratings outlook to "negative" from "stable", citing increasing risks that growth in Asia's third-largest economy will remain lower than in the past. The outlook partly reflects government and policy ineffectiveness in addressing economic weakness, which led to an increase in debt burden from already high levels, the ratings agency said. The Nifty 50 index fell 0.4% in early trade on Friday, while the rupee weakened to 71.31 against the dollar, versus Thursday's close of 70.965. Moody's retained its foreign and local currency ratings at 'Baa2'. India's economy grew only 5.0% year-on-year between April and June, its weakest pace since 2013, as consumer demand and government spending slowed amid global trade frictions. This prompted a slew of rate cuts by the central bank, while the government rolled out several measures, including a sharp cut in corporate taxes, in a bid to boost growth. "While government measures to support the economy should help to reduce the depth and duration of India's growth slowdown, prolonged financial stress among rural households, weak job creation, and, more recently, a credit crunch among non-bank financial institutions have increased the probability of a more entrenched slowdown," Moody's said. The ratings agency does not expect the credit crunch among non-bank financial institutions to be resolved quickly, it added. After the corporate tax cuts and lower nominal GDP growth, Moody's now expects a government deficit of 3.7% of GDP in the fiscal year ending in March 2020, compared with a government target of 3.3% of GDP.

Moody's cuts India's outlook to 'negative' on economic growth worries

Infosys' Co-Founder NR Narayana Murthy Famously Said 'When In Doubt, Disclose'. Now The Company Is In Crisis.

Gravitas: What's Up With Infosys?

RBI's Report & S&P's Note Highlights Risks To Economy Even As Ease Of Doing Business Improves.

Gravitas: India: Ease Of Doing Business Ranking Jumps, But Economy Faces Risks

It is unfortunate that political games are being played over the state of the Indian economy, says Senior Journalist Lalit Shastri.

Video analysis: Politics over state of Indian economy

Finance Minister Nirmala Sitharaman has reacted sharply to Raghuram Rajan's views on the slowdown of the Indian economy. Rajan was appointed Governor of Reserve Bank of India in 2013 during UPA 2, headed by Manmohan Singh.

Now, he is going about saying that the Modi Government lacks vision on economic growth.

Addressing a select gathering at the Consulate General of India in New York City recently, the Finance Minister hit back by categorically stating that it was during Raghuram Rajan's time that huge loans were disbursed only on a phone call from crony leaders.

Taking a dig at Manmohan Singh, who was the Prime Minister when all this was happening, Sitharaman said that Manmohan Singh is supposed to have an articulated vision of the Indian economy. She also observed that Indian Public Sector banks did not have the worst phase than when there was this combination of Manmohan Singh as Prime Minister and Raghuram Rajan as Governor of Reserve Bank of India.

On what ails our banks today and what is the genesis of the bad loan crisis. the Finance Minister said Dr Rajan had himself told a Parliamentary Panel that a large number of bad loans could be linked to the period between 2006 and 2008. This is the time when Manmohan Singh was the Prime Minister - so where should the buck stop?

After winning the Nobel Prize in Economics, Abhijit Banerjee is reported to have said: "Indian economy is on shaky ground." "In the last five-six years, at least we could witness some growth, but now that assurance is also gone."

According to Banerjee, in the short term, Modi government policies are not highly simulating. Besides Ujjwala, the other flagship schemes of the Modi Government are not putting cash in the hands of anybody.

If the Finance Minister were to take his advice, Banerjee said that he would probably say, "Get some more money in the hands of the poor and they will spend it."

Its all about increasing consumption but we don’t increase consumption by increasing bank accounts. On the consumption front, both Banerjee and Raghuram Rajan perfectly gel and have the same take. But this is looking at the problem - the state of the national economy - through the keyhole.

Running a country with a vision is more important than building a short-term road map only to woo the voters. The pitfalls of short term policies notwithstanding, Congress leader Rahul Gandhi has chosen to stick to the same plank crafted by the likes of Banerjee and Rajan.

During campaigning for the Maharashtra and Haryana State Assembly election, Rahul Gandhi again took a jibe at Prime Minister Narendra Modi and his Government while taking credit for Mahatma Gandhi Rural Employment Guarantee Scheme that was introduced by the Manmohan Singh Government to ensure money directly reached the poor in the countryside.

Then Rahul had also upped his campaign for the 2019 Parliamentary election by announcing the NYAY scheme, which Abhijit Banerjee had helped conceptualise. After the people of India have rejected this scheme and shown the Congress party its place, Banerjee is again advocating the idea of direct money transfer in a big way. And Rahul is trying to play the game of one-upmanship with Modi on the agenda of neo-patrimonialism.

People appear fully capable of seeing through all this and as far as the outcome of the general election to the State Assemblies of Maharashtra and Haryana is concerned, for the main Opposition Congress, the writing is clear on the wall.

More about Abhijit and his observations about the present state of Indian economy would follow on the basis of analysis of past follies, including the way policies influenced by the Global Research Centre founded by Banerjee and company in the US were tested in a State like Madhya Pradesh - the central Indian State - 1999 onwards and how the people had rejected a popularly elected government moving on this path in the 2003 election, when Madhya Pradesh had the potential but was still devoid of the economic infrastructure and lacked a positive track record in terms of human resource development, which is so essential for economic growth.

1999 was the starting point in Madhya Pradesh when the then State government focused only on imparting training to teachers at the primary school level and totally neglected the issue of schools devoid of basic facilities. There was also a lopsided approach when it came to building the infrastructure and human resource development for the sake of economic growth. In the process, a whole generation has now multiplied in geometric progression, which is barely able to sustain itself and the quality of life for a big section of the population remains a far cry. It is unfortunate that political games are being played over&nbsp;the state of the economy and even acclaimed economists have become a party to political machinations.

 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) &nbsp; 
&nbsp;

 
&nbsp;

Finance Minister Nirmala Sitharaman has reacted sharply to Raghuram Rajan's views on the slowdown of the Indian economy. Rajan was appointed Governor of Reserve Bank of India in 2013 during UPA 2, headed by Manmohan Singh.

Finance Minister Nirmala Sitharaman has reacted sharply to Raghuram Rajan's views on the slowdown of the Indian economy. Rajan was appointed Governor of Reserve Bank of India in 2013 during UPA 2, headed by Manmohan Singh. Now, he is going about saying that the Modi Government lacks vision on economic growth. Addressing a select gathering at the Consulate General of India in New York City recently, the Finance Minister hit back by categorically stating that it was during Raghuram Rajan's time that huge loans were disbursed only on a phone call from crony leaders. Taking a dig at Manmohan Singh, who was the Prime Minister when all this was happening, Sitharaman said that Manmohan Singh is supposed to have an articulated vision of the Indian economy. She also observed that Indian Public Sector banks did not have the worst phase than when there was this combination of Manmohan Singh as Prime Minister and Raghuram Rajan as Governor of Reserve Bank of India. On what ails our banks today and what is the genesis of the bad loan crisis. the Finance Minister said Dr Rajan had himself told a Parliamentary Panel that a large number of bad loans could be linked to the period between 2006 and 2008. This is the time when Manmohan Singh was the Prime Minister - so where should the buck stop? After winning the Nobel Prize in Economics, Abhijit Banerjee is reported to have said: "Indian economy is on shaky ground." "In the last five-six years, at least we could witness some growth, but now that assurance is also gone." According to Banerjee, in the short term, Modi government policies are not highly simulating. Besides Ujjwala, the other flagship schemes of the Modi Government are not putting cash in the hands of anybody. If the Finance Minister were to take his advice, Banerjee said that he would probably say, "Get some more money in the hands of the poor and they will spend it." Its all about increasing consumption but we don’t increase consumption by increasing bank accounts. On the consumption front, both Banerjee and Raghuram Rajan perfectly gel and have the same take. But this is looking at the problem - the state of the national economy - through the keyhole. Running a country with a vision is more important than building a short-term road map only to woo the voters. The pitfalls of short term policies notwithstanding, Congress leader Rahul Gandhi has chosen to stick to the same plank crafted by the likes of Banerjee and Rajan. During campaigning for the Maharashtra and Haryana State Assembly election, Rahul Gandhi again took a jibe at Prime Minister Narendra Modi and his Government while taking credit for Mahatma Gandhi Rural Employment Guarantee Scheme that was introduced by the Manmohan Singh Government to ensure money directly reached the poor in the countryside. Then Rahul had also upped his campaign for the 2019 Parliamentary election by announcing the NYAY scheme, which Abhijit Banerjee had helped conceptualise. After the people of India have rejected this scheme and shown the Congress party its place, Banerjee is again advocating the idea of direct money transfer in a big way. And Rahul is trying to play the game of one-upmanship with Modi on the agenda of neo-patrimonialism. People appear fully capable of seeing through all this and as far as the outcome of the general election to the State Assemblies of Maharashtra and Haryana is concerned, for the main Opposition Congress, the writing is clear on the wall. More about Abhijit and his observations about the present state of Indian economy would follow on the basis of analysis of past follies, including the way policies influenced by the Global Research Centre founded by Banerjee and company in the US were tested in a State like Madhya Pradesh - the central Indian State - 1999 onwards and how the people had rejected a popularly elected government moving on this path in the 2003 election, when Madhya Pradesh had the potential but was still devoid of the economic infrastructure and lacked a positive track record in terms of human resource development, which is so essential for economic growth. 1999 was the starting point in Madhya Pradesh when the then State government focused only on imparting training to teachers at the primary school level and totally neglected the issue of schools devoid of basic facilities. There was also a lopsided approach when it came to building the infrastructure and human resource development for the sake of economic growth. In the process, a whole generation has now multiplied in geometric progression, which is barely able to sustain itself and the quality of life for a big section of the population remains a far cry. It is unfortunate that political games are being played over the state of the economy and even acclaimed economists have become a party to political machinations. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Indian economy not immune to blemishes of politicisation

India wants to comply with global sanctions, including US&nbsp;sanctions on Venezuela and Russia, but also needs to maintain its own strength and strategic interests, Finance Minister Nirmala Sitharaman said in an interview on Tuesday.

The United States in January imposed the toughest sanctions yet on Venezuela's oil industry. The move has scared away some global customers, but with few alternative suppliers of heavy oil, Indian refiner Reliance Industries Ltd has been buying Venezuelan crude from Russian major Rosneft. The company is set to resume direct oil loadings in the South American nation after a four-month pause.

Sitharaman said the government has expressed its view to the United States.

"In specific issues which are critical for India's strategic interests, we have explained to the United States that India is a strategic partner for the United States of America and you want a strategic partner to be strong and not weakened," she said.

"We value the strong partnership with the USA, but we should equally be allowed to be a <a href="https://www.wionews.com/india-news/government-committed-to-provide-eco-friendly-energy-security-to-india-nirmala-sitharaman-255784">strong economy</a>."

The <a href="https://www.wionews.com/world/world-economy-at-its-weakest-pace-since-global-financial-crisis-international-monetary-fund-256126">International Monetary Fund</a> earlier on Tuesday lowered its outlook for Indian growth in 2019, citing weaker-than-expected domestic demand. The US-China trade war will cut 2019 global growth to its slowest pace since the 2008/09 financial crisis, the IMF said.

India's gross domestic product grew at its weakest pace since 2013 between April and June, stoking expectations of further stimulus.

"Global headwinds ... are getting stronger by the day," Sitharaman said. Asked about further fiscal stimulus, she said,&nbsp;"I have not closed the door" on that.

New Delhi has been trying to boost domestic growth through an infrastructure package and a new loan programme organised with the banking sector that has doled out loans worth over 80,000 crore (8.7 billion pounds), she said.

The finance minister defended the government's move to abrogate Article 370 in Jammu and Kashmir in August.

The removal of the constitutional article that granted special status to Jammu and Kashmir will boost the region and the country's economic potential, she said. 
&nbsp;

India wants to comply with global sanctions, including US sanctions on Venezuela and Russia, but also needs to maintain its own strength and strategic interests, Finance Minister Nirmala Sitharaman said in an interview on Tuesday.

India wants to comply with global sanctions, including US sanctions on Venezuela and Russia, but also needs to maintain its own strength and strategic interests, Finance Minister Nirmala Sitharaman said in an interview on Tuesday. The United States in January imposed the toughest sanctions yet on Venezuela's oil industry. The move has scared away some global customers, but with few alternative suppliers of heavy oil, Indian refiner Reliance Industries Ltd has been buying Venezuelan crude from Russian major Rosneft. The company is set to resume direct oil loadings in the South American nation after a four-month pause. Sitharaman said the government has expressed its view to the United States. "In specific issues which are critical for India's strategic interests, we have explained to the United States that India is a strategic partner for the United States of America and you want a strategic partner to be strong and not weakened," she said. "We value the strong partnership with the USA, but we should equally be allowed to be a strong economy." The International Monetary Fund earlier on Tuesday lowered its outlook for Indian growth in 2019, citing weaker-than-expected domestic demand. The US-China trade war will cut 2019 global growth to its slowest pace since the 2008/09 financial crisis, the IMF said. India's gross domestic product grew at its weakest pace since 2013 between April and June, stoking expectations of further stimulus. "Global headwinds ... are getting stronger by the day," Sitharaman said. Asked about further fiscal stimulus, she said, "I have not closed the door" on that. New Delhi has been trying to boost domestic growth through an infrastructure package and a new loan programme organised with the banking sector that has doled out loans worth over 80,000 crore (8.7 billion pounds), she said. The finance minister defended the government's move to abrogate Article 370 in Jammu and Kashmir in August. The removal of the constitutional article that granted special status to Jammu and Kashmir will boost the region and the country's economic potential, she said.

India cannot sacrifice economic strength to comply with US sanctions: Sitharaman

The World Bank on Sunday slashed its growth forecast for India's current fiscal year to 6%, down from 7.5%, warning that the "severe" slowdown could further weaken the country's stuttering financial sector.

In its last forecast in April, the bank had said that India's economic outlook was strong and expected growth of 7.5% during the current fiscal year that began in April.

But Asia's third-largest economy is currently growing at its slowest pace in six years, expanding by just 5% in the April-June quarter, hit by flagging consumer demand and a slackening in government spending.

India’s industrial output also shrank at its fastest rate in more than six years in August, data released last week showed, indicating that a slew of government measures had yet to underpin a recovery.

In an effort to kick-start the economy, India's central bank has cut interest rates five times this year, and underlined the challenge for policymakers by downgrading its growth forecast to 6.1% from 6.9% earlier this month.

Last week, ratings agency Moody’s Investors Service lowered its growth forecast for India to 5.8% for the current fiscal year from 6.2%, adding that a long period of weak growth will hamper the government’s fiscal consolidation plans.

The World Bank's latest forecast also underlined similar concerns linked to slowing growth and New Delhi’s decision to cut the corporate tax rate, which will cost about 1.5 trillion rupees in tax revenues.

"While the authorities have shown steadfast commitment to fiscal prudence, the significant growth deceleration as well as the corporate tax cuts undertaken to counter it come with heightened risks of fiscal slippage," the bank's report said.

The bank said it expects the economy to gradually recover, growing at 6.9% in the fiscal 20/21 starting next April.

The World Bank on Sunday slashed its growth forecast for India's current fiscal year to 6%, down from 7.5%, warning that the "severe" slowdown could further weaken the country's stuttering financial sector.

The World Bank on Sunday slashed its growth forecast for India's current fiscal year to 6%, down from 7.5%, warning that the "severe" slowdown could further weaken the country's stuttering financial sector. In its last forecast in April, the bank had said that India's economic outlook was strong and expected growth of 7.5% during the current fiscal year that began in April. But Asia's third-largest economy is currently growing at its slowest pace in six years, expanding by just 5% in the April-June quarter, hit by flagging consumer demand and a slackening in government spending. India’s industrial output also shrank at its fastest rate in more than six years in August, data released last week showed, indicating that a slew of government measures had yet to underpin a recovery. In an effort to kick-start the economy, India's central bank has cut interest rates five times this year, and underlined the challenge for policymakers by downgrading its growth forecast to 6.1% from 6.9% earlier this month. Last week, ratings agency Moody’s Investors Service lowered its growth forecast for India to 5.8% for the current fiscal year from 6.2%, adding that a long period of weak growth will hamper the government’s fiscal consolidation plans. The World Bank's latest forecast also underlined similar concerns linked to slowing growth and New Delhi’s decision to cut the corporate tax rate, which will cost about 1.5 trillion rupees in tax revenues. "While the authorities have shown steadfast commitment to fiscal prudence, the significant growth deceleration as well as the corporate tax cuts undertaken to counter it come with heightened risks of fiscal slippage," the bank's report said. The bank said it expects the economy to gradually recover, growing at 6.9% in the fiscal 20/21 starting next April.

World Bank slashes India's growth forecast to 6% for this fiscal year

Dismissing concerns about economic slowdown, Union Minister Ravi Shankar Prasad on Saturday cited the earnings of three movies on October 2, saying they collectively earned Rs 120 crore in a day and hence the economy of the country is "sound".

Addressing a press conference, Prasad said, "On October 2, three movies were released. Film trade analyst Komal Nahta had said that the day saw earning of over Rs 120 crore, a record by the three movies. The economy of the country is sound. That is why there is a return of Rs 120 crore in a day."

"I was the Information and Broadcasting Minister in the then Atal Bihari Vajpayee`s government. I am fond of movies. There has been a huge business of movies," he added.

The economic growth slowed to a seven-year low to 5 per cent in April as compared to 8 per cent in June quarter a year ago, as per the government data.

The slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output, the Union Ministry of Statistics and Programme Implementation had said in a statement.

The Union Minister termed the National Sample Survey Office (NSSO) report as "false".

"That report is false. I gave you 10 relevant data, not one is present in the report. We never said we will give government jobs to everyone. Few people tried to mislead in a planned fashion," said Prasad.

In May, the Centre had made public the NSSO`s Periodic Labour Force Survey report that placed the unemployment rate at 6.1 per cent for the year 2017-18, the highest in 45 years.

The report placed the unemployment rate among men at 6.2 per cent and women at 5.7 per cent, combining both rural and urban areas and the overall rate at 6.1 per cent.

Prasad said that Maharashtra government led by Chief Minister Devendra Fadnavis completed his five-year term and stated that the people of the state respect their leaders.

"Fadnavis has successfully completed his term of five years. This clearly states that the people of the state respect their leader as the BJP has a culture of respecting the leader who heads the state. Fadnavis has a clean image.It is a big achievement," said the Union Minister.

Making a veiled reference to P Chidambaram, who served as the then Home Minister when the 26/11 attacks took place, Prasad said, "In 2008, there was an attack in Mumbai and both the Centre and the state governments at that time were so helpless. The Home Minister at that time said `Sorry Mumbai` and he is in jail now."

"Today nobody has the guts to attack Mumbai or Maharashtra. They know if they carry out an attack, they will have to pay a very heavy cost," he said while reiterating the Centre`s resolve of zero tolerance against terror.&nbsp;

Dismissing concerns about economic slowdown, Union Minister Ravi Shankar Prasad on Saturday cited the earnings of three movies on October 2, saying they collectively earned Rs 120 crore in a day and hence the economy of the country is "sound".

Dismissing concerns about economic slowdown, Union Minister Ravi Shankar Prasad on Saturday cited the earnings of three movies on October 2, saying they collectively earned Rs 120 crore in a day and hence the economy of the country is "sound". Addressing a press conference, Prasad said, "On October 2, three movies were released. Film trade analyst Komal Nahta had said that the day saw earning of over Rs 120 crore, a record by the three movies. The economy of the country is sound. That is why there is a return of Rs 120 crore in a day." "I was the Information and Broadcasting Minister in the then Atal Bihari Vajpayee`s government. I am fond of movies. There has been a huge business of movies," he added. The economic growth slowed to a seven-year low to 5 per cent in April as compared to 8 per cent in June quarter a year ago, as per the government data. The slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output, the Union Ministry of Statistics and Programme Implementation had said in a statement. The Union Minister termed the National Sample Survey Office (NSSO) report as "false". "That report is false. I gave you 10 relevant data, not one is present in the report. We never said we will give government jobs to everyone. Few people tried to mislead in a planned fashion," said Prasad. In May, the Centre had made public the NSSO`s Periodic Labour Force Survey report that placed the unemployment rate at 6.1 per cent for the year 2017-18, the highest in 45 years. The report placed the unemployment rate among men at 6.2 per cent and women at 5.7 per cent, combining both rural and urban areas and the overall rate at 6.1 per cent. Prasad said that Maharashtra government led by Chief Minister Devendra Fadnavis completed his five-year term and stated that the people of the state respect their leaders. "Fadnavis has successfully completed his term of five years. This clearly states that the people of the state respect their leader as the BJP has a culture of respecting the leader who heads the state. Fadnavis has a clean image.It is a big achievement," said the Union Minister. Making a veiled reference to P Chidambaram, who served as the then Home Minister when the 26/11 attacks took place, Prasad said, "In 2008, there was an attack in Mumbai and both the Centre and the state governments at that time were so helpless. The Home Minister at that time said `Sorry Mumbai` and he is in jail now." "Today nobody has the guts to attack Mumbai or Maharashtra. They know if they carry out an attack, they will have to pay a very heavy cost," he said while reiterating the Centre`s resolve of zero tolerance against terror.

Economy is sound as 3 movies earned over Rs 120 crore in a day: Ravi Shankar Prasad

India slipped ten&nbsp;places to rank at 68th spot on the&nbsp;<a href="https://www.wionews.com/opinions/can-india-realistically-become-us-5-trillion-economy-236846">Global Competitiveness Index</a>(GCI)&nbsp;while Singapore became the world's most competitive economy pushing the US to the second rank.

Launched in 1979, the GCI&nbsp;maps the competitiveness landscape of 141 economies through 103 indicators such as inflation, digital skills, life expectancy and&nbsp;trade tariffs.

India, which was ranked 58th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF), is among the worst-performing BRICS nations along with Brazil which ranked even lower than India at 71st this year.

China was ranked&nbsp;at 28th spot&nbsp;same as last year&nbsp;but took the lead in terms of competitiveness among the BRICS economies.

Meanwhile, Singapore replaced the US as the world's most competitive economy. It scored for its superior public sector, labour force, diversity and infrastructure.

Hong Kong, Netherlands and Switzerland followed at third, fourth and fifth place&nbsp;respectively.

In the index, India was&nbsp;followed by some of its neighbours including Sri Lanka at 84th place, Bangladesh at 105th, Nepal at 108th and Pakistan at 110th place.

Here are the 10 most competitiveness economies of the world.

1. Singapore

2. United States

3. Hong Kong

4. Netherlands

5. Switzerland

6. Japan

7. Germany

8. Sweden

9. United Kingdom

10. Denmark

The report cautioned that the constantly changing geopolitical backdrop and escalating trade tensions have increased uncertainty in the global economy&nbsp;which could lead to an economic slowdown.

Watch: Cautious optimism about Indian economy

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The WEF reminded policymakers of the necessity to take a "holistic approach"&nbsp;on&nbsp;planning, focus on quality-centred development, and further balance the relationship among short-term factors, quarterly reports and electoral cycles.

"The international trading system is [not] perfect, it needs to be improved. There are some issues in the international trading system, but this rule-based system is the way to go. Increasing tariff is not helping at all. And yes, it's bad, this kind of protectionism is bad. It's the uncertainty that this tension creates that is affecting the business sentiment and could actually accelerate the downturn, that is for the global economy, there seems to be a downturn coming," said Thierry Geiger, head of analytics and quantitative research on&nbsp;global&nbsp;competitiveness&nbsp;and risks.

The report further stressed the importance of openness, with experts urging the importance of greater investment in education, skills training and a more balanced and inclusive development model that will contribute to the healthy development of the global economy.

(With inputs from agencies)

India slipped ten places to rank at 68th spot on the Global Competitiveness Index(GCI) while Singapore became the world's most competitive economy pushing the US to the second rank.

India slipped ten places to rank at 68th spot on the Global Competitiveness Index(GCI) while Singapore became the world's most competitive economy pushing the US to the second rank. Launched in 1979, the GCI maps the competitiveness landscape of 141 economies through 103 indicators such as inflation, digital skills, life expectancy and trade tariffs. India, which was ranked 58th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF), is among the worst-performing BRICS nations along with Brazil which ranked even lower than India at 71st this year. China was ranked at 28th spot same as last year but took the lead in terms of competitiveness among the BRICS economies. Meanwhile, Singapore replaced the US as the world's most competitive economy. It scored for its superior public sector, labour force, diversity and infrastructure. Hong Kong, Netherlands and Switzerland followed at third, fourth and fifth place respectively. In the index, India was followed by some of its neighbours including Sri Lanka at 84th place, Bangladesh at 105th, Nepal at 108th and Pakistan at 110th place. Here are the 10 most competitiveness economies of the world. 1. Singapore 2. United States 3. Hong Kong 4. Netherlands 5. Switzerland 6. Japan 7. Germany 8. Sweden 9. United Kingdom 10. Denmark The report cautioned that the constantly changing geopolitical backdrop and escalating trade tensions have increased uncertainty in the global economy which could lead to an economic slowdown. Watch: Cautious optimism about Indian economy × The WEF reminded policymakers of the necessity to take a "holistic approach" on planning, focus on quality-centred development, and further balance the relationship among short-term factors, quarterly reports and electoral cycles. "The international trading system is [not] perfect, it needs to be improved. There are some issues in the international trading system, but this rule-based system is the way to go. Increasing tariff is not helping at all. And yes, it's bad, this kind of protectionism is bad. It's the uncertainty that this tension creates that is affecting the business sentiment and could actually accelerate the downturn, that is for the global economy, there seems to be a downturn coming," said Thierry Geiger, head of analytics and quantitative research on global competitiveness and risks. The report further stressed the importance of openness, with experts urging the importance of greater investment in education, skills training and a more balanced and inclusive development model that will contribute to the healthy development of the global economy. (With inputs from agencies)

Global Competitiveness Index: India slips 10 places to 68th; Singapore replaces US on top

Watch in WION Wallet: Cautious optimism about the Indian economy. World Economic Forum clears out that how India is falling down economically at the global slowdown.

WION Wallet: Cautious optimism about Indian economy

The strong BJP government is not afraid of taking bold steps. In a daring move, the Finance Minister slashed corporate tax rates to revive the sagging economy.&nbsp;

The market was longing for some good news and jumped more than 5 per cent on a single day – the same day when the tax cut was announced. This is the biggest single-day jump in over a decade, a barometer indicating that the move was welcome.&nbsp;

The BJP government was criticised for derailing the economy and held responsible for a low 5 per cent GDP growth. First, the real estate sector was down and the auto industry was in the slump. These two sectors were seen as pulling down the other industries, ultimately pushing the Indian economy into recession.&nbsp;

The BJP government was under tremendous pressure to stop that from happening. As can be expected, it did not fall short of expectations. On September 20, Finance Minister Nirmala Sitharaman reduced the corporate tax rate for domestic firms and new manufacturing units by 10 to 12 percentage points. She also said that the effective tax rate for domestic corporates, inclusive of surcharges, will fall from 34.94 per cent to 25.17 per cent, provided they stop availing of any other tax sops.

It is also to be noted that for new manufacturing firms set up after October 1, 2019, and commencing operations by March 31, 2023, the effective tax rate comes down from 29.1 per cent to 17 per cent.&nbsp;

Earlier, corporate houses were not too pleased with the Finance Minister for announcing new tax structures in the Union budget. Foreign investments have slowed down with many companies starting to pull money out of the country. This had a negative effect on the stock market and the GDP rate started falling.

The tax rate cut is expected to boost the economy. The growth rate, which currently stands at 5 per cent, is poised to improve. Tax rates, which were earlier high, are now comparable to other Asian countries. It is slated to bring in further investments into the country.&nbsp;

The auto sector, which is already saddled with low demand and job cuts, may get a boost. This will have an overall favourable impact on the economy. India Inc has, as can be expected, welcomed the move with open arms.&nbsp;

Most investments aimed at Asia, were landing up in Vietnam and Philippines. Now with the ongoing trade war on between the US and China, these investments could be routed to India.&nbsp;

However, there are also those critics who feel that the slowdown is because of global recession and also decreased consumption demand within the economy. Hence, the tax cut will not have any direct impact on the growth.&nbsp;

The stock market jump, they argue, was more of a knee jerk reaction and may not be a steady indicator of growth. They believe that the tax cut needs to be coupled with increase in government spending, of which there are not enough signs as yet. There has been many job losses and revival of the economy will take time.&nbsp;

Critics also claim that this move is pro-rich, as only corporate taxes have been slashed. To boost demand, disposable income in the hands of the consumers is mandatory. For that to happen, income tax rate for individuals need to be reduced. At the moment, though, it is the other way round.&nbsp;

There is also the view that economic development is happening in bits and parts. It may not be enough to create confidence in the minds of the investors.&nbsp;

However, the tax cut by the BJP government remains a welcome step in the right direction and a few more steps are needed to put the economy back on the right course. The tax cut could be an initial reform and may act as a steroid for the economy. It proves one thing, however, that the BJP government is stable enough to take bold steps to revive the economy. 
 
(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-a-much-needed-steroid-for-the-slowing-down-indian-economy-2795226">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) &nbsp; 
&nbsp;

The strong BJP government is not afraid of taking bold steps. In a daring move, the Finance Minister slashed corporate tax rates to revive the sagging economy. The market was longing for some good news and jumped more than 5 per cent on a single day – the same day when the tax cut was announced.

The strong BJP government is not afraid of taking bold steps. In a daring move, the Finance Minister slashed corporate tax rates to revive the sagging economy. The market was longing for some good news and jumped more than 5 per cent on a single day – the same day when the tax cut was announced. This is the biggest single-day jump in over a decade, a barometer indicating that the move was welcome. The BJP government was criticised for derailing the economy and held responsible for a low 5 per cent GDP growth. First, the real estate sector was down and the auto industry was in the slump. These two sectors were seen as pulling down the other industries, ultimately pushing the Indian economy into recession. The BJP government was under tremendous pressure to stop that from happening. As can be expected, it did not fall short of expectations. On September 20, Finance Minister Nirmala Sitharaman reduced the corporate tax rate for domestic firms and new manufacturing units by 10 to 12 percentage points. She also said that the effective tax rate for domestic corporates, inclusive of surcharges, will fall from 34.94 per cent to 25.17 per cent, provided they stop availing of any other tax sops. It is also to be noted that for new manufacturing firms set up after October 1, 2019, and commencing operations by March 31, 2023, the effective tax rate comes down from 29.1 per cent to 17 per cent. Earlier, corporate houses were not too pleased with the Finance Minister for announcing new tax structures in the Union budget. Foreign investments have slowed down with many companies starting to pull money out of the country. This had a negative effect on the stock market and the GDP rate started falling. The tax rate cut is expected to boost the economy. The growth rate, which currently stands at 5 per cent, is poised to improve. Tax rates, which were earlier high, are now comparable to other Asian countries. It is slated to bring in further investments into the country. The auto sector, which is already saddled with low demand and job cuts, may get a boost. This will have an overall favourable impact on the economy. India Inc has, as can be expected, welcomed the move with open arms. Most investments aimed at Asia, were landing up in Vietnam and Philippines. Now with the ongoing trade war on between the US and China, these investments could be routed to India. However, there are also those critics who feel that the slowdown is because of global recession and also decreased consumption demand within the economy. Hence, the tax cut will not have any direct impact on the growth. The stock market jump, they argue, was more of a knee jerk reaction and may not be a steady indicator of growth. They believe that the tax cut needs to be coupled with increase in government spending, of which there are not enough signs as yet. There has been many job losses and revival of the economy will take time. Critics also claim that this move is pro-rich, as only corporate taxes have been slashed. To boost demand, disposable income in the hands of the consumers is mandatory. For that to happen, income tax rate for individuals need to be reduced. At the moment, though, it is the other way round. There is also the view that economic development is happening in bits and parts. It may not be enough to create confidence in the minds of the investors. However, the tax cut by the BJP government remains a welcome step in the right direction and a few more steps are needed to put the economy back on the right course. The tax cut could be an initial reform and may act as a steroid for the economy. It proves one thing, however, that the BJP government is stable enough to take bold steps to revive the economy. (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Corporate tax cut may act as steroid for the economy

Under the stewardship of Prime Minister Narendra Modi, India has set sights on becoming a $5 trillion economy in five years from now, up from about $3 trillion at present.&nbsp;

Can India pull it off, or shall we say, can’t it? The target may seem ambitious, but is certainly not beyond the indomitable spirit of Indian enterprise!&nbsp;

What is essentially required is a political and bureaucratic commitment to work overtime to make a ‘sare jahan se achcha’ Bharat, by creating an ecosystem that unleashes the ‘animal spirits’ of Indian business.&nbsp;

For long, India has been a prisoner to socialist dogma, a maze of rules and regulations and flip-flop in policymaking. A fundamental shift in mindset is needed — unless ample wealth is created, no amount of ‘fair distribution’ would ensure ease of living for the poor. Unfortunately, job creators are seen as bloodsuckers, to put it crudely.

Highly conscious of this, Modi, who hails from Gujarat — a state where ‘making money’ is not looked down upon — said in his Independence Day speech this year that wealth creators must be honoured. From the ramparts of Red Fort, he said people involved in creating wealth were, to him, &nbsp;“the wealth of the country”.&nbsp;

He stressed that people should stop viewing wealth creators with suspicion and that they deserved greater respect. Greater wealth creation would lead to greater distribution and welfare of the people. “Our investors should invest more, earn more, and generate more jobs,” he said.

Modi’s SMS to Ratan Tata inviting him to set up a Nano car plant in Gujarat, after being hounded at Singur in West Bengal, is history. The Singur episode highlighted the anti-success and anti-wealth mentality pervasive and endemic in our society, including a section of political leadership and bureaucracy. This has to change for India to achieve her growth potential.

Our business ecosystem has changed since the days of then Prime Ministers P V Narasimha Rao and Manmohan Singh, but the job of dismantling the fetters is only half done.&nbsp;

Some years ago, Gautam Adani didn’t get an audience with the ‘political CEO’ during his Bihar visit! He went on to set up industry in neighbouring Jharkhand.&nbsp;

The recent scrapping of large contracts signed earlier in Andhra Pradesh is indicative of the whimsical functioning of a section of our politicians. These point to the deep-rooted malaise in our mindset that wealth is evil and rich people are bad people!

Eminent jurist and economist of yesteryears, late Nani A Palkhivala had once pointed out, citing figures, that the number of jobs created till then in government and in organised industry was almost the same. What this meant was that people engaged in production in the industry were being regulated by an equal number of government officials. A lopsided development model, to say the least.&nbsp;

It was again Palkhivala who had made a distinction in the colour of black money. The money earned by a doctor from private practice is through perfectly legal means but turns black for not being declared in income-tax returns.

On the other hand, money made on the sly by politicians, government officials, smugglers, bootleggers etc is through patently illegal means and is hidden from the I-T department too. Yet, politicos and top government babus are held in high esteem, while rich businessmen and industrialists are seen as bad, evil people!&nbsp;

The Modi government has repealed some laws and simplified some others, but more needs to be done. Way back in 1990, a leading English daily of Gujarat used to name a businessman in an I-T case only after conviction, and not after a raid. It is a moot point if this kind of respect for wealth creators is possible in these times of media boom.

If we are not to bequeath misery and poverty to our children, the society has to shed its anti-investor, anti-wealth creator, anti-achiever and anti-success culture. PM Modi has struck the right note in his Independence Day address. On his part, he should continue to focus on clarity and stability in policymaking, and shun any flip-flop. &nbsp;

(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-respect-wealth-creators-for-conducive-economic-environment-2793818">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) &nbsp;

Under the stewardship of Prime Minister Narendra Modi, India has set sights on becoming a $5 trillion economy in five years from now, up from about $3 trillion at present.

Under the stewardship of Prime Minister Narendra Modi, India has set sights on becoming a $5 trillion economy in five years from now, up from about $3 trillion at present. Can India pull it off, or shall we say, can’t it? The target may seem ambitious, but is certainly not beyond the indomitable spirit of Indian enterprise! What is essentially required is a political and bureaucratic commitment to work overtime to make a ‘sare jahan se achcha’ Bharat, by creating an ecosystem that unleashes the ‘animal spirits’ of Indian business. For long, India has been a prisoner to socialist dogma, a maze of rules and regulations and flip-flop in policymaking. A fundamental shift in mindset is needed — unless ample wealth is created, no amount of ‘fair distribution’ would ensure ease of living for the poor. Unfortunately, job creators are seen as bloodsuckers, to put it crudely. Highly conscious of this, Modi, who hails from Gujarat — a state where ‘making money’ is not looked down upon — said in his Independence Day speech this year that wealth creators must be honoured. From the ramparts of Red Fort, he said people involved in creating wealth were, to him, “the wealth of the country”. He stressed that people should stop viewing wealth creators with suspicion and that they deserved greater respect. Greater wealth creation would lead to greater distribution and welfare of the people. “Our investors should invest more, earn more, and generate more jobs,” he said. Modi’s SMS to Ratan Tata inviting him to set up a Nano car plant in Gujarat, after being hounded at Singur in West Bengal, is history. The Singur episode highlighted the anti-success and anti-wealth mentality pervasive and endemic in our society, including a section of political leadership and bureaucracy. This has to change for India to achieve her growth potential. Our business ecosystem has changed since the days of then Prime Ministers P V Narasimha Rao and Manmohan Singh, but the job of dismantling the fetters is only half done. Some years ago, Gautam Adani didn’t get an audience with the ‘political CEO’ during his Bihar visit! He went on to set up industry in neighbouring Jharkhand. The recent scrapping of large contracts signed earlier in Andhra Pradesh is indicative of the whimsical functioning of a section of our politicians. These point to the deep-rooted malaise in our mindset that wealth is evil and rich people are bad people! Eminent jurist and economist of yesteryears, late Nani A Palkhivala had once pointed out, citing figures, that the number of jobs created till then in government and in organised industry was almost the same. What this meant was that people engaged in production in the industry were being regulated by an equal number of government officials. A lopsided development model, to say the least. It was again Palkhivala who had made a distinction in the colour of black money. The money earned by a doctor from private practice is through perfectly legal means but turns black for not being declared in income-tax returns. On the other hand, money made on the sly by politicians, government officials, smugglers, bootleggers etc is through patently illegal means and is hidden from the I-T department too. Yet, politicos and top government babus are held in high esteem, while rich businessmen and industrialists are seen as bad, evil people! The Modi government has repealed some laws and simplified some others, but more needs to be done. Way back in 1990, a leading English daily of Gujarat used to name a businessman in an I-T case only after conviction, and not after a raid. It is a moot point if this kind of respect for wealth creators is possible in these times of media boom. If we are not to bequeath misery and poverty to our children, the society has to shed its anti-investor, anti-wealth creator, anti-achiever and anti-success culture. PM Modi has struck the right note in his Independence Day address. On his part, he should continue to focus on clarity and stability in policymaking, and shun any flip-flop. (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Economic woes: PM Narendra Modi should continue to focus on clarity and stability in policymaking

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