• About us
  • Careers
  • Brand Partnerships
TFI Official Merchandise
TFI हिन्दी
TFI Global
Saturday, February 4, 2023
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    The disintegration of BYJU’s has just begun

    The disintegration of BYJU’s has just begun

    Child Marriage Assam

    Himanta Biswa Sarma Launches Crackdown on Child Marriage in Assam

    Rana Ayyub

    Tom-Foolery Exposed: The Savage Science of Victimology

    Hydrogen trains

    Budget lights the fire for Indian Railways’ Hydrogen transformation

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    The disintegration of BYJU’s has just begun

    The disintegration of BYJU’s has just begun

    Budget 2023’s Delicate Dance: Balancing Fiscal, Populism and the Public Interest

    Budget 2023’s Delicate Dance: Balancing Fiscal, Populism and the Public Interest

    Artificial Intelligence India

    Unlocking Artificial Intelligence Potential: India’s 2023 Budget and the Future

    new tax regime

    Budget 2023: Income Tax breakthrough for India’s middle class

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    Defence budget India

    Modernization of Indian defence: Right trajectory but low velocity

    AK-203 rifles

    Amethi has started producing the dreaded AK 203 for India and the world

    HELINA and VSHROD

    Amidst build up on China and Pakistan border India gets HELINA and VSHROD

    K9-Vajra

    K9 VAJRA: The Made in India weapon that China fears

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Arindam Bagchi IWT

    India takes charge on Indus Water Treaty

    In the Presidential year of G20, they have waged an info war against India

    In the Presidential year of G20, they have waged an info war against India

    Macron-Modi-Biden: France gives India an edge in dealing with the USA

    Macron-Modi-Biden: France gives India an edge in dealing with the USA

    Ajit Doval Jake Sullivan

    The Quiet Revolution: India’s Diplomatic Success in Bringing Tech Transfer

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • History
    • Indology
    Ram V. Sutar

    The legacy of Ram V. Sutar: A gift from Bhagwan Vishwakarma

    Dilip Kumar Indira Gandhi

    When Dilip Kumar silenced Indira Gandhi

    Bhagwan Vishnu Bhavishya Badri

    Is Bhagwan Vishnu leaving Badrinath and shifting to Bhavishya Badri?

    Banjara community

    Banjaras are Sanatani and everything else about them is cropped up

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Food
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    Light Pollution

    Light pollution: What is it and how to stop it?

    S Balbir

    S Balbir: The Voice That Suddenly Went Silent

    Sharad Kelkar: An underrated gem of Indian Cinema

    Sharad Kelkar: An underrated gem of Indian Cinema

    Sayaji Shinde

    Unrecognized in Bollywood, but Celebrated Everywhere Else: The Tale of Sayaji Shinde

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    The disintegration of BYJU’s has just begun

    The disintegration of BYJU’s has just begun

    Child Marriage Assam

    Himanta Biswa Sarma Launches Crackdown on Child Marriage in Assam

    Rana Ayyub

    Tom-Foolery Exposed: The Savage Science of Victimology

    Hydrogen trains

    Budget lights the fire for Indian Railways’ Hydrogen transformation

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    The disintegration of BYJU’s has just begun

    The disintegration of BYJU’s has just begun

    Budget 2023’s Delicate Dance: Balancing Fiscal, Populism and the Public Interest

    Budget 2023’s Delicate Dance: Balancing Fiscal, Populism and the Public Interest

    Artificial Intelligence India

    Unlocking Artificial Intelligence Potential: India’s 2023 Budget and the Future

    new tax regime

    Budget 2023: Income Tax breakthrough for India’s middle class

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    Defence budget India

    Modernization of Indian defence: Right trajectory but low velocity

    AK-203 rifles

    Amethi has started producing the dreaded AK 203 for India and the world

    HELINA and VSHROD

    Amidst build up on China and Pakistan border India gets HELINA and VSHROD

    K9-Vajra

    K9 VAJRA: The Made in India weapon that China fears

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Arindam Bagchi IWT

    India takes charge on Indus Water Treaty

    In the Presidential year of G20, they have waged an info war against India

    In the Presidential year of G20, they have waged an info war against India

    Macron-Modi-Biden: France gives India an edge in dealing with the USA

    Macron-Modi-Biden: France gives India an edge in dealing with the USA

    Ajit Doval Jake Sullivan

    The Quiet Revolution: India’s Diplomatic Success in Bringing Tech Transfer

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • History
    • Indology
    Ram V. Sutar

    The legacy of Ram V. Sutar: A gift from Bhagwan Vishwakarma

    Dilip Kumar Indira Gandhi

    When Dilip Kumar silenced Indira Gandhi

    Bhagwan Vishnu Bhavishya Badri

    Is Bhagwan Vishnu leaving Badrinath and shifting to Bhavishya Badri?

    Banjara community

    Banjaras are Sanatani and everything else about them is cropped up

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Food
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    Light Pollution

    Light pollution: What is it and how to stop it?

    S Balbir

    S Balbir: The Voice That Suddenly Went Silent

    Sharad Kelkar: An underrated gem of Indian Cinema

    Sharad Kelkar: An underrated gem of Indian Cinema

    Sayaji Shinde

    Unrecognized in Bollywood, but Celebrated Everywhere Else: The Tale of Sayaji Shinde

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
No Result
View All Result

HOME » Economy » Cutting the clutter on India’s GDP debate

Cutting the clutter on India’s GDP debate

Sanju Verma
by Sanju Verma
8 September 2019
in Economy
0
growth, GDP, economy, Indian, auto, manufacture

(PC: Aaj Tak)

668
VIEWS
Share on FacebookShare on Twitter

India’s GDP growth coming in at 5 per cent for the June 2019 quarter, has re-started the “slowdown debate”, but amidst the slowdown in manufacturing and services, the good news is, the stupendous 8.6 per cent growth in electricity and power generation, versus a modest 4.3 per cent number in the March 2019 quarter. Also, trade, hotels & communication services recorded a solid 7.1 per cent growth versus a 6 per cent number in the preceding March quarter. The soft GDP growth figure was led by muted private final consumption expenditure,which only grew by 3.1 per cent. However, on the flip side, government expenditure provided the much needed cushion to growth and increased by an exceptionally robust 8.8 per cent.

Tepid auto sales have been the focus of the “growth debate”. While it is true that auto sales have seen a decline, one must be cognisant of the fact that India is not isolated in this case. USA, China and Japan too are just about emerging from the worst auto slow down in decades, thanks to mandatory compliance with BS-VI emission norms, that will take effect from 2020. In India, a ruling by the apex court in July 2018, making third party insurance for new car and two wheeler owners mandatory, further added to the soft demand for passenger vehicles.

However, those who use lacklustre auto sales to make their bearish case, fail to acknowledge that cement sales, a great lead indicator of an economy’s health, have been pretty healthy in the last eighteen months. Ambuja Cements Ltd, for instance, for the June 2019 quarter, reported a 51 per cent quarter on quarter (QoQ) and a 12 per cent year on year (YoY) growth in earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne while ACC Ltd, another cement major, reported a 25 per cent rise in operating profit on account of better realisations and operational efficiencies, on the back of a good 7.8 per cent growth in net sales.

That the structural fabric of the Indian economy is in fine fettle, is further evident from the 30.6 growth in revenues and 11 per cent growth in the loan book of home loan giant, HDFC Ltd., for the June 2019 quarter, with the outstanding loan book at a solid Rs 4.16 lakh crore. The “slowdown” therefore is only cyclical and not, structural.

Modi government has in the last few days, rationalised the rules for foreign portfolio investors (FPIs), by doing away with the broad-based eligibility criteria, allowing offshore funds of mutual funds (MFs) and central banks that are not members of the Bank of International Settlements (BIS), to register as FPIs and, permitting FPIs to invest in unlisted non convertible debentures (NCDs) and more importantly, removing the contentious “Angel Tax” and “FPI Surcharge”.

Additionally, the decision to infuse upfront, Rs 70,000 crore, into public sector banks, to enable the release of Rs 5 lakh crore worth of liquidity in the market,making all pending GST refunds to MSMEs payable within 30 days, allowing additional 15 per cent depreciation on vehicles, lifting the ban on vehicle purchases by the government, tightening norms for credit rating agencies, a partial credit scheme for purchase of pooled assets of non-banking finance companies (NBFCs) and housing finance companies (HFCs), up to Rs 1 lakh crore and permitting NBFCs to use the Aadhaar authenticated bank ‘Know Your Customer’ (KYC), to avoid duplication, will go a long way in ensuring that the Modi juggernaut, effectively crystallises the roadmap towards the $5 trillion landmark, in the next five years.

Again, ensuring that banks link their loan products to RBI’s Repo rate, so that RBI’s rate cuts result in lower EMIs for borrowers and, extending additional liquidity support of Rs 20,000 crore to the National Housing Bank (NHB), to tackle the real estate sector’s sluggishness, besides the four consecutive Repo rate cuts to 5.4 per cent, to bring down real interest rates, should certainly help.

It also needs to be added here that while in July and August 2019, FPIs have roughly sold Indian shares worth $3.07 billion, they were net buyers of Indian shares worth $11.3 billion, between January-June 2019. Also, the recent selling by foreign investors is less due to local issues but largely driven by global risk aversion, thanks to negative bond yields, inverted yield curve in the U.S., a 0.1 and 0.2 per cent contraction in German and U.K. GDP figures for the June 2019 quarter, continuing trade war rhetoric between the US and China, protests in Hong Kong, escalating tensions between the UK and Iran and ofcourse, growing fears of a “No Deal Brexit”.

RBI’s decision on 26th August 2019, to transfer as “dividend and surplus”, roughly Rs 1.76 lakh crore to the government, on the basis of recommendations by the Bimal Jalan led panel,should also serve as a booster dose for both the equity and bond markets, going forward. The “realised equity range” mandated by the Jalan panel, has been set at 6.5-5.5 per cent of the RBI’s balance sheet. Since, as on 30th June 2019, the realised equity stood at 6.8 per cent, well above the lower floor of 5.5 per cent, the entire net income of the RBI was decided to be transferred to the government.

Hence, Modi naysayers who are sneering at the fact that the government has rewarded itself with a “windfall”, are clearly mistaken.The RBI Act of 1934 for instance, clearly mandates the RBI to transfer any available surplus after making adequate provisions for bad and doubtful debts, depreciation in assets, contribution to staff and the super-annuation fund, among others.

Speaking of reforms, the fact that “Modinomics” is not xenophobic and if anything, welcomes long term foreign capital, is evident from a slew of measures like allowing 100 per cent FDI in coal mining and contract manufacturing, approving 26 per cent overseas investment in digital media, relaxing the 30 per cent local sourcing norms for single-brand retail trading (SBRT) and ofcourse, permitting online sales without prior opening of brick and mortar stores, which will lead to the creation of jobs in logistics, digital payments, customer care,training and product skilling, going forward.

Last but not the least,the game changing bank mergers announced on 30th August 2019, fifty long years after former PM, Indira Gandhi, nationalised 14 major banks in July 1969, in a hopelessly debilitating move, will have far reaching ramifications. From 27 to 18 in 2017 and now whittling down the number of public sector banks (PSBs) to just 12, is not merely about finding synergies through consolidation. Size and scale matter in the banking business.The Modi government’s decision therefore to have only 12 large PSBs is great news, as it will suitably ring-fence these banks against potential systemic risks, raise their appetite for business and increase their lendable resources by growing their ability to raise funds at competitive rates.

To cut to the chase, reforms apart, since business sentiment and consumer confidence, in large part, are a function of liquidity, the Modi government has fired a few well meaning and absolutely well timed salvos. Foreign and domestic investors can certainly expect better tidings going forward, as this is a government that listens, absorbs, assimilates and acts, in a manner that is both business friendly and investor friendly.

Ms Sanju Verma is an Economist & Chief Spokesperson for BJP,Mumbai. She tweets @Sanju_Verma_

Tags: autoEconomyGDPIndia
Share36TweetSend
Previous Post

First Kashmir, Now Afghanistan – Imran Khan will go down in history as the most incompetent Pakistani PM ever

Next Post

NGOs assisting illegal activities in Rohingya camps banned by Bangladesh

Sanju Verma

Sanju Verma

Economist,MBA Finance,Ranked in Asiamoney,ex JP Morgan&HDFCSec, Author-'Truth&Dare-The Modi Dynamic',Chief Spokesperson&Co-Convener,Intellectual Cell, BJPMumbai.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

  • Most Read
  • Comments
  • Latest
Xi Jinping, coronavirus, Shinzo Abe, china, Japan, coornavirus, COVID-19, Wuhan Virus

‘Pack up and get out of there,’ Japan to spend $2.2 billion to get Japanese companies to exit China

9 April 2020
ajay devgn karan johar

The man who bullied the Bully – How Ajay Devgn made Karan Johar’s monopoly a joke and forced him to apologize

22 June 2020
Huawei, China, Trump, USA, Xi Jinping

‘Our survival is at stake now,’ Chinese Telecom giant Huawei crumbles after US ban on Semiconductor exports

19 May 2020
T-Series Sonu Nigam Divya Khosla Kumar Bhushan Kumar

T-Series forced to take down Atif Aslam’s video, Divya Khosla trolled. T-Series has a bad day in office

25 June 2020
Meat Ban

A Jain responds to Meat Ban in Mumbai

Public Sector Bank, Government, Bill

Dear bank employees, continue your stride but PSBs will be privatized

anti-Hindi

Anti-Hindi Forever?- In search of a National Language!

Dear Liberals – your Beef Parties are not protests, they just intend to displease the Majority

Dear Liberals – your Beef Parties are not protests, they just intend to displease the Majority

WhatsApp Privacy Policy: Supreme Court Smacks Down Attempt to Trample User Choice

WhatsApp Privacy Policy: Supreme Court Smacks Down Attempt to Trample User Choice

4 February 2023
Light Pollution

Light pollution: What is it and how to stop it?

4 February 2023
Arindam Bagchi IWT

India takes charge on Indus Water Treaty

3 February 2023
The disintegration of BYJU’s has just begun

The disintegration of BYJU’s has just begun

3 February 2023

Popular This Week

Preity Zinta
Cinema

Preity Zinta – The woman who stood up to the underworld, but paid a heavy price for it

by Paurush Gupta
30 January 2023
Adani-Hindenburg row: Decoding the hidden agendas
Premium

Adani-Hindenburg row: Decoding the hidden agendas

by Abhishek Kumar Singh
29 January 2023
Govinda congress
Cinema

When Govinda started literally pleading in front of Sonia Gandhi

by TFIPOST News Desk
31 January 2023
The untold story of Swami Pranavananda
History

The untold story of Swami Pranavananda

by Abhishek Kumar Singh
29 January 2023
Reality of Bageshwar Dham
Analysis

The Bageshwar Dham: The Reality of Dhirendra Krishna Shastri

by Tejasvi Malhotra
31 October 2022

©2023 TFI Media Private Limited

  • Terms of use
  • Privacy Policy
  • Sitemap
No Result
View All Result
  • Premium
  • Politics
    • Analysis
    • Opinions
    • Trending
  • Economy
    • Business
    • Finance
  • Defense
    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
TFI Official Merchandise
TFI हिन्दी
TFI Global
  • About us
  • Careers
  • Brand Partnerships

©2023 TFI Media Private Limited

Follow us on Twitter

and never miss an insightful take by the TFIPOST team

Follow @tfipost