Hanke, who currently teaches applied economics at Johns Hopkins University (USA), pointed out that India experienced an unsustainable credit boom, and now the chickens are coming to roost with a massive pile of non-performing loans piled up, primarily at the state-owned banks.
Maruti chairman R C Bhargava has said that lack of political consensus is slowing down the Indian economy which, in turn, is limiting the ability of India Inc to make new investments and create fresh jobs. The need of the hour is to draw up long-term industry-focused growth strategies, “rather than be short-term in our thinking”.
With stagflation looming, India needs comprehensive and bold, not piecemeal, reforms in 2020.
Exporters reckon that as framing a new foreign policy will take time, the present scheme is likely to continue. Cashew export has been declining in the last few years with the rise of Vietnam as a major exporter of the commodity.
The high taxes on branded food products has led to an increase sale of food in loose form which is unsafe and unhealthy. This has also reduced consumption of packaged food, said Jindal. The association has also recommended that new units be provided with a five-year tax holiday irrespective of the location of the unit.
In the first half of the current fiscal, the CAD narrowed to 1.5 per cent of GDP from 2.6 per cent in the same period in FY2018-19 on the back of a reduction in the trade deficit. Trade deficit shrank to USD 84.3 billion in the first half of FY2019-20 from USD 95.8 billion last year, the RBI said.
The core sector output for the month of November has grown to -1.5% vs -5.8% the previous month.
Announcing the infrastructure project pipeline for the next five years, the finance minister said the spending will help the country nearly double the size of the GDP to $5 trillion by 2025. According to the sector-wise break-up of projects, Rs 24.54 lakh crore investment will flow in the energy sector, and of that Rs 11.7 lakh crore would be in just the power sector.
Live water storage in reservoirs in the southern states of Andhra Pradesh, Telangana, Karnataka, Kerala and Tamil Nadu is 76% of their capacity of 52.8 bcm as of this week, according to CWC. The storage was 48% of capacity a year ago while the 10-year average is 54%.
Faced with a shortfall in revenue collection, the government has initiated austerity measures by revising downwards the expenditure limit for January-March period of the ongoing financial year.
These projects are on top of Rs 51 lakh crore spent by the Centre and the states during the last six years.
"Over 1.15 crore FASTags have already been issued, with more than one lakh being issued every day," the Ministry of Road Transport & Highways said. The daily transactional value has crossed Rs 52 crore with the number of FASTag payments surpassing 30 lakh. A FASTag provides smooth journey to commuters through toll plazas on national highways.
For onboarding central departments and states, the government is looking at two single point of contacts, one each from central department and state; list of licences and documents; detailed processes; timelines for each approval /deemed approvals; and support for IT systems integration from all departments, an official said.
Shops, business firms or companies with an annual turnover of Rs 50 crore or more and required to provide digital payment facilities to customers as part of government's stride towards a less-cash economy, will not have to pay any penalty till January 31 for not installing the system.
Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Guruprasad Mohapatra said that despite a slowdown in the global economy, inflows of foreign investment into the country have not been impacted. India received a USD 27.2-billion foreign investment in the first half of 2019 and the pace is said to have sustained thereafter.
The US economy grew faster than other rich countries and navigated the decade without suffering a single recession, the first time that has happened since records began in the 1850s. Defying the legion of declinists, the US was one of only two major countries, alongside China, to expand its share of the global economy in the 2010s.
Even as it eased the rates, the RBI slashed growth estimates by an unprecedented 240 basis points since the rate cutting cycle began in February to a low of 5 per cent. The central bank's youngest Deputy Governor ever -- Viral Acharya -- quit six months before his three-year term was to end in June 2019.
Prime Minister Narendra Modi has met with industry representatives and sought inputs on how to reverse the slowdown in the economy, boost exports and on ways to develop the 5G ecosystem. During 3-hour meeting, PM asked them to share details of obstacles they face and suggest ways to overcome them.
The high-resolution maps being prepared by the Survey of India will lead to complete digitisation of land records in India. This is going to be a giant leap for the country. The current maps have been made on a 1:50,000 scale. The new maps will offer 1:500 resolution, meaning 1 cm on the map will represent 500 cm on the ground.
“We feel our goods exports may touch $330-340 billion in the current fiscal… If the global situation improves, which is likely in the first half of 2020, we may look for 15% growth in exports during the next financial year,” said FIEO president Sharad Kumar Saraf. India’s exports in 2018-19 were $331 billion.
The govt had created a buffer stock of 56,000 tonnes for the current year but it was not sufficient to contain the prices which are still ruling above Rs 100 per kg in most cities across the country. As a result, the govt was compelled to import through state-run MMTC. Cooperative Nafed, which had maintained the buffer stock of onion on behalf of the govt, will continue to do so next year.
The process has already gained momentum with the appointment of Deloitte as advisor for the strategic sale. The only obstacle now is employee resistance. But unions are sounding less hostile than they initially did.
Reserve Bank of India’s (RBI) December Monetary Policy Statement says that capacity utilisation by India Inc, whether seasonally adjusted or otherwise, is well below 70%. Unless they feel that their ability to meet demand is constrained by capacity, or they see demand picking up very fast, industry has no reason to add to fresh capacity.
Competing with private companies for limited resources could cap the room for RBI to cut interest rates. Even if it does, market rates won’t ease due to higher government debt. Also, with inflation being predicted to ease by the second half of 2020 towards the target of 4%, prospects for sharp rate cuts diminish.
A cut in personal I-T will put more money in the hands of people, lift overall sentiment, and perk up demand. However, while this story may play out with some time lag, tax loss would be immediate, adding to the Rs 1.45 lakh crore giveaway on account of corporate tax.
2019 leaves us with more questions than answers. ET editors pick the 20 most vital questions and explore how the answers may play out over 2020, which may well determine India’s near-term future.
The easiest fix, many have argued, is to put more money in the hands of the consumer by cutting personal income tax (I-T) in this budget. The assumption being made is that this extra money would then be spent on buying goods and/or services, thereby stoking demand that’s currently in the doldrums.
The expert view, as borne out by rapid dialling down of forecasts, is that consumption will remain tepid with concerns over the economy, low rise in incomes, rural stress, and lack of credit dragging down demand. In short, the economy may pick up from the lows, but just about.
Besides insufficient production, a rise in direct imports by China after its stricter monitoring of illegal border trade with Vietnam has also contributed to growth in its seafood imports.
India may yet reclaim its mantle as the next big thing, albeit a toned-down and more durable version.
An information portal collating official data on employment, health, GST and trade could be up soon.
"India has decisively overtaken both France and the UK to become the world's fifth-largest economy in 2019. It is expected to overtake Germany to become fourth largest in 2026 and Japan to become the third largest in 2034," the report, titled 'World Economic League Table 2020', said.
According to the Confederation of Indian Industry (CII), with the initial difficulties associated with the goods and services tax (GST) and the Insolvency and Bankruptcy Code (IBC) getting gradually ironed out, the industry is hopeful of substantial benefits for the economy. CII believes that with the sharp moderation in growth, the time has come to adopt an expansionary fiscal policy.
Earlier in November, the DIN system was made mandatory only for search authorisation, summons, arrest memo, inspection notices and letters issued by the Central Board of Indirect Taxes and Customs (CBIC) in the course of any enquiry. The government has already executed the DIN system in the direct tax administration from October 1.
Initially, Santusht (Hindi for satisfied) would monitor all services provided by retirement fund body EPFO and health insurance and services provider ESIC to formal sector workers. Later, the portal would cover other wings of the ministry as well. It would also have data on real time basis to assess the performance of each and every official.
According to an official, all special director generals and additional director generals have been asked to approach the authority concerned in their respective states to entrust more projects to the CPWD. The official said that agency is a principal engineering organisation of the central government.
The government in February released a draft national e-commerce policy, proposing setting up a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad. Several firms raised concerns over some points in the draft.
A 28 member Standing Committee on Statistics (SCES) chaired by former Chief Statistician Pronab Sen is constituted by the statistics ministry to improve quality of data. Earlier expressing concerns over "political interference" in influencing statistical data in India,there was a demand for "institutional independence".
Speaking at the Bharat Chamber of Commerce, Niti Aayog distinguished fellow Ramgopal Agarwala said, "In my personal opinion, the country is in a difficult situation but not in a crisis. The reforms implemented were necessary but hastily implemented."
Commerce Secretary Anup Wadhawan said the current slowdown in exports is mainly due to a decline in petroleum products, which constitute 13.42 per cent of overall outward shipments.
During the 2nd edition of the 2+2 dialogue held last week, India and the US agreed to further expand their defence ties and concluded the crucial Industrial Security Annex (ISA).
The govt permitted officers at the level of commissioners to bar debit of input tax credit for one year in case of credit being availed fraudulently. The GST Council had approved a proposal in this regard at its meeting on December 18 to check tax evasion and menace of fake invoicing.
The GoM includes home minister Amit Shah and agriculture minister Narendra Singh Tomar as members and other members include the ministers of state for agriculture, finance, tribal affairs and animal husbandry.
The RBI has held falling government revenue as the prime reason for a poor fiscal figure. This along with weaker private consumption and investment has weakened the economy, however the nation's financial system remains resilient with the asset quality of banks improving (NPAs remaining stable at 9.3 per cent as of September as same as March 2019)
At the end of September 2019, the capital to risk assets ratio (CRAR) of the NBFC sector stood at 19.5 per cent, lower than 20 per cent as at end-March 2019. According to RBI's Financial Stability Report, the net NPA ratio of non-banking financial companies (NBFCs) remained steady at 3.4 per cent between end-March 2019 and end-September 2019.
Earlier in its bi-monthly monetary policy review this month, the RBI had announced that to bring UCBs with assets of Rs 500 crore and above under the CRILC reporting framework.
Addressing a press conference, Union Housing and Urban Affairs Minister Hardeep Singh Puri said in the next three to four months, the ministry will sanction all the 1.12 crore houses, a target set by the government.
"During the Financial Year 2018-2019, LIC generated a valuation surplus of Rs 53,214.41 crore, registering a growth of 9.9% over the previous year. It has a market share of 76.28% in number of policies and 71% in First year Premium as on 30.11.2019," the finance ministry said.
India has seriously compromised its edible oil security which has resulted in dependence on imports growing to almost 70%. The main reason for stagnant oilseed production has been lack of interest among oilseed farmers due to poor returns. We have been advocating keeping high import duties on edible oils being imported in the country, said SEA president.
Home Minister also released Coffee Table Book ‘Sarvodaya Himachal’ on the occasion. Union Home Minister appreciated the efforts of the State Government for organising this Meet and thereafter succeeding in ensuring ground breaking of projects worth over Rs 13656 crore.
