15 ways to define India’s slowdown

Source: LiveMint.com, Aug 14, 2019

The rain has stopped. You step out of home to run a few errands. On the way, you find ₹500 note lying on the ground. You pick it up and put it in your trouser pocket, thinking you’ll donate it to the local charity. But you give in to temptation as soon as you cross the local book shop and buy the latest bestseller for ₹500. The bookseller is an alcoholic and uses the money to buy his stock of alcohol for the day. The liquor shop owner takes the ₹500 and walks across to the local cinema and buys the ticket for the latest movie, featuring his favourite heroine. He also buys some atrociously priced popcorn and a soft drink. The cinema owner has to go attend a wedding at the other end of the town and he gives that very ₹500 note to a taxi driver, given that his driver is on leave. Read the rest of this entry »

IMF forecasts India’s growth will improve to 7.5% in the next fiscal

Source: Livemint.com, Jan 22, 2019.

NEW DELHI: India will grow at a world-beating 7.5% in 2019-20 amid slower global expansion, the International Monetary Fund (IMF) said, upgrading its October forecast of 7.4%.  “India’s economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease,” IMF said in an update to its biannual World Economic Outlook (WEO) on Monday.


The review comes even as trade tensions and a weakening Europe cast a shadow over global growth.
IMF estimates India to grow 7.3% in 2018-19 and 7.7% in 2020-21. India’s contribution to world growth has risen from 7.6% during 2000-08 to 14.5% in 2018, according to IMF.

Without naming India, IMF said that in emerging markets and developing economies, where inflation expectations are well-anchored, monetary policy could provide support to domestic activity as needed.
With retail inflation slowing to an 18-month low of 2.19% in December—though services inflation remains elevated—many analysts believe the Reserve Bank of India’s (RBI) monetary policy committee will cut policy rates at its review meeting on 7 February.

“We will take necessary steps to maintain financial stability and to facilitate enabling conditions for sustainable and robust growth,” RBI governor Shaktikanta Das said in his first speech at the Vibrant Gujarat Summit on Friday after taking charge as the central bank’s 25th governor last month.

 

India shines in ease of doing business, but this is where it lags behind

Source: Financial Express, Nov 12, 2018

India has emerged as one of the biggest ‘improvers’ in the World Bank’s Ease of Doing Business index with the leap of 23 spots to rank at 77 this year, from 100 last year, among 190 countries. However, Laveesh Bhandari – an economist and head of Indicus Foundation – wrote in The Indian Express today that though the ease of doing business study does indicate a positive change over the last year in some areas, including enforcement of contracts, paying taxes, and registering property, where the country performs poorly, there is much that it does not capture.

According to Bhandari, the massive jump in ranking is correlated with an improvement in ratings as well, which have seen a rise of 6.6% over last year. Therefore, in the two years, the position of India has gone up on Doing Business index dramatically from 130 to 77 this year. Read the rest of this entry »

India’s flagging economy draws dire warnings of recession

Source: The Economic Times, Sept 29, 2017

NEW DELHI: Prime Minister Narendra Modi came to power on a euphoric wave of promises to boost India’s economy, add millions of jobs and bring “good times” to the developing nation.

Three years later, India’s economic prospects look decidedly grimmer. India’s economic expansion has slowed to its lowest level in three years. Small businesses are struggling, or even shutting down, after overhauls of the nation’s currency and sales tax system. Modi’s own allies warn of a dire outlook, with some raising the specter of an economic depression.

While government ministers have urged patience, analysts and others in Modi’s governing Bharatiya Janata Party are not so sanguine about the current trends.
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India jumps 16 spots on Competitiveness Index

Source: Business Standard, Sept 28, 2016

India jumped 16 places for the second year in a row to the 39th rank on the World Economic Forum’s (WEF) Global Competitiveness Index 2016-17. It was ranked 55th in 2015-16. This is the largest gain made by any country on the list.

Switzerland was ranked the most competitive country for the eighth consecutive year, followed by Singapore, the United States, the Netherlands and Germany.

The rankings measure countries’ performance on three indicators — basic requirements, efficiency enhancers, and innovation and sophistication factor. Performance on these in turn is measured through sub-indicators.

“Thanks to improved monetary and fiscal policies, as well as lower oil prices, the Indian economy has stabilised and now boasts the highest growth among G20 countries. Recent reform efforts have concentrated on improving public institutions (up 16), opening the economy to foreign investors and international trade (up four), and increasing transparency in the financial system (up 15),” said the report.

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Dark clouds over India’s growth engines

Source: Business Standard, May 30, 2016

New Delhi: A rather peculiar aspect of India’s growth structure under the new Gross Domestic Product series has been the stellar performance of the micro, small and medium enterprises (MSME) in the manufacturing segment.

With the bigger manufacturing companies struggling over the past few years, it was these smaller companies that provided the much needed fillip to manufacturing growth.

The Reserve Bank of India’s analysis of the Ministry of Corporate Affairs database confirms this. Gross value added (GVA) by these companies grew at a staggering 17.3 and 16.2 per cent in 2013-14 and 2014-15, respectively, dwarfing the value addition by their larger counterparts who grew at a modest 10.1 and 12 per cent over the same period.

index

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Amazon sets the pace for e-commerce in India

index.jpgSource: Business Standard, May 26, 2016

New Delhi: Seattle-based e-commerce giant Amazon should be happy that even before it turns three in India on June 5, the company has emerged a leader in this market. Before rivals can protest, we are not talking numbers yet. The American player has won the first round simply because it has successfully pushed competition to change the narrative and metrics of the online play.

Earlier this week, the almost nine-year-old poster boy of Indian ecommerce, Flipkart, announced in three separate interviews that customer satisfaction would be its mantra from now on. GMV or gross merchandise value of goods sold on the platform, till now the benchmark for success, will be kept aside, said Binny Bansal, who became CEO of Flipkart in January. Not too long ago, Snapdeal CEO Kunal Bahl had the same to say about shedding the GMV goalpost.

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