India business confidence picks up in January

indexSource: Business Standard, Jan 28, 2016

Business sentiment in India rose for the first time in three months to the highest since October 2015, as domestic orders strengthened at the start of the year, showed a survey by MNI Indicators. But, only 17 per cent of the respondents said their business performance was better under the new government, a possible indication that these companies expected faster reforms from the government. Read the rest of this entry »

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Economy hits rough patch as key numbers falter

Source: Business Standard, Jan 13, 2016

New Delhi: Industrial output registered its sharpest fall in four years with the index of industrial production (IIP) contracting 3.2 per cent in November, government data showed on Tuesday. Earlier, Nikkei’s Manufacturing Purchasing Managers’ Index (PMI) had fallen to a 28-month low in December.Taken together, these key macroeconomic indicators suggest softening industrial growth in the second half of the current financial year. Output is likely to suffer further in the coming months, as the full impact of the Chennai floods plays out. Read the rest of this entry »

5 early signs that point to economic revival

Source: LiveMint.com, Jun 17, 2015

Mumbai: Higher indirect tax collection, growth in commercial vehicle sales, growth in Index of Industrial Production (IIP), a four‑month high Manufacturing Purchasing Managers’ Index (PMI), and boost in infrastructure spending are the five signs pointing to economic improvement in India.The Indian stock market went up by about 30% in 2014 and the momentum was carried forward in 2015, at least in the first quarter, when the benchmark indices scaled to new highs.

However, earnings of Indian companies have left markets disillusioned. In the fourth quarter of the last financial year (January–March 2015), according to analyst estimates, the performance of Indian companies was one of the worst in recent times. As a result, the benchmark indices have lost about 11% from the top. The view on the street is that markets will remain weak in the near term, and are waiting for signs of earnings revival. Such a revival depends on economic recovery.

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RBI Allows Companies to Issue Rupee Bonds Abroad

Source: Business Standard, Apr 08, 2015

Mumbai: Allowing companies to issue rupee-denominated bonds abroad will address both pricing and currency risks, while opening a window for rupee-denominated instruments to trade abroad.

The move follows robust demand for rupee-denominated bonds issued by the International Finance Corporation (IFC) and the Asian Development Bank (ADB).

“It will bring more liquidity and funds and since these are raised in the rupee, no hedging volatility is involved,” said Rajeev Talwar, executive director of real estate major DLF.

Even large companies struggle to raise funds from the local debt market, mainly due to the short tenure of bonds (up to three years) and big investors like Life Insurance Corporation of India insisting on triple-A ratings. “There is no depth in the local debt markets,” said Seshagiri Rao, joint managing director, JSW Group. “The equity markets get many tax incentives and India should extend these to the debt market. It’s important for infrastructure and companies setting up large projects to have access to long-tenure loans; a thriving bond market will help companies.”

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Delayed Monsoon

wait for mansoonIt was a historic moment for India. After a gap of 30 years, India got  a stable majority  government, National Democratic Alliance (NDA)  won more than 50% of seats.  For the last three decades  we had coalition governments. Irrespective of which party had  a major stake, when it’s coalition, it’s difficult to reach agreement on major decisions, as Government is always at mercy of small coalition partners.

Now,  that its majority is with a single political party (BJP), everyone is expecting the government at center would take some bold decision. It is possible. It is important to take decision – some may be wrong, but it is always better to take some wrong decisions than non-decision at all. First 6 months were testing time – firstly because of pressure of expectations and inexperience (for more than a decade BJP was away from ruling position) and secondly because of delayed monsoon. It seems monsoon too was testing patience of the new rulers as well as all residents. Though delayed, finally monsoon has settled and it seems government too has settled down. They have reviewed the situation and it seems now things have started moving.

From the point of view of companies looking at India, either as a manufacturing base or as a potential market, there  can’t be a better time than current. Most important aspect any investor looks for, while thinking to enter a new country, is government stability. Undoubtedly, there can’t be a more stable government than current. Second important factor is leadership. Mr. Narendra Modi, prime minister of India, is known for his strong leadership and proactive approach towards development. Third aspect is  government approach towards industry and commerce. One of the reasons people have voted ruling alliance to power is because of the vision of growth and development NDA promised in their election manifesto. Now it is time that  government acts on its promises and try to fulfill them.  Everybody who knows about India is aware that it is difficult, almost impossible, to fulfill all the promises but any efforts towards even partial fulfillment will be seen as positive movements.

It seems government is moving in the right direction towards fulfillment of people’s expectations from it. Areas NDA government has promised to work on include economic revival, growth, agriculture and balanced development for all. The slogan of new government is “Sabka Sath, Sabka Vikas”  (“participation of all, development of all”) and the new initiative by government “my Gov’  appears to be a right step towards involvement of all in governance.  Through this portal, government is seeking advice, thoughts and ideas on various topics that concern India. At the same timethe portal is asking people to participate directly in those areas which interest them so that they could also be part of execution.

Economic situation is stable,  stock exchange index is showing steady growth,  monsoon, though delayed in many parts of the country,has crossed its average, farmers expect a good crop, government has settled down, people expectations  also have become realistic  and now it’s time for government to really act, start implementing the programs they promised during the election campaign. NDA said “Ache Din Aane Wale Hain” (“Good days are going to come”) and people expect them to come soon. Social media has started mentioning about some policy decisions, which could mean good days have started. And, there cannot be better time for investment in a country than when both Government and people are positive about its future…

RAVI PATIL – Director INDOLINK India.

India, Singapore Want Economic Partnership Deal Fast-Tracked

India & Singapore New Delhi: India and Singapore have asked their negotiators working on the Comprehensive Economic Partnership Agreement (CEPA) to show adequate flexibility to move ahead and have the review completed at the earliest.

This was agreed to at a meeting that the Singapore’s visiting Foreign and Law MinisterK Shanmugam, had with External Affairs Minister Sushma Swaraj here on Tuesday.

“The focus of the discussion was largely economic. Singapore is the source of the largest foreign direct investment into India,” the spokesman of the Ministry of External Affairs said.

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India displaces Japan to become third-largest world economy in terms of PPP: World Bank

Source: The Economic Times, Apr 30, 2014

NEW DELHI: India has displaced Japan to become the world’s third biggest economy in terms of purchasing power parity (PPP), according to a World Bank report released on Tuesday.The 2011 round of the bank’s International Comparison Program (ICP) ranked India after the US and China. The last survey in 2005 had placed the country on 10th place.

PPP is used to compare economies and incomes of people by adjusting for differences in prices in different countries to make a meaningful comparison.

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