Stan AF Posted September 5, 2019 Posted September 5, 2019 (edited) On 8/31/2019 at 8:19 PM, G_B_ said: and what has that got to do with anything? for the record isnt it obvious that we are recapitalising the banks (or making an attempt) to improve liquidity. Re subramanium he has simply cherry picked 17 indicators out of a possible 300 to further his argument. https://www.thehindubusinessline.com/opinion/gdp-over-estimation-argument-is-flawed/article28066659.ece Its nothing more than a working paper in harvard. Something to write about in the Indian express. For example automobile sales are down but second hand car sales and revenue of ola and uber is growing rapidly. So it is really wise to look at automobile manufacturing in isolation when the very concept of car ownership is being questioned. The truth is we have probably moved away from the rock bottom this quarter, Both manufacturing and services have seen a rise in PMI in July which indicates positive sentiment. since you seem to love livemint, https://www.livemint.com/news/india/india-services-activity-reverses-course-surges-in-july-pmi-1565010269698.html This positive sentiment was generated after government has started to heavily spend on stuff like infra. The lag in Q1 was due to the elections and a lag in government formation. First, there is a risk of downgrade. India's credit ratings is borderline investment grade, By raiding into rbi reserves there's a risk of capital flight as bimal jalan committee argues here . https://timesofindia.indiatimes.com/business/india-business/jalan-panel-flags-recap-risking-downgrade/articleshow/70866870.cms Second, fin min already had said that banks will get 70,000 crores capital infusion into the system. There's no clarity on whether this is seperate from the 1.76 lakh crores from the rbi as you say. https://www.moneycontrol.com/news/business/economy/banks-to-get-upfront-capital-infusion-of-rs-70000-crore-from-government-4367401.html Third, we all know 2 former reserve bank governors (Urjit Patel and Vital acharya) quit as the RBI's autonomy is under question. Not sure which economist who is worth his salt would agree to either demo or raiding into rbi's contginency reserves like this under spurious reasons. https://www.thehindubusinessline.com/money-and-banking/the-math-behind-rbis-record-rs-176-lakh-crore-surplus-transfer-to-the-government/article29266795.ece https://www.thehindubusinessline.com/opinion/rbis-surplus-transfer-isnt-true-income/article29301974.ece And lastly not just arvind subramanian IMF's chief economist had rightly questioned India's rising GDP among 4 decades unemployment as well. https://www.indiatoday.in/business/story/chief-economist-gita-gopinath-raise-doubt-india-gdp-1500308-2019-04-12 Nothing more to say. Edited September 5, 2019 by Stan AF
G_B_ Posted September 5, 2019 Posted September 5, 2019 1 hour ago, Stan AF said: First, there is a risk of downgrade. India's credit ratings is borderline investment grade, By raiding into rbi reserves there's a risk of capital flight as bimal jalan committee argues here . https://timesofindia.indiatimes.com/business/india-business/jalan-panel-flags-recap-risking-downgrade/articleshow/70866870.cms Second, fin min already had said that banks will get 70,000 crores capital infusion into the system. There's no clarity on whether this is seperate from the 1.76 lakh crores from the rbi as you say. https://www.moneycontrol.com/news/business/economy/banks-to-get-upfront-capital-infusion-of-rs-70000-crore-from-government-4367401.html Third, we all know 2 former reserve bank governors (Urjit Patel and Vital acharya) quit as the RBI's autonomy is under question. Not sure which economist who is worth his salt would agree to either demo or raiding into rbi's contginency reserves like this under spurious reasons. https://www.thehindubusinessline.com/money-and-banking/the-math-behind-rbis-record-rs-176-lakh-crore-surplus-transfer-to-the-government/article29266795.ece https://www.thehindubusinessline.com/opinion/rbis-surplus-transfer-isnt-true-income/article29301974.ece And lastly not just arvind subramanian IMF's chief economist had rightly questioned India's rising GDP among 4 decades unemployment as well. https://www.indiatoday.in/business/story/chief-economist-gita-gopinath-raise-doubt-india-gdp-1500308-2019-04-12 Nothing more to say. Ummm you are doing it again. Aravind Subramanium aggressively argued that India needs RBI reserves as they were too much. Why are you not mentioning that? His argument is that India needs to pump money into the economy. If anything this bad blood between government and RBI was caused by Aravind Subramanium. Acharya and Urjit Patel were put in place by Rajan. Rajan himself had a clash with Subramaium because the former laid down norms by which banks had to keep aside a higher % of deposits. Re the downgrade etc. Our trade balance and current account deficit is declining and well within control. It was 0.7% of GDP in the fourth quarter. Ie the RBI needs less reserves as a contingency against this. 24 billion out of 430 billion is not exactly taking a big chunk out. The Jalan committee is a report will naturally advocate for some caution. Its their necks on the line. https://www.business-standard.com/article/economy-policy/india-s-current-account-deficit-narrows-sharply-to-0-7-of-gdp-in-q4-119062900014_1.html Yoda-esque 1
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