rkt.india Posted August 14, 2019 Posted August 14, 2019 India smartphone market grew 7% in Q1 2019: IDC NEW DELHI: With a total shipment of 32.1 million units, India's smartphone market grew 7.1 per cent year-on-year (YoY) despite the global market falling by six per cent during the same period, a new report by the International Data Corporation (IDC) said on Monday. The research showed that despite the government's new e-commerce rules, online channels managed to sustain their pace, registering 19.6 per cent year-on-year growth in Q1 2019. Xiaomi maintained its leadership position, growing YoY by 8.1 per cent in Q1 2019 while Samsung was at the second position with a decline of 4.8 per cent in Q1 2019. Vivo grabbed the third position as its shipments doubled in Q1 2019 whereas OPPO recaptured the fourth position with a year-on-year growth of 9.7 per cent. "Fuelled by attractive offers and new launches by vendors like Xiaomi, Samsung, Realme, and Huawei, online sales reached 40.2 per cent of the market in Q1 2019 .. Read more at: //economictimes.indiatimes.com/articleshow/69310193.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst https://economictimes.indiatimes.com/tech/hardware/india-smartphone-market-grew-7-in-q1-2019-idc/articleshow/69310193.cms
Stan AF Posted August 14, 2019 Posted August 14, 2019 Combination of structural, cyclical factors reason for current economic slowdown: SBI study Business Press Trust of India Aug 14, 2019 19:08:07 IST New Delhi: The current economic slowdown can be attributed to a combination of structural and cyclical factors, in addition to global uncertainties, an SBI study said on Wednesday. The country's economy is showing signs of slowdown, with hi-frequency indicators like industrial output posting subdued growth and automobile sales touching historical lows. "The reasons for the current domestic slowdown, apart from the global uncertainties look like a combination of both structural and cyclical factors," State Bank of India (SBI) said in its research report 'Ecowrap'. It said there are clearly a host of structural factors that are holding back current consumption. Representational image. Reuters. A substantial decline in wage growth (both rural and urban wages) in recent times resulting in lower household savings (a result of conscious policy decisions to correct macro imbalances) has possibly slowed down the growth in real per capita income that is holding back demand, it said. The share of private sector has declined from 50 percent during 2007-14 period to 30 percent during 2015-19 in new project investments (in value terms). A possible increase in current capacity utilisation (at 76.1 percent) can happen only if the sector-specific issues are simultaneously addressed to boost demand of bank credit, the report said. On automobile sector slowdown, Ecowrap said it is not restricted just to India, but the impact is felt across geographies with China also facing the brunt of the auto slowdown. Even in the US, after a long period of auto sector sluggishness, the July numbers gave some respite but that also may be an impact of the base effect. In Germany too, the auto sector witnessed a production decline of 12 percent in the first half of the year. "The criticality of automobile sector can be gauged by a humongous 30 million employment on a per annum basis which it generates. Out of this more than 50 percent could be of contractual nature, hence the seriousness of the current auto slowdown," it said. Referring to the external environment, it said the global economy is currently in uncharted territory. The assumptions which "we hold for reasonably predicting the future" do not seem to be holding up and the global economy is witnessing outlier events on a daily basis, the occurrence probability of which is practically non-existent given the assumptions. For example, it said Argentina's stock market declined by 38 percent in a single day, the largest one-day decline in its history. Independent observers suggest that this was a 17-sigma event, which means that it should not have happened even once in the history of the universe, the report noted. Updated Date: Aug 14, 2019 19:08:07 IST https://timesofindia.indiatimes.com/business/india-business/slowdown-in-economy-due-to-structural-and-cyclical-factors-sbi-study/articleshow/70678835.cms https://www.firstpost.com/business/combination-of-structural-cyclical-factors-reason-for-current-economic-slowdown-sbi-study-7165281.html
mishra Posted August 15, 2019 Posted August 15, 2019 @Stan AF Lets cut some slack to Modinomics. Global economy is slow and FT predicted that Global recession is imminent based on Bond Market activities. So any growth of India above 5% is not bad
Stan AF Posted August 16, 2019 Posted August 16, 2019 Why this economic slowdown is serious Market-based economies thrive on hope and belief of profit by private entrepreneurs. In the times of negative market sentiments, the government increases its expense to bring back hope. But the Narendra Modi government's hands are tied at the moment. The economic slowdown presents a serious challenge to the Narendra Modi government as it sets a target of making India a $5 trillion economy in five years. (Photo: PTI) HIGHLIGHTS Auto sector is facing worst crisis in about 20 years In real estate sector, number of unsold homes have increased When government needs more money, tax collection has grown by just 1.4% Suppose you inherited a farmland and a house. You grow your own food using family bank of seeds. You don't use chemical fertilisers and prepare organic manures using cow dung and similar stuff on your own. You don't buy fodder for your cattle or poultry which fulfil your milk and meat requirements. You use biogas as fuel for household energy. This means you have a self-sustained viable economy. But you are contributing nothing to country's gross domestic product (GDP) as you are not using money. Now, consider this. Your neighbour works in a factory and earns a salary. She buys grocery from a kirana store, milk and butter from a dairy parlour, clothes from a shopping mall, dines out and watches a movie or a play on weekends, employs a help in her home and pays taxes. Her activities are the guarantee that the country's GDP clock is ticking upward. Every single purchase by her begins a chain of purchase and sale. The kiranawallah goes to wholesale market to buy stuff for shop. The wholesale market sources its supplies from the farmers, who purchase seeds, fertilisers, tractors, diesel and employ labourers on their fields. All are paid in money. This is repeated for every single purchase by your neighbour. She ensures flow of money that defines growth of measurable GDP. This chain of sale and purchase has shown signs of slowdown over the past few months. It is visible in almost every sector of the Indian economy. The result was worrisome for 2018-19, for which the GDP growth rate was 6.8 per cent. This is the slowest growth rate of GDP since 2014-15. The previous low was 6.39 per cent in 2013-14 following which the Narendra Modi government came to power in 2014. Recent GDP figures have only aggravated the concerns of economic slowdown. According to Central Statistics Office, India's GDP slowed to a five-quarter low of 6.6 per cent in October-December 2018. It fell below 6 per cent mark in January-March 2018-2019. At 5.8 per cent, the March quarter growth rate pushed India behind China after seven quarters. But that rivalry is the least of the worries for Indian economy. There are ominous signs showing that slowdown is deep. Auto sector Automobile sector is facing its worst crisis in 20 years. Reports say around 2.30 lakh jobs have been lost in the auto sector. A large of it is being blamed on the global trend accentuated by the Brexit situation. But what signals a deeper problem is the Society of Indian Automobile Manufacturers (SIAM) report that 300 dealerships have shut down in recent times. Sales of cars, tractors, two-wheelers have declined considerably. SIAM said about 10 lakh jobs have been hit in the auto component manufacturing industry. Real estate The health of real estate is a massive indicator of the state of Indian economy. It has links with about 250 ancillary industries -- bricks, cement, steel, furniture, electrical, paints etc -- and affects them all if there is a boom or gloom in the sector. Reports are that the volume of unsold houses over the past one year has increased in the top cities of the countries. According to real estate research company Liases Foras, the unsold inventory currently stands at 42 months. This means it will take three-and-a-half years for the existing unsold inventory (read flats/houses) to clear up. An efficient market maintains 8-12 months of inventory, the company said. FMCG at slow pace The fast-moving consumer goods (FMCG) companies have reported decline in volume growth in the April-June quarter. This has been blamed on a sluggish rural demand, which, in turn, indicates less availability of money in villages. Reports say that the demand for FMCG in rural India was growing at 1.5 times of the urban demand. The rural demand has come down to the level of urban growth or below. FMCG major Hindustan Lever reported volume growth of 5.5 per cent in April-June quarter compared to 12 per cent last year. Dabur posted a growth of 6 per cent against 21 per cent last year. Britannia Industries recorded a volume growth of 6 per cent against 12 per cent in the same period last year. Asian Paints saw a volume growth slump from 12 per cent in April-June quarter last year to 9 per cent this year. Bank's lending to MSME At macro-level, lending by banks to industries shows a significant jump from 0.9 per cent in April-June quarter in 2018 to 6.6 per cent for the same period this year. This should reflect in job growth in industries but the employment situation is dismal. While the labour force survey, released by the government in July, showed a record high unemployment rate of 6.1 per cent for 2017-18, recent Reserve Bank India report does not present a brighter picture. The RBI consumer confidence survey showed a drop in consumer confidence for July over pessimist situation in job creation and overall economic scenario. This contradiction is explained in the details of pattern of lending by banks, which have extended credit to big industries while money flow to medium- and small-scale enterprises, which are the biggest employers. The credit to big industries grew by 7.6 per cent during April-June compared to 0.8 per cent last year. Lending to MSME (micro, small and medium enterprises) by banks has actually slipped from 0.7 per cent in 2018 to 0.6 per cent this June quarter. Government's hands tied Market-based economies thrive on hope and belief of profit by private entrepreneurs. When market sulks under negative sentiments in the market, the government infuses money to bring back hope. But the central government's hands are tied. In India, the government expenditure accounts for around 10 per cent in the economy. With the government sensing an economic slowdown, it increased expenditure by 19 per cent in 2017-18 and 13 per cent in 2018-19. This was the highest increase in government expenditure since 2008 financial meltdown. To do a repeat, the government needs more money. But revenue collection is moderate for April-June quarter -- at Rs 4 lakh crore registering a growth of less than 1.5 per cent. To put in perspective, the gross tax collection growth for April-June 2018 was over 22 per cent. Simply put, the government does not have enough money to invest in the economy. Read | Auto sector crisis: 2.30 lakh jobs lost as industry faces worst crisis in 20 years Also read | Annual GDP falls to 6.8% from 7.2% last year, March quarter growth slower than China You may like to read | From policy paralysis to economic paralysis? Modi govt is decisive but Watch | Is PM Modi's goal of $5 trillion economy by 2024 a pipe dream?
Stan AF Posted August 16, 2019 Posted August 16, 2019 (edited) Tracking India's economic slowdown: Narendra Modi govt has a herculean task ahead to pep up growth with dying private investment Business Vivek Kaul Aug 14, 2019 15:23:27 IST Editor's note: This is the third part of a multi-part series in which Firstpost’s columnists will analyse the ongoing economic slowdown and offer solutions. Over the last few weeks, there has been a spurt of news articles on the economic slowdown. Car sales are down. Two-wheeler sales are down. Even mopeds are not selling as much as they did. The volume growth, or the number of packs sold, of Fast-Moving Consumer Goods (FMCG) companies has slowed down big time. New investment projects are barely being announced and there has been a huge drop in the projects being completed. Exports are stagnant and the government’s collection of taxes have been more or less flat. There is more than enough evidence of the economy slowing down. In fact, as this news report points out, people are thinking twice even before buying a Rs 5 biscuit pack. The question is why. Let’s take a look at this pointwise. 1) The Gross Domestic Product (GDP) of an economy consists of four parts: Private consumption expenditure, investment, government expenditure and net exports (exports minus imports). In the Indian case, private consumption expenditure makes up 60 percent of the economy. In the last few years, the investment part of the economy hasn’t gone anywhere and it is consumption which has been driving the economy. Now consumption is slowing down. 2) Why is consumption slowing down? Between April 2014 and March 2019, the retail loans of banks went up by 120 percent. Between April 2009 and March 2014, the five-year period before the period under consideration, the retail loans of banks had grown by 80 percent, on a much lower base. Representational image. Reuters Between April 2014 and March 2019, credit card outstanding went up by 204 percent whereas personal loans went up by 255 percent. What this tells us is that borrowing financed a large part of consumption, over the last five years. Why did this happen? This happened primarily because the income in the last five years hasn’t gone up as much as it did in the period of five years before that. The per capita income between April 2014 and March 2019 went up by 59 percent. It had gone up by 88 percent between April 2009 and March 2014. With this fall in the rate of growth of income, people borrowed more to consume and spend more. 3) Banks were not the only financial institutions giving retail loans. So, were the non-banking finance companies (NBFCs). Post-demonetisation in November 2016, banks had seen a huge increase in their deposits. Given that the banks were paying interest on these deposits, they needed to lend it out as well. They were not in a mood to lend to the industry, given the massive amount of bad loans they had accumulated on lending to industry. Bad loans are largely loans which haven’t been repaid in 90 days or more. What they did instead was started lending big time to the NBFCs. Between March 2017 and March 2019, the banks lending to the NBFCs increased 64 percent to Rs 6.4 lakh crore. This easy lending by banks further encouraged the NBFCs to go easy on retail lending. Between March 2017 and March 2018, retail lending of the NBFCs jumped 39 percent to Rs 3.6 lakh crore. 4) The overall financial liabilities of the households went up by Rs 6.7 lakh crore in 2017-2018. This is a huge number. 5) In the recent past, several NBFCs have been in more than a spot of bother. This has led to the banks cutting down on their lending to the NBFCs. Between March 2019 and June 2019, bank lending to the NBFCs shrunk close to 1 percent. Banks are a major source of funds for the NBFCs. The Reserve Bank of India (RBI) data for the NBFCs for 2018-2019 is not currently available. But data put out by the credit bureau, CRIF High Mark, suggests that during 2018-2019, loans given by the NBFCs have fallen by 31 percent. 6) What about retail lending carried out by banks? Between March 2019 and June 2019, the retail lending carried out by banks increased by just 1.5 percent. If we look at the year-on-year growth in retail loans between June 2018 and June 2019, it remains strong at 16.6 percent. But the growth of just 1.5 percent between March and June this year tells us that the bulk of the growth in retail loans happened between June 2018 and March 2019 and things have slowed down since. This tells us that people are becoming averse to the idea of taking on new loans to finance consumption. This was bound to happen at some point of time given that the income hasn’t been increasing at the same pace as it was in the past. Borrowing can finance only so much of consumption growth and in the process of economic growth. 7) There is another point that needs to be made here, which is not very obvious in the first place. In much of the western world, the thinking is that in an economic slowdown it is best to cut interest rates and let people borrow and spend more. This logic does not apply very well to countries like India. When it comes to a certain section of the population, they tend to consume more when interest rates are high. Take the elderly. When they earn a higher rate of interest on their deposits, they tend to consume more. Post-demonetisation interest rates have fallen and this clearly has had an impact on their consumption. What has not helped is that hospital and medicine inflation in 2018-2019, two figures very important for the elderly, were at 9.4 percent and 7.2 percent respectively. 8) A great success of the Narendra Modi government has been the ability to maintain low food inflation. The food inflation in 2018-2019 was just 0.14 percent. This basically means on the whole, food prices were flat. While this was good news for consumers, it wasn’t good news for farmers. A major reason for flat food prices is that when it comes to many agricultural commodities, India as a country is producing more than it consumes. At the same, this excess produce is not being exported and hence, has led to stagnant food prices. Stagnant food prices have meant flat incomes in large parts of rural India and this has now started to impact consumption. Ultimately, consumption on its own cannot keep creating economic growth all the time. For that to happen, incomes need to keep going up at a good pace as well. For incomes to go up, there has to be economic activity and for that investment and industry need to progress. (The writer is an economist and author of the Easy Money trilogy) Read Part 1: Why Narendra Modi govt shouldn’t delay fiscal stimulus to revive struggling industries Part 2: Country needs meaningful transition policies; simple demand and supply games won't do Updated Date: Aug 14, 2019 15:23:27 IST https://www.firstpost.com/business/tracking-indias-economic-slowdown-narendra-modi-govt-has-a-herculean-task-ahead-to-pep-up-growth-with-dying-private-investment-7163631.html Edited August 16, 2019 by Stan AF
Stan AF Posted August 18, 2019 Posted August 18, 2019 (edited) Auto industry may shed 500k jobs next quarter Tier II-III companies with a turnover of less than Rs 400 crore are bleeding the most. By Prachi Verma, ET Bureau | Updated: Aug 18, 2019, 06.33 AM IST NEW DELHI: India’s $57-billion auto components industry is expected to face more jobs losses over the next quarter due to the ripple down effect of slumping automobile sales. Front-end sales jobs and those related to technical, painting, welding, casting, production technology and services are primarily at risk, industry players said. “The vehicle industry is witnessing de-growth, resulting in 100,000 job losses in the component sector over the last few months. Should this trend persist for another 3-4 months, it could lead to 1 million job losses,” Vinnie Mehta, director generalm Automotive Components Manufacturers Association of India (ACMA), told ET. Recruitment firms Xpheno and TeamLease have pegged the job losses at more than 500,000 in the coming quarter. “The job cuts are happening around the major hubs, and by at least 10% in each of the companies,” said Rituparna Chakraborty, co-founder, TeamLease Services. The downturn in the auto sector is expected to last anywhere between six and nine months, she said. Tier II-III companies with a turnover of less than Rs 400 crore are bleeding the most. Around 5 million are employed in the sector, which exports components worth $15 billion. “Contractual employees are being laid off after unskilled & semi-skilled employees in the auto ancillary industry,” said Mehta. The slowdown started during the festival season in September last year. “About 15% reduction in man-hours, including actual lay-offs and reduction in work days/hours, has taken place since September 2018 till date,” said Ram Venkataramani, president, ACMA and managing director at Amalgamations Group, an auto ancillary player. Another 15%, roughly 750,000 workers, may be forced to quit over the next quarter or so, he said. Amalgamations Group has laid off about 200 across functions and levels. Other companies, too, have started taking protective measures. For instance, automobile components manufacturer Minda IndustriesLtd has put a freeze on fresh and replacement hiring. It has also reduced inventory and operational costs. “We are not touching the people in the company just yet,” said Nirmal Minda, chairman, Minda Industries, adding that contract workers may be the first to let go in case the situation worsens. The company has more than 20,000 employees, of which 5,000 are contract workers. Ajay Kumar, HR head at tyre maker Continental India, said, “We closely monitor our production and process cost. Hiring is being looked at carefully as a matter of process discipline but we are continuing to hire.” “The auto ancillaries sector would definitely see some impact; Apollo Tyres has been able to keep itself above troubled waters till now,” said Satish Sharma, president, Asia Pacific, Middle East and Africa, Apollo Tyres. Bosch, Ceat, Shriram Pistons and Rings, and Lumax Industries did not respond to ET’s queries on the employment scenario. https://m.economictimes.com/industry/auto/auto-news/auto-industry-may-shed-500k-jobs-next-quarter/articleshow/70709114.cms Edited August 18, 2019 by Stan AF
Stan AF Posted August 19, 2019 Posted August 19, 2019 (edited) View: Its the start of a structural problem, not a temporary cyclical one Our manufacturing is jammed at a long-term low of 15% of GDP. Domestic demand has also slowed down. By ET CONTRIBUTORS | Updated: Aug 19, 2019, 06.20 AM BCCL Having ignored education for decades, we have millions of young people without the skills for tomorrow’s employment. By Omkar Goswami After going through three successive quarters of slowdown in India, and with the prospects of that continuing for some more, every thinking economist is asking one question: is this cyclical or structural? In other words, is it just a series of bad quarters that will right itself soon enough with adequate monetary and credit stimulus? Or is it something more serious one that is beyond the ken of repo rate-led monetary interventions? Whatever I have learnt over four decades of economics, and all that I see in boardrooms of companies spanning different industries, suggest that we may have got into a structural impasse. Getting out of it will need interventions that go well beyond the realms of reducing the repo rate. Make More in India Let’s start with manufacturing. At 15%, India’s share of manufacturing to GDP has remained persistently flat over a long period. Compare that with Malaysia at 22%, South Korea and Thailand at 27%, China at 29% over a much higher GDP, and even Bangladesh at 17%. It seems that ‘Made in India’ is about commissioning dreadful statues of gear-cogged lions at key cross-roads of our major cities. It has done nothing to increase manufacturing in our GDP. There’s worse. Not only has there been no rise in the share of manufacturing, but it has also shrunk across key sectors. Over the last six months up to May 2019, textiles de-grew by 1% amonth, electrical equipment didn’t grow at all, rubber and plastic products slumped by over 3%, the output of fabricated metals as well as paper crashed by over 10% a month, and that of motor vehicles plummeted by over 5% a month. Matters have worsened in June 2019. The index of industrial production hit a four-month low with 15 of the 23 industry groups showing negative growth. Next question: how much are we investing to create future income? Today, our gross fixed capital formation is between 31% and 28% of GDP, depending on whether it is measured in constant or current prices. There being no significant productivity increases, these rates are wholly insufficient to sustain consistent GDP growth in the region of 7.5%, let aside 8%. Compared to our capital formation of around 31% of GDP, it was over 34% in Indonesia, 44% in China, and over 31% and rising in Bangladesh. In the last two years, I have seen no additional investment proposals in any boardroom. Now for some longer-term issues. In the last 50 years, no economically significant nation has grown rapidly without investing in the quality of its workforce — something that becomes supremely important in an era of rapid computerisation, networking and artificial intelligence. Where do we stand here? Awfully. In 2011, the literacy rate for Indians of 18-24 years was 86%. Compare that with 97% for China in its period of highest growth, 99% for Indonesia, and 98% for Malaysia and Thailand. It is worse for women of same age group: 82% for India, 95% for China, 99% for Indonesia, and 98% for Malaysia as well as Thailand. No Southeast Asianand East Asian country has discriminated against girls in education. We have, and continue to do so. Given this educational disparity, it isn’t surprising that India has a very low share of women in the workforce —which itself is fast declining over time. In 2005, women accounted for over 26% of the workforce. This has steadily reduced to 22% in 2018. In comparison, the share in Bangladesh in 2018 was over 30%, China 44%; Indonesia 39%, Malaysia 38%, and Thailand above 45%. As You Sew, So Shall You Rip On to exports. Between April 2011and June 2019, our exports have been pretty much flat — oscillating around $25 billion a month. China, with five times our GDP, exports almost eight times as much. South Korea, at 60% of our GDP, exports twice as much. Malaysia and Thailand, with less than a fifth of our GDP, export over three-quarters as much as we do. Simply put, notwithstanding IT, we have failed as an exporting nation. A persistently overvalued real exchange rate has also played its role. The scenario is depressing. Our manufacturing is jammed at a longterm low of 15% of GDP and going through a grim phase. Domestic demand has seriously slowed down. There is no vent through greater exports. Having ignored education for decades, we have millions of young people without the skills for tomorrow’s employment. We are persistently poor in employing women. To me, it looks like the beginning of a serious structural problem, not a temporary cyclical one. It requires serious kick-starting with a severely constrained exchequer. So, it must go back to banking, and creating sufficient liquidity with affordable credit flows to key sectors. I can think of four: low-cost housing, roads and highways, rural infrastructure, and textiles. The first three have high employment potential while creating demand for core industries, and the fourth creates an essential product for the people. Each of these can get a fillip through specific credit flows catalysed by accommodative policies of the Reserve Bank of India. These will not solve the longer-term structural problem, but may mitigate some of it, while helping a cyclical uptick. Having said that, I fear that the days of 7% growth are over. We may have to now live with 6% — heaven forbids, perhaps even lower. As you sow… The writer is chairman, Corporate and Economic Research Group (CERG) Advisory (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.) https://m.economictimes.com/news/economy/indicators/view-its-the-start-of-a-structural-problem-not-a-temporary-cyclical-one/articleshow/70728021.cms Edited August 19, 2019 by Stan AF
diga Posted August 19, 2019 Posted August 19, 2019 (edited) Quote “Do not step out of home on Thursday unless it is necessary " Maharashtra Navnirman Sena (MNS) Saw this on twitter.. and some news about Raj Thackerey being summoned by ED. @G_B_ Effects on Mah politics?? Edited August 19, 2019 by diga
Stan AF Posted August 20, 2019 Posted August 20, 2019 Raghuram Rajan: Economic slowdown ‘very worrisome’, reforms needed to boost ailing sectors Raghuram Rajan said the government's top priority should be fixing the problems in power and non-banking financial sectors (NBFCs). By Express Web Desk |New Delhi | Updated: August 20, 2019 7:58:23 am Former RBI governor Raghuram Rajan (Express photo by Nirmal Harindran) Calling the recent slowdown in the economy “very worrisome”, former RBI governor Raghuram Rajan has said the government needed to come out with a new set of reforms to revitalise the ailing sectors. Rajan said the government’s top priority should be fixing the problems in power and non-banking financial sectors (NBFCs). “We need a fresh set of reforms informed by view on what we want India to be and I would love for that view to be articulated at the very top (that) here is the kind of economy that we want. One-off programs here and there don’t amount to a comprehensive reform agenda for the economy,” Rajan told CNBC TV18. The economy is fast losing its growth momentum as a result of a dip in consumption demand and slide in investment activity. Non-banking financial companies (NBFCs) are facing severe liquidity crunch in the wake of IL&FS crisis. “What we really need is an understanding of how we are going to propel this country by the two or three percentage points greater growth that it needs and that needs fixing the immediate problems such as in the power sector, such as in the non-bank financial sector and those need to be done yesterday, not in the next six months, it is very important that those be tackled immediately,” Rajan said. Rajan said the government cannot rely on sops and advocated for a new set of reforms to increase private sector investment. “We need a new set of reforms, which energise the private sector to invest. Sops, stimulus of one kind or the other are not going to be that useful in the longer-term especially given the very tight fiscal situation that we have. Instead, bold reforms, well thought of, not jumping off the cliff, but really seriously thought out reforms in a variety of areas which energise the Indian people, energise the Indian markets and energise Indian business,” he said. Rajan also drew attention to former chief economic advisor Arvind Subramanian’s revelations that GDP growth was overestimated by 2.5 per cent during 2011-12 and 2016-17. “I also think that we should pay attention to some of the arguments made by the former chief economist Arvind Subramanian that in fact we may be overestimating growth with some of the new GDP data and I would suggest – I have been saying this for some time – we need fresh look from an independent group of experts at the way we compute GDP and make sure that we are not in a sense having GDP numbers that mislead and cause the wrong kinds of policy actions,” he said. The recent crisis in the auto sector has resulted in thousands of job losses, while the fast-moving consumer goods (FMCG) companies have reported a decline in volume growth https://indianexpress.com/article/business/economy/economic-slowdown-very-worrisome-reforms-needed-to-boost-ailing-sectors-raghuram-rajan-5917936/
Stan AF Posted August 20, 2019 Posted August 20, 2019 All is not well is the byword as Shaktikanta gives India 'Panglossian' A mood of doom and gloom will not help anyone at this point, Shaktikanta Das said. The share of manufacturing in India's GDP, at 15%, has long remained distressingly low for a country that aims to be among global industrial heavyweights. Auto, the sector that has the lion's share in the country's manufacturing basket, is seriously sputtering. July auto sales came in at a 20-year low, SIAM data showed. At the current rate, total annual passenger car sales for this fiscal could fall to sales levels last seen in 2014-15. The financial sector is still caught in the deep mess that started with the unravelling of IL&FS. The pockets of the common Indian — including the farmer — are empty, with the result that consumption, which is the mainstay of the country's GDP, is firmly stuck in the slow lane. Investment — both private and corporate — continues to be pedestrian and is likely to remain so, cutting out the last hope for a quick, significant turnaround. Companies have delayed investment because of widespread business uncertainty, while the government can't afford to double down on its part owing to fears over a spike in deficit. The road back to growth The governor acknowledged all these bottlenecks — he admitted that things like the NBFC crisis and the resultant lack of liquidity for critical sectors do affect businesses as well as the economy at large. RBI is closely monitoring NBFCs and housing finance companies to make sure no other collapses happen, Das said. He put into words all of RBI's concerns over the steady fall in growth; he said a revival in growth was now the top priority that's keeping every policymaker busy. Das sought to reassure businesses by saying liquidity will not be a deterrent for growth. RBI's endeavour is to ensure enough liquidity in the system so that the productive needs of the economy are met, he said. So, from where does RBI see the economy getting the push it needs so badly? "Not just from monetary policy but also through transmission. So our expectation is that banks should move faster on rate cut transmission," he said. https://m.economictimes.com/news/economy/policy/all-is-not-well-is-the-byword-as-shaktikanta-gives-india-panglossian/articleshow/70734905.cms
Stan AF Posted August 21, 2019 Posted August 21, 2019 https://churumuri.blog/2019/08/21/the-state-of-indias-economy-in-30-screenshots-from-just-the-last-15-days-of-the-economic-times/ Posted on 21 August 2019 by churumuri The state of India’s economy in 30 screenshots from just the last 15 days of ‘The Economic Times’ The travails of the automotive industry have got all the coverage (The Telegraph, above), but various sectors of the Indian economy are in deep slump, as Narendra Modi bloviates about making India a $5 trillion economy. (How many zeroes in a trillion? 12, actually.) Eight key core sectors of the economy–including electricity, natural gas and petroleum refinery products–have had their lowest growth in 50 months, according to official data (Deccan Herald, above). In just the last two days two industry bodies, of tea and cotton (above), have bravely issued advertisements announcing the huge job losses that are on the anvil. Britannia CEO Varun Berry‘s quote that consumers were hesitating to buy a Rs 5 biscuit packet hits the nail on the head. But the big picture is even more revealing of the state of the economy under the much-vaunted “Gujarat Model”.
Stan AF Posted August 21, 2019 Posted August 21, 2019 (edited) [Cont'd] Here are 30 screenshots from the last 15 days of The Economic Times, each headline providing a peek of the oncoming truck. *** https://churumuri.blog/2019/08/21/the-state-of-indias-economy-in-30-screenshots-from-just-the-last-15-days-of-the-economic-times/ Edited August 21, 2019 by Stan AF
Stan AF Posted August 22, 2019 Posted August 22, 2019 Facing Shutdown & Job Losses, Textiles Association Issues Ad In Newspaper Begging Govt’s Attention The Logical Indian Crew India August 20th, 2019 / 4:32 PM / Updated 15 hours ago Page 3 of The Indian Express, dated August 20, carried an advertisement by Northern India Textile Mills Association (NITMA). It was titled ‘Indian Spinning Industry Facing Biggest Crisis, Resulting in Huge Job Losses’. This newspaper advertisement spoke about the job crisis faced by the industry, which is otherwise the biggest employer after the agriculture industry in India. It is one of the rare occurrences when an industry body attempted to draw the government’s attention via a newspaper advertisement. NITMA has called this the biggest crisis ever, befalling the Cotton and Blends spinning industry, kinds of which was seen during 2010-11. During that year, India’s cotton output had dipped to 332.25 lakh bales. Citing data from Directorate General of Commercial Intelligence and Statistics (DGCI&S), the association says that there has been a 34.6% drop in the export of cotton yarn value in 2019 (April-June) as compared to the 2018 value for the same period. Among the various challenges, taxes levied by state and centre, high-interest rates, high cost of raw materials in comparison to global prices and cheaper imports of garments and yarn from countries like Bangladesh, Sri Lanka and Indonesia, have been outlined in the advertisement by NITMA. The advertisement further notes that about one-third of spinning capacity across India has been closed and those still running are incurring huge cash losses. “The Indian textile industry employing over 100 million people directly and indirectly hereby seeks immediate attention of the Government of India to prevent job losses and avoid the spinning industry from becoming Non-Performing Asset (NPA),” the advertisement said. Distress Faced By Textiles Industry The International Cotton Advisory Committee (ICAC) in February this year said that India’s cotton production is set to drop by 7% due to ‘insufficient rainfall’. This against China’s estimated 1% production increase might cost India its distinction as the world’s largest cotton producer, the report said. Just last month, a release issued by NITMA said that the textile spinning mills in North India were considering cutting down production and shutting down mills once a week. The decision was made in lieu of poor demand for yarn from overseas market, combined with excess spinning capacity in the country. The release said, “China, which has been a major importer of Indian yarns for the past few years, has cut down imports in the past few months, thus worsening the situation, leading to the accumulation of yarn stocks in Indian spinning mills.” The releases further added that some textile units are considering lowering the capacity to even 50% in the wake of the unsafe market situation and to have less borrowing/outstanding and stocks. https://thelogicalindian.com/awareness/textile-industry-advertisement/
Stan AF Posted August 22, 2019 Posted August 22, 2019 [Cont'd] Tea Industry’s Public Appeal On August 1, the Indian Tea Association had issued a similar public appeal. The appeal asked the government to ban expansion of tea estates for at least five years and for the Provident Fund (PF) contribution of workers to be taken over by the state government for at least three years, in order to provide relief to the industry. Himanta Biswa Sarma, Assam’s Finance Minister had also tweeted that the tea industry in Assam was undergoing critical phase. To relieve the producers, the state government withdrew cess on green leaves, he said in the tweet.
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