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Will india make it – 2016? How to revive Investment
Another year has passed and there are still no signs of a revival in private investment. It was never meant to be easy. After all, India is in the midst of what resembles a “credit-less recovery”. GDP...
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Column: India’s GDP to auto-correct
It’s GDP season again. India’s “new” GDP series has kept us on our toes, springing a new surprise with every release. Over the last several quarters, the statistics agency, the ministry of statistics...
View ArticleMonetary policy review highlights inflation outlook uncertainty
The RBI held on to its 5.1% CPI inflation forecast for January-March 2017, but highlighted that there were upside risks now versus the scope for downside surprise last time. This is unsurprising since...
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GST rate impact: Here’s how the new tax can carry a greater punch
(PTI) The government, over the last few days, finalised GST rates that could blunt the reform’s growth impact. It has decided on multiple tax rates and exemptions, moving further away from an ‘ideal’...
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Riding a wave: A case can be made that, for credibility sake, RBI needs to...
What RBI really worries about are the second-round effects of the housing allowance. (Image: Reuters) Watching India’s inflation trends these days gets us humming The Doors’ 1967 popular single, ‘Break...
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Farm crisis: Landless may be better off, but landed are worse off; here is...
There is anecdotal evidence that demonetisation hurt the liquidity of food traders, resulting in fire sales. (Reuters) The state of India’s rural economy is puzzling. There is enough evidence to...
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Is 4 pct inflation new normal? The rise back up may not be too sharp either
The period since 2014 to now is a virtuous cycle in which falling inflation each year is triggering even lower inflation over the next. (Image: Reuters) We have said this before, and have found new...
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States’ Finances & FRBM Goals: Tied to the mast, but loosely
The Centre’s transfers to the states have been rising since the Fourteenth Finance Commission (14FC) came into effect in FY16. In Greek mythology, the song of the sirens was so alluring that enchanted...
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FRBM targets: NHPS, higher MSPs a drag on debt goal
Given the rapid changes in the Indian economy over the last decade, there were calls for a new and updated FRBM law. Given the rapid changes in the Indian economy over the last decade, there were calls...
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Storm before the lull: Inflation will surge in FY19, cool off the year after
The government has passed on much of the global oil price increase to retail prices . It is well known that when a negative output gap begins to close, it starts to push core inflation up. Indeed, we...
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Growth outlook: India’s GDP growth likely to hit 7.5% by end-2019
The start of 2018 marked a period of overshooting, thanks to a low base and inventory re-stocking. GDP growth fell during the demonetisation and the GST implementation period of 2016-17, undershooting...
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RBI Monetary Policy Review: Hold rate hike? No, it should be done sooner...
We expect RBI to hike the policy repo rate by 25 bps in the upcoming policy meeting, taking it to 6.75%. (Reuters) A constantly changing growth and inflation nexus, and delays in monetary transmission,...
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Domestic infrastructure: Fix land and labour related regulatory hurdles to...
India’s GDP growth remains unchanged despite world growth falling (Represenmtative image) Much has been said about the role played by higher oil prices in widening India’s current account (C/A)...
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Ailing NBFCs, fiscal gaps offset oil, tame inflation gains
India’s fiscal finances are walking a tightrope. In the last three years, NBFCs (here we also include the housing finance companies) accounted for nearly a third of incremental credit. Alas, following...
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Falling rural demand: The rural-urban inflation divide to the fore
This has implications for monetary policy. By PranjulBhandari It is well acknowledged that CPI inflation has fallen dramatically this year (from 5.1% in January to sub-3% in November), and 70% of this...
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GDP numbers: Statistics Office’s single deflation practice behind...
A proxy of input and output price inflation suggests that Q2 stood out as a quarter in which the two price inflation indices moved in opposite directions. The July-September 2019 (Q2 FY19) GDP growth...
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Fiscal math: Additional spending on rural India may keep 60 pct public...
If divided equally, as suggested by the new FRBM, both the Centre and the aggregated states should run deficits of no more than 2.5%, each, by FY25. A fog has set over New Delhi: the fiscal outlook for...
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Fiscal forecast: What budget 2019 could offer?
The budget is likely to be replaced by a new one once the new government takes over after national elections. India’s Central government will present its budget for FY20 on February 1. Because this is...
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The enigmatic finances of India’s states
The Central government’s fiscal deficit came in at 3.5% of GDP, the same as in the previous year. India’s public sector borrowings remain sticky and at elevated levels; however, the underlying mix has...
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Food price rise: How RBI can still find room to ease
As a consequence, this spike should not concern RBI too much. In December, CPI inflation soared to 7.4%, its highest print in over five years. This has come at a time when economic growth has slowed to...
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Budget 2020: Being boring, and just implementing pre-existing policies is better
Budget 2020-21: Alas, the 0.5% of GDP slippage is not where it ends. Over the last few years, some on-budget expenditures have been pushed off-budget. Budget 2020 India: Fiscal policy has already...
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Budget 2020: More questions than answers
Budget 2020-21: The FY20 corporate tax revenues came in Rs 1.55 lakh crore lower than budgeted. Union Budget 2020 India: As the dust settles on the FY21 budget, there are some lingering questions we...
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Adani Ports & SEZ: Retain ‘buy’, fair value at Rs 410
Adani Ports has seen reduction of share pledges worth Rs 58 bn aggregated across ports, transmission and enterprises on repayment of underlying debt. The Adani group reduced aggregate share pledges by...
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Coronavirus crisis: More economic pain ahead
We estimate that 65% of economic activity, more than 50% of consumption and arguably all of the investment will be impacted. (Illustration by Rohnit Phore) In a TV address on April 14, Prime Minister...
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Jobs can be regained, but at what wage?
We divide circular migrant labour into distress-led and aspiration-led migrants. (File image) A stand-out feature of India’s Covid-19 experience has been a large displacement of labour. The reverse...
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Beware pitfalls when analysing Q1 GDP
It is likely that several quarters down the line, when the informal sector survey results are available, this number is revised down to a ~25% y-o-y contraction. (Reuters file image) By Pranjul...
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