ECONOMY

gates-vs-rangarajan:-difference-of-perception-casts-shadow-on-projection

Gates Vs Rangarajan: Difference of perception casts shadow on projection

India has the potential for "very rapid" economic growth over the next decade which will lift people out of poverty and allow the government to invest in health and education priorities in an "exciting way". This was what Bill Gates, billionaire philanthropist and Microsoft co-founder, stated last Monday. 

Three days later former RBI Governor C Rangarajan has questioned the prudence of the government on reaching the $5 trillion GDP target by 2025 at the present growth rate. He finds it "simply out of question."

It may be underlined that NaMo Govt soon after assuming office for the second term had set a target of taking the economy to $5 trillion over the next 5 years. But since there have been dark clouds gathering all over the economy leading many to question the maintainability of the target.

Southwards movement of the economy is continuing with growth rate slowing from 8.2 percent in FY16 to 6.8 percent FY19. The first quarter growth slipped to a six-year low of 5 per cent, the best forecast for the second quarter is 4.3 percent now. Even RBI has lowered its growth full year forecast by a full 9o bps in two months to 6.1 percent in its October policy review.

India’s economy is about $2.7 trillion and talking about doubling this over the next five years at $5 trillion seems impossible. The required rate of growth to achieve that level is in excess of 9 percent per annum. So the former governor says reaching $ 5 trillion by 2025 is simply out of question".

Statements of Bill Gates and Dr C Rangarajan appear to represent two different perspectives and appear mutually differing, rather mutually conflicting. But the difference of perception casts shadow on India’s economic projection as well.

(By Rakesh Ranjan)

22 Nov 2019
aiming-at-$5-tn-economy:--govt-says-economy-still-best-in-the-world

Aiming at $5 tn economy: Govt says economy still best in the world

Almost all financial institution predicting India’s GDP going below 5 per cent but the government is patting its back by saying that despite deceleration India will remain the fastest growing economy. There is no slump and India is still projected to be the fastest growing economy in FY20 among the G-20 nations.

Finance Minister Nirmala Sitharaman is of the view that the government has been taking several measures to address moderate levels of fixed investment rate in the economy, plateauing of private consumption rate and a modest export performance, with a view to increasing the GDP growth. She was confident that the goal of $5 trillion economy will be achieved by 2025.

The government also talks about implementing major reforms to build the investment climate in the country for becoming a $5 trillion economy. The WEO of October 2019 projects a significant slowdown in world output and trade in 2019. Yet India, despite some recent deceleration of GDP growth, is still projected by WEO to grow at the fastest rate in 2019-20 among G-20 countries.

The World Bank's Ease of Doing Business 2020 Report, India's ranking improved by 14 positions to 63 in 2019 from 77 in 2018 after GST was implemented in 2017 will have certain impacts.

19 Nov 2019
gates-vs-rangarajan:-difference-of-perception-casts-shadow-on-projection

Gates Vs Rangarajan: Difference of perception casts shadow on projection

By IndianMandarins 22 Nov 2019

India has the potential for "very rapid" economic growth over the next decade which will lift people out of poverty and allow the government to invest in health and education priorities in an "exciting way". This was what Bill Gates, billionaire philanthropist and Microsoft co-founder, stated last Monday. 

Three days later former RBI Governor C Rangarajan has questioned the prudence of the government on reaching the $5 trillion GDP target by 2025 at the present growth rate. He finds it "simply out of question."

It may be underlined that NaMo Govt soon after assuming office for the second term had set a target of taking the economy to $5 trillion over the next 5 years. But since there have been dark clouds gathering all over the economy leading many to question the maintainability of the target.

Southwards movement of the economy is continuing with growth rate slowing from 8.2 percent in FY16 to 6.8 percent FY19. The first quarter growth slipped to a six-year low of 5 per cent, the best forecast for the second quarter is 4.3 percent now. Even RBI has lowered its growth full year forecast by a full 9o bps in two months to 6.1 percent in its October policy review.

India’s economy is about $2.7 trillion and talking about doubling this over the next five years at $5 trillion seems impossible. The required rate of growth to achieve that level is in excess of 9 percent per annum. So the former governor says reaching $ 5 trillion by 2025 is simply out of question".

Statements of Bill Gates and Dr C Rangarajan appear to represent two different perspectives and appear mutually differing, rather mutually conflicting. But the difference of perception casts shadow on India’s economic projection as well.

(By Rakesh Ranjan)

aiming-at-$5-tn-economy:--govt-says-economy-still-best-in-the-world

Aiming at $5 tn economy: Govt says economy still best in the world

By IndianMandarins 19 Nov 2019

Almost all financial institution predicting India’s GDP going below 5 per cent but the government is patting its back by saying that despite deceleration India will remain the fastest growing economy. There is no slump and India is still projected to be the fastest growing economy in FY20 among the G-20 nations.

Finance Minister Nirmala Sitharaman is of the view that the government has been taking several measures to address moderate levels of fixed investment rate in the economy, plateauing of private consumption rate and a modest export performance, with a view to increasing the GDP growth. She was confident that the goal of $5 trillion economy will be achieved by 2025.

The government also talks about implementing major reforms to build the investment climate in the country for becoming a $5 trillion economy. The WEO of October 2019 projects a significant slowdown in world output and trade in 2019. Yet India, despite some recent deceleration of GDP growth, is still projected by WEO to grow at the fastest rate in 2019-20 among G-20 countries.

The World Bank's Ease of Doing Business 2020 Report, India's ranking improved by 14 positions to 63 in 2019 from 77 in 2018 after GST was implemented in 2017 will have certain impacts.

loss-of-many-listed-companies-plunges-to-rs-36,500-crore

Loss of many listed companies plunges to Rs 36,500 crore

By IndianMandarins 18 Nov 2019

Many of the listed companies of India except financials and oil and gas companies reported a combined net loss for the first time in the past 15 years while their net sales contracted for the first time in four years in Q2 that is July-September quarter. The bottom line slipped into the red due to record losses posted by mobile operators during Q2.

The decline in sales is attributed to slackness in demand in the domestic economy. This also clouds the earnings outlook for the forthcoming quarters. Listed companies’, excluding financials and oil and gas, combined earnings plunge 68 per cent YoY to Rs 36,500 crore.

it-is-time-to-invest-in-india-

It is time to invest in India?

By IndianMandarins 30 Oct 2019

Though many top world economic body predicted slower growth for India, two top Indian industrialists -- Reliance Industries Chairman Mukesh Ambani and auto major Mahindra & Mahindra Chairman Anand Mahindra (M&M) – are of the view that economy has started showing signs of a pick-up. The recent sales indicators show the worst is now left behind.

Speaking at the Future Investment Initiative summit in Riyadh, Ambani said that India’s slight economic slowdown would reverse in the coming quarters. What I see happening in the past 2-3 years was transformation.

Ambani said, “If you look at what happened, yes, there has been a slight slowdown but in my view it’s temporary.” “All the reform measures that have been taken in the last few months will show the outcome. I am quite sure that in the coming quarters this will reverse,” he said.

Ambani is in talks with Saudi Arabian oil giant Aramco to sell one-fifth of his oil-to-chemicals business in India for $15 billion. He said that India and Saudi Arabia have almost factors to drive growth — technology, young demography, and leadership.

why-did-fm’s-husband-praise-rao-singh-model-of-economy-

Why did FM’s husband praise Rao-Singh model of economy?

By IndianMandarins 17 Oct 2019

Not only the government but FM Nirmala Sitharaman is facing onslaught for the declining growth rate of the country but her husband and economist Parakala Prabhakar’s take on the Indian economy has opened can of worms when he said that the Modi government’s economic policy is causing economic distress in the country. This has embarrassed the government and the FM alike giving more strength to speculation that she is on her way out of the ministry whenever reshuffle takes place.

Prabhakar suggested the government to adopt the Rao-Singh economic model that paved the way for liberalisation of the economy. The government must not always resort to criticizing Nehruvian socialism. He said, "Data flowing uninterruptedly into the public domain show that sector after sector is staring at a seriously challenging situation."

Insiders say that the reason for his outburst is that the BJP leadership is not giving him any space anywhere. People say that he was instrumental into bringing Andhra Pradesh’s Jan Sena Party closer to the BJP. He accomplished the task effectively for the BJP and hence he had some expectations from the BJP leadership to draft him into a bigger role. People feel that Sitharaman has been asked to cut more that she even cannot chew probably this is the reason that he has opened a front against the government.

He did not leave any chance to put the government in dock when he said, "The rejection of Nehruvian 'socialistic pattern of society' was clear since the days of the Bharatiya Jana Sangh. The BJP's advocacy of what can, at best, be loosely termed as a capitalist, free market framework remained untested in practice...In economic policy, the party mainly adopted 'Neti Neti (Not this, Not this'), without articulating what was its own 'Niti (policy)'.

He suggests the BJP should adopt the Rao-Singh economic architecture, adding, "A full-fledged embrace could provide the BJP and the government a lodestar to steer the economy out of the choppy waters."

banerjee,-a-nobel-laureate-in-economics,-apprehensive-about-india’s-growth-story!

Banerjee, a Nobel laureate in economics, apprehensive about India’s growth story!

By IndianMandarins 15 Oct 2019

With the World Bank reducing the growth rate of India to around 6 per cent from its earlier projection of 7.5 per cent, Indian-American Nobel laureate in economics Abhijit Banerjee too is of the view that Indian economy is on a shaky ground as far as growth is concerned.

Banerjee is of the view that the data available at the moment do not hold any assurance for India's economic revival anytime soon. Indian economy is on a shaky ground. After witnessing the present (growth) data, just can't be sure about revival of economy in near future.

In the last five-six years, at least the country witnessed some growth, but now that assurance is also gone and there is no growth visible. He has also talked about imposing more taxes on rich and industrialist of the country to help the economy grow. He had several countries as research subject.

moody’s-prediction-on-growth-rate-of-india’s-economy

Moody’s prediction on growth rate of India’s economy

By IndianMandarins 11 Oct 2019

Though the government is continuously grappling with the pressure of taking measure to accelerate the growth rate of the country as leading rating agency Moody’s has also predicted the growth rate of the country for 2019-20 financial year below 6 per cent that is 5.8 per cent.

Moody’s is of the view that due to some factors impacting for long term the slowdown in Indian economy is likely to be dragged for a slightly longer time. Even Reserve Bank of India in its appraisal meeting for monetary policy in the current fiscal reduced 6.1 per cent.

Moody’s in its report says that the main reason behind slow down is slump in investment which has brought down the number of employment. This has also impacted consumption in the rural area. There are several reasons for slowdown some are domestic but some of them are going to have long-term impact.  

who-is-to-be-blamed-

Who is to be blamed?

By IndianMandarins 17 Sep 2019

It might appear bizarre at the first instance but senior advocate Harish Salve blamed the Supreme Court for India’s current economic downturn. To him the genesis lies in SC’s verdict on 2G Spectrum Case in which it knocked down all 122 spectrum licenses issued to telecom operators. He underlines that when a foreigner invested billions of dollars, it was the country’s rule which said he must have an Indian partner. The foreigner did not know how the Indian partner got the licence. Blanket cancellation of licences marred foreign investors’ confidence in the system. “That’s when the decline of the economy began,” says Salve.

 

Following CAG revelation in 2010 that 2G scam caused a loss of Rs 01.76 lakh crore to the govt exchequer. The SC had then cancelled 122 licences in February 2012, rejecting Salve’s argument who appeared for 11 telecom companies in the case.

 

Recently, Finance Minister had underlined that people preferring Ola and Uber, among other reasons including less appetite for vehicle loan and future of electric mobility, was responsible for slowdown in automobile sector. Later she infused 70,000 cr package to boost economy.

 

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Indianmandarins.com, an initiative of New Media Network, is a multi-media initiative for the fast and real-time dissemination of news and information related to civil services, central PSUs and other institutions that play a critical role in governance, administration, corporate governance, and public life in India. We aspire to provide our esteemed readers with news breaks and situation analysis in the above-mentioned domain of operations. Currently, we are available at www.indianmandarins.com. We are now planning to branch off into print publication and few other related business initiatives.