RURAL ECONOMY

fitch-retains-sovereign-rating-of-india-lowers-outlook-to-negative-from-stable

Fitch retains sovereign rating of India; lowers outlook to negative from stable

Amid a growing number of Coronavirus cases, Fitch Ratings agency has retained India’s sovereign rating at the lowest investment grade of “BBB-“, while it has revised downward its rating outlook for India to negative from stable. Fitch has cited increasing risk to India’s growth and debt outlook, as a reason for the above ratings.

Fitch stated that COVID-19 pandemic has significantly weakened India’s growth outlook for fiscal year 2021, simultaneously exposing challenges associated with a high public-debt burden. Although, the rating agency expects India’s economic activity to contract by 5% in the fiscal year 2021 before rebounding by 9.5% in fiscal year 2022.

19 Jun 2020
rahul-interviews-rajan-strategy-to-make-1-and-1-as-11-

Rahul interviews Rajan: Strategy to make 1 and 1 as 11?

Rahul Gandhi interacting with former RBI governor Raghuram Rajan on India’s economy post-COVID-19 is certainly not out of the context rather makes a great sense. But Gandhi interviewing Rajan is something also certainly uncommon as it has some unique political overture.

It may be underlined that the ruling BJP has constantly been trying to corner Congress’ de-facto chief Rahul Gandhi by projecting him an over-rated leader beyond his limits and mocking him every now and then for his gestures and remarks.

Rahul is often termed in public as a sincere leader lacking consistency and seriousness in his approach. It is believed that Rahul’s move would have emanated from his strategy of image makeover especially at a time when the country, post-COVID-19 appears to be facing severe unemployment crisis and economic downturn. One can not deny the strategy that Rahul’s political stature and Rajan’s institutional credibility put together may add to Rahul’s image makeover.

03 May 2020
fitch-retains-sovereign-rating-of-india-lowers-outlook-to-negative-from-stable

Fitch retains sovereign rating of India; lowers outlook to negative from stable

By IndianMandarins 19 Jun 2020

Amid a growing number of Coronavirus cases, Fitch Ratings agency has retained India’s sovereign rating at the lowest investment grade of “BBB-“, while it has revised downward its rating outlook for India to negative from stable. Fitch has cited increasing risk to India’s growth and debt outlook, as a reason for the above ratings.

Fitch stated that COVID-19 pandemic has significantly weakened India’s growth outlook for fiscal year 2021, simultaneously exposing challenges associated with a high public-debt burden. Although, the rating agency expects India’s economic activity to contract by 5% in the fiscal year 2021 before rebounding by 9.5% in fiscal year 2022.

rahul-interviews-rajan-strategy-to-make-1-and-1-as-11-

Rahul interviews Rajan: Strategy to make 1 and 1 as 11?

By IndianMandarins 03 May 2020

Rahul Gandhi interacting with former RBI governor Raghuram Rajan on India’s economy post-COVID-19 is certainly not out of the context rather makes a great sense. But Gandhi interviewing Rajan is something also certainly uncommon as it has some unique political overture.

It may be underlined that the ruling BJP has constantly been trying to corner Congress’ de-facto chief Rahul Gandhi by projecting him an over-rated leader beyond his limits and mocking him every now and then for his gestures and remarks.

Rahul is often termed in public as a sincere leader lacking consistency and seriousness in his approach. It is believed that Rahul’s move would have emanated from his strategy of image makeover especially at a time when the country, post-COVID-19 appears to be facing severe unemployment crisis and economic downturn. One can not deny the strategy that Rahul’s political stature and Rajan’s institutional credibility put together may add to Rahul’s image makeover.

direct-tax-collection-unrealistic-without-revision-who-is-to-be-blamed-

Direct tax collection unrealistic without revision: Who is to be blamed?

By Rakesh Ranjan 22 Apr 2020

The economy of the country is collapsing and it is unlikely that the government will be able to match the Direct Tax Collection even of any of the past three years’ tally. It is for sure going to remain lower than the past 3-4 year’s collection.

Director IT-Budget Mahesh Kumar has written to all principal chief commissioner of IT that the statistical growth rate for a region has been further moderated by averaging it out with the all-India targeted growth rate so as to narrow the gap between all-India growth and the target growth rate given to the region.

But in a changed scenario how tenable this tax recovery target will be that is a big question. The target set by the government in the budget for 2020-21 tax collection was Rs 13.19 lakh crore with almost one third from Mumbai only which is worst affected by COVID-19 halting every economic activity.

A senior IT official told Indianmandarins that CBDT should have revised the budget estimates as he feels meeting the budget target is unlikely and impossible. But now IT officials would be under immense pressure to go aggressive and target businessmen.

Another senior officer said that when there are already massive layoffs of employees, how would there be personal income tax collection? There will not be any salary revision in any sector with massive salary cuts. All these things should have been factored into by the CBDT but as per Pandey’s instruction, CBDT sent the letter with zone wise targets without realizing reality on the ground.

(By Rakesh Ranjan)

uncertainty-intensifies-amid-covid-pandemic-niti-aayog-vc-fears-gdp-slipping-to-zero-or-in-minus

Uncertainty intensifies amid COVID pandemic: NITI Aayog VC fears GDP slipping to zero or in minus

By IndianMandarins 29 Mar 2020

As various rating agencies are predicting GDP growth of India slipping between 2.5 percent and 3.5 percent but it could slip to zero or even negative in the first quarter due to the impact of countrywide lockdown imposed to contain the spread of the deadly Covid-19.

NITI Aayog vice-chairman Rajiv Kumar has said that while there is a chance that this may not happen since essential services are functioning and essential goods moving, the virtual shutdown of all other sectors of the economy could result in a zero or negative GDP growth. He further added ha however, everything depends on how long the economic curfew will last. But it is sure that the economy would be hit very hard during this quarter.

However, it is difficult to predict that what would happen beyond June as there is too much uncertainty but everything depends on the length, severity and spread of the pandemic. NITI Ayog ruled out the possibility of a recession as after June.

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."

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