Tag Archives: GDP

New Delhi: Overcoming the slowdown from demonetisation, the growth rate of India's economy is projected to accelerate from this year's 6.7 percent to 7.2 per cent next year and 7.4 percent in 2019 making it again the world's fastest growing major economy, the UN said on Monday.

"Despite the slowdown observed in early 2017 and the lingering effects from the demonetization policy, the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms," according to the World Economic Situation and Prospects 2018 report.

 

However, the 7.2 percent growth rate projected for India next year in the latest report is lower than the mid-year update's projection made by the UN in May of 7.9 percent.

China's economic growth for this year was 6.8 percent, according to the report, putting it slightly ahead of India. But the growth projections for China is 6.5 percent next year and 6.3 percent in 2019

Releasing the report, Under Secretary-General for Economic and Social Affairs, Liu Zhenmin, said: "The upturn in global growth is a welcome sign of a healthier economy."

The report painted a rosier outlook for the world economy overall, saying "it has strengthened as lingering fragilities related to the global financial crisis subside" and recorded this year the "highest growth rate since 2011," even though it is only 3 percent. The report said that growth level is expected to continue over the next two years.

South and East Asia remain the world's most "dynamic regions" accounting for nearly half of global growth in 2017, with China alone contributing about one-third, the report said.

"Vigorous public investment in infrastructure has been critical" in counteracting negative developments.

The report warned that for India "the anaemic performance of private investment remains a key macroeconomic concern."

"Gross fixed capital formation as a share of GDP has declined from about 40 per cent in 2010 to less than 30 per cent in 2017," the report said. It added that there was "subdued credit growth, low capacity utilization in some industrial sectors and balance sheet problems in the banking and corporate sectors".

It also said that there was "some degree of uncertainty over the monetary policy stance in India." It added, "Subdued inflation, coupled with a good monsoon season, offers scope for additional monetary easing. However, if inflation accelerates faster than anticipated, the loosening cycle could end abruptly."

India's fiscal deficit has declined visibly, and it is expected to narrow further to 3.2 per cent of GDP in 2018.

Liu also warned that the improved global economic growth "may come at an environmental cost".

"This calls for stronger efforts to delink economic growth and environmental degradation," he added.

 

 

 

 

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New Delhi: Prime Minister Narendra Modi today addressed company secretaries as the Institute of Company Secretaries of India or ICSI completed 50 years. PM Modi asked company secretaries to ensure firms obey the law and give priority to transparency.

 

Here are the highlights of PM Modi's speech:

 

 

  • The motto of your company is speak the truth and follow the rules.

 

  • It is you who determines corporate culture and it is the duty of your organisation to show people the right path.

 

 

  • We launched many anti-corruption measures, insolvency and bankruptcy code and the good and simple tax. This government had the courage to bring about demonetisation.

 

  • The government has worked to institutionalise systemic honesty.

 

 

  • The result of the relentless labour of the government is that the country's economy is running with less cash transactions. After demonetisation, cash to GDP ratio has now come down to 9 per cent. It used to be more than 12 per cent before 8 November 2016.

 

 

  • There are some people who sleep well only after they spread a feeling of pessimism all around. We need to recognise such people.

 

 

  • In the past three years, after registering a growth of over 7 per cent, we suffered economic slowdown and we are not denying that. But we also want to tell you that we are equipped to deal with the issue.

 

 

  • Some people had started saying that the way we had implemented GST was incorrect due to economic slowdown. I am neither an economist nor have I claimed that I am one. But today when people are discussing this I want to say that India was part of a group of countries called fragile five.

 

 

  • The economists who are claiming these things today, I would like to ask them why was India a part of such a group back then when we had good economists?

 

  • We have taken several important decisions on reforms and the process will continue. The financial stability of the country will also be maintained. We will take every necessary step to increase investment and speed up economic growth.

 

  • The number of air passengers has gone up by 14 per cent in the past two months. The sale of telephones has also seen a growth of 14 per cent. Sale of tractors has gone up by 34 per cent.

 

 

  • This happens when the people have faith in the government and they know that the economic condition of the country is sound.

 

 

  • Today, financing is not limited to banks. So you can clearly see the difference our government has made in three years.

 

 

 

 

 

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New Delhi:  Facing public resentment over the recent spike in fuel prices, the government on Tuesday cut the excise duty on both branded and unbranded petrol and diesel by Rs 2 a litre from Wednesday. According to sources, the finance ministry was initially reluctant to reduce the duty due to revenue concerns, but relented after discussions with the petroleum ministry on implementing steps to bring down petrol prices to Rs 60-65 a litre. 

“(The) government has reduced the basic excise duty on petrol and diesel (both branded and unbranded) by Rs 2 a litre with effect from October 4, 2017. Revenue loss on account of these reductions will be about Rs 26,000 crore in a full year and Rs 13,000 crore in the remaining part of the current financial year," the finance ministry announced on Twitter.

This comes at a time when diesel in Delhi scaled an all-time high of Rs 59.14 a litre, while other cities, too, saw a considerable increase in prices. The price of petrol in Delhi was at a two-year high of Rs 70.88 a litre on Tuesday. Currently, taxes constitute the excise duty of Rs 21.48 a litre, 30 per cent of the price of petrol, and Rs 17.33 a litre, 29 per cent of the price of diesel.

On September 20, Finance Minister Arun Jaitley had ruled out a cut in the excise duty. “We need excise revenues to push public investment, and if any state wants to reduce the excise duty, then they can do so," he had said. With subdued tax collections and the fiscal deficit touching 96 per cent of this year's target in August, the Union government was reluctant to cut the excise duty on petrol and diesel.

The government, however, is clear that there will be no rollback of the market-linked pricing policy for petrol and diesel. The United Progressive Alliance (UPA) government had decontrolled petrol prices in 2010 and had started a phased decontrol of diesel prices. In 2014, oil marketing companies moved to full market-linked pricing for diesel under the National Democratic Alliance (NDA) government.

Out of the overall excise collection, 42 per cent is transferred to state governments. However, industry experts and the government believe that prices will ease in the next few weeks as international prices are showing a declining trend.

Besides the excise duty, state governments levy the value-added tax in the range of 25-40 per cent on petrol and 15-25 per cent on diesel. Many state governments have also increased VAT on petrol and diesel in the past one year. While Kerala increased VAT on petrol to 34 per cent from 26 per cent, Maharashtra increased it to 47 per cent from 27 per cent, and Delhi to 27 per cent from 20 per cent.

Interestingly, since the implementation of daily pricing on June 16 this year, the price of the Indian basket of crude oil has gone up by around 19 per cent from $46 a barrel to $55.36 a barrel. However, domestic retail selling prices of petrol and diesel in Delhi have gone up by only 8 per cent during this period.  

"We see a decline in crude oil prices now. Hence, there will be a balancing of fuel prices in the coming weeks. The positive global changes include an increase in rig utilisation and also a rise in production from Libya and Algeria, which will increase supply,” said Dhaval Joshi, an analyst with Emkay Global Financial Services.

According to Petroleum Minister Dharmendra Pradhan, the main reason for the increase in petroleum product prices is the increase in international prices due to hurricanes Harvey and Irma in the US, following which 13 per cent of the US refinery capacity was shut down. “In the past three months, the FOB price of petrol and diesel in the international market increased by 20 per cent. The recent rise in prices is transient in nature and will ease in the coming days,” said a source close to the development.  

Pradhan has asked the Goods and Services (GST) Council to consider bringing all petroleum products within the ambit of the GST so as to harmonise the tax structure. The Union government also claims that the tax collected from petroleum products has led to an increase in allocations towards agriculture and farmers, rural development, and other infrastructure projects. Spending on agriculture has increased by 71 per cent compared to 2013-14. Spending on road transport and highways has doubled in the past three years, while the allocation to rural development has increased by 34 per cent.

 

 

 

 

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New Delhi:  Finance Minister Arun Jaitley has asked companies to boost investments as businesses bruised by a slowing economy and falling returns defer spending.

Speaking at the Bloomberg India Economic Forum in Mumbai, Mr Jaitley and Amitabh Kant, the chief executive officer at Niti Aayog, the nation's economic think-tank, called for more private spending from local companies and said the banking system must get healthier to support that investment. Mr Jaitley told companies that there's "no need to panic," while R. Shankar Raman, chief financial officer at Larsen & Toubro Ltd., India's biggest engineering and construction company, said the environment is not conducive for adding investments.

India's economy expanded at the slowest pace in three years in the quarter ended June 30 as Prime Minister Narendra Modi's move to ban 86 percent of the nation's cash and the country's biggest tax reform disrupted businesses. Meanwhile loan growth is languishing near the lowest level since 1992 as companies struggling with bad debt and idle capacity await evidence of a pick up in demand before they buy machinery or hire more workers.

"Private sector is going to be hard nosed when it comes to committing investment," Larsen's Shankar Raman said in an interview at the sidelines of the forum on Friday. "We have already committed investment and have not seen returns flow through, so no board in their right mind will like to sanction further investment, unless there is a viable business plan around it."

Factories were running at about 74 percent of capacity in October-December, business sentiment in manufacturing worsened in the April-June period and consumer confidence dipped in June. The Nikkei India Composite PMI Output Index contracted for a second month in August, a report showed earlier this month.

"We have to push for more reforms. We have to set our house in order," Niti Aayog's Amitabh Kant said at the forum. "Government alone cannot create infrastructure. Private sector participation is a must."

The government's revenue may be threatened in the coming months by the new goods and services tax, implemented July 1. The reform -- one of India's biggest since the economy opened to foreigners in 1991 -- was a win for Mr Jaitley and promises to unite the nation's 1.3 billion people into a massive common market.
However, early hiccups include confusion about the method of filing receipts and the multi-layered tax structure, which contrasts with a single rate in most countries. Businessmen are also claiming hefty tax credits, which could drain government finances.

"I am concerned that after GST and cash ban, which were seen as reforms by investors, India is now seen to be slipping fiscally" said Priyanka Kishore, lead Asia analyst at Oxford Economics, Singapore.

Any deterioration in public finances risks the wrath of rating companies such as S&P Global Ratings, which last week downgraded China for the first time since 1999 citing soaring debt. India carries the lowest investment grade rating and a cut to junk status could force some investors to dispose their Indian assets.

"How do you maintain the balancing act between continuing to spend in an economy, continue to maintain your banks and support them, and how do you maintain standard of fiscal prudence?" Mr Jaitley said. "And this is the challenge we are facing."

The Finance Minister also needs funds to inject fresh capital into India's struggling banks. The lenders are sitting on $191 billion of souring debt. Under-provisioned banks are also unwilling to lend more, which means investment by private companies may shrink this year.

Mr Jaitley has said he expects strong banks to take over weaker ones especially in the state-run sector. Earlier this year, the government gave the Reserve Bank of India greater powers to go after defaulters and recover loans through a new bankruptcy code.

"We are looking at both consolidation and strengthening," Mr Jaitley said, without providing a timeline.

 

 

 

 

 

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New Delhi:  Both demonetisation and GST have affected India's gross domestic product (GDP) growth adversely, former Prime Minister Manmohan Singh said on Monday.

"Both demonetisation and GST have had some impact on GDP," Manmohan Singh, who has earlier said the Indian economy has been running on only "one engine" of public spending, told CNBC-TV18 channel.

 

"Both would affect the informal sector, the small scale sector that are responsible for 40 per cent of of GDP... 90 per cent of employment is in the informal sector.

"So when 86 per cent of currency is withdrawn from circulation, plus GST, which was put in practice in haste.. lot of glitches are now coming up, it was bound to affect GDP growth adversely," he said.

Former Reserve Bank of India Governor Raghuram Rajan estimated earlier this month that the country's GDP had taken a hit of between 1 to 2 per cent due to demonetisation, which translated to a sum of around Rs 2 lakh crore.

 

 

 

 

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NEW DELHI: BJP President Amit Shah said on Saturday that there will be a robust banking sector in five to 10 years time following the steps taken by the Narendra Modi government to clean up the public sector bank's balance-sheets in the face of NPAs.

 

Addressing an industry interactive session at Ficci here, he said that high amount of non-performing assets (NPAs) of the public sector banks were a reality and there was no point in hiding them through "jugglery of figures".

 

He said it was the first time that all the NPAs were brought on record and while it would lead to some transitory problems, the government would find a permanent solution in consultation with all stakeholders including all states, industry and banks.

 

Blaming the Congress led UPA government for the high amount of NPAs, he said while the BJP is blamed, all the NPA accounts were opened in the UPA era.

 

Shah also attacked the previous Manmohan Singh government and said during the 10 years of the UPA rule, "the GDP growth rate came down from 8 per cent to 4.7 per cent, fiscal deficit rose above five per cent, inflation rose to double digits and the nation saw a series of scams".

"They damaged the credibility of the government and lowered the international image of the country. There were multiple centres of power during their rule where only the Prime Minister had no power," he said adding the India's growth story was stopped in those ten years.

 

He added the Narendra Modi-led central government was trying to turn around the situation and had again "brought the GDP to 7.1 per cent, if you ignore the last quarter".

He said much should not be read into the April-June GDP figures of 5.7 per cent and claimed that the economy was poised for a strong showing in the long-term.

The BJP chief also said the number of total direct tax payers had also doubled in the last three years from 3.7 crore to 6.4 crore.

He also defended the controversial demonetisation decision and said that it expanded the formal economy.

"While the process for fixing accountability for that money is going on, no one can deny that money which was stashed illegally will now be used for the country's economic growth," he said.

The BJP President said the government had managed to save around Rs 59,000 crore in subsidies after linking them with Jan Dhan accounts.

"That money was going to those who it wasn't meant for. It may not be called a scam but there was rampant corruption involved which was not even caught by the CAG."

About the GST, Shah said that earlier tax regime led to uneven development in the country with some regions growing at the cost of others"

"But GST will lead to uniform growth across the country over the next decade or so," he said.

Shah said the BJP government focused on long-term gains rather than short-term benefits.

 

 

 

 

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New Delhi: Key Indian equity indices -- the NSE Nifty50 and the BSE Sensex -- traded with substantial gains during the mid-afternoon session on Friday as broadly positive global cues and healthy buying in automobile, banking and healthcare stocks kept investors' sentiments buoyed.

Around 1 p.m., the wider 51-scrip Nifty50 of the National Stock Exchange (NSE) traded higher by 43.10 points or 0.43 per cent at 9,961 points.

 

The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 31,769.34 points, traded at 31,871.69 points -- up 141.20 points or 0.44 per cent from its previous close at 31,730.49 points.

The Sensex has so far touched a high of 31,890.28 points and a low of 31,707.27 points.

The BSE market breadth was bullish with 1,581 advances and 799 declines.

"The BSE Sensex opened higher on Friday against the previous session's closing. The broader NSE's Nifty, too, rose in the morning hours. The Indian rupee opened little changed against the US dollar," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

"Shares of pharmaceutical companies rose, whereas Tata Consultancy Services and HDFC shares fell. Top gainers on NSE were Dr. Reddy's Lab, Auropharma and Lupin, while the top losers for the morning were TCS, HDFC and Hindustan Unilever," he added.

On Thursday, the benchmark indices pared all losses to close in the green, supported by short covering in consumer durables, automobile and oil and gas stocks and positive European markets.

The Nifty50 closed at 9,917.90 points -- up 33.50 points or 0.34 per cent -- while the Sensex closed higher by 84.03 points or 0.27 per cent at 31,730.49 points.

 

 

 

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India's GDP or gross domestic product grew at 5.7 per cent in the April-June quarter, slowing down from the 6.1 per cent recorded in the March quarter. Economists polled by Reuters had forecast Indian economy to grow at 6.6 per cent in the first quarter. To July 1 GST implementation destocking, in the run-up, impacted the growth numbers, say analysts.

Prime Minister Narendra Modi's shock decision last November to scrap high-value old banknotes wiped out about 86 percent of currency in circulation virtually overnight, pounding consumer demand.

 

But economists expect the economic growth to accelerate further during the course of this year. Some momentum in the run-up to the July 1 Goods and Services Tax (GST) rollout economic activity in the country had lost, has started to recover, according to global brokerage Nomura.
To accelerate in the second half of the current year the brokerage expects GDP growth. With collections exceeding the revenue target for the first month of July, the GST tax collection is off to a good start. Nearly one-third of tax payers are yet to submit their returns. Analysts say that collections are likely to go up as more tax payers pay their dues.

 

As measured by gross value added (GVA) is expected to expand by 7.3 per cent in the current fiscal the RBI estimates economic activity, up from 6.6 per cent in 2016-17, in its annual report unveiled on Wednesday the Reserve Bank said. Real gross value added (GVA) is another measure of economic activity that is arrived at by excluding net indirect taxes from GDP.

India's GDP or gross domestic product grew at 5.7 per cent in the April-June quarter, slowing down from the 6.1 per cent recorded in the March quarter. Economists polled by Reuters had forecast Indian economy to grow at 6.6 per cent in the first quarter. To July 1 GST implementation destocking, in the run-up, impacted the growth numbers, say analysts.
Prime Minister Narendra Modi's shock decision last November to scrap high-value old banknotes wiped out about 86 percent of currency in circulation virtually overnight, pounding consumer demand.

 

But economists expect the economic growth to accelerate further during the course of this year. Some momentum in the run-up to the July 1 Goods and Services Tax (GST) rollout economic activity in the country had lost, has started to recover, according to global brokerage Nomura.
To accelerate in the second half of the current year the brokerage expects GDP growth. With collections exceeding the revenue target for the first month of July, the GST tax collection is off to a good start. Nearly one-third of tax payers are yet to submit their returns. Analysts say that collections are likely to go up as more tax payers pay their dues.

 

As measured by gross value added (GVA) is expected to expand by 7.3 per cent in the current fiscal the RBI estimates economic activity, up from 6.6 per cent in 2016-17, in its annual report unveiled on Wednesday the Reserve Bank said. Real gross value added (GVA) is another measure of economic activity that is arrived at by excluding net indirect taxes from GDP.

 

 

 

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