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. For the full year, we expect GDP to contract 7.2% y-o-y (see g
Jobs can be regained, but at what wage?
Going by past experience and a possible second-round effect of the pandemic, India may have a wage problem, and it could get stuck in a low-growth equilibrium
Coronavirus crisis: More economic pain ahead
Expect another round of conventional and unconventional easing for cushioning the ongoing economic crisis
Adani Ports & SEZ: Retain ‘buy’, fair value at Rs 410
FY20 has been a meaningful year of outperformance for ADSEZ’s portfolio, which grew 7% versus a flattish year for major ports and 3-4% growth for aggregate Gujarat volumes (the state accounts for ~80% of Adani Port’s volu
Budget 2020: More questions than answers
Budget 2020 India: The Budget has left a slew of questions regarding GDP growth and state finances, and tensions around fiscal deficit numbers in its aftermath
Budget 2020: Being boring, and just implementing pre-existing policies is better
Union Budget 2020 India: The government can look at imparting a demand stimulus, but only if supported by asset sales. There is a clamour for cuts in the personal income tax rate.
Food price rise: How RBI can still find room to ease
The sharp rise in the price of vegetables since August seems to have driven much of the spike in inflation. This was not a big surprise.
The enigmatic finances of India’s states
India’s public sector borrowings remain sticky and at elevated levels; however, the underlying mix has been changing. The period FY13-17 was characterised by the Central government lowering its fiscal deficit, and states of
Fiscal forecast: What budget 2019 could offer?
Budget details will influence upcoming monetary policy action and will focus on rural India and continued support for MSMEs.
Fiscal math: Additional spending on rural India may keep 60 pct public debt-to-GDP ratio target elusive
There is no agency in the government that looks comprehensively at both Central and state, fiscal costs and revenues, and relating them to the fiscal rules that the country has enacted.
GDP numbers: Statistics Office’s single deflation practice behind underestimated growth
Instead of deflating output and input with their respective prices, the statistics agency deflates both with a common output deflator. Therefore, when input and output prices are moving in opposite directions, a bias can aris
Falling rural demand: The rural-urban inflation divide to the fore
Improvement in rural wages is not good enough. It is just a return to trend growth after lying below it for a while, and more importantly, trend growth is falling.
Ailing NBFCs, fiscal gaps offset oil, tame inflation gains
In the last three years, NBFCs (here we also include the housing finance companies) accounted for nearly a third of incremental credit.
Domestic infrastructure: Fix land and labour related regulatory hurdles to boost growth
With slowing world growth, the falling ` won’t help. improve domestic infra, ease the regulatory hurdles in acquiring land and hiring labour
RBI Monetary Policy Review: Hold rate hike? No, it should be done sooner rather than later. Here’s why
A constantly changing growth and inflation nexus, and delays in monetary transmission, suggest the rate decision in the upcoming RBI policy meeting on October 5 should be assessed over a multi-year horizon.
Growth outlook: India’s GDP growth likely to hit 7.5% by end-2019
Depending on the global environment, potential growth could rise meaningfully from 2020, led by higher investment and growth dividends from recent reforms.
Storm before the lull: Inflation will surge in FY19, cool off the year after
RBI may hike rates as soon as August as FY19 inflation rises, on the back of MSP-hikes, rising crude prices, etc. the case for further hikes in FY20 is weak as the pressures abate
FRBM targets: NHPS, higher MSPs a drag on debt goal
Even doubling current consolidation efforts won’t help. However, setting the GST right could raise the necessary revenues to meet the debt target.
States’ Finances & FRBM Goals: Tied to the mast, but loosely
State deficits are set to narrow, though marginally, in FY19. But the debt-bill cloud looms large while the drag from govt finances will have its bearing on growth.
Is 4 pct inflation new normal? The rise back up may not be too sharp either
We have said this before, and have found new evidence since. Inflation in India has fallen dramatically, and while the excessively low levels of FY18 may not be sustainable as some of the drivers are short-lived, we think the
Farm crisis: Landless may be better off, but landed are worse off; here is what you should know of rural distress puzzle
The state of India’s rural economy is puzzling. There is enough evidence to support both opposing statements: one, that the rural economy has improved, and two, that the rural economy is in the doldrums.
Riding a wave: A case can be made that, for credibility sake, RBI needs to rework its inflation forecasts
Watching India’s inflation trends these days gets us humming The Doors’ 1967 popular single, ‘Break on through to the other side’.
GST rate impact: Here’s how the new tax can carry a greater punch
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’ structure.
Monetary 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.
Column: India’s GDP to auto-correct
As prices normalise, GDP overestimation will narrow
Will india make it – 2016? How to revive Investment
Govt capex and growth in consumption together could revive India's investment cycle – eventually
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