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Economic recession has effected almost all of the major economies of the world whether developed or developing, economies which don't have strong fundamentals are effected the most like the US economy(which happens to be the largest economy of the world presently). So what has made indian economy safer even in these tough times?
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According to me it's the government's hold on the economy in place and the good thing about indian government is that it takes a very conservative approach because it keeps people's interest on high priority and consider the ill effects of one economic decision rather then talking about the corresponding positives this has acted as a firewall from the ongoing economic crises which is biggest after the 1929 great depression which i read in my history book in tenth grade.
It may be noted that still in india government has a very strong hold on the economic activities ( a lot of restrictions were removed in the 90's when Manmohan singh was Finance minister under PV Narsimha Rao government) had it been still like early 90's indian economy would have been completly shielded from the crises but an economy can rise only if it takes off some of restrictions and let the business congloramates go beyond the physical boundaries and compete globally as majority of indian companies are currently doing that's very good according to me.
If Indian government had lifted all of the retrictions in 90's no doubt our economy would have been much bigger today but would have been as affected as USA presently with pink slips all around and companies following hire and fire policies huh...thank god Manmohan Singh was there to think about it at that time...really SINGH is KING!!
The point described above by me is made clear by following figures that in the month of May itself we had $2 billion of FII money into our country, this is because of the stability and strength of the Indian economy, which is reassuring to the Indian investor.
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ok now i am logging off will keep you guys updated in next post coming soon
- Himanshu Sharma
Friday, June 19, 2009
Indian Economy is resistant to ongoing recession
Sunday, June 14, 2009
Plan outlay may swell by Rs 1,00,000 cr in Budget
Plan expenditure may see a quantum jump of about Rs one lakh crore due to likely increased allocation for the UPA's flagship programmes such as NREGA, Bharat Nirman as well as concessional foodgrains to the poor.
This is likely to take total Plan expenditure to Rs 3.85 lakh crore against Rs 2.85 lakh crore in the interim Budget, tabled in February, sources told media.
Higher Plan expenditure may cause increase in the fiscal deficit for 2009-10 to over six per cent of gross domestic product (GDP) from 5.5 per cent projected in the interim budget.
President Pratibha Patil in her address to the joint sitting of Parliament had expressed the government's commitment to flagship schemes including the NREGA and Bharat Nirman, besides food security, among other programmes.
"Ministries have sought more allocation to implement flagship schemes, including social sector programmes and new schemes. This may result in the Plan expenditure pegged at 2.85 lakh crore during the interim budget to swell by about Rs one lakh crore," a source said.
Ministries seeking higher allocation in view of the government's commitment for flagship schemes and strengthening infrastructure include rural development, railways, power, urban development, water resources and human resource development among others, the sources said.
Sector-wise plan allocation for education may go up over Rs 15,000 crore, rural development Rs 4,000 crore, urban development about Rs 4,000 crore, power Rs 8,000 crore and health Rs 4,000 crore.
Tuesday, June 2, 2009
$ v/s INR daily updates -June 2009
This post gives daily INR v/s US$ updates for the month of June 2009 the comparison is at closing of the indian stock markets. and enteries are in cronological order -
PS - the order of each daily entry is as follow:
Rs v/s US$ | price of 1 us$ in INR | change wrto previous day | remarks/analysis
RS v/s $ | 48.53 | 0.38 | Up^38 paise wrto $
RS v/s $ | 48.06 | -0.15 | Down(-15) paise
RS v/s $ | 47.91 | -0.15 | Down(-15) paise
June 8/2009 - Rs v/s $ updates
RS v/s $ | 47.08 | 0.08 | Up^8 paise wrto $
RS v/s $ | 47.16 | -0.32 | Down(-32) paise
RS v/s $ | 46.84 | -0.30 | Down(-30) paise
June 2/2009 - Rs v/s $ updates
RS v/s $ | 46.99 | 0.30 | Up^30 paise
Monday, May 11, 2009
Industrial output down 0.5 percent yoy
India's industrial output likely shrunk in March from a year earlier, its third fall in four months, as the global economic slowdown hit exports and domestic demand remained soft, a poll showed.
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The median forecast in the poll of 13 analysts was for an annual decline of 0.5 in the index of industrial production (IIP) in March, the final month of the 2008/09 fiscal year.
Output fell an annual 1.2 per cent in February, according to provisional figures. Output rose 0.4 per cent in January and fell 0.6 per cent in December.
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"It's going to be flattish, near the trough. Exports remain weak and domestic demand is also subdued," said D.K. Joshi, principal economist at rating agency Crisil.
Some economists expect industrial output grew less than 4 per cent in India's fiscal year that just ended in March, less than half the 8.1 per cent growth rate of the previous year.
Economists expect output growth to improve in coming months as government stimulus measures and aggressive rates cuts by the central bank take hold, with demand for consumer goods, vehicles and building materials showing signs of picking up.
Macquarie Securities said industrial growth may reverse its weaker trend from April as motor vehicles, cement and steel are already showing signs of increased activity.
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A survey of purchasing managers showed expansion of manufacturing activities in April, its first uptick in five months.
Car sales, a gauge of consumer demand, rose 4.2 per cent in April from a year earlier, but sales of trucks and buses were down 11.3 per cent.
India's factory output sharply slowed last year as high borrowing costs and the global credit crunch forced firms to delay expansion plans and then cut output as demand for goods in overseas markets fell sharply.
Policymakers say the economy may have grown less than 7 per cent in 2008/09, slowing sharply from 9 per cent or more seen in previous three years. The central bank expects the growth rate to slow further to 6 per cent in 2009/10, which would be the weakest in seven years.
Tuesday, May 5, 2009
RBI moves $5.7 bn to Indian government
(5-5-09 - RBI news) - The Reserve Bank of India said today it had transferred 280 billion rupees ($5.7 billion) from its intervention bonds to the government, a move that would ease the pressure on record market borrowings planned for 2009/10.
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The RBI has taken a series of steps to ensure the government's net borrowing plan of 3.09 trillion rupees in the fiscal year that began on April 1 would go through smoothly without disrupting markets and sending yields shooting up.
The government had borrowed a net 3.02 trillion rupees in 2008/09.
The 10-year bond yield briefly ticked 1 basis points lower to 6.25 percent on the announcement. It has dropped more than 100 basis points since hitting a four-month high of 7.37 percent in mid-March.
The Reserve Bank of India said the transfer, which was made on May 2, would form part of the government's borrowing plan for 2009/10. It aims to move a total of 330 billion rupees from the market stabilisation scheme (MSS) in this year.
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The outstanding amount under the MSS account was 427.73 billion rupees on May 2, the RBI said. It has also bought back federal bonds in recent weeks to ensure adequate investor appetite for new auctions.
In early March, the central bank had given 120 billion rupees from the MSS account to the government to meet a sudden surge of borrowings in the closing weeks of the 2008/09 fiscal year.
Monday, May 4, 2009
RBI offers 600 bn rupees at special repo
The Reserve Bank of India said it would conduct a special repo auction for 600 billion rupees on Monday. The reversal of the auction will be on May 18, it said in a statement.
The special repo facility was introduced on Oct. 14, 2008 on a daily basis, offering 200 billion rupees to meet liquidity needs of mutual funds.
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The central bank later increased the facility to 600 billion rupees to include liquidity needs of non-banking financial companies and housing finance companies. At its policy review on April 21, the central bank said the auction will be conducted on a weekly basis every Monday till March 2010.
posted under - RBI updates, indian economy updates, Reserve Bank of India, RBI,
Economy poised for a rebound
The worst is over and the economy looks set for a rebound. This may sound contra-intuitive after dire predictions of a long and deep
slowdown, but economists and investment bankers interviewed by TOI see a revival as early as September, or latest by December. All of them see growth riding on the back of domestic demand rather than overseas business but caution that some sectors such as IT may take a little longer.
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The pace of rebound being projected ranges from an optimistic 8% of GDP to a cautious 6-7% in the last quarter. For the full fiscal, there's consensus on 6.5-7% except a CII forecast that pegged it at 6-6.5%. But a word of caution here will not be out of place. These figures could still go off the mark as the signs may be deceptive. This is just like when the specialists failed to see through the boom to see the bust coming.
"Green shoots of growth are showing in some sectors and we can certainly see a sustainable upward movement by the September-October busy season. Summer is lean period as activities usually slow down before picking up in September... or more in October," Ficci secretary-general Amit Mitra said.
Suresh Tendulkar, chairman of PM's Economic Advisory Council, was more optimistic and said recovery had started. "There have been some pressure on the bottomline and profit growth may not be as high as expected. But the way revenues have grown, it shows revival has started," he said.
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All of them identified infrastructure as the engine, driving demand in steel, cement and other manufactured items. "Infrastructure will spur the drawdown on inventories. That's happened in cement and is starting to happen in steel," said the investment banker.
Mahajan sees agriculture in a support role. "It will prompt rural demand but since there's a rigidity in the sector, it is not like the farm sector will carry the economy as a whole. A good monsoon and a good crop will certainly help the economic revival but that will not be the sole driver. After all, you already have good rural demand."
Mitra said steel and cement signified some turnaround in producer side. "FMCG never suffered. Activities in small housing are coming back. All these can be sustained if interest rates come down... projects become viable, start getting off the ground and (with low interest) propel consumer side interest."
Wednesday, April 29, 2009
Indian economy to recover from mid-2009 - Macquaire
(29-4-2009 Indian economy updates) - Indian economy will begin to recover from the middle of this year, thanks to the fiscal and monetary measures taken up by the government, but the outcome of the ongoing general election remains a legitimate concern, global research firm Macquarie has said.
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Macquarie said, "Our view remains that the largely domestically-driven Indian economy will begin to recover palpably from mid-year onwards."
The double-cylinder fiscal and monetary response has been aggressive and already paying dividend, the research firm said but added that "political uncertainty over the outcome for the ongoing general election remains a legitimate concern".
The other factors likely to contribute include that India is relatively less dependent on exports, its export profile is not heavily dependent on electronic or automotive shipments and the domestic fiscal and policy response has been aggressive and effective.
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Macquarie further said the Reserve Bank of India appears to be approaching the end of the policy rate-cutting cycle, but banks have more room to cut their lending rates more aggressively, which in turn should boost economic activity.
"Indeed, the broader setting is evolving nicely to position the economy for a better second-half of FY'10. Currently, we forecast a full-year GDP growth of 5.5 per cent for FY'10 following an estimated 6.5 per cent in the last fiscal year," Macquarie said.
Monday, April 27, 2009
Direct tax collection Rs 3.37 lakh crore
(27/4/2009 - Indian Direct tax updates) - The direct tax collection during the last fiscal year 2008-09 was to the tune of Rs 3.37 lakh crore against Rs 3.12 lakh crore in financial year of 2007-08, a top revenue official said on Monday.
"The tax collection was, however, short of budgetary estimates of Rs.3.45 lakh crore. Similarly, the indirect tax collection was Rs 2.65 lakh crore as against Rs 2.81 lakh crore in previous year, Secretary, Department of Revenue, New Delhi, P V Bhide told reporters.
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Bhide, who was here to attend the passing out of 61st batch of Indian Revenue Service (IRS) at the National Academy of Direct Taxes (NADT), said the cut in duty taxes reduced the indirect tax collection.
Speaking at the valedictory function of induction course of 61st batch, Bhide called upon the young officers to be honest and strive for tax administration while their primary responsiblity is tax collection.
Treat the income tax assessee as a client and not a criminal, he advised. The new tax code was being readied and would be brought in soon, he said.
Thursday, April 23, 2009
Inflation rises to 0.26 percent - April 11
Indian inflation Updates April 2009 - Annual Inflation consisting Wholesale price index rose 0.26 per cent in the 12 months to April 11, above the previous week's annual rise of 0.18 per cent.
It was above a median forecast of 0.09 per cent in a poll of analysts. The annual inflation rate was 7.95 per cent during the corresponding week of the previous year.
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The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.
Hmm so despite slowdown everywhere indian economy is showing growth signs as growth in inflation percent nearly shows that consumer spending has not been hit amid global economic crises , One reason for growth of indian economy is (according to me) is the black economy which runs in parallel in india but is not shown in the audit books of the firms, so atleast some advantage of black money in these crucial crises times.....
wait for the next post dedicated to "parallel black economy of india"
posted under - inflation 2009, indian inflation, inflation in april, april inflation updates, economy of india, indian economy updates
Monday, April 20, 2009
Indian Forex reserves at USD 252 billion
(20/4/2009 Indian Economy updates) - India's foreign exchange reserves stood at USD 252 billion as of end-March, declining by USD 57.7 billion over the previous year, the Reserve Bank said on Monday.
The RBI said in its Macroeconomic and Monetary Developments in 2008-09 said, the overall approach to the management of India's foreign exchange reserves in recent years reflects the changing composition of the balance of payments and the 'liquidity risks' associated with different types of flows and other requirements.
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"Taking these factors into account, India's foreign exchange reserves continued to be at a level consistent with the rate of growth, the size of the external sector in the economy and the size of risk-adjusted capital flows," RBI said.
posted under - economy of india, indian economy updates, indian forex reserves, RBI updates, indian economy blog, economy of india updates, forex updates, india forex reserves
Economic growth drivers moderating - RBI
Major drivers of growth in India are witnessing moderation and various surveys of economic activity point towards less-than-optimistic
sentiment for the economy in coming months, the Reserve Bank of India (RBI) said on Monday.
The survey of professional forecasters conducted by the Reserve Bank of India cut gross domestic product estimates for the 2009/10 fiscal year to 5.7 percent from 6.0 percent, it said in a review of the economy.
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The central bank said the slew of measures taken by it and the government would help tame the moderation in growth and revive consumption and investment demand.
Thursday, April 9, 2009
Inflation lowers but food items prices skyrocket
Annual inflation fell to a three- decade low of 0.26 per cent, although prices of essential food items rose by up to 17 per cent, shows data released just days ahead of the country going to general elections.
Wholesale prices-based inflation declined by 0.05 percentage points for the week ended March 28 from 0.31 per cent in the previous week.
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Even as the point-to-point inflation is near zero level, the average rate of price rise works out to be 8.4 per cent for the fiscal 2008-09 against 4.7 per cent in 2007-08.
Edible items like salt, sugar, milk, cereals, pulses, manufactured food products, spices and fruits were selling at higher rates for the week under review than a year ago.
In the backdrop of fall in sugarcane production, sugar prices soared by 17 per cent leaving a bitter taste. Inflation has become a key election issue, with political parties promising cheap rations for the poor.
Salt prices too went up by 10.68 per cent, milk by 6.22 per cent, cereals by 9.61 per cent, pulses 8.46 per cent and fruits by 8.02 per cent. However, drop in prices of minerals, metals, fuel, power and lubricants helped pull down the over all inflation to a three decade low.
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With the inflation dropping to such a low, analysts feel that the Reserve Bank of India may signal further cut in interest rates. RBI Governor D Subbarao reviewed the interest rate scenario with the heads of commercial banks in Mumbai yesterday.
"Inflation is low due to crisis in demand and crisis of confidence. It is low (also) due to base effect," said economic research body, RIS' Director-General Nagesh Kumar.
The Finance Ministry described the year-on-year price rise as "stable". It said the inflation of primary articles declined for the week ended March 28, 2009 from the previous week.
However, there was 3.46 per cent point-to-point annualised price rise for these articles. Further disaggregation of food articles shows that several items were selling at higher prices.
posted under - Inflation, Indian inflation updates, April inflation updates, Inflation at all time low, indian economy updates, economy of india, india and inflation
source - www.economictimes.com
Wednesday, April 8, 2009
Oil export earnings rise 17 per in 2009
April 8/09 - Despite facing a downturn in demand and consequently in prices since October 2008, India’s earning from oilmeal exports increased 17% to Rs 8,341 crore in 2008-09 even on a lower export volume. A firm trend in global markets during the first half of the FY09 has helped India beat the impact of recession on oilmeal exports.
Riding on substantial gains in price realisation in the first half of 2008-09, oilmeal continues to remain the highest export earner in the agri-commodity segment. During the year, it fetched about Rs 8,341 crore on an export volume of 5,421,607 tonne compared to Rs 7,109 crore against a volume export of 5,442,132 tonne in 2007-08.
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According to the Solvent Extractors’ Association of India (SEA), oilmeal exports in the first two quarters of 2008-09 jumped due to excellent demand and higher realisation of FOB prices. However, it stagnated in the third quarter. Exports declined heavily in the fourth quarter faced with a decline in meat and poultry production in its prime markets in South-east Asia, which happened due to dip in consumer demand for livestock products in the recession-hit countries.
posted under - Oilmeal earnings, oil exports, indian economy updates, economy of india, indian oil exports news, indian economy news, oilmeal in india, oilmeal exports
Economy Updates - Exports down 18% to $12 bn in March 2009
April 7/09(India Economy Updates) - The country seems all set to miss the pared down export target for 2008-09 with exports recording a fall in March 2009, for the sixth time in a row. Quick estimates made by the commerce department reveal that exports fell by 18% in March 2009 to $12 billion.
The aggregate export figure for the entire fiscal is, therefore, at $168.59 billion, which is more than a billion dollar short of the lower range of the revised target of $170-175 billion set by the government. The unofficial quick estimates, however, are sometimes quite different from the revised estimates officially issued at the end of the month.
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While desegregated figures are not available, a government official said that sectors such as textiles, handicrafts, carpets, leather, gems & jewellery and marine products continued to do badly. While demand for some of these products, especially textiles, has started picking up slightly in the EU market, demand from the US continues to be sluggish, the official added.
India exported goods worth $162 billion in 2008-09 registering a healthy growth over the previous fiscal. The 2008-09 fiscal began on a robust note with exports growing by more than 30% in the first six months. While the effects of the global demand slowdown started appearing in September with export growth slowing down to 10% in September 2008, the downslide started in October 2008 with exports entering the negative territory with a fall of 12.8% over October 2007.
Exports have not managed to get out of the negative zone ever since. Commerce and industry minister Kamal Nath, who had initially fixed the export target for 2008-2009 at $200 billion, brought it down to $170 billion-$175 billion in the last quarter of the fiscal year.
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With demand in key markets including the US, the EU and Japan slowing down, exports in most countries have been hit.
posted under - Exports , indian export news, Indian exports updates, economy of india, indian economy updates, indian economic news, economic news of india
Tuesday, April 7, 2009
India ranks second in industrial production among developing countries
India ranks among the top five developing countries in production of six major industrial items, including textiles, motor vehicles, chemicals and basic metals, according to a UN agency UNIDO.
In four out of the six industrial products - textiles, chemicals and chemical products, basic metals and electrical machinery and apparatus - India figures at number two only behind China.
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India's annual growth rate of manufacturing value added (MVA) has risen from 6.9 per cent in the period 2000-2005 to 12.3 per cent between 2005 and 2007, according to the year book of the United Nations Industrial Development Organisation (UNIDO).
It found that the share of MVA in India's gross domestic product (GDP) has risen to 14.8 per cent in 2006 from 13.8 per cent in 2001.
UNIDO found that the developing countries now produced almost 30 per cent of the world MVA compared to 16 per cent in 1990.
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"The increasing share of developing world vis-a-vis industrialised countries is also explained by the shift of location of manufacturing, especially assembling of final products from industrialised countries to developing countries," the UNIDO said.
posted under - industrial production, indian economy, economy of india, indian industrial output, output updates, indian economy updates, economy of india
Monday, April 6, 2009
FDI to remain robust - Goldman Sachs
The global economic slowdown will not affect the foreign direct investment (FDI) flow to India as the domestic demand remains "resilient", investment banker Goldman sachs said on Monday.
"FDI is showing positive signals," Tushar Poddar, an economist with Goldman Sachs said, adding: "We expect FDI inflows to remain significant in 2009-10, given India's relatively resilient domestic demand momentum."
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According to the bank, the FDI flow to India during September-January - the months when the credit crisis was at its peak - amounted to $9.2 billion, higher than $7.9 billion in the corresponding period last year.
Pranjul Bhandari, another economist at Goldman, said: "India's balance of payments (BOP) may have had its worst quarter in October-December 2009, when it showed a deficit of $18 billion."
"NRI deposits showed an uptick last fiscal, but we expect it to remain flat in 2009-10. We expect NRI deposits coming due in the next year ($32 billion) to get rolled over to a large extent, but do not expect large fresh inflows," he added.
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External commercial borrowings (ECBs) are expected to moderate in in the current fiscal. Although ECBs have slowed to $9.1 billion during September-February from $11.8 billion in the previous six months.
"In 2009-10, we expect ECBs to remain positive due to higher growth and yields in India, notwithstanding the $7 billion of outstanding commercial loans coming due," Bhandari said.
Private remittances from Indians working abroad slowed to $4.3 billion in the October-December quarter from $7.9 billion in the July-September quarter.
"We expect this to remain weak, but do not expect much further weakness from current levels," she said.
Bhandari added that the merchandise trade deficit had fallen to $5 billion in February from a peak of $14 billion in August.
Posted under - FDI in india, indian economy updates, economy of india, recession and indian economy, Indian FDI, foreign direct investment in india, India FDI, FDI updates
source - www.economictimes.com
Thursday, April 2, 2009
India's Apr-Feb 2008-09 exports at $156 bn
India's exports in the April to February period reached $156 billion and are expected to touch $170-175 billion in fiscal 2009/10, Commerce Secretary G.K. Pillai said on Friday.
"We will be lucky if we touch the $170 billion target (this fiscal year)," Pillai said referring to the slowdown in exports due to the global economic crisis.
Govt released the trade data for february yesterday.
posted under - exports of india, indian exports, export data from india, Indian economy updates, economy of india, effect of recession, indian exports
Wednesday, April 1, 2009
India Economy Updates - Govt introduces LLP business structure
India today introduced a new kind of business structure, Limited Liability Partnership (LLP), a form of entity where the partners' liability is limited to the extent of their stake which will specially benefit the services sector.
The LLP Act, was passed by the Parliament and given assent by the President Pratibha Patil, was notified today after being approved by the Election Commission to do so, sources in the Ministry of Corporate Affairs told PTI.
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Rules under the Act were also notified today. The Act will specially benefit the service sector by providing a platform to professionals like chartered accountants and company secretaries to come together to form an LLP and provide a single-window shop to all people wanting to avail professional services.
The LLP is a hybrid of partnership firms and companies. It is a separate legal entity and the partners have the advantage of being liable to the extent of their shareholding in the entity. The software, a part of the government's e-governance programme MCA 21, for incorporating and formation of the company has been prepared and the new LLPs will register online, sources added.
posted under - LLP act, LLP, indian LLP act , LLP act 2009, Limited Liability Partenership, LLP in india, Indian Economy updates, economy of india
Monday, March 30, 2009
ग्रोथ ओवर ८ परसेंट सुस्तैनाब्ले - RBI
The Reserve Bank of India expects the economy's growth rate to bounce back above 8 per cent once the current global economic and financial turmoil passes, Deputy Governor Rakesh Mohan said today.
"Our overall assessment is still an 8 per cent-plus growth is sustainable in the medium term. We can expect to come back to 8 per cent-plus growth once this interregnum is over," Mohan told a news conference.
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The government expects the economy to grow about 7 per cent in the fiscal year that ends on March 31, well below rates of 9 per cent or more in the previous three fiscal years.
Mohan said India would be cautious in moving towards fuller capital account convertibility for the rupee currency.
"We have also looked at the fuller capital account convertibility and concluded its desirable, but we need to move with caution," he concluded.
posted under - RBI updates, Indian Economy updates, economy oeconomy, recession and indian economy, economy of india, india economy
