FISCAL CONSOLIDATION
Job creation and social spending to be key focus areas for NDA 3.0: DK Joshi
Now, the other issues like external vulnerability, those markers also look good. Your current account deficit is in the safe zone. You have ample forex reserves. So, in this global environment where there are too many risks lurking around, we do not know when these risks will play out, but we know that they are, whether it is global debt or it is the Middle Eastern conflict or it is Russia-Ukraine war, all of these can become bigger problems, so you need to have buffers.
Budget likely to stick to fiscal road map: UBS
UBS predicts that the new government will follow a medium fiscal consolidation path but with a populist tilt in its first budget after the elections. The RBI's higher-than-expected dividend transfer to the government provides fiscal leeway for populist spending, especially to support lower-income groups. The government is expected to target a fiscal deficit of 5.1% of GDP in FY25, aiming to reduce it further to below 4.5% of GDP by FY26. While tougher reforms may be challenging, supply-side reforms like manufacturing, labour laws, and skill development are likely to continue.
Modi 3.0: How different will be the third Modi government
Narendra Modi is scheduled to take take oath for the third term as India's Prime Minister in a changed political landscape. Allies demand concessions, potentially affecting economic agenda. Expectations for populist budget with focus on welfare and rural areas, though concerns raised over economic impact. Reform agenda may face challenges due to weakened mandate, but continuity likely in infrastructure investment and business environment improvements.
No rate cut seen in August either, but enough signs of a shift in stance
The minutes of the meeting will be available on June 21. Varma and Goyal have argued that high interest rates might be hindering potential growth. They have previously debated that a high real interest rate—the difference between the actual interest rate and inflation—could be compromising growth.
No rate cut seen in August either, but enough signs of a shift in stance
In the normal course of events, the rising dissent in the MPC should have led to more joining the camp of rate cut seekers as data turns benign. Inflation may not have come back to the 4% target, but it's not threatening to soar. For the US, it is at 3.4% in April when the target is 2%.
India's medium-term fiscal consolidation likely to get more challenging, Fitch says
India's medium-term fiscal consolidation faces challenges with a new coalition government coming to power, potentially impacting a ratings upgrade, as Prime Minister Narendra Modi's BJP fell short of a majority. Fitch Ratings analyst Jeremy Zook expects the government to aim for a 4.5% fiscal deficit by 2025-26, but uncertainty looms beyond. The central bank's surplus transfer aids fiscal goals, but a coalition government may complicate consolidation efforts.
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Lok Sabha results won't force India's budget to make significant policy shifts: Fitch
Fitch Ratings anticipates minimal policy shifts in India post-election losses. The upcoming July budget will detail economic reform plans and fiscal goals for the next five years, crucial for addressing fiscal metrics, reducing debt, potential deviations from capital expenditure commitments, the risk of heightened social spending, progress in judicial reforms at the state level, and reforms in the manufacturing sector.
Coalition politics, weakened mandate could make passing legislations on ambitious reforms challenging: Fitch
Fitch Ratings predicts that the new government in India, led by Narendra Modi, will face challenges in passing legislation on ambitious reforms due to coalition politics and a weakened mandate. Major reforms to land and labour laws will remain on the agenda, but these have been contentious and the NDA's weaker mandate could complicate their passage further. The BJP fell short of a single-party majority in the 543-seat lower house of parliament for the first time since its latest period in government in 2014.
Lok Sabha Results: Will a fractured mandate for NDA impede new govt's infra and capex push?
The 2024 Lok Sabha elections deliver a fractured mandate, influencing economic reform outlook. Experts recommend focusing on public capex and high-tech sectors for growth. Tanvee Gupta Jain predicts fiscal leeway for populist spending, supported by progress in implementing labor laws.
Modi 3.0 has heavy lifting to do on tax reforms to managing stock risks
Economists outline key priorities for India's incoming government, emphasizing the need for growth, job creation, and macro stability. Pronab Sen highlights the importance of sustainable livelihoods, while Pranjul Bhandari suggests that 'easy' reforms could maintain 6.5% growth. However, achieving 70 million jobs requires politically sensitive reforms in agriculture, labor, and land. Additional recommendations include infrastructure investment, judicial reforms, enhancing export competitiveness, and further tax reforms, particularly bringing petroleum and power under GST.
BlackRock stays bullish on Indian bonds after narrow Modi win
Neeraj Seth, chief investment officer at BlackRock, predicts that India's fiscal consolidation under Modi's leadership will continue. Cooling inflation may lead the Reserve Bank of India to ease later this year, supporting the preference for longer duration bonds like the seven and 10 year ones.
Expect broad policy continuity with focus on capex: Ratings agencies
Economists emphasize the new Indian government's need to focus on growth, job creation, fiscal stability, tax reforms, and risk management. Reforms in land, labor, and capital markets are crucial, along with fiscal consolidation and increased government spending to attract private investments. They suggest balancing pro-consumer policies in agriculture and tackling judicial delays. These efforts aim to sustainably boost job creation and income levels, with the potential to raise India's economic growth to 7.5-8% over the medium-to-long term.
Modi govt's fiscal consolidation pace post-Covid worse than peers? Moody's report flags weaker fiscal, debt metrics
Moody's rating agency has pointed out that India's fiscal consolidation following the Covid-19 pandemic has lagged behind when compared to its peers. This includes several emerging markets in the Asia-Pacific region.
New govt likely to vote for populism in budget
With the Lok Sabha election results hinting at a coalition government, economists anticipate a populist Budget focusing on welfare schemes for the upcoming fiscal year.
As India steps back into coalition era, uphill road for tough reforms
In the new coalition government era, India's reform agenda may prioritize job creation and factors market reforms. Balancing political sensitivities and reform priorities will be crucial for the government in navigating coalition dynamics and opposition pressures.
Macro policy choices unclear, but work cut out on reforms agenda
In FY24, nominal GDP grew 9.6%, CPI inflation recorded 5.4%, and real GDP growth was estimated at 8.2%.
Bond yields jump, rupee weakens as trends fall short of hopes of largest NDA win
Government bonds and the rupee weakened as Lok Sabha election results indicated a lower NDA majority. 10-year bond yield rose 9 bps to 7.03%, rupee fell to 83.42/$1. Yields impact borrowing costs. Market awaits full election outcome.
India 10-year bond yield sees biggest spike in 8 months on poll results uncertainty
Indian government bond yields surged as early voting trends showed Prime Minister Narendra Modi's NDA leading, causing the benchmark 10-year yield to jump to 7.0130%.
Sun Pharma expects high single-digit top line growth in current fiscal
Sun Pharmaceutical Industries expects high single-digit top line growth in FY24 with total revenue at Rs 48,497 crore, led by Managing Director Dilip Shanghvi. The firm anticipates similar growth in FY25 with investments in product launches and R&D activities.
Economy expands 7.8% in Q4, lifting FY24 growth to 8.2%
This is the highest annual growth since FY17, excluding the 9.7% post-Covid rebound in gross domestic product (GDP) in FY22 after the 5.8% contraction in FY21. The advance estimate released in February had pegged FY24 growth at 7.6%. Economists and government expect the high growth to continue though tepid private consumption remains a concern.
S&P Global to observe India's fiscal glidepath for ratings upgrade
S&P Global Ratings will monitor India's fiscal consolidation efforts over the next two years for a potential sovereign ratings upgrade. Despite raising the outlook to "positive," the rating remains "BBB-." Focus is on India's fiscal deficit reduction targets, fiscal discipline with RBI's surplus transfer, and its ability to manage inflation.
RBI's dividend transfer may ease deposit rates if govt spends it: Ind-Ra
India Ratings and Research (Ind-Ra) stated that the RBI's Rs 2.11 lakh crore dividend transfer will likely ease liquidity pressure and lower deposit rates in the banking system if the government spends it. The substantial dividend will strengthen the central government's fiscal position, potentially leading to additional spending or fiscal consolidation.
SJVN Q4 Results: Net profit jumps two-fold to Rs 61 crore
State-owned SJVN has reported over two-fold jump in consolidated profit to Rs 61.08 crore during the March quarter, on account of exceptional gains.
What kind of election results would shake up the markets? Seshadri Sen answers
Seshadri Sen discusses the impact of BJP's majority in the upcoming elections on the economy, focusing on manufacturing, infrastructure, and capital goods sectors. sen says the the only negative outcome for the markets is that the BJP falls considerably short of the absolute majority. All other outcomes are largely the same.
Brigade Enterprises Q4 Results: Profit jumps nearly 3-fold to 206 crore
Realty firm Brigade Enterprises Ltd on Tuesday reported a nearly three-fold jump in consolidated net profit to Rs 206.09 crore for the March quarter on the back of higher income. Its net profit stood at Rs 69.25 crore in the year-ago period.
Goodluck India Q4 Results: Net profit grows 33% to Rs 37 crore
Goodluck India reported a 33% increase in consolidated net profit to Rs 37.21 crore for the March quarter due to higher revenues.
RBI dividend to have limited impact on medium-term fiscal consolidation: Fitch
Fitch Ratings emphasized the limited medium-term impact of the RBI's surplus transfer on India's fiscal consolidation and debt path. The government targets a fiscal deficit of 4.5% of the GDP by FY26, with potential positive implications for credit ratings.
Suzlon Energy Q4 Results: Net profit drops 21% YoY to Rs 254 crore
Renewable energy solutions provider Suzlon Energy on Friday reported nearly 21 per cent decline in consolidated net profit to Rs 254 crore in the March quarter mainly due to certain exceptional items.
RattanIndia Power Q4 Results: Firm posts Rs 10,665 cr net profit on exceptional gains
RattanIndia Power on Wednesday reported a consolidated profit of Rs 10,665.75 crore in the March 2024 quarter, mainly due to exceptional gain. The company had reported a loss of Rs 483.19 crore in the year-ago quarter, a BSE filing showed.
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