FISCAL INTERVENTION
India steel, trade ministries in talks over rising Chinese imports
India's steel and trade ministries are discussing the increasing imports of steel, especially the influx of cheap Chinese goods, according to a government source. The talks come amid ongoing requests from top producers for higher tariffs. India became a net steel importer in the fiscal year ending in March, with finished steel imports reaching a five-year high in April and May, based on provisional government data.
Priyank Kharge meets IT minister Ashwini Vaishnaw, requests Centre's support for state's chip firms
Karnataka IT minister Priyank Kharge met Ashwini Vaishnaw, union IT minister, to seek support for the state's semiconductor and electronics space. Kharge said that the State has the highest share of 46% in India in housing innovative companies and contributes 10% of India's industrial output.
Govt steps help boost toy exports, manufacturing; more work needed: DPIIT Secretary
In the interim Budget in February, the Commerce and Industry Ministry has recommended an outlay of Rs 3,489 crore for the Production Linked Incentive (PLI) scheme for toys to boost domestic manufacturing of the sector.
Will RBI start cutting interest rates from October? Dr Samiran Chakraborty answers
In Citi's house view, we think that the Fed rate cut will start early, so we have put our first RBI rate cut in October, to some extent also factoring that in that if Fed moves earlier, then RBI gets the scope to move as well.
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.
HUL-owned Oziva posted Rs 44 crore loss on Rs 104 crore revenue in FY24
In FY23, OZiva had posted a net profit of Rs 58.3 crore, as it benefitted from a one-time gain of Rs 95.5 crore during the year. Its operating revenue for the year was Rs 99.3 crore.
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View: Your first 100 days to-do list, Gov
The upcoming government will have its work cut out for it as it steps into power following the conclusion of the 18th Lok Sabha polls. While the current administration has made strides in improving the business environment in India, there are key reforms that the new government must prioritize to fully capitalize on the country's growth potential.
RBI dividend will have economic dividends
RBI came into this windfall because of high interest rates in advanced economies, which may persist before an eventual cyclical inversion. The strength of India's recovery from the pandemic also contributed to the RBI surplus, and monetary policy would be inclined to pursue this course by easing interest rates ahead of the pack. Inflation is offering comfort on the demand side for an interest rate downcycle. Food inflation, less amenable to demand management, remains a concern.
How will RBI's Rs 2.11 lakh cr dividend payout to government help Indian economy? A Balasubramanian answers
So, I think combination of these two things put together have made RBI to come with about highest ever dividend, especially at a time where the market is also generally getting, not market, in general, the bond market keeps a very close eye on fiscal numbers.
Swaminathan Aiyar wonders how RBI managed to give Rs 2.1 lakh cr dividend to govt, says it will make a huge difference to July Budget
Finance Minister aims to reduce fiscal deficit from 5.8% to 4.5% in two years, relying on non-revenue RBI transfer. This strategy facilitates reaching 5.1% deficit this year. Challenges remain in sustaining revenue deficit reductions alongside fiscal targets. Aiyar says it is not very clear at this point what has resulted in this rise in the RBI dividend. Once we have greater clarity on that, we will be able to find out what are the consequences for different parts of the economy.
China shares soar, Japan slides as yen pinned near intervention zone
Chinese shares led a rally around most of Asia on Monday amid a broadly optimistic global economic backdrop, but Japanese shares tumbled with the yen pinned near levels that have traders on guard for a currency intervention.
China shares jump, Japan tumbles with yen pinned near intervention zone
U.S. stock futures also pointed firmly higher following a market holiday on Friday, when the Federal Reserve released data showing their preferred inflation measure indicated price pressures are further easing, bolstering bets for a June interest rate cut.
Next generation reforms to avoid middle-income trap: Suman Bery
In an interview, NITI Aayog vice chairman Suman Bery discusses the impact of staying on the "fiscal glide path" on India's credit ratings and private investment. He praises the finance minister for staying the course on fiscal consolidation, which provides headroom for the Reserve Bank of India and impacts the credit ratings of corporates and banks. Bery notes that the timing is right for a huge capex cycle in the private sector and emphasizes the need for regulatory reforms, decentralization, and freeing up sectors like agriculture and energy. He also mentions the importance of transparency in land markets, digitization, and artificial intelligence. Additionally, Bery highlights the challenge of a growing population and the progress made in reducing multidimensional poverty, but suggests that more significant measures may be included in the full budget.
Budget 2024: A pressing issue that may not wait till full budget
The fiscal deficit target of 5.3% will be set by the government in FY25, keeping in view the fiscal consolidation path till FY26, as it normalises capital spending and refrains from any major announcements in the interim budget before the general elections, Icra and Barclays economists have said. ICRA expects the fiscal deficit target for FY25 to be set at 5.3% of GDP, midway through the expected print of 6.0% for FY2024 and the medium-term target of sub-4.5% by FY26.
Budget 2024: Govt may go for big hike in PM-Kisan payout and a housing & jobs push
Union Budget 2024: The government will likely increase the amount of money transferred under its flagship direct benefit transfer scheme - Pradhan Mantri Kisan Samman Nidhi or PM-Kisan - by about 50% to ₹9,000 per year from the current ₹6,000, said some of the economists polled.
Government needs to keep doing high quality capex even while controlling top line spending: Neelkanth Mishra
Neelkanth Mishra, Chief Economist at Axis Bank, believes that the Indian government may have extra cash in hand this year, resulting in lower borrowing for the next year. While the growth in capital expenditure may slow down, there should still be room for it as subsidies and basic expenditures like salaries and pensions are expected to decrease. Mishra also expects the government to continue its focus on macroeconomic stability and prioritize stability for growth.
Insurtech startup Acko aims to achieve profitability by fiscal year 2027
Acko is eyeing profitability on the back of its general and health insurance segment turning earnings positive, founder and CEO Varun Dua said in an interview with investment bank UBS Global. Recently, Acko floated its life insurance company focussing on the sale of term plans, which is currently in the beta stage.
Mahindra expects to sustain growth momentum in SCV segment next fiscal
Mahindra & Mahindra expects to maintain growth in the small commercial vehicles segment next fiscal year by continuously refreshing its range according to customer needs. The company recently introduced the new Supro Profit Truck Excel series, available in diesel and CNG Duo variants, and priced between Rs 6.61 lakh and Rs 6.93 lakh. The company plans to introduce air conditioning to its pick-up range in the near future.
Inside an exemplary fiscal fitness regime: How to manage govt finances the Indian way
India has shown exemplary fiscal behaviour throughout multiple global shocks. Government debt went up less and came down faster than major systemic economies whose imprudence is creating risks for the rest of the world. India has among the best prospects for fiscal consolidation. It is the strategy underlying this outperformance that needs to be understood and emulated elsewhere.
India's macroeconomy sound, fiscally disciplined: IMF's Asia and Pacific director Krishna Srinivasan
The International Monetary Fund (IMF) has praised India's macroeconomic environment, stating that it is fiscally disciplined and has effectively controlled inflation. The IMF suggests that India should focus on structural reforms to further boost growth, including improving the business environment, labor reforms, and removing trade restrictions.
RBI's forex interventions used to manage volatility, not fix rupee level: Das
He also said there is a need to fully understand cryptocurrency risks before it is legitimised. Das said emerging markets always face spillover risks and India took a conscious decision to build buffers against these risks.
Exporters seek govt intervention in providing affordable credit to MSMEs, seek ECLGS extension
India's exports declined 6.86 per cent to USD 34.48 billion in August, for the seventh month in a row, due to a fall in shipments from key sectors like petroleum and gems and jewellery on subdued global demand. The trade deficit (difference between imports and exports) during the month touched a 10-month high of USD 24.16 billion.
Gujarat witnesses nearly 50% surge in 'Crorepatis' last fiscal: Tax data reveals
This marks a significant shift from the previous year, with 4,500 individuals joining the ranks of high-income taxpayers. The data also reveals a notable growth in the number of 'crorepatis' in Gujarat over the past five years, with the count doubling from 7,000 to 14,000. Experts attribute this surge to factors such as decreased corporate taxes, the impact of GST, and IT interventions in income tax payments.
RBI’s generosity is good for India’s fiscal glidepath, but not enough for oil price relief: Kotak's Economist Bhardwaj
India's central bank surplus transfer to the government will help it maintain fiscal prudence but it is unlikely to cut fuel taxes now, said Upasna Bhardwaj, a senior economist at Kotak Mahindra Bank. With disinvestment revenues posing a risk, higher subsidy payments, if any, would be cushioned, Bhardwaj said.
Indians singed by high food prices await targeted interventions, tax cuts to make ends meet
Skyrocketing food prices in India are hitting consumers hard. Prices for staples such as rice, pulses and tomatoes, essential items used in the preparation of most Indian dishes, have surged and making affording even necessities difficult for most Indians, who in any case paying over Rs 100 for a litre of petrol in many parts of the country.
Liquor sales volume grows 14% in FY23, premium segment over Rs 1,000 grows 48%
In FY23, whisky remained the largest segment with an expected sales volume of 243 million cases, contributing 63 per cent of sales of the total industry. Moreover, after many years of decline, Gin seems to have reversed the trend and is back in growth, added the report CIABC, which is the apex body of the Indian Alcoholic Beverage Industry.
Nearly $1.6 b a day: RBI's intervention to shield rupee from volatility in FY23
The RBI's average daily gross interventions in the foreign exchange market in the previous financial year were 85% higher than the previous year as the rupee battled extraordinary global headwinds. The latest data show that on a gross basis, the RBI sold $212.57 billion and bought $187.05 billion in the previous financial year.
Rupee ends near 82/USD as likely RBI intervention caps gains
"The market, therefore, is likely to keep a close eye on non-farm payrolls report due on Friday and any upward surprise in job addition, the unemployment rate or hourly wage growth could increase the possibility of a 50 bps rate hike," HDFC Bank economists wrote in a note.
Massive currency market intervention may not impact monetary policy independence: Report
Forex market interventions during surges in capital flows to contain the INR volatility lead to an increase in money supply or M3, which however is found to be neither inflationary nor elicit a policy rate response by the RBI, finds a research paper published by the Reserve Bank of India .
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