INSUBCONTINENT EXCLUSIVE:
Course correction ahead! In this round of state elections and in the runup to the general elections in five months, more than which party
Services.
Madan Sabnavis, Chief Economist at Care Ratings, said there would be certain changes in policies
this round of state elections, losing key strongholds Chhattisgarh and Rajasthan and also putting up a poor performance in Telangana and
Mizoram, while trends at 2 pm showed the saffron party was set to retain Madhya Pradesh.
Despite some respite for the Indian economy from
external factors in the form of softening crude oil prices and a potential halt to US Fed rate hikes, the Modi government has been walking
on a tightrope on the fiscal front this year thanks to the mid-year swell in import bill owning to a spurt in oil prices and also slower GST
collection for most part of this financial year
The government has also not made much progress on its disinvestment agenda due to a volatile market.
On Monday, Finance Minister Arun
Jaitley enhanced the government contribution towards NPS pension corpus of government employees to 14 per cent from existing 10 per cent and
also made the entire withdrawal amount tax free at the time of retirement
Expect significant increase in minimum support prices (MSP) and more spend on rural welfare schemes
The fiscal deficit this year has already crossed the full-year budgeted number by almost 4 percentage point
Broadly speaking, central government finances are not in bad shape
Indirect tax collection and divestment have been major negative areas
The government may become aggressive in mobilising revenues through different forms of divestment
February, and economists widely feel the focus may turn on the rural economy, infrastructure, welfare, housing, railway and road
This may impact the fiscal maths
related to foreign investors
They have offloaded shares worth Rs 31,408 so far this year
Last, they had recorded net outflows in a calendar year was in Jan-Dec 2011 at Rs 2,714 crore
Their net inflows stood at Rs 49,729 crore in 2017, Rs 20,566 crore in 2016, Rs 17,806 crore in 2015 and Rs 97,069 crore in 2014.
In a
surprise move, Urjit Patel resigned as RBI Governor on Monday, nine months prior to the end of his tenure
The news came as a surprise amid a public feud between the central government and the central bank on a variety of issues, including the
surplus reserves to the government, dilution of Basel III norms (bringing capital to risk weighted assets ratio down to 8 per cent instead
of 9 per cent), and keeping power assets out of the stressed assets framework
were getting sorted out after the last RBI board meeting and December monetary policy
Quick announcement of a new governor will dispel some of these concerns
