Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | August 2022
Posted on August 30, 2022
H I G H L I G H T S
- Finance ministry bets on rural demand recovery
- Mixed signals from Govt finances in April-June 2022
- Inflation remains elevated, though on a decelerating path
- No escape for RBI from presenting inflation report to Govt
- Industrial growth up but marginally above pre-Covid days
- Exports growth slows; annual increase could be just 14 per cent
- No respite from further tightening of monetary policy
- Digital payment and lending norms in for overhaul
- Electricity law change triggers prot
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | July 2022
Posted on July 28, 2022
H I G H L I G H T S
- 5G auctions make headway, fetch record revenues
- Another BSNL package to clean up its balance sheet
- Govt taxes the oil sector to meet higher spending burden
- Making oil producers and exporters share their spoils
- Quick roll back of new oil taxes benefits some companies
- GST buoyancy brings cheer to North Block
- Exports in June show signs of slowdown, major sectors hit
- Retail inflation marginally lower, IIP growth brings solace
- Indian rupee remains volatile, loses 7 per cen
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | June 2022
Posted on July 1, 2022
H I G H L I G H T S
- Five years after, GST compensation issue remains unresolved
- Rupee depreciation continues, RBI uses forex reserves
- GDP growth 8.7 % in 2021-22, but will be lower in 2022-23
- Tax revenues buoyant, but slippage in deficit target unavoidable
- Finance Ministry report raises concerns over likely twin deficits
- Higher expenditure outlays create fresh burden for govt finances
- RBI hikes repo rate again, set to miss inflation target
- Govt responds to unemployment fears, announces mor
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | May 2022
Posted on May 30, 2022
H I G H L I G H T S
- RBI Annual Report offers different strokes on economy
- Lower RBI dividend for Govt as provisions see a five-fold rise
- Falling circulation of currency notes of Rs 2000 denomination
- Headwind for privatisation as proposals run into trouble
- Disinvestment receipts look up, set to exceed 2022-23 target
- Inflation on a rising spree, while industrial growth stays feeble
- High inflation spurs RBI on a monetary policy action overdrive
- Reducing liquidity and setting a goal of p
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | April 2022
Posted on April 28, 2022
H I G H L I G H T S
- Gross tax collections bonanza for the Centre in 2021-22
- Pleasant surprise on revenue from direct and indirect taxes
- Better planning and forecasting on tax collections
- Conservative revenue planning for 2022-23 stands in good stead
- No cheer from growth and inflation forecast for India
- Relief from IMD’s normal monsoon forecast in 2022
- RBI revises outlook: Lower growth and higher inflation
- No increase in interest rates for now; subtle change in stance
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | March 2022
Posted on April 2, 2022
H I G H L I G H T S
• Exports touch a new high
• FDI inflows decelerate
• Indian economy faces headwinds
• Inflation scenario looks grim
• Pressure on Centre’s deficit
• Retail oil price strategy
• Moves on bank privatisation
• Tax collections buoyant
Exports touch a new high
Almost a decade ago, India’s merchandise goods exports had crossed the $300 billion mark. That was in 2011-12. In the last ten years, the performance
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | February 2022
Posted on February 28, 2022
H I G H L I G H T S
• India’s oil sector policy hit by Russia-Ukraine conflict
• Retail inflation management would cause concern
• Govt choices limited as agri-commodities prices will go up
• Impact on government finances may be manageable
• Question mark over consumer spending and pace of recovery
• Real estate, construction, cement to be hit by higher prices
• RBI monetary policy maintains stance with no rate hike
• Move tow
Special Report on Budget 2022
Posted on February 4, 2022
H I G H L I G H T S
• Surprises galore in the fiscal mathematics of Budget 2022
• Marginal fiscal slippage
• A few imponderables
• Focus on fiscal consolidation
• No respite from debt overhang
• Higher interest burden choking expenditure
• Transparency in Budget accounting
• Growth assumptions puzzling
• Tax revenue growth underestimated
• Tax revenue next year may be a pleasant surprise
• Realism in disinvestment receipts
• Lack of clarity on privatisation
• Capex rise helped by loans to states
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | January 2022
Posted on January 28, 2022
H I G H L I G H T S
• First print of 2021-22 GDP out, many more to come
• Significant variations in six versions of the GDP data
• GDP growth in 2021-22 to help project Budget numbers
• Low demand continues to be a cause for concern
• GST collections on the rise, but there are caveats
• GST collections’ share in GDP sees no recovery
• Nominal growth in 2021-22 may not be enough to help GST
• Double whammy from industrial output
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | December 2021
Posted on December 29, 2021
H I G H L I G H T S
• Winter Parliament session gives key economic bills a miss
• Farm laws repealed and electoral laws amended
• No change in RBI policy stance & benchmark interest rates
• Effective hike in reverse repo rate through an indirect route
• Growth projection retained at 9.5%, Omicron notwithstanding
• Inflation projected to stay below the upper tolerance band
• New policy to strengthen prudential norms for NBFCs
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | November 2021
Posted on December 2, 2021
H I G H L I G H T S
• Indian economy recovers, but its size still at 2019 level
• No nod yet for entry of industrial houses into banking
• Privatisation bill holds the clue to corporate ownership of banks
• Bank privatisation not going to be a one-shot affair
• Promoters allowed to hold higher equity stake in banks
• Fertility rate drops, need for bigger socio-economic policy push
• Farm laws repealed, new challenges on minimum support price
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | October 2021 | Vol 03 Issue 10 | Monthly
Posted on November 1, 2021
H I G H L I G H T S
• Robust tax revenue boosts Govt finances in 1st half of 2021-22
• Only worry on revenue front caused by poor disinvestment
• Exports maintain robust growth in first half of 2021-22
• Imports up at a higher pace, widening the trade deficit
• Air India privatised, returns to the Tatas after 68 years
• What Tatas paid out to acquire Air India
• Govt sheds Air India, but carries a lot of its past debt
• Growth outlook brightens, India
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | September 2021
Posted on September 30, 2021
H I G H L I G H T S
• Higher tax revenues swell Govt coffers, but no relief for deficit yet
• Relief for telecom sector: Will players bite the tariff bullet?
• Retail Inflation moderates, no relief from wholesale prices
• Foreign trade buoyant, with exports rising in August
• Industrial output up, riding on manufacturing
• Bumper kharif crop expected, though sowing marginally lower
• Wealth inequality wider than income disparity
Higher tax revenues swell Govt coffers
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | August 2021
Posted on September 1, 2021
H I G H L I G H T S
• GDP up 20% in Q1 2021-22; its real size lower than Q1 2019-20
• National Monetization Plan ambitious, raises questions
• Push for new infrastructure scheme, ambivalence on privatization
• Scrappage policy to boost auto sales, curb vehicular pollution
• RBI monetary policy maintains status quo, bats for growth
• Different strokes from Monetary Policy Committee members
• Exports spurt in July, showing growth for eighth month running
• Wholesale
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | July 2021
Posted on August 3, 2021
H I G H L I G H T S
• Government finances better with higher tax revenues
• Poor disinvestment and slow capex rise cause for concern
• Delicensing power distribution part of big legislative agenda
• Implementing power distribution reform key to its success
• New law to pave the way for general insurance privatisation
• IBC tweaked to allow pre-pack resolution of stressed MSMEs
• Easier access to insured deposits in banks facing moratorium
• Mining law change to
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | June 2021
Posted on June 29, 2021
H I G H L I G H T S
• Indian economy’s contraction in 2020-21 revised down
• April-June 2020 saw India’s worst decline in economic output
• Agriculture bucked the overall decline in many sectors
• Construction led the recovery from third quarter
• Services remained in contraction mode for the whole of 2020-21
• Growth forecast for 2021-22 lowered by World Bank, RBI
• Sharp variations in Govt’s tax revenue estimates
• Actual tax revenues fell 10-12 % over RE in 2018-19 & 2019-20
• Ac
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | May 2021
Posted on May 28, 2021
• Growth prospects take a hit after 2nd wave of COVID-19
• Finance Ministry plays down the overall impact on economy
• RBI rolls out package to address concerns over COVID-19
• Fillip to bond buying programme to help soften yields
• Loan restructuring move to help stressed MSMEs
• False cheer on industrial growth, real concern on inflation
• Automobile sales mask deeper industry-wide problems
• Good tidings on GST collections in April
• E-way bills generation shows worrying trend
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | May 2021
Posted on May 25, 2021
H I G H L I G H T S
• Growth prospects take a hit after 2nd wave of COVID-19
• Finance Ministry plays down the overall impact on economy
• RBI rolls out package to address concerns over COVID-19
• Fillip to bond buying programme to help soften yields
• Loan restructuring move to help stressed MSMEs
• False cheer on industrial growth, real concern on inflation
• Automobile sales mask deeper industry-wide problems
• Good tidings on GST collections in April
• E-way bills generation show
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | April 2021
Posted on April 30, 2021
H I G H L I G H T S
• Economic growth prospects for 2021-22 take a hit
• Inflation concerns may worsen, impacting RBI’s options
• Second Covid wave sees fewer curbs on economic activity
• A shift in the vaccination strategy; states to do heavy lifting
• New strategy reduces Central spend on vaccines
• Maruti exudes optimism on car sales
• Automobile sales back to where they were in 2015
• Industrial output falls; consumer durables buck trend
• Positive surprise on Centre’s tax coll
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | March 2021
Posted on April 6, 2021
H I G H L I G H T S
• A lower fiscal deficit for 2020-21, thanks to higher tax revenues
• March pick-up in exports helps reduce full year’s trade gap
• GST collections recovery reflects improved procedures
• No change in inflation targeting regime, but prices up
• Economy tracker: Covid surge shows a deceleration in activity
• Three relaxations that impacted India Inc and banks
• Extending deadline on e-mandate on recurring payments
• Enforcement of Labour Code deferred, ball in st
Indian Economy Review by Mr AK Bhattacharya, Editorial Director, Business Standard | February 2021
Posted on March 1, 2021
H I G H L I G H T S
• Mixed picture on growth, worries on fourth quarter numbers
• RBI Report hints at maintaining existing inflation targets
• No rate cut, but bond market spikes worry RBI
• Retail inflation down, industrial output up
• Trade data offers relief as domestic demand improves
• PM batting for private enterprise, sets a new benchmark
Mixed picture on growth, worries on fourth quarter numbers
The news on the growth front was mixed as evident from the latest data released by
Special Budget Review by Mr AK Bhattacharya, Editorial Director, Business Standard
Posted on February 4, 2021
H I G H L I G H T S
• Union Budget for 2021-22: An Assessment
• Using a fiscal crisis to lend greater transparency
• No increase in revenue spend, but a big boost to capex
• Stability in direct taxes, but Customs review worrying
• Big reforms announced; implementation will be the key
• Privatisation and asset sale to raise resources
• Higher FDI & foreign ownership in insurance allowed
• Legislative reforms for ease of doing business
• Idea of a bad bank makes its debut; DFI makes a comeback
Indian Economy Review | January 2021
Posted on January 28, 2021
H I G H L I G H T S
• Different strokes : Higher NPAs and a glorious summer
• GST collections buoyant, augurs well for recovery prospects
• Automobile manufacturers see green shoots of recovery
• Power consumption and railway freight pick up
• Investment in new projects still a cause for worry
• Unemployment rate lower, but mixed consumer sentiment
• Rural work demand under MGNREGA spurts in December
• A new framework for NBFC regulation
• Govt crackdown on WhatsApp, enters a court batt
Indian Economy Review | December 2020
Posted on December 30, 2020
H I G H L I G H T S
• Rerating of economic recovery prospects
• Most agencies upgrade India growth estimates
• Is India in a recession? Not really!
• The other upsides of the Indian economy
• A seven-pronged strategy from the RBI
• Industrial output bounces back, but will it be sustained?
• Retail inflation down, but no relief for RBI
• No cheer from exports, but industrial demand picks up
• Direct tax collections recover smartly, but will miss target
• Fresh momentum for Air India
Indian Economy Review | November 2020
Posted on November 28, 2020
H I G H L I G H T S
• In spite of recovery, growth set to elude India in 2020-21
• Govt finances show the stress, but they are getting better
• Opening up banking to corporates raises hackles of experts
• Extending PLI scheme to 10 sectors: A double-edged sword?
• Stimulus III: Fiscal cost contained within Rs 1.2 trillion
In spite of recovery, growth set to elude India in 2020-21
For two successive quarters, the Indian economy has shrunk and technically is in recession, but it
Indian Economy Review | October 2020
Posted on November 2, 2020
H I G H L I G H T S
• Worrying signs in state finances
• State Budgets shrinking with expenditure cuts
• Stimulus II, but with negligible impact on the fisc
• LTC measures may benefit 850,000 govt staffers
• 6 % rise in Central capex, but states may be worried
• Confusion over GDP contraction estimates
• Implications of near-zero growth
• Nominal versus real may hold the key
• Drawing comfort from higher inflation & growth
• RBI bets on growth, ignores inflation work
Indian Economy Review | September 2020
Posted on September 30, 2020
H I G H L I G H T S
• Vodafone tax controversy back to haunt the Govt
• No resolution of the tax case even after 13 years
• What it actually means for Govt finances
• A lot about investment sentiment and a political promise
• The 2014 Budget and its treatment of the Vodafone tax
• Future of bilateral investment treaties in limbo
• Labour law reforms gain momentum
• Freedom to hire and fire, no hike in payout
• A liberalised regime for the contract labour system
• A leg-up for gig economy worker
Indian Economy Review | August 2020
Posted on August 29, 2020
H I G H L I G H T S
- Covid-19 has made growth challenges more complex, says RBI
- No definitive growth forecast; post-pandemic recovery to be different
- No hasty or disruptive withdrawal of regulatory easing
- A long list of policy prescriptions for boosting the economy
- Focus on global supply chains and free trade agreements
- Shifting policy focus for agriculture and manufacturing
- A four-pronged approach to address woes of the financial sector
- GST compensation cess transfer to states comes to a halt
Indian Economy Review | July 2020
Posted on July 31, 2020
H I G H L I G H T S
- Financial sector gets the Covid-19 jitters
- RBI’s financial stress report raises NPA alarms
- Challenges of moratorium, restructuring, capitalisation & funding
- To extend moratorium or not to extend it beyond August
- One-time loan restructuring and its implications for IBC
- Demand for more bank capital; Govt finances to be under stress
- Govt nudges banks to lend more, RBI Guv for non-banking funds
- India toughens its stance on China with more policy action likely
- After 18 years,
Indian Economy Review | June 2020
Posted on June 30, 2020
H I G H L I G H T S
- Moody’s paints a gloomy picture
- S&P softens the Moody’s blow
- Growth may recover, but indebtedness will rise
- Different strokes from Moody’s and S&P
- China story remains unscathed
- Booster dose for Indian agriculture
- Freeing up inter-state farm trading
- Leg-up for contract farming, with pre-fixed farm prices
- Breather from Essential Commodities Act for some crops
- Lack of clarity may dilute agriculture reforms
- A mixed picture on green shoots of economic recovery
- Unemployment
Indian Economy Review | May 2020
Posted on May 28, 2020
Surprises galore in the Modi package
The Narendra Modi government sprang a series of surprises on almost every commentator and critic, who had been wondering how it would meet its commitment of rolling out as large an economic package as Rs 20 lakh crore to counter the adverse impact of Covid-19 on the economy. On May 12, Prime Minister Narendra Modi had underlined the need for building a self-reliant India and promised an economic package of over Rs 20 lakh crore. This was about 10 per cent of
Indian Economy Review | April 2020
Posted on April 29, 2020
Making growth forecasts post-Covid becomes more difficult
How serious will be the impact of the Covid-19 outbreak on India’s economic growth? The range of estimates on India’s growth of gross domestic product (GDP) in 2020-21 is quite wide and, therefore, puzzling. It is difficult to state with certainty at this point in time which forecast is going to be closer to the final number on growth. But a quick review of the different estimates put out by different agencies will give an indication of
Indian Economy Review | March 2020
Posted on March 30, 2020
Corona response; impact on the economy
What appeared very distant just two months ago became a danger signal next door within a few weeks and has now engulfed the whole nation as a full-blown crisis with an unprecedented impact on the country’s health and economy. On January 30, the first Coronavirus case was confirmed in India. By early March, it became a global pandemic and the Indian government advised caution to all its citizens, even though the spread was limited. In the second week of Marc
Indian Economy Review | February 2020
Posted on February 27, 2020
Coronavirus impact: No signs of an improvement in economic outlook
The economic outlook showed no signs of any improvement in February. The impact of the outbreak of coronavirus, starting from Wuhan in the Hubei province of China and now threatening to engulf many other countries, will be felt not just in terms of the loss of lives (already estimated at over 2,770), but also in a slowdown in the global economy. There are estimates that the Chinese economy’s output growth may be shaved off
SPECIAL ISSUE: Union Budget Review by Mr A K Bhattacharya, Editorial Director, Business Standard | February 2020
Posted on February 3, 2020
REVIEW OF THE UNION BUDGET 2020
- The maths behind the headline fiscal deficit number
- Extra-Budget borrowing up, raising both transparency and concern
- A big jump in disinvestment target, making execution the key
- Banking on non-tax revenues again, but worrying drop in PSU dividends
- Tax initiatives: Away from exemptions, but dividend tax for recipients
- Concerns over defence, subsidies, tariffs and infrastructure spend
Overview
The Union Budget for 2020-21 was presented to Parliament on Feb
Indian Economy Review | January 2020
Posted on January 28, 2020
Mixed signals for the financial sector; more resilient but NPAs may rise
While many banks have begun reporting better financial performance (ICICI Bank declared a 158 per cent jump in its net profit for the third quarter of 2019-20, for instance), the overall prospects for India’s financial sector appear to be quite mixed. A quick assessment of the pluses and minuses of the Indian financial sector reveals that while a lot in terms of recovery has been achieved, maintaining vigil against any
India Economic Review | December 2019
Posted on December 30, 2019
Growth worries persist, but where are the green shoots?
Managers of the Indian economy so far have had no respite from worries over an economic slowdown. On November 29, the Central Statistics Office released the gross domestic product (GDP) numbers for July-September 2019, which placed growth at 4.5 per cent, a six-year low. Coming on top of consecutive deceleration in growth every quarter since January-December 2018, when it was estimated at 8.1 per cent, the latest GDP growth print suggested
India Economic Review | November 2019
Posted on November 18, 2019
Privatisation gets a boost, but a few areas of concern
The Narendra Modi government has now sent out signals that it is not averse to the idea of privatisation in a few select cases. On November 20, the Union Cabinet Committee on Economic Affairs took three important decisions. One, it approved privatisation of three state-controlled companies. The three companies, which would be privatised or whose management control would move to a new entity, are Bharat Petroleum Corporation Limited (BPCL)
India Economic Review | October 2019
Posted on October 30, 2019
State of the Economy – A Dilemma
The month of October began with what looked like a reality check on the Indian economy. And that process was kicked off by none else than India’s central bank, the Reserve Bank of India (RBI). In its bi-monthly monetary policy review on October 4, the RBI cut the repo rate (the rate at which the central bank lends to commercial banks and, therefore, signals the overall interest rate direction) yet another time by 25 basis points, taking the overall reduction
India Economic Review | September 2019
Posted on September 26, 2019
Bold Moves, But Not Yet Out Of The Woods
The last few weeks have seen the Union government in firefighting mode. As the signs of an economic slowdown became increasingly more evident, the Union finance ministry came out with a slew of measures – as many as four packages in as many weeks – in a bid to revive the Indian economy. A rough estimate puts the total impact of these measures at a little over Rs 1.6 lakh crore by way of revenues foregone and additional expenditure by the government.
India’s economic growth prospects did not look very bright this month. On August 9, the Central Statistics Office released the industrial growth numbers for June 2019. At 1.95 per cent, this was one of the lowest in recent months and a sharp deceleration over industrial growth in the previous two months – 4.32 per cent in April and 4.55 per cent in May. The industrial growth for the first quarter of the current financial year thus settled down at just 3.6 percent, as
