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Monthly Economic Review - June 2014 - 30/06/2014
As per the Central Statistics Office's (CSO) Provisional Estimates of National Income 2013-14, the economy grew at a sub-par rate of 4.7%. Lacklustre performance of industrial activity and deceleration in the services sector led to this slowdown, while agricultural performance was upbeat. At 0.4%, industrial growth was pulled down by manufacturing and mining sectors. At 6.8% of GDP, services sector grew at a slower pace than witnessed a year ago, due to deceleration in the growth rate of the combined category of trade, hotels and restaurant and transport, storage and communications to 3% from 5% in 2012-13.
Financial Markets Review - Fortnight Ending 11 July 2014 - 11/07/2014
The new government unveiled the Union Budget for 2014-15 on 10 July 2014. The budget estimates for fiscal deficit stands unchanged from the target laid down in the interim budget at 4.1% of GDP. The gross market borrowing for 2014-15 is estimated at Rs 6 lakh crore and net borrowing stands at Rs 4.61 lakh crore. The finance minister laid down the fiscal consolidation roadmap by targeting to bring down fiscal deficit to 3.6% in FY16 and 3% by 2016-17. As per the Economic Survey 2013-14 the GDP growth for FY15 has pegged at 5.4% to 5.9%. It was acknowledged that inflation has moderated, though it continues to remain above comfort level. The Economic Survey also highlighted the need for monetary policy framework for targeting CPI inflation.
Financial Markets Review - Fortnight Ending 27 June 2014 - 27/06/2014
The sectarian violence in Iraq resulted disruption of crude oil supply which adversely hit the overall market outlook and in turn the macro-economic situation in India. On the other hand, investors' sentiments remained extremely keen on the announcement of Union Budget 2014-15 scheduled on 10 July. Markets were optimistic about a strong rebound in economic growth however, higher than expected CAD, fiscal deficit and inflation might disrupt the government's economic plans in the long-run as the new government has inherited an economy that is struggling under the weight of inflation and debt.
Financial Markets Review - Fortnight Ending 30 May 2014 - 30/05/2014
With the forming of the new government at the centre, hopes for recovery in economic growth escalated creating buoyancy in the financial market activities during the fortnight ending 30 May. The newly elected political party already began its plan to cut the fiscal deficit. Amid this positive outlook, markets discounted rating downgrade that has been cut to junk from investment grade from the rating agencies. However, global repercussions on withdrawal of stimulus by central banks continued to bother the market dynamics posing additional obstacles to RBI in the formulation of monetary policy. Moreover, looming risk of a weak monsoon raised inflationary pressure on the domestic economy.
Revenue Mobilisation: Assumptions of Buoyancy - 02/08/2014
In recent years, fiscal consolidation has been led by contraction in government spending. In the Union Budget for 2014-15 revenue mobilisation has received a major thrust, as buoyancies of all major taxes are expected to go up. This article examines the challenges of attempting to improve revenue collection and meet the targets for revenue.
Indian Agriculture on a Dynamic Path: Positive Response to Multi-Pronged Policy Initiatives Since 2004-05 - 28/06/2014
Indian agriculture has been doing far better in the years since 2004-05. This note explores vailable data to understand why this has been so. It is found that after 2004-05, public investment in agriculture increased, the National Horticulture Mission was launched, and more agricultural credit was made available that spurred private investment in agriculture as well. These policy initiatives resulted in increased yields and higher agricultural growth.
Selected Macro-Economic Indicators - 20/08/2014
The RBI study of select non-government non-financial public limited companies showed a deterioration in performance in 2012-13. The debt to equity ratio has gone up from 42.9% in 2011-12 to 46.2% in 2012-13. Expenditure on raw materials, as a percentage of the value of production, increased to 60.1% in 2011-12 from 59.2% in 2010-11 and remained stable in 2012-13. Interest expenditure as a percentage of gross profits rose from 21.8% in 2010-11 to 32.5% in 2012-13. Profits after tax to net worth, which stood at 12.0% in 2010-11, dropped sharply to 8.7% in 2012-13. The payout ratio steadily increased from 24.7% in 2010-11 to 33.4% in 2012-13.
Financial Markets - Key Indicators - 20/08/2014
Weekly Updates - 22-28 July 2014 - 28/07/2014