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Foreign Exchange Spending and Earning of Corporates in India - 07/11/2014
An analysis of corporate sector earnings and spending reveals that since liberalisation in the early 1990s, Indian companies have become increasingly dependent on foreign inputs, while foreign companies operating in India continue to focus on marketing their products here. Undeniably, the corporate sector has been and is a major contributor to India's current account deficit.
RBI Balance Sheet in Recent Years: A Prisoner of a Distorted Monetary Policy Stance - 18/10/2014
The Reserve Bank of India's latest accounts indicate that the structure of earnings has clearly shifted to domestic sources, particularly from assets. Further, the RBI has made large transfers to the Government of India over the past few years at the cost of maintaining critical reserves to ensure the financial stability of the central bank. The RBI has not made public a report that is said to provide justification for such a shift in policy. This goes against the post-financial crisis view that central bank operations must be more transparent and open to public scrutiny.
Monthly Economic Review - October 2014 - 30/11/2014
The Cabinet Committee on Economic Affairs (CCEA) has announced Minimum Support Prices (MSPs) for certain rabi crops of 2014-15. Industrial output improved in September 2014 from the previous two months, while services output came to a standstill in October 2014. Both wholesale and retail inflation eased in October 2014, heightening expectations of a rate cut by the central bank. Fiscal health continues to be worrisome as revenue collections lag, six months into the fiscal. These uncertainties over growth revival continue to prevail.
Monthly Economic Review - September 2014 - 31/10/2014
The 'First Advance Estimates of Production of major Kharif crops for 2014-15', have put the kharif output to be 7% lower from the Fourth Advance Estimates of 2013-14. Industrial growth too has not been very encouraging yet again, as revealed by new IIP data in August. Though on an expansion mode, services sector activity only paced in September 2014 over August. Annual inflation continued to be on the lower side, thereby prompting the Reserve Bank of India to retain the key policy rates, even as liquidity provided under the export credit refinance (ECR) facility has been reduced. Though the outlook for retail inflation has improved, monetary easing may not be possible in the current fiscal due to upside risks from food price shocks and geo-political tensions in the Middle-East. Government expenditure fell yet again, keeping the deficit lower y-o-y. However, trade deficit has widened to a 16-month high. Owing to all these macroeconomic developments, financial market activities remained mixed.
Financial Markets Review - Fortnight Ending 25 July 2014 - 25/07/2014
Moderate pick up in global economic activity helped the risk appetite of investors resulting in a strong rise in the portfolio inflows in to emerging market economies in the recent period. In conjunction with improved business sentiments amid firming up of industrial growth and exports, the domestic financial market activity also got a fillip.
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.
Selected Macro-Economic Indicators - 19/09/2014
India’s real GDP growth registered an improvement in the first quarter of 2014-15 (5.7%) compared to the last quarter of 2013-14 (4.6%). While the growth rates of industry and services improved to 4.2% and 6.8% respectively, that of agriculture and allied activities slowed down. Within industry, the manufacturing sector registered a turnaround and grew at 3.5%; electricity generation posted double-digit growth of 10.2%. Within the services sector, growth in community, social and personal services at 9.1% was almost three times that of the last quarter of 2013-14, but less than the corresponding quarter of 2012-13.
Financial Markets - Key Indicators - 19/09/2014