ECONOMY
We read the RBI annual report for you. Here are the key takeaways.
RBI says slowdown is cyclical and broad-based in nature. It retains 6.9 percent GDP growth estimate for the current fiscal year.
ECONOMY
Das Capital | RBI rides to the rescue
Will the government use this fiscal space to reduce fiscal deficit or will it boost spending by more than what has been budgeted?
ECONOMY
Sentiment Booster | Are confidence building measures enough to overcome lenders’s risk aversion?
Banks are parking almost a trillion rupees daily at the RBI’s overnight repo window. That shows they have money but are unwilling to lend.
ECONOMY
Monetary policy meeting minutes | Growth overarching focus; more rate cuts in the offing
The quantum of rate cuts is not a given. It depends on not only the incoming data, but also the transmission that has happened so far.
POLICY
From demographic dividend to population explosion: How India squandered its human capital advantage
Population growth cannot be used as a strawman target to cover up policy failures on other fronts such as protecting natural resources and the environment.
ECONOMY
Here’s yet another way to kill Animal Spirits
Investigative agencies should not treat all decision to sanction loans which have gone bad as crimes. Fear psychosis among bankers will kill lending.
MARKETS
Markets | Rupee gets a breather. It is unlikely to last
Tariff concessions seem more aimed at protecting the wallets of US consumers. No real progress has been made in US-China trade talks.
MARKETS
Markets | Don’t pop the champagne corks yet
A slowing economy and the crisis in the NBFC sector are risks.
ECONOMY
There is a limit to how much rate cuts can push growth
Rate cuts and ease of funds flow are at best lubricants, they are not engines of growth. Clearly, it is up to the government to do something to tackle the slowdown now.
ECONOMY
Policy | Asset quality review for NBFCs: If not now, then when?
No amount of liquidity - and rate cuts – will help unless the structural problems in the NBFC sector are resolved
BUSINESS
ECB relaxation makes India more vulnerable on the external front
The government seems to have run out of options to boost economic growth. Its tax revenues are flat in the June quarter leaving little fiscal space to spend more. So it is flogging its one-trick pony of trying to boost credit growth.
BUSINESS
Payment guarantees for power purchases will boost revival chances of the power sector
About Rs 30,000 crore of bank guarantees will have to be readied by August 1.
BUSINESS
Realty Bites | SC's Amrapali judgement: When homebuyers are failed by builders, banks and local authorities
Improper due diligence has not only led to a pile of up of non-performing loans but now, also puts in danger banks’ status as secured creditors. If this happens in case after case, the recent IBC amendment which reinforces their supremacy in case of recoveries will be a hollow victory.
BUSINESS
Policy | 50 yrs of bank nationalisation: Is it time to privatise all banks?
Governance practices can be revamped only if PSU banks cut their umbilical cord to the government. All proposals in this directions – and umpteen committees have suggested this too – have just remained talk.
BUSINESS
Policy | A shot in the arm for the insolvency code
The government's proposed amendments to the IBC could go a long way in ensuring that the insolvency code's objectives are achieved, and in a timely manner
BUSINESS
Chart of the day | Business confidence in India lower than in the times of policy paralysis
The reasons for plummeting optimism are all too familiar. Companies are worried about a slowing economy, public policies, weak sales, rupee depreciation, lack of skilled labour and even water shortages.
BUSINESS
Asking passengers to give up subsidies won’t solve Railways’ financial problem
Cutting costs, leveraging assets such as land and infrastructure, and a judicious increase in fares would go a long way in addressing the financial problems.
BUSINESS
RBI inspection reports confirm our worst fears
If India wants to avoid a repeat of the NPA cycle every decade or so, stricter penalties should be introduced.
BUSINESS
Markets | How to kill foreign investor interest in equities 101
India is not divorced from global macro conditions and the growth prognosis at home is as grim (relative its own historical rates) as the rest of the world.
BUSINESS
Budget paves way for debt-fuelled spending binge on investments and consumption
This push to increase credit offtake may take some time to bear fruit.
BUSINESS
‘Where’s the money going to come from’, Economic Survey asks Budget
A slowdown in consumption will just add to the economic squeeze and also upset the government’s plans to earn more resources
BUSINESS
Union Budget | The one number that shows why Nirmala Sitharaman should focus on reviving capex
New project announcements fell 87 percent from a year ago
BUSINESS
Financial Stability | NPA cycle over, but where are banks going to get growth capital?
Under RBI’s baseline scenario (without taking into account any capital infusion from the government), system level capital adequacy ratio is projected to come down to 12.9 percent in March 2020 from 14 percent in March 2019. As many as five banks will have a capital adequacy ratio below the regulatory minimum of 9 percent by March 2020.
BUSINESS
Financial Stability | RBI report underlines shaky business model of NBFCs
Risk aversion among financial market participants is here to stay for some time owing to frequent credit rating downgrades and higher risk of developer defaults.
