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India - Economy Central Bank Government Politics

Discussion in 'International Stock Markets' started by bigbear0083, Apr 5, 2016.

  1. bigbear0083

    bigbear0083 Content Manager
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    Economy of India
    From Wikipedia, the free encyclopedia

    http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CCcQFjAD&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FEconomy_of_India&ei=9XE6VPubNI-cyASY0YKACA&usg=AFQjCNGnmzktwfdLf64ODKpoWIvdbDUwFQ&bvm=bv.77161500,d.aWw&cad=rja

    The economy of India is the tenth-largest in the world by nominal GDP and the third-largest by purchasing power parity (PPP).[28] The country is one of the G-20 major economies, a member of BRICS and a developing economy that is among the top 20 global traders according to the WTO.[29] India was the 19th-largest merchandise and the 6th largest services exporter in the world in 2013; it imported a total of $616.7 billion worth of merchandise and services in 2013, as the 12th-largest merchandise and 7th largest services importer.[30] India's economic growth slowed to 4.7% for the 2013–14 fiscal year, in contrast to higher economic growth rates in 2000s.[31] IMF projects India's GDP to grow at 5.4% over 2014-15.[32] Agriculture sector is the largest employer in India's economy but contributes a declining share of its GDP (13.7% in 2012-13).[5] Its manufacturing industry has held a constant share of its economic contribution, while the fastest-growing part of the economy has been its services sector - which includes construction, telecom, software and information technologies, infrastructure, tourism, education, health care, travel, trade, banking and others components of its economy.[6]

    The post independence-era Indian economy (from 1947 to 1991) was a mixed economy with an inward-looking, centrally planned, interventionist policies and import-substituting economic model that failed to take advantage of the post-war expansion of trade and that nationalized many sectors of its economy.[33] India's share of global trade fell from 1.3% in 1953 to 0.5% in 1983.[34] This model contributed to widespread inefficiencies and corruption, and it was poorly implemented.[35]

    After a fiscal crisis in 1991, India has increasingly adopted free-market principles and liberalised its economy to international trade. These reforms were started by former Finance minister Manmohan Singh under the Prime Ministership of P.V.Narasimha Rao. They eliminated much of Licence Raj, a pre- and post-British era mechanism of strict government controls on setting up new industry. Following these economic reforms, and a strong focus on developing national infrastructure such as the Golden Quadrilateral project by former Prime Minister Atal Bihari Vajpayee, the country's economic growth progressed at a rapid pace, with relatively large increases in per-capita incomes.[36] The south western state of Maharashtra contributes the highest towards India's GDP among all states, while Bihar is among its poorest states in terms of GNI per capita. Mumbai is known as the trade and financial capital of India.
     
  2. T0rm3nted

    T0rm3nted Moderator
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    Indian Stock Futures Fluctuate Before Reliance, HDFC Earnings
    Indian equity-index futures swung between gains and losses after the benchmark gauge climbed for a sixth day and investors awaited the release of earnings at some of the biggest companies including Reliance Industries Ltd.

    Read full article here: http://bloom.bg/1U7X3dT
     
  3. T0rm3nted

    T0rm3nted Moderator
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    India's Stock Futures Signal Declines Before U.S. Jobs Report
    Indian stock-index futures fell, tracking equity losses in Asia, before a report on U.S. employment data that may indicate whether the world’s biggest economy can withstand higher borrowing costs.

    Read full article here: http://bloom.bg/1T4alta
     
  4. T0rm3nted

    T0rm3nted Moderator
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    With 60,000-Case Backlog, India Bankruptcy Overhaul Faces Delays
    India has a brand new law at its disposal to help clean up $131 billion of impaired debt and avert a crisis at its banks. Implementation challenges are so daunting that the full benefits may be years away.

    Read full article here: http://bloom.bg/25uq76r
     
  5. aaa

    aaa Member

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  6. aaa

    aaa Member

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    The Indian finance minister will be presenting the FY17/18 budget on February 1. This budget is critical as it requires the government to boost growth and consumption spending that were impacted following demonetisation, while maintaining the fiscal discipline to capture foreign investor interest and prevent a ratings downgrade.

    Following the note ban in November, the economic growth is expected to slow down to 6.8% this year vs 7.6% in the previous year. It is expected that the government will take steps to boost investment by promoting infrastructure investment. It is also expected to lower personal taxes and simplify the tax structure to increase compliance. This move could stimulate consumption by putting more money in the hands of the individuals.

    However, additional investments and promotions to drive growth and consumption would mean easing the budget deficit target to ~3.3% of GDP instead of the original 3%. This rise in deficit could further have implications for sovereign ratings and foreign capital inflows.The possibility of ending tax break on equity gains or a levy on foreigners could further drive away foreign investors. Also, increasing deficit and rising oil prices this year could contribute to inflation thereby restricting central bank ability to lower interest rates to spur consumption.
     
  7. aaa

    aaa Member

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    Fiscal discipline, growth acceleration and taxation simplification characterise the Indian budget this year. A fiscal deficit target of 3.2% for FY'18 and 3% for FY'19 along with a target of 60% debt to GDP by 2023, has assured investors of the government's fiscal prudence while adequately addressing the growth slowdown concerns from demonetization.

    The following are some of the key budget highlights and their impact on sectors:
    1) Affordable housing has been given infrastructure status, thus providing access to FDI to projects under this category. This will provide a boost to construction activity. It could lead to higher demand for home improvement products
    2) Focus on digital transactions - incentivizing digital payments, discouraging use of cash (ban on cash transactions above INR 300k) could benefit banks and digital payment companies.
    3) Tax rate cuts for individuals could put more cash in the hands of consumers to spend more on household goods, two-wheelers, etc. With a great portion of the budget dedicated to rural areas, there could be significant consumption demand from rural areas. All these measures could benefit the consumer discretionary sector.
    4) Allocation to infrastructure spending has been increased by 25% over last year with a special emphasis to transportation. These steps could benefit sectors like real estate and steel
    5) However, government proposal to amend drug rules, to promote the use of generic medicines and ensure availability of drugs at reasonable prices, may have implications for the pharma sector.

    With Sensex and Nifty gaining 1.76% and 1.81% resp. on budget day, the markets have already given a thumbs-up to the government's fine balancing act.
     
  8. aaa

    aaa Member

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  9. aaa

    aaa Member

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    Vodafone Group Plc. recently announced talks of the merger of its Indian subsidiary, Vodafone India Ltd. with Idea Cellular Ltd. If the deal goes through, the combined entity would become India's biggest telecom operator in terms of revenue and subscriber base. Following the news, Vodafone shares rose 4%, while Idea Cellular shares shot up 30% intraday. How does this deal impact the individual entities and industry? Consider these pointers:

    A) For Vodafone Plc., as its privately held Indian subsidiary reverse merges with a public entity, the deal would provide more exit flexibility and allow an opportunity to de-consolidate Vodafone India

    B) Idea investors could benefit as increased synergy leads to increased market capitalisation. However, there remains a risk of share prices dipping if merger talks fail.

    C) With Indian Telecom Industry witnessing consolidation, the deal could change competitive dynamics. It could enable the new entity to better compete with the aggressively growing Reliance Jio. However, the deal could trigger increased competitive moves from resource-rich competitors, Reliance Jio and Bharti Airtel.

    India's telecom M&A rules impose caps of 50% to revenue, subscriber base per circle and also impose spectrum limits of 50% per circle and 25% overall. This merger could trigger a breach in these areas, thus, threats to execution remain.
    But if successful, will this deal increase profits for the telecom players through consolidation or will it trigger a more aggressive price war?
     
  10. aaa

    aaa Member

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    IN10Y yields up further 8 bp after Wed's 30 bp rise as RBI changed policy stance to neutral, left key rates unchanged
     

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