DOCSLIB.ORG

Mrf Ltd. | Dixon Technologies (India) Ltd. | Privi Speciality Chemicals Ltd

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Mrf Ltd. | Dixon Technologies (India) Ltd. | Privi Speciality Chemicals Ltd Market Overview Monthly Insight Performance Startup Corner Book Review Prominent Headlines Sector Outlook: Cement Government Measures/Reforms World Economic Event Calendar Q&A with Vice Chairman Management Commentary Mutual Fund Overview Stock Picks Economy Review Technical View INSIGHT November 2020 Q&A with Vice Chairman Mr. Shankar Sharma, First Global MRF LTD. | DIXON TECHNOLOGIES (INDIA) LTD. | PRIVI SPECIALITY CHEMICALS LTD. Market Economy 1 Overview 44 Review Prominent Startup Headlines Corner PROMINENT October 2020 HEADLINES 4 53 Q&A Government with Vice Measures/Reforms Chairman Mr. Shankar Sharma, 6 First Global 54 Stock Mutual Picks Fund Overview • MRF Ltd. • Dixon Technologies (India) Ltd. • Privi Speciality Chemicals Ltd. 12 60 Monthly Technical Insight View Recommendation 21 Performance 65 Sector Book Cement Review - The Checklist Manifesto: How to Get Things Right 25 By Atul Gawande 69 Management World Commentary Economic 31 72 Calendar MarketOVERVIEW fter having recovered 56% revival process, hence volatility in from the lows, markets markets. The US elections are also are now looking out for expected to add volatility for the affirmation of demand time being and while betting odds revivalA and more importantly are against Donald Trump at the sustenance of demand. While the moment, polls could be misleading markets have depicted V - shaped like that happened in 2016. However, recovery, the economy is probably the important thing to notice is that Paras Bothra going through a K - shaped one, whoever wins, barring the policies where recovery across varied sectors towards visa approval process, it are heterogeneous. The arguments would be positive towards India are true especially for sectors like since both contestants have agendas auto & consumer durables which against China. Besides, once election fear that there could be a lull after is over, the whole attention will the festival season is over. Besides, shift towards policies by US Fed to markets are already factoring in pullback economic growth. Majority demand revival in FY21 and earnings expect Fed to target inflation rate of growth in FY22, hence it is prone 2% while keeping rates ultra-low and to volatility in case of risks towards needless to say G-7 central banks that vulnerability of growth in FY22 would likely follow US Central bank. or postponement towards FY23. The The Reserve Bank of India (RBI) in risks of a second wave across Europe its monetary policy minutes have and potential surge in cases post highlighted that the members like festival season in India, could have Michael Patra expressed that it may serious ramifications to the demand take years for India’s GDP to regain 1 INSIGHT November 2020 lost output due to the coronavirus have generally blamed on low fiscal pandemic. According to him, “In In the absence of stimulus for India to be the major the absence of intrinsic drivers, the reason for divergence of growth rates recovery may last only until pent- intrinsic drivers, between India and developed world, up demand has been satiated and the recovery may the same theory doesn’t hold ground replenishment of inventories has last only until when comparing with emerging been completed. Empirical evidence pentup demand nations. China’s economy has revived suggests that consumption-led has been satiated strongly and IMF now expects 2020 recoveries are shallow and short- GDP growth to be at 1.9%, the fact that lived. Exports could be a driver, but and replenishment Bangladesh & Vietnam are expected with the WTO’s latest projection of inventories has to grow at 3.8% & 1.6% in 2020 has of a decline in world trade volume been completed. raised eyebrows. That highlights by 9.2 per cent in 2020, the role of Empirical evidence that India was hit by Covid when its exports in powering a durable revival suggests that economic growth was already low is likely to be circumscribed”. Other and hence the recovery is painful. MPC members like Mr. Jayanth consumption- However, these three countries are R. Varma also batted for keeping led recoveries competing to fill up the space vacated policies accommodative and the are shallow and by China as well as the opportunities narrow linkage between inflation shortlived. created as an alternative global & policy rates. According to him, supply chain. The Govt. has come up high long-term rates are inflicting with the production linked incentive damage to the economy in two (PLI) scheme and electronics & ways. “First, a significant part of the of World Economic Outlook (WEO) APIs are expected to be major easing of policy rates is not being has advocated for heightened public beneficiaries, with real orders and transmitted to longer term rates that investment as the private sector enquiries coming in for mobile form the benchmark for corporate shies away. It has also cautioned manufacturers (as suggested by borrowing and investment decisions. governments and central banks companies like Micromax & Lava). Excessive long-term rates exacerbate against premature withdrawals of Besides, the Govt. has also amended the collapse of investments in the support measures. While this would archaic labour laws and would be economy. Second, high long-term imply that Govt.’s fiscal deficit taken note in ease of doing business rates cause an appreciation of the real will scale disproportionately and rankings for sure. However, India is effective exchange rate by stimulating sovereign debts will rise, the same not the only one and Bangladesh & foreign capital inflows into our bond would be taken in positive note given Indonesia have also been bringing markets at a time when the collapse benefits of job creation. The Govt. reforms to attract FDI, although of investment has caused the current has communicated that another Vietnam leads by a fair margin. The account to swing into surplus,” Given stimulus package is in the making ministry of commerce however the steep nature of sovereign yield and it is expected to be addressed recently stated that for FY21 (April to curve, it hurts investments and thus towards creating infrastructure, August) total FDI inflow of US$ 35.73 it is essential for RBI to guide for which indeed is the right approach. billion is received against US$ 31.60 accommodative stance beyond six Besides, media articles also state that billion in FY20 and it is the highest months and keep even long-term the Govt. might tap external markets ever for first 5 months of a financial interest rates lower, so that India’s given strong forex reserves as well as year. An article in Mint highlights that private sector can get comfortable lower sovereign external debt (less Vietnam & India are the most cited enough to invest. A growth led by than 5% of GDP) for India. Besides countries when it comes to moving investments is sustainable while led it would also be competitive as out manufacturing from China, it’s by consumption is shallow, this has domestic interest rates are high (thus infrastructure & regulations are been shown by empirical data. resulting in higher interest payments major shortcomings albeit it still has labour cost advantage. Thus, the focus While interest rate is one of the for Govt.) and would also result in of the Govt. to now on infrastructure factors which corporate considers crowding in private debt & as well and ease regulations with these while committing for capex, the as investment. IMF however revised reforms are the most crucial steps. primary criteria is of demand and India’s GDP downwards by 5.8% (from capacity utilization in the economy Jun’20 WEO estimates) and expects Thankfully, the timing is right as which has been running low even to decline by 10.3% in 2020. This is the economy is recovering strongly before pre-Covid and thus demand against the background of a revision as suggested by the manufacturing pick-up and sustenance are also in world GDP growth estimates for as well as services PMI and people keenly watched by India Inc. 2020 from -5.2% to -4.4% led by have been spending less time at However, IMF in it’s October edition developed economies. While experts home and recreation & footfalls have November 2020 INSIGHT 2 Source: Mint steadily improved. India’s external five-quarter high of 4.91% in Q2FY21 muted numbers however demand sector is strong and September after 14.31% yoy decline in Q1FY21. Net remains strong from rural segment exports have grown 6% (in USD profit, adjusted for one-time profit and the same is depicted in tractor terms) and import cover is robust. or loss, in Q2FY21 grew at the fastest sales too. Two wheelers, cement, Various consumption indicators pace in four quarters at 6.23% from metals & paints also reported strong suggest demand revival, although a year ago, against 18.9% decline in numbers, although demand falling bank credit growth remains low and Q1FY21. Besides, growth in Q2FY21 short & inventory buildup in next so are employment opportunities came on the back of 10.74% growth quarter is a matter of concern and (compared to pre-covid), the in Q2FY20. Among sectors, cement this could affect production numbers recovery is not uniform across all & IT companies reported better than ahead. Clearly, the whole focus is on sectors. The swift recovery in the expected numbers. Management how far the demand sustains, the Indian economy is also reflected in commentaries remained upbeat fact that household savings have also September quarter earnings of India for IT sector amid increasing deals been hit severely amid low interest Inc., based on an analysis of 170 listed as clients have increased spend on rates and high inflation and abundant companies by Mint (excluding banks, cloud/digital transformation amid liquidity which is expected to financial services firms and oil and pandemic.
Load more

Recommended publications
  • Daily Economic News Summary: 29 January 2020
    Daily Economic News Summary: 29 January 2020 Daily Economic News Summary: 29 January 2020 1. Trade, tourism and tech key: PM Modi tells envoys Source: Hindustan Times (Link) Prime Minister Narendra Modi wants India’s envoys to foreign nations to focus more on international trade which, he believes, is an intrinsic and crucial part of the country’s diplomatic outreach. In a meeting with his ministers and bureaucrats earlier this month, the Prime Minister also spoke about how diplomats posted in foreign countries can try to boost inflow of tourists and technology from foreign shores to the country. Modi’s focus on the three Ts, trade tourism and technology comes at a time when New Delhi has drastically improved its ease of doing business and opened up more avenues for Foreign Direct Investments (FDI). The government, which is also dealing with an economic slowdown , is keen to attract investment to push growth. 2. Janak Raj to succeed Michael Patra at RBI's monetary policy department Source: Business Standard (Link) The Reserve Bank of India has appointed Janak Raj, principal advisor to the monetary policy department, as executive director. He succeeds Michael Patra effective January 24. With this, the RBI will have 12 EDs, its full strength. Patra will be part of the six-member monetary policy committee (MPC) as a deputy governor, and so will be Raj as an ED of the department. Raj would be part of MPC as an internal RBI member. However, Raj also retires in a few months, and the RBI is also fast-tracking promotions of two chief general managers in the bank.
    [Show full text]
  • A New Era in Indian Monetary Policy: Monetary Policy Committee
    International Journal of Science and Research (IJSR) ISSN (Online): 2319-7064 Index Copernicus Value (2015): 78.96 | Impact Factor (2015): 6.391 A New Era in Indian Monetary Policy: Monetary Policy Committee Mohan Bhaskar Bodhankar Abstract: An article on the formation of Monetary Policy Committee by the Reserve Bank of India for deciding upon the Interest rate decisions. The Monetary Policy committee will strive to bring the inflation rate under control. Keywords: Monetary, Policy, Committee, Transparency, Future A new era in Indian monetary policy has begun. On 4th The Mpc Improves Transparency and brings a collective October, 2016 the first interest rate decision taken by the approach to the inflation problem. According to the monetary policy committee (MPC) was unanimous. All six mandate, the MPC will have to release the minutes of the members voted for a reduction in the benchmark repo rate meetings 14 days after the meet, which are expected to by 25 basis points. reveal how a member voted and why. The government has decided to bring the provisions of Why is it important? amended RBI Act regarding constitution of MPC into force Until recently, India‟s central bank used to take its monetary on June 27, 2016 so that statutory basis of MPC is made policy decisions based on the multiple indicator approach. effective,” according to a finance ministry statement. “The Its rate decisions were expected to take into account rules governing the procedure for selection of members of inflation, growth, employment, banking stability and the Monetary Policy Committee and terms and conditions of need for a stable exchange rate.
    [Show full text]
  • High Frequency Indicators Point to Recovery
    High frequency indicators point to recovery: RBI RBI bought net $3.99 bn in spot forex market in RBI says banks reluctant to Dec lend to big business All high frequency indicators point to a recovery based on a revival of consumption, but private India's central bank bought a net $3.99 billion The Reserve Bank of India (RBI) investment is lagging despite a growth promoting rupees from the spot foreign exchange market in has expressed concern over the budget, according to RBI's February assessment of December compared to a net purchase of $10.26 contraction in credit offtake by the economy in its monthly bulletin. billion in December, its monthly bulletin released on large industries and Monday showed. The Reserve Bank of India bought In terms of nominal GDP, 96 per cent of pre- infrastructure and pointed out $10.01 billion while it sold $6.02 billion in pandemic economic activity has been restored, that there’s reluctance on the December, data showed. The rupee had moved in a assuming that the National Statistical Office’s first part of bankers to lend to large range of 73 to 73.96 per dollar in December. industries. advance estimates hold. All high frequency indicators point to a recovery based on a revival of The net outstanding forward purchase stood at The central bank also raised consumption is underway. But it could be short- $39.79 billion as of end-December, compared with a concern over the sharp lived, the Bulletin warned. " The jury leans towards net purchase of $28.34 billion at the end of deceleration in credit growth in such recoveries being shallow and short-lived " said November.
    [Show full text]
  • April 2021 Prabha Ias Ips Coaching Academy Prabha Ias Ips Coaching Academy
    100 PRACTICE QUESTIONS INCLUDED APRIL 2021 PRABHA IAS IPS COACHING ACADEMY PRABHA IAS IPS COACHING ACADEMY www.prabhaonlineips.com PREFACE This is our special edition of Current Affairs Magazine for UPSC Civil Services Examination & Other Central & State Government Job Examinations, released for the month of April 2021. The Magazine is divided into three sections: Section 1: Topic Wise Current Affairs in Short ……………………….Page 03 to Page 107 The first section is dedicated for Topic Wise 1 Liner Current Affairs to provide information about all major happenings in this month. Important Days Page 04 Agreements Page 17 Appointment News Page 21 Award News Page 29 Banking News Page 36 Books and Author Page 45 Defence News Page 48 Economy Page 52 International News Page 58 Miscellaneous News Page 63 National News Page 69 Obituaries Page 76 Ranks & Reports Page 86 Schemes and Committee Page 90 Science & Technology Page 92 Sports News Page 96 State News Page 100 .. NO 776 NSK NAGAR (opp to Chennai ford) Ponamallee High Road, Arumbakkam, Chennai-600106 | Phone: 044-42026575 Page 1 PRABHA IAS IPS COACHING ACADEMY www.prabhaonlineips.com Section 2: Detailed Analysis of important events …………………Page 108 to Page 129 The Second Section is dedicated to Civil Services Aspirants and covers some major happenings in this month along with analysis. The Content part has been created as per the present shift in the examination pattern of the Civil Services Examination. The magazine will cover your syllabus of ‘General Studies - II & General Studies – III. The content has been covered from various online & offline sources including reputed newspapers like The Hindu, Indian Express etc.
    [Show full text]
  • Banking News
    Banking News • SBI also announced that it has also rationalised interest rate on savings bank account to a flat 3 percent per annum for all buckets. • Currently, the interest rate on SB accounts is 3.25 percent for deposits up to Rs 1 lakh in SB accounts, and 3 percent for deposits above Rs 1 lakh. • The country's largest lender has 44.51 crore savings bank (SB) accounts • SBI also waived minimum balance requirement in Saving Account • SBI customers need to maintain AMB of Rs 3,000, Rs 2,000 and Rs 1,000 in metro, semi urban and rural areas, respectively Banking News • Fixed deposits (FDs) maturing between 7 days to 45 days will offer an interest rate of 4 per cent as against 4.50 percent earlier • Interest rates on FDs maturing in one-year and above have been reduced by 10 basis points • One-year to less than two-year tenor FD will earn an interest rate of 5.90 per cent against 6 per cent earlier • SMS facility will be free now • Marginal Cost of Funds based Lending Rate has been reduced by 10 basis points to 7.75 per cent from 7.85 percent earlier Question. Where is the headquarter of Indian Coast Guard ? a) Chennai b) Vishakhapatnam c) Kochi d) New Delhi e) Mangalore Question. Where is the headquarter of Indian Coast Guard ? a) Chennai b) Vishakhapatnam c) Kochi d) New Delhi e) Mangalore • Motto: वयम ् रक्षाम (We protect) • 18 August 1978: Founded Exercise SAREX 2020 • National level Search, and Rescue Exercise and Workshop (Exercise SAREX 2020) concluded in the sea at Vasco, Goa.
    [Show full text]
  • 11208-9781455201662.Pdf
    WP/10/183 A Monetary Policy Model Without Money for India Michael Debabrata Patra and Muneesh Kapur © 2010 International Monetary Fund WP/10/183 IMF Working Paper Office of the Executive Director A Monetary Policy Model Without Money for India Prepared by Michael Debabrata Patra and Muneesh Kapur1 Authorized for distribution by Arvind Virmani August 2010 Abstract This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. A New Keynesian model estimated for India yields valuable insights. Aggregate demand reacts to interest rate changes with a lag of at least three quarters, with inflation taking seven quarters to respond. Inflation is inertial and persistent when it sets in, irrespective of the source. Exchange rate pass-through to domestic inflation is low. Inflation turns out to be the dominant focus of monetary policy, accompanied by a strong commitment to the stabilization of output. Recent policy actions have raised the effective policy rate, but the estimated neutral policy rate suggests some further tightening to normalize the policy stance. JEL Classification Numbers: E31; E32; E52; E58; F41 Keywords: Exchange Rate Pass-through, India, IS Curve, Monetary Policy, Monetary Transmission, Neutral Interest Rate, New Keynesian Model, Phillips Curve Author’s E-Mail Address: [email protected]; [email protected] 1 Michael Debabrata Patra is Senior Advisor to the Executive Director for Bangladesh, Bhutan, India and Sri Lanka in the IMF.
    [Show full text]
  • The Mechanics of Central Bank Intervention in Foreign Exchange Markets
    ISSN 1936-5098 CAE Working Paper #09-02 The Mechanics of Central Bank Intervention in Foreign Exchange Markets by Kaushik Basu January 2009 January 27, 2009 The Mechanics of Central Bank Intervention in Foreign Exchange Markets Kaushik Basu Department of Economics Cornell University Ithaca, New York 14853 Email: [email protected] Abstract Central banks in developing countries, wanting to devalue the domestic currency, usually intervene in the foreign exchange market by buying up foreign currency using domestic money—often backing this up with sterilization to counter inflationary pressures. Such interventions are usually effective in devaluing the currency but lead to a build up of foreign exchange reserves beyond what the central bank may need. The present paper analyzes the ‘mechanics’ of such central bank interventions and, using techniques of industrial organization theory, proposes new kinds of interventions which have the same desired effect on the exchange rate, without causing a build up of reserves. Key words. Exchange rate, oligopoly theory, central bank intervention, foreign exchange dealers, India JEL classification numbers. L31, D43, F31, G20 Acknowledgements. The work on this project began with a visit to the Reserve Bank of India, Mumbai, in August-September 2008, during which time I interviewed a large number of economists and officials at the Reserve Bank. I am grateful, in particular, to Y.V. Reddy, Rakesh Mohan, Shyamala Gopinath, Chandan Sinha and Michael Patra for valuable discussions. Subsequently, as the paper began to take shape, I have had the benefit of conversations with and comments from Talia Bar, Saugata Bhattacharya, Jonathan Cave, A. Chari, Sayantan Ghoshal, Annemie Maertens, Ted O’Donaghue, Ila Patnaik, Heraklis Polemarchakis, Eswar Prasad, and Assaf Razin.
    [Show full text]
  • World Bank Document
    102629 THE WORLD BANK GROUP Public Disclosure Authorized 2015 ANNUAL MEETINGS OF THE BOARDS OF GOVERNORS Public Disclosure Authorized SUMMARY PROCEEDINGS Public Disclosure Authorized Public Disclosure Authorized Lima, Peru October 9-11, 2015 THE WORLD BANK GROUP Headquarters 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Phone: (202) 473-1000 Fax: (202) 477-6391 Internet: www.worldbankgroup.org INTRODUCTORY NOTE The 2015 Annual Meetings of the Boards of Governors of the World Bank Group (Bank), which consists of the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), International Development Association (IDA), Multilateral Investment Guarantee Agency (MIGA) and International Centre for the Settlement of Investment Disputes (ICSID), held jointly with that of the International Monetary Fund (Fund), took place on October 9, 2015 in Lima, Peru. The Honorable Kordjé Bedoumra, Governor of the Bank and Fund for Chad served as the Chairman. The Summary Proceedings record, in alphabetical order by member countries, the texts of statements by Governors and the resolutions and reports adopted by the Boards of Governors of the World Bank Group. Mahmoud Mohieldin The Corporate Secretary World Bank Group Washington, D.C. January, 2016 iii CONTENTS Page Address by the President of Peru, Ollanta Humala Tasso ...............................................................1 Opening Address by the Chairman Kordjé Bedoumra Governor of the World Bank Group and the International Monetary Fund for Chad ...............5 Opening Address by Jim Yong Kim, President of the World Bank Group .....................................8 Report by Marek Belka, Chairman of the Development Committee .............................................12 Statements by Governors and Alternate Governors.......................................................................14 Bangladesh ...................................... 14 New Zealand ...................................
    [Show full text]
  • Opinion | Greater Transparency Could Enhance RBI Credibility
    Date: May 30, 2019 Opinion | Greater transparency could enhance RBI credibility Vidya Mahambare , Anuj Agarwal It may be a good idea to record and release transcripts of Monetary Policy Committee meetings In 2016, the Reserve Bank of India (RBI) adopted an inflation targeting framework. Under this, its Monetary Policy Committee (MPC), consisting of three internal and three external members, determines the central bank’s policy rate (repurchase rate). Each member has one vote and, in the event of a tie, the RBI governor has the casting vote. The MPC meeting typically begins with presentations by the central bank’s monetary policy department, information and insights derived from various surveys, and stakeholders’ discussions such as with representatives of banks and industry that are held leading up to the meeting. This is followed by deliberations among the members. The meeting ends after the members cast their votes on the last day. Usually, the meetings used to be held over two days, but have been stretched to a three-day affair since last June. At the time, RBI had attributed the extension to “administrative exigencies", although it has stuck to the format since. The next meeting is scheduled on 3, 4 and 6 June. The outcome of the MPC meetings is often non-unanimous. This is true in the case of RBI, as it is in the case of other central banks as well. In six of the last eight meetings, at least one member voted differently from the majority. A non-unanimous verdict suggests differences in the assessment of inflation and growth in the face of economic uncertainty.
    [Show full text]
  • Speaker's Profile: Michael Debabrata Patra Is Adviser-In-Charge of The
    Speaker’s Profile: Michael Debabrata Patra is Adviser-in-Charge of the Monetary Policy Department in the Reserve Bank of India since March 2006. Before moving to the Monetary Policy Department in October 2005, he was Adviser in the Department of Economic Analysis and Policy in charge of international finance, money and banking. He has served in various capacities in the Reserve Bank of India which he joined in 1985. He is a Fellow of the Harvard University where he undertook post doctoral research in the area of financial stability. He has a Ph.D. in Economics from the Indian Institute of Technology, Mumbai. His Ph.D. thesis was entitled “The Role of Invisibles in India’s Balance of Payments: A Structural Approach”. He has received professional training at the IMF Institute on Financial Programming and Policy and at the Centre for Central Banking Studies, Bank of England. A list of some of his recent publications is given below. RESEARCH PUBLICATIONS OF DR. MICHAEL PATRA 1. “Monetary Policy Committee: What Works and Where”, Reserve Bank of India Occasional Papers, Vol. 28, No.2, Monsoon 2007. 2. “India’s Worker Remittances : A Users’ Lament about Balance of Payments Compilation”, IMF Website, December 2003 3. “Should Financial Stability Be Assigned to Public Policy?”, Economic and Political Weekly, June 7, 2003. 4. “Financial Stability and Public Policy: Putting the Finger to the Wound” in RBI Staff Studies, January 2003. 5. “The Price of Low Inflation” in Reserve Bank of India Occasional Papers, Vol.21 – Nos. 2 and 3, Monsoon and Winter, 2000. 6.
    [Show full text]
  • Edited Transcript of Reserve Bank of India's Monetary Policy Press
    Edited Transcript of Reserve Bank of India’s Monetary Policy Press Conference: April 07, 2021 Participants from RBI: Shri Shaktikanta Das – Governor, Reserve Bank of India Shri M. K. Jain – Deputy Governor, Reserve Bank of India Dr. Michael D. Patra – Deputy Governor, Reserve Bank of India Shri M. Rajeshwar Rao – Deputy Governor, Reserve Bank of India Shri T. Rabi Sankar – Executive Director, Reserve Bank of India Shri Yogesh Dayal – Chief General Manager, Reserve Bank of India Yogesh Dayal (Moderator): Hello, and welcome to this post policy press conference for the first Bi-monthly monetary policy for the year 2021-22. We have with us around about 35 Media persons representing various organisations; wire agencies, newspapers, televisions, portals, I welcome them all. And, to conduct the press conference in a cordial manner, I will call out the names of people, and then we can go. So with your permission, shall we start? Shaktikanta Das: Yes. Go ahead, please. Yogesh Dayal: Thank you, Sir. I'll invite Ira Dugal from Bloomberg Quint to ask a question please. Ira Dugal (Bloomberg Quint): Good morning, I'll get straight to what seems to be the headline announcement, which is the government bond purchases from the securities market. Sir, can you help us understand what is the rationale behind this? Why this has been an important announcement alongside the OMOs, would it replace OMOs, would it be run alongside OMOs? And, if it is going to replace OMOs, you could have simply announced an OMO calendar. So, I'm trying to understand what the RBI is trying to do through this, what it was not already doing with the existing liquidity management tools? Shaktikanta Das: Thank you Ira for that question.
    [Show full text]
  • India Monthly Economic Report
    Monthly Economic Report September 2016 British High Commission New Delhi SUMMARY GST Council now in action New Governor, Monetary Policy Committee – Policy rate at 6 year low Fiscal Deficit Update Budget in Feb as opposed to March. Rail budget scrapped Fiscal Deficit Update GST Council Now In Action India's fiscal deficit in the April-August The Cabinet approved the creation of GST council and its period touched 76.4% of Budget estimates secretariat, after receiving the assent on GST Constitution Bill for fiscal 2016-17 as against 66.5% of from the President. The GST Council is a joint forum of the Budget in the same period last year. The Centre and the States. The big issue facing the council is high deficit during these months is said to determining the tax rates and to strike a balance between be the result of front loading of spending protecting tax revenues while arriving at a rate that does not such as on recommendations of seventh hurt the common man. Besides the rates, dual administration pay commission, to alleviate rural distress between the states and the centre will be one of the most etc. and a shortfall in non-tax revenues. contentious issues. The council is to give its recommendations on the tax rate and other provisions within 60 days. According to the consolidation plan, it is planned to achieve an ambitious fiscal With the GST Council slated to take vital decisions during its deficit target of 3.5% of GDP, from 3.9% coming meets, the government appointed Mr Arun Goyal as last year.
    [Show full text]