Do it yourself

 The latest macro data indicates that the Indian economy may be standing at an inflection point. It may have survived a major accident in the form of Covid19 pandemic; luckily scraping through with couple of broken bones and some bruises. The economy is recuperating well and is perhaps ready for discharge from the hospital. Of course, for next few quarters the economy may still need to use the crutches of government spending, before it could walk on its own. The amount of bill for the recovery from pandemic would mostly be known in next six months. We would also know how the cost of pandemic would be shared between various stakeholders, i.e., government, citizens and businesses. Post pandemic, the challenges before the government are multifold; and so are the opportunities. A successful resolution of these challenges could trigger a virtuous cycle of growth and catapult the economy to the higher orbit. A failure may not be an option, as it could cause a disaster of unfathomable...

Recently updated national account statistics highlights many interesting and noteworthy trends relating to household economics, especially consumption, investments and savings at the household level. The data also highlights the impact of demonetization on the household economics that may be the key to the understanding of current economic slowdown. Some of the noteworthy trends in household savings are as follows: (a)    Overall household savings have shown a declining tendency in past one decade. From a recent high of 24.3% of GDP in FY13, these have declined to 22.3% in FY18. (b)    Gross financial savings have recorded significant increase in the past few years. From 10.7% in FY12, gross financial savings had increased to 14.2% in FY18. The trend in Net Financial Savings has been little weak though, reflecting the rise in financial liabilities at household level, which have risen from 3.3% of GDP in FY12 to 5.6% of GDP in FY18. This h...