Do it yourself

Some of the headlines in yesterday's newspapers made interesting reading: A few days ago, the finance minister had categorically dismissed the talks about changes in the GST rates. She was quoted having said that "Buzz is everywhere other than in my office". Yesterday, West Bengal Finance Minister Amit Mitra, who is also former head of GST Council and FICCI General Secretary, reportedly, wrote to the finance minister requesting, “We should not in any way tinker with the rate structure or impose any new cess at a time when the industry and consumers are going through the most distressing times with ‘stagflation’ knocking at our door (stagnation accompanies by growing inflation).” ( see here ) It is very difficult for a common man to assimilate, how such a senior person would write an official request, if there is no buzz around. The commerce minister highlighted that he has taken an exercise to consult country’s top 25 corporate houses and lenders, to asse...

As expected, the GDP growth data for 2QFY20 came out to be poor. In the quarter ended September 2019, India's real GDP grew 4.5% and GVA grew 4.3%, the lowest rate of growth in 6years. The latest economic growth rate of India is now lower than China, Indonesia, Myanmar, Vietnam, Philippines, and similar to Malaysia. The supply side data explains that the slowdown is pervasive and all sectors of the economy are struggling. Industrial sector was stagnant with manufacturing recording its first quarterly contraction in a long time. Services grew less than 7%, the lowest pace in 2years. Despite above normal monsoon, the agriculture growth at 2.1% was also lowest for the second quarter of a fiscal in many years. On the demand side, private consumption grew 5.1%, slightly better than 3.1% in 1QFY20, but dismal in comparison to historical trends. Investments grew barely at 1%. Both exports and imports contracted for the first time since 2016. Import contraction of 6.9% d...

The economic data for 2QFY20 will be released today evening by the Central Statistics Office (CSO). There is a near consensus that this data may not be good. The estimates of various agencies and institutions are ranging between 4% to 4.8% growth in real GDP over 2QFY19 (vs. 5% in 1QFY20). 2QFY20 is expected to be the sixth straight quarter of decline in growth rate, the longest span of decline since 2011-2012. Since this data belongs to the quarter ended September 2019 and the financial performance of the businesses for that quarter is already in the public domain, it is reasonable to assume that the financial markets have assimilated the poor growth numbers quite well. However, the growth estimates for corporate revenue and profit for 2HFY20 may not be factoring a negative surprise. Going by the forecasts of most analysts and economists, the growth estimates of 2HFY20 are not very encouraging; though the consensus is expecting the second half of the year to be better...