Market Pulse

Date Heading Details
17-Dec-2018   09:19 Hrs IST Govt will stick to 3.3% fiscal deficit target in FY19, clock growth rate of 7-8%: Jaitley <p align="justify">Expressing optimism over India's fiscal position, Finance Minister Arun Jaitley has said that the government will stick to its fiscal deficit target in the current financial year (FY19) because when current account deficits are impacted by oil prices and strengthening dollar, the last thing that India can afford is to run itself into a twin deficit situation because a fallout of that is very serious. The government has budgeted to contain fiscal deficit at 3.3% of the Gross Domestic Product (GDP) in the current fiscal, lower than 3.5% in 2017-18. As per latest data, fiscal deficit in April-October period stood at 103.9% of budget estimates.</p><p align="justify">On the growth front, he said even though there are global uncertainties, India will clock a growth rate of 7-8% and will retain the tag of the world's fastest growing major economy. He added ‘in course of the next few years, we intend to overtake the UK in terms of GDP and come close to Japan in terms of GDP not per capita income'. Since India is a major importer, Jaitley said oil prices have a direct impact on the country. He also said India has a particular resistance capacity to deal with rising crude oil prices and when it breaches the limit, it can impact inflation, currency and the current account deficit (CAD). The CAD, which is the difference between the inflow and outflow of foreign exchange, widened to 2.9% of GDP in the July-September quarter from 2.4% of GDP in April-June.</p><p align="justify">Noting down the challenges to the economy, the Finance Minister said there is a need to get out of the ‘syndrome of difficulties in credit' and improve the liquidity situation in the market. The second challenge is ‘even when the election year debate goes on, many like you (industry) will have to flag to different players in the political system the importance of sound policy and how much they can be blended with good politics'. He said India cannot afford to have fragile coalitions for stable policy decisions and continue on the path of reforms. He said a coalition government would lead to a situation where the country probably will have a helpless Centre dependent on these kind of players.<br></p>
14-Dec-2018   09:14 Hrs IST Liquidity issues faced by NBFIs to weigh on India's growth prospects: Moody's <p align="justify">Raising concerns over economic growth, global credit ratings agency, Moody's Investors Service has said that liquidity constraints faced by some non-bank financial institutions (NBFIs) in India, after the default of Infrastructure Leasing &amp; Financial Services (IL&amp;FS) in September 2018, will likely tighten credit supply and the country's Gross Domestic Product (GDP) growth rate will slow to just a little over 7% for the fiscal 2019 and 2020. Besides, Indian economy grew at 7.1% in the July-September quarter of FY19, lower than 8.2% in April-June.</p><p align="justify">Moody's also said that just above 7% growth for fiscal 2019 and 2020, is below an estimated 7.4% outturn in the fiscal year ending March 2018 and below the pick-up in growth that they envisaged a few months ago. It added that any further distress in the NBFI sector will pose significant downside risks to India's growth outlook. The nation's NBFIs are an important provider of credit to the country's economy and, in the fiscal year ended March 31, 2018, accounted for nearly 17% of total loans and one third of total retail loans.</p><p align="justify">The rating agency further said in a downside scenario, a sharper slowdown in NBFI credit supply would significantly tighten overall credit availability, drive up borrowing costs and reduce economic growth by around half a percentage point over a few years. It noted that weaker nominal GDP growth over a prolonged period would weigh on India's fiscal strength and the overall sovereign credit profile. <br></p>
13-Dec-2018   09:33 Hrs IST India's rapid growth enough to offset worries about independence of RBI: S&P Global
12-Dec-2018   09:26 Hrs IST Govt need to consider permitting 100% FDI in multi-brand retail trade: CII
11-Dec-2018   09:14 Hrs IST Curtailing independence of central bank will be credit negative: Moody's
10-Dec-2018   09:36 Hrs IST India's CAD widens to 2.9% of GDP in Q2FY19 on higher trade deficit
07-Dec-2018   09:20 Hrs IST RBI will continue to inject liquidity into system via OMO till March-end: Viral Acharya
06-Dec-2018   09:45 Hrs IST India likely to maintain ‘high growth rate' of 7-8% over next decade: Arun Jaitley
05-Dec-2018   09:24 Hrs IST India's economy likely to bounce back in Q4FY19: Rajiv Kumar
04-Dec-2018   09:14 Hrs IST Crisil lowers India's GDP growth forecast by 10 bps to 7.4% for FY19

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