Elections, now: UPA inherited a robust economy and brought it crashing

Discussion in 'Economy & Infrastructure' started by Ray, Aug 22, 2013.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

    Apr 17, 2009
    Likes Received:
    Call for elections, now: UPA inherited a robust economy and brought it crashing to the ground

    Piyush Goyal

    In a debate on the state of the economy in Parliament last week, finance minister P Chidambaram's comments highlighted his disconnect from ground realities, where every section of society — the rich, the middle class and the poor, the salaried and self-employed, the young and old — is in deep economic distress.

    The precipitous fall of the Sensex coupled with the dwindling rupee have exposed the hollowness of his tall claims. Yet, during the debate, instead of res-ponding to members' concerns, the FM diverted the discussion into economic theories and challenged the opposition to respond to five questions. Chidambaram never gave me an opportunity to reply there. I reply here.

    First, he blamed global factors for our domestic woes. Are global factors to blame for retrospective tax amendments and policy flip-flops that have left investors bereft of any faith in India? Are global factors to blame for ministerial turf wars that have held up Rs 7 lakh crore worth of infrastructure projects? Are global factors to blame for the UPA creating only an abysmal 2.7 million jobs, versus 60.7 million created under NDA?

    He talked of inclusive growth being the reason for low growth. But a growing economy earns the government higher revenues that can be used for social welfare. Gujarat and MP have demonstrated that inclusion can be dovetailed with growth, designing welfare programmes focussed on skill development and job creation, thereby pulling people out of poverty and making them self-reliant and happy.

    Under Narendra Modi, Gujarat has the lowest levels of unemployment in the country at 1% and the highest growth rate among large states at 10% CAGR (FY02-12). In fact, in agriculture, Gujarat has grown at twice the national average. Under Shivraj Singh Chouhan, MP too consistently posts double-digit agriculture growth. Who does this benefit if not the rural poor and the farmer who toils to feed our people?

    If UPA indeed performed so spectacularly on 'inclusion', why have we slipped in the UN's Human Development Index rankings from the 127 {+t} {+h} to the 136 {+t} {+h} spot? Why are greater proportions of Class V students unable to read Class II texts? Why have we become worse off in global hunger indices ever since the UPA took over? In contrast, Gujarat succeeded in reducing malnutrition by 31.9% versus a national average of 9% during 2007-11.

    Second, under NDA, the current account was converted to a surplus by 2002 and this was sustained till we left office. Short-term debt was only $4.4 billion and our forex reserves, net of external debt, were also in a surplus. UPA inherited a robust economy and has brought it to grief today, with skyrocketing CAD plus precarious external debt of $390 billion and growing. Short-term debt has grown from 3.9% of external debt in 2004 to 25%, at $97 billion in 2013.

    I dread to think how we will repay $172 billion in the next 12 months while we also have to finance the current CAD at $80 billion. The FM claims to have maintained forex reserves at the $280-290 billion level but ignores the fact that external debt has sharply risen from $260 billion (at Rs 45/$) to $390 billion (at Rs 62/$) in under three years. The external debt on every citizen of India has more than doubled! To finance the current year's CAD, this government will resort to high-cost borrowing, depreciating the rupee further!

    Third, the FM makes very patronising statements about 'fiscal consolidation'. The Cong-ress is responsible for gross fiscal profligacy in the last few years and now has the audacity to preach. Even the FY13 target was only met after the FM cut capital expenditure on infrastructure, rural roads, defence and power by Rs 77,000 crore. Interestingly, the expenditure on minority and tribal welfare, which the Congress exploits for divisive vote-bank politics, was also cut by nearly Rs 2,000 crore.

    Fourth, we were asked if we are for a loose or a tight monetary policy. We are for an effective monetary policy! Whenever the Congress has come to power, it has driven both interest rates and inflation up. NDA inherited 12.01% interest rate in 1998 and brought it down to 5.8% by 2004, simultaneously reducing inflation.

    Fifth, the UPA is patting itself on its back for increasing minimum support prices. The reality is that input costs for the likes of fertilisers, diesel, seeds and wages have almost trebled, due to double-digit inflation. Small farmers all over the country are increasingly committing suicide and are no better off under the UPA, as both interest rates and inflation are high. What steps has Chidambaram taken to reduce high input costs and eliminate supply chain woes?

    The PM has now reasserted that there's no risk of a 1991-like crisis. However, the conditions are identical — high fiscal and current account deficits, high interest rates and inflation, capital flight due to waning investor confidence, trade imbalances, negative IIP, burgeoning external debt and possible sovereign downgrade.

    We have two choices. We can continue living in a state of denial, hoping that the tide will turn miraculously, or get our act together now. It is time the government calls for elections to give people an opportunity to elect an honest, decisive and visionary leader who can transform India into a prosperous, confident and developed nation.

    The writer is Rajya Sabha MP and national treasurer of BJP.

    Call for elections, now: UPA inherited a robust economy and brought it crashing to the ground - The Times of India


    Couple of issues this article raises.

    In a Parliamentary democracy there should be debate. So, how is it that Chidambaram challenged the opposition to respond to five questions. and yet never gave the Opposition an opportunity to reply there?

    That sure is a recipe for frustration, anger and disruption.

    That said, how far is Mr Goyal correct?

    The economy is in a real mess and of that there is no doubt.

    But will election change the fortunes of India?

    Is there any hope of a silver lining in this black cloud?

    It maybe true that Gujarat and MP are doing better than what the Union Govt is doing, but obviously India is a larger entity beyond these two States and so how can this huge mess we are in be removed in a jiffy by quoting the good work of these two States?
    Last edited: Aug 22, 2013
    thakur_ritesh, sob and sachin3 like this.
  3. sob

    sob Moderator Moderator

    May 4, 2009
    Likes Received:
    New Delhi
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    In the afternoon we had a very aggressive PM blaming the opposition for the logjam in the Parliament, the common man for buying gold and all other ills on the Global economy. There was tall claims that the economy would grow at 5.5% this year and there was nothing to despair he was in command and had the respect of international leaders and also the support of his council of ministers.

    However by evening the GDP data for Q1 was out and this was not the flat growth the PM was promising but a downward movement that could take the economy beyond the crisis point.

    Economic growth virtually halved in two years to 5 percent in the fiscal year that ended in March — the lowest level in a decade - Firstpost

    From this there are two very big points to focus on.

    1. With Q1 GDP at 4.4%, for the whole year GDP to be at 5.5% as the PM said today, then the balance three quarters growth should be 6% plus. That is definitely not happening. With 2/3rds of the Q2 already gone, I am seeing at best same 4.4% GDP growth, so where does it leave Q3 and Q4 -- 7% to 8%. This is not going to happen.

    2. Fiscal deficit figures for Q1 are at an astounding 62.8% for the full years budgeted figures. Most probably this is last years fuel subsidy bill , which should have been accounted for , but pushed into this year so that the FM could show the fiscal deficit at 5% and stave off the negative sovereign ratings. With elections approaching subsidies cannot be capped, FSB is now a Rs. 90,000 Crore reality. Rs. is on a downward spiral is only going to increase the oil subsidy and hence our fiscal deficit.

    What we need today in our country is an Indian spring. This downward spiral is very dark and dangerous and we will be seeing major defence deals being delayed or retendered or even cancelled. After all votes are more important than the borders of our country or the lives of the soldiers defending the same borders.
  4. Ray

    Ray The Chairman Defence Professionals Moderator

    Apr 17, 2009
    Likes Received:
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    BJP defends govt's fall guy Pranab Mukherjee

    NEW DELHI: With speculation rife that sections in the government might be inclined to blame the economic crisis on the decisions taken by Pranab Mukherjee when he was finance minister, BJP on Friday strongly took up cudgels for the President.

    Reacting to the debate on Prime Minister Manmohan Singh's statement on the economic situation in Rajya Sabha, leader of opposition Arun Jaitley took exception to what he termed the government's bid to blame the rise in fiscal deficit and current account deficit (CAD) on the decisions taken between 2009 and 2011: the period when Mukherjee held charge of the finance ministry.

    Jaitley said fiscal discipline was breached because of the schemes that were launched in 2007-2008 to bolster Congress's preparations for the 2009 polls: a not-so-subtle allusion to the farm loan waiver announced during P Chidambaram's previous stint in the finance ministry.

    "Electoral expenditure was undertaken. As a result of which, from 2.5%, you have gone (in terms of fiscal deficit) to 6%. Your revenue deficit went up. And you merely say that the periods of 2009 and 2011 were responsible because those in-charge at the time are not here to defend themselves," the BJP leader said.

    The comment came against the backdrop of Chidambaram's statement, in response to a question earlier this week, where he acknowledged that certain decisions taken during 2009-2011 contributed to the fiscal deficit worsening. Although the finance minister had also said that the steps were necessary -- a reference to the stimulus package -- to keep the economy stable in the wake of the global financial crisis of 2008, his statement was played up in certain quarters as a criticism of his predecessor

    For all his sympathy for the President, Jaitley on Friday faulted the finance ministry's decision under Mukherjee to tax telecom major Vodafone retrospectively, although he also said that the PM should have applied himself to the decision.

    BJP defends govt's fall guy Pranab Mukherjee - The Times of India
  5. Ray

    Ray The Chairman Defence Professionals Moderator

    Apr 17, 2009
    Likes Received:
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    Combative PM Manmohan Singh blames BJP for economic ills

    Manmohan, Jaitley spat over who is accountable for blocking consensus on issues concerning the economy.

    Prime minister Manmohan Singh on Friday tried to fob off agitated Rajya Sabha members over the weakening rupee with a straight-faced and bare economic fact-sheet and rounded it with a pale Manmohanomic exhortation to get reforms going. “The easy reforms of the past have been done. We have the more difficult reforms to do such as reduction of subsidies, insurance and pension reforms, eliminating bureaucratic red tape and implementing Goods and Services Tax. These are not low hanging fruit and need political consensus.”

    However, leader of the Opposition Arun Jaitley, responding to the prime minister’s written statement, argued: “This country has survived many economic crises. But there is one fundamental difference this time: the ability of the government to handle the crisis. He (the prime minister) has emphasised the larger consensus. Political consensus has not been built on the economy. It is the government that fractures and breaks the consensus.”

    It was provocation enough for the prime minister. When he got up to reply after opposition leaders made their points, Singh tore into Jaitley’s remarks. He said the principal opposition party has not reconciled itself to the electoral defeats in 2004 and 2009, and that it has been obstructing the functioning of parliament.

    He said that in no other democracy in the world that members of the principal opposition party walk into the Well of the House and shout, “PM chor hai, PM chor hai”.

    When he was heckled about the missing files from the coal ministry with regard to the coal allotment scam, a Singh shot back, “I am not the custodian of files in the coal ministry.”

    About the 2G spectrum scam and the coal allotment scam, Singh said “there are institutional arrangements” to deal with questions of corruption and there is no need for parliament to be stalled.

    He confessed that “No central government can say that it can control all prices” and that “onion prices rice and fall”. He said that the situation is not comparable to 1991 and that the foreign reserves are in a better shape and the cover for imports for seven months. He was confident that the GDP growth rate for 2013-14 would be around 5.5 per cent, up from the present 3 per cent. He promised high, stable growth in two to three years.

    It was a not an inspiring exchange between a peeved prime minister and a sulking opposition.

    Combative PM Manmohan Singh blames BJP for economic ills - India - DNA
  6. Ray

    Ray The Chairman Defence Professionals Moderator

    Apr 17, 2009
    Likes Received:
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    'Unfortunate' Manmohan Singh did not give confidence to people: Sitaram Yechury

    Communist Party of India (Marxist) leader Sitaram Yechury on Friday criticised the Prime Minister, terming his Parliamentary statement made on the situation of the economy as ‘unfortunate’, and added that Dr. Manmohan Singh should have used the opportunity to connect with and give confidence to the people of India during the present economic slump.

    “It is unfortunate because this was the occasion for the Prime Minister, through the Parliament, could tell the country – to give them confidence—as to how this crisis would be overcome, what they are planning to do,” Yechury said.

    The CPI(M) leader also said that the back and forth in Parliament --between the Bharatiya Janata Party (BJP) and the ruling Congress --contributed to sidestepping the real economic issue at hand.

    “It’s very unfortunate that the whole debate has been diverted between the Congress and the BJP. In the bargain, the basic questions that all of us raised on the gravity of the economy has just got shelved,” Yechury said.

    After the Prime Minister made his statement in the Lok Sabha, the BJP immediately criticised Dr. Manmohan Singh, saying that his speech had no content and that his behavior of walking off from the House was severely offensive to the Opposition.

    “"I want to strongly reiterate, again, that the problem that the nation faces today is the problem of trust. That credibility gap is not going to be bridged by this statement," BJP leader Yashwant Sinha said.

    Sinha said the Opposition wanted a structured Parliamentary debate on the economic situation in the country, but Manmohan Singh blatantly walked off immediately after his speech.

    "After giving a disappointing statement on the economy, the Prime Minister left immediately. He did not even have the courtesy to listen to the Opposition leader. The Leader of Opposition probably just wanted to say that there should be a structured Parliamentary discussion on the matter. However, the Prime Minister walked off like we-the people sitting in Parliament-are all incompetent and useless individuals sitting in the Lok Sabha," Sinha said.

    "We believe that he has disrespected the Parliament and the Opposition in the way he walked off, which is why Leader of Opposition Sushma Swaraj got up and said that the behaviour of the Prime Minister is extremely offensive to us-in protest, we will boycott the Parliament," he added.

    Terming the statement as 'frustrating', Sinha said that the Prime Minister's speech had no content.

    "I want to make clear that there was absolutely no content in the speech of the Prime Minister. He simply used words, which had no meaning. He did not bring forth anything new. The country has been let down with his speech as the people cannot see any beacon of hope, after the Prime Minister's statement," he said.

    Meanwhile, in the Rajya Sabha, in an unprecedented attack on the BJP-led opposition for disrupting the Parliamentary proceedings, Prime Minister Dr. Manmohan Singh on Friday exchanged aggressive remarks with Leader of Opposition in Rajya Sabha Arun Jaitley, and said that he commands a certain respect despite what the members say.

    "Have you heard of any country where MPs shout and walk to the well of the House and say 'Prime Minister chor hai' (the PM is a thief). Despite what some members may say, I do command a certain respect in the council of ministers," he told the Rajya Sabha.

    Leader of Opposition in Rajya Sabha, Arun Jaitley, responded sharply, and said: "Have you heard of any democracy where PM won a vote of confidence by buying members of Parliament?

    Dr. Singh, earlier in the day, said that the Central Government is taking steps to reduce current account deficit and added that growth will improve in the second half of fiscal year.

    "There are concerns and justifiably so on how rupee fall will impact economy, the movement of the rupee recently is a matter of concern to the government," Dr. Singh told the Lok Sabha while making a statement on the current economic situation.

    'Unfortunate' Manmohan Singh did not give confidence to people: Sitaram Yechury - India - DNA
  7. thakur_ritesh

    thakur_ritesh Administrator Administrator

    Feb 19, 2009
    Likes Received:
    Land of the GODS - "Dev Bhomi".
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    "House logjam hitting investor mood", so says our PM!

    I almost died laughing! Who makes these people PMs and FMs?! Seriously can't stop laughing.
  8. Ray

    Ray The Chairman Defence Professionals Moderator

    Apr 17, 2009
    Likes Received:
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    Live: Jitters on for economy, GDP at 4.4%, manufacturing at -1.2%

    5.30pm Q1 FY14 GDP at 4.4%

    India’s economy grew at the slowest quarterly rate since the global financial crisis in the three months through June, lower than expected and hurt by a contraction in mining and manufacturing, government data showed on Friday.

    Analysts polled by Reuters had forecast growth of 4.7 percent. June’s figure of 4.4 percent was the slowest growth since the Jan-March quarter of 2009.

    The economy has been steadily losing momentum in recent years. Economic growth virtually halved in two years to 5 percent in the fiscal year that ended in March—the lowest level in a decade—and most economists surveyed by Reuters in the past week expect 2013-14 to be worse.

    Manufacturing fell an annual 1.2 percent during the quarter while mining fell by 2.8 percent, the data showed. while farm output rose 2.7 percent.


    Although the Q1 numbers for FY14 were not very encouraging, Prime Minister’s Economic Advisory Council chief C Rangarajan kept some hope alive particularly for the second half.

    “We should improve in the second and third quarter. This is somewhat of a depressing picture. Agriculture should pick up in the coming quarters,” Prime Minister’s Economic Advisory Council chief C Rangarajan told CNBC-TV18.

    “I expect the second half of the year to perform better,” Rangarajan said.

    3.30 pm: Sensex closes up 229 pts, rupee recovers

    The Indian markets recovered the losses and ended in green as blue chips surged tracking a rebound in the rupee for a second day ahead of April-June GDP data.

    The BSE Sensex closed at 18631.03, up 229.99 points or 1.25 percent. The Nifty closed at 5479.20, up 70.15 points or 1.30 percent.

    Meanwhile, the rupee has also recovered slightly. At 3.45 pm, the rupee is trading at day’s high of 66 per dollar, stronger than its close of 66.55/56 on Thursday.

    HDFC Bank Ltd provisionally rose 3.5 percent, while Tata Consultancy Services Ltd ended 4.3 percent higher after marking its all-time high at Rs 2,050.

    1. 37 pm: Not back at 1991 levels, says PM

    Pointing out that the fundamentals of the Indian economy is much stronger now, PM Manmohan Singh said that the country is not back to 1991. “We have no reason to believe that Indian economy is back to 1991. Our fundamentals are much stronger,” he said.

    Singh said, We have the means to put the economy back to 6-8 percent growth in 2-3 years.” He said members should trust the ability of the government to tackle economic difficulties and not be influenced by the speculative inflows and outflows of capital.

    The PM said that the investors have not lost confidence. However, he said that there are certain events and evils in the country which are of concern.

    He also said that the government is confident of achieving 5.5% growth this fiscal.

    1. 37 pm: On missing coal files:

    The PM washed his hands off the missing coal block allocation files and said, “I am not custodian of coal ministry files.”

    1. 35 pm: PM on corruption issues disrupting Parliament

    The PM said that the corruption episodes do not have to be a reason to disrupt Parliament to prevent the government from doing their duties. “There are courts which can grapple with the issue. We do not want to defend any of the guilty,” he said.

    The PM denied saying that rupee depreciation is universally good for the economy.

    1. 25 pm: Ruckus in Rajya Sabha as PM tries to make statement

    Prime Minister Manmohan Singh was not allowed to speak by shouting MPs as he rose to speak in Rajya Sabha, after delivering his statement on economy in Lok Sabha.

    Miffed Singh asked the opposition leaders, ”Have you heard of any other country where the opposition leaders does not let the Prime Minister present a speech before the Parliament?”

    Leader of Opposition Arun Jaitley retorted, “Have you heard of any democracy where PM won vote of confidence by buying votes of members of Parliament.”

    Criticising the opposition, he said that the Parliament has not been allowed to function session after session. “It is the responsibility of all members of house to send out right signals to domestic and international investors,” he said.

    12. 45 pm: ‘PM only used words, has said nothing new’

    Reacting to the PM’s statement, opposition leaders in the Parliament said that the PM has no new steps in mind to revive the company.

    “PM has only used words, has said nothing new,” Yashwant Sinha said.

    BJP leader Arun Jaitley said that the whole world had warned about the current economic crisis for the last 5 years but the government took no heed. “There have been multiple warnings of a policy paralysis. The whole world warned us,” he said.

    Jaitley said that the financial data will be announced today and the PM has given an indication that growth in the country will be flat.

    “Today the situation appears to be far gloomy, confidence lost on ability of the government to handle the crisis. Political consensus is not built up but fractured by the government,” he added.

    12. 35 pm: Markets in the red after PM’s speech

    The Prime Minister’s speech in Parliament did not give away any concrete announcements which is likely to have impacted market.

    At 12. 35 pm, the BSE Sensex is at 18388.22, down 12.82 points or 0.07 percent. The Nifty is also struggling at 5396.80, down 12.25 points, or 0.23 percent.

    Dilip Bhat of Prabhudas Liladher however did not attribute the market reaction to Prime Minister’s speech per se. He said market is now so vulnerable that it is reacting to each and every minor negatives.

    You can read the PM’s complete speech here.

    12:30 pm: BJP walks out of Lok Sabha saying they’re unsatisfied with PM’s statement

    Whether the Prime Minister’s statement boosts market sentiment or not, the BJP definitely wasn’t impressed and walked out of the Lok Sabha saying they were unsatisfied with the Prime Minister’s statement.

    12: 15 pm: PM says political consensus needed to ensure other reforms can be pushed through

    Pointing out that there had been a fall in inflation, the Prime Minister said that the RBI was working to contain it.

    The Prime Minister sought to address concerns over the banking sector and said that the sector was still well capitalised and would be able to compensate for any non-performing assets.

    “Indian banking sector has seen some rise in bad loans…My belief is there is a liquidity problem,” Singh said.

    He said that while the government had tackled some reforms there were other reforms in the pension, insurance and taxation sector that could be achieved only if there was a political consensus to back them.

    “Reforms like the Goods and Services Tax requires states to come to an agreement. We need a consensus on this issue,” he said.

    Singh urged the political parties to join the government’s efforts to bring the economy on track.

    “We will need to ensure fundamentals of economy remain strong so that india grows at a healthy rate for years to come,” Singh said.

    “It is times like this where the nation shows what it is truly capable of,” the Prime Minister said.

    12:15 pm: PM says no question of capital controls, monsoon will rescue economy

    “Foreign exchange markets have a record of overshooting and that is what is happening with the rupee and other currencies,” the Prime Minister said.

    “I would like to assure the country and the world at large the government is not contemplating any capital flow controls,” Singh said.

    The Prime Minister said there was no question of reversing the current policy of the government.

    The fundamentals of the economy determine the value of the rupee and due to slowing growth the government’s measures had little effect on it, he said.

    “As the effect of the good monsoons kick in I expect growth to pick up,” he said, adding that it should pick up in the second half of the current fiscal year.

    The full effect of economic decisions taken by the government will come into play over the year will result in higher growth particularly in manufacturing, he said.

    He promised that the government would do whatever was necessary to contain the fiscal deficit and would take steps to curb spending on subsidies that were not reaching its intended targets, particularly the poor.

    The rupee would pick up once the condition of the economy improved, he said.

    12:00 pm: PM blames global factors, says govt is working to boost rupee

    Prime Minister Manmohan Singh blamed the global factors like the crisis in Syria and the Federal Reserve’s ending of monetary supply.

    “The rupee has fallen due to current account deficit and other domestic factors. We intend to reduce the current account deficit and improve economic factors,” Singh said.

    The Prime Minister said the government had taken all possible steps to reduce current account deficit.

    Singh said the moves by the government to reduce the current account deficit had already begun to work and were visible.

    11. 35 am: It’s not the end of pain for markets yet, says JM Fin

    The market over the past few months has seen a lot of pain, but it is not the end yet, says Gautam Shah, CMT, VP-Financial Services, JM Financial. He says the market may be heading lower, as there are still no clear signs of bottoming out. He says eventually Nifty will head towards 5000 and on the upside it will be difficult to break the 5500-5600 band.

    Shah told CNBC-TV18, every time the market moves beyond 5400, the risk reward actually turns in favour of the bears and every time the market will move toward 5000-5100, the risk reward would turn in favour of the buyers.

    10.15 am: Sensex gains 100 pts, rupee falls

    The market slowly extended its upward journey in morning trade Friday with the Sensex gaining 100 points, supported by financials and technology stocks.

    The Sensex is up 110.94 points at 18511.98, and the Nifty is up 21.85 points at 5430.90. The BSE Midcap and Smallcap indices gained 0.5 percent each. About two shares advanced for every share declining on Bombay Stock Exchange.

    Ambareesh Baliga, managing partner-Global Wealth Management, Edelweiss Financial Services says the market bounce back will not last long although Nifty can rally up till 5500-5550.

    Meanwhile, Indian rupee erased some of its gains today, falling 78 paise to 67.33 against the dollar.

    Coal India shares lost 1.5 percent as the department of divestment has appointed 7 merchant bankers to divest 5 percent stake in the company, reports CNBC-TV18 quoting sources. Bankers were Goldman Sachs, Credit Suisse, Deutsche Bank, SBI Capital Markets, Kotak Mahindra Capital, JM Financial and Bank of America Merrill lynch.

    9. 25 am: Markets open in red, rupee at 67

    The Indian markets opened in the red today as losses in Infosys, TCS and Sesa Goa push Sensex lower by more than 100 points in opening session.

    The BSE Sensex opened at 18292, down 105 pts while the Nifty was at 5369. down 40 pts.

    Indian rupee fell by 45 paise to 67 against the dollar in opening trade Friday after sharp recovery in previous session. The domestic currency was closed at 66.55 per dollar on Thursday, up 225 paise from its record low of 68.8 touched on Wednesday.

    The first quarter GDP numbers are set to come out today. The figure could be lower than the street expectations of 4.7 percent.

    Meanhwile, just three days after the Lok Sabha passed the Food Security Law, Lok Sabha passed the Land Acquisition Bill moved by rural development minister Jairam Ramesh.

    Globally, US markets gained for a second day on Thursday on better than expected economic data and as Syria concerns eased. European markets also gained over half a percent. Back home,Sensex ended 404.89 points at 18401.04. Nifty gained 124 points to close above 5,400.

    End of updates for 29 August

    8.07 pm: Rupee stands at 66.55 against the dollar

    The rupee today pulled back after touching 67.37 against the dollar. Right now it stands at Rs 66.55 for one dollar.

    4. 05 pm: Sensex closes 450 pts up, RIL up 5%

    Indian shares rose nearly 2 percent as blue chip shares including HDFC surged tracking a rebound in the rupee from a record low in the previous session, after the central bank’s move to provide dollars directly to oil companies.

    The BSE Sensex closed at 18401.04 , up 404.89 points or 2.25 percent while the Nifty closed at

    5409.05, up 124.05 points or 2.35 percent.
    Mortgage lender Housing Development Finance Corp Ltd provisionally rose 5.7 percent, while software exporter Tata Consultancy Services Ltd ended 1.2 percent higher after earlier making its all-time high at Rs 1,970.

    Stocks in news:

    Reliance zooms around 5 percent as the company and its partner BP won approval to invest USD 3.18 billion in R-Series gas field in the flagging KG-D6 block, reports PTI.

    Infosys is down 0.37 percent after it announced that its global head of manufacturing Ashok Vemuri has resigned.

    1.20 pm: Sensex gains 300 pts on rupee recovery

    The BSE Sensex is trading up around 300 points and the Nifty has gained over 80 points, tracking a rebound in the rupee from a record low after the Reserve Bank of India’s move to provide dollars directly to oil companies.

    Traders say continued foreign selling and expiry of August equity derivative contracts later in the day may increase volatility in the second half of trade on Thursday.

    At 1.20 pm, the BSE Sensex is at 18301.23, up 305 points or 1.70 percent, while the Nifty is at

    5378.15, up 93.15 points, or 1.76 percent.
    12.30 pm: Food Bill is credit negative for India, warns Moody’s

    India’s plan to provide cheap grains to the poor is credit negative and will exacerbate the government’s weak finances, Moody’s Investors Service said in a statement on Thursday.

    “The measure is credit negative for the Indian government because it will raise government spending on food subsidies to about 1.2 percent of GDP per year from an estimated 0.8 percent currently, exacerbating the government’s weak finances,” Moody’s said in a statement today.

    12. 00 pm: PM to make statement on rupee tomorrow

    Prime Minister Manmohan Singh told parliament he was willing to make a statement on the state of economy on Friday, when the lawmakers asked him what steps the government was considering to take to deal with the falling rupee.

    “I cannot deny that the country is faced with a difficult situation,” Singh said, in brief remarks to the upper house of parliament on Thursday.

    “I don’t deny there are some domestic factors. There are also some international factors arising out of change in U.S monetary stance,” he said. Singh also cautioned that the rising tensions in Syria could have negative implications for oil prices. India imports nearly 80 percent of its crude oil needs.

    11. 17 pm: Govt concedes to opposition demand for PM statement on rupee

    Responding to the opposition, Parliamentary Affairs Minister Kamal Nath said, “We recognise the concern of the members on the rupee fall. PM will make a statement in the House tomorrow.”

    11. 05 am: Opposition demands statement from PM on rupee

    TMC leader Sougata Roy said that the Finance Minister P Chidambaram did not mention a single step about the cascading fall of the rupee at his press conference day before yesterday.

    He also said that economists have held that the fiscal deficit will increase with the implementation of Food Bill, which has resulted in rupee fall.

    The TMC leader demanded a statement from the Prime Minister on the steps being considered to support the rupee. “Let the PM give a statement to the House, let him reassure, all is well or all is not well,” he said.

    10. 50 am: Rupee pulls back, but don’t rule out 70

    After an extremely rough ride for the last few weeks, the rupee today strong today at 66.92 and moved higher to 67.37 against the dollar. But is this a time to rejoice? Not really. Rajesh Pandathil of Firstpost argues here that the rupee pullback is temporary and one cannot rule out the rupee going back to 70 levels. Read more here.

    9. 40 am: Sensex up 100 pts, rupee recovers on RBI steps

    The Indian markets opened in the green after two days of crisis. The BSE Sensex opened around 1.2 percent higher more than 100 points with 27 components in the green. Nifty also opened 1 percent higher.

    BSE bankex recovered from its bad run; sits at the top of the sectoral pack with gains of 2.2 percent

    The rupee rallied sharply to sub 67 per dollar levels on Thursday after the central bank said it would supply dollars to oil companies through a separate window in its latest attempt to shore up the currency.

    The partially convertible rupee was trading at 66.90/91 per dollar at 9:10am, 2.8% stronger than its close of 68.80/81 on Wednesday, when it hit a record low of 68.85.

    The benchmark 10-year bond yield also gained tracking the rupee, with the yield falling as much as 21 basis points to 8.75%.

    Asian shares stabilised on Thursday after two days of steep losses as fears that US-led forces would soon launch a military strike on Syria abated, and oil prices retreated from a six-month peak.

    End of updates for 28 August

    6 pm: Markets recover, Sensex up 100 pts

    Rupee closes at lowest ever: 68.80 — losing 3.86 percent against the US dollar.

    3.25 pm: IT stocks help markets recover

    The Indian markets recovered at the end of the trading session today. The BSE Sensex closed at 17983.93, up 0.09 percent, while the Nifty closed at 5285.00, down 0.05 percent.

    BSE IT index ends the day at the top of the sectoral pack with gains of nearly 3 percent. ONGC and HDFC which fell more than 5 percent are the top Sensex losers. Wipro, TCS and Tata Power end up more than 3 percent–these stocks are the top Sensex gainers.

    2.55 pm: Markets recover, Sensex up 100 pts

    At 2.55 pm, the BSE Sensex is at 18081.57, up 0.63 percent while the Nifty is at 5310.70, up 0.44 percent.

    The market recovered on account of buying at lower levels. Most beaten down stocks like banks, capital goods, FMCG and oil & gas recovered from the day’s low on short covering.

    2. 49 pm: India on a rocky road, says S&P

    Rating agency Standard & Poor’s has said that the road for large deficit countries such as Indonesia and India is rocky but the situation cannot be termed an Asian crisis.

    Meanwhile, Vibhav Kapoor of IL&FS of says with the indices and currencies falling like ninepins, it is best that investors stay on the sidelines and not be in a hurry to buy into this market.

    “For a long time the market stayed in a range of 5500-6200 for the last year-and-a half. Once that broke through with all the attendant fundamental factors in place, it was just not a technical breakthrough, I think we are in for much more trouble going forward,” he told CNBC-TV18 in an interview.

    2. 05 pm: The govt can’t save rupee, should quit, says BJP

    With the rupee breaching an all time low of Rs 68 against the US dollar and fears of mounting fiscal deficit, BJP today said the government has run out of ideas and should quit.

    The Left parties attacked the government’s policies and said the country was heading towards an economic emergency.

    The BJP asserted the UPA government should step down charging that it has “completely run out of ideas to deal with the crisis”.

    “I have been saying that the only thing that will stabilise rupee and market at this point of time is for the government to resign and go for fresh elections,” BJP leader and former finance minister Yashwant Sinha said.

    “Indian economy under Manmohan Singh is on ventilator in the ICU…it is happening because of big CAD and fiscal deficit, and complete lack of trust of investors in the present ruling establishment,” Ravi Shankar Prasad Deputy leader of opposition in the Rajya Sabha said.

    Endorsing Sinha’s views, Prasad said that “sooner the government goes better it will be for the country” as the present dispensation has “completely run out of ideas.”

    12. 25 pm: LIC comes to rescue of sagging markets yet again

    Life Insurance Corporation of India is likely to have bought shares to boost the market, Reuters reported today citing dealers.

    This is not the first time LIC is playing saviour for the stock markets. The government had taken help from the insurance behemoth a number of times earlier whenever it wanted to prop the market.

    Sensex recovered as much as 410 points or 2.3 percent from the day’s low. Bank Nifty recovers nearly 310 points. The Indian rupee has also recovered 91 paise from the day’s low reportedly after RBI intervention in the forex market.

    12. 26 pm: IT stocks rejoice while others cringe in rupee pain

    Information technology shares rose as the rupee hit record lows today with Tata Consultancy Services rising as much as 4 percent in the early trades.

    Software exporters gain when the rupee declines because a weak rupee means better earnings for them.

    According to a report on Moneycontrol, Infosys shares hit a 28-month high today as brokerage house CLSA accorded a buy recommendation on the stock.

    The brokerage house has set a target price for the stock at Rs 3,550 a share, the report said.

    CLSA says that the company is likely to witness an earnings per share upgrade of 8-12 percent on weaker rupee and that it expects clarity on US Immigration Bill in two months.

    HCL Technologies gained more than 1 percent. Meanwhile, Wipro shares traded 2.42 percent higher at Rs 466 on the National Stock Exchange as of 12.8 pm a day after it replaced Reliance Infrastructure Ltd in the National Stock Exchange’s 50-stock Nifty.

    12. 15 pm: Gold prices at all-time high

    Gold prices zoom to all-time high of Rs 34,500 per ten gram at open as rupee hits historic low of 68.75 amid firm global trend.

    11. 05 am: Rupee, stock markets pull back

    The Indian rupee and stock markets pulled back from the lows probably after the RBI sold dollars through the public sector banks, reported CNBC-TV18.

    The rupee was at 68.07, after touching a 67.88 against the dollar. The Sensex was at 17,629.77, down 338.31 or 1.88 percent, and the Nifty at 5,165.30, down 122.15 or 2.31 percent.

    However, the pullback is likely to be a temporary one as the underlying bearish tone is unlikely to change by the RBI’s intervention.

    10. 28 am: With rupee at 68.66, it’s a bottomless fall

    The rupee continued its fall to hit 68.66 taking all financial markets along with it. The Sensex was at 17502.76 down 465 points and the Nifty was at 5131.85, down 153 points.

    41 of the Nifty constituents and 26 of the Sensex were in the red. The rupee has fallen 8 percent this week and 13 percent and July 15 when the RBI started its tightening cycle.

    HSBC, meanwhile, said that the biggest problem with Indian equities is the over ownership of foreign institutional investors. Though the situation is changing, the stock market will have to bear the brunt for some more time. There is nothing much to do now, but to adjust to further slowdown in growth.

    10.10 am: Rupee breaches 68, is this Chidu jinx?

    The Indian rupee has hit 68 against the dollar a day after Finance Minister P Chidambaram reiterated that the rupee is undervalued and the government will not miss the fiscal deficit target. At 10.10 am, the rupee is trading at 68.02 against dollar.

    The rupee has dropped 19.2 percent this year and is set for the worst fall since 1991. The rupee is currently the world’s worst performing currency.

    The currency has plunged a little over 13 per cent so far in the month of August alone to mark its worst monthly fall since the year 1993.

    Herald Van Der Linde, Head of Equity Strategy, Asia-Pacific, HSBC feels that India was over-owned by foreign intuitional investors (FIIs) as the situation is changing. In an interview to CNBC-TV18, he warned that over-ownership will remain an overhang on India.

    “We will see economy, earnings downgrades in India. India’s multiples need to come down further. India needs to adjust to further slowdown in growth,” he explained.

    10.00 am: ‘RBI must intervene to tackle rupee fall,” says JP Morgan

    Expressing concern over the rupee fall, JP Morgan said forex intervention by the Reserve Bank of India is required to stem rupee fall. “Turnaround in real economy will take some time,” it said.

    JP Morgan said that the Food Security Bill is not a major factor for rupee depreciation and said tax collection, oil & gas subsidies are worries for fiscal deficit target.

    9.50 am: Rupee fall panic spreads on Twitter

    The rupee panic has spread across social media too, with many coming up with suggestions of what the government must do to stop the rupee fall.

    Here are a couple of tweets:

    9.15 am: Sensex opens 100 pts down, banks biggest loser

    The Indian markets opened in the red once again today following the rupee fall and weak global cues.

    The BSE Sensex opened at 17778.68, down 1.06 percent, while the Nifty opened at 5215, down 1.40 percent. The Sensex is down more than 100 points with 27 components in red.

    BSE bankex sits at the bottom of the sectoral pack with losses of nearly 3 percent; all components in the red.

    Among the bank stocks, Axis Bank is trading down 6 percent, HDFC and Yes Bank are down almost 5 percent.

    Tech stocks continue to perform well with BSE IT index at the top of the sectoral pack with gains of 1.1 percent.

    Meanwhile, axtending its early rally, gold price hit fresh all-time high of Rs 33,824 per 10 grams Tuesday on heavy buying as rupee plunged to its new record low of 66.30 against the US dollar.

    9.00 am: Rupee hits 67.98

    The Indian rupee opened at new record low today at 66.90 against the dollar. Rupee has fallen more than 6 percent this week so far.

    In ten minutes of trade, rupee hit 67.98, its new record low.

    On Tuesday, the rupee hit a record low of 66.30 before closing at 66.19, down 188 paise from Monday’s close of 64.31, over concerns that the food security bill would throw government finances into disarray and fears of a US strike against Syria.

    The rupee is emerging as a front-runner in a race to the bottom among emerging market currencies. In both absolute and percentage terms, Tuesday’s drop is the highest ever. The rupee has fallen by around 20% since the beginning of the year.

    Updates end for 28 August

    4 pm: Sensex closes 590 pts down

    The Indian markets gave up nearly all gains made over the previous three sessions, as blue chips including HDFC plunged on worries the passage of a food security bill would worsen the country’s fiscal deficit.

    The rupee closed at 66.24 to a dollar, its lowest in 18 years.

    The BSE Sensex closed at 17968.08, down 590.05 points or 3.18 percent. The Nifty closed at 5287.45, down 189.05 points, or 3.45 percent. Bank Nifty closes at lowest level since January 11, 2012.
    The rupee hit a record low and shares slumped on Tuesday after Lok Sabha’s approval of a $20 billion plan to provide cheap grain to the poor renewed doubts about the government’s resolve to control spending ahead of elections due next year.

    SBI Chairman Pratip Chaudhuri said that RBI will take final call on currency swap and he does not think it will make a huge difference. Adding that currency swap has been tried before, Chaudhuri stresses that it won’t correct trade imbalance. “Banking system will not be impacted by rupee depreciation and MTM losses depend on domestic interest rate,” he said.

    Technology stocks remained on buyers’ radar as the rupee depreciation will help these IT software services exporters to report better earnings in Q2.

    However, BHEL, HDFC and HDFC Bank plunged more than 8 percent, which indicates that there may be some offloading by foreign institutional investors.

    2.50 pm: Large fiscal deficit will impact growth negatively, says Yashwant Sinha

    Criticising the government and the state of economy, BJP leader Yashwant Sinha said that running a large fiscal deficit will impact inflation which will lead to rising interest rates, thus impacting investment and growth.

    “All of us remember the famous statement made by the PM that ‘money doesn’t grow on trees’. He also said that when the fiscal deficit will increase, the CAD will increase, prices will rise leading to an increase in the unemployment rate. I agree with the Prime Minister. This is a vicious cycle, and we need to find a way,” he said.

    Sinha said that India’s external debt is Rs 390 billion dollar, out of this the short-term debt if a little over 172 billion dollars. And this is a worrying scenario as short-term debt is supposed to be repayed by 2014.

    1. 40 pm: Rupee hits 66

    The Indian rupee has hit a new record low of 66. At 1.47 pm, rupee is at 66.02 against dollar.

    The BSE Sensex is at 18032.16, down 525.97 points, 2.83 percent. The Nifty is at 5298.35, down 178.15 points, 3.25 percent.

    Ajay Marwaha of HDFC Bank told CNBC-TV18 that the RBI’s intervention in the forex market has been largely ineffective and attributed the fall in rupee to the fall in emerging market currencies.

    12. 11 pm: ‘Market in Catch-22 situation’

    “The market is in a catch-22 situation, but it’s like catching a falling knife. Investors with 1-and a half to 2 years horizon may get into a select frontline stocks where FII selling has been huge, Dilip Bhat of Prabhudas Lilladher told CNBC-TV18.

    He said though the Nifty may bounce back to 5700 levels, the volatility in the markets will be killing.

    The Sensex was 491 points down and the rupee hit a new low of 65.87.

    Finance Minister had earlier allayed fears saying that the Food Security Bill will not have a negative impact on the fiscal deficit. “We will not cross the red line of 4.8 percent of GDP this fiscal,” he told at a press conference.

    IT stocks are doing well in what is otherwise a weak day for markets. The rupee’s weakness may be helping tech stocks. Wipro is trading 0.63 percent up, Infosys is up 1 percent.

    11. 35 am: Rupee hits record low, Sensex down 500 pts

    The Indian rupee hit a record low today at 65. 68 against the dollar. The Indian currency fell nearly 4% in the last three trading sessions.

    Meanwhile, reacting to the rupee fall, the markets also went in deep red. The BSE Sensex is at 18076.28, down 2.60 percent, nearly 500 points down. While the Nifty is at 5325.55, down 2.76 percent.

    Ashutosh Raina of HDFC Bank attributed rupee weakness to genral decline in all emerging market currencies across the globe. He said food security bill passed by the Lok Sabha yesterday added to already existing concerns about the twin deficits. He however said 70 level may not be that near as 66 will have to be defended for sometime.

    11. 25 am: CLSA says Modi stock market’s greatest hope

    Indian remains the most at risk of a sovereign debt crisis, though the country does not have a high foreign ownership of rupee debt, said CLSA in its GREED and Fear note.

    That Congress President Sonia Gandhi’s rare speech was only to endorse the highly expensive Food Security Bill is clouding the hope that the Congress will at least now strive to improve the governance, it said.

    “The Indian stock market’s greatest hope in this respect is the emergence of Gujarat Chief Minister Narendra Modi as the BJP’s prime ministerial candidate. While the odds are definitely stacked against him, GREED & fear’s view is simply that the worse the sense of crisis the better Modi’s chance of winning,” it said.

    According to the brokerage, Modi has been increasingly attacking the direction-less government and the collapsing rupee of late. It expects the rhetoric to gain pitch as the election approaches.

    10. 40 am: Chidambaram says food bill wont affect Fiscal deficit

    Finance Minister P Chidambaram said that the ‘red line’ on fiscal deficit is 4.8 percent of GDP and that will not be breached even if Food Security Bill is implemented.

    The Food Bill was passed in the Lok Sabha yesterday.

    The Finance Minister reiterated that the rupee is undervalued and it will find its own level. “We have to be patient, firm. Rupee will find its appropriate level,” he said.

    He said that the CCI has cleared Rs 1.83 lakh crore worth projects yesterday and the message that the government wants to send through this is that investment cycle has been revived and the government is pushing it.

    10.20 am: ‘Don’t be surprised if Nifty hits 4900′

    Hiren Ved, Director & CIO Alchemy Capital says the recent pullback seen in the market was entirely due to short covering and given the way Indian’s macros are shaping up, one should not be surprised if Nifty hits 4900 going ahead.

    His views come in line with Ridham Desai of Morgan Stanley. The market is likely to remain in a sideways range till the next Reserve Bank of India (RBI) monetary policy, which is scheduled in September, he told CNBC-TV18.

    At 10. 18303.76 -254.37 (-1.37%)
    NIFTY5395.10 -81.40 (-1.49%)

    9. 45 am: Food Bill fans deficit concerns, rupee falls below 65

    The rupee plunged near its all-time low and paring its gains in the last two sessions, as concerns weighed heavily in the financial markets on the expected increase in government’s subsidy burden following the passage of the food security Bill.

    The rupee had ended down 110 paise or 1.74 percent at 64.30 against the US dollar after hitting an intra-day low of 64.75 in the previous session.

    Forex dealers said besides strong demand for the American currency from importers and banks, dollar’s strength against other currencies overseas amid expectation that the Federal Reserve will soon taper its bond-buying programme weighed on the domestic currency.

    They said several measures announced by the government and the RBI failed to check volatility in the rupee.

    Weak domestic fundamentals such as record current account deficit concern too put pressure on the rupee, they said.

    In order to arrest the rupee slide, RBI had announced measures such as restriction on Indian firms investing abroad and on outward remittances by resident Indians, triggering talks of return of capital control regime.

    9. 15 am: Rupee plunges below 65, Sensex down 200 pts

    The rupee resumed its free fall and plunged to 65.22 in the opening trades today largely in line with the rout witnessed in the emerging market currencies globally.

    Adding to the rupee’s worries was the month-end dollar demand from importers including oil marketing companies.

    The experts spoke on the CNBC-TV18 said the rupee’s depreciation was linked to the wide current account deficit. “The rupee will continue to depreciate” Ray Farris of Credit Suisse told CNBC-TV18. He India may have to resort to monetary tightening to arrest the currency slide.

    The rupee depreciation pulled down the Sensex and the Nifty, with both the benchmark indices opening down about 1 percent.

    The BSE Sensex opened at 18323, down 1.5 percent, while the Nifty opened at 5399, 1.4 percent down.

    On Monday night, Parliament approved the historic Food Security Law after just six hours of debate. Food minister KV Thomas tweaked several key proposals including assuring states that their existing schemes will not be tampered with and they will get to select the beneficiaries. The total food grain requirement is projected at 62 million tonnes for an estimated expenditure of around Rs 125000 crore this year.

    Globally, Syria concerns led US stocks to reverse earlier gains in the last hour of trading with the Dow and S&P 500 ending about half a percent lower. In Europe, shares closed slightly lower with fears of a government collapse in Italy dragging down the Italian index.

    Asian markets were trading lower today morning following a lackluster lead from Wall Street and fears of a possible confrontation with Syria.

    Banking stocks have been badly hit with all BSE bankex components trading in red. Yes Bank , IndusInd Bank and Canara Bank are all down more than 3 percent.

    Sesa Goa is down 4 percent. On Monday, Sesa Goa announced it will replace Sterlite in the Sensex. Sesa Goa’s weightage will also increase in Nifty and FTSE.

    IDFC is down 7.23 percent as Reserve Bank has notified the decrease in FII limit in IDFC to 54% from 74% earlier.

    Live: I still command respect, trust govt on economy, says PM - Firstpost
    Last edited: Aug 31, 2013
  9. nirranj

    nirranj Regular Member

    Jun 21, 2013
    Likes Received:
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    Why is MMS blaming common man for importing gold??

    What has he done to ensure that the domestic coal production meets the internal demands??

    Nothing... The CIL is the major culprit for this CAD.


    Apr-July coal imports jump 32% | Business Standard

    What has He done to control the Defense Imports??

    When He cannot persuade the generals to develop and buy equipment from within, He is blaming the Common man who is working day in and day out to earn money...

    If he has ever contested in a open election, If he had ever came to the streets to speak with the common man, he would have understood how hard everyone is toiling to make their ends meet.
  10. sob

    sob Moderator Moderator

    May 4, 2009
    Likes Received:
    New Delhi
    Re: Elections, now: UPA inherited a robust economy and brought it cras

    Why just coal, we were one of the largest exporters of iron ore and today because of the vendetta politics of the Congress we have turned into a net importer of iron ore.

    When the BJP was in power in Karnataka at that the Central agencies went into overtime to go after the Reddy Bros i.e BJP. Goa is another case where the Cetral Government is sitting on files for months and not allowing for the mines to be re opened as the local govt. belongs to BJP and they will derive all the 3political capital out of this issue.

Share This Page