India's top biscuit makers Britannia Industries Ltd and Parle Products Pvt. Ltd say sales have slowed dramatically in the countryside as price hikes deter shoppers even before the impact of a deficient monsoon takes its full toll on rural spending power.
The development raises fears that India may not be able to count on a resilient rural economy to offset the effects of the current slowdown, experts said. Biscuits are everyday products that are popular in both rural and urban markets and a slowing in their sales could well indicate a slowing of consumption in rural India.
Great, now only if Mr.Murthy can tell Armand to wake up from his delusions.Things worse than 1991, no longer possible to sell India story: Narayana Murthy, Chairman Emeritus, Infosys
...
"The world expected a lot from us. And compared to that expectation, we have fallen very very short. And therefore, I would say, this is worse than 1991," Murthy said. "I meet a lot of CEOs outside India and earlier India was mentioned once every three times China was mentioned. But now, if China is mentioned 30 times, India is not even mentioned once," he added.
armand is right.Great, now only if Mr.Murthy can tell Armand to wake up from his delusions.
Its still better than China...
India's sovereign credit rating can be downgraded to junk status if the government fails to address the fiscal imbalances in the economy, Standard & Poor's said.
Speaking to ET Now, Takahira Ogawa, director of sovereign ratings at S&P, said expectations from the government were low.
"India's fiscal and monetary policy needs coordination," he said.
Ogawa added that high interst rates, deficit and inflation were impacting the country's growth, saying that he did not expect Q2 GDP growth to rebound.
There is a need to see some measures from the government to address the subsidy issue, he said, but added that subsidy reforms will be difficult in FY-13 owing to the coming elections.
Earlier in April this year, S&P cut India's outlook to negative from stable, citing slow progress on its fiscal situation, as well as deteriorating economic indicators. Stating that India's investment and economic growth have slowed, Standard & Poor's (S&P) revised its outlook for the Indian economy to negative and gave it a rating of BBB(-) from stable.
The lowered outlook jeopardises India's long-term rating of BBB-, which is the lowest investment grade rating.
i just hope you are not joking or you are not being sarcasticarmand is right.
come rain or shine, india always performs better than china. even when it doesn't.
As an outsider,,, being honest and not having a dog in this fight, you all have a mess on your hands. 55 billionairs in India a land of 1.2 billon control India's percent of Indias GDP 55 billionaires command nearly $250 billion in wealth — a staggering sum relative not only to the country's gross domestic product, but to peers in bigger economies. A Mighty Few and India's Richest Rich - Graphic - NYTimes.com
In India, wealth of 36 families amounts to $ 191 billion, which is one-fourth of India's GDP. In other words, 35 elite Hindu families own quarter of India's GDP by leaving 85 % ordinary Hindus as poor!
The dominant group of Hindu nationalists come from the three upper castes ( Brahmins, Kshatriyas, and Vaishyas ) that constitute only 10 per cent of the total Indian population. But, they claim perhaps 80 % of the jobs in the new economy, in sectors such as software, biotechnology, and hotel management.
About 50 families are running India for their own benefit, even at the expense of 1.2 billion Indians. Your not alone its going that way in the USA too. There rich are getting richer, its one thing the US election is about.
1. You are going to have to redistribute the wealth, power and jobs in India. What ever your doing is not enough.
2. Corruption,,, is like cancer it will eat away at the very fabric of indias society.
3. Pride perception, right now too many Indians have given up, want to emigrate to other countries, they see India is as a loser,
4. Education, while literacy is suppose to be about 70 percent by USA standards of useing an 8 grade education as a yardstick illiteracy in India is about
30 percent.
Completely agree with you on this point. We need to grow faster to lift people out of poverty.1. You are going to have to redistribute the wealth, power and jobs in India. What ever your doing is not enough.
You have the nail on the right head. Corruption does not discriminate between class and religion and to go forward as a nation we have to tackle it.2. Corruption,,, is like cancer it will eat away at the very fabric of indias society.
We are seeing a reverse drain. Many Indian Professionals are coming back from the US and UK. They perceive India to be a better bet.3. Pride perception, right now too many Indians have given up, want to emigrate to other countries, they see India is as a loser,
We can debate about the figures till the ed of the world, but yes focus has to be on education.4. Education, while literacy is suppose to be about 70 percent by USA standards of useing an 8 grade education as a yardstick illiteracy in India is about 30 percent.
The petroleum ministry plans to raise diesel rates by Rs 4-5 per litre after the parliament session ends on September 7 as oil firms' revenue loss has soared to almost half the retail price, but it expects stiff resistance from the ruling coalition, having tough time defending the government on the coal issue.
Oil companies, which are free to pair pump prices of petrol with market rates, are also set to raise gasoline prices by about 5 a litre. "We could not raise its price last month due to the monsoon session. But we can't wait beyond," a senior executive in a state oil firm said. The parliament session will be over on September 7 unless it ends earlier because of current pandemonium due to alleged coal scam.
"It will be a disaster for the economy if government defers its plan to raise diesel prices. Coalgate is a political issue and diesel price is an economic issue. Companies are losing more than 19 a litre in Delhi. It is not sustainable even for the exchequer," said a senior executive in a state oil firm. Diesel is sold at 41.29 a litre in Delhi. Diesel accounts for more than 60% total revenue loss of oil firms, which is estimated about 190,000 crore for financial year ended March 2013.
The Vijay Kelkar committee has cautioned that India's current account deficit (CAD) might rise to a record 4.3 per cent of gross domestic product (GDP) in 2012-13 if reforms to address this do not take place.
The panel, asked to recommend on consolidation of government finances, also observed that foreign exchange reserves and currency vulnerability resemble those in the infamous 1990-91 balance of payments crisis. In fact, if no reforms of the type it recommends are undertaken, our economic situation could be worse than in the 1991 crisis, it has warned.
However, this is the worst-case scenario, and the CAD for 2012-13 might actually lie be 3.5-4 per cent of GDP, economists said, due to a rise in services exports and slowing in imports due to a slowing economy.
More, the comparison with 1990-91 seems exaggerated, aver some, as forex reserves are comfortable at $293 billion, as of September 21.
The CAD was 3.9 per cent of GDP in the first quarter ended June, higher than the 3.8 per cent of GDP in the corresponding period last year. In value terms, the CAD was lower at $16.6 bn against $17.5 bn at the same time last year but the CAD-GDP ratio was higher, on account of a lower GDP base in dollar terms.
The rupee was in the 45-48 (to the dollar) range in the first quarter of 2011-12, whereas it was 55-56 in Q1 of 2012-13.
In case of the "do-nothing scenario", the Kelkar report said CAD, 4.2 per cent of GDP in 2011-12, could deteriorate further this year. "CAD could be possibly at 4.3 per cent of GDP this year, at a time when the world market and capitals flows are exceedingly fragile and where financing of this magnitude is creating huge risks for macroeconomic and external stability," it said.
Economists spoken to did not feel India would see a record CAD this year. "It will be about 3.5 per cent of GDP, as imports are declining due to a slowing economy," said D K Joshi, chief economist, CRISIL. YES Bank analysis projects CAD at 3.6 per cent of GDP in 2012-13, on the back of an improvement in net invisible inflows.
The invisibles trade was $25.9 bn in Q1, down from $27.5 bn last year, due to slowing demand from the US and Europe.
Merchandise exports contracted 2.6 per cent in the first quarter and its imports fell 3.6 per cent, narrowing the overall trade deficit to $42.5 bn from $51.5 bn in the fourth quarter of 2011-12. The report went on to add that forex reserves were falling, and the currency especially vulnerable. "The combination is reminiscent of the situation last seen in 1990-91," it said.
In the 1990-91 BoP crisis, CAD was three per cent of GDP. Our gold reserves are at $26.2 bn and forex reserves at $293 bn. In 1991, the latter were at $1.2 bn in January and had depleted 50 per cent by June, where India could finance just three weeks' worth of imports.
Also in 1991, the rupee had to be devalued by 18-19 per cent against major currencies. Today, it has begun rising again, up four per cent against the dollar in the past 15 days and having closed at a five-month high of 52.85 last week due to heavy capital inflows. "We now the expect rupee to trade close to 52-54 by December and to gradually move towards 50-52 by March," said Shubhada Rao, chief economist, YES Bank.
However, economists agree that the rupee has started appreciating because of the reforms announced by the government on foreign direct investment and fuel price corrections. These lifted market sentiment.
The Kelkar report said the consequences of not quickly taking credible effective measures for correcting the current fiscal deficit is likely to be a sovereign credit downgrade and flight of foreign capital.
"This will invariably further weaken the rupee and negatively impact the capital markets and the banking sector. In addition, the situation leaves little head room for counter-cyclical policy measures in the event of another global crisis," it said. Arun Singh, senior economist, Dun and Bradstreet, said he agreed that CAD was a big concern at the moment and felt it would be around four per cent of GDP in 2012-13. "Exports to the US and Europe are falling, while upward pressure on oil prices remain," he said.