Indian Economy: News and Discussion

[IndianHawk]

Once again this is not how it works.

There is something called the fiscal deficit which the govt needs to maintain very carefully in order to uphold both the consumers and markets confidence.

India's current fiscal deficit stands at 9.3% of the GDP for FY21 which is a lot but slightly better than the expected 9.5%. the govt always tries to stays in single digits 9.3, 6.9 for example. Once double digits start to come a sense of panic starts to build in therefore the govt will always try to stay below 10% while slowly but steadily moving back to 6-7%.

Now look at this idiot.

Print more money, spend liberally: P Chidambaram advises govt | India News - Times of India

India News: NEW DELHI: Expressing concern over the state of the economy, Congress on Tuesday said the Modi government should consider the suggestions offered by t.

timesofindia.indiatimes.com

And people wonder how the economy is still recovering from the past decade.

Printing and spending money might seem like a good idea at the start but it is anything but good. India has had a horrible experience with deficit financing in the 80s where the govt would just spend without thinking twice and the results of that experiment is there for everyone to see.

Printing or borrowing money without any plan will result in more inflation which is something that the govt is trying to control. The other issue as of now is the the "scale of bad loans"

Remember this.

Lockdown moratorium | Loans up to ₹2 crore may get relief

Banks will suffer a loss of ₹6 lakh crore in case of complete waiver to all borrowers, says affidavit

www.thehindu.com

It will take almost a year for us to know the extent of bad loans and NPA's in the banking sector. How many people went bust hoe many had their checks bounced and hoe many lost their assets is simply a unknown factor as of now. Borrowing more money above that is just madness.

Govt has already done a lot by spending generously during the first wave and is now trying to create "bad bank" of sorts to mitigate the damage done. These are steps in the right direction to bring the deficit under control.

spending more will simply increase the damage.

Fiscal deficit is not that big of an issue if growth is robust. Since govt revenue too grow with gdp. Which adjust fiscal deficit to lower percentage of GDP.

FRBM act is already in place to rain it in if it gets out of hand.

Growth won't just come from govt spending but mostly from resumption of stopped projects and pent up demand.

For example my new house got delayed in lockdown . No work for last two months. Now I am going to spend all that money just in few weeks .

So things are going to work much much faster.

 

[Leonardo Alves]

This Chawla sure has lots of dirt on her hand.
Please see this too.

Foolery is on full display, madam thinks if she is BIKAU then every one too is.

 

[Sehwag213]

How true argument is this ? Should income tax have been lowered instead of Corporate tax ?

 

[Chandragupt Maurya]

20% ethanol blending by 2023

 

[IndianHawk]

How true argument is this ? Should income tax have been lowered instead of Corporate tax ?

View attachment 93143

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When you lockdown entire industry while industry keeps paying salaries . This is what happens. It's temporary.

 

[Knowitall]

Fiscal deficit is not that big of an issue if growth is robust. Since govt revenue too grow with gdp. Which adjust fiscal deficit to lower percentage of GDP.

FRBM act is already in place to rain it in if it gets out of hand.

Growth won't just come from govt spending but mostly from resumption of stopped projects and pent up demand.

For example my new house got delayed in lockdown . No work for last two months. Now I am going to spend all that money just in few weeks .

So things are going to work much much faster.

Fiscal deficit is not that big of an issue if growth is robust.

And that is why it has become a issue in the first place.

This has been India's past growth rate over the past few years.

Before it finally went bust during the pandemic.

And this was India's fiscal deficit over the past few years.

Now to curtail this and bring it back to 7-6.8 percent the financing of fiscal deficit will be done mainly through higher market borrowings, disinvestment and receipts from the indirect taxes including import duties and cess which leads to a chain reach of govts selling of PSU's, increasing tariffs ultimately contributing to inflation too.

Govt to go ahead with divestment of 23 PSUs cleared by Cabinet: Nirmala Sitharaman

Nirmala Sitharaman, in a conversation with Hero Enterprise Chairman Sunil Kant Munjal, said the government as part of the Aatmanirbhar Bharat package had announced opening up of all sectors for private participation.

www.financialexpress.com

From what we can see that govt is trying to curtail their spending here and bring fiscal deficit under control because it directly leads to inflation.

So yes fiscal deficit is indeed a very big issue especially since growth has been unstable over the past few years.

Now to your next point.

FRBM act is already in place to rain it in if it gets out of hand.

FRBM act is not a magic wand that can be used to clear everything it has it's limits.

Hard-pressed for funds to combat the crisis, the government had in May increased its market borrowing programme for the current financial year by more than 50 per cent to Rs 13.1 lakh crore from Rs 7.8 lakh crore budgeted earlier.

Finance Commission recommends FRBM Act revamp

The FRBM Act needs to be revamped because of prevailing uncertainty and contemporary realities and challenges, the commission said. The Union and state governments will have to amend their FRBM Acts to ensure their legislations are consistent with the fiscal sustainability framework, it added.

economictimes.indiatimes.com

The act is being amended itself to meet with the growing strain and be more flexible to give the govt more space to act.

For example my new house got delayed in lockdown . No work for last two months. Now I am going to spend all that money just in few weeks .

Your case unfortunately does not apply to the nation as a whole.

India's middle class has shrunk overall due to back to back waves of covid which have eaten through the finances of the public.

And contrary to the popular belief the people who do have the money to spend are already spending it in the form of mutual funds etc. I had already talked about this a few days back.

Stock market as a matter of fact should never be used an indicator to gauge the economy.

Liquidity in the markets is very high right now. FII's are selling and DII's are buying up everything and since interest rates are on the ground and lockdowns in place money is flowing into the market in form of mutual funds and direct investment.

Plus nobody pulled out their money this time looking at the recovery situation last year.

It is better to look at other indicators rather than the stock market to check economic growth.

So money is already flowing into the system even during the pandemic.

 

[doreamon]

How true argument is this ? Should income tax have been lowered instead of Corporate tax ?

View attachment 93143

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This was done to attract FDI .. We were at disadvantage with respect to SE asian countries . It ll be beneficial in medium term once we get over the pandemic ..

 

[Knowitall]

How true argument is this ? Should income tax have been lowered instead of Corporate tax ?

View attachment 93143

View attachment 93144

View attachment 93145

This is not something new corporate tax collections have been falling over the last two years.

There are a multitude of reasons for this

The govt had slashed corporate tax rates in September 2019 by around 10 percentage points. The effective tax rates were brought down to around 25 per cent for existing companies and to around 17 per cent for new companies in the manufacturing space.

This was done by the govt to help the economy and industries recover faster.

A reduction in tax rates and contraction in GDP due to the pandemic.

The pandemic has affected businesses a lot we can expect this to stabalize and grow back over the next few years albeit a bit slowly.

 

[IndianHawk]

And that is why it has become a issue in the first place.

This has been India's past growth rate over the past few years.

View attachment 93152

Before it finally went bust during the pandemic.

View attachment 93159

And this was India's fiscal deficit over the past few years.

View attachment 93161

Now to curtail this and bring it back to 7-6.8 percent the financing of fiscal deficit will be done mainly through higher market borrowings, disinvestment and receipts from the indirect taxes including import duties and cess which leads to a chain reach of govts selling of PSU's, increasing tariffs ultimately contributing to inflation too.

Govt to go ahead with divestment of 23 PSUs cleared by Cabinet: Nirmala Sitharaman

Nirmala Sitharaman, in a conversation with Hero Enterprise Chairman Sunil Kant Munjal, said the government as part of the Aatmanirbhar Bharat package had announced opening up of all sectors for private participation.

www.financialexpress.com

From what we can see that govt is trying to curtail their spending here and bring fiscal deficit under control because it directly leads to inflation.

So yes fiscal deficit is indeed a very big issue especially since growth has been unstable over the past few years.

Now to your next point.



FRBM act is not a magic wand that can be used to clear everything it has it's limits.

Hard-pressed for funds to combat the crisis, the government had in May increased its market borrowing programme for the current financial year by more than 50 per cent to Rs 13.1 lakh crore from Rs 7.8 lakh crore budgeted earlier.

Finance Commission recommends FRBM Act revamp

The FRBM Act needs to be revamped because of prevailing uncertainty and contemporary realities and challenges, the commission said. The Union and state governments will have to amend their FRBM Acts to ensure their legislations are consistent with the fiscal sustainability framework, it added.

economictimes.indiatimes.com

The act is being amended itself to meet with the growing strain and be more flexible to give the govt more space to act.



Your case unfortunately does not apply to the nation as a whole.

View attachment 93166

India's middle class has shrunk overall due to back to back waves of covid which have eaten through the finances of the public.

And contrary to the popular belief the people who do have the money to spend are already spending it in the form of mutual funds etc. I had already talked about this a few days back.



So money is already flowing into the system even during the pandemic.

Yes the government will spend as much as possible to bring back growth. It will even print more money if necessary.

The only downside to that is rising inflation. But inflation only rises fast when economy is growing fast. So that worry is not here and hence govt can open its hand . Growth once back on track will revive inflation and inflation will eat into debt. That is they way most countries deal with high fiscal deficit in times of crisis.

FRBM act forces govt to plan for bringing deficit down in phased manner which the govt will over next 6-7 years.

No nation holds back growth to reduce fiscal deficit almost all nations right now are at record levels of deficit .

Secondly about inequality. Growing inequality is precisely sign of faster growth. We are too poor to worry about equality anyway ( in global comparison) Our goal is to increase the size of pie first .

USA was extremely corrupt , polluted and extremely unequal in its gilded age. China is it's heady years of growth was also extremely corrupt , polluted and unequal only now they are trying to address those issue as they have grown much larger and growth is slowing down.

India is doing much better in comparison on almost all fronts despite growing faster.

Anyway most indians have retained both their jobs and there income levels . Many faced temporary unemployment due to lockdown are already being hired back. IT companies are showering bonuses due to lack of talent. Their is dearth of workers in MP because labourers haven't came back form bihar and locals won't do those works.

Overall there is no dearth of work it's just an artificial crisis imposed by lockdown . Things are reverting back to normal at lighting speed.

 

[Knowitall]

Yes the government will spend as much as possible to bring back growth. It will even print more money if necessary.

The only downside to that is rising inflation. But inflation only rises fast when economy is growing fast. So that worry is not here and hence govt can open its hand . Growth once back on track will revive inflation and inflation will eat into debt. That is they way most countries deal with high fiscal deficit in times of crisis.

FRBM act forces govt to plan for bringing deficit down in phased manner which the govt will over next 6-7 years.

No nation holds back growth to reduce fiscal deficit almost all nations right now are at record levels of deficit .

Secondly about inequality. Growing inequality is precisely sign of faster growth. We are too poor to worry about equality anyway ( in global comparison) Our goal is to increase the size of pie first .

USA was extremely corrupt , polluted and extremely unequal in its gilded age. China is it's heady years of growth was also extremely corrupt , polluted and unequal only now they are trying to address those issue as they have grown much larger and growth is slowing down.

India is doing much better in comparison on almost all fronts despite growing faster.

Anyway most indians have retained both their jobs and there income levels . Many faced temporary unemployment due to lockdown are already being hired back. IT companies are showering bonuses due to lack of talent. Their is dearth of workers in MP because labourers haven't came back form bihar and locals won't do those works.

Overall there is no dearth of work it's just an artificial crisis imposed by lockdown . Things are reverting back to normal at lighting speed.

Covid-19 crisis: Spending curbs on ministries

In new directions issued to all central government departments on April 8, the finance ministry has drawn up three categories of ministries/departments and restricted expenditure of several of these to within 15-20% of that budgeted for FY21 in the April-June quarter. The finance ministry has...

m.economictimes.com

The govt is doing exactly the opposite of what you are saying.

Covid-19 crisis: Spending curbs on ministries

In new directions issued to all central government departments on April 8, the finance ministry has drawn up three categories of ministries/departments and restricted expenditure of several of these to within 15-20% of that budgeted for FY21 in the April-June quarter. The finance ministry has...

m.economictimes.com

They are already curbing spending through various methods.

Now for your next point while the govt has already opened it's hand rbi has already asked them to cut back prices because many industries are still functioning and affecting the common man.

RBI monetary policy: Govt told to cut fuel taxes to ease inflation concerns

GDP projection revised upwards, but lower than Eco Survey's

wap.business-standard.com

And who is talking about equality here? We were talking about the middle class here which forms the bulk of indian consumption market. Loss in their directly affects the consumption which jn turns affects the GDP.

Anyway most indians have retained both their jobs and there income levels . Many faced temporary unemployment due to lockdown are already being hired back. IT companies are showering bonuses due to lack of talent. Their is dearth of workers in MP because labourers haven't came back form bihar and locals won't do those works.

Please provide me the source for this claim of yours.

 

[Chandragupt Maurya]

Naya Raipur Smart city

 

[FalconSlayers]

 

[FalconSlayers]

I don’t think our economy can survive this much, lockdown for 10 more days.

 

[FalconSlayers]

 

[FalconSlayers]

 

[FalconSlayers]

Watch this whole podcast, it is really scary .

 

[shade]

Reliance Jio About to Make India Very Happy

Reliance Jio might launch the new affordable smartphone in partnership with Google before Diwali this year.

telecomtalk.info

Jio making $50 smartphone in collaboration with Google
Ching chong firm called Wingtech( has a factory in India ) is doing the design, possibly also assembly.
UTL Neolyncs( Lava/Karbonn wala ) and Dixon are the Indian companies doing the assembly

 

[FalconSlayers]

Reliance Jio About to Make India Very Happy

Reliance Jio might launch the new affordable smartphone in partnership with Google before Diwali this year.

telecomtalk.info

Jio making $50 smartphone in collaboration with Google
Ching chong firm called Wingtech( has a factory in India ) is doing the design, possibly also assembly.
UTL Neolyncs( Lava/Karbonn wala ) and Dixon are the Indian companies doing the assembly

China doing design? Lol. I won’t give a f to this phone tHen.

 

[shade]

China doing design? Lol. I won’t give a f to this phone tHen.

$50 is like 3.5k
It's not intended for people like me and you, it's for the type of person who buys the "JioPhone" and gets some 2 years worth of Jio with the phone.

JioPhone Digital life ab sabhi ke liye - Buy 4G VoLTE Phone at ₹749

Digital Life with JioPhone - Now available for just ₹749! Immerse yourself in HD Voice quality like never before. Get complimentary subscription to Jio Apps. Shop now!

www.jio.com

idk how this scheme works and will benefit Mukes.

In any case 60% of the smartphone market share here is controlled by chink brands, so most people have no problem with chink shit.

 

[FalconSlayers]

So if the major parts are still being manafactured in India how exactly does it beneift the common man all the profits will go ambani and others will go to chinese factories

Dude please no sarcasm here