by admin | May 25, 2021 | Business, Business Summit, Economy, Emerging Businesses, Events, Finance, Investing, Markets, News, Politics, SMEs
By Mohit Dubey,
Lucknow : The eleven-month-old Bharatiya Janata Party (BJP) government in Uttar Pradesh is pulling out all stops to make the UP Investors Meet on February 21-22 a grand success and a spectacle to remember — with promises to bring in investments of Rs 1 lakh crore (about $15 billion).
The government machinery in the state capital is on overdrive — over 1,000 rooms have been booked in plush five- and four-star properties, four different menus of seven-course meals have been finalised, over 2,500 policemen have been requisitioned for the VVIP gathering and a fleet of dozens of cars has been booked.
That’s not all. Gallons of paint have been sanctioned to spruce up the road sides, roads are being relaid, the entire route to be taken by the guests has been lit up with LED lights. Murals of prominent city monuments are being painted on the walls of flyovers, new greenery is being planted and more than a dozen bureaucrats are burning the midnight oil to make the event a mega success.
With President Ram Nath Kovind, Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley flying into the city for the two-day jamboree, the bureaucracy and the state government are trying to finalise the minutest of details and to ensure that the state is showcased in the best of ways to attract maximum investment.
A Who’s Who of the business world, including Mukesh Ambani and Gautam Adani, and top executives from majors like Cadila, Mahindra and Mahindra, Torrent and Essel, have confirmed their attendance at the event, which is aimed at hard-selling the state which for years has had promises made but negligible investments.
A war room has been created at the Lal Bahadur Shastri Bhavan where dozens of bureaucrats, assisted by top company executives, are working “almost 24×7” to ensure that the loose ends are tied before the mega event. Alok Pandey, a Gujarat cadre IAS officer on deputation to Uttar Pradesh, who is also the nodal officer for the investors meet, informed IANS that “almost every day, all officials involved leave the war room only around midnight”. Other top bureaucrats involved are being led by Industrial and Infrastructure Development Commissioner (IIDC) Anoop Chandra Pandey and Principal Secretary Navneet Sehgal and many more.
Sources told IANS that MoUs for more than Rs 1 lakh crore investment have been signed and would be exchanged on the inaugural day in the presence of the Prime Minister.
The Adani group has shown its willingness to set up a Mega Logistics Hub in the NCR (National Capital Region). It has also offered to set up a private university in the NCR and the mandarins in the state government are scurrying for land for these projects. Some 1,000 acres have been offered in Bulandshahr, neighboring the NCR, and to show its seriousness to investors, the state government has also sent a proposal to the Union government to expand the NCR up to Bulandshahr, an official said.
The IIDC Pandey told IANS that the “state government is determined like never before to get investments and to ensure that the investors get the best possible facilities in return”. It is for the first time in the state that sector-wise policies are being made under the Investment and Employment Promotion Policy, officials said. With the state and the Centre ruled by the BJP, the “seriousness and convertibility of promises looks tempting”, averred a senior bureaucrat.
“There have been similar events by predecessor governments on a smaller scale, but with very little returns. This is possibly the last chance for the state to salvage its image as a promising destination for investment and to sell all that it has,” Kiron Chopra, a prominent city industrialist, pointed out, adding it should not be just to invite people with no deliverables.
A private PR company has been hired to handle the promotions and social media, and its staff is stationed at the war room to ensure that every event — like the five road shows in various cities of the country — are telecast live on social media and all pictures and news related to the event are posted on Instagram, Twitter, Facebook and Youtube.
The opposition is, however, unimpressed. Chief spokesman of the main opposition Samajwadi Party Rajendra Chowdhary said “public money is being wasted” by the BJP government to “hide its failures in the 11 months of its rule in the state and four years at the Centre”.
He further accused the Yogi Adityanath government of trying to hoodwink the people with such grand events even as the state suffers from poor law and order, soaring crime and distress among the farmers.
Stuti Kaul, an old Lucknowite, however, is less cynical and more optimistic. She is happy that the city is being spruced up like never in the past and pats the BJP government for “at least trying”.
Whether the results of the mega event will show up or not is up to the future. It’s wait and watch till then as the state, for now, soaks itself in the spirit of the investors meet.
(Mohit Dubey can be contacted at mohit.d@ians.in)
—IANS
by admin | May 25, 2021 | Opinions
By Amit Kapoor,
The usual brouhaha around the Budget strips the Economic Survey of the attention it deserves. The Survey document, especially since Arvind Subramanian has taken over as the Chief Economic Advisor, has consistently pushed the envelope on economic thinking, providing exciting new insights for the Indian economy. The latest one, released three days before the Budget, introduced a new phrase into economic jargon: The “late convergence stall”. It is a phenomenon that the Survey fears might affect the growth process of the developing world.
The basic argument is this. Economic convergence, which is the process of low-income countries catching up with richer ones in standards of living, has been taking place over the last few decades at an accelerated pace; something which economists like to call “convergence with a vengeance”. To be precise, countries were on a divergence path before 1997, a period of convergence from 1998 till the financial crisis in 2008 and an era of accelerated convergence post-crisis.
However, with changing global economic scenarios, it might be more and more difficult for developing countries to narrow the gap. In other words, the economies that have been rapidly climbing up the economic ladder might face a “late convergence stall”.
The threat of a convergence stall might result from the development of four challenges that were non-existent during the formative stages of the developed world. The first and the most crucial one is the end of rapid globalisation that benefitted the East Asian economies and even China. High levels of export growth rates of these countries have been drivers of their economic growth stories.
Developing nations that are late to the global scene cannot expect to achieve such export levels in the current inward-looking shifts in trade policy, especially across the developed world.
Subramanian always remains careful in stating that it is the era of “hyper-globalisation” (or rapid globalisation) which has come to an end, and not globalisation per se. However, globalisation, if defined as a period when trade among nations is growing faster than the global GDP growth, can be seen to be growing rapidly from 1950 till a few years after the economic crisis of 2008. During this period, growth in trade was close to five per cent while growth in world GDP was close to four per cent.
After 2010, growth in world trade levels has fallen below GDP growth, marking an era of de-globalisation (3.5 per cent economic growth against global trade growth of 2 per cent). Therefore, even though the Survey takes a conservative approach in claiming that globalisation has come to an end, the data shows that the world is, in fact, de-globalising.
It can be the case such low levels of trade might not hold once the world economic growth is running in full throttle, but the fact of the matter remains that the developing world cannot reap the same gains that were received in the later part of the 20th century. This could bring about the historical divergence that world economies had experienced throughout much of modern economic history. This trend was famously evidenced by Harvard’s Lant Pritchett in his paper “Divergence, Big Time” in which he showed that between 1870 and 1990, the richest and poorest countries have shown considerable divergence between their per capita incomes. Therefore, the convergence has only been a recent phenomenon. It would not be a surprise if it returned.
To make matters worse, other avenues of economic development that had been open earlier are also closing down. While industrial expansion was the most effective means of achieving economic successes for poor economies in the past, high productivity has implied that economies in current times reach the pinnacle of industrial employment much earlier on their growth path.
Turkish economist Dani Rodrik, also from Harvard, calls this “premature deindustrialisation” and shows how most of the developing world is affected by it. Therefore, resources which earlier used to shift from the low-productivity informal sector to high-productivity jobs, now usually shift to sectors that are only marginally more productive. The economic gains from a shift of labour across sectors are thus not derived to an extent that was true for the countries that are now high up on the income spectrum.
The case for a slowing down of convergence or divergence is, therefore, quite strong. The developing world needs to be prepared for any such restoration of the past economic trend. The advent of automation and similar technological innovations will further accentuate the problem because the richer countries will be more capable of deploying them for production on a mass scale. It is comforting to realise that the Indian government is well aware of the threat in advance, but it remains to be seen if this awareness is followed up with appropriate policy action.
The Economic Survey gets it right in recommending rapid improvements in human capital to sustain growth at current levels, but takes a defeatist approach in suggesting that India can do very little about diminishing globalisation. On the contrary, there remains immense scope for the country to play an enabling role in further integration of the global economic order. If the US is currently a lost cause, there remain other large markets like the EU and East Asia where India can further the cause of higher trade openness.
(Amit Kapoor is chair, Institute for Competitiveness, India. The views expressed are personal. He can be contacted at amit.kapoor@competitiveness.in and tweets @kautiliya. Chirag Yadav, researcher at Institute for Competitiveness has contributed to the article)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
Mumbai : Positive global indices, coupled with healthy buying in capital goods, auto, banking, healthcare and metal stocks, lifted the key Indian equity indices on Monday.
Market observers said investors awaited the retail and industrial inflation data due to be announced in the evening which is expected to give direction to the central bank’s next course of action on raising interest rates.
The wider Nifty50 of the National Stock Exchange held the 10,500-mark and closed higher by 84.80 points or 0.81 per cent at 10,539.75 points.
On the BSE, the barometer 30-scrip Sensitive Index (Sensex) closed at 34,300.47 points — up 294.71 points or 0.87 per cent from its previous close.
The Sensex touched a high of 34,351.34 points and a low of 34,115.12 points during the intra-day trade.
The BSE market breadth was bullish as 2,050 stocks advanced as against 764 declines.
In terms of the broader markets, the S&P BSE mid-cap index edged higher by 1.31 per cent and the small-cap index by 1.60 per cent.
“Markets bounced back on Monday after the correction seen on last Friday. The gains came on the back of strong global cues,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
“Major Asian markets closed on a positive note, barring the Hang Seng index. European indices like FTSE 100, DAX and CAC 40 traded in the green,” he added.
Last week on Friday, the key equities had plunged into the negative territory amid a global sell-off, with the Sensex shedding 407.40 points or 1.18 per cent and the Nifty50 was down 121.90 points.
Vinod Nair, Head of Research, Geojit Financial Services, said: “On Monday, market reversed from previous day’s losses owing to positive global cues and expectation of marginal decline in January CPI (Consumer Price inflation) inflation today.”
“Mid and small-caps outperformed the benchmark indices as investors start accumulating the over sold stocks. The economy is forecast to improve in the long-term with strong earnings growth which is likely to provide a safety to the ongoing consolidation,” he added.
The Central Statistics Office (CSO) is slated to release the macro-economic data points of the CPI and IIP (Index of Industrial Production) on Monday evening.
On the currency front, the Indian rupee strengthened by nine paise to close at 64.31 against the US dollar from its previous close at 64.40.
In terms of investments, provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 814.11 crore while domestic institutional investors bought stocks worth Rs 1,342.70 crore.
Sectorwise, the S&P BSE capital goods index surged by 317.88 points, followed by auto index by 266.55 points and banking index by 197.62 points.
On the other hand, the S&P BSE IT index edged lower by 52.47 points and the Teck (technology, media and entertainment) index by 22.59 points.
Major Sensex gainers on Monday were: Tata Steel, up 4.22 per cent at Rs 712.50; Yes Bank, up 2.89 per cent at Rs 334.95; Power Grid, up 2.51 per cent at Rs 198.05; IndusInd Bank, up 2.12 per cent at Rs 1,686.45; and Hero MotoCorp, up 1.94 per cent at Rs 3,615.
Major Sensex losers were: State Bank of India, down 2.67 per cent at Rs 288.50; Infosys, down 0.72 per cent at Rs 1,103.80; ITC, down 0.53 per cent at Rs 269.85; Mahindra and Mahindra, down 0.43 per cent at Rs 746.70; and ICICI Bank, down 0.23 per cent at Rs 326.
The Indian equity markets will remain closed on Tuesday (February 13) for Mahashivratri.
—IANS
by admin | May 25, 2021 | Business, Commodities, Commodities News, Economy, Markets, News, SMEs
Assocham President Sandeep Jajodia (Left)
New Delhi : A slight easing of food prices helped lower India’s retail inflation in January to 5.07 per cent even as factory production growth slowed somewhat in December to 7.1 per cent, according to official data on Monday.
India Inc lauded the continuing high single-digit recovery in industry as well as the slight fall in inflation.
While retail inflation was 5.21 per cent in December 2017, the Index of Industrial Production (IIP) had grown at an impressive 8.8 per cent in November.
On a year-on-year basis, the consumer price index (CPI) last month was at a much higher level than the 3.17 per cent in January 2017.
The consumer food price index (CFPI) in January stood at 4.58 per cent compared with the 4.85 per cent of December 2017.
As per the data released by the Central Statistics Office (CSO), the sequential slowdown in factory output was mainly on account of lower production in the manufacturing sector.
However, on a year-on-year basis, the manufacturing sector expanded by a healthy 8.4 per cent, while the mining sector’s output inched up by 1.2 per cent and the sub-index of electricity generation increased by 4.4 per cent.
“In terms of industries, 16 out of the 23 industry groups in manufacturing sector have shown positive growth during December 2017 compared with corresponding month of the previous year,” the CSO said.
According to the data, the industry group ‘manufacture of other transport equipment’ has shown the highest growth of 38.3 per cent followed by 33.6 per cent in ‘manufacture of pharmaceuticals, medicinal chemicals and botanical products’ and 29.8 per cent in ‘manufacture of computers, elecronic and optical products’.
Last week, The Reserve Bank of India (RBI) kept its key interest rate unchanged at 6 per cent for the third time in succession at its final bi-monthly monetary policy review of the fiscal, citing upside risks for inflation from rising global crude oil prices and other domestic factors.
The RBI said its decision to keep its repo rate, or short-term lending rate for commercial banks, unchanged is consistent with the neutral stance of the central bank aimed at achieving its median inflation target of 4 per cent.
“We expect headline inflation to be at 5.1 per cent in the fourth quarter (January-March), including the impact of HRA (house rent allowance) to central employees, up from the 4.6 per cent in Q3,” RBI Governor Urjit Patel told reporters in Mumbai after the release of the monetary policy review.
However, the fact that the central bank did not raise the repo rate in the face of hardening inflation as recommended by one of the six monetary policy committee (MPC) members is being considered as an attempt to aid in economic recovery.
Industry chamber Assocham termed the IIP data “a positive sign towards growth cycle of industrial activity in India”.
“However, risks to the Indian economy continues to prevail in the forms of continued uncertainties in the global environment due to geo-political situations, including rising global protectionism could further delay a meaningful recovery of external demand,” said Assocham President Sandeep Jajodia.
“Besides, private investment continues to face several impediments in the form of corporate debt overhang, stress in the financial sector, where (banks’) NPAs (non-performing assets) continue to increase, excess capacity and regulatory and policy challenges,” he added.
“This is the second consecutive month in which IIP has shown high single-digit growth, which is encouraging,” India Ratings and Research (Ind-Ra) Principal Economist Sunil Kumar Sinha said in a statement.
“However, Ind-Ra believes it still early to read much from these numbers as these have been calculated on a low base when industrial output had collapsed due to the impact of demonetisation,” he said.
“Retail inflation came down to 5.07 per cent in January 2018, lower than 5.21 per cent recorded last month, but remained higher than the RBI’s base target value of 4 per cent,” he added.
Rating agency Crisil said that inflation, however, continued to firm up in large parts of the services sectors such as housing, driven by the revision in house rent allowance payments, education and in recreation, amusement and personal care and effects.
“Yet, core inflation, stayed broadly unchanged from the previous month, at around 5.1 per cent in January,” a Crisil release said.
“The industry seems to be shedding away the weight of GST-related glitches behind and trying to get back lost momentum, as both domestic and global growth surge.”
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Rohit Vaid,
Mumbai : The volatility of global stock markets, along with macro-economic data points, are expected to influence the Indian equity market next week, opined analysts.
Market observers pointed out that the ongoing quarterly results season and crude oil price fluctuations, combined with the direction of foreign fund flows and the rupee’s movement against the US dollar, will also impact investors’ risk-taking appetite.
“The markets next week will focus on earnings, macro-data and, of course, global cues,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
“The global markets remain volatile, which might spill over to Indian markets. FPIs (Foreign Portfolio Investors) have been net sellers, hence support from DIIs (Domestic Institutional Investors) remains important in event of global volatility.”
In the past few weeks, a massive sell-off in the global markets has pulled the Indian equity indices deep into the red. Since February 1, 2018, the Bombay Stock Exchange (BSE) Sensex has shed around 1,900 points and the National Stock Exchange (NSE) Nifty50 over 500 points.
According to securities market regulator Sebi’s Chairman Ajay Tyagi, Indian stock market volatility “may continue” for some more time due to global factors.
However, he assured that “there is no cause of worry” in terms of volatility, as the country has a robust risk-management system and that “there is no issue in terms safety of contracts or enforcement of contracts”.
Answering a query on Economic Survey’s recommendation for the need to be vigilant of stock market movements, Tyagi said: “There is no cause of worry in terms of volatility.”
“Volatility, perhaps, may continue for some time, because, as you see in the US, the unemployment rates have really come down, wage rates have really gone up, so, maybe it is more than what was expected,” he said at a press briefing in New Delhi on Saturday.
The Economic Survey 2017-18, tabled in Parliament on January 29, had called for a vigil against a likely stock market bubble and that “sustaining” the current high valuations require “future earnings” to meet high expectations.
Apart from global cues, the ongoing quarterly results season assumes significance as major firms like GAIL, Indian Hotels, DLF, Fortis Healthcare, GMR Infra, Welspun India, Idea Cellular, Jet Airways, Nestle India and Sun Pharma are expected to announce their quarterly results in the coming week.
“The current earnings season is providing strong signs of revival in corporate earnings, underlining the long-term growth prospects,” said Vinod Nair, Head of Research, Geojit Financial Services.
“However, the prevailing inflationary pressure and fiscal slippage may turn RBI to take a more hawkish stance in the near future. Considering this, the near-term profitability of domestic corporate might get impacted by higher inflation and interest cost.”
Besides the Q3 results, investors will keep a close watch on the upcoming macro-economic data points such as the Index of Industrial Production (IIP), Consumer Price Index (CPI), Wholesale Price Index (WPI) and Balance of Trade figures.
The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI on February 12.
“In the week ahead, December IIP, January CPI and WPI inflation data are key triggers for the market,” Nair said.
“The CPI inflation is expected to reduce marginally to 5.1 per cent from 5.2 per cent, while IIP to decelerate to 6.1 per cent versus 8.4 per cent.”
On technical levels, the underlying short-term trend of the NSE’s Nifty50 remains bearish.
“Technically, with the Nifty continuing to correct this week after breaking a trend line support in the previous week, the underlying short-term trend remains down,” said Deepak Jasani, Head of Retail Research for HDFC Securities.
“Further downsides are likely once the immediate supports of 10,276 points are broken. Any pull-back rallies could find resistance at 10,703 points.”
Last week, the key Indian equity indices — the BSE Sensex and the NSE Nifty50 — receded for the second consecutive week on the back of a massive global stock markets’ sell-off.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) tanked by 1,060.99 points or 3.02 per cent to close at 34,005.76 points.
Similarly, the wider Nifty50 of the National Stock Exchange (NSE) closed the week’s trade at 10,454.95 points — shedding 305.65 points or 2.84 per cent from its previous week’s close.
(Rohit Vaid can be contacted at rohit.v@ians.in)
—IANS
