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Chidambaram lists out 5 point economy health warps for 2017




New Delhi, January 2: Senior congress leader and former finance Minister P Chidambaram on Sunday highlighted 5 point economy health warps for 2017 and turned upside down Modi government’s claim of India being one of the fastest growing large economies of the world.

Rather being complacent with government’s claims that Indian economy is poised to grow at decent GDP growth rate, moderate inflation, contained fiscal deficit and swollen foreign exchange reserves Chidambaram uncovers an apparently depressing state of Indian economy.

1. Lost confidence of Foreign investors: Foreign Portfolio Investment or FPI is a standard metric of gauging confidence in the economy and since 2008 it is the first time that FPI is negative in the country.

Chidambaram highlighted until October 2016, net FPI was positive at Rs 43,428 crore but after note-ban in November and December, the flow reversed and FPI outflow was Rs 66,137 crore, resulting in negative net FPI at Rs 22,709 crore.

Now the prerogative is on Modi government to rebuild the confidence of FPI and end the FPI’s flight for uncertainty in India in 2016.

2. Whither Make in India…Index of Industrial Production (IIP) is an indicator of the health of the manufacturing sector. And post currency note ban IIP has declined rigorously. Amid declining manufacturing in consumer non-durables segment (down 25%), capital goods segment (down 6 %) IIP for March 2017 may turn out lower than the IIP for April 2016.

3. Dying credit growth. Next point of worry is purging credit growth in the country. Credit growth is recorded at historic low of 6.63 % at the end of November 2016 pointing towards parched economic activity in the country.

4.  Uncovering double whammy for the banking sector, Chidambaram wrote: While credit growth remains sluggish — indicating that there is little demand for investment credit — the gross NPA situation has worsened between September 2015 and September 2016 from 5.1 per cent to 9.1 per cent.

While PM Modi announced a series of benefits for drawing credit for small income groups, probably to increase the credit demand, P Chidambaram in his article blatantly wrote, “Banks have few takers for credit and, at the same time, banks are unable to recover loans.”

The inescapable conclusion is that the promised revival of the industrial sector remains a promise and there are no signs of revival.

A closer look at industry growth
Currently, non-food credit has grown by 6.99 per cent. Medium-scale industries including textiles, sugar, cement, jute where regular, non-casual employment is dominant, has registered negative growth every month since June 2015. While small and micro industries are crippling even worse at (-)4.29 per cent.

“Demonetisation was the last straw and many of them have shut down and thrown out of employment millions of workers,” Said Chidambaram. This cites how crippling industries can boost banking activity and draw credit when consumption and demand are already hurt (amid cash crunch arising from demonetisation) in the economy?

The analysis cites how crippling industries can boost banking activity and draw credit when consumption and demand is already hurt (by cash crunch/demonetisation) in the economy.

5. Last but not the least, Exports are a reliable measure of the manufacturing capabilities as well as the competitiveness of an economy. Former finance minister cracks out the real picture of Indian economy where manufacturing is dithered, merchandise exports are declined, markets are lost and jobs are axed. He asks how Indian economy can regain lost markets when “Neither Prime Minister nor Finance Minister has rung the alarm bells about declining merchandise exports. We have not heard a serious conversation about ways and means to reverse the situation.”

All five issues — FPI, IIP, credit growth, NPA and exports — have been adversely affected by demonetisation. So, the state of the Indian economy has become worse since the massive disruption caused by demonetisation on November 8, 2016.

While wishing Happy New Year, the economist and politician P Chidambaram’s highlighted in his Sunday article published in Indian Express why Indians with sullen and dejected faced are apprehensive about the immediate future post demonetisation.

Wefornews Bureau


Key Indian equity indices open flat



Mumbai, April 20: The key Indian equity indices opened on a flat note on Friday.

At 9.17 a.m., the wider Nifty50 of the National Stock Exchange (NSE) traded at 10,558.15 points, down 7.15 points or 0.07 per cent from the previous close at 10,565.30 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 34,434.14 points, traded at 34,414.73 points (9.17 a.m.) — down 12.56 points or 0.04 per cent — from its previous close at 34,427.29 points on Thursday.

The BSE market breadth so far was bearish with 710 declines and 507 advances.


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Key equity markets rise on Asian cues, supportive metal, IT stocks



Mumbai, April 19:  The key Indian equity markets traded in the positive territory on Thursday afternoon tracking strong cues from the Asian markets.

Heavy buying in the metal, IT and capital goods stocks also helped the market sentiment to remain positive.

So far, the S&P BSE metal index surged around 558.59 points, followed by the IT stocks which edged up by 125.58 points and capital goods stocks, by 120.60 points.

At 1.20 p.m., the wider Nifty50 on the National Stock Exchange (NSE) traded higher by 33.40 points or 0.32 per cent at 10,559.60 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 34,403.67 points, traded at 34,412.41 points (1.20 p.m.) — up 80.73 points or 0.24 per cent from its previous session’s close.

The Sensex has so far touched a high of 34,478.82 points and a low of 34,358.91 during the intra-day trade.

The BSE market breadth was bullish with 1,265 advances and 1,082 declines.

“Markets gained in early morning trade as global Asian indices traded in green, following the US markets which closed with one per cent up-move,” said Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

On Wednesday, profit booking, along with heavy selling pressure in the banking sector stock, led the key Indian equity indices to break their nine-day gaining streak and end in red.

The Nifty50 fell by 22.50 points or 0.21 per cent to close at 10,526.20 points on Wednesday, and the Sensex closed at 34,331.68 points — down 63.38 points or 0.18 per cent.

On Thursday, the major gainers on the BSE were Tata Steel, Yes Bank, Bharti Airtel, Tata Consultancy Services and ONGC while Axis Bank, HDFC, Sun Pharma, Coal India and ICICI Bank were among the top losers.

On NSE, the top gainers were Hindalco, Vedanta and Tata Steel and major losers were BPCL, Hindustan Petroleum and Indian Oil Corp.


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CBI arrests 3 company directors in Rs 2,654 cr bank fraud case




New Delhi/Ahmedabad, April 18: The CBI has arrested three promoter-directors of a Vadodara-based company in connection with its ongoing investigation into a case of Rs 2,654.40 crore fraud committed on a consortium of banks, officials said on Wednesday.

A Central Bureau of Investigation (CBI) official told IANS: “The agency has arrested the promoter-directors of the Diamond Power Infrastructure Ltd (DIPL) Suresh Narain Bhatnagar, his two sons Amit Suresh Bhatnagar and Sumit Suresh Bhatnagar.”

The CBI located the accused in Udaipur in Rajasthan on Tuesday evening with the assistance of Gujarat Police and arrested them on Wednesday morning.

The official said they would be produced before the Special Judge of CBI Cases in Ahmedabad.

On March 26, the CBI filed a case against DPIL and its directors for defrauding the consortium of 11 banks of Rs 2,654.40 crore. The loan availed by them was declared a non-performing asset (NPA) in 2016-17.

Since the filing of case, the agency has carried out searches at the corporate office, two factory premises and the residences of the directors of the firm.

According to the CBI FIR, the DPIL, which is engaged in the production of cables and other electrical equipment, fraudulently availed credit facilities since 2008, leaving behind a total outstanding debit of Rs 2,654.40 crore as of June 29, 2016.

The agency said that the company managed to get term loans and credit facilities thought it figured in the Reserve Bank of India’s list of defaulters and the caution list of Export Credit Guarantee Corp of India (ECGCI) at the time of initial sanction of credit limits by the consortium.

At the time of consortium’s formation in 2008, Axis Bank was the lead bank for the term loan and the Bank of India was the lead bank for cash credit (CC) limits.

The Bank of India, which tops the list with Rs 670.51 crore of loans, is followed by Bank of Baroda (Rs 348.99 crore), ICICI Bank (Rs 279.46 crore), State Bank of India (Rs 266.37 crore), Axis Bank (Rs 255.32 crore), Allahabad Bank (Rs 227.96), Dena Bank (Rs 177.19 crore), Corporation Bank (109.12 crore), Exim Bank of India (Rs 81.92 crore), IOB (Rs 71.59) and the IFCI Bank (58.53 crore).

The company, allegedly with the support of officials from various banks, managed to obtain enhancement in credit facilities.

The FIR said the DPIL, through its founder and directors associated in the criminal conspiracy with the unidentified bank officials of various banks, cheated those banks by way of misappropriating public funds through falsification of accounts, creation of false documents, forgery of records and knowingly using such records as genuine.


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