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CSO pegged erroneous 7.1% GDP estimates, experts

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GDP Data

New Delhi, January 7: The advance estimate of 7.1 per cent GDP released by Central Statistical Organisation (CSO) could be erroneous as it fails to cater to data for the months after demonetisation.  

Domestic rating agency ICRA on Friday pegged the expected growth for 2016-17 lower at 6.8 per cent. “Given the impact of demonetisation on actual activity from mid-November 2016 onward, projecting GDP growth for the full year by extrapolating the trends up to October 2016 for several sectors, may introduce more errors than in earlier years. This would be particularly apt for cash intensive sectors such as construction,” said ICRA in a statement.

ICRA anticipates GDP (gross domestic product) and GVA (gross value added, which excludes taxes and subsidies) growth for FY2017 at 6.8 per cent and 6.6 per cent respectively, which is lower than the advance estimates of CSO. CSO pegged growth of real GVA in 2016-17 at 7 per cent against 7.2 per cent in 2015-16.

ICRA further pointed out that unfolding trend in sub-sectors such as manufacturing, agriculture, electricity and construction could result in lower growth.

ICRA said unavailability of corporate filings for third quarter of FY2017 and second advance estimates of Rabi output (as opposed to the available data on sowing), are likely to constrain the accuracy of the advance estimates.

While Rabi sowing has grown by a healthy 7 per cent on a subdued base, activity and incomes related to non-crop agricultural sectors including horticulture and livestock may have been adversely impacted by the liquidity crunch, it added.

Yesterday, Former Deputy Chairman of erstwhile Planning Commission Montek Singh Ahluwalia also forecasted at least 1 -2 % fall in the GDP growth. Ahluwalia had said government should immediately take steps to put the economy back over the 7 percent growth.

“Instead of 7 per cent, the economic growth will be 5 plus or 6 plus this year,” said Ahluwalia.

Citing the underlying strength in Indian economy, Ahluwalia said, once the shock due to demonetisation is behind us, economic growth should be above 7 per cent.

An editorial “India’s Slowing GDP Growth Forecast to 7.1% Does Not Include Effects Of Demonetisation” published in Forbes says, “demonetisation has caused a reasonably serious hit to GDP this quarter past. It would not surprise me if growth was negative in fact–although that most certainly not my central guess. Others have suggested 1, 2, 4% hits to growth as a result of the demonetisation. I find all of them believable and wouldn’t want to have to choose between them.

The effects of demonetisation on Indian industry, manufacturing, and supply chain are far reaching and the forecast on GDP growth can not be accurately accounted until it caters perils left out by note ban on all the sectors.

Wefornews Bureau

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Key Indian equity indices open flat

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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.

IANS

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

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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.

IANS

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

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CBI

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.

IANS

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