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GDP data not gospel truth, need not be taken seriously: BJP MP

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Nishikant Dubey

New Delhi, Dec 2 : A day after Finance Minister Nirmala Sitharaman hit out at the government critique saying espousing of personal views might hurt national interest, another Bharatiya Janata Party (BJP) member of Parliament on Monday hit headlines by rejecting the gross domestic product (GDP) numbers.

Speaking in the Lok Sabha, Nishikant Dubey dismissed the economic indicator by saying GDP numbers need not be taken seriously as they were not words of a religious book.

Quoting Simon Kuznets, who developed the modern concept of GDP, Dubey said, the GDP might not be accurate and was not of much use. “When GDP came in 1934, Kuznets said, I quote ‘the valuable capacity of human mind to simplify a complex situation in a compact characterisation becomes dangerous when not controlled’,” he said.

“This was said by Kuznets that it’s not right to consider the GDP as gospel…the Bible, the Ramayana or the Mahabharata. The GDP would not be of much use in the future,” said the BJP member from Godda in Jharkhand.

The remark has come in the wake of criticism of the government’s economic policies from several quarters after the GDP growth rate for the July-September quarter declined to a 6-year low of 4.5 per cent.

The economy has been witnessing slowdown in the past few months, and fears of recession have cropped up. The government, however, is of the view that there is no recession at the moment and its recent measures would soon bear fruit.

In another statement that grabbed the limelight was Sitharaman’s tweet. Responding to the recent comment of industrialist Rahul Bajaj over fear among the people about criticising the government, Sitharaman said it was better to seek an answer than spreading one’s own impressions or opinion, as spreading of one’s personal views might hurt the national interest if it gained traction.

In a tweet on Sunday, she also said questions or criticisms were heard, answered and addressed to.

“Home Minister @AmitShah answers on how issues raised by Rahul Bajaj were addressed. Questions/criticisms are heard and answered/addressed. Always a better way to seek an answer than spreading one’s own impressions which, on gaining traction, can hurt national interest,” Sitharaman tweeted.

At an event here over the weekend with Home Minister Amit Shah in the audience, the Bajaj Group Chairman raised the concern that although the government was “doing good”, there was “no confidence” among the public and the industry whether the government would appreciate if it was criticised.

To this, Shah responded by saying there was no need to be afraid. “If someone has been written about the most, that’s us,” Shah said.

After Shah’s response, Biocon CMD Kiran Mazumder Shaw tweeted: “Will be happy to share my views with govt if asked.”

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Sensex up 129 pts, Yes Bank tanks 7%

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Sensex equity Nifty

Mumbai, Dec 11 Sensex advanced 129 points during the early trade on Wednesday while the Nifty traded slightly below the 11,900 mark.

Yes Bank fell over 7 per cent after it postponed the decision to approve or decline the binding offer of $1.2 Billion — 60 per cent of the total capital the bank aims to raise — submitted by mysterious investor Erwin Singh Braich on Tuesday.

Yes Bank, however, said it is willing to “favourably consider the offer of $500 Million of CitaxHoldings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting..”

At 9.59 a.m., the Sensex was up 129.98 points or +0.32 per cent at 40,369.86. The Nifty jumped 35.05 points at 11,891.85.

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DoT cracks whip, tells telcos to pay pending AGR dues fast

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Mobile tower

New Delhi, Dec 10 : The Department of Telecom (DoT) has asked telecom licencees to speed up the process of self-assessment of adjusted gross revenue (AGR) based dues and the payment of over Rs 1.47 lakh crore and submit comprehensive representation on previous issued demands latest by December 13, 2019.

The letter issued by the DoT has been viewed by IANS. The deadline for payment of AGR dues is January 23, 2020.

Three telcos — Airtel, Vodafone Idea and Tata Tele — have filed review petition of the Supreme Court order in October, which paved the way for the DoT to seek AGR dues, penalty and interest from the telcos.

“The comprehensive representation shall be submitted within a week latest by December 13, 2019,” DoT said in the letter to the telecom licensees, adding that majority of the licence fee assessments have been settled after the SC judgement and for any remaining issues, a comprehensive representation needs to be submitted to the department.

In light of the Supreme Court order on AGR computation, all the annual assessment for licence fees and spectrum usage charges for relevant years are being re-examined.

“And now since all the earlier demands are being re-examined with respect to the SC judgement, you are requested to kindly submit a comprehensive year-wise, circle-wise representation except for issues which have been decided by the SC,” the letter said.

“In this regard, it is pointed out that over a course of time, multiple representations related to LF (licence fee) assessments were received from various licencees for consideration by the department,” the DoT letter added.

Further, self-assessment of dues and payments along with the submission of relevant documents as per a licence finance wing letter of November 13 needs to be expedited, the letter said.

Any issues should be pointed out in the comprehensive representation to be submitted but in no case the self assessment of the dues and payments along with the submission of relevant documents are to be delayed, it pointed out.

The Supreme Court decided in favour of the government’s contention that all revenues, including that from non-core sources, would be counted in calculating AGR. Licence holders have to pay about 8 per cent of AGR to the DoT as fees. Telcos also pay about 3-4 per cent of AGR as spectrum usage charges.

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RBI seen holding rates in the remainder of FY20

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Reserve Bank of India RBI

New Delhi, Dec 10 : Notwithstanding growth pangs, the Reserve Bank is expected to maintain the accommodative monetary easing pause till the end of FY20 to contain retail inflation levels, say industry observers.

Economists and industry experts pointed out that an imminent rise in retail food inflation over the next two months will override growth concerns and deter RBI to go in for a rate cut during the final monetary policy review for FY20 in Februray.

“In our view, the CPI inflation will rise sharply in the next two prints. So, we expect a pause in the February 2020 policy review,” said ICRA Principal Economist Aditi Nayar.

“Further monetary easing may not be sufficient to trigger a rapid revival in economic growth in the current situation.”

Recently, RBI’s monetary policy committee in its fifth review of the current fiscal maintained the repo, or short-term lending rate for commercial banks at 5.15 per cent.

The apex bank had reduced key lending rates during the last five policy reviews to reverse the current consumption slowdown that has plagued the country’s economy.

RBI Governor Shaktikanta Das defended the decision by recalling the “primary objective” of the central bank was inflation targeting and price control.

He pointed out that headline inflation is currently high, largely due to rise in food inflation. Das added that food inflation will remain “very high” during January-March, which prompted the RBI to hit the pause button on rate cuts.

Last month, macro-economic data showed that a substantial rise in food prices had lifted India’s October retail inflation to 4.62 per cent from 3.99 per cent in September.

The National Statistics Office is slated to release the macro-economic data point of Consumer Price Index for November on December 12, followed a day later by Wholesale Price Index.

Besides, RBI reduced the country’s FY20 GDP growth forecast from 6.1 per cent in the October policy to 5 per cent.

“Interestingly, the RBI seemed content with the pace of transmission and no longer sees the transmission as staggered and incomplete,” Edelweiss Securities’ Economist Madhavi Arora.

“We think that this easing pause is temporary. Even so, our estimates suggest inflation will likely remain above 5 per cent in 4QFY20 and could constrain a rate cut in February.”

Furthermore, RBI may await the budgetary announcements and the fiscal measures thereof before any decision to revise the rates.

According to Acuite Ratings & Research Lead Economist Karan Mehrishi: “At this point, an accommodative policy in pause mode appears likely till Q1 FY21.

“While there may be a potential risk of a rate hike if the inflation print remains persistently elevated along with a comfortable liquidity scenario, it is likely that the MPC will abstain from such action unless there is a modest revival in growth rate.”

(Rohit Vaid can be contacted at [email protected])

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