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Post 5% GDP growth estimate, India Inc seeks fiscal stimulus

On Tuesday, the Central Statistics Office (CSO) pegged the 2019-20 growth at an 11 year low of 5 per cent.

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New Delhi, Jan 8 : With the 2019-2020 GDP growth rate projected to fall to 5 per cent, industry body Ficci on Wednesday suggested relaxing the fiscal deficit target as a measure to boost demand, saying infusion of capital into the economy is imperative to boost growth.

Ficci President Sangita Reddy said that with the advance GDP estimates projecting the current fiscal’s GDP growth at 5 per cent, it is a necessity now for the government to look at measures to infuse capital into the economy in a systematic way.

On Tuesday, the Central Statistics Office (CSO) pegged the 2019-20 growth at an 11 year low of 5 per cent.

“The GDP growth estimate for the current financial year of 5 per cent is on expected lines. The growth during the first half of the year has been moderate and we hope to see some momentum in the latter part. In fact, there are nascent signs that point towards an improvement and we need to make sure that these find a more solid footing going ahead,” Reddy said.

“The Ficci is of the view that the fiscal deficit target could be relaxed to support infusion of Rs 1.5-2 lakh crore in the economy in the coming year, as such fiscal expansion is much needed at the current juncture to give a boost to demand and trigger investments,” she said.

“The nature of the economy is cyclical and when a potential recessionary cycle is foreseen, move to induct more capital into the economy to re-energize it is more important than worrying about fiscal deficit. A time-bound plan must be put in place on the mechanics to repair fiscal deficit through different measures, including disinvestment in PSUs,” she added.

According to the Ficci President, the “Union Budget 2020-21 is to be announced soon and we look forward to government continuing taking steps towards bridging the existing gaps and giving out positive signals to boost the sentiment, consumption and investments. Apart from providing cheaper loans, more efforts must be made to increase incomes, especially in the rural areas. Steps are also required to boost construction, infrastructure and exports.

“Ficci is also of the view that a significant focus on the economies of the future technologies like artificial intelligence, along with added stress on science and innovation, are also critical to add a parallel wave of growth,” she added.

Reddy also said that the government must enable reforms, which will enable ease of doing business for sustaining growth and demand.

She noted that a survey is being conducted by Ficci across industries to assess the countrywide sentiment and what it would take for corporate India to re-energize itself.

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CRISIL completes Greenwich acquisition

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New Delhi, Feb 26 Rating agency CRISIL on Wednesday said it has completed the acquisition of 100 per cent stake in Greenwich Associates LLC (Greenwich).

The transaction was announced on December 19, 2019.

Greenwich is a well-established and leading provider of proprietary benchmarking data, analytics, and qualitative, insights to financial services firms worldwide.

Based in Stamford, Connecticut, it serves over 300 clients across top investment banks, corporate banks, commercial banks, asset managers and key players in the market infrastructure space globally.

Ashu Suyash, Managing Director & CEO, CRISIL, said, “Greenwich will accelerate CRISIL’s strategy to be the leading player in the growing market of global benchmarking analytics across financial services. Greenwich’s deep expertise in Voice of Customers’ surveys, proprietary data assets, and capabilities to source and aggregate high value performance data will complement CRISIL’s exiting offerings. We are very excited to be able to bring new, powerful and unique analytics to our clients through this acquisition.”

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Markets open in red on Wednesday

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Mumbai, Feb 26 The 30-scrip Sensitive Index (Sensex) on Wednesday opened on a negative note during the morning session of the trade.

The Sensex of the BSE opened at 40,194.89 points which was also the high point. The Sensex touched a low of 39,888.17 points.

On Tuesday the Sensex closed at 40,281.20 points.

The Sensex is trading at 40,044.11 down by 214.35 points or 0.53 per cent.

On the other hand, the broader 50-scrip Nifty at National Stock Exchange (NSE) opened at 11,738.55 points after closing at 11,797.90 points.

The Nifty is trading at 11,711.30 points in the morning.

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Bank credit growth may rise 200-300 bps next fiscal: Crisil

Incremental net domestic credit this fiscal up to December 2019 is just a fifth of what it was a year ago.

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New Delhi, Feb 25 : Bank credit growth is set to bottom out but may rise 200-300 bps next fiscal while retail lending, supported by securitisation, will remain the key driver in the next fiscal.

The prolonged slowdown in bank lending may be bottoming out this fiscal, with gross credit offtake set to rise 8-9 per cent on-year in fiscal 2021, a good 200-300 basis points (bps) over the likely growth of 6 per cent this fiscal.

A gradual pick-up in economic activity, continuing demand for retail loans, and strong growth in lending by private sector banks should drive the uptick.

Recent policy moves announced in the Union Budget, and by the Reserve Bank of India (RBI) are also expected to provide the spur, Crisil Ratings said on Tuesday.

As for this fiscal, some growth momentum is expected in the fourth quarter, after a subdued three quarters — due to traditional fiscal year ending growth.

The RBI’s move to exempt banks from cash reserve ratio requirement for incremental credit to certain sectors for up to five years will also support lending.

Incremental net domestic credit this fiscal up to December 2019 is just a fifth of what it was a year ago.

Lending to the retail segment and non-banking financial companies showed good growth, while credit to corporates (ex-NBFC) and micro, small, and medium enterprises declined, Crisil said.

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