If the government borrows in foreign currency, then in order to spend it domestically it will have to get the same converted into rupee from the Reserve Bank of India. This is bound to increase risk of inflation in the country. Although Finance Minister Nirmala Sitharaman did not acknowledge in her Budget speech that the government’s revenue fell short of budget estimates of 2018-19, if we look carefully, the revised revenue estimates of 2018-19 are much lower than the Budget. This shortfall is seen in both direct taxes and direct taxes. But the central government repeatedly reiterated its commitment to … Continue reading Govt’s Move to Take Foreign Loan Unwise, May Come at a Dangerous Cost
On March 4, 2019, US President Donald Trump, in a letter to the US Congress, expressed his willingness to withdraw from India the Generalised System of Preferences (GSP), which allows India to export some types of goods at zero or very low tariffs. President Trump said, “I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary, developing country effective June 5, 2019.” Similarly, President Trump decided to withdraw this facility from Turkey, and the decision was implemented on … Continue reading India must protect its interests in US trade tussle
Nobody knows what would be the future of the trade war that is going on between the USA and China. However, it is for sure that world trade would undergo radical changes in the coming months and years. By imposing tariffs of 25 per cent and 10 per cent on steel and aluminum, respectively, the US has initiated the trade war in the world. Policymakers and people around the world are worried about the future scenario of world trade. In the last 23 years, notably after the binding agreements in the WTO, global trade has showed an unprecedented growth of … Continue reading Spoiling the math of global trade
Daily Excelsior The Reserve Bank of India once again opted not to reduce the interest rate while declaring monetary policy on 30th October, 2012. By this act, the Bank has once again disappointed all those who were expecting a cut in the interest rates. Though the Reserve Bank of India has half-heartedly tried to increase the liquidity in the economy by reducing Cash Reserve Ratio, but this may not bring any reduction in the lending rates. The industrial growth rate has been falling continuously for one and a half years and is nearing zero now. This has resulted in slowdown … Continue reading Courage needed in monetary policy
Daily Excelsior The two fastest growing economies- India and China are gradually coming under the grip of economic slowdown. It is important to note that China after achieving the economic growth rate of 10 to 14 per cent in the last two decades has set a record of being the fastest growing economy. Though India could not achieve economic growth as fast as China could, yet it achieved the average economic growth rate of around 8 per cent during the ten years of the Tenth and Eleventh Five Year Plan. Economic slowdown gripped the entire world after the recession period … Continue reading Lest disillusionment turns into hopelessness!
Daily Excelsior The Government of India has taken some decisions in the name of ‘economic reforms’, according to which FDI has been allowed into multi brand retail and pension funds for the first time and FDI cap for insurance sector has been raised from 26 percent now to 49 percent. Normally it is believed that we need to bring in foreign investment to make up for shortage of foreign exchange and raise capital for development. This would also give strength to rupee, it is claimed. But strange is the fact the all types of facilities are rolled out for foreign … Continue reading NRI remittances beat FDI