On Friday, we got the news on GDP and also the big bang announcement on merger of PSU banks and you could have seen today how market reacted. Market went down -2% and it clearly shows its worried on growth and not happy on the bank merger announcements.
GDP numbers are more worrisome because its very much lower than all the analysts expectations. GDP was at 5% vs 5.8% previous quarter and GVA was at 4.9% vs 5.7%. The worst hit was the manufacturing which was at 0.6% vs 3.1%.
Well, there have been many things announced over the last 10 days but there is nothing which has been directed straight at pulling up the sagging growth. There has been no BIG bang money spending measures, nothing fiscal. The announcement on merger and capitalization will strengthen the banks but it will take time; we might see the impact of this only in FY21, depending on the timeline.
The slowdown at 5% means that the economy needs more than all that which the govt has given; a major fiscal push is required. I am not sure if the govt is thinking this as a cyclical issue. If it thinks it as cyclical issue they are sure to screw up the economy further, unless they realize soon its a structural issue and these structural issues needs to be addressed soon. Sentiments are low and that too, to a large extent is keeping the demand on bay. The govt needs to thus announce measures which will push up investor confidence and more than non-fiscal, a good fiscal push is required.
Taking care of the FII and super-rich alone will not help; the govt needs to get down to real reforms. Collapse of the private sector consumption is a very big worry and that is what the govt needs to concentrate on. Manufacturing growth at a meager 0.6% should really get the govt going.
The grim picture we see today is more on account of our own doing and cannot be blamed on the global factors alone. Hope the govt takes this very seriously and gets cracking on pushing reforms which impacts real people and not the mere 1% of the population.
GDP numbers are more worrisome because its very much lower than all the analysts expectations. GDP was at 5% vs 5.8% previous quarter and GVA was at 4.9% vs 5.7%. The worst hit was the manufacturing which was at 0.6% vs 3.1%.
Well, there have been many things announced over the last 10 days but there is nothing which has been directed straight at pulling up the sagging growth. There has been no BIG bang money spending measures, nothing fiscal. The announcement on merger and capitalization will strengthen the banks but it will take time; we might see the impact of this only in FY21, depending on the timeline.
The slowdown at 5% means that the economy needs more than all that which the govt has given; a major fiscal push is required. I am not sure if the govt is thinking this as a cyclical issue. If it thinks it as cyclical issue they are sure to screw up the economy further, unless they realize soon its a structural issue and these structural issues needs to be addressed soon. Sentiments are low and that too, to a large extent is keeping the demand on bay. The govt needs to thus announce measures which will push up investor confidence and more than non-fiscal, a good fiscal push is required.
Taking care of the FII and super-rich alone will not help; the govt needs to get down to real reforms. Collapse of the private sector consumption is a very big worry and that is what the govt needs to concentrate on. Manufacturing growth at a meager 0.6% should really get the govt going.
The grim picture we see today is more on account of our own doing and cannot be blamed on the global factors alone. Hope the govt takes this very seriously and gets cracking on pushing reforms which impacts real people and not the mere 1% of the population.
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