Mon, 25 Oct 2021 Today's Paper

Indian government dampens hopes of economic stimulus

24 August 2019 12:10 am - 0     - {{hitsCtrl.values.hits}}

A A A

 MUMBAI (AFP) - Indian markets fell yesterday after a top official dampened hopes of a stimulus package to support a misfiring economy and ease a liquidity crunch in Asia’s third-largest economy.


India’s economic growth has slowed in the past three consecutive quarters, losing its status as the world’s fastest-growing major economy to China, with unemployment at its highest since the 1970s.


Industry figures have been calling on newly re-elected Prime Minister Narendra Modi’s government to provide more of a fiscal boost as signs multiply that numerous sectors are suffering a painful slowdown.


But Krishnamurthy Subramanian, the government’s chief economic advisor, suggested on Thursday that state intervention creates a “moral hazard” and is “anathema to the way the market economy functions”.


Reportedly under pressure from the government, India’s central bank in August cut interest rates for the fourth time this year to a nine-year low in an attempt to boost growth.
The automotive sector is particularly stricken, with car sales plunging 31 percent in July, the ninth consecutive monthly drop, prompting manufacturers to halt production at some plants.
India’s largest biscuit maker Parle Products warned this week that it might have to lay off up to 10,000 workers if the government doesn’t cut sales taxes. 

 

Part of the problem is that India’s banks are reluctant to lend following a slew of bad loans, with the deputy head of government think-tank Niti Aayog calling for Modi’s government to “take steps that are out of the ordinary”.


“For the last 70 years, we have not faced this kind of a liquidity situation. (The) entire financial sector is up in a churn and nobody is trusting anybody else,” Rajiv Kumar said.
Gross domestic product (GDP) for the world’s sixth-biggest economy grew 5.8 percent in the final quarter of 2018, down from 6.6 percent in the previous quarter.


Economists at Nomura predicted this week a further slowing of momentum, forecasting growth of 5.7 percent in the first three months of 2019. GDP data are due next Friday.
Shares fell sharply on Thursday on Subramanian’s comments with the Sensex index dropping almost 600 points. Last morning the index fell almost 100 points before recovering slightly.

 

 

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.