oppn parties Economic Growth: Uncertain Times

News Snippets

  • The Supreme Court directed the Election Commission to investigate alleged irregularities in bulk Form 7 applications during Uttar Pradesh's Special Intensive Revision of electoral rolls, take corrective steps and submit a compliance report. The Commission's counsel told the court that its officers had found the bulk applications false and had not acted on them
  • The INDIA bloc postponed its symbolic public impeachment proceedings against Chief Election Commissioner Gyanesh Kumar to October 31 because of rain and reiterated plans for its November 1 march to Ramlila Maidan
  • Prime Minister Narendra Modi accused opposition leaders of spreading rumours and attempting to create chaos amid the West Asia crisis, while Home Minister Amit Shah challenged them to seek a special parliamentary session to discuss their allegations against the Election Commission. Shah said the BJP was ready for a debate on the Special Intensive Revision of electoral rolls
  • Amit Shah announced that the BJP would implement a Uniform Civil Code in Uttar Pradesh if it returned to power in next year's Assembly election. Samajwadi Party president Akhilesh Yadav questioned why the BJP had waited through two terms in government before making the promise
  • The political dispute over the proposed sale of a 60.72% stake in IDBI Bank to Fairfax intensified as Rahul Gandhi questioned the government's decision and raised concerns about employee protections and reservation policies. Finance Minister Nirmala Sitharaman defended the transaction, saying the bank had been revived through recapitalisation and that due process had been followed
  • Congress has asked Bengal's Chief Electoral Officer, State Election Commission and Kolkata Municipal Corporation to provide an online voter-roll search facility and email-based filing of claims and objections for the civic polls. The CPM has separately sought the relocation of three municipal returning officers' offices to north Kolkata to make access easier for voters
  • The Madras High Court directed Tamil Nadu's Cyber Crime Division to monitor online platforms for content amounting to criminal intimidation of sitting judges and ordered police to act against threats and personal abuse. It declined to impose a blanket ban on peaceful discussion or criticism of judicial decisions, distinguishing criticism of judgments from intimidation of judges
  • Six people, including five passengers and the pilot, were killed when a helicopter travelling from Badrinath to Dehradun crashed in Uttarakhand's Joshimath valley after losing communication and tracking contact. Operator Trans Bharat Aviation grounded its entire fleet as a precaution while authorities conducted search and rescue operations
  • The Reserve Bank of India intensified cybersecurity scrutiny of banks after a rise in attacks, asking lenders to demonstrate compliance with existing rules, examine vulnerabilities in application programming interfaces and explain preparations for AI-related risks. The review follows a leak of data belonging to 3,900 SBI customers and more than 700 unauthorised transfers worth about $2 million from two non-bank lenders
  • India's foreign-exchange reserves fell by $1.27 billion to $719.75 billion in the week ended October 23, marking a seventh consecutive weekly decline and the lowest level in more than two months. RBI data also showed bank credit grew 17.94% year-on-year to ₹232.54 lakh crore by October 15, ahead of 16.6% growth in deposits
  • The Sensex rose 308.49 points, or 0.42%, to close at 74,459.53 on Friday, while the Nifty 50 gained 116.35 points, or 0.51%, to settle at 23,053.10, crossing the 23,000 mark. IT stocks led the rally, with the Nifty IT index gaining over 2%, while mid-cap and small-cap shares came under pressure, with their respective indices falling 0.93% and 1.85%. For October, the Sensex gained 2.7% and the Nifty 1.9%, ending a two-month losing streak
  • Manisha Bhanwala became the first Indian woman to win a senior wrestling world title, defeating American Abigail Nette 8-6 in the 59kg freestyle final after trailing 0-6. India finished the women's freestyle competition with four medals, its best-ever haul at the championships
  • India defeated Japan 4-1 in the men's Asian Champions Trophy in Jalandhar to register a third consecutive victory. Abhishek Nain scored twice, while captain Harmanpreet Singh and Vishnukant Singh added one goal each
  • New Zealand beat India by 87 runs in the fourth T20 International at Auckland, with Glenn Phillips scoring 107 off 49 balls as the hosts posted 259-7. India were restricted to 172-9 but retain a 3-1 lead in the five-match series
  • Supreme Court wonders how scammers know who keeps huge funds in their accounts, says bank staff is involved in digital arrest scams and asks RBI to mandate indemnification by banks of money lost by customers in digital arrest scams
Congress conducts 'public impeachment' of CEC Gyanesh Kumar in mock Parliament at party chief Mallikarjun Kharge's house /////// Rahul Gandhi says Kumar is not going to survive as CEC
oppn parties
Economic Growth: Uncertain Times

By Ashwini Agarwal
First publised on 2022-03-01 10:39:53

The National Statistical Office (NSO) has confirmed what was clearly visible on the ground. Economic growth has slowed down considerably and the Indian economy grew at just 5.4% in Q3, down from 8.5% achieved in Q2. Consequently, the estimate for the full year growth in FY22 has been revised to 8.9%, down from 9.2% projected earlier. Even this will be hard to achieve given the sluggish private consumption and global headwinds. These figures show that the growth in Q4 will slide below 5%. The figures are also much lower than RBI estimates in December which pegged full year growth at 9.5% and Q3 and Q4 at 6.6% and 6% respectively.

Sluggishness in manufacturing and construction pulled the economy back in Q3. While manufacturing added a value of just 0.2% in Q3, construction contracted by 2.8%. The services sector was steady but labour intensive sectors were still distressed and nowhere their pre-Covid levels in real terms. Private consumption, which grew at 7% in Q3, is likely to go down to just 1.5% in Q4. Gross fixed capital formation is also sluggish and points to the fact that there is not much activity in capacity expansion or starting new projects given the subdued demand.

Although the estimate of 8.9% will still make India the fastest growing major economy in the world, it is unlikely that the figure will be achieved. Already, crude prices have hit the roof and the pump prices will see a huge increase in India in the first week of March as soon as the election ends in UP. Analysts fear that the rise will be in the region of Rs 10 per litre over a short period and that would lead to inflationary pressures. It might also lead the RBI to raise interest rates and squeeze out extra cash from the financial markets. Add to this the problems exporters will face due to the Ukraine situation, the supply chain disruption, the payments problem (with Russia out of Swift system), high prices of almost all commodities leading to increased cost of inputs and volatility in financial markets and the scenario remains bleak.