oppn parties Economy: Growth Will Go Down Further Due To Global Headwinds & Untamed Inflation
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February 04, 2023

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  • The Centre today said that there were no systemic issues linked to financial markets invloved in the crash of Adani group shares and market regulators were capable of doing what was needed. It said there is no need for the government to step in
  • Nearly 96% of the candidates appeared for the JEE(Mains) exam in the January session, making it the all-time high attendance
  • The Union budget has provided that input tax credit will not be available to companies on products and services they procure to fulfill their CSR obligations
  • Bombay HC rules that an FIR can be quashed even if a person is convicted in a trial court if an appeal in the case is pending before a higher court
  • Supreme Court thrwos out PIL seeking one candidate, one seat in elections, says it is the call of the legislature
  • Law minister Kiren Rijiju said that the government remained committed to diversity in selection of judges
  • Mamata Banerjee alleges that due to government pressure on public financial institutions to invest in Adani group, deposits in LIC and banks have become vulnerable
  • Kerala journalist Siddique Kappan was finally released from Lucknow jail, 28 months after his arrest by UP police in a UAPA case and more than 20 days after he was granted bail by Allahabad HC
  • A 65-year-old woman who was alone at home was hit on the head with a hammer and robbed in Kolkata
  • Enforcement Directorate charges that Arvind Kejriwal connived with Delhi liquor scam accused, court takes congnizance of charge sheet
  • Opposition stalls Parliament, demand probe into the Adani controversy. Says government forced LIC, SBI and other public institutions to invest in Adani group companies
  • RBI seeks information from banks about their exposure to the Adani group
  • BSE and NSE initiate additional risk-containment measures to counter the rout in Adani shares
  • Adani group shares free fall continues unabated: led by Adani Enterprises and Adani Total Gas,group companies lose 45.7% marekt capitalization in just 6 trading sessions
  • Stock market insulates itself from fall in Adani group shares. Sensex ends in green after another volatile session while Nifty ends in red but flat: Sensex gains 224 points to 59932 and Nifty loses 5 points to 17610
Free fall in Adani group shares continues unabated, Opposition parties demand a probe by a joint parliamentary committee or a Supreme Court-appointed panel
oppn parties
Economy: Growth Will Go Down Further Due To Global Headwinds & Untamed Inflation

By A Special Correspondent
First publised on 2022-10-13 08:31:51

The Indian economy is showing all signs of slowing down while inflation refuses to be tamed. IMF has revised its growth forecast for FY23 to under 7% while Finance Minister Nirmala Sitharaman has said that the growth rate will be 7%. She has also said that the upcoming budget will tackle both inflation and growth, which is a tall order given that the government is constrained for funds and the RBI is continuously hiking key policy rates making borrowing costly.

Retail inflation in September was 7.4%, the highest in five months while food inflation - the basic index that pinches the common man - was at 8.4%, the highest in 22 months. Nothing has been spared in the food basket with fruits, vegetables, dairy products, cereals and pulses, cooking oils, eggs and meat products all becoming dearer. Inflation is now ruling much above the 6% threshold of the RBI. With unseasonal rains in many parts of the country likely to impact prices of farm products in the coming months, food inflation is a major worry. It is now clear that monetary policy alone is incapable of taming inflation yet the RBI has no option but to hike interest rates further in its December policy meet.

On the other hand, industrial output fell by 0.8%, a small figure but one which points to further contraction. As the Ukraine war drags on disrupting supply chains, the global economy shows signs of slowing down which will impact export orders and the decision by OPEC to cut crude production, the Indian economy is facing strong global headwinds. This will lead to further slowdown in some sectors.

As RBI hikes rates, the impact on demand will be felt in the coming months. If demand slows down, growth will also go down. Then India will be looking at a growth of just 6 or 6.5% in FY23. Coupled with the fact that growth is very uneven across sectors, which will be very unsettling for the economy. The government needs to intervene by taking measures to reduce prices of essentials and investing in infrastructure projects to keep up the growth momentum.