oppn parties Economy In Doldrums, Stocks Bleed

News Snippets

  • The government decides to decriminalize more than two-thirds of penal sections in the Companies Act
  • Muslim groups tell the Supreme Court that they want the Babri Masjid to be restored
  • Muslim groups claim that while they were asked questions in court, Hindus were not questioned
  • Postpaid mobile services restored in Jammu & Kashmir from today, but still no internet
  • Abhijit Banerjee, an Indian-American currently a professor at MIT, wins the 2019 Noble prize in economics jointly with two others
  • Industrial output slumps in August as the IIP shrinks by 1.1%
  • Prime Minister Modi and Chinese President Xi Jinping watch a cultural show at the Shore Temple in Mamallapuram
  • J&K administration lifts the ban on entry of tourists in the Valley, but it remains doubtful how many will visit without being able to use mobile phones and internet
  • After Sena asks members to support the BJP candidate in Kalyan, 26 party corporators and 300 members resign setting off a crisis
  • The Centre sets up a 12-member committee to suggest systemic changes in the GST structure to improve compliance and collection, prevent misuse and evasion and rationalize rates and slabs
  • In line with the RBI outlook on the Indian economy, rating firm Moody's also downgrades growth forecast from 6.8% to 5.8% this year, saying the economy is experiencing a pronounced slowdown
  • HDFC chairman Deepak Parekh says the financial system in India does not offer foolproof security for misuse of the savings of the common man
  • Shivinder Singh and Malvinder Singh, promoters of Ranbaxy and Fortis, arrested for their role in Religare Finvest scam
  • Supreme Court says marriage can be dissolved if it has broken down irretrievably
  • DA of Central government staff hiked by 5% to 17%
Sourav Ganguly is the new president of BCCI, says conflict of interest is a big concern
oppn parties
Economy In Doldrums, Stocks Bleed

By Ashwini Agarwal

The stocks are continuing to bleed, eroding investor wealth and confidence. Today, the Sensex went down by 470.14 points to 36,093.47, down 4219 points from its all-time high. The Nifty50 fell 11.5 percent from the record high touched in June, 2019 closing 135.90 points lower at 10,704.80. This is the lowest level since February 19, 2019. The market was in a consolidation phase for the last few weeks but the bears once again embraced it in a tight hug in the last couple of days.

Even as the government announces 'schemes' to revive the economy, the markets continue to show no-confidence in the measures. Foreign funds are liquidating their investments in Indian stocks at a rate that is alarming. The time for knee-jerk response is over, investors seem to be saying. But is anyone in the government listening? Probably not. For, although finance minister Nirmala Sitharaman has said that she is working on it, one feels that the government is not attacking the root of the problem.

The government seems to have decided that this economic depression is cyclic. But most analysts feel that it is also structural in nature. Hence, structural reforms are required but there is nary a whisper from the North Block about any such measures. The GST regime needs to be simplified and the tax base broadened by plugging loopholes. It is also required that no sector is left exempted from GST, if not immediately then within a given time frame. Then, the government must take an immediate decision to sell Air India and BSNL to stop public money from being wasted. Divestment in PSUs must also be prioritized. Land and labour reforms, hanging fire since the first term of the NDA, cannot be postponed now if the dream of being a $ 5 trillion economy by 2024 is to be realized. Norms for public-private partnership in infrastructure projects must be announced forthwith and such projects must be fast-tracked. The government must boost domestic investment to spur consumption, without which the economy is not going to come out of this deep tunnel of despair and gloom.