INDIA's population growth rate has gone down from 17%
pertenyears to 12% pertenyears... From 1.7 percent to 1.2% peryear or 170 crore
peryear to 120 crores peryear... This is one of the major reasons for a
slowdown in the growth rate... After accounting for the natural unemployment
rate or frictional unemployment of 4-5 percent the potential growth of the
INDIAn economy is 7-8% without stoking inflation... 6.1% unemployment is not
that bad by the standards depending on the lowdown... and could bounce back
with stimuli....
Agriculture economy in INDIA provides employment to
50% of the economy, yearly floods and drought affect demand in the economy also
through prices, higher prices of the food items again increase interest rate
expectations and lower demand for other industries, too... It is a big
constituency, too... Problems in the agriculture must be dealt consciously...
Too much supply of labour has depressed in income and demand in the agriculture
economy....
PM must allocate funds for irrigation and dams to reduce the chances for floods and droughts the economy faces every year that upset prices or inflation and interest rate and expectations to provide stability and reduce uncertainty...
According to tradingeconomics.com INDIA's GDP would
be around 3,42, 000 Crores Rs GDP in India is expected to be 3420.00 USD
Billion by the end of this quarter, according to Trading Economics global macro
models and analysts expectations. In the long-term, the India GDP is projected
to trend around 3420.00 USD Billion in 2020, according to our econometric
models. Trading economics dot com... which would be significantly higher than
2019... INDIA's GDP at constant prices is also expected to go up 37200 crore rs
which would be higher than the average real GDP growth rate of 7% in 2018...
this is world bank and MOSPI data....
The annual real growth rate for the year 2020 would
be 18%... according to the base year 2017-18 by chain... the nominal GDP for
the year for the year 2018 is 2726 billion USD in 19 would be 2900 billion USD
and in 20 would be 3420 billion USD... then real GDP growth rate in 18 is 7%,
in 19 13% and in 20 would be 18% according to the chain based index... The
means INDIA is growing 5% on average every q and 18% every year...
Next year’s 2020s GDP estimate is at 5%... This is
the average of annual growth in the four quarters; the annual growth rate would
be 20%...
Almost nobody understands qoq or yoy concept... qoq
over the last quarter from a base year, same with yoy... if the economy grew 7%
last year, owing to the base year, this year's 5% growth rate means that this
year growth rate has increased 13%, on the same base year...
Disinvestment of PSUs has been slow though it (Gov)
has set the limit over 3, 00, 000 crores... We have a huge foreign exchange
reserves of over 450 billion dollars or 32, 00, 000 crore rs which could help
lower cad, especially lower oil prices 'coz of more dollars per rupee...
If it is spent in INDIA that would help lower dollar
and increase foreign exchange rate of the rupee and lower oil prices and
inflation expectations... which could reinforce expansion... More dollars would
flow in due to strong rupee....
Rating agencies and foreign investors keenly watch
fiscal deficit target and inflation expectations... Higher Center plus States'
deficit in a slowdown is constricting public spending... Though, if public
spending is productivity enhancing that would be expansionary, inflation
expectations would be contractionary... Spending on education/skills and health
could increase productivity of the human capital...
Seasonal and cyclical food inflation has been there
since a longtime which is always followed by more supply and lower prices... It
is more or less transient...Demand has gone up relative to supply since supply
has been delayed... Low borrowing cost or real interest rate since inflation
has increased could help increase supply and contain prices... The food
deflation in the past which depressed rural demand could get a lift by higher
food prices and increase rural income and demand in the economy...
Little inflation and inflation expectations from a
low base are good for spending for, both, consumption and investment... If
people believe that prices may rise they would buy soon, also because borrowing
cost (expectations) could increase and if they believe that prices may fall
they would delay spending also because of lower borrowing cost expectations....
We see that expectations reinforce prices and
expectations through the borrowing cost expectations which could increase
volatility... In INDIA, higher inflation has reduced real interest rates, but
increase in nominal rates could increase real rates and reduce supply and
further increase prices...
Inflation in INDIA is a supply side problem further
worsened by higher demand during higher growth and the economy easily starts
overheating... Inflation expectations and investment, bonds and stocks and broader
economy, are linked through bond prices and exchange rate, too...
Higher inflation increase bond yields and lower bond
price expectations, people sell bonds and increase investment in equities and
lower inflation reduce bond yield and increase bond prices, people buy bonds
and sell equities... Higher prices increase investment in production, too and
vice versa... Little inflation and expectations are good for the economy...
Expectations are self-fulfilling... If you would wish good it will happen and vice versa because all the economy need is rational expectations and higher spending consumption and saving and investment...
Trump and oil producing nations only add to
uncertainty for investors... The situation is dramatically linked to oil
prices... US shale, too...
Violence and vandalism is akin to terrorism, of the
political parties too... Students must become policy makers, after their study,
patience is a virtue... abhi to bas jail jayenge...
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