Budget 2020...

The FM started with the fundamentals of the Indian economy, probably pointing to low inflation and contained Fiscal deficit and Current Account… and reiterated the commitment to increase income and the purchasing power to boost demand and growth… with respect to Late Former FM Shri Arun Jaitley…

She also tried to underscore her vision and past success by numerating formalisation of the economy, adding 16 lkh more taxpayers and providing jobs to the workforce…  The FM told that the average consumer saves 4% more due to lower gst and transmission to consumer prices equivalent to 1 lkh crore… The license permit raj is behind and the economy is more market based on the forces of actual demand and supply… 

Aspiration, Care and Economic Development was on the top of mind of the FM and was the theme of the Budget… She said several millions have been lifted out of poverty and the gov-debt has been lower compared to few years back…

She presented a 16 point plan to double farmer income and tried to incentivize farming through allocation of money for water and irrigation and farm credit of Rs 15 lkh crore… The Budget sought to increase production of the fodder through MGNREGA… Investment in transportion, cold storage and warehouses was among the top priority of the agri-budget…

The Budget would provide 69 thsd crore for improving the healthcare sector… Govt intends to eliminate Foot to Mouth Disease…

Rs 99, 300 crore have been allocated for the education and Rs 3, 000 for the skill development of youth… Engineers would be updated through skills and internship programmes to increase employability..

The FM tried to contain Fiscal Deficit target between 3.5 to 3.8%...

Our FM gave tax relief to millions of taxpayers by reducing tax and altering tax bracket… Now, taxpayers with R5 lkh to 7.5 lkh would pay 10% tax, from Rs 7.5 lkh to 10 lkh would pay 15% tax, 10-12.5 lkh would pay 20% and 12.5 -15lkh would pay 25% tax… Now on average everybody would pay 5% less tax on their income… and in some cases as lower as 10%...

The FM has removed Dividend-Distribution-Tax (DDT) altogether which is a big positive for the stock market, but let LTCG tax unaltered …

The gov set a disinvestment target of 2.1 lkh crore and try to raise money through LIC IPO and disinvestment in IDBI bank which pushed related stock during the day…

Our FM also allocated a lot of money on a number of heads including steps to incentivize technology and IT… which would increase spending in the economy…

Agriculture which needs structural reforms to increase investment got maximum funds which was largely expected and would help boost farm incomes and demand and growth in the economy… Lower incomes tax and lower tax for the affordable housing could increase demand and spending, too… The FM underlined her commitment for Land, Labour, Capital and Tax reforms going ahead…

This is an expansionary budget which is likely to put money in people’s hands, especially the agriculturists and the salaried and working… 

Budget, Business and Bandh... 2...

There is not much difference between nominal gdp and real gdp as such, growth rate would remain same... because inflation has only changed little... the formula for calculating real gdp is nominal gdp/deflator... INDIA has grown 10.8% in the current year... base year would also be deflated... There is not much difference between nominal gdp and real gdp growth rate when inflation had been on the lowside... in this situation nominal gdp and real gdp would remain same... nominal gdp and real gdp growth rate too...


GDP Constant Prices in India is expected to be 38147.00 INR Billion by the end of this quarter in 2019 and 34427 INR Billion in 2018, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate GDP Constant Prices in India to stand at 38153.00 in 12 months time. In the long-term, the India GDP Constant Prices is projected to trend around 42465.00 INR Billion in 2020, according to our econometric models. According to the above data the INDIAN economy expended 10.8% in 2019 and would expand 11%% in 2020...


If inflation is 6% how there could be a slowdown... Recession is often market by a period of low demand and prices and high unemployment and low growth and vice-versa... A recent study shows that prices and growth are positively correlated... Low growth means low demand and low inflation and high growth means high demand and prices... INDIA is growing 5% every quarter and 20% every year...


Banks have been recapitalised by several lakh crores and IBC has fastened the resolution process... Stressed assets have comedown sharply... Rs 120 lkh crore investment in the infra has potential to consume alot of unskilled labour... INDIA is not in a recession, just a slowdown in the growth rate, due to an election year, people held investment due to a regular budget... which is likely to catchup pace soon... OMOs are also a way to capitalise banks, we saw in the US during QE... Banking is with the RBI and recapitalisation, too... Bailout in the US was widely criticised in the US, bailing out banks for their excess...


The 50% of the economy is unorganised which, if formalised could double the growth... there is a vast service sector of which we have little idea, both, in the rural and urban areas, no account... business must slowly increase investment to reduce their weighted average cost, because no body can predict a clear bottom of the interest rate cuts by the rbi... inflation has already reduced real interest rates and money is cheap...


According to chain based index method for calculating real GDP, the next year's growth rate would be 9.5%... The economy would achieve last year GDP 4.5% plus 5% next year... on the 2017-18 base....


Rationalising the tax structure to increase competitiveness and demand in and of the INDIAN Economy and growth is a crucial reform when the insiders want to reduce tax terrorism which could also increase scale and revenue... The gov must comeup with any idea to reduce indirect taxes paid by the poor people... Our late former FM Shri Arun Jaitley once realised the problem of indirect taxes paid by the poor...


Land, labour, capital and tax reforms must be high on the wishlist to increase the competitiveness and productivity and demand and growth... Lower consumer prices is the goal of the above reforms... The productivity and competitiveness, both point to lower prices for the consumers....


90% wealth share is with top 1%... Income tax exemption may be given to rest 99% at a very low cost... who have a higher MPC... Reservation under economically backward has already been given to upper cast having Rs 8 lkh yearly income which is a very large group... covering 80% tax payers and voters...


Marginal propensity to consume is higher for lower and middle class... Lower tax would increase real incomes, both consumption and savings would increase, lower interest rate could increase investment and could further boost real incomes, low inflation could further increase domestic real exchange rate... and could further increase exports due to internal devaluation... All through increase in the value of money....


Investment in storage and the farmers' ability to hold and increase supply during high prices and fewer middleman could increase their income... Irrigation and protection from floods could help reduce risk associated with investment in the agriculture...


Public spending during slowdown is the Keynesian prescription which is a right thing to do when the private sector has put investment on hold, the Rating Agencies must realise, higher inflation and interest rate expectations may crowd in private investment... A higher external borrowing plan from the US or Japan or Europe for infra and const could further help improve the gov finances.. and rating agencies and investors sentiment...


During last recession (2008) the fiscal deficit target breached 6%, though this time it is reasonable to contain it at 4% to boost the economy without overheating, supply side for food and fuel must be strengthened ,during higher unemployment and slow growth compared to the potential...


FPI must understand that higher prices/inflation are good for margins/earnings and share prices, though exchange rate risk might be hedged through derivatives... Higher prices are good for supply and investment... Though on correction people would demand more...


Last Budget was off date just after the elections... Budget must include promises made in the Manifesto... Credibility of Politicians is paramount...



Higher fiscal deficit could increase price expectations and spending... Productivity and lower prices and higher demand through public spending like more investment in skills and production, supply would increase too, could help increase demand and growth and revenue... Higher fiscal debt of Rs 2 lkh crore during slowdown is good idea to crowd in private investment... More disinvestment would increase capacity too invest in productivity and increase real wages and incomes, profits too... Disinv. target is 3 lkh crore... The Gov must be able to clarify on popular expectations from the budget... so people do not delay spending due to uncertainty...


Since the INDIAN bond market is under-developed, means supply of bonds is low and lower money supply has increased bond yields... ....Opposite of QE... More money supply in the Bond market could reduce bond yields as FDs would be substituted for bonds and increase interest rate on FDs which could increase bond price expectations, but also increase interest rate on FDs and and more deposits... for short term bonds... Low supply of bonds has increased interest rate on bonds... For investors they should allocate in both the assets to avoid loss... that would work in both upcycle and downcycle, too... banks too....


The Gov may impose Rs 1 per person perday perfamily tax on food on ALL to create a precautionary fund to stabilize prices in the economy... By this Gov could collect 47450 billion INR peryear...


We must be able to know why people are fleeing from a religious majority into INDIA brings them into suspicion... And, the issue must be raised universally... INDIA cannot guaranty free citizenship to all necessarily... And, ask other countries to share the burden of illegal refugees...


Policemen have specials right provided by the Law or Constitution of the country... They could move to the court of law against violence in the name of the freedom speech and protest in decent... Police have human rights too... Everybody knows what happened 2 JMs... Jamia Milia and Jama Masjid... There already exists a Media...


FM must fulfill popular wishes/expectations within the budget... Some extra borrowing and spending during slowdown could help increase demand; ultimately it would go to the people's pocket... Higher demand and price expectations could increase growth expectations... expectations lead to further expectations from the business and consumer community.... The Gov has reduced taxes like Corporate Tax and indirect tax, there has been little progress on overall productivity and demand and productivity and demand and prices, little transmission to consumer prices to increase real wages and incomes and profits too... So, there must be a direct tax cut within the budget to increase (real) income and demand and growth...


The Fed is close to r* or neutral or zero real interest rate and the labour market is healthy, the Fed may continue its neutral or stable stance, which could help stabilise inflation/price expectations and spending... Changes in inflation/price-level has the ability to increase demand and supply and employment and investment and consumption and savings in the economy, though if people expect demand/supply stimuli they may hold either demand or supply that might increase volatility... .. that might increase volatility... Nonetheless, expectations are subject to uncertainty and change and they also reinforce prices and expectations and demand and supply... Lower prices increase demand and price expectations and higher prices increase supply and lower price expectations... Prices help clear excess demand and supply in the economy... and expectations may be self-fulfilling and could increase volatility... People speculate on prices and a general expectation is formed by them which might be uncertain due to several factors...

Budget, Business and Bandh...

The gov and rbi could do little to lower or increase prices to clear excess supply/demand and even it may delay spending and growth... Other things remaining stable, if the rbi maintains a neutral stance or status quo, it would help stabilise demand/supply and prices and speculation by consumers and investors and producers... But, if it increases interest rate... supply and employment and demand would go down which would further increase price or inflation and expectations and worsen unemployment which could prolong adjustment.... and vice versa...

Assuming inflation at the target, the rbi may decide nominal interest rate as per the demand and supply of money in the market or let the market decide... Money supply has been too much regulated... or peg repo rates to the bonds, short and long... Banks must match interest rate with the bond market rates....

Transport/oil demand and prices is the chief reflector of demand in the economy and therefore... Revenue from oil has increased in the past few years since oil prices fell from over $ 110 per barrel to $ 60-70... But taxes remained more or less same... which could help reduce deficit... It is also an indicator of demand in the economy... and they have showed 15% growth this year…

…..when INDIA exports more petroleum products than it imports...

Including oil, real estate, electricity and booze in the GST could reduce uncertainty over investment as these have a very large base which could help shore-up the GST revenue... Land, labour and capital reforms could further increase certainty or predictability for business...

If banks pass on the rate cuts to the borrower and invest profits in gov and corporate bonds it could compensate loss, due to lower interest rates... More money supply would reduce interest rate and could increase spending... No crowd out, but crowd in... Higher bond prices would benefit investors... Gov would pay less in interest payment and would also increase gov spending...

Lower income tax could increase consumption and saving/investment and demand and tax revenue as the growth revives...Hope it is implemented soon and not just an expectation...

If banks do not pass rate cuts, corporate lower taxes, business gst and gov oil prices... It really becomes difficult to increase demand, people expect them and they are delaying spending… The RBI and Gov are on the same page... Total tax exemption upto Rs 8 lkh is expected as LTCGT cut... or only after 3 years......

The gov needs to increase spending also spending like lower tax during slow down and consolidation during high growth to control demand/supply and prices or unemployment and inflation which may delay spending from the expectations channel... People speculate on prices, both lower and higher... Lower prices increase the value of money for wagers and higher prices increase profits, but they would help if it really happens... Otherwise we lose... growth may be delayed too due to hold on investment...

The 1% has 90% share in the product (GDP)... It would help (lower income tax).... to the common man... transmission to consumers prices could increase the chance of a bounce back, real wages and incomes would increase... Higher rural income would further boost demand... Low prices would reduce the cost of investment lower prices lower wage demand and competitiveness... Lower borrowing cost would be expansionary, too....

Unskilled workers have been in large supply which has depressed productivity and real wages... Providing more skills could increase productivity and wages... Though, over supply of skilled in sectors like medical and engineering could also lower demand of such professionals relative to supply... CAs and CSs supply have been limited which has pushed up demand and incomes... the same could be applied in agriculture and construction...

The gov may put a skills cess on the superrich... and provide unskilled skills based on the industry demand and supply only accordingly...

The US can always print currency and there is no scope for default and settles imports in the USD... That is why dollar is safe (heaven currency)... Everybody wants the US tech and USD... weapons, too... and, now shale, everybody want it because it is cheap... Same with China which has queued Renmibi to emerge as a substitute for USD, everybody wants Chinese goods, but it uses USD for payment to gain USD and depreciation to gain competitiveness through exchange rate... Any economy which has high demand for its exports should settle trade in its own currency... imports too... would have a stable currency compared to others, like the US... Its demand and price would increase...

There is no such certainty that when recession will strike in the US and what could be the bottom and how long it would take? But, there is scope that the Fed would follow neutral or zero real interest rate, nominal interest rate minus inflation, or it would balance inflation with nominal interest rate cancelling out each other, to keep the value of money...

Recently, Gita Gopinath said that in 2020 the real rate of growth of the GDP would be 4.8% … The 4.8% is the average of real-GDP growth rate of the four quarters... The total growth rate of the four quarters would be 4.8% x 4 equals 19.20%... no doubt in one or two quarters growth rate could cross 6 and even 7 %...

Why identification of genuine citizens and refugees is being opposed, especially when they are majority from the terrorism affected areas like Pak... and Afgha...? How would the Gov provide benefits to genuine poor citizens and refugees, according to the Act, INDIA if they are left unidentified? What could be wrong just with identification?

….ye jo dalit-muslim gathjod, jiski baat tukde-tukde gang k sapna hai... desh ko barbaad kar dega... caa nahin hoga to jaroort ka paisa garib tak kaise pahuchega... shame same to vote bank politics... In logon ko jail ya detention mein dala ja sakta... Save your self...

They are protesting against a law and the spirit of Constitution, which is unconstitutional... The businesses are not investing due to instability created by such... bandh would destroy business... This is totally unproductive; they would unite HINDUS, too, which is a majority which would vote for the incumbency...

Inflation and Unemployment and Growth and Expectations....

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...

Economy and Growth, and CAA...

Corporate tax cut and even lower tax for new firms could bolster profits and investment and also increase real incomes by reducing prices... It has the potential to unlock alot of demand and spending in the economy...

The Gov may bring the tenders for private investment where there is a need to increase the productivity or production or supply and incentivise the firms... Though, it has reduced the Corporate tax to 17% for new firms which could make the existing firms a little uncompetitive and discourage investment... which may need re-alignment...

Banks and NBFCs are in problem for wrong policies in the past, but at the same time, both, the Gov and RBI have ensured enough liquidity to the both... Banks must pass on rate cuts to increase business... For banks and NBFCs the RBI is more responsible than the Gov...

As far as fiscal deficit is concerned the RBI has a foreign exchange reserve of $ 450 billion ( approx. 40 lkh crore inr) which might be used for investment and reduce deficit... More supply of dollar would also reduce import cost and trade deficit... oil would be cheap, too....

According to the latest chain based method index on base year 2017-18 last year’s growth rate was 7.9% ( or 107.90) and this year's growth rate is 13.36% (or 113.36)...

Banks borrow short and lend long which risks solvency if people start pulling money back, due to higher inflation and consumption... when they should borrow long and lend short... Therefore, the question is which rate should be higher or which should be lower.... or borrowing cost in the longrun would be high or lending rate in the shortrun...

Generally, longrun rate is higher than the shortrun, but according to the above condition short run rate should be higher than the longrun rate because banks would borrow long at lower cost and lend short at higher rates... But, the evidence from the US shows that buying longrun bonds would also lower short run rates...

The RBI is buying longterm bonds which would reduce longterm rates and selling short bonds which could increase shortterm rates... which could affect credit demand... the gap between shorterm rates and longterm rates could widen... and increase banks margins, but not good for credit growth, in the short term borrowing cost could go up...

The question is why the RBI is selling shorterm bonds which could increase shorterm interest rates?

Though, if banks want they could pass on the benefit to the borrower... Same with real estate companies........

Increasing fiscal deficit target means, the Gov would borrow more or more public debt which in a low inflation and low interest rate scene or through counter-cyclical policy could help increase employment/demand and spending and growth only if it increase productivity and help stabilise prices and expectation or inflation and growth...

Inflation could reduce the value of capital if public debt increases only demand without increasing productivity or supply... it would also crowd out private investment, through higher borrowing cost... Inflation and depreciation could increase foreign capital outflows...

The Gov is giving reservation to economically backward earning less than Rs 8lkh which would cover 80% of the population, including the existing reserved category... The Gov must walk the talk... by providing 100% tax exemption upto 8lkh... It is also expansionary... More spending could help higher GST collection and stable rates...

Infrastructure companies and banks, plus NBFCs and real estate companies are expecting demand stimuli to revive the economy... The Gov and RBI have incentivised these sectors in the form of lower taxes and interest rate, but they are reluctant to pass on benefits to consumers...

When commercial banks condition would improve it would also secure loans to NBFCs... and it would increase demand in the real estate... The government has committed Rs 100 lkh crore investments in infra... Former CEA's Economic Survey showed INDIA has a bright future...

Low prices increase the real balances with the public and could increase demand, if lower interest rate and taxes are passed to the consumers, this is very important to increase demand... More directly it is like sitting on your own competitiveness... Especially banks they must pass on rate cuts to boost demand and profits...

Irrespective of other countries currencies INDIA's economy is several more trillion economy in Rupee terms... Multiply 5 lkh crore dollars with 70 rupees... approx... 350 trillion or lkh crore rupees economy...  Currently it is 190 trillion rupees economy… but, there has been quite substantial inequality in the incomes… 90% own 10% of the wealth and 10% has 90% of wealth… 

Data show that Dec q is always better than Sep q followed by even better March and June q's... INDIA is in a cyclical slowdown that we observe every year...

It is crucial to actively manage supply according to demand or expected demand for skills...

Market is running on expectations, the longterm story is intact and the policymakers are committed to growth....

Without passport none should be allowed to enter INDIA because of security concerns... Not all are terrorist, but we should not risk others image and security...

The Act (CAA) is not excluding anybody form getting INDIAn citizenship; it is just against illegal immigration... It sought to define who is a citizen of INDIA amid illegal trespassing... who can vote...

There is no rationale behind accepting refugees or immigrants from a majority nation, if they are refusing them why should INDIA accept them if they are a threat to stability... If their nations (Afghanistan, Pakistan and Bangladesh)... are rejecting them... there must be some issue...

Accepting Hindus, Jains, Sikhs, Buddhists have majority in INDIA and they are facing bitter circumstances in the above countries…

What is the guaranty that they are not terrorist who is trying to use another channel? Who would take that responsibility? They could easily go to a majority nation where there rights would be preserved after all it is a issue of brotherhood, backed by vote banks pol....

INDIA is deeply affected by terrorism... and cross border politics... Not all are terrorist, but some of them are... Anybody can enter INDIA if they have legal documents... there is no discrimination...

Income, Demand and Growth (Rate)...

There is no Gov that is deliberately wrong 'coz it reduces the chances of re-election... Rajan may provide solutions to increase growth, he had been an insider in the Gov... It was Rajan's own advice to increase investment in infra, const and real estate where NPAs are highest... back in 2008...


Lower income tax would boost indirect tax collection, if people increase spending.. Real balances with the public would also increase due to lower GST and corporate taxes which may further increase spending and indirect tax revenue...


Higher disposable income could increase spending and indirect tax collection and reveue... Moreover, the Gov may also try boost real incomes by including the oil in the GST list of highest tax slab... Oil is scarce therefore it is rational to put it into highest GST tax rate to control demand.... Currently tax on oil is 100% of the price...


Daily consumption has not gone down, including conveyance, because it cannot that is why cpi has gone up, but consumption of manufactured products has gone down that is why core-cpi is mute... If the price of daily consumption goes down it could increase real cash with the public and demand for manufactured goods...


In a country where there is a large number of poor people, not everybody is fortunate and can afford a living without employment and earning... 6.1% unemployment rate is not that high in a slowdown, just above the natural rate of unemployment... Unorganised sectors create more employment in INDIA than the organised sectors... Nonetheless, there is a wage and demand problem...


Growth in September, qoq 2019 has gone down compared to the June quarter which was higher than the March qoq, preceeded by a growing December and September quarters 2018 and has increased over the same quarter last year, yoy, we have produced more on yoy basis...


Gross fixed Capital Formation is continuously goingup with temporary short and small blips...


If  Gov, banks and industry pass on the lower oil prices, rate cuts and corporate tax cuts and GST, respectively, to consumers it would increase real wages and incomes and demand and spending... but, they are just holding on price and demand and growth transmission and investment in the expectation that growth would revive then they would initiate... they could themselves revive investment and growth... they may miss growth when inflation and cost are low... As soon as they pass on benefits of excess capacity and higher productivity to the consumers it could increase demand and growth...


INDIA is growing 4% qoq and 16% annually... According to the latest chain based method if last year’s growth rate was 8% and this year’s growth is 5%.... then the growth rate would be -3 upon 8 multiplied by 100 equals -37.5%... compared to same q last year…


As far as -37% less growth than the last year same q is concerned it shows that growth rate is less than the previous yearonyear 100% when the growth rate was 8%, but the growth rate has increased 62.5% of the yoy 8% growth rate... Therefore, this year's growth on September q last year would be 5%... which has been added yoy and qoq... though lower qoq... 5% growth is the just one quarter's growth and when we add we arrive around 20% nominal growth and 16% real annual growth rate...


INDIA is growing 4% qoq and 16% annually or yoy... According to the latest chain based method if last years growth in GDP at constant prices was 34139 inr billion and this years growth is 35851 inr billion.... then the growth rate would be again 4-5% qoq which means every quarter and not compared to previous quarter...


Analysts are expecting a 5.5% growth for the next year… There are 4 quarters in 1 year, if the average growth is 5.5% then the 4 quarter growth might be 4%,5%,6%,7% or 7%,5%,4%,6% or 5%,4%,7%,6%.........


Growth has just gone down in the past two quarters... It is a short period of slowdown and nothing like recession... Inflation, especially core-CPI, but also CPI to an extant ,and growth are in a seasonal/cyclical slowdown... Floods and drought upset prices every year... which also affect rural demand when 70% people live in villages and are unproductively engaged in agriculture... The FM must comeup with a package for the rural sector as 60% of the population is seasonally occupied by the agriculture...


Stock screener could be a game changer the way investors view stock market investment... It is lesss time taking. now... and more predictable than before... stock prices…


Investors must choose stocks with P/B ratio at 2-3 with consistent growth and returns... Moreover, SIP or STP style is good, but for high returns investors must buy more at 10% or more correction, they must be mentally prepared... As share price go down they need less and less money to buy more stocks... which could maximise returns...


Bonds price-in yields if the market expects rate cut... The recent surge in bond yields are close to the amount of rate cut expectations which show correction in expectations...

Growth (Methodology) and the Monetary Policy...

Growth has increased on yoy base year when the economy grew 8%, this year’s growth increased 4.5%, over the last year same quarter when the economy was away slowdown so how could there be slowdown, now...


The economy has slowed compared to the last two quarter, but the economy has increased over the last year, so growth would add, the economy has increased last year’s 8% and 5% this year’s compared to last year if we use same base year to calculate real GDP growth rate...


September quarter is always slow compared to other three quarters... December shows improvement, followed by March and June... June quarter is always the best...


INDIA''s economy has done better than the stock market... Economy's has grown (real terms) 16% and the stock markets 13% per-annum in the last 8 years since 2011-12 base...


INDIA's food inflation is responsible for the growth cycles due to flood and also lack of irrigation facilities... when inflation increases it increases inflation and interest rate expectations which delays investment decisions and slows the cycle...


Any price rise could be transmitted to the general price level through interest rate, wages, and exchange, depreciation in the nominal exchange rate due to higher inflation and expectations could make imports costly...


The policy makers must avoid uncertainty or unforseen demand and supply shocks or grey rhino and black swan events from the expected growth path of the economy, and seriously try or commitment to achieve the projected growth rate to increase investment/employment and demand/supply in case of adverse shocks...


Similarly, the RBI may reduce uncertainty around interest rates, by remaining accommodative and tolerate higher inflation upto 6% to increase growth.... Achieving the inflation target is also an important part of the policy b’coz it is an indicator of demand... Higher inflation or price expectations at the target may help increase demand and spending and growth...


If INDIA could remove risk associated with food and oil inflation it could lower inflation and increase competitiveness, it would increase real disposable income and it would also increase real interest rate saving and investment, wages are consumed and profits are saved and invested... when everybody would spend it increases demand and supply... when both would increase prices could remain stable...


Lower taxes are also a form of fiscal spending... Rs 100 trillion commitment to spend is also ambitious...


Only INDIA's growth rate has gone down, but growth is still higher than the previous year same quarter...


INDIA has grown more than 200% in the last 7 yrs in GDP at constant price terms after 2012... In 5yrs economy will more than double to $5 trillion... Don't believe anybody, believe the data...


Only growth rate has gone down, growth has increased yoy GDP has grown, GDP at constant prices has increased 16% on the 2012 base year in real terms... The growth is down in cyclical or seasonal terms due to flood and lack of irrigation which INDIA faces every year...


Chidambaram Sir must tell the public that why we need cash when everybody has a bank account and mobile/internet... It increases the cost of banks... Moreover, all the money in banks would increase money supply and help increase rate cut transmission...


RBI Guv commentary showed that there is less space for rate cuts going forward keeping inflation in mind that has already cut real interest ahead the RBI meet by more the rate cut expected by the RBI...


The commentary was mature and expected to improve growth going forward (green shoots and revival in agriculture due to higher food prices too)... The RBI tried to stabilise expectations and promised to further strengthen growth through an accommodative stance, the RBI monetary policy would help the markets stabilise and gain ground before marching fore...


RBI must not discriminate between PSBs, CBs, NBFCs and Cooperative banks because there is no restriction on inter-banks inter-NBFC liquidity afterall it's all people money... though shadow banks must be properly regulated, the lesson we have learnt from US and China...


To much frequent changes in the base year could make the historical growth comparison impossible and redundant.. It would be difficult to compare growth pre and post the base year... To capture price changes we already use deflator to nominal GDP to arrive at the real GDP growth and growth rate... Changing base year in a sense is debasing of the growth rate...