Green-Shoots are Visible...

The PMI has recorded expansion in the economic activity... People also hold investment due to closing of the Financial Year and the Budget.... which would resume after those events... FM and RBI couldn't be more supportive and stimulative... If the greenshoots are not visible then we are also not going down, the economy has been more stable... Lower interest rate and higher fiscal deficit would increase the Public Spending and income multiplier would work... Lower gst and corp-tax would also help increase real wages and income and demand and spending and growth... Higher income expectations could boost demand, spending and prices and growth...

Investment was put on hold due to the Budget... INDIA is in a cyclical demand slowdown... which happens every year... Food and vegetables have been more speculative due to drought, in some parts and floods in some other... People speculate on monsoon and food prices which is also manipulative sometimes... ie expectations around prices play an important role in investment in stocks and supply... it happens every year... Food and fuel have a significant effect on inflation 'coz they are key elements of the consumption basket of the poor and real incomes and demand... core inflation also depend on CPI because of wage demand and inflation.... Nonetheless, lower demand could lower the ability to pass on price increase to consumers... Higher incomes and demand could increase core CPI or or price expectations... and increase spending and growth... Lower investment could be attributed to the Budget...

Lose Regulation of the shadow banks and the NBFCs have been the source of systematic risk and NPAs... we have evidence of risky lending by shadow banks in the US and China... Better regulation (like banks) could mitigate that risk, since banks are already lending big money to NBFCs... In INDIA NBFCs have lend on a large scale when the PSBs were holding credit growth due to the stressed assets... The RBI must make crop insurance and hedge investment necessary for loans... That would make the investments safe....

The Govt has more than $ 500 billion in the foreign exchange reserves with the RBI which is lying idle/passive... INDIA's CAD is around $ 70 bllion and the reserve is enough for 6 months imports... The reserve could also help increase investment in skills and productive areas... $ 500 billion is 35 lkn crore rupees... More supply of dollar could lower it and make the rupee strong and oil cheap which could also increase competitiveness of the Economy... The Gov and RBI should try to bring rupee denominated bonds get indexed in foreign indices...

The skills gap has constrained the productivity and production and wages and incomes and demand and growth in UP... With biggest land area UPs growth rate is lackluster compared to other States like Gujarat... Industrialisation could further improve jobs situation... UP has the potential to become a leader in Agro-processing and attract FDI in under-penetrated areas for job creation...

INDIA's Debt-GDP ratio 69% is low compared to the developed and is close to Germany's one of the best among... and lower than Japan, US and UK... INDIA’s debt is 1,294 billion usd and of US is 23.25 trillion usd.....

The Center and State fiscal deficit combined doesn't give the right picture... Decentralisation and devolution of more funds to State and alternate sources of revenue, like fuel, has kept States' fiscal deficit in check... The need really is to ask states to increase spending to restore recovery... States fiscal deficit is 2.5% and Center's is 3.8%... States could still increase spending....

Inflation (core) is stable, when gov increases spending it increases demand and prices, like UPA2... Bonds yields and lower interest rate... have also been stable... Monsoon and Oil pose greater risk to inflation and interest rate expectations.... and demand/spending and growth and expectations...

Manmohan Singh's comment spread pessimism and could could hurt business expectations and reinforce low growth (only)... He shall stop giving forward guidance to the investors... that may hurt the Economy.... Monmohan Singh's counseling of the investors is not right... Inflation in INDIA is running above the target... Does it signify slowdown, even core-CPI...? Slowdown means deflation or a sustained period of low demand and prices.... Is it all observed...

Everybody knows that the Budget wanted to crowd-in the Private investment.... The theme was ADC- Aspiration, Development and Care...

Demo was not supported by Urjit Patel... MPC continued a hawkish stance even when inflation was way below the target...

This is time domestic players increase business by lowering prices and increase demand and prices and expectations... when everybody would spend it would increase price expectations...

At one place Covid-19 would reduce demand and prices China and higher price in other countries (importing countries).... Spending would increase in other countries 'coz of higher price expectations and less spending in China due to lower price expectations... This is an adaptive expectations model, which could reduce CAS in China and also reduce CAD in other countries... Lower price expectations would delay spending in China and higher price expectation could increase demand and spending and growth in other countries... Expectations play an important role in spending, especially the investment spending, the speculative demand (with savings) which then also creates employment and demand... In this process both demand and supply increase upto full employment... China hit that wall and wages have not remained competitive both, nominal and real coz of full employment... Stimuli could help balance growth... Recovery in China is also important to increase supply and contain or stabilise prices and expectations and spending globally...

Market Capitalisation is at all time low and may point recovery soon... They (Mutual Funds) could if you invest in daily SIPs... It would give you better cost averaging returns... Investors must chase the bottom of the stock price of the good PE companies by buying more on significant dips/corrections till the gap closes to 20%... a good stock could go 20% in a day.... So it is not a big difference... and you could easily wait for good returns... this one is short run strategy.... PB ratio shows, less than three, that the current price is a good bet and PE ratio shows that the earnings and returns expectations are high... Growth ensures that the stock would be in demand... If followed this could help accumulate more stocks when they are cheap till it bounces back in less money and sell high... A good stock could easily give 50% returns in a year... or 5% per month...

If a company buysback it would benefit both the company and investors, afterall the company is the promoter and carry the majority of shares, its share price goes up to, people invest more in such companies...  The Govt has only discouraged buybacks recently... The rest would be a gain...

During the US President visit to INDIA… The analysts hope the US would help INDIA maintain its oil reserves, since it creates uncertainty for growth …. Sofar the success has been limited, US has shown little interest in exporting oil to INDIA... US has also big bio-diesel reserves which produce less pollution when blended with fuel... INDIA should try to import more bio-diesel than fuel to tackle climate change...

INDIA may try for the continuation of free trade agreement under Generalised System of Preferences -GSP - to access the US market at low cost for exports and more foreign exchange and stability... The INDIAN Economy, though, has reduced the poverty at a higher rate, but, it is still less than 4rth of the US economy and home for a large number of poor people in the population... Creating good jobs for its poor population would help bring them out of poverty....

It is clear that people having a (legal) passport and identity cannot be denied entry and citizenship... Anybody from a religious majority terrorist country must be identified... Terrorism is a menace for INDIA... It's for security of INDIAN's and to provide benefits to the poor... Opposing CAA, NRC and NPR is self-destructive... The gov's around the world are planning RFID chips to be used for security concerns... If gov brings anything like that, then, what would happen???

The question of religion doesn't arise... It is about majority and minority and the protection of their rights... INDIAN muslims are not denied citizenship anyway... and could enter INDIA only if he has a valid passport and visa

A law passed in the Parliament could only be challenged in the Court... (Not on the streets; added)... Kapil Sibal...

Budget, the MPC and the Economy...

The Budget had it all... it was a very good Budget... We had spending on the Agriculture, Education, Heatlhcare, lower Income Tax, removal of DDT and push for privatisation through disinvestment and protection of domestic producers and employment through import duty... All money would ultimately go to people's hand which either might be saved or spend or both which the economy needs at this point of time... It was a prudent budget that would help crowd in private investment and consumer demand... Higher savings could increase the productivity of capital by reducing interest rate... The spending would work through multiplier...


It is not the duty of the gov to increase investment or unproductive spending, it is up to the private sector, the gov though could incentivize investment by increasing people's income... The budget has given full space to the private sector to increase investment without crowding out, but crowd in... The budget would help stabilize the growth rate... what the gov would spend would be also somebody's income... Lower consumer prices could further boost real incomes... Core-inflation or manufactured goods inflation, excluding food and fuel has been low...


The gov may increase import duty on the finished product and lower on the intermediate products... Employment generation through protection/import-duty and higher price expectations in the domestic economy for the domestic producers could be the right thing to do... It could also help increase productivity and exports... Production in INDIA is important to provide jobs... Domestic producers would be happy with the move...


Import duty increase could help protect domestic producers and increase employment... FM provided everything except LTCG relief in the Budget... It is not rationale to expect common-man a Budget expert... Spending would work through multiplier...


If the gov wants to stabilise the stock market it may try to increase STCGT (short-term capital-gain tax, less than 6 months, or variable for the time period, higher on less time and less for longer time) instead of LTCGT... It would help the stock market investors against too much volatility in the short-run...


INDIA is already $ 3 trillion dollar economy which means  Rs 210 lkh crs... People have money, but not value and it would happen when supply/productivity/competitiveness/production would increase for which lower borrowing cost is sine qua non... The RBI might try to increase supply when demand is high and decrease supply when demand is low which could help stabilize prices within the inflation target, higher inflation could further erode value of money... Lower and stable prices could help maintain financial stability... 10% inflation target could also help boost supply and lower prices and create value... people would increase investment and demand at lower prices and low borrowing cost... which could increase demand and price expectations... 10% inflation is very minimal... 0.10 per rupee or 11 on 10...


5% growth per quarter is good when the external environment is reeling under uncertainty and low global growth which could easily add 2% to the total growth rate... China, US, Europe all had been affected by trade wars and supply chain disruption... and, now, the corona virus


If transmissions are not passed to the borrowers... the RBI may cut real rates to zero or neutral real interest rate... Inflation excluding food and fuel is 3.5% and nominal interest rate is 5.15%... Therefore, real interest rate is 1.65%... RBI is no profit organisation... though it pays dividend to the gov... In a less rich economy people save less and positive real interest rate is important to increase competitiveness.... and productivity... lower and stable prices are important for financial stability... Everybody knows that fuel creates uncertainty for growth in INDIA... which INDIA now exports more than it imports...


With Monetary Policy accommodative along a 25 basis point cut and the a neutral real interest rate of 1.25% in a world of negative real rates could help the stock market scale new heights... The market is ready for this, though, higher money supply through OMOs and lower SLR and a lower reverse repo rate could induce banks to lend more at lower rates...


A change in psychology of the investors has been observed that they may take a rate cut or too much easing as signals for that there are underlying problems with the growth or something is wrong... But, Sensex is positive, both mathematical and sentimental... As Analysts are seeing shoots of a bounce back in demand/supply/prices/consumption/savings/investment/employment/growth/expectations....


Rate cut and accommodative Money Supply would increase competitiveness and productivity of capital and investment and lower prices may increase real wages and incomes reinforcing demand and supply and growth... exports would increase too....


The PSBs are also not passing the rate cuts by the RBI, if they take lead, others (PrSBs) may follow as there would be competition to increase the market share...


In Jan inflation increased to 7.58%.... Lower real interest rate and inflation expectations could increase spending and growth, too, as long as as RBI remains accommodative or neutral... The Economy swings between excess demand and excess supply and lower price/higher quantity or higher price/lower quantity, though excess could push prices and expectations down/up by increasing demand/supply and prices and expectations... too much supply/demand could delay spending which might reinforce prices and expectations... In this, if people expect that a(ny) policy or stimuli or expectations that would further increase volatility until it becomes a reality or is completely suspended... Uncertainty also reinforces prices and growth and expectations...


There are alot of things we have that are going through stagnant demand and prices compared to food (except food), fuel, too, just two of the categories which create alot of uncertainty for growth, too.... which directly affect real wages and incomes and demand and growth, food and fuel demand is high in INDIA, but demand in other categories is low which must have credit supply at cheap rates to create jobs... These must have separate funds or incentives to increase production through investment, too... supply creates demand...


The slowdown is an oppourtunity to invest more at lower prices... The real balance effect would work, also through incentives and inducements... Lower prices increase demand and price and expectations and spending and growth and expectations...


Germany’s internal devaluation is a better model than China's external devaluation... Lease of land could lower the cost of land in INDIA....


Now investors and especially SIPs which is a favored route of investment would keep the stock market get going with an upward bias in the medium to long run...


BJP lost some elections due to limited reach to the poor condition of rural and agricultural areas... though, last budgets had been dedicated to fill that gap... If provided skills to the rural population, rural hinterland could prove to be positive for next elections...


Donald Trump the US’ President is scheduled to visit INDIA in Feb. Like always US would like to strike arms/defense deal, investment in indigenous industry could be a success... The President and PM post do not provide any incentive to increase trade and negotiations... like other jobs... They are there to increase investment and create employment in the Economy... Security even above that...


It is a cyclical slowdown... checkout on Google... though, green shoots of recovery are visible in INDIA….

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...