Weekend musings!!

 

Why Opposition Congress, Communists, and NGOs want Elections based on Ballot papers

Because people want to create booth capturing and ballot papers/ VVPAT rigging scenarios where bombs can b thrown at the crowd to kill them while miscreants can destroy all ballot papers/VVPAT evidences etc. And finally they can blame Modi for rigging and not able to manage elections etc.

If 100% VVPAT print out is given to the people, then also they can sell the printouts for money to the parties .

How SC can stop selling of votes with VVPAT printout proof for higher amounts? Indirectly such VVPAT printouts will only encourage more black money to flow into our elections.

GOI should bring in a legislation whereby the Elections are jointly funded by Centre  through Budgetary allocations.SC should support the Govt for greater control, stricter monitoring and vigilance over expenses of Candidates who stand for elections. Only this can minimise use of black money in elections.

                                                                     <======><======>

Is India moving towards Presidential form of elections with Modi projected as PM candidate

Multiparty democracy will come into play when TINA factor is absent. When u r posed with the question whether u want stability and progress of the Country for your Children and grand Children to prosper fast or you want Uncertainty , what would you choose? This is not…

when media and journalists caution apprehension that  our Parliamentary election is morphing towards mandate for Presidential form, r they not mouthing Congress/ Dot alliance views? When the common man is confronted with TINA factor , when the masses should choose between Certainty of stability vs Uncertainty in every sphere which can weaken the country and its future , what would they choose?This is Hobson's choice!!

                                                                    <======><======

Controversy created by Congress as to Minorities,especially Muslims will have first claim on Nation's resources

Speaking of giving minorities  first claim on national resources in the name of Secularism is nothing but appeasement for vote bank politics.If then PM had said inclusive growth is important and weaker sections like senior citizens, war widows,people with disabilities, destitute women and children would have first claim on nation;s resources then that would have been appropriate. But then Muslims would not vote for Congress!!

IMF, World Bank and Asian Development Bank-all three have revised upwards India's GDP growth for 2024 & 2025

 That's good news for the Indian economy. The World Bank and IMF have both recently increased their projections for India's GDP growth in fiscal years 2024 and 2025.

• The IMF expects India's economy to grow at 7.8% in FY24, which is higher than the government's estimate of 7.6%. IMF raises India's FY25 growth forecast to 6.8%; FY26 outlook unchanged: IMF noted that the growth surprised on the upside in the second half of 2023 as robust domestic demand fuelled activity, especially in emerging Asian economies. 
  and most notably India, recorded sizable positive growth surprises. In India, we expect investment to contribute disproportionately to growth, much of it public investment
• The World Bank projects a growth of 6.8% for both FY24 and FY25, attributing this to strong private consumption and public investment. 

• Recently India's GDP growth forecast has been revised upwards by the Asian Development Bank (ADB).

  Here's a quick summary of the key points:

  • The ADB upgraded India's GDP growth forecast for the current fiscal year (FY 2024-25) from 6.7% to 7%.
  • This revision is driven by factors like strong public and private sector investments, along with a gradual improvement in consumer demand.
  

Courtesy:The Print

In FY24, exports of goods came down by 3.2% yoy. Ready made garments, Gem & jewellery and Petroleum products were down but under Imports Oil imports were also down.So, the overall Trade deficit as a percentage of GDP is well contained below 2% of GDP.

Courtesy:CRISIL

The recently announced HSBC Flash India Composite Purchasing Managers Indices (PMI) indicate upbeat momentum in Indian economy. At 62.2 in April, the Flash India Composite PMI output index rose at the fastest pace in nearly 14 years.This clearly indicates that the Economy is growing at a robust pace and is emerging as a strong economy.

The most important outcome expected out of these GDP growth upward revisions and fiscal rectitude shown by GOI in containing the Fiscal deficit to 5.1% for FY25 , is Ratings upgrade by Global Rating agencies.

India's exports has come of age in FY 24

 February 2024 saw the highest monthly merchandise exports of the current fiscal year to yet. India exported USD 41.40 billion worth of goods in February 2024, up 11.86% from USD 37.01 billion in the same month the previous year.

Petroleum products, engineering goods, electronics, organic and inorganic chemicals, drugs and pharmaceuticals, and petroleum products are the main drivers of merchandise export growth in February 2024.
Exports of engineering goods reached USD 9.94 billion in February 2024, up 15.9% from USD 8.58 billion in the same month the previous year.

Organic and inorganic chemical exports rise by 33.04% from USD 2.22 billion in February 2023 to USD 2.95 billion in February 2024. Exports of electronic goods grow by 54.81% to USD 3.00 billion in February 2024 from USD 1.94 billion in February 2023.
In February 2024, the value of drugs and pharmaceutical products exported was USD 2.51 bn

an increase of 22.24% overUSD 2.06 Billion in February 2023

Petroleum Products exports in February 2024 grew by 5.08% at USD 8.24 Billion from USD 7.84 Billion in February 2023

Exports of Agricultural products including Tobacco (58.24%),Meat, Dairy & Poultry Products (37.83%), Oilseeds (37.71%),Cereal Preparations & Miscellaneous Processed Items(17.69%), Spices (14.84%), Fruits & Vegetables (12.72%)

and Rice (1.81%) showed growth momentum in February 2024

Overall trade deficit improved by 37.80% from USD 116.13Billion in April-February 2022-23 to USD 72.24 Billion in April-February 2023-24

Last but not the least, the merchandise trade deficit improved by 8.43% from USD 245.94 Billion in April-February 2022-23 to USD 225.20 Billion in April-February 2023-24. 

Courtesy:PIB press release dt 15th April 2024

This trend shows that India has come of age in Exports and has sustained this growth trend despite global head winds like recession in some of the economies, war in Ukraine and in Middle east. Hopefully this momentum will continue to grow in FY 25 and thereafter also.

Oil price movements can be the big party spoiler  and  so needs to be monitored closely!

Current Positive Economic Indicators for FY 24-25 and beyond ,for Indian Economy

 

GST collections and core sector growth in FY24 paint a positive picture of the Indian economy at the end of the fiscal year. Here's a breakdown of what we know:

• GST Collections: Reports indicate that GST collections remained buoyant throughout FY24. In February 2024, collections reached Rs 1.7 lakh crore, reflecting a year-on-year growth of 12.5% [1]. This trend is consistent with the entire fiscal year, suggesting increased economic activity.

• Robust Core Sector Growth: The core sector, which comprises eight key infrastructure industries in India, witnessed strong growth in February 2024. The Purchasing Managers' Index (PMI) for manufacturing activity rose to 56.9, indicating a significant expansion. Additionally, the output of these core sectors reached a three-month high of 6.7% in February, compared to 4.1% in January [2].

Connection Between the Two: A rise in GST collections often reflects a growth in economic activity. Businesses tend to collect and pay more GST as they sell more goods and services. So, buoyant GST collections can be seen as a positive indicator alongside robust core sector growth. This suggests that FY24 might have been a period of economic expansion in India.

It's important to note that these are glimpses from reports and might not represent the final figures for FY24. However, they do provide encouraging signs about the Indian economy.

Here are some other positive economic indicators for India, besides the ones you mentioned:

• Rising Foreign Exchange Reserves: High forex reserves provide a buffer against external shocks and can be used to stabilize the rupee.
• Fiscal Deficit contained at 5.8% fo GDP and budgeted lower at 5.1%: This means the Govt is fully committed to fiscal consolidation glide path to bring down the Fiscal deficit to 4.5% or lower by FY26.
• Increasing Foreign Direct Investment (FDI): FDI inflows indicate that foreign investors are confident in the Indian economy and see it as a good place to invest.
• Indian Govt Bond inclusion in JP Morgan and Bloomberg Indices in FY 24-25: This is expected to bring an inflow of US25 billion in the Financial year ending 2025.
• Likely Improvement of Credit Rating: Due to the above positive economic indicators, the new Indian Govt after elections can rightfully expect a good credit rating upgrade from international agencies which will allow India to borrow money at lower interest rates and with all the positive news can attract capital at cheaper costs.
• Growing Startup Ecosystem: A thriving startup ecosystem signifies innovation and entrepreneurship, which can drive future economic growth.
• Government Reforms: Recent government reforms aimed at improving ease of doing business and attracting investments through schemes like PLI can boost economic activity, employment and a growing manufacturing pie.This can have Multiplier effect across the economy on income and employment opportunities.
• Growing Services sector and Services Exports:According to the commerce ministry, India's services exports in April 2023–February 2024 were $314.82 billion, which was a 7% increase from the same period in 2022–2023

It's important to remember that a healthy economy relies on a balance of various factors. While these indicators are positive, we should also monitor potential challenges like inflation, unemployment rates, and global economic conditions.

Core Industries Growth in Dec 23 is the slowest in 14 months

 According to a press release from the Commerce Ministry, the Index of Eight Core Industries (ICI) increased by 3.8% in December 2023 compared to the previous year. The release also stated that the production of coal, natural gas, steel, fertilizers, refinery products, cement, and electricity increased in December 2023

However, the growth of India's eight core sectors slowed to 3.8% in December 2023, which is a 14-month low. This is a significant decline from the 8.3% recorded in the same period the previous year

The eight core industries in India make up 40.27% of the weight of items in the Index of Industrial Production (IIP). The IIP is a measure of the growth of various sectors of an economy, such as mineral mining, power, and manufacturing

The eight core industries in decreasing order of their weightage are:

1. Refinery products
2. Electricity
3. Steel
4. Coal
5. Crude oil
6. Natural gas
7. Cement
8. Fertilizers                                                                                                                                                                                                                                                                                The rest of the IIP is dependant on Exports growth for incremental growth and Manufacturing of Consumer non-durables and Consumer durables etc. which in turn will depend on disposable income on hand.                                                                                  When Private Final Consumption Expenditure is languishing especially in Rural areas(Refer "State of the Economy-Jan 24" -RBI), the growth of GDP may be impacted in the months to come, when fiscal stimulus steroids through deficit gets curtailed.                                                          

Significance of Ayodhya temple for Civilisational re-awakening

 "தருமத்தின் வாழ்வதனை சூது கவ்வும்;தருமம் மறுபடியும் வெல்லும்" என்ற பாரதியின் வாக்கு பலித்தது - நேரடியான எடுத்துக்காட்டு அயோத்தி இராமர் கோவில்.

This Ram temple has become a reality in India after 500 years and still those who are opposing it must remember that it has not been built in Mecca or Medina ,but in Ram's Janmasthan/birthplace in Ayodhya in India i.e Bharat!!

It is incumbent upon media and Journalists to write reinforcing PM's words on Goodness ,Harmony and Dharm represented by Ram.Ram, according to Valmiki, lived as an ideal man which needs to be emulated by all human beings.Truth,Valour, sacrifice, patience, perseverance , endurance,persistence,forgiving others,being grateful are all eternal ideas and Ram is the personification of these values in life.His friendship with Tribal king Guha and his acceptance of forlorn Sabari are symbols of love, inclusivity and humility. We should Write how Ram's value systems are relevant to India as a modern civilisation  and  to our Constitutional Rule of Law .Ayodhya Court battle itself was a true representation of Ram's Rule of Law where all sides were given equal chance to air their views and present evidences.Court verdict was won not by the Might of the Majority but by Ram's way of Equity ,justice and Rightfulness. It was a judgment "by the Righteous,for the Righteous &of the Righteous"

Gandhiji said that Rama and Rahim are one for him but , whether the Muslims were and are  prepared to accept his words and accept any diety?So without acceptance or meeting of minds , Gandhiji's words sound hollow and empty and so his words lost its relevance . His words cannot be sought to be forced upon one side alone, by letting of the other side by pampering or appeasing them.To some extent ,to show the large heartedness we can extend our friendship hand and if they hit our hands taking our compassion and concern as cowardice, then the other side will only invite reaction and retaliation

Yes, the structure that was deemed to be masjid was demolished and then Ram temple has risen there.However those who are opposing must also remember these things 1) in the first place it was not used for prayers/namaz by Muslims for many years atleast since the locking of its gates by Congress Govt since 1950 onwards;2) Supreme Court has looked at it as land ownership dispute and has settled the case in favour of the Hindus who presented evidences and records to prove their genuine ownership.3)Say a land is owned by those opposing the temple and the usurper of their land after taking illegal possession constructs a house in that land, would these owners abandon their land in favour of usurper and allow him to use the house constructed in their land , genuinely owned by them?!

India's Fiscal deficit glide path linked to India's credibility

 India's Fiscal deficit budgeted for FY 23-24 was 5.9% of GDP which is an important metric for measuring the efficiency of the Government of India in comprehensively managing its finances including its Revenue Collection and its Spending efficiency in terms of Capex as well as Revenue expenditures.

As per FRBM Act GOI has taken up an obligation to reduce the fiscal deficit over the years and bring it down to 4.5% in Fy26.In this context, we need to understand that in FY 25 it has necessarily reduce it to 5.3% or less than that and in the forllowing FY26 it has compress the Fiscal deficit to 4.5% inorder to achieve as committed.

Why this FD reduction is important

1)Fiscal deficit means that the Government is living beyond its means i.e it is borrowing out of its future revenue streams. More the FD, the Govt may be forced to borrow if its Revenue collections languish or expenditure runs out of control.We have seen two Covid years where GOI faced double whammies in both the years when Revenues faltered and Revenue expenditure skyrocketed due to subsidies and free foodgrains to people.Therefore we should reduce FD in years of relative stability like the current years inorder to save for rainy years lest we face storms in the coming years.

2)FD of Centre and States combined is already more than 8% and this profligacy, may mean more borrowings by both Centre and State which will burden the Govts, with huge servicing costs i.e interest payments.Since our Govt debt to GDP is already high at more than 80% and should we face another Covid type Black Swan event, then our borrowings level may go out of hand.

IMF has already warned about this untenable  Government Debt to GDP levels getting out of hand if necessary steps to rein in Fiscal Deficits are not taken.

When Govts. borrow more for Revenue expenditure that may crowd out Private sector investments, which will adversely impact further asset creation and generation of employment.

3)Containing FD becomes an important signal to lenders and Ratings Agencies across the globe that we are committed to Fiscal Discipline. GOI's credibility in fiscal management is in sticking to its committed fiscal deficit glide path when the weather is clear. Only by adhering to the promised Fiscal deficit glide path we can improve our sovereign ratings , which will help both the Govts as well as private sector to source funds at cheaper rates.

4)High FD of 5% or more will stoke inflation in the economy and if major portion of FD is for Revenue expenditure, then the country and its people may face high inflation. Inflation in true sense is a Tax on the poor and it constrains the disposable income in the hands of the people which will not help in the cause of growing our economy rapidly.

5) Fiscal deficit has a moral hazard dimension,  since Fiscal deficit indicates that we are borrowing from our children inorder to sustain or feed ourselves today.In short as fathers and grand fathers we are living beyond our means. As per reputed Economists,only FD of 3% of GDP is sustainable in the long run and we have a long way to go.