สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 9 ธันวาคม 2556

New Delhi Elections: AAP adds new chapter to India’s governance story

Apart from the stunning defeat of the Congress party in 3 of the 4 states, the spectacular debut of the Aam Aadmi Party (AAP) that won 28 of Delhi’s 70 assembly seats will force political parties to relook their future strategies. While barriers to entry remain high in Indian politics, a rank newcomer doing so well should get the BJP especially, given its urban bias, to think of the consequences of an AAP extending to more urban centres. Investors would also do well to keep in mind that while stock markets may rally in the hope of a particular candidate coming to power, no party coming to power changes the direction of the market in anything other than the very short run. While it can be argued that investors will start announcing new projects once they are convinced the government is going to push projects, with large swathes of India Inc vastly over-leveraged, industry is not going to find it easy to either raise equity or debt required immediately. Big reforms on GST or on privatising the coal sector, for instance, will all require political parties to work together—exactly the same kind of support the UPA is not finding it possible to put together right now.

(Source: Financial Express)

India lauds Doha revival as WTO pushes through package

Even as desperation started creeping in, trade ministers from 159 member countries who had gathered in the Indonesia island resort held on to till the last moment, as World Trade Organization (WTO) Director General Roberto Azevêdo pronounced the Bali package was "agreed and adopted", amid loud cheers and deafening applause. The final ministerial declaration accepted India's demand for continuing with the interim solution until a permanent one was arrived at to the problem of allowing the government more leg-room to buy food at administered prices, as part of their food stockholding programmes, which isn't allowed under existing rules. A final deal on trade facilitation and a beneficial package for least developed countries were also sealed. For India, the trade facilitation agreement will entail legislative changes. It will be given financial assistance and adequate time to bring about these changes.

(Source: Business Standard)

Raghuram Rajan attributes current economic woes to domestic factors

Attributing the current economic woes to stimulus provided by the government to tide over the global crisis of 2008, RBI Governor Raghuram Rajan has said it eventually led to an overheated economy, high inflation and uncomfortable fiscal and current account deficits. Addressing investors at an Citibank event in New York, Rajan said economy has slowed to below 5 per cent from an average of 8 per cent between 2002-2012, mainly on account of domestic factors. The current account deficit (CAD), which is the difference between inflow and outflow of foreign exchange, rose to a record high of 4.8 per cent of GDP in 2012-13, from 2.8 per cent in 2010-11. Following the measure taken by the government and the RBI to increase inflow and restrict gold imports, the CAD moderated to 3.1 per cent of the GDP in first half of current fiscal. It was at 4.5 per cent in H1 of 2012-13. On a more long-term basis, Rajan hoped that inflation indexed bonds would help reduce gold demand.

(Source: Economic Times)

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