สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 16 มีนาคม 2555
Govt to unveil budget amid slowing growth, political crisis
Indian Finance Minister Pranab Mukherjee was set to present the federal budget to parliament on Friday morning, under pressure to trim the country's fiscal deficit amid cooling economic growth and a crisis of stability for the coalition government.
The government's move on Wednesday to raise railway fares for the first time in eight years sparked an intense backlash from a key coalition ally, further eroding its ability to make politically tough decisions such as raising diesel prices in order to ease its fiscal deficit.
In Friday's budget for the year that starts in April, investors were looking for credible deficit reduction targets, with some economists saying roughly 5 % of GDP is realistic.
The Indian economy is coming to the end of a tough fiscal year that is expected to see growth slow to about 6.9 %, far below the nearly 9 % target set in last year's budget.
High inflation forced the central bank to continue raising interest rates even as its counterparts elsewhere turned their focus towards reviving growth. While inflation is no longer near double digits, it rose to 6.95 % annually in February.
(Source: Economic Times, Reuters India, IBNLive, Business Standard)
RBI leaves rates on hold, warns on inflation
The Reserve Bank of India (RBI) left interest rates unchanged on Thursday and warned of resurgent inflation risks, a hawkish stance that disappointed investors clamoring for the first rate cut since the aftermath of the global financial crisis.
The RBI kept its policy repo rate on hold at 8.50 %, as had widely been expected. It kept the cash reserve ratio unchanged at 4.75 % after a 75 basis point-cut on Friday in a surprise off-cycle move to ease tight banking system liquidity.
While market hopes had risen that the RBI would finally begin lowering rates after 13 increases between March 2010 and October 2011, it opted not to make a move before Friday's federal budget release for the fiscal year starting April 1.
Growth in Asia's third-largest economy slowed to 6.1 % in the three months to December, the weakest in almost three years, and is on track to fall just short of 7 % in the fiscal year that ends this month.
The central bank's next policy review is on April 17, and many economists and traders had expected it to cut rates then.
(Source: yahoo.com, Reuters India, IBNLive, newspedia.in)
Economic Survey: Govt calls for fiscal consolidation
Disappointing performance of the economy in this fiscal should be a "wake-up call" for the government, the Economic Survey said, but it expressed the hope that growth rate would rebound to 7.6 % in 2012-13 on the back of moderating inflation and low interest rates. The Survey made a case for fiscal consolidation, tax reforms, opening of the multi-brand retail to global chains, freeing of diesel prices and stressed on honesty quotient, too.
The economic survey said a lower fiscal deficit will help investments to rebound quickly.
Economic growth faltered to a three-year low of 6.1 % in the December quarter following a contraction in investment, and the pace of economic expansion this fiscal year is forecast to dip below 7 % for the first time in three years.
Capital investment has dropped to 30 % of GDP in the fiscal year ending on March 31 from 32 % a year ago.
The economic survey, however, forecast a pick up in the economy in 2012/13 as it expects fiscal consolidation along with lower inflation will help investments recover.
It expects annual economic growth to be about 7.6 % in 2012/13 and 8.6 % in the year after.
Talking to reporters, Chief Economic Adviser Kaushik Basu, the main author of the Survey, said growth in the manufacturing and agriculture sectors are likely to be key drivers in the next fiscal.
(Source: the Hindu, Reuters India, IBNLive, Hindu Business Line)
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