Next year will be a more challenging year than this has been but the Reserve Bank of India (RBI) will continue to do everything possible to lessen the domestic effects of the global financial crisis, its chief said.
In speech released on Thursday, RBI Governor Duvvuri Subbarao said the outlook for India and the world remained uncertain and the path of the global crisis and its resolution remained unclear.
While the central bank had a roadmap, it was not possible to deploy it all in one go.
"It would be our endeavour to adapt this roadmap to the evolving global developments and implement it flexibly and pragmatically," he said.
"Our approach, as indeed of every prudent central banker around the world, has been to 'cross the river by feeling the stones'."
Subbarao said India's economic fundamentals remained strong, but developments in the real economy, financial markets and global commodity prices pointed to a period of moderating growth and declining inflation.
"The year 2009-10 will be more challenging than the current one," he said.
"The RBI will continue to be on vigil and do everything possible within its mandate to mitigate the impact of the crisis on the Indian economy."
Since mid-October, the central bank has lowered its key lending rate by 250 basis points to 6.5 percent to shield the economy from the spillover of the global credit crisis.
It has also aggressively slashed banks' reserve requirements to shore up growth, which many expect to slow to 7 percent in the fiscal year which ends in March from 9 percent in 2007/08.
The government bond market is widely expecting interest rates to fall again soon, with the benchmark 10-year bond yield dropping 30 basis points on Thursday to 5.50 percent.
Subbarao noted inflation had been declining for the four weeks before he spoke, pointing to a faster-than-expected reduction in the pace of rising prices, while a recent cut in state-set fuel prices should further ease inflation pressures.
Data on Thursday showed India's wholesale price index, its most widely watched inflation measure, rose 6.84 percent in the 12 months to Dec. 6, sharply below the previous week's 8 percent and lower than a Reuters estimate of 7.49 percent.
Source: Agencies
Showing posts with label Indian economy. Show all posts
Showing posts with label Indian economy. Show all posts
Thursday, December 18, 2008
Wednesday, December 17, 2008
Indian unorganized retail sector to grow to $496 bn in four years
The unorganized retail sector is expected to grow at about 10 percent per annum to reach $496 billion in 2011-12 despite the steady expansion of organized retailers, a study released Wednesday said.
The report on the impact of organized retail on small shop owners, released in parliament by the Delhi-based think tank Indian Council for Research on International Economic Relations (Icrier), said the retail business in the country would grow at 13 percent annually from $322 billion in 2006-07 to $590 billion in 2011-12.
The unorganized retail industry was valued at $309 billion in 2006-07.
However, given the relatively weak financial state of the unorganized retailers and the space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand, the report said.
Hence, the organized retail that now constitutes a small four percent of the total industry is likely to grow at a much faster pace of 45-50 percent per annum and quadruple its share in total retail trade to 16 percent by 2011-12, the Icrier said.
However, the Icrier added that small shop owners in the vicinity of organized retailers have experienced a decline in their volume of business and profit after the entry of bigger players.
According to the report, consumers have gained with the entry of organised retailers and their overall spending has also gone up.
While all income groups saved through organized retail purchases, the report revealed that lower income consumers saved more.
Moreover, the report said farmers benefit significantly from the option of direct sales to organized retailers.
Profit realisation for farmers selling directly to organized retailers is about 60 percent higher than that received from selling in local markets.
The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganized retailers.
It also urged for encouraging cooperatives and associations of unorganized retailers for direct procurement from suppliers and farmers.
Also, simplification of the licensing and permit regime for organized retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.
Source: Agencies
I
The report on the impact of organized retail on small shop owners, released in parliament by the Delhi-based think tank Indian Council for Research on International Economic Relations (Icrier), said the retail business in the country would grow at 13 percent annually from $322 billion in 2006-07 to $590 billion in 2011-12.
The unorganized retail industry was valued at $309 billion in 2006-07.
However, given the relatively weak financial state of the unorganized retailers and the space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand, the report said.
Hence, the organized retail that now constitutes a small four percent of the total industry is likely to grow at a much faster pace of 45-50 percent per annum and quadruple its share in total retail trade to 16 percent by 2011-12, the Icrier said.
However, the Icrier added that small shop owners in the vicinity of organized retailers have experienced a decline in their volume of business and profit after the entry of bigger players.
According to the report, consumers have gained with the entry of organised retailers and their overall spending has also gone up.
While all income groups saved through organized retail purchases, the report revealed that lower income consumers saved more.
Moreover, the report said farmers benefit significantly from the option of direct sales to organized retailers.
Profit realisation for farmers selling directly to organized retailers is about 60 percent higher than that received from selling in local markets.
The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganized retailers.
It also urged for encouraging cooperatives and associations of unorganized retailers for direct procurement from suppliers and farmers.
Also, simplification of the licensing and permit regime for organized retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.
Source: Agencies
I
Thursday, December 11, 2008
Uncertainty will remain in Indian economy, says RBI chief
The outlook for the Indian economy in the coming months remains uncertain but the Reserve Bank of India (RBI) will take appropriate Subbarao action when needed, its chief said on Thursday.
"The situation way forward is quite uncertain. The RBI will take appropriate action as and when required," Subbarao told reporters after a meeting of the bank's governing board.
"The RBI will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate."
He also said the central bank would endeavour to minimise the stress on various sectors of the economy which have been hurt by the global economic crisis.
On Saturday, the bank aggressively cut its main rates to support slowing.
"The situation way forward is quite uncertain. The RBI will take appropriate action as and when required," Subbarao told reporters after a meeting of the bank's governing board.
"The RBI will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate."
He also said the central bank would endeavour to minimise the stress on various sectors of the economy which have been hurt by the global economic crisis.
On Saturday, the bank aggressively cut its main rates to support slowing.
Uncertainty will remain in Indian economy, says RBI chief
The outlook for the Indian economy in the coming months remains uncertain but the Reserve Bank of India (RBI) will take appropriate Subbarao action when needed, its chief said on Thursday.
"The situation way forward is quite uncertain. The RBI will take appropriate action as and when required," Subbarao told reporters after a meeting of the bank's governing board.
"The RBI will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate."
He also said the central bank would endeavour to minimise the stress on various sectors of the economy which have been hurt by the global economic crisis.
On Saturday, the bank aggressively cut its main rates to support slowing.
"The situation way forward is quite uncertain. The RBI will take appropriate action as and when required," Subbarao told reporters after a meeting of the bank's governing board.
"The RBI will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate."
He also said the central bank would endeavour to minimise the stress on various sectors of the economy which have been hurt by the global economic crisis.
On Saturday, the bank aggressively cut its main rates to support slowing.
Sunday, December 7, 2008
Is the worldwide bailouts 10 times bigger than Indian economy?
In their efforts to tackle the global economic crisis, the rescue packages announced by the governments across the world has crossed 10 trillion-dollar mark (about Rs 50,00,000 crore) -- an amount equivalent to nearly 10 times the total size of Indian economy.
The amount is believed to grow even bigger with the turmoil still being in expansion mode.
A lion's share of about three-fourth of the worldwide bailout package of about 10.1 trillion dollar has come from the world's biggest economy, the US, whose total national debt has also incidentally crossed the 10 trillion-dollar mark.
The size of the entire Indian economy, where the impact of global crisis has been relatively less disastrous, pales at about one trillion dollar.
These bailouts, which have been prevalent in both developed and developing worlds due to the financial turmoil that turned severe after the fall of Lehman Brothers, have come in various forms of financial stimulus by the governments across the world -- be it putting in fresh money into a crisis-ridden institution, bringing them under the government's fold or other fiscal measures.
America set the ball rolling for such packages, with the world's largest economy announcing 700 billion-dollar plan primarily to shore up the fortunes of the country's battered financial institutions. Taking into account other rescue acts by the US, its total bailout plan runs into more than seven trillion dollars.
Various European nations together have come up with about 1.3 trillion dollar in financial assistance apart from the European Commission urging the constituent countries to pledge nearly 254 billion dollar.
Further, Germany has thrown lifelines to the tune of 60 billion dollar to save the country's leading financial firms -- Dexia Bank and Hypo Real Estate -- both of which were battered by the worsening economic turmoil.
While Hypo Real Estate received 50 billion dollar, Dexia Bank got a lifeline worth about 10 billion dollar.
Among the developing nations, China has announced a massive 586 billion-dollar plan to boost its economy and the funds would be mainly utilised for infrastructure projects.
Other major bailouts in recent times include 572 billion dollar pumped by Ireland administration to strengthen the country's banks, 150 billion dollar pledged by Russia and 30 billion dollar put in by the Poland government.
Meanwhile, the whopping seven trillion-dollar injected into the economy by the US, includes billions of dollars of term funding facilities, currency swap arrangement with various foreign governments and rescue of Wall Street giants.
With the economic turmoil continuing unabated, the Bush administration recently came up with another mega 800 billion- dollar plan, which would help in buying toxic mortgage assets, among others.
Further, the Federal government threw a lifeline of more than 300 billion dollar to banking behemoth Citigroup. The rescue includes fresh capital injection to the tune of 40 billion dollar and guaranteeing assets worth 306 billion dollar.
In the United Kingdom, the administration has announced injection of more than 100 billion dollar, with funds primarily utilised to rescue its banks.
Bradford & Bingley, which was on the verge of collapse received nearly 33 billion dollar from the administration.
Source: Agencies
The amount is believed to grow even bigger with the turmoil still being in expansion mode.
A lion's share of about three-fourth of the worldwide bailout package of about 10.1 trillion dollar has come from the world's biggest economy, the US, whose total national debt has also incidentally crossed the 10 trillion-dollar mark.
The size of the entire Indian economy, where the impact of global crisis has been relatively less disastrous, pales at about one trillion dollar.
These bailouts, which have been prevalent in both developed and developing worlds due to the financial turmoil that turned severe after the fall of Lehman Brothers, have come in various forms of financial stimulus by the governments across the world -- be it putting in fresh money into a crisis-ridden institution, bringing them under the government's fold or other fiscal measures.
America set the ball rolling for such packages, with the world's largest economy announcing 700 billion-dollar plan primarily to shore up the fortunes of the country's battered financial institutions. Taking into account other rescue acts by the US, its total bailout plan runs into more than seven trillion dollars.
Various European nations together have come up with about 1.3 trillion dollar in financial assistance apart from the European Commission urging the constituent countries to pledge nearly 254 billion dollar.
Further, Germany has thrown lifelines to the tune of 60 billion dollar to save the country's leading financial firms -- Dexia Bank and Hypo Real Estate -- both of which were battered by the worsening economic turmoil.
While Hypo Real Estate received 50 billion dollar, Dexia Bank got a lifeline worth about 10 billion dollar.
Among the developing nations, China has announced a massive 586 billion-dollar plan to boost its economy and the funds would be mainly utilised for infrastructure projects.
Other major bailouts in recent times include 572 billion dollar pumped by Ireland administration to strengthen the country's banks, 150 billion dollar pledged by Russia and 30 billion dollar put in by the Poland government.
Meanwhile, the whopping seven trillion-dollar injected into the economy by the US, includes billions of dollars of term funding facilities, currency swap arrangement with various foreign governments and rescue of Wall Street giants.
With the economic turmoil continuing unabated, the Bush administration recently came up with another mega 800 billion- dollar plan, which would help in buying toxic mortgage assets, among others.
Further, the Federal government threw a lifeline of more than 300 billion dollar to banking behemoth Citigroup. The rescue includes fresh capital injection to the tune of 40 billion dollar and guaranteeing assets worth 306 billion dollar.
In the United Kingdom, the administration has announced injection of more than 100 billion dollar, with funds primarily utilised to rescue its banks.
Bradford & Bingley, which was on the verge of collapse received nearly 33 billion dollar from the administration.
Source: Agencies
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