Opinion | Lighten India’s debt burden to give growth a chance
5 years, 2 months ago

Opinion | Lighten India’s debt burden to give growth a chance

Live Mint  

With India’s economy growing at the slowest pace in six years, many wonder why consumers, companies and even the public sector can’t set it right. For a time, it was forgotten as India’s economy got a welcome boost from falling oil prices, a surge in lending from shadow banks, and a rise in public sector investment. Oil prices stabilized, alarm grew over the unsustainable growth model of shadow banks, and a sharp rise in public sector debt raised borrowing costs. Moreover, because of these stretched balance sheets, major players in the economy—namely companies, banks, households and the government—are now unable to spend their way out of the ongoing slowdown. Finally, divesting government stakes in companies and selling various government-owned assets, such as roads, ports and airports, will also improve the health of the government’s balance sheet.

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History of this topic

India’s sky-high household debt faces a year of reckoning
2 days, 22 hours ago

India’s sky-high household debt faces a year of reckoning

Live Mint  

The much-awaited boom of consumer spending has not materialized, with demand in both rural and urban areas remaining subdued. Countries such as Poland, Mexico and South Africa all have higher per capita income, but a lower level of household debt. Consumption tilt As of March 2024, housing loans accounted for 30% of total household debt. Motilal Oswal in a report …

India must revive PPPs and reform its bond market to boost economic growth
6 days, 5 hours ago

India must revive PPPs and reform its bond market to boost economic growth

Live Mint  

At 6.4%, India’s likely growth rate for 2024-25 as estimated by the National Statistics Office, would be lower than not just earlier estimates, but even the recently revised estimate of the central bank. Talk of India being the world’s fastest growing large economy brings little cheer to Indians, except at top levels of the pyramid. In short, for India to …

Prudent policy: India should not let public debt eclipse the fiscal deficit
1 week, 2 days ago

Prudent policy: India should not let public debt eclipse the fiscal deficit

Live Mint  

In a 2020 address to the nation soon after the outbreak of covid, Prime Minister Narendra Modi cited age-old wisdom that advised against losing control of three things: fire, debt and disease. To cushion India’s economy from the pandemic’s shock, though, government spending had to vastly exceed its inflows, taking its fiscal deficit to 9% plus of GDP in 2020-21. …

India’s household debt is rising but low compared to other emerging markets: RBI
1 week, 6 days ago

India’s household debt is rising but low compared to other emerging markets: RBI

Deccan Chronicle  

Mumbai: The Indian household debt has been increasing over the past three years but remains relatively low compared to other emerging market economies, the Reserve Bank of India said in its December 2024 Financial Stability Report. “At 42.9 per cent of GDP in June 2024, India’s household debt is relatively low compared to other EMEs, however, it has increased over …

India’s GDP growth shocker: Bad news can be good too
1 month, 1 week ago

India’s GDP growth shocker: Bad news can be good too

Live Mint  

India’s growth in gross domestic product of 5.4% in the three months ended 30 September, or the second quarter of 2024-25, was a shocker. It’s the lowest level seen since the third quarter of 2022-23 and a sharp drop from 8.1% growth in the same period last year and also from 6.7% in the first quarter of 2024-25. Given the …

S&P Foresees Steady 6.5-7 Percent Growth for India Until 2027
2 months ago

S&P Foresees Steady 6.5-7 Percent Growth for India Until 2027

Deccan Chronicle  

New Delhi: S&P Global Ratings on Thursday projected the Indian economy to grow between 6.5-7 per cent annually in the three fiscal years till March 2027 as infrastructure spending and private consumption drive growth momentum. “Good economic growth prospects will continue to support banks' asset quality, while healthy corporate balance sheets, tighter underwriting standards and improved risk management practices will …

Dear new govt, do get real
7 months, 2 weeks ago

Dear new govt, do get real

Times of India  

Message to incoming GOI: in the fastest growing large economy, over 80% of those out-of-work are young. It’s imperative, therefore, for the incoming govt to leave campaign rhetoric behind and apply itself to the task of accelerating growth, for all. Here’s a summary of the good, the bad and the ugly of the India growth story that should inform the …

Raging inflation, stagnant wages forcing households into debt: Congress
9 months ago

Raging inflation, stagnant wages forcing households into debt: Congress

The Hindu  

The alarm bells are ringing for the Indian economy, but Prime Minister Narendra Modi has not heard them, the Congress said on April 9. The principal Opposition party’s statement was in response to a news report in The Hindu that quoted the findings of leading financial services firm Motilal Oswal on India’s growing household debt. Party general secretary Jairam Ramesh …

RBI Rejects IMF Warning of India's Debt to GDP Exceeding 100%
10 months, 3 weeks ago

RBI Rejects IMF Warning of India's Debt to GDP Exceeding 100%

Deccan Chronicle  

Mumbai: Spending on social and physical infrastructure, climate mitigation,digitalisation and skilling the labour force can yield long-lasting growth dividends. Using a dynamic stochastic general equilibrium model, the economists found that if the government expenditure is directed towards employment-generating sectors, climate risk mitigation and digitalisation, the debt-GDP ratio of the general government can decline substantially to 73.4 per cent of GDP …

Budget 2024: Can India become a $7 trillion economy by 2030?
11 months, 2 weeks ago

Budget 2024: Can India become a $7 trillion economy by 2030?

India Today  

A recent review report released by the government has estimated India's potential economic trajectory, aiming to hit the $7 trillion mark by 2030, ahead of the upcoming Interim Budget 2024-25. "India's unwavering commitment to ensuring steady economic growth is generating resources for investment needed for climate change adaptation, building resilience, and mitigating emissions,' the Finance Ministry report said. The report …

India’s Markets Are Turning Into an Inexorable Force
1 year ago

India’s Markets Are Turning Into an Inexorable Force

Bloomberg  

Anyone wondering whether the India juggernaut is sustainable will find the answer in bonds, which have a penchant for discerning the way of the world and telling every other market what to do. At least $1 trillion of government securities traded multiple times annually in the most populous nation and biggest democracy are poised to become the darling of international …

India's external debt at $629.1 billion at June-end, says RBI data
1 year, 3 months ago

India's external debt at $629.1 billion at June-end, says RBI data

Hindustan Times  

India's external debt rose marginally to USD 629.1 billion at June-end 2023, although the debt-GDP ratio declined, according to a Reserve Bank data released on Thursday. RBI further said outstanding debt of the general government decreased, while non-government debt increased at end-June 2023 The debt rose by about USD 4.7 billion from USD 624.3 billion at March-end. US dollar-denominated debt …

India’s external debt rises to $629.1 billion at end-June 2023: RBI
1 year, 3 months ago

India’s external debt rises to $629.1 billion at end-June 2023: RBI

The Hindu  

India’s external debt at end-June 2023 was placed at $629.1 billion, recording an increase of $4.7 billion over its level at end-March 2023 according to data released by the Reserve Bank of India on September 28. Excluding the valuation effect, external debt would have increased by $7.8 billion instead of $4.7 billion at end-June 2023 over end-March 2023. Net outgo …

Shedding more light on the debt dilemma
1 year, 5 months ago

Shedding more light on the debt dilemma

The Hindu  

The elevated levels of India’s fiscal deficit and public debt have been a matter of concern for a long time in India. Financial repression The debt-dynamics equation states that when there is no primary deficit, if the growth rate of GDP exceeds the effective interest rate paid on government bonds, the overall debt will decline. When the interest rate on …

India likely to have stable debt-to-GDP ratio going forward, says IMF official
1 year, 9 months ago

India likely to have stable debt-to-GDP ratio going forward, says IMF official

Deccan Chronicle  

WASHINGTON: India is expected to have a stable debt-to-GDP ratio going forward, a senior official from the International Monetary Fund said on Wednesday and recommended rationalization and simplification of Goods and Services Tax. According to Paolo Mauro, Deputy Director of the IMF Fiscal Affairs Department, there will be a gradual resumption of the rise in the global public debt-to-GDP ratio …

RBI lifts loan costs to tame inflation
1 year, 11 months ago

RBI lifts loan costs to tame inflation

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India on Wednesday raised the benchmark lending rate by 25 basis points to 6.5% as the RBI targets persistently high core or underlying inflation that it sees as a risk to the improving outlook for the economy. Observing that the rate increases since May were still working their way through the …

Keep an eye on these economic indicators in 2023
2 years ago

Keep an eye on these economic indicators in 2023

Live Mint  

Global headwinds, tightening monetary policy and the lingering effects of the pandemic have combined to create a gloomy global outlook. In its December bulletin, the Reserve Bank of India said that with balance of risks being tilted towards a darkening global outlook and emerging markets appearing more vulnerable, the Indian economy needs support from domestic growth drivers. Sectoral deployment of …

Banking data bodes well for the economy
2 years ago

Banking data bodes well for the economy

Hindustan Times  

The Reserve Bank of India ’s Report on Trend and Progress of Banking in India 2021-22, released on December 27, underlines the trend of continuous improvement in the health of India’s banking sector. The credit goes to RBI’s nimble-footed approach during the pandemic’s disruption and its sustained efforts to clean bank balance sheets in India. To be sure, the story …

Economy resilient, on course to acheive 7% growth in FY23: RBI article
2 years, 1 month ago

Economy resilient, on course to acheive 7% growth in FY23: RBI article

The Hindu  

With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook appears to be resilient and on course for about 7% GDP growth in the current fiscal though India is still sensitive to global headwinds, according to an article released by the RBI on Friday. In the article, the authors - led by RBI Deputy Governor Michael Debabrata …

Can India Inc strong balance sheets nudge investments?
2 years, 7 months ago

Can India Inc strong balance sheets nudge investments?

Live Mint  

When the pandemic threw challenges early on, India Inc. turned into balance sheet repair mode, pouncing on low interest rates and surplus liquidity. “In a low interest rate regime, this capex rebound could partly be the reason for these companies to increase debt levels to finance some of the capex." The reasons could vary: for instance, the power sector saw …

ADB pegs 2022-23 GDP growth at 7.5%
2 years, 9 months ago

ADB pegs 2022-23 GDP growth at 7.5%

The Hindu  

The Asian Development Bank forecasts India’s GDP growth to moderate to 7.5% in 2022-23 from an estimated 8.9% in 2021-22, but will pick up to reach 8% in 2023-2024. Food prices In its Asian Development Outlook report released on Wednesday the bank stated that food prices were expected to rise in tandem with increasing commodity prices Higher public capital spending …

India's GDP growth turns positive, but experts caution against celebrating 0.4% growth
3 years, 10 months ago

India's GDP growth turns positive, but experts caution against celebrating 0.4% growth

India Today  

Though India’s economic health continues to slowly improve, a comprehensive recovery is yet to be seen. It had contracted by 23.9 per cent in April-June 2020 and by 7.5 per cent in July-September 2020; in the October-December 2020 period, it grew 0.4 per cent. The Finance Ministry’s Economic Survey 2020-21 projects that India’s real GDP growth in FY22 will be …

India should worry about its public debt
3 years, 11 months ago

India should worry about its public debt

Live Mint  

NEW DELHI : Till 1972, India’s general debt—for the Centre and states—rose steadily to about 39% of gross domestic product and then fell sharply in 1974. Remember that the granular security level data for the Centre and states allows us to paint a much more accurate picture of the interest rate component’s contribution to changes in public debt. As our …

India’s growth story has never seemed so endangered
4 years, 4 months ago

India’s growth story has never seemed so endangered

Live Mint  

We all knew it would be bad, but no one could have predicted just how bad. Supply and credit links, which had been largely cash-based in the informal sector, among others, remained broken even after high-denomination currency came back into circulation, and some small businesses and poorer households—we will likely never know how many—never recovered to their level of well-being …

GDP data: Coronavirus pandemic may dent India's growth for years
4 years, 4 months ago

GDP data: Coronavirus pandemic may dent India's growth for years

India Today  

India is likely to post its steepest ever economic growth slump on record, just a couple of years after it earned the tag of the fastest-growing major economy in the world. The country is expected to register a sharp quarterly growth slump of 15-25 per cent - the worst since such data was first published in India in 1996 - …

Government debt-to GDP ratio to be at 80% by FY30: Report
4 years, 4 months ago

Government debt-to GDP ratio to be at 80% by FY30: Report

Deccan Chronicle  

Chennai: India’s general government debt-to-GDP ratio is likely to be at 80 per cent of GDP by FY30 and is unlikely to fall to the 60 per cent target even by FY40. India’s general government debt-to-GDP ratio is likely to be at 80 per cent of GDP by FY30 and is unlikely to fall to the 60 per cent target …

India’s economy grew in Q1, but deep slump is expected
4 years, 7 months ago

India’s economy grew in Q1, but deep slump is expected

Al Jazeera  

Though Q1 GDP topped estimates, coronavirus lockdowns have economists betting that negative growth is on the cards. India’s economy grew at a faster pace than economists expected last quarter with a deeper slump likely to come after the nation of 1.3 billion people went into lockdown to contain the coronavirus outbreak. The strict stay-at-home restrictions imposed late March brought India’s …

Opinion | Can India grow at 7% with all the macro-headwinds?
4 years, 8 months ago

Opinion | Can India grow at 7% with all the macro-headwinds?

Live Mint  

The West found itself immersed in the damage caused to its economic and health systems by the pandemic since early months of 2020. For emerging markets in Asia and Latin America, it seems the disease managed to infect their economies even before a full-blown health crisis descended upon them. However, extremely low prices might lower global growth and in turn …

Drop in borrowing costs shows India NBFC crisis may ease
4 years, 11 months ago

Drop in borrowing costs shows India NBFC crisis may ease

Live Mint  

Borrowing costs for India’s top-rated shadow financiers declined last month, indicating that the nation’s prolonged credit crisis may be seeing some improvement. Premiums that investors seek to buy AAA rated five-year bonds of non-bank lenders over government notes with similar maturities narrowed to a 16-month low in January, helping a gauge measuring bond spreads to strengthen. Supporting these financiers is …

Latest headache for Indian firms: Sluggish bond market
4 years, 11 months ago

Latest headache for Indian firms: Sluggish bond market

Live Mint  

India needs a bigger bond market now more than ever, to help get funds to cash-strapped companies cut off from their shadow lenders by a crisis in that sector. Rupee corporate bond issuance seen increasing little in 2020 A stalling in issuance also undercuts attempts by Finance Minister Nirmala Sitharaman and predecessors to expand India’s corporate bond market to better …

NBFC crisis far from over: Revitalizing shadow bank industry is a must
5 years ago

NBFC crisis far from over: Revitalizing shadow bank industry is a must

Live Mint  

India’s shadow banks, which lend to everyone from teashop merchants to property tycoons, get a mixed bill of health in Bloomberg’s latest check. Revitalization of the industry, whose woes mounted last year when major mortgage lender Dewan Housing Finance Corp. missed repayments, is key to helping staunch a further slowdown in the nation’s economy. The Bloomberg check-up of the sector’s …

Financial system stable despite weakening economic growth; reviving consumption, investment a major challenge: RBI
5 years ago

Financial system stable despite weakening economic growth; reviving consumption, investment a major challenge: RBI

Firstpost  

The PSBs need to build stronger buffers to absorb any disproportionate operational losses, while private lenders need to focus on corporate governance, the RBI said. Mumbai: India’s financial system remains stable even after economic growth plummeted to a six-year low, the Reserve Bank of India said on Friday. “Reviving the twin engines of consumption and investment while being vigilant about …

India's financial system stable despite weakening economic growth, says RBI
5 years ago

India's financial system stable despite weakening economic growth, says RBI

India Today  

India's financial system remains stable even after economic growth plummeted to a six-year low, the Reserve Bank of India said on Friday. "Reviving the twin engines of consumption and investment while being vigilant about spillovers from global financial markets remains a critical challenge going forward," the central bank said in its bi-annual Financial Stability Report released on Dec. 27. State-owned …

Why Union Budget 2020 is an opportunity for govt to demonstrate its intent to rebuild economic policy credibility
5 years ago

Why Union Budget 2020 is an opportunity for govt to demonstrate its intent to rebuild economic policy credibility

Firstpost  

Union Budget documents show that from FY17 to FY20, capital expenditure allocation went up by 18 percent over four years; revenue expenditure went up by 45 percent in that same period: nearly 2.5 times more The public discourse and expert discussion on India’s current economic slowdown is reminiscent of a central theme in the 1970 Kannada film Samskara. Stop talking …

Economic slowdown: Manufactured crisis
5 years, 2 months ago

Economic slowdown: Manufactured crisis

The Hindu  

ALL observers—the government, the corporate sector and independent analysts—are unanimous that the Indian economy has been on a downswing. That the gross domestic product growth rate in the first quarter of 2019-20 fell drastically to 5 per cent made a big splash in the news and made the Central government grudgingly accept the problem. The objective of this paper is …

A nervous economy: Why sops are proving to be a tough sell
5 years, 2 months ago

A nervous economy: Why sops are proving to be a tough sell

India Today  

Despite the various measures taken by the government to boost investment, corporates seem to be shying away from taking risks, with the economy hanging on a precarious balance. Government data released on November 11 showed that factory output, as indicated by the Index of Industrial Production, fell for the second consecutive month in September, by 4.3 per cent. Data from …

India's rising household debt has helped drive demand but will lead to negative impact on growth in long-term: Report
5 years, 4 months ago

India's rising household debt has helped drive demand but will lead to negative impact on growth in long-term: Report

Firstpost  

An increase in the household debt-to-GDP ratio by one percentage point lowers output growth in the long run by 0.1 percent. Figure 2: India’s Household Debt While this rise in debt has helped drive demand after the shocks of demonetisation and GST, these signs are not promising over the long run. The paper further states that the negative impact of …

Warning signs for Indian economy: Government spooking investors
5 years, 4 months ago

Warning signs for Indian economy: Government spooking investors

India Today  

Prime Minister Modi wanted to double the size of the economy to five trillion by 2025, but the looming economic crisis has emerged as the biggest challenge for his second term dream. India's economy has been tipped to enter recession in the first quarter of 2019 with gross domestic product growth falling to a five-year low of 5.8 per cent. …

RBI has done its dharma, now it needs to be careful about karma
5 years, 5 months ago

RBI has done its dharma, now it needs to be careful about karma

Live Mint  

The credit for the phenomenal drop in retail inflation, India’s biggest headache over the past several years, goes to its central bank. Indeed, as former governor of the Reserve Bank of India D. Subbarao said, it is the central bank’s dharma to manage inflation and RBI has delivered on it. This could also infuse confidence and in turn assist in …

The case for doubting India’s GDP numbers
5 years, 6 months ago

The case for doubting India’s GDP numbers

Live Mint  

Arvind Subramanian was the chief economic advisor to the Government of India from October 2014 to June 2018. Arvind Subramanian wrote an article in The Indian Express summarizing his findings on the econometric work he had done on India’s gross domestic product growth estimates. I concluded—without any statistical estimation—that India’s real GDP growth rate might be overstated by 1-1.5 percentage …

Resolving India’s banking crisis
5 years, 8 months ago

Resolving India’s banking crisis

The Hindu  

The government that assumes office after the general election will have to crack a serious and unresolved problem: India’s banking sector. Public sector banks accounted for ₹8.9 trillion, or 86%, of the total NPAs. In 2018, the State Bank of India’s gross NPA/gross advances ratio was 10.9%. Second, the government must infuse at one go whatever additional capital is needed …

$22 billion gone, yet India’s shadow banks face more dark days
5 years, 10 months ago

$22 billion gone, yet India’s shadow banks face more dark days

Live Mint  

Mumbai: As key engines of loan growth in the world’s fastest-expanding major economy, they once were investor favorites. But a series of missed payments by one of the biggest firms, Infrastructure Leasing & Financial Services Ltd. — once categorised as “systemically important” by the central bank — then roiled India’s stock market. “We believe NBFC growth will disappoint and there …

Opinion: NBFCs may need to suffer some pain
6 years, 2 months ago

Opinion: NBFCs may need to suffer some pain

Live Mint  

In India, crises move slowly. The country’s shadow banking sector -- dominated by what officials call “non-banking financial corporations” or NBFCs -- faces something of a reckoning over the next month. What’s more problematic, perhaps, is the government’s insistence that the Reserve Bank of India open up a special window to lend money to the sector as it has for …

The need for a boost to MSME sector
6 years, 2 months ago

The need for a boost to MSME sector

Live Mint  

Prime Minister Narendra Modi’s Diwali package for micro, small and medium enterprises may be late in the day, but it’s nevertheless a boon, particularly the interest subvention and the measures to see that bills are paid on time. According to the MSME Pulse report, for public sector banks, the level of non-performing assets among MSMEs went up from 13% in …

Opinion | Debt market worries for the stock market
6 years, 3 months ago

Opinion | Debt market worries for the stock market

Live Mint  

The financial sector dominated the Indian stock market last week and is likely to remain in focus in the near term. Although the fund house and Dewan Housing Finance executives came out to explain their position, it was not enough to calm the market. Since NBFCs don’t have a sticky deposit base unlike banks, some of the highly leveraged entities …

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