13 September 2017

Time for course correction

India’s growth is on a declining path and first quarter of 2017-18 recorded a lowest growth of 5.7%. There is a steep fall in manufacturing growth to 1.2%. Demonetization and de stocking by traders are stated as the reasons. But the problem appears much deeper.

  1. India is witnessing a poor performance on export front due to weak global demand. Improvements though happened they are only marginal.
  2. There is a sharp fall in the investment rate. Gross fixed capital formation rate has fallen to 27.1%. Though Public investment is stable , there is no improvement in private and household investment. FDI’s are on rise and they are flowing in to old assets. Credit growth has also drastically fallen.
  3. The root cause of the problem is NPA’s of banks. So, recapitalization of banks by absorbing NPA’s is very much necessary. On industry front, stalled projects can be revived faster.
  4. Across the world, there is a renewed focus on small and medium enterprises for creating growth. India shall follow the same.

An alliance on track

Shinkansen, Japanese high seed rail has a fool proof record on punctuality, safety. China is the major contender for Japan and its solutions are much cheaper. India is going to establish its first high speed rail on Ahmedabad – Mumbai line in partnership with japan.

Major challenge with these projects is profitability. Other than Tokyo-Osaka line, no high speed rail line is profitable in Japan. Same is the case with Taiwan. But, Japanese low cost loan, liberal technicals assistance, high density of population between Mumbai and Ahmedabad makes it attractive.

Slow creep

In India, petrol prices in Market are not in alignment with International crude prices. Major reasons for this are the taxes laid by the Governments at union and state level. Fall in crude prices did not benefit the customer but raised revenues of government manyfold.

Shattered dreams

US president Donald Trump recent policy decision on deferred action for childhood arrivals has put more than 800,000 people livelihoods and future under threat. Existing beneficiaries have time until March5, 2018 to renew their permits. Unless legislature intervenes no positive action can be expected.

Pakistan should see blowback from supporting terror – Interview with Afghan foreign minister

Afghan Foreign minister has highlighted the following points on future of Afghanistan.

  1. President Trump’s new Afghan policy is not a time based approach. It is a condition based approach.
  2. It addresses core of the problem. Safe heavens to terrorists on Pakistan soil.
  3. An emphasis is made on regional Approach for Afghan Peace. A peaceful and stable Afghanistan is in everyone’s interest including Pakistan.

News

  1. Stung India slams inaccurate UN reports - India is very critical of the UNHRC permanent representative comments on violence by cow vigilantes, Human rights situation in J&K, Rohingya issue. India clearly stated that isolated incidents are over stated.
  2. Chakmas to be made citizens : India is thinking to provide citizenship rights to Chakmas with out any land ownership rights in Arunachal Pradesh.

Note from Dr. Rambabu

Dear students, we have launched a skill development program for you. If you can make right use of the same, it can benefit you immensely. Please participate actively in writing tests and presenting them for evaluation. Our collective objective is you clearing this exam. Your motivation and confidence are in between your present position and future. I reiterate , start writing.

All the best.

RB.