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India’s Q1 GDP growth falls to 5.7%, hits 3-year low

Discussion in 'World Economy' started by Agent_47, Aug 31, 2017.

  1. PeegooFeng41

    PeegooFeng41 2nd Lieutant FULL MEMBER

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    It is more due to change in tax regime. Local economy was subdued due to fear of taxed highly under GST regime. Plus a number of businesses were simply not ready with tax compliance.
     
  2. Nilgiri

    Nilgiri Lieutenant IDF NewBie

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    This is all neccessary part of creating better (formal) job based growth long term.

    Hot money trickle down just is not working in Indian environment for myriad reasons (see the GDP growth of UPA versus jobs produced). Hence a few percentage blips on GDP for few quarters is ok tradeoff if we get higher formalisation of economy (so real liquidity can transfer well inside it).

    However govt must now ensure it proceeds with re-capitalisation of NPA affected instruments in a cautious, prioritised manner along with other liquidity deprived sectors (prioritise by job elasticity). Thats the main silver lining of demonetisation now. Tax net is now much improved too, thats a good long term result. We also have much more data and the fact that black cash is not a large part of black money as originally thought (there was no other real way of figuring that out tbh).
     
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  3. Golden_Rule

    Golden_Rule Lieutenant FULL MEMBER

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    The unaccounted black money as such did not contribute by itself in any way to the GDP before demonetization. When it was used in part payment with the accounted money, the check money participated to the GDP. And the biggest way in which black money was used as a surrogate was in real estate dealings. And that has almost come to a stand still. This is the key component which has dragged the GDP down to such low levels. Also the hype of e-commerce has died down and has stabilized to a state of equilibrium of real demand to a previously hyped demand. Finally the overall job market has taken a southward hit.

    These are the key factors in playing down the GDP numbers for India. GOI should focus on re-monetizing the real estate market. People are eagerly looking forward to a policy statement on this front.
     
  4. Som Thomas

    Som Thomas 2nd Lieutant FULL MEMBER

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    manufacturing sector: India manufacturing sector bounces back from July's contraction: PMI - The Economic Times
    Sep 01, 2017, 11.54 AM IST
    NEW DELHI: Manufacturing activity in India rebounded in August with new orders and output returning to growth territory after contracting in July due to the rollout of the Goods and Services Tax ( GST), a private survey showed on Friday.

    The Nikkei India Manufacturing Purchasing Manager’s Index ( PMI) rose to 51.2 in August from a 101 month low of 47.9 in July.

    A reading above 50 on the index indicates expansion.

    "August’s PMI results showed that manufacturers in India recovered quickly from the sharp slump that followed the introduction of the GST," said Pollyanna De Lima, economist at IHS Markit and author of the report.

    The boost came a day after official data showed manufacturing growth in the first quarter of the current financial year plummeted to 1.2% from 10.7% in the year ago making India's GDP growth slump unexpectedly to a three-year low of 5.7% in the June quarter.

    "After a loss of momentum in fiscal year (FY) 2016, IHS Markit forecast the Indian economy to recover marginally in FY 2017, with real GDP growth expected at 7.3%," De Lima said.

    To cope with higher workloads, manufacturers hired extra staff at the fastest pace since March 2013.

    http://m.economictimes.com/news/eco...ulys-contraction-pmi/articleshow/60320102.cms

    @Nilgiri
     
  5. Paliwal Warrior

    Paliwal Warrior Lt. Colonel ELITE MEMBER

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  6. Hellfire

    Hellfire Devil's Advocate THINKER

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    The main reason is the introduction of demonetisation followed by GST. The informal payment of the service sectors simply disappeared with demonetisation and the off the books collections dropped. The correction occurred due to people not being able to deal off the books :)

    The parallel economy took a hit and the overall effect is being seen as the money that was available in the parallel economy, which was used to drive sales in segments like real estate, automobile, luxury goods etc, simply ceased overnight and this segment got hit.
     
  7. Flyboy!

    Flyboy! Lieutenant FULL MEMBER

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    Many made fun of MMS about his GDP prediction. Govt and many ministers said 7.5%+ ... Now, enuff said.
     
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  8. Notsuperstitious

    Notsuperstitious 2nd Lieutant FULL MEMBER

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    Two years before the next general election is about when economy slows down to pick up sharply in election year.

    Samaz ne wale ko ishara kaafi hai.
     
  9. Paliwal Warrior

    Paliwal Warrior Lt. Colonel ELITE MEMBER

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    Are you saying.off book transaction not happening post demo
     
  10. Paliwal Warrior

    Paliwal Warrior Lt. Colonel ELITE MEMBER

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    Seems you have bought modi,s rhetorics wholesale

    You know as the saying goes

    Hook line and sinker

    I think you have heard too many of modi speeches which goes like this ......

    There are only x no of taxpayers who pay more than 25 lac tax
    But there are y no of care costing more Tha. 25 lac being sold

    Blah blah. Blah

    You know these are statements & rhetoric without any head or tail

    Bhai real life Delhi

    India.public has made modi forget about demo & black money
     
  11. randomradio

    randomradio Colonel REGISTERED

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    Growth from next term will be much higher. Growth for this year will be above 7%.
     
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  12. Paliwal Warrior

    Paliwal Warrior Lt. Colonel ELITE MEMBER

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    Which will be around 5% of you want to compare to mms govt - old series / base data
     
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  13. Flyboy!

    Flyboy! Lieutenant FULL MEMBER

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    MMS is unrivaled when it comes to finance ministry. Jaitley doesn't even lie in his shadows.
     
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  14. Sancho

    Sancho Lt. Colonel IDF NewBie

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    Hilarious, when the NDA gained from the growth of the UPA policies, that got India through the global financial crisis, it was turned into NDAs growth (even by faking higher growth rates), now when the NDA has brought the growth down, because of their own policies, it's UPAs fault. :lol:
     
  15. Sancho

    Sancho Lt. Colonel IDF NewBie

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    And that's the scary part! What happened to the double digit promises? That's why they faked the calculation method and now we are back, to where we were in 2013/14 and that with growing global economy and low fuel prizes.
     

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