Some of the typically sluggish indicators such as consumer sentiment, bank credit have seen a pick up. But escalating geopolitical tensions and higher oil prices pose risks.
The currency is likely to have stable value, limiting appeal as an asset. It may be safer than holding cash, but tech, connectivity will pose issues, if meant for wide use by households.
Lack of dedicated debt agency leads to conflict between managing govt debt and inflation. RBI chose former, but rate hike would have helped normalisation, attracted foreign funds.
The big capex push will not only create productive assets, but also more jobs. This, in turn, will create sustainable demand as well as crowd in private investment and push growth.
The Modi government has given a boost to capital expenditure and announced several infra projects to pump-prime private investment and economic recovery.
Budget should offer immediate relief to people worst hit during pandemic, focus on public investment in infrastructure, continue disinvestment plans for PSUs.
Budget could also look at tax rebates to stimulate housing demand, raising standard deduction, getting rid of redundant stock market taxes to encourage households to invest.
Rules-based framework should be put in place up front for govt to exit from Vi, sell 35.8% stake to public. This should prevent future govts from treating it permanently as PSU.
With both GDP and inflation rising, central banks around the world may hike interest rates leading to instability in financial markets. But it’s not all bad news.
Economists say there are weaknesses in India’s GDP data. But statisticians claim the accusations are based on flawed understanding, saying while GDP has problems, the economists are looking in the wrong places.
Coaching centres for Army aspirants in Jhunjhunu are shutting down due to plummeting admissions in the face of a lack of job guarantees under Agnipath Scheme.
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