India A Land of Hope In A Slowing Global Growth

In his concluding remarks, while addressingto the India-Singapore Economic Convention, Prime Minister Narendra Modi said “Recently, the IMF chief has said that India is a bright spot in the Global economy. I did not want to wait for that brightness to reach to you on its own. Hence, I am here. I am here to invite you to India in a bigger way. I have also come to assure you that I am there to carefully hold your hands”. He also said “Runways for take –off of the economy have been made.” This clearly shows how confident the PM is on improvement of the Indian economy in last eighteen months. We are already seeing sentiments converting into commitments when it comes to the foreign direct investments. There has been substantial increase in the FDIs in India in last 15 months ending June 2015. According to Department of Industrial Policy and Promotion (DIPP), the total FDI inflows soared by 24.5 per cent to USD 44.9 billion during FY2015, as compared to USD 36.0 billion in FY2014. This growth has further increased to 40 per cent (in rupees term)in the first three months of this fiscal. Against FDI of Rs 43,171 crore that we received in the first quarter of FY15, this fiscal in the same period we have received FDI to the tune of Rs 60,299 crore. The government to further boost this entire investment environment and to bring in more foreign investments in the country, has recently brought in FDI related reforms and liberalisation touching upon 15 major sectors of the economy.

These figures give enough reason for those who keep  commenting on his foreign trips and not concentrating on India to  now view his visits from a different perspective. These FDIs are essential at this stage for our economy to accelerate its growth rate. There are even other indicators that are showing visible improvement in various parts of economy. Since March this year, nearly USD 60 billion worth of union and state projects through September has been cleared, according to government data.

Also, as mentioned in this space earlier the approach of NDA government is now going to change with respect to reaching out to opposition party after its defeat in Bihar assembly election. The government, before the start of winter session made a bid to build support for the various bills including GST, at an all-party meeting, which was even attended by PM Modi. The bill has been blocked in Parliament by the opposition Congress which has demanded key changes in it. I hope and believe that, though, this session will be stormy we may see some progress on the passing of key bills in this session. .

The opposition also needs to understand that this is the moment for India, which remains a land of hope among emerging markets. Its fundamental are improving fast. As an example for April-August 2015,fiscal deficit was Rs.3.69 trillion or 66.5 per cent of the full-year target of Rs. 5.56 trillion. The fiscal deficit was Rs.3.98 trillion in the same period a year ago, about 75 per cent of the FY15 target. The Index of Industrial Production (IIP) has been consistently trending higher, supported by manufacturing growth in the country. Being a net importing country, India is significantly benefitting with the fall in commodity prices especially crude oil. Even after a cut of 1.25 per cent in the key policy rates year till date, interest rates have enough margin to fall as inflation is at historic low.I also believe that Fed is not going to increase rate even in the month of December, especially after the recent terrorist attack on Paris and continued escalation of strife in Middle East.

Our cover story this time talks in detail about all macro-economic factors in detail and their performance in last one year. The story also covers detail analysis of quarterly results of Q2FY16. Altogether ten important sectors of economy are included along with their Q2 and half yearly results of companies falling under these sectors. Result clearly shows that we are still couple of quarters away from meaningful recovery in the earnings while we have surely hit the bottom.

Beside this we have also carried a special report on how change in holding of institutional investors changes the share prices (if any). Please do write to us with your suggestions and feedback at comment@dsij.in