The Indian government is expected to announce steps today to boost the
sagging economic sentiment. Finance Ministry (FinMin) sources told NDTV that the
announcement is expected after the meeting of FinMin officials early
afternoon.
Here are ten latest developments:
1) Announcements today are likely to include raising the interest for NRI deposits, cutting down wasteful expenditures and unveiling a bond issue for overseas investors to improve capital inflows in the wake of the rout in rupee.
Also Read: NRI deposit rate hike, spending cut, bond issue possible steps by RBI, govt
2) As government prepares to unveil some measures to revive the economy, Prime Minister Manmohan Singh says India cannot expect "outside help" on a scale which can see the country through its difficulties. He will have to appoint a new finance minister soon. Prime Minister Manmohan Singh is still "churning" in his mind as to who will take over the key finance portfolio from Pranab Mukherjee who will step down from the coveted post on Tuesday.
3) Economic growth fell to 6.5 per cent in 2011-12 - and to a nine-year low of 5.3 per cent in the March quarter - while industrial output continues to be sluggish with a mere 0.1 per cent growth in April. Inflation too remained at an elevated level of 7.55 per cent in May.
4) Hit by a weak global sentiment and subdued local macroeconomic performance, the rupee has lost over 25 per cent in the last one year. It also breached the 57 level against the dollar on June 22. Traders said that it could soon fall to 58 to US dollar.
5) Finance Minister Pranab Mukherjee had yesterday announced that the government and the RBI would take steps to arrest the declining rupee and improve market conditions. He said that he was concerned about the state of the economy.
6) Traders said the central bank likely sold $250-300 million dollars on Friday to rescue the Indian currency. Mukherjee said the government had discussed the situation with the central bank governor on Friday. The rupee dropped a little over 3 percent against the dollar this week, its worst weekly decline in nine months, weighed down by mounting concerns over the global as well as India's economy. Analysts say the rupee could continue to fall further in the near-term, dragged down by the momentum from the worsening global risk environment.
7) Market analysts expect RBI to announce an increase in interest rates for deposits of Non-Resident Indians. They also expect government to announce a bond issue to attract inflows. RBI may increase the interest rate on FCNR(B) deposit further and announce the issuance of bonds for Non-Resident Indians to address the issues in the short-term" Crisil Chief Economist D K Joshi said.
8) Experts also see steps being taken to reduce the twin deficits. CNI Research Head Kishor Ostwal said,"It might take steps to tame fiscal and current account deficits." "Private investment in India is constrained by lack of availability of funds. Government might announce some measures for attracting investments and also steps to cut down wasteful expenditures," said Y K Alagh, Chairman, Institute of Rural Management.
9) In 1998, India launched Resurgent India bonds soon after the announcement of nuclear tests and sanctions that followed. The scheme attracted $ 4.2 bn. In 2000, the government launched India Millenium Deposits on the back of rising fuel prices and slowing capital flows. The scheme attracted $ 5.5bn.
10) Experts feel that a $ 5bn scheme may not make any significant difference. According to a section of experts, India would need something close to $ 15 bn to $ 20bn to have a meaningful impact on the economy
Here are ten latest developments:
1) Announcements today are likely to include raising the interest for NRI deposits, cutting down wasteful expenditures and unveiling a bond issue for overseas investors to improve capital inflows in the wake of the rout in rupee.
Also Read: NRI deposit rate hike, spending cut, bond issue possible steps by RBI, govt
2) As government prepares to unveil some measures to revive the economy, Prime Minister Manmohan Singh says India cannot expect "outside help" on a scale which can see the country through its difficulties. He will have to appoint a new finance minister soon. Prime Minister Manmohan Singh is still "churning" in his mind as to who will take over the key finance portfolio from Pranab Mukherjee who will step down from the coveted post on Tuesday.
3) Economic growth fell to 6.5 per cent in 2011-12 - and to a nine-year low of 5.3 per cent in the March quarter - while industrial output continues to be sluggish with a mere 0.1 per cent growth in April. Inflation too remained at an elevated level of 7.55 per cent in May.
4) Hit by a weak global sentiment and subdued local macroeconomic performance, the rupee has lost over 25 per cent in the last one year. It also breached the 57 level against the dollar on June 22. Traders said that it could soon fall to 58 to US dollar.
5) Finance Minister Pranab Mukherjee had yesterday announced that the government and the RBI would take steps to arrest the declining rupee and improve market conditions. He said that he was concerned about the state of the economy.
6) Traders said the central bank likely sold $250-300 million dollars on Friday to rescue the Indian currency. Mukherjee said the government had discussed the situation with the central bank governor on Friday. The rupee dropped a little over 3 percent against the dollar this week, its worst weekly decline in nine months, weighed down by mounting concerns over the global as well as India's economy. Analysts say the rupee could continue to fall further in the near-term, dragged down by the momentum from the worsening global risk environment.
7) Market analysts expect RBI to announce an increase in interest rates for deposits of Non-Resident Indians. They also expect government to announce a bond issue to attract inflows. RBI may increase the interest rate on FCNR(B) deposit further and announce the issuance of bonds for Non-Resident Indians to address the issues in the short-term" Crisil Chief Economist D K Joshi said.
8) Experts also see steps being taken to reduce the twin deficits. CNI Research Head Kishor Ostwal said,"It might take steps to tame fiscal and current account deficits." "Private investment in India is constrained by lack of availability of funds. Government might announce some measures for attracting investments and also steps to cut down wasteful expenditures," said Y K Alagh, Chairman, Institute of Rural Management.
9) In 1998, India launched Resurgent India bonds soon after the announcement of nuclear tests and sanctions that followed. The scheme attracted $ 4.2 bn. In 2000, the government launched India Millenium Deposits on the back of rising fuel prices and slowing capital flows. The scheme attracted $ 5.5bn.
10) Experts feel that a $ 5bn scheme may not make any significant difference. According to a section of experts, India would need something close to $ 15 bn to $ 20bn to have a meaningful impact on the economy
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