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Elephant in the Room-General Elections, reduce GDP(Gas,Diesel,Petrol)prices to boost GDP!!!

  Elections, particularly in India, can indeed have an impact on its economy, including liquidity and inflation. During election periods, State governments of India often increase spending to buttress their election campaign and implement populist measures to attract voters. However this GOI has eschewed its temptation to loosen its purse strings. However it has increased its Capex infra projects which can generate assets and have a trickle down effect in the income of the people. But this increased government spending at State levels can potentially lead to higher liquidity in the financial system. If the increased liquidity is not matched by an increase in productivity or economic growth, it can potentially lead to inflationary pressures. In such situations, central banks like the Reserve Bank of India (RBI) might need to adopt tight liquidity management policies to rein in inflation. Tight liquidity management involves reducing the money supply in the economy by selling governme...

Falling IIP, Rising CPI-double whammy for the Economy.

  India's latest IIP numbers for June 2023 are not encouraging. The Index of Industrial Production (IIP) rose by just 3.7 percent in June 2023, as compared to 5.2 percent in May 2023. This is the lowest IIP growth rate since February 2023. The slowdown in industrial production is being attributed to a number of factors, including: 1)The ongoing global chip shortage, which is affecting production in a number of sectors,  including automobiles and electronics. 2)The rising cost of raw materials, which is making it more expensive for businesses to produce goods . 3)The slowdown in investment activity, as businesses become more cautious about spending  in the face of rising inflation and interest rates. The slowdown in industrial production is a worrying sign for the Indian economy. The manufacturing sector is a major driver of economic growth, and a slowdown in this sector will have a knock-on effect on other sectors, such as trade and services. The government will need to t...

Two wheeler sales in July 2023 in India & Fuel price cut

  The total two-wheeler sales in India in July 2023 was 14,91,720 units, down 8.80 percent from the same month last year. Of these, the domestic sales stood at 12,05,662 units, down 7.76 percent year-on-year. The top 5 selling two-wheeler brands in India in July 2023 were: Hero MotoCorp - 3,91,310 units Honda Motorcycle and Scooter India (HMSI) - 3,38,310 units TVS Motor Company - 3,12,307 units Bajaj Auto - 2,68,840 units Suzuki Motorcycle India - 80,309 units Hero MotoCorp was the clear leader in the two-wheeler market, with a market share of 26.2%. Honda Motorcycle and Scooter India was in second place, with a market share of 23.1%. TVS Motor Company was in third place, with a market share of 21.7%. Bajaj Auto was in fourth place, with a market share of 18.3%. Suzuki Motorcycle India was in fifth place, with a market share of 5.4%. The two-wheeler market in India is expected to grow in the coming years, driven by factors such as rising income levels, increasing urbanization, and...

India's PMI and growth prospects

  The July PMI was slightly lower than the June PMI, but both readings were above the 50-mark, indicating expansion in the manufacturing sector. The decline in the July PMI was likely due to a number of factors, including rising input costs, supply chain disruptions, and a slowdown in demand. However, the overall picture for the Indian manufacturing sector remains positive, with the PMI remaining above the 50-mark for the 25th consecutive month. Here is a table comparing the July and June PMIs: Indicator July June Manufacturing PMI 57.7 57.8 Output 57.5 57.8 New orders 58.3 58.7 Input prices 62.7 62.5 Employment 51.0 50.7 Business confidence 63.3 63.4 As you can see, July PMI w as lower than the June PMI in all but one indicator. However, the overall picture for the Indian manufacturing sector remains positive, with the PMI remaining above the 50-mark for the 25th consecutive month. The July 2023 PMI report for India did not include any specific figures on corporate profits. Howeve...

Weekend Musings!

M y humble learnings: Maths- every problem has a solution and basically can be solved mentally, Music - relaxes and soothens your nerves and learning it improves your innovativeness in problem solving and  English - gives you lot of confidence to face your bros and bosses, gets you respect when you articulate clearly in English with little bit of humour sprinkled! it's literature is a gateway to know the world at large!மூச்சு வாங்குது! <=><=><=><=><=><=> WWW- We all know it is World Wide Web. Mundaka upanishad says Brahmam is like a Spider designing its web and generates the raw material itself to create the universe! So the Universe is a WWW- W isvam, W ishnur, W ashatkaro-Web!He also strides and measures the Universe-Wishwam, in 3 (www) steps!Even Bhagavatam extols the all pervading Bhagawan as " As the spider very easily creates the network of its cobweb and manifests its power of creation without being vanquished by others, so also you y...

Heady concoction of India's Higher Inflation, Higher Growth and Higher Unemployment rate!

Indian Inflation no. in June 23  India's June CPI increased slightly to 4.81%, from 4.25% in May. This is still within the Reserve Bank of India's (RBI) tolerance band of 2-6%, but it is the highest level since March 2023. The increase in inflation was driven by a rise in vegetable prices, which rose by 19.19% in June. Other food items that saw a rise in prices include cereals (12.7%), pulses (10.5%), and meat and fish (6.9%). Based on the June inflation number, the RBI may do the following: Keep interest rates unchanged in August .  The RBI is likely to keep interest rates unchanged in its next monetary policy review in August, as it will want to assess the impact of the recent rate hikes before taking any further action. However, if inflation continues to rise, the RBI may be forced to raise rates again in September or October. Signal a rate hike in August.  The RBI may signal a rate hike in August, even if it does not actually raise rates at that time. This would send ...