Business Today

tackling a wobbly economy

Economy 2020 will bring uncertainties and surprises galore. Exports uptick will depend on whether – if at all – the US-China tariff war stabilises and whether the world economy will head towards recession as many economists predict; domestic private corporate investment into new capacities will depend on consumption and demand uptick in the economy; and demand, in turn, will depend not just on whether new jobs are created by fresh private investment but also on regaining consumer confidence. In short, we’re in a vicious cycle of a deep, deep slowdown. Our fate will depend on how we deal with the crises coming our way, how we minimise the collateral damage to businesses, jobs, banks, even lives. So, how should India tackle a wobbly economy? We approached two experts – one outside…

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http://www.businesstoday.in Editor-in-Chief: Aroon Purie Group Editorial Director: Raj Chengappa Editor: Rajeev Dubey Group Creative Editor: Nilanjan Das Group Photo Editor: Bandeep Singh Executive Editor: Anand Adhikari Deputy Editors: Goutam Das, Ajita Shashidhar, Naveen Kumar (Money Today) SPECIAL PROJECTS AND EVENTS Senior Editor: Anup Jayaram CORRESPONDENTS Senior Editors: P.B. Jayakumar, Nevin John, Joe C. Mathew, E. Kumar Sharma, Dipak Mondal, Manu Kaushik, Sumant Banerji Associate Editors: Nidhi Singal, Rashmi Pratap Senior Assistant Editor: Sonal Khetarpal Assistant Editor: Rukmini Rao RESEARCH Principal Research Analysts: Niti Kiran, Shivani Sharma COPY DESK Senior Editor: Mahesh Jagota Senior Associate Editor: Kaveri Nandan Associate Editor: Sanghamitra Mandal Chief Copy Editor: Gadadhar Padhy Copy Editor: Aprajita Sharma PHOTOGRAPHY Deputy Chief Photographers: Shekhar Ghosh, Rachit Goswami, Yasir Iqbal Principal Photographer: Rajwant Singh Rawat ART Assistant Creative Editor: Safia Zahid Deputy Art Director: Amit Sharma Associate Art Director: Ajay Thakuri Assistant Art Director: Raj Verma Designer: Rajesh Singh Adhikari PRODUCTION Chief of Production: Harish Aggarwal Senior Production Coordinator: Narendra Singh Associate Chief Coordinator: Rajesh…

india gets record pe/vc funds

THE FUND FLOOD PE/VC investments have risen more than four-fold since 2008 FINANCE LEADS Financial services got the most funds, followed by life sciences, in November 2019 INFRA GETS A HELPING HAND THE SIZE GAME The number of large deals – above $100 million – saw a sharp spike 12 Large deals in November 2019, aggregating $3.8 billion, compared to five worth $950 million in November 2018 SLOW EXIT PE/VC exits declined sharply in value, likely due to subdued market and low valuations in most market segments 15 Exits worth $1.4 billion in Nov 2019, twice the value in Nov 2018 46% Share of technology sector in all exits FOOD PRICES DRIVE UP CPI INFLATION Retail price inflation, measured by the Consumer Price Index (CPI), shot up to 5.5% in November 2019, the highest since July 2019. The main driver was food inflation,…

how to steady a wobbly economy

Budget 2020 will be presented in the shadow of one of the longest spells of slowdown — six quarters so far — in more than two decades. That poses a host of challenges for Finance Minister Nirmala Sitharaman as slowing tax collections have left practically no leeway for fiscal stimulus out of the government’s balance sheet. On top of that, exports have stagnated, private investment has ground to a halt and consumption is still reeling under the effect of demonetisation, GST, lack of jobs and public sentiment. Just public expenditure seems to be driving the economy for now. Business Today hosted a Pre-Budget Panel Discussion to debate how to steady a wobbly economy. The panelists were Gopal Krishna Agarwal, National Spokesperson of BJP on Economic Affairs; Sumant Sinha, Chairman and Managing…

“government doesn’t have the bench strength to handle the economy”

What is your diagnosis of the problems the Indian economy is facing? My overall assessment of the Indian economy is on the same lines as (former Chief Economic Adviser) Arvind Subramanian’s paper jointly with (IMF’s former India head) Josh Felman, which was published in December 2019. The economy faces serious problems, both structural as well as cyclical. The structural problems are deeper and more serious. This government believes that the problems are entirely cyclical and therefore they come up with what they consider solutions to the cyclical nature of the problems. As a result, the crisis has worsened. Let me just tick off a few heads where the crisis has deepened — non-food credit, exports, NPAs, stalled projects, fiscal deficit, revenue collection, and expenditure constraints. In each of these heads, the crisis…

“the slowing economy will remain so for some time”

How bad is the economic slowdown? Is the lack of structural reforms the root cause? This year we are going to have GDP growth of about 5 per cent. I expect next year to be about 6 per cent. If one is talking about structural reforms, there are all kinds of people, particularly from my fraternity, who keep coming up with an agenda for structural reforms. If you look at those items, they have been on the reform agenda since 1991 or 1993. So, no one is denying the importance of those structural reforms. They have been pending, and there are reasons for that. Most of the pending reforms are actually state subjects, and there are legislative issues with some others. There was a period when India grew 9 per cent for…