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<keyword id="6355261" type="POSITION" weightage="100" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="100" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> has recently tweeted, “India should no longer remain a market for the global industry; rather we should become a global <keyword id="6362048" type="ORGANIZATION" weightage="100" keywordseo="Manufacturing">manufacturing</keyword> hub.” This is interesting, as well as exciting, on many levels. 
 
For years now, India has been playing the role of a cheap alternative to skilled technical labour. Its main contribution to the world, ever since the invention of ‘zero,’ has been technical expertise in the IT and ITeS segments. However, the first-world nations have already taught us that the key to making the leap from ‘developing’ to ‘developed’ lies in boosting the country’s economy. 
 
Britain overtook the world during the Industrial Revolution and America surpassed it after World War II when manufacturing was at its peak in the country. India needs to pick up these traits if it wants to be a superpower – a title that has been hanging like an elusive carrot for its citizens. 
 
The way up 
Jaitley’s tweet was not out of thin air. The market, too, is indicating some positives for the Indian economy. In the month of May, there was high order flow for Indian manufacturers from both local and international sources. This upsurge was reflected in HSBC India’s Manufacturing PMI (Purchasing Managers’ Index) that improved marginally, from 51.3 in April to 51.4 in May. This also led to an increase in India’s benchmark stock index over the past three weeks. An upward movement was also seen in export orders, which resulted in a small bump in the employment rate. From 50.2 in April, it rose to 50.6 in May. 
 
On the flipside, severe power outages during the summer caused delays in production across the country. 
 
The I/O game 
In the month of May, the rise in order flow also led to an upsurge in purchasing activity. Even though all market groups showed signs of growth in purchase, the rate of business expansion was nominal. This was mainly due to the nullifying factor of input and output costs. Input costs rose in May although the rate of increase was the weakest in one year. This might have happened due to the higher prices paid for some raw materials. At the same time, output costs increased as well. 
 
Engineering leads the way 
Manufacturing is the key area where the numbers are getting better, although at a very conservative rate. However, it is only natural that an engineering group should lead the way in the current scenario. Incidentally, Larsen &amp; Toubro jumped 6.5%, displaying the best performance on the Sensex, while the BSE Capital Goods index rose 4.9%, its best performance since January 2011. On the whole, engineering stocks’ points increased 21%, giving hope to the nation’s economy and proving that manufacturing is on its way up. 
 
The Modi factor 
Narendra Modi, the new Prime Minister of India, sailed to office solely depending on the ‘development’ war cry. “Investments, growth and jobs” are the three magic words Modi used to sway an entire nation, which was stuck in an economic limbo during the previous government’s rule. 
 
No group is happier about this change than the business houses. Being a pro-corporate leader, Modi’s main goal is to ensure the revival of the economy through increased manufacturing. Since the country finally has a leader who is determined to ensure development, business leaders are now hoping for the omission of restrictive labour laws that decelerate manufacturing. However, going by the labour unrest of the last decade in West Bengal and more recently in Gurgaon and Manesar, it would be imperative for the establishment to maintain some sort of balance to ensure that the workforce is motivated not through fear but through goal-based incentives. 
 
After the drastic fall of the rupee last August, it is high time for India to bounce back. And manufacturing has to lead the way – there are no two ways about it.

Manufacturing
Is Key To India’s Economic Revival

German engineering and electronic major <keyword id="127554" type="CITY" weightage="100" keywordseo="Siemens-AG">Siemens AG</keyword> hopes the new government led by ‘strong and experienced’ <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword> would be able to revive the <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> and expedite the decision-making process. 
 
"India needs to spend more money on infrastructure. We look at the new government with lots of hope. He is a strong leader and experienced in running governments (Gujarat). Holding back of investments was a problem. Projects were not moving. A stable government will hopefully change all that," Roland Busch, member of the managing board of Siemens AG, said. 
 
The Siemens Group in India, which consists of 13 companies, provides direct employment to over 19,000 people. Presently, the group has 21 manufacturing plants and a wide network of sales and service offices across the country. 
 
Busch said, "I will give you an instance. It took us a long time to get a site… A long, long time. In other countries, the timelines are shorter. So, I expect and hope the new government would make it easier for corporates to do business in India, which is a very promising market." 
 
He said India needed to invest a lot in infrastructure in order to grow at 7-8%. 
 "In the last 10-20 years or so, China has invested 9.5% of its <keyword id="35050" type="CITY" weightage="100" keywordseo="gdp">GDP</keyword> in infrastructure. In comparison, India has done just about 3.8% or so. If you look at segments within Indian infrastructure, you would see there is a great need for capacity addition. Just to give you an example, leading Indian cities are anticipated to see 100% rise in commuter traffic by 2030," he said.

Siemens Pins Hopes On Modi Govt For Economic Revival

The Prime Minister’s Office (PMO) has asked the economic ministries to come up with strategies in a bid to revive foreign <keyword id="6362476" type="ORGANIZATION" weightage="100" keywordseo="investments">investments</keyword> in the country. The new strategies should be able to change the negative global narrative about India and reposition the country as a viable investment destination. 
 Over the weekend, <keyword id="577616" type="PERSON" weightage="80" keywordseo="Nripendra-Misra">Nripendra Misra</keyword>, principal secretary in the PMO, chaired a meeting with secretaries from core economic ministries to discuss measures that would revive investment in the country. “The PMO conveyed its concerns about improving the business environment in order to revive investments and stir job creation,” an official said. 
 “There was a general brainstorming on some of the immediate steps, such as resolving conflicts between investors and the government,” he added. Although officials did not divulge any information about the specific deliberations at the meeting, it is learnt that <keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword> (foreign direct investment) in defence had been discussed. 
 A proposal to amend the FDI policy in the defence sector is likely to be taken up soon as Prime Minister <keyword id="6354477" type="PERSON" weightage="80" keywordseo="Narendra-Modi">Narendra Modi</keyword> has signalled allowing more FDI than the present cap of 26% and 49% (on a case-to-case basis). “Why should we import defence equipment? We dream of an India that is self-sufficient in producing defence equipment, using the latest technology,” Modi had said at the launch of the aircraft carrier INS Vikramaditya in Goa.

PMO Asks Economic Ministries To Revive Foreign Investments

Kolkata, Jun 19 () Economists on Friday expressed doubts over the timing of the economic revival in the post- COVID-19 era, saying that the pandemic has sauntered on stage when the slowdown had already begun. Rathin Roy, director of National Institute of Public Finance and Policy, an autonomous research body, said declining consumption and investment is not matched by the increase in government spending. "Neither the Reserve Bank of India nor the government can save the economy. The private agents will have to ensure that they will drive the economic growth and take the lead", Roy said at a webinar organised by Indian Chamber of Commerce. However, Prime Minister Narendra Modi had recently said the economy is showing "green shoots" as the country emerges from the coronavirus lockdown. Regarding the Rs 20 lakh crore financial package announced by the government, Roy said the public sector banks have been asked to lend more. "The government has chosen the credit and monetary policy route to boost the economic growth rather than the fiscal mode," he said. Roy said the issue of migrant workers will have an impact on the economic growth and availability of quality workers in the post-COVID-19 world will be a challenge. State Bank of India's chief economic advisor Soumya Kanti Ghosh said the GDP for one quarter has been lost, amounting to Rs 40-50 lakh crore, due to the coronavirus crisis. "No amount of fiscal or monetary support will help recover that," he said, adding that the pandemic has come at a time when the economy was already in a recessionary mode. Ghosh also said the issue of migrant workers due to the lockdown "has not been handled well". He said the RBI has been proactive with its steps to revive the economy. "When the economy is contracting, more credit offtake will lead to bad asset quality, and this is where the fiscal policy will come into play," he added. Rajat Kathuria, director and chief executive of the Indian Council for Research on International Economic Relations (ICRIER), another policy think-tank, said it is worrying that the unemployment is going up among the low- skill, uneducated and self-employed workers. He expressed hope that workers will return to their workplaces as there are little employment opportunities in rural areas. According to him, India should invest more in creating a welfare state. dc BDC BDC

Economists raise doubts over timing of economic revival in post-COVID-19 era

Mumbai, May 20 () The stimulus package announced by Finance Minister Nirmala Sitharaman "fails to involve" banks in the economic revival process, a member of the Reserve Bank of India's central board said on Wednesday. The stimulus package is "imaginative and forward looking, yet fails to involve banks as frontline warriors in revival of economy," Satish Marathe, a member of RBI's central board, said in a social media post. Sitharaman had announced a series of measures following Prime Minister Narendra Modi's announcement of a Rs 20 lakh crore stimulus package to help the economy. Marathe shared a viewpoint from analysts at rating agency Crisil's research wing, which is sceptical about the near-term benefits of the package to make his point. He said the three-month moratorium offered for loan repayments announced by Reserve Bank of India (RBI) is "not enough" and also listed out other expectations for the benefit of the banking sector. These include relaxations in non performing asset (NPA) and provisioning, he said. Marathe, who has been deeply associated with the cooperative banking sector, said all these "norms need to be part of the stimulus for putting India once again on the growth trajectory". It can be noted that industry bodies have also been pitching to the RBI for relaxations on aspects like moratorium, NPA recognition and provisioning. The package announced by Sitharaman has been termed as "maximum bang for the minimum buck" by an analyst for the very low impact on the fiscal math and dependence on other factors like guarantees to achieve the impact. According to estimates, its fiscal impact varies from 1-2 per cent of the GDP, while Modi had mentioned that the measures will entail a stimulus close to 10 per cent of the GDP. However, most of the analysts have welcomed the long-term potential of the moves, especially the long awaited reforms, but have been sceptical about its short-term impact on growth. Many analysts believe the Indian GDP will contract despite the stimulus package, with some pegging the decrease in the economy at as high as 5 per cent. AA DRR DRR

Stimulus package fails to involve banks as frontline warriors in economic revival: Satish Marathe

MUMBAI: Getting the <keyword id="34412" type="ORGANIZATION" weightage="40" keywordseo="economy">economy</keyword> going again will be among the primary tasks of the new government, although there are few concrete signs of a turnaround amid gloomy forecasts of a possibly weak monsoon. But if and when some of the sunnier prognostications come true, the banking sector will be among the beneficiaries. 
 Banking analysts are of the view that once the economy picks up, ICICI Bank and <keyword id="6355975" type="CITY" weightage="40" keywordseo="Axis-Bank">Axis Bank</keyword> will gain on account of loan growth and <keyword id="6357149" type="CITY" weightage="80" keywordseo="HDFC-bank">HDFC Bank</keyword> will benefit on account of better credit quality and margin improvement. 
 "All the three banks - ICICI Bank, HDFC Bank and Axis Bank - are well placed to grow once the economic revival kicks in. In terms of valuation, Axis Bank is cheaper compared to an ICICI Bank," said Vaibhav Agarwal, <keyword id="194323" type="POSITION" weightage="60" keywordseo="banking-analyst">banking analyst</keyword> at Angel Broking. "Axis Bank's focus on its retail business has increased over the past two years. There have been some concerns on the asset-quality front. However, once the policy environment improves, these concerns will be over." 
 
The banks have been consolidating corporate loans and diversifying their balance sheet, so they are positioned to hit the growth button once the economy gains momentum. In the March quarter, the big three private sector lenders saw credit growth in the high teens. 
 
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In the March quarter, ICICI reported a 15% rise in profit to Rs 2,652 crore, while Axis Bank's increased 18.5% to Rs 1,842 crore, both meeting expectations. HDFC Bank's profit grew 23% to Rs 2,327 crore, the slowest in more than a decade and below estimates on account of the sluggish economy and higher tax rates. 
 
Private lenders expect to grow faster than the industry average, which is around 20%. 
 "We expect the system loan growth to be 16-18% in the current financial year. We aim to grow at 2-4% higher than (this) average. So, our credit growth is expected to be 18-20%," said <keyword id="45875" type="PERSON" weightage="40" keywordseo="Chanda-Kochhar">Chanda Kochhar</keyword>, managing director and chief executive officer, ICICI Bank. On the asset quality front, managements feel the worst is over. 
 "ICICI Bank and Axis Bank would be the biggest beneficiaries of an economic revival as they would see loan demand from corporates increase. HDFC Bank will see increase in short-term loan demand and will benefit from improved asset quality," said Saday Sinha, banking analyst, <keyword id="66607" type="CITY" weightage="40" keywordseo="Kotak-securities">Kotak Securities</keyword>. "Axis Bank has exposure to the power sector. In the next one-and-a-half years, if the input linkage problems are not solved, it (Axis Bank) runs the risk of restructuring these accounts." 
 
ICICI Bank and Axis Bank have restructured loans worth Rs 2,156 crore and Rs 1,115 crore, respectively. "Looking at where we are and the uncertain environment, with no change in financial year 2015, we see credit cost to be around 70 basis points," said V Srinivasan, executive director, corporate banking at Axis Bank. 
 
Net non-performing assets rose marginally to 0.3% from 0.2% for HDFC Bank. 
 
"We have managed to maintain asset quality as we have avoided lending to some names and stayed away from groups that have been highly leveraged," said Paresh Sukthankar, deputy MD, HDFC Bank. There is an element of "growth and asset quality linked to the economic growth. The worst is behind us. Clearly we are off the bottom", he said.

ICICI, Axis & HDFC Bank Will Gain Most From Economic Revival, Say Analysts

Globally renowned economist <keyword id="6358908" type="PERSON" weightage="20" keywordseo="raghuram-rajan">Raghuram Rajan</keyword>’s latest lecture at the Brown University is being used by the opposition in India to slam the government for its majoritarian approach while the supporters of the Narendra Modi administration are trolling the former governor of the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) for an alleged political attack on the government. The fact of the matter is Rajan pointed out both the flaws and positives of the Modi regime in India and shared some ideas on how the currently sagging economy can be revived and put back on a high-growth path. “Let us not dismiss some of the good things that the Modi government did…. Consumption growth supported by borrowings and transfers as well as the household measures like the free cooking gas, really gave the people a sense that they were better off; despite the fact, unlike NDA-I, there were few deep reforms that liberalised growth and markets,” Rajan said in his lecture on October 12. “But what the Modi administration did in economic performance, it is not sustainable. And therefore, unless it changes we’re going to have problems down the line,” he added. So what is it that the government can do to improve India’s economic growth. Here’s Rajan’s “wishlist”, as he called them, in his own words. <ol><li>We need to further move to de-politicise appointments of leadership at democractic institutions and reduce interference/intervention in their functioning. There is no more important institution than the Supreme Court but also investigative agencies like the CBI, CAG, CVC, CIC including the vice chancellors of different universities.Universities are an important source of independent ideas and to politicise appointments there is to reduce the flow of ideas to what is more politically convenient. </li><li>There is a need to go back to the path devolving funding from the Centre to the states but also from the states to the local bodies. The states have also been remiss in pushing funding to the local bodies. It is important that we not only devolve funding but also devolve powers. It will allow the people to hold the government accountable. The more localised it is, the more we can see what the government is doing and can object. Local police paid by local funds will be much more sensitive to local needs than for example the local police that is employed by the state and responds to commands from the state capital rather than the locals. </li><li>There is no point in offering more stimulus in the economy if the stressed sectors-- real estate, construction, banking, non-banking financial firms-- hold back any possible economic growth. There is a need, in such stress situations, for the government to come in through the regulator, look through the balance sheets of these companies, figure out which ones can be saved and which one cannot be, and figure out a way for the ones that cannot be saved to be put them in some form of receivership so that they don’t serve as an overhang in the market. This is the classic game plan for distressed situations even if it involves private sector firms so long as these can be systemic. Given that non-banking financial firms are 17% of the economy, you can’t avoid doing this. If you keep avoiding it, eventually the problems will spread more widely. Unless the government is completely sure that each one of these stressed companies is isolated from the rest of the system, it is extremely important that you do that ‘search and rescue’. Providing <keyword id="6355375" type="DEFINITION" weightage="20" keywordseo="Liquidity">liquidity</keyword> is not enough. Release the stressed assets, like unsold apartments for example, into the market at a reasonable pace. Some of the decisions are going to be arbitrary, some of them are going to be the source for future governments to accuse you of shenanigans and investigate the process and send the CBI etc after you. But this is governance, and it is about taking hard decisions. You can make it as transparent as you can. </li><li>Improve the functioning of the factor markets -- land, labour, finance, regulations. India has workers who you can hire and fire at any time -- they have no rights whatsoever -- and those permanent labour who have all the rights and you can’t fire them. We have both those and nothing in the middle. India would be better off if it would ‘grandfather’ those guys who have permanent jobs, but find a way to move the guys with temporary jobs, contractual jobs to more security by giving them multi-year contracts and building up their stake in the firm by, for example, increasing severance pay over time. There are things you can do to improve labour markets even while adding more flexibility-- things that would improve job security. Not everyone will have a permanent job but it would give people much better than what they have today, which is really contractual uncertainty. One of the biggest stumbling blocks in India is acquiring land. We are a democracy and we need to acquire it in a fair way, which gives the person who sells the land substantial revenues in the future e.g. land sharing agreements. Take 5 acres, develop all 5 and give back 2 acres to the farmer or whoever you have taken it from. Many of these work but we need to find the best practices here and not get stuck in an equilibrium where we can’t buy the land-- the land that the farmer actually wants to sell. But we can’t buy it because we can’t agree on a price that is reasonable and not subject to political intervention later. </li><li>Prune some regulations while improving others. There are some areas where we are under regulated. If you see the way houses are built in hill stations, we will know that whatever zoning laws we have don’t seem to function there. </li><li>Reduce the public sector presence. Part of the reason why governments in India have so much power is because they control financing. 70% of the banking system is in the hands of the government, there are also a number of state-owned companies, the Life Insurance Corporation is under the thumb of the government. When you have so many ways to favour some and dis-favouring others, it is a temptation for any government. It is a source which can affect people’s actions.We need to reduce this as it will make India far more democratic and also far more amenable to growth. </li><li>Keep tariffs relatively low, keep them relatively predictable, that will bring more foreign direct investment. We need to focus on making India more export competitive but we can focus not just on manufacturing but non-traditional exports like education. Improving our educational institutions and getting students from the rest of the world would be a way of exporting. Similarly, healthcare. We can provide doctors to the rest of the world. Why not export Indian services by getting patients to come to India. That means make their experience much easier. Tourism is, of course, a big service factor. Even for manufacturing exports, we need a more transparent, institutionalised process for changing regulations and tariffs on investors. Today, it’s on a whim and can be changed overnight. This was a complaint that Amazon and Walmart had. They thought they were buying into a particular regime and started investing on that basis and the rules changed on them overnight. We need a more transparent process for this. If we move towards a government with more checks and balances and a more market-driven economy, not only will the private sector become more efficient and independent, it will become a more of a check on the government, like in this country (US). I am not saying that the private sector in this country (US) is perfect. I am just saying, in industrial countries there is a power that is independent of the government, that is the private sector and that is a good thing. Without stronger growth, distributive policies, which have been quite effective, will overwhelm revenues, driving the economy into a hard corner. </li><li>Ignore fiscal deficit at your own peril. There is sometimes a sense in India that fiscal deficit doesn’t matter-- let’s spend more. That would be disastrous. One of the things that India has done well over the last few decades has been to run a reasonably tight ship. There have been populist pressures but we have reversed them in times of trouble. For example, the efforts taken in 2012 to reduce spending and deficits protected the Indian economy during the ‘taper tantrum’ by the US in 2013.</li></ol>SEE ALSO: <a href="https://www.businessinsider.in/narendra-modi-pmeac-comments-on-indias-economic-slowdown/articleshow/70954078.cms" data-type="tilCustomLink" target="_blank">Here’s what Narendra Modi’s closest advisors have been saying about economic slowdown</a>

Raghuram Rajan’s recipe to revive India's economic growth

New Delhi, Jul 8 () The Delhi government's panel for economic recovery from COVID-19 on Wednesday decided to emphasise on revisiting licensing norms, reviving demand and simplifying pandemic-related regulations as an immediate focus to boost businesses. In its first meeting, the committee took a decision to adopt a "survive, revive, thrive" approach to tide over the economic cost of the lockdown imposed to curb the spread of the viral infection. According to a government statement, the immediate focus in next three to six months will be on ensuring the survival of businesses and industry sectors by revisiting licensing norms, simplifying COVID related regulations and taking measures to revive demand. In the medium term, that is the next three years, the committee will focus on revival of the business environment by accelerating pending reforms related to ease of doing business in Delhi, it said. By opening up early and putting a robust healthcare strategy in place, the Delhi government has set right conditions for economic recovery, said Delhi Dialogue and Development Commission vice-chairman Jasmine Shah who chaired the meeting. He said, "By working together with industry stakeholders, the Delhi government is keen to come out stronger from the economic shock of the COVID-19 pandemic." The committee for comprehensive analysis and suggestion regarding measures to be initiated by the government to help people and business in the time of the COVID-19 pandemic was formed last week on the recommendations of Chief Minister Arvind Kejriwal and Lt Governor Anil Baijal. "At a time when many Indian cities are still oscillating between locking and unlocking, Delhi's firm focus on economic revival shows the tremendous progress we have made so far," Shah said. The meeting was also attended by representatives from trade, industry and restaurant sectors, and senior government officers. Several industry members expressed the urgency of taking measures to revive demand with specific steps like permitting outdoor sitting and extending hours of operations for restaurants. They also recommended a joint effort among stakeholders at individual market-level by setting up control rooms to monitor social distancing and sanitisation protocols to instil confidence among consumers. The meeting was also attended by Mekin Maheshwari, co-founder of Global Alliance for Mass Entrepreneurship who presented the work of the National Task Force on MSME Transformation constituted by it. Based on the deliberations and inputs from various members of the Committee, it was decided that the panel will adopt the "Survive, Revive, Thrive approach to chart the roadmap for economic recovery in Delhi, according to the Delhi government statement. Gyanesh Bharti, the commissioner of South Delhi Municipal Corporation highlighted that the civic body has already initiated the process for an automatic extension of all existing licenses issued by local bodies up to March 30, without interest or penalty. The commissioner of industries also shared with the panel the progress made by his department in providing moratorium on lease rent on land issued by DSIIDC as well as a major reduction in the interest rate on penalties. In the long term, providing a thriving business environment on par with global cities was a vision that the committee agreed to work towards. Identifying and consolidating sunrise sectors such as tourism, hospitality, entertainment and knowledge-based industries and providing a thriving atmosphere for startups were some of the measures discussed at the meeting, added the statement. VIT NSD NSD

Survive, revive, thrive: Delhi govt panel's approach for economic recovery from COVID-19

NEW DELHI: Analysts at Dalal Street see India in a multi-year <keyword id="72589" type="UNKNOWN" weightage="60" keywordseo="bull-market">bull market</keyword>, which may push the <keyword id="6484188" type="CITY" weightage="80" keywordseo="Sensex">Sensex</keyword> level to much debated 100000 in the next 10 years, supported by earnings growth, economic revival and reform push by the new government. 
 
The benchmark index Sensex has managed to rally 420 per cent or a little over 21,500 in the last 10 years. But can it triply from here in the next ten years? That remains to be seen. However, analysts are not giving up hopes just yet. 
 
“India has a long way to go. The ingredients for a sustained bull market are very much in place and there is a good amount of visibility that we will at least go back to the long range profit growth of 14-15 per cent,” said Navneet Munot, CIO, SBI Mutual Funds. 
 
“Considering the fact that valuations are reasonable and if India Inc can deliver growth of around 15 per cent per annum, which is not an unreasonable expectation over a long period, the Sensex can hit 1,00,000 in 10 years,” he added. 
 Year 2014 has been eventful for the Indian markets, pushing them up by over 25 per cent, with both the Sensex and the <keyword id="6354813" type="COMPANY" weightage="80" keywordseo="nifty">Nifty</keyword> touching record highs on the back of improving domestic macros, supportive global liquidity and the expected governance improvement in India after the last general elections. 
 
The macro-economic data is looking positive, the economic activity is expected to gather steam by 2015 and GDP growth rate might hit near the 7 per cent mark in the next two years. 
 
However, Munot is not the only one who is optimistic about the Indian markets. Back in the month of June, Varun Goel of Karvy also predicted the level of 100000 for the Sensex in the next six years. 
 
“We see 2014 bringing a new bull cycle into existence. A strong export sector, revival in investment activity, continued recovery in the US &amp; a stable Euro area are significant positives for equity markets. With domestic macro-economic data also on the mend, we are aggressive buyers of the Indian equity,” said Varun Goel, Head PMS, Karvy. 
 From an equity market stand-point, macro-economic revival in India will open opportunities to make strong returns in the next few years. Goel expects a GDP growth of 6 per cent in FY15 and believes that the <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> will see a revival of growth and earnings cycle from there on. 
 
“For FY15, we expect a Sensex EPS growth of around 15 per cent and believe that earnings growth for the new five to six year business cycle should be at least 20%, considering the economy will revive from a very low base,” he added. 
 
Goel is of the view that a multiple rerating is also possible as cost of equity goes down in the next few years with the decrease in risk-free rate. An earnings growth between 20 and 25 per cent and multiple rerating from 15x to 16-17x in the next few years can lead to a 25% compounding of the Sensex returns, which will take it to 100,000 levels by calendar year 2020, he explains. 
 
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Economic revival key for earnings growth: 
 
The Indian markets have got support from strong inflows from foreign institutional investors who have pumped in over $26 billion in the Indian market so far in the year 2014. 
 
FIIs are betting big on the Narendra Modi-led BJP government as they see it initiating reforms to spur economic growth, remove bottlenecks and aid investment activity. 
 <keyword id="71" type="POSITION" weightage="100" keywordseo="Prime-Minister">Prime Minister</keyword> <keyword id="6354477" type="PERSON" weightage="60" keywordseo="Narendra-Modi">Narendra Modi</keyword> is about to finish his first 100 days in office, but India Inc CEOs are convinced an economic revival is around the corner. 
 
A majority of 50 CEOs polled by ET are preparing to make fresh investments and are also stepping up hiring, all in anticipation of a 6-8% GDP growth most feel is possible over the next three years. 
 
The results of the exclusive ET Poll suggest that after years of uncertainty and inaction, India Inc is now preparing to re-ignite its growth engines. The poll shows 74 per cent of CEOs are already seeing demand pick-up, 80 per cent have made new investment decisions or are likely to do so soon and two-thirds are now stepping up hiring. 
 
Earlier this week, global brokerage firm Nomura, which sees nearly 15 per cent upside in the Sensex in the next one year, revised its FY16 real GDP growth forecast to 6.8 per cent YoY vs. 6.5 per cent previously. 
 
Of the many variables that make up the market’s macro ecosystem, growth is unarguably the most important, largely because its relationship with the market is quite unequivocal and straightforward. 
 
“Rising growth is strongly correlated with a re-rating of the market’s earnings multiple, while falling growth is strongly correlated with a de-rating of the market’s earnings multiple,” added the Nomura report, authored by Sonal Varma and Aman Mohunta. 
 
So, is a 15 per cent earnings growth possible if the economy turns around? 
 It is very much possible provided global environment remains stable, the Reserve <keyword id="6355303" type="CITY" weightage="100" keywordseo="Bank-of-India">Bank of India</keyword> eases key policy rates which would help in kick starting investment cycle for India Inc’s control on inflation and policy push. 
 
Despite so many negatives plaguing the economy, corrective measures by the new government can quickly revive growth. The growth rebound to those levels can take place quickly by reviving the investment demand. Once that has been achieved, the more difficult path of reclaiming the 7-8 per cent growth can start. 
 
“While 15 per cent earnings growth rate does not look difficult, the fact is we have not had three years of 15% plus earnings growth rate except in the period of 2003 to 2008,” said Anoop Bhaskar, Head-Equities, UTI AMC. 
 
“We need to get the right kind of macro factors in place for you to deliver that number on a consistent basis. Of course, we can get two years or three years, but to get it for the next six-seven years in a row requires that we have in place macro factors which remain fairly comfortable and positive,” he added.

India In Multi-Year Bull Market; Sensex Seen At 1,00,000 In 10 Years

New Delhi, Apr 16 () The Retailers Association of India (RAI) on Thursday urged government to "strongly consider" allowing all forms of retailers, not just e-commerce players, to operate through home delivery during the extended lockdown period. While supporting the government's move to extend the lockdown to curb the spread of coronavirus pandemic, RAI said such a move will facilitate availability of all goods at the doorsteps of customers while supporting economic revival for the country. "We urge the government to strongly consider that all forms of home delivery across retailers be allowed the benefit of doing business via contactless home delivery," the retailers body said in a statement. Allowing this for all retailers, and not just e-commerce players, will facilitate the availability of all goods at the doorsteps of customers, it added. "This will ensure that there are fewer reasons for the public to step outside of their homes. It will also ensure greater availability of supplies and help conform to the requirement of social distancing," RAI said. This move will further support the economic revival for the country as well as allow for new avenues of job creation in the market, it added. On the guidelines issued by the Ministry of Home Affairs on Wednesday for the extended lockdown, RAI said it brings the focus that the government has on maintaining social distancing while ensuring that consumers get what they want in a safe and contactless manner. "It demonstrates the intent to support the safety of the people while also enabling the movement of goods required to ensure economic activity," RAI said. RKL RVK

Allow home delivery by all retailers, not just e-commerce players: RAI

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Thomson ReutersJapanese Prime Minister Shinzo Abe at parliament in Tokyo.</div></div></div>Standard &amp; Poor's, one of the world's biggest credit-ratings agencies, just cut Japan's rating.The country's credit rating previously got an AA- grade, but it's now sitting at A+. That's still an investment-grade rating, but S&amp;P is flagging major concerns for the Japanese economy, which has grown very slowly and accumulated a mountain of government debt.It's not a good verdict for Abenomics, the pet project of Prime Minister Shinzo Abe. Here's what S&amp;P says:We believe the likelihood of an economic recovery in Japan strong enough to restore economic support for sovereign creditworthiness commensurate with our previous assessment has diminished. Over 2011-2014, average per-capita income in Japan slipped to US$36,000 from close to US$47,000. Apart from a sharp depreciation in the exchange rate between the yen and the U.S. dollar, this also reflected weak average economic growth during the period and persistently weak price trends. Despite showing initial promise, we believe that the government's economic revival strategy - dubbed "Abenomics" - will not be able to reverse this deterioration in the next two to three years.Abe has tried to use massive monetary and fiscal easing, as well as structural economic reform, to revive Japan's sluggish growth. But after a sales-tax hike in April 2014, growth slowed down by much more than expected, and the Bank of Japan is still nowhere near its new 2% inflation target.What's more, the country's outlook has been budged from stable to negative. That is S&amp;P's signal that further cuts are likely to come. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/make-stronger-coffee-butter-bulletproof-2015-8">The one thing you can add to coffee for even more energy in the morning</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="AzaHR0azqiCrAFeAtElHGrY0gtxdQM__" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

JAPAN'S CREDIT RATING JUST GOT SLASHED

<ul class="summary-list"><li><keyword id="11896865" type="UNKNOWN" weightage="60" keywordseo="democrats" source="Orion">Democrats</keyword> are putting forward a measure to slash drug prices through a Senate review.</li><li>It's the first step to revive their stalled economic agenda, and Manchin is on board with this part.</li></ul>Senate Democrats are taking the first step to revive swaths of their dormant economic agenda with a greenlight from Sen. Joe Manchin of West Virginia. It amounts to the most serious attempt to enact some parts of their economic plans in 2022, seven months after they fell apart due to Manchin's opposition.Democrats are putting forward a measure to slash prescription drug prices, intended to pass using the intricate <keyword id="11896863" type="UNKNOWN" weightage="60" keywordseo="reconciliation" source="Orion">reconciliation</keyword> process — a maneuver allowing Democrats to circumvent a Republican filibuster and approve bills with a simple majority vote. The first step in that process is a review known as the "Byrd Bath" from the Senate parliamentarian, the top official overseeing what can be included in such a bill.Passing a bill through reconciliation would require a unanimous vote from Senate Democrats in the evenly divided chamber. While Manchin has been a key holdout on many parts of the broader agenda, he has expressed support for prescription drug reform. "Senator Manchin has long advocated for proposals that would lower prescription drug costs for seniors and his support for this proposal has never been in question," Manchin spokesperson Sam Runyon said in a statement. "He's glad that all 50 Democrats agree." The <a href="https://www.finance.senate.gov/imo/media/doc/070622%20Prescription%20Drug%20Pricing%20Reform%20Leg%20Text.pdf">190-page bill text</a> from the Senate Finance Committee shows part of the package is intended to:<ul><li>Allow Medicare to negotiate prices for some drugs starting next year</li><li>Cap price increases at inflation in Medicare and private insurance</li><li>Limit out-of-pocket costs for Medicare beneficiaries at $2,000 annually</li><li>Provide free vaccines to seniors</li></ul>Experts say these provisions are capable of providing financial relief to both the private and public sector."There is potential here with the drug pricing reforms to save money for the government, employers, and patients," Larry Levitt, executive vice president for health <keyword id="11896048" type="UNKNOWN" weightage="60" keywordseo="policy" source="Orion">policy</keyword> at the Kaiser Family Foundation, told Insider. "That's a trifecta that's quite unusual in health care."He continued: "The trade-off is potentially somewhat fewer new drugs coming to market, a point the pharmaceutical industry will continue to hammer away at."For now, Democrats removed a planned $35 monthly cap on insulin. It's a top Democratic priority <a href="https://www.finance.senate.gov/imo/media/doc/12.11.21%20Finance%20Text.pdf">once included</a> in the House-approved legislation that later died in the Senate. It was at always at risk of falling out of the bill if the Senate parliamentarian deemed it unrelated to the federal budget. It's possible for Democrats to reintroduce it into the bill later in the coming weeks. A spokesperson for the Senate Finance Committee declined to comment.Senate Majority Leader <keyword id="11949067" type="UNKNOWN" weightage="60" keywordseo="chuck-schumer" source="Orion">Chuck Schumer</keyword> <a href="https://mountainlake.org/congress-moves-to-lower-insulin-costs/?utm_content=buffer41582&amp;utm_medium=social&amp;utm_source=twitter.com&amp;utm_campaign=buffer">has committed</a> to advancing a alternate bipartisan bill from Sens. Susan Collins of Maine and Jeanne Shaheen of New Hampshire that would establish the $35 limit on insulin starting in 2023. The measure would omit people without health insurance.Talks are underway and it's unclear whether their insulin legislation would secure the backing of 10 Senate <keyword id="11899267" type="UNKNOWN" weightage="60" keywordseo="republicans" source="Orion">Republicans</keyword> needed to clear a filibuster to pass the upper chamber. GOP lawmakers tend to oppose federal price controls, arguing they stymie research and innovation.Other signature Democratic priorities remain up in the air, such as <a href="https://www.businessinsider.com/manchin-extending-obamacare-aid-income-threshold-2022-6">an extension of enhanced federal subsidies</a> under the Affordable Care Act set to expire in December and a range of clean energy tax credits. <a href="https://www.businessinsider.com/senate-democrats-sinema-deal-biden-economic-agenda-bbb-millionaire-tax-2022-7">Democrats are eyeing</a> $1 trillion in total spending with half the amount directed to slash the federal deficit.

Senate Democrats take the first step to reviving their stalled economic agenda with Manchin onboard

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Wikimedia CommonsA photo from Depression-era Louisiana.</div></div></div>Globalization has been one of the dominant economic trends for over 100 years. Expanding free trade and increasing the flow of goods, services, and people from country to country has been a so-far invincible force since the late 19th century.According to George Saravelos and Robin Winkler, strategists at Deutsche Bank, <a href="http://www.businessinsider.com/goodbye-globalization-2016-11">the era of expanded globalization is over and de-globalization is here.</a>While we've <a href="http://www.businessinsider.com/trump-trade-policy-lead-to-global-recession-2016-11">written about the implications of trade restrictions, tariffs, and the like before</a>, Saravelos and Winkler made an interesting comparison to the last time the US attempted to stem the tide of globalization.Saravelos and Winkler noted that there has been another time before the election of Donald Trump that a Republican came into office with both houses of Congress on his side calling for the protection of the American economy. From the note: "In 1928, on the eve of the Great Depression, Herbert Hoover ran on a platform that promised higher tariffs on agricultural products to America's suffering farmers. Having won the presidency and a comfortable Republican majority in Congress, Hoover proceeded to pass, with the help of Republican senators, the Smoot-Hawley Act, which was signed into effect in 1930 and raised tariffs on more than 20,000 products to levels not seen before in US trade history."This in turn, led some of the biggest trade partners of the US to also raise their tariffs against American goods in retaliation. Furthermore, limits on capital flows and movement of people also put a drag on economic growth. The end result contributed to the disaster of the Great Depression."As a result, US trade halved within years, and global trade weakened even more, even if it continued at low levels within regional trading blocs such as the Commonwealth and the remnants of the Gold Bloc," said the note. "The rise in protectionism served as an important catalyst to the global recession."Many of the protectionist moves made by Hoover are echoed in the suggestions of President-elect Trump today. Several analysts have noted that the large trade partners Trump has threatened with tariffs - <a href="http://www.businessinsider.com/donald-trump-45-tariff-chinese-imports-china-2016-1">China</a> and <a href="http://www.businessinsider.com/donald-trump-presidency-effects-mexico-2016-11">Mexico</a> - could also retaliate with their own tariffs.In fact, the Chinese government has threatened some measures like <a href="https://www.theguardian.com/world/2016/nov/14/china-threatens-to-cut-sales-of-iphones-and-us-cars-if-naive-trump-pursues-trade-war">restricting iPhone and US car sales</a> if Trump goes through with his policies. Additionally, Trump wants to stem the flow of immigrants into the US, which could be a negative labor supply shock.<div class="KonaFilter image-container display-table"><div><div class="image on-image">ReutersPresident-elect Donald Trump</div></div></div>Saravelos and Winkler also noted that this issue was exacerbated in the 1930s by developments in Europe."Flows in capital and people further declined in the early 1930s as a wave of populist political movements spread through Europe," said the note.<a href="http://www.businessinsider.com/france-2017-elections-and-the-rise-of-populism-in-europe-2016-11">Far-right populist parties</a> have been aiming to restrict the flow of immigrants and pull back from the European single market. And the <a href="http://www.businessinsider.com/marine-le-pen-brexit-trump-new-world-order-2016-11">UK's exit from the European Union</a> is a concrete example of such a move.Now Saravelos and Winkler point out that drawing a historical comparison is "not intended to argue for a repetition of history but to highlight how a sequencing of events led to the unraveling of global trade."There are also some caveats here. For one thing, Trump's proposals are not as severe as the policies Hoover put in place. Further, economies and people are already far more connected than they were in the late 1920s.While the strategists did not predict any sort of calamity from this trend and Trump's policies, they did note that they "doubt that global growth will be helped" and noted there could be serious problems with the policies' implementation. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/men-perfect-body-changed-history-video-2016-10">How the 'perfect body' for men has changed over the last 150 years</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="k3dmszNzE6rI1CJmReq9ubSqLK0z-VaY" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

You Searched For "economic revival" and got 13 results

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India In Multi-Year Bull Market; Sensex Seen At 1,00,000 In 10 Years

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JAPAN'S CREDIT RATING JUST GOT SLASHED

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