The Hindu Business Line : Booster for economy

The signals to watch for are GDP growth, fall in interest rates for middle and poorer classes and no significant change in rupee-dollar parity. Watching the progress in recapitalisation of the public sector banks and the success of Government in monitoring growth in sectoral credit and credit deliveries to companies by banks will also indicate which way the economy is swinging.

Growth in retail sector, trends in larger format stores and growth in borrowings from abroad by developers of integrated townships and NBFCs will also reflect if the dose is working. Other barometers are imports and exports, NBFCs’ moves to finance commercial vehicles, etc. — *T. S. Sundareswaran, email

Figures of advance tax collections will help us understand if corporates are able to register expected growth, thus pointing to the success of the booster dose. Where multiple ministries/authorities start infrastructure projects, it can be taken as a sign of the economy taking off. The public knows about the progress of the economy only from the annual Economic Survey and during the Union Budget — V. Narayanan, email

The effectiveness of the steps taken by the Government can be recognised first through increase in demand for capital goods. Increase in investment leads to increase in employment and income. Demand for goods and services leads to rise in prices and profits. The multiplier effect leads to further investment, production, income and savings. — T.V. Jayaprakash, email

The stimulus package announced by the Government on January 2 was modelled on those adopted by the West. While the moves to allow IIFCL to raise Rs 30,000 crore and permit NBFCs to raise ECBs to fund infrastructure projects are aimed at infusing liquidity into the sector, the interest rate cuts and removal of interest rate ceilings on ECBs will make borrowings more affordable. Moreover, the package is too small to act as a strong spur to economic activities and growth at this stage. – K. K. Ammannaya, email

Demand from crucial sectors is one of the most important signals indicating if the booster dose is having its effect. Revival of demand will signify that we are on the road to recovery. This is a time-consuming process in the midst of job cuts every other day.

Job opportunities, revival of capital projects and demand awakening are all clear indicators of performance of the stimulus package. — Ashok Jayaram, email

The signals for watching the results are growth in GDP, reflected in government bulletins, fall in interest rates for middle and poorer classes and no significant change in rupee-dollar parity. Watching the progress in recapitalisation of the public sector banks and the success of Government in monitoring growth in sectoral credit and credit deliveries to companies by banks will also indicate which way the economy is swinging.

Growth in retail sector, trends in larger format stores and growth in borrowings from abroad by developers of integrated townships and NBFCs will also reflect if the dose is working. Other barometers are import-export and countervailing duties, quantity of imports and NBFCs’ moves to create demand for commercial vehicles. — T. S. Sundareswaran, email

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