Beware the quantum computers
Today’s encryption technology will be putty in the hands of those running the post-quantum world. How equipped ...
The latest industrial production numbers paint a somewhat bleak picture of the Indian economy, even though it remains a better long-term bet than other emerging economies, China included. A 3.2 per cent slide in the factory index for November 2015, after a 9.8 per cent spurt in October, should not come as a surprise to those familiar with such “analytically bewildering” swings, to quote the former RBI governor, D Subbarao. Yet, the index of industrial production reveals a trend that cannot be ignored. For instance, it is difficult for the ‘fastest growing economy’ to draw comfort from the fact that the IIP has risen 3.9 per cent this fiscal year, against 2.5 per cent last year. Worse, private investment is stuck in a rut. Besides, it is not the IIP alone that is “bewildering”. The GDP data point to a manufacturing output growth of 8.2 per cent in the first half of 2015-16, double the IIP growth rate. If the performance of 2,711 ‘non-government, non-financial listed companies’ cited in the Centre’s mid-year review is anything to go by, the IIP this time seems closer to the truth: sales have contracted over three consecutive quarters ended September last year. Since the review acknowledges “mixed signals with indicators not always pointing in the same positive direction”, it is important to probe the issue further. The earlier criticism that the new GDP series overstates manufacturing output needs to be revisited, and the air cleared once and for all.
As for prices, retail inflation at 5.6 per cent in December 2015 is now on the rise for five straight months owing to vegetables and pulses inflation in particular, a situation that may persist if the rabi crop is weak, thanks to dry weather and a very mild winter so far. However, the bigger picture is one of an economy beset by deflation. The wholesale price index has been negative for a year, which indicates poor industrial demand, besides falling commodity prices. Negative inflation and ‘high growth’ cannot be easily explained, just as falling exports and sluggish investment do not point to buoyancy. The puzzle deepens in the absence of reliable jobs data, something the Centre must lay more stress on. Consumption may not spur growth for long in such a situation. Food prices need to be dealt with as a supply constraint, as they can impinge on disposable incomes and hurt overall demand.
Nevertheless, the 10 percentage point divergence between retail and producer price indices suggests a latent growth problem and the need for an accommodative monetary and fiscal policy. The Budget is being framed for a year that may see lower world growth than in 2015-16. Falling commodity prices could trigger debt defaults, bankruptcies and political stress in commodity exporting countries. Investors may prefer to hold US treasuries, gold and low-risk bonds over equities. India is still in a sweet spot, given this grim scenario. Its twin deficits are under control and its currency stable in times of competitive devaluations. A Budget that focuses on public investment can usher in real change.
Today’s encryption technology will be putty in the hands of those running the post-quantum world. How equipped ...
Rocketship’s Anand Rajaraman on getting pitches from places like Rameswaram and Patna
Bengaluru-based Archeron group plans to open five banks that are run entirely by AI and quantum technologies
Ably skippered by N Srinivasan, India Cements is upping its post-Covid-19 game by expanding capacity
Three-in-one: Passive debt funds come at a low cost and have high-quality portfolios. Some offer return ...
Trend in the rupee movement and Q4 earnings can give direction to the market
There is room for improvement in fund transfer options
Silver looks positive but lacks the higher volumes required to substantiate bullishness
Murder is a theme that is unlikely to darken and yellow with time, the writer Truman Capote had once said.
Expect the unexpected when musicians of different traditions come together for a duet
On Ugadi, the Telugu New Year Day, a chronicler recalls slices of an isolated year gone by and realises that ...
In her novel based on the life of Rani Jindan Kaur, author Chitra Banerjee Divakaruni crafts a hero for the ...
Marketers are padded up, sponsorship deals have been struck, and campaigns are rolling out. Now let the games ...
And what marketers can possibly do to bring it back in our lives
The agency has changed form over the years but its lustre has not dimmed
Media Factory has purchased the majority stake held by Sam and Lara Balsara of Madison World in Madison Media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor