Priyanka Gandhi joins active politics, becomes AICC Gen Sec for UP East

New Delhi, Feb 29: India’s economy expanded at its slowest pace in more than six years in the last three months of 2019, with analysts predicting further deceleration as the global Covid 19 coronavirus outbreak stifles growth in Asia’s third-largest economy.

The gross domestic product (GDP) data released yesterday showed government spending, private investment and exports slowing down, while there is a slight upturn in consumer spending and improvement in rural demand lent support.

The quarterly figure of 4.7% growth matched the consensus in a Reuters poll of analysts but was below a revised - and greatly increased - 5.1% rate for the previous quarter.

The central bank has warned that downside risks to global growth have increased as a result of the coronavirus epidemic, the full effects of which are still unfolding.

Prime minister Narendra Modi’s government has taken several steps to bolster economic growth, including a privatisation push and increased state spending, after cutting corporate tax rates last September.

In its annual budget presented this month, the government estimated that annual economic growth in the financial year to March 31 would be 5%, its lowest for last 11 years.

Modi’s government is targeting a slight recovery in growth to 6% for 2020/21, still far below the level needed to generate jobs for millions of young Indians entering the labour market each month.

The annual GDP figure for the September quarter was ramped up from an earlier estimate of 4.5%, while the April-June reading was similarly lifted to 5.6% from 5%, data released by the Ministry of Statistics showed on Friday.

Capital Investment Drop

In the December quarter, private investment grew 5.9%, up from 5.6% in the previous quarter, while government spending rose by 11.8%, against 13.2% in the previous three months.

However, corporate capital investment contracted by 5.2% after a 4.1% decline in the previous quarter, indicating that interest rate cuts by the central bank have failed to encourage new investment. Manufacturing, meanwhile, contracted by 0.2%.

“It appears growth slowdown is not just cyclical but more entrenched with consumption secularly joining the slowdown bandwagon even as the investment story continues to languish,” said Madhavi Arora of Edelweiss Securities in Mumbai.

Many economists said that the government stimulus could take four to six quarters of time before lifting the economy and the impact of those efforts could be outweighed by the global fallout from the coronavirus epidemic that began in China.

“The coronavirus remains the critical risk as India depends on China for both demand and supply of inputs,” said Abheek Barua, chief economist at HDFC Bank.

Indian shares sank on Friday for a sixth session running, capping their worst week in more than a decade. The NSE Nifty 50 index shed 7.3% over the week, while the Sensex dropped 6.8%, the worst weekly declines since the 2008-09 financial crisis.

Separately, India’s infrastructure output rose 2.2% year on year in January, data showed on Friday.

A spike in inflation to a more than 5-1/2 year high of 7.59% in January is expected to make the RBI hold off from further cuts to interest rates for now, while keeping its monetary stance accommodative.

New Delhi, Jun 25: Union Home Minister Amit Shah on Thursday hit out at Congress for "unceremoniously sacking" its spokesperson and said that leaders in the opposition party are "feeling suffocated".

To substantiate his point, Shah referred to the recent Congress Working Committee (CWC) meet in which senior members and younger members raised a few issues, however, they were "shut down".

Taking to Twitter, Shah posted two English dailies' articles titled -- "Not scared of PM Modi, but many in the party dodge him: Rahul at Congress Working Committee meet" and "Congress removes Sanjay Jha as party spokesperson after critical article".

Last week, Jha was dropped as AICC spokesperson and Abhishek Dutt and Sadhna Bharti appointed as National Media Panelist of Congress party.

"During the recent CWC meet, senior members and younger members raised a few issues. But, they were shouted down. A party spokesperson was unceremoniously sacked. The sad truth is - leaders are feeling suffocated in Congress," the Union Minister tweeted.

Meanwhile, Shah also targetted Congress on the completion of 45 years of emergency, which was imposed by former Prime Minister Indira Gandhi on June 25, 1975 and asked the party to self introspect.

"As one of India's opposition parties, Congress needs to ask itself: Why does the Emergency mindset remain? Why are leaders who do not belong to 1 dynasty unable to speak up? Why are leaders getting frustrated in Congress? Else, their disconnect with people will keep widening," he wrote.

New Delhi, Jun 23: In an unexpected development, the pump price of diesel is all set to surpass the petrol price in the capital, making it the most expensive transport fuel for the first time in a long time.

Globally, diesel is priced slightly above petrol prices due to the very nature of the product that has a higher cost of production. But in India, due to the lopsided taxation structure, diesel attracts lesser of the tax between the two auto fuels keeping its prices lower than petrol for last several years.

Diesel is currently priced at Rs 79.40 a litre in the Capital, just 36 paise short of petrol price that is being retailed at Rs 79.76 a litre. Going by the trend of price movement in the two products for the last few days where diesel prices have consistently increased by 50-60 paise per litre while the daily increase in petrol prices have fallen to just 20 paise on Tuesday, it is set to surpass petrol prices in next few days.

"Diesel price movement is sharper in international market and if oil companies follow the global price trend, diesel prices will surpass that of petrol later this week. It will be after many years that this would happen and is expected to sustain for some time unless government changes the tax structure of the petroleum products again," said an oil sector expert from one of the big four audit and advisory firms asking not to be named.

Interestingly, even in India the base price of diesel is expensive than petrol. According to the Indian Oil Corporation (IOC), while the base price of petrol in Delhi currently comes to Rs 22.11 per litre, the same for diesel is higher at Rs 22.93 per litre (effective from June 16, 2020). This has been the case for a long time, but retail price of petrol can be higher than diesel due to central and state taxes.

What has now brought diesel prices to a whisker of petrol prices in the capital is the Delhi government's decision early May to increase the Value Added Tax on diesel from 16.75 per cent to 30 per cent and on petrol from 27 per cent to 30 per cent. This increased the retail price of diesel and petrol in Delhi by Rs 7.10 and Rs 1.67 a litre respectively. With Central taxes on the two products already reaching identical levels, the Delhi governments move hastened price parity between petrol and diesel.

Currently, the Central excise on petrol is Rs 32.98 a litre while that on diesel it is Rs 31.83 a litre. The VAT on petrol in Delhi is Rs 17.71 a litre and that on diesel is Rs 17.60 a litre.

While the movement of retail pricing is being seen with a sigh of relief by vehicle owners whose cars run on petrol, those buying the relatively expensive diesel cars are now repenting on their decision. The development is also being seen with caution by automobile companies who have spent millions to ramp up their facilities for diesel run vehicles. The expectation is that demand for such cars will now fall, causing more damage to companies where sales are already impacted due to persistent economic slowdown and now the spread of COVID-19 pandemic.

"The pricing development would push automobile companies to strategies being followed by companies in the western markets where diesel run cars are not sold on fuel pricing differential, but on overall make and quality that puts them ahead of petrol run cars," the expert quoted earlier.

Yes, but for commercial vehicle sector the rising price of diesel had not been welcomed. In fact, the commercial transport sector had time an again threatened strike against the move to raise fuel prices.

With petrol and diesel retail prices closing, the case for adultering fuel has also gone down much to the relief of vehicle owners.