India's growth slowed due to demonetisation, GST: Donald Trump administration

Agencies
February 22, 2018

Washington, Feb 22: America's bilateral trade deficit with four major countries, including India, narrowed in the first three quarters of 2017 as compared to the previous year, the US administration said in a report according to which India's growth has slowed due to the effects of its structural economic reforms.

The Economic Report of the President (ERP) that shows a path for continued growth and paints a rosy picture for the American economy, alleges that countries, including India and Brazil - both GATT signatories since 1948 - have been far less open, preserving high bound rates and avoiding universal binding coverage.

"Growth in India has slowed due to the effects of its structural economic reforms. India's demonetisation of large-denomination notes in November 2016 invalidated 86 per cent of the cash in circulation in an economy where more than 90 per cent of transactions were cash-based," it said.

"The introduction in July 2017 of a single, country-wide sales tax replaced a vast number of different state and local tax rates, and has created short-term uncertainty," the report noted.

The report expressed concern over increasing share of non-performing loans (NPLs) in India's banking sector, which it said poses further risks.

According to country-sourced statistics provided to the IMF, NPLs as a share of all loans (i.E. NPL slippage ratio) in India stood at 9.7 per cent in the third quarter of 2017, compared with 1.7 per cent in China (IMF 2017).

"NPLs have increased at an alarming rate in recent years, with the current NPL slippage ratio in India almost double that in FY 2014/15 (IMF 2017b). Public sector banks, with the State Bank of India as a leading example, account for the lion's share of NPLs in the banking sector," it said.

The Reserve Bank of India predicts that gross NPLs as a proportion of all loans will increase to 10.8 per cent in the first quarter of 2018, and to 11. 1 per cent by September 2018.

"However, the stress of India's banking sector may be ameliorated in the future, given that the government recently announced a USD 32.4 billion package to recapitalise publicly- owned banks," the report said.

Noting that India has been the most frequent user of anti-dumping measures, the White House said delays in the approval of agricultural products derived from biotechnology in China, the EU, India, and other countries result in increased market uncertainty among technology providers, farmers, and traders of US corn, soy, cotton, and alfalfa—leading to reduced exports of these products.

The Trump administration also blamed India for not implementing the WTO ruling on poultry.

"India has failed to revise its requirements for poultry in a manner that would allow for US imports, and the case continues to be litigated in the WTO," it said.

"Since 2007, India has restricted various US agricultural products, including poultry meat, eggs, and live pigs, supposedly to prevent the entry of avian influenza into India," the report said.

The US has maintained that no scientific basis supports the ban.

In March 2012, the US initiated a WTO dispute by requesting consultations with India.

In emerging and developing economies, such as Brazil, China, India, Russia, and certain other countries in Africa, Asia, and Latin America, strengthening the external environment continues to help output growth recover.

"There are, however, certain risks to future growth. As monetary policy normalises with higher interest rates in advanced economies, emerging and developing economies could face an outflow of capital," it said.

"Financial stability risks are also increasing due to the increase in nonperforming loans on the private sector balance sheets of two of the biggest and fastest-growing emerging market economies - China and India. Credit growth in China has arguably also become excessive, as it continues to shift from growth led by exports and investment to an economy led by internal demand," it said.

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News Network
January 7,2020

Mumbai, Jan 7: People protesting against the JNU violence were evicted from Gateway of India here on Tuesday morning as roads were getting blocked and tourists and common people were facing problems, a police official said.

Police had appealed to the protesters to shift but they didn't listen, so they were "relocated" to Azad Maidan, the official said.

Hundreds of people, including students, women and senior citizens - who assembled at the iconic Gateway of India since Sunday midnight - demanded action against the culprits and called for Union Home Minister Amit Shah's resignation.

Violence broke out in the Jawaharlal Nehru University (JNU) in Delhi on Sunday night as masked men armed with sticks and rods attacked students and teachers and damaged property on the campus.

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News Network
January 9,2020

New Delhi, Jan 9: JNU students who tried to march towards the Rashtrapati Bhavan on Thursday protesting the violence on the university campus were stopped by police and later detained.

The police also resorted to baton charge to control the mob who tried to block the traffic at Janpath. Using loudspeakers, the police also appealed to the crowd to maintain peace.

Before the students tried to proceed towards the Rashtrapati Bhavan, a delegation of JNU Students' Union and JNU Teachers' Association also met Human Resource Development (HRD) Ministry officials and demanded the removal of Vice-Chancellor M Jagadesh Kumar from his post.

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News Network
January 13,2020

Jan 13: For the first time in years, the government of India’s Prime Minister Narendra Modi is playing defense. Protests have sprung up across the country against an amendment to India’s laws — which came into effect on Friday — that makes it easier for members of some religions to become citizens of India. The government claims this is simply an attempt to protect religious minorities in the Muslim-majority countries that border India; but protesters see it as the first step toward a formal repudiation of India’s constitutionally guaranteed secularism — and one that must be resisted.

Modi was re-elected prime minister last year with an enhanced majority; his hold over the country’s politics is absolute. The formal opposition is weak, discredited and disorganized. Yet, somehow, the anti-Citizenship Act protests have taken hold. No political party is behind them; they are generally arranged by student unions, neighborhood associations and the like.

Yet this aspect of their character is precisely what will worry Modi and his right-hand man, Home Minister Amit Shah. They know how to mock and delegitimize opposition parties with ruthless efficiency. Yet creating a narrative that paints large, flag-waving crowds as traitors is not quite that easy.

For that is how these protests look: large groups of young people, many carrying witty signs and the national flag. They meet and read the preamble to India’s Constitution, into which the promise of secularism was written in the 1970’s.

They carry photographs of the Constitution’s drafter, the Columbia University-trained economist and lawyer B. R. Ambedkar. These are not the mobs the government wanted. They hoped for angry Muslims rampaging through the streets of India’s cities, whom they could point to and say: “See? We must protect you from them.” But, in spite of sometimes brutal repression, the protests have largely been nonviolent.

One, in Shaheen Bagh in a Muslim-dominated sector of New Delhi, began simply as a set of local women in a square, armed with hot tea and blankets against the chill Delhi winter. It has now become the focal point of a very different sort of resistance than what the government expected. Nothing could cure the delusions of India’s Hindu middle class, trained to see India’s Muslims as dangerous threats, as effectively as a group of otherwise clearly apolitical women sipping sweet tea and sharing their fears and food with anyone who will listen.

Modi was re-elected less than a year ago; what could have changed in India since then? Not much, I suspect, in most places that voted for him and his party — particularly the vast rural hinterland of northern India. But urban India was also possibly never quite as content as electoral results suggested. India’s growth dipped below 5% in recent quarters; demand has crashed, and uncertainty about the future is widespread. Worse, the government’s response to the protests was clearly ill-judged. University campuses were attacked, in one case by the police and later by masked men almost certainly connected to the ruling party.

Protesters were harassed and detained with little cause. The courts seemed uninterested. And, slowly, anger began to grow on social media — not just on Twitter, but also on Instagram, previously the preserve of pretty bowls of salad. Instagram is the one social medium over which Modi’s party does not have a stranglehold; and it is where these protests, with their photogenic signs and flags, have found a natural home. As a result, people across urban India who would never previously have gone to a demonstration or a political rally have been slowly politicized.

India is, in fact, becoming more like a normal democracy. “Normal,” that is, for the 2020’s. Liberal democracies across the world are politically divided, often between more liberal urban centers and coasts, and angrier, “left-behind” hinterlands. Modi’s political secret was that he was that rare populist who could unite both the hopeful cities and the resentful countryside. Yet this once magic formula seems to have become ineffective. Five of India’s six largest cities are not ruled by Modi’s Bharatiya Janata Party in any case — the financial hub of Mumbai changed hands recently. The BJP has set its sights on winning state elections in Delhi in a few weeks. Which way the capital’s voters will go is uncertain. But that itself is revealing — last year, Modi swept all seven parliamentary seats in Delhi.

In the end, the Citizenship Amendment Act is now law, the BJP might manage to win Delhi, and the protests might die down as the days get unmanageably hot and state repression increases. But urban India has put Modi on notice. His days of being India’s unifier are over: From now on, like all the other populists, he will have to keep one eye on the streets of his country’s cities.

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