The slump is attributed to tepid investment and weak consumption demand. Manufacturing grew by a paltry 0.6% while farm sector witnessed a growth of 2% during the same period. In its FY19 annual report, RBI said that the slowdown is primarily cyclical. However, structural headwinds in the form of weak propensity to consume is discernible.
In order to recuperate the flagging economy, a pragmatic mix of both monetary policy and fiscal policy is warranted. Factoring the benign inflationary pressures and moribund growth conditions, RBI maintained a dovish monetary stance. Since Jan 2019, RBI has reduced its policy rate by 110 bps. Another 25bps cut may be in the offing on Oct 4 when RBI announces its 4th bi-monthly monetary policy statement. The Government too, announced a slew of measures to infuse liquidity and revive sentiments. Notable amongst them are the revoking of enhanced surcharge on capital gains on equities for FPIs/domestic investors, frontloading of Rs 70,000 Cr of additional capital for public sector banks, withdrawal of angel tax provisions for start-ups, Rs 20,000 Cr of extra liquidity for HFCs, additional 15% depreciation for vehicles acquired from now till 31st Mar, 2020, amalgamation of public sector banks (post consolidation, there will be 12 PSBs). The measures, however, didn’t prop up the sentiments significantly.
On Sep 20, the Finance Minister announced slashing of corporate tax rate to 22% (effective 25.17%, w.e.f Apr1, 2019) from the base rate of 30% for all companies subject to the condition that no incentives or exemptions shall be availed. New local manufacturing companies, incorporated on or after Oct 1, 2019 shall be taxed at 15% (effective 17.01%) and need not pay Minimum Alternate Tax (MAT). For companies which continue to avail exemptions/ incentives, the MAT rate has been reduced from 18.5% to 15%. This will make Special Economic Zones (SEZs), a preferred place for export-oriented units.
This story is from the December 2019 edition of Investors India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 2019 edition of Investors India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Are You Drinking Too Much Coffee? If Yes, Then You Are Taking A Big Risk!
Coffee contains caffeine in maximum percentage:
LIC MUTUAL FUND
According to World Bank data, women represent 49.7% of the world population. In India, women represent 48.4% of the population but they contribute only around 18% of the GDP compared to 41% in China.
Maintain 15-20% exposure to US funds in your equity portfolio
2022 was a difficult year for stocks in the United States (US), particularly for the large tech companies known as FANG. Concerns about the Russia-Ukraine conflict, inflation, etc led to a significant drop in their values.
Systematic Investment Plan (Sip): Meaning, Benefits, How It Works
We all dream of buying a car, dream house, gadgets, etc. This all can come to reality if we have strong financial planning. One of the best options is to start investing in mutual funds through a SIP (Systematic Investment Plan).
How to repair your credit score
Fintechs have seen their personal loan portfolios rise at a humongous pace between 2017-18 and 2022-23. However, loans below Rs. 50,000 are showing signs of strain, according to a white paper brought out by Experian and the Digital Lenders' Association of India. If you have defaulted on a loan recently, here are steps you can take to repair your credit score.
Abhaya Here For Her Smile -
Ever wondered why brushing and flossing is so important? Well, it's not just about sparkling white teeth!
The Pathway to Building Wealth: Unlocking Prosperity through Strategic Knowledge and Investment Habits
Mr. Sanjiv Bajaj is the Jt. Chairman & MD, Bajaj Capital, building the platform for the Business leaders of the Financial Services and Advisory sector to exchange their vision, experience, and views on making the right financial decisions.
India's Economic Rise and the $10 Trillion Opportunity
In the last two years, India has been the fastest-growing major economy in the world.
"Consumption is one of the most attractive investment opportunities in India"
Q 1: Your take on the recent Household Consumption Expenditure Survey? Have you observed any great change in urban or rural consumption pattern?
Learn the Magic of Self-Talk There is perpetual self-talk taking place inside all of us
We listen when our self-talk happens in our minds; we listen to whatever is imprinted in our memories and our past conditioning. Many a time we do not hear exactly what the other person is saying, and we form an opinion.