Auto dealers unsure of a revival in consumer sentiment in festive season

Current Affairs

India’s real or inflation-adjusted gross domestic product (GDP) grew at 5 per cent in the June 2019 quarter of financial year 2019-20 (Q1FY20), the slowest growth in six years (25 quarters). In nominal terms, the growth stood at 7.99 per cent, lowest since December 2002.
With this, fears of the slowdown being a more structural one than a cyclical one have surfaced.
What is a cyclical slowdown?
A cyclical slowdown is a period of lean economic activity that occurs at regular intervals. Such slowdowns last over the short-to-medium term, and are based on the changes in the business cycle.
Generally, interim fiscal and monetary measures, temporary recapitalisation of credit markets, and need-based regulatory changes are required to revive the economy.
What is a structural slowdown?
A structural slowdown, on the other hand, is a more deep-rooted phenomenon that occurs due to a one-off shift from an existing paradigm. The changes, which last over a long-term, are driven by disruptive technologies, changing demographics, and/or change in consumer behaviour.
Dissecting India’s slowdown

 A slowdown in consumption demand, decline in manufacturing, inability of the Insolvency and Bankruptcy Code (IBC) to resolve cases in a time-bound manner, and rising global trade tension...Read More

Anil Ambani's Reliance Naval risks insolvency as banks say no to debt plan

Current Affairs

There is no change in Pakistan's nuclear policy, the Foreign Office has said, hours after Prime Minister Imran Khan vowed that his country will never ever start a war with India, amid escalating tensions between the nuclear powers over the Kashmir issue.
Addressing a gathering of the Sikh community at the Governor's House in Lahore on Monday evening, Khan said both India and Pakistan are nuclear-armed countries and if tension escalates, the world will face danger.
"There will be no first from our side ever," he said, without explaining further.
However, Khan has been repeatedly threatening the possibility of a nuclear war with India over Kashmir after his efforts to internationalise the matter failed to gain any traction.
Khan also said conflict create more problems than resolving them.
"I want to tell India that war is not a solution to any problem. The winner in war is also a loser. War gives birth to host of other issues," he said.
However, Pakistan Foreign Office said Khan's comments were being taken out of context and did not represent a change in Islamabad's nuclear policy.
"Prime Minister's comments on Pakistan's approach towards conflict between two nuclear armed states are being taken out of context," Foreign Office spokesperson Mohammad Faisal said in a late night tweet on Monday.

 "While conflict should not take place between two nuclear states, there's no change in Pakistan's nuclear policy," he said...Read More

With no major fiscal support, govt's growth measures seen falling short

Current Affairs

India’s steps to boost financial market sentiment and support businesses could fall short of shoring up growth in Asia’s third-largest economy.
Finance Minister Nirmala Sitharaman announced a number of measures on Friday to help re-ignite an economy that’s slowed sharply on the back of weak consumption and a deteriorating global environment. However, she didn’t outline any major fiscal support -- as businesses had been calling for -- focusing instead on steps to spur foreign funds and lending.
Economists, finance leaders, industry executives and local media raised questions about the effectiveness of the measures, which included scrapping a tax on foreign funds, allowing concessions on vehicle purchases and hastening infusion of an already announced 700 billion rupees ($9.8 billion) of capital in state-run banks.
“These are short-term palliatives,” said Priyanka Kishore, head of India and Southeast Asia economics at Oxford Economics in Singapore. “What India needs is structural reforms to take growth to above 7 per cent.”
Consumers have cut spending in India as they turn more pessimistic about jobs amid a slowdown in growth to a five-year low.
Data due this week is likely to show the economy expanded 5.7 per cent in the quarter ended June, below the 5.8 per cent pace seen in the previous three months.
The withdrawal of the additional tax on foreign portfolio investors may help to spur sentiment in the equity markets. Overseas investors pulled out more than $3 billion from the nation’s stock and bond markets since July.

 But businesses had been hoping for more...Read More