oppn parties Downgrading By Moody's: Somewhat Pessimistic

News Snippets

  • Kapil Sibal leaves Congress, fills nomination for Rajya Sabha with SPs backing
  • RBI bans 5 NBFCs as it cracks down on e-lending platforms
  • Hindustan Motors to tie-up with Peugeot to bring out a redesigned version of the iconic Ambassador
  • GST Council to defer rate rejig due to inflation
  • Centre to sell 29.5% in Hindustan Zinc at an expected price of Rs 38000cr
  • Stocks remain negative on Wednesday: Sensex loses 303 points to 53749 and Nifty 99 to 16025
  • IPL: RCB beat LSG by 14 runs and end their dream run. Rajat Patidar scores a brilliant 112. RCB will take on RR to decide who goes through to the finals
  • Delhi Additional district judge Nikhil Chopra says there is no legal right for people seeking to worship deity inside Qutab Minar, says it survived 800 years without worship so "let it survive like that"
  • Punjab chief minister Bhagwant Mann sacks state health minister Vijay Singla over corruption charges. Singla was later arrested by the ACB
  • Protestors burn the house of Andhra minister P Viswaroop and MLA Satish Kumar over renaming of Konaseema district as B R Amberdkar Konaseema
  • Gyanvapi: Varanasi district judge decides to first hear the 'maintainability' plea filed by mosque management
  • Delhivery and Venus Pipes shares list at premium of 10% and 8.7% respectively even when market sentiment was down
  • In a bid to cool edible oil prices, Centre allows duty-free imports of 20 lakh tonnes each of crude sunflower oil and crude palm oil per annum this year and next
  • Centre caps sugar exports to ensure availability of stocks in the domestic markets to cool prices
  • Stock markets get the jitters as RBI signals rate hike and government moves in to control inflation: Sensex tumbles by 236 points to 54052 and Nifty goes down by 89 points to 16125
Yasin Malik of JKLF gets two life terms in terror funding case /////// Kashmir TV artist killed and her nephew injured in a terror attack in Hushroo in Budgam district
oppn parties
Downgrading By Moody's: Somewhat Pessimistic

By A Special Correspondent

With the Indian economy showing signs of a prolonged slowdown and with the government responding extremely slowly and with small measures, one cannot fault Moody's for downgrading India's rating from "stable" to "negative". But having said this, the fundamentals of the economy are quite strong in the medium term and beyond and this rating will have to be revised soon. The present state of the Indian economy must also be seen in the context of the slowdown being seen in all major economies of the world.

The slowdown in India is driven by a near absence of demand. It is not as if people are not earning. But the gloomy outlook has made them wary about the future and they are postponing buying decisions. This situation is not going to change until the government invests heavily in infrastructure to put money in the market. The cascading effect will benefit all sectors, lifting the sentiment. But the government simply does not have the money. Hence, it should divest in state-owned enterprises like the loss-making Air India and others and think of other methods of raising revenues.

The government has been taking steps to improve the ease of doing business. It has lowered corporate taxes to make them competitive with other countries.  Inflation is low, fiscal deficit has been kept in check and the current account deficit is not showing an alarming rise. These are positive factors. It has also taken major steps to revive the real estate sector by floating a fund to complete incomplete projects.

But the government has the mandate to push for structural reforms. It has been acting too slowly, often giving the impression of carrying out knee-jerk responses to crisis situations. This has to change. It has to bring the banking sector back in line, fix realistic charges for utilities like power to make the sector get better realizations and become viable. It has to work to create a market for debt instruments in India. It has to further cut red tape and make doing business easier. Structural reforms are the need of the hour. The government must not delay taking decisions in this regard.