oppn parties Economy In Doldrums, Stocks Bleed

News Snippets

  • EMI's set to rise after the RBI hikes key policy rate
  • Calcutta HC says that the right to privacy does not end with the death of a person
  • Supreme Court says that a delayed order of preventive detention makes it invalid
  • Shashi Tharoor posts an erronous map of India in his manifesto, rectifies the error after criticism
  • Sonia Gandhi to take a call on who will be Rajasthan chief minister
  • Mallikarujun Kharge to be the new candidate to oppose Shashi Tharoor in the Congress presidential elections
  • RBI says that the September inflation rate may be higher than 7%
  • RBI hikes key rates by 50bps, downwardly revises FY23 growth rate to 7% from 7.2% earlier
  • Stocks recover well on Friday: Sensex gains 1016 points to0 57426 and Nifty 276 points to 17094
  • Mirabai Chanu wins gold easily at the National Games
  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
RBI hikes key rates by 50bps, stocks jump and recover 50% of the losses incurred in the last few session
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Economy In Doldrums, Stocks Bleed

By Ashwini Agarwal

The stocks are continuing to bleed, eroding investor wealth and confidence. Today, the Sensex went down by 470.14 points to 36,093.47, down 4219 points from its all-time high. The Nifty50 fell 11.5 percent from the record high touched in June, 2019 closing 135.90 points lower at 10,704.80. This is the lowest level since February 19, 2019. The market was in a consolidation phase for the last few weeks but the bears once again embraced it in a tight hug in the last couple of days.

Even as the government announces 'schemes' to revive the economy, the markets continue to show no-confidence in the measures. Foreign funds are liquidating their investments in Indian stocks at a rate that is alarming. The time for knee-jerk response is over, investors seem to be saying. But is anyone in the government listening? Probably not. For, although finance minister Nirmala Sitharaman has said that she is working on it, one feels that the government is not attacking the root of the problem.

The government seems to have decided that this economic depression is cyclic. But most analysts feel that it is also structural in nature. Hence, structural reforms are required but there is nary a whisper from the North Block about any such measures. The GST regime needs to be simplified and the tax base broadened by plugging loopholes. It is also required that no sector is left exempted from GST, if not immediately then within a given time frame. Then, the government must take an immediate decision to sell Air India and BSNL to stop public money from being wasted. Divestment in PSUs must also be prioritized. Land and labour reforms, hanging fire since the first term of the NDA, cannot be postponed now if the dream of being a $ 5 trillion economy by 2024 is to be realized. Norms for public-private partnership in infrastructure projects must be announced forthwith and such projects must be fast-tracked. The government must boost domestic investment to spur consumption, without which the economy is not going to come out of this deep tunnel of despair and gloom.