oppn parties Stock Markets Not Impressed By the Economic Package

News Snippets

  • Karnataka HC has ruled that a harassment complaint lodged by a wife after receiving a divorce notice from the husband loses its weight in the eye of the law and quashed the FIR filed by a women against her husband and in-laws
  • 35 people killed in renewed violence in Manipur, 30 of them militants
  • Manipur boils on the eve of Home minister Amit Shah's visit as militants strike, vandalize MLAs home and loot armouries
  • Kerala chief minister P Vijayan says Centre's decision to cut the borrowing limit of the state is 'sadistic' and shows its negative mentality towards the state's development
  • Rahul Gandhi recieves passport, set to travel to the US
  • Centre said that the march-to-Parliament by wrestlers was a 'deliberate provocation'
  • Prime Minister Modi inaugurates the new Parliament building, calls it 'cradle of empowerment'
  • Mamata Banerjee will most likely attend the opposition meet called by Nitish Kumar in Patna
  • With container prices, which were on fire, crashing by 40% YoY, importers and exporters in India heaved a sigh of relief as the burden of high freight costs will reduce
  • In an aim to push lenders to manage risks better after the US financial crisis, the RBI has reviewed bond value norms
  • 14 countries under the Indo-Pacific Economic Framework (IPEF), including India, entered into an agreement to boost supply chains and counter China
  • Malaysia Cup badminton- H S Prannoy wins the title beating Weng Hong Yang of China 21-19,13-21, 21-18
  • Yashasvi Jaiswal replaces Ruturaj gaikwad as stand-by opener for the WTC final
  • IPL final washed out due to rain, rescheduled for today, the reserve day
  • In a shameful incident, Delhi Police manhandled international wrestlers when they sought to march peacefully to the new Parliament building to highlight their greivances, detained some top wrestlers
Fifth IPL title for Chennai as Ravindra Jadeja hits 10 off last two balls to spoil the party for Gujarat Titans
oppn parties
Stock Markets Not Impressed By the Economic Package

By Ashwini Agarwal

The jitters of an economy showing signs of severe distress and the fact that foreign investors have not been impressed by the government’s kneejerk response caused a massacre on the stock exchanges on Tuesday and indices tumbled by over 2 percent. The decline was broad-based and few stocks escaped the bear hug. Investors lost Rs 2.16 lakh crore in a day and it was the worst fall in the market since October 2018. The GDP growth figures announced showed that the economy grew only by 5% last quarter but in this period of gloom, people say that even this figure is inflated and the real growth is about 4%. 

Despite the economic package announced by the government to revive the economy, in which a few sops were provided to foreign investors, they have taken out nearly Rs 5500 crore from the Indian market since August 23. This means that such investors are not fully convinced that the economy can be revived through such stop-gap measures. They are also not enthused by low earnings being reported by Indian companies and global factors such as the trade war between the US and China.

Local investor sentiment is clouded as several economic indicators point to a slide that is not going to reverse any time soon. Companies are reporting depressing profit figures. Auto sales have dipped precariously with companies shedding workers and dealerships closing down. GST collections in July slipped below Rs 1 lakh crore. The government has not announced any major investments despite receiving Rs 1.76 lakh crore from the RBI. Demand has not picked up and the market sentiment is downbeat.

In such a scenario the government will have to immediately make major investments in infrastructure projects and undertake structural reforms. The package announced in stages can at best be the starting point. It reversed certain adverse policies announced in the budget to give relief to a cross-section of investors. But it did not address the structural ills affecting the economy. Hence, if any gains accrue due to the package, they will only be short-term. But the Indian economy is crying for long term structural correction. If this government, with a huge majority backed by popular mandate, does not do it, who will?