oppn parties Stock Markets Not Impressed By the Economic Package

News Snippets

  • Batteries, chains and screws were among 65 objects found in the stomach of a 14-year-old Hathras boy who died after these objects were removed in a complex surgery at Delhi's Safdarjung Hospital
  • India confirms that 'verification patrolling' is on at Demchok and Depsang in Ladakh after disengagement of troops
  • LeT commander and 2 other terrorists killed in Srinagar in a gunbattle with security forces. 4 security personnel injured too.
  • Man arrested in Nagpur for sending hoax emails to the PMO in order to get his book published
  • Adani Power sets a deadline of November 7 for Bangladesh to clear its dues, failing which the company will stop supplying power to the nation
  • Shubman Gill (90) and Rishabh Pant (60) ensure India get a lead in the final Test after which Ashwin and Jadeja reduce the visitors to 171 for 9 in the second innings
  • Final Test versus New Zealand: Match evenly poised as NZ are 143 ahead with 1 wicket in hand
  • PM Modi said that a historic Diwali will be celebrated in Ayodhya after 500 years with the rebuilding of the Ram Mandir there
  • Priyanka Gandhi, campaigning as the candidate in Wayanad, alleged that the BJP had neglected the constituency
  • UP Police arrested 7 people for selling firearms on WhatsApp, Instagram and Facebook
  • The Election Commission once again slammed the Congress for 'frivolous doubts' on the Haryana election process
  • Government has advised pharma companies to cut prices of cancer drugs as the customes duty has been slashed
  • Bengal tweaks PMAY scheme to make it 'better' than the Central offer
  • PM Modi slams Delhi and Bengal for not rolling out Ayushman Bharat in their states. TMC rebuts the charges and says the Bengal Swasthya Sathi scheme is better than the Central scheme
  • iPhone exports from India surged 33% in the period April to September this year
PM Modi 'strongly condemns' on Hindu temple in Canada while MEA expresses concern over safety of Indians
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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?