Economy, Moody's upgrades, Manmohan downgrades, Jaitley elated

Moody’s has expressed confidence in in the continued progress on economic and institutional reforms over time and sees that this will enhance India’s growth potential and its large and stable financing base for government debt. Moreover it predicts that this will lead to a gradual decline in Government debt burden over the medium term. Although India’s high debt burden remains a constraint on the country’s credit profile, Moody’s believes that the reforms put in place have reduced the risk of a sharp increase in debt, even in potential downside scenarios. Moody’s has also raised India’s long-term foreign-currency bond ceiling to Baa1 from Baa2, and the long-term foreign-currency bank deposit ceiling to Baa2 from Baa3. While critics have taken the Mody government to task for the GST, demonetisation and Aadhaar card controversy rages on, Moody sees these as positive structural reforms that will reduce informality in the economy. Moody’s website acknowledges that demonetisation and GST have undermined growth in the near term through disruption but sees these measures to be beneficial in the longer term. Moody’s even predicts that GDP growth will increase in Fiscal year to 7.8 in Fiscal year 2018 and will continue to grow robustly 2019 onwards. It sees reforms to continue to strengthen India’s institutional framework and is encouraged by Government efforts to reduce corruption, fomalise economic activity and improve tax collection. Congress, however continues to dampen this news, pointing to the immediate impacts of the policies. Its spokesperson said that both Modi and Moody’s had “failed to gauge the mood of the nation”. “After destroying India’s economy, the Modi government was clutching at straws to claim los‘ credibility. Modiji and Moody’s ‘Jodi’ have failed,” Congress spokesperson Randeep Singh Surjewala tweeted. [caption id="attachment_21933" align="alignleft" width="236"] Jaitley looking happy[/caption] Jaitley meanwhile was jubilant, having come under constant attack from the media for the policies. He felt vindicated saying, “It is extremely encouraging that there is an international recognition… This is not something that is happening in isolation.” Jaitley told reporters: “It is a belated recognition of all the positive steps taken in the last few years. It is a recognition and an endorsement of the process that India has undergone in the last three-four years where a number of structural reforms have placed India on a higher growth trajectory.” He said the government had shown fiscal prudence through a series of steps in the last few years like demonetisation, introduction of Aadhaar, Insolvency and Bankruptcy Code, recapitalisation of public sector banks and smooth transition to the GST that have led to better economic situation. Jaitely said: “Smooth transition of GST is universally recognised as a landmark reform in Indian tax structure. All these steps which constituted major reforms are directional in nature. All steps taken in the last few years had a roadmap. “For three years we were doing a lot of structural reforms. Even we have moved up 30 places in World Bank’s Ease of Doing Business. Now after a long spell of 13 years, India gets rating upgradation,” he added. The minister said that with the introduction of GST, market barriers had been removed. Also, demonetisation had made the country less cash currency oriented and made it more digitised. “Our track record for the last three years speaks for itself and we intend to move on that. We will maintain fiscal prudence,” Jaitley said. In a hard hitting speech at Kochi, Dr Manmohan Singh, former Prime Minister, attacked Mody Government, saying that the three-and-a-half year rule has ruined all sectors and also created a wedge in the secular credentials of India. His speech turned to erosion of secularism. The Business community however was happy with Moody’s upgrading and satisfied with Jaitley. (with IANS) // ]]>

Modi does a mimic gimmick in Gujarat

Breathtaking glimpses of the Ghogha-Dahej ferry service. Its inauguration is a landmark moment in Gujarat’s development journey.

— Narendra Modi (@narendramodi) October 22, 2017 Modi said the foreign exchange reserves had shot up from $30,000 crore to $40,000 crore. Modi said many economists too were saying that the fundamentals of the country’s economy were strong. He added that his government had taken several steps to boost the economy. Modi said the Goods and Services Tax (GST) had made transportation seamless, helping save thousands of crore as now trucks need not stop at tax booths. “A truck that used to take five days now takes three. So much money is being saved in fuel cost and even money going to corrupt hands. Tell me, will all those who used to benefit from the old system not get angry with Modi or not?” The Prime Minister again tried to pacify the trade and business community, stating that his government was not interested in retrospective inspection or audit of their business. “For the section that is coming into the mainstream with honesty, I want to assure them that no official would be given the right to harass them,” he added. Earlier in the day, Modi on Sunday inaugurated a Rs 650-crore roll on-roll off (Ro-Ro) ferry service that reduces travel time by six hours between Saurashtra and South Gujarat in the election-bound state. Addressing a gathering here after the inauguration, Modi blasted the Congress saying the previous Congress-led government in the Centre had stalled all Gujarat development projects by creating procedural hurdles in the name of environment. “When I was the Chief Minister, I faced hostility from the then central Government. People at the Center were like that. From Vapi to Mandvi in Kutch, they (the UPA government) had banned development in the entire coastal area of Gujarat. They had threatened to lock all our industries in the name of environment.” He said this had changed since he took power in Delhi and gave importance to the Gujarat development. “It seems implementation of all good works are my luck. Changes don’t come from cliched attitude but by new thinking. We changed the way of thinking.” He said the ferry in the Gulf of Khambhat of the Arabian Sea would reduce the travel time between Bhavnagar district in western Gujarat’s Saurashtra region and Dahej in Bharuch district in south Gujarat from seven hours to one hour, cutting the distance between two places to 31 km from 360 km. “It is a landmark project not only for India but also for the entire South-East Asia. It is a dream come true for the people of Gujarat.” The Prime Minister said the Ro-Ro ferry was like an “amrit” – the drink of immortality – bestowed upon to the people Gujarat as a blessing from Hindu god of oceans Varuna. “Imagine how much time and petrol this ferry service will save,” he said, adding the facility would not be restricted to just one route.  

What about the Gujarat poll dates?

Election to pick a new 182-member Gujarat Assembly is due before January 22, 2018 when its term ends. The Election Commission has not announced the poll dates as of now even citing it would bring in the imposition of the model code of conduct that would disrupt relief operation for flood-hit victims. Opposition parties have alleged that the poll panel has given time to the ruling BJP to announce sops for the people of Gujarat.
(with IANS) // ]]>