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India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

NEW DELHI—With India facing an economic crisis brought on by the coronavirus pandemic, Prime Minister Narendra Modi is looking to deregulation as the cure.

The changes pushed through in recent weeks by his Bharatiya Janata Party, affecting everything from factory floors to farming, have so far led to more confusion than acclaim, but economists say the economic overhaul could ultimately improve India’s troubled growth prospects.

“The reforms are in the right direction. They are bold steps,” said Ashok Gulati, an Indian agricultural economist and professor at the Indian Council for Research on International Economic Relations.

India’s economic growth was slowing alarmingly even before the pandemic abruptly threw it into reverse, starting in March. In the months that followed, the economy contracted by almost one-quarter, the sharpest blow suffered by any of the world’s largest economies during the coronavirus-induced downturns.

The poor have been particularly hard hit, as workers who had migrated to cities to support families in rural areas returned home when those jobs disappeared. With many returning to farming, they now depend more than ever on India’s heavily regulated agricultural economy.

Mr. Modi, whose government’s perilous financial state has left few options for addressing the crisis, pushed through a grab bag of dramatic regulatory changes last month with little warning and no debate in Parliament. In a voice vote—obscured by technical glitches with the public broadcast of the proceeding that made it difficult to determine which parliamentarians actually supported the measures—the BJP passed a flurry of politically difficult changes.

In a single swoop, it dismantled a longstanding regulatory system that forced farmers to sell most of their crops through government-approved wholesale markets dominated by traders and middlemen instead of directly to consumers or food processors.

Then the BJP passed a series of new labor measures that increased the number

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Harman consolidates creative and media mandate with Havas India | Advertising

Harman consolidates creative and media mandate with Havas India | Advertising

Harman, a wholly-owned subsidiary of Samsung Electronics, has awarded its integrated creative and media communication mandate to Havas Creative India for its consumer brands – JBL and Harman Kardon post a multi-agency pitch. 

 

Last year, the agency had bagged the creative mandate of Harman’s Infinity brand. 

Havas will be handling integrated creative, digital strategy, and overall media buying and planning for both offline and online mediums.

 

Yogesh Nambiar, head – marketing, Harman India, said, “India is an important market for us and our brands enjoy leadership across various segments in consumer audio. We now want to take it a step further and enhance our customer experience by offering a wider landscape of unique products and experiences. While finding an agency, we were looking for a talented and enthusiastic team that has a passion for music and understands the Indian market, and which could add a meaningful difference to our brands with their power of innovative thinking. I am looking forward to the exciting spaces that Havas will explore to engage with the existing and new consumers of our most popular audio brands.”  

 

Rana Barua, group CEO, Havas Group India, said, “It is indeed a delight for us to strengthen our relationship and partner with Harman in India, and add the media and creative mandate for JBL and Harman Kardon, in addition to working on Infinity. We have been doing some very exciting work on Infinity and with these two brands the challenge and expectations go up as these are very key players in the audio industry and have very clear objectives and plans. What is sweeter is that we won it with our integrated village model which further emphasises the #BetterTogether philosophy of Havas.”

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India announces economic stimulus to boost demand by $10 billion

India announces economic stimulus to boost demand by $10 billion

NEW DELHI (Reuters) – India on Monday announced steps to stimulate consumer demand, including advance payment of a part of the wages of federal government employees during the festival season and more capital spending as it tries to bolster the pandemic-hit economy.

FILE PHOTO: Finance Minister Nirmala Sitharaman arrives at her office before leaving for parliament to present the federal budget in New Delhi, India, July 5, 2019. REUTERS/Anushree Fadnavis/File photo

The government will allow its employees to spend tax-exempt travel allowances on goods and services, Nirmala Sitharaman, India’s finance minister told a news briefing.

She said the government will also shore up investment by spending extra 250 billion rupees ($3.41 billion)on roads, ports and defence projects, and offering 120 billion rupees in interest-free 50-year loans to state governments for spending on infrastructure before March 31,2021.

“All these measures are likely to create an additional demand of 730 billion rupees ($9.96 billion),” Sitharaman said, adding the proposals would stimulate demand in a “fiscally prudent way.”

Prime Minister Narendra Modi’s government, which imposed a tough lockdown to stem the spread of the coronavirus in March, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season, which runs from October to March.

The latest package would not require any extra borrowing by the federal government, Tarun Bajaj, economic affairs secretary at the Ministry of Finance, told reporters.

India’s federal government said last month it would stick to revised borrowing target of 12 trillion rupees ($163.78 billion) in the current fiscal year ending March, against an earlier estimate of 7.8 trillion rupees.

India’s total coronavirus cases have crossed 7.12 million, second only to the United States, with deaths reaching 109,150.

The Reserve Bank of India left key policy

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India announces economic stimulus to boost demand by $10 bln

India announces economic stimulus to boost demand by $10 bln

By Aftab Ahmed and Manoj Kumar

NEW DELHI, Oct 12 (Reuters)India on Monday announced steps to stimulate consumer demand, including advance payment of a part of the wages of federal government employees during the festival season and more capital spending as it tries to bolster the pandemic-hit economy.

The government will allow its employees to spend tax-exempt travel allowances on goods and services, Nirmala Sitharaman, India’s finance minister told a news briefing.

She said the government will also shore up investment by spending extra 250 billion rupees ($3.41 billion)on roads, ports and defence projects, and offering 120 billion rupees in interest-free 50-year loans to state governments for spending on infrastructure before March 31,2021.

“All these measures are likely to create an additional demand of 730 billion rupees ($9.96 billion),” Sitharaman said, adding the proposals would stimulate demand in a “fiscally prudent way.”

Prime Minister Narendra Modi’s government, which imposed a tough lockdown to stem the spread of the coronavirus in March, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season, which runs from October to March.

The latest package would not require any extra borrowing by the federal government, Tarun Bajaj, economic affairs secretary at the Ministry of Finance, told reporters.

India’s federal government said last month it would stick to revised borrowing target of 12 trillion rupees ($163.78 billion) in the current fiscal year ending March, against an earlier estimate of 7.8 trillion rupees.

India’s total coronavirus cases have crossed 7.12 million, second only to the United States, with deaths reaching 109,150.

The Reserve Bank of India left key policy rates unchanged on Friday, while retaining an accommodative monetary stance to support an economy that is projected to contract by almost 10% in the current

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India Unveils $6.6 Billion Plan to Boost Consumer Demand

India Unveils $6.6 Billion Plan to Boost Consumer Demand

(Bloomberg) — India announced measures worth $6.6 billion to stimulate consumer demand and investment in the economy damaged by the coronavirus pandemic.



a group of people walking down a dirt road: Workers talk on mobile phones at a road construction site in Bhopal District, Madhya Pradesh, India, on Tuesday, Nov. 20, 2018. Key Indian states are voting in polls that may be a preview of next year's national election, with Prime Minister Narendra Modi trumpeting populist welfare schemes to retain power while the opposition works to build alliances that can oust the ruling party.


© Bloomberg
Workers talk on mobile phones at a road construction site in Bhopal District, Madhya Pradesh, India, on Tuesday, Nov. 20, 2018. Key Indian states are voting in polls that may be a preview of next year’s national election, with Prime Minister Narendra Modi trumpeting populist welfare schemes to retain power while the opposition works to build alliances that can oust the ruling party.

As much as 116 billion rupees ($1.6 billion) would be paid as allowances and advances to federal government employees with the condition they spend on non-essential goods before March 31, Finance Minister Nirmala Sitharaman told reporters in New Delhi on Monday. States would separately be eligible to get 120 billion rupees in 50-year interest-free loans for capital expenditure, she said.

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In addition, the federal government will set aside 250 billion rupees toward capital expenditure on roads, defense infrastructure, water supply and urban development, Sitharaman said.

Sitharaman expects the measures to, either directly or indirectly, create demand of more than 1 trillion rupees in the economy, where consumption makes up about 60% of gross domestic product. The steps mark the latest effort by the government to shore up the economy headed for its worst contraction this financial year, after a 21 trillion-rupee package announced in May fell short of providing the desired support.

Read: Indian Consumers Brace for High Inflation as They Curb Spending

“Measures by the government to stimulate demand must not burden the common citizen with future inflation,” Sitharaman said. “We also kept it in mind that it must not put government debt on an unsustainable path. Today’s solution must not cause tomorrow’s problem.”

Nevertheless, they are bound to add

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