Blog for Stock tips, Equity tips, Commodity tips, Forex tips: Sharetipsinfo.com

Domestic rating agency Crisil on Friday lowered its real GDP growth forecast for India to 7.3 per cent in FY23 from 7.8 per cent estimated earlier.

It attributed the downward revision to higher oil prices, slowing of export demand and high inflation.

This is in line with the RBI's estimate of 7.2 real GDP growth for this fiscal year.

Crisil said there are a slew of negatives like high commodity prices, elevated freight prices, drag on exports as global growth projections get lowered, and the largest demand side driver of private consumption remaining weak.

The only bright spots are the uptick in contact-intensive services and forecast of a normal and well-distributed monsoon, it said, lowering its growth outlook.

Inflation, which has been pegged to average at 6.8 per cent in FY23 as against 5.5 per cent in FY22, reduces purchasing power and would weigh on revival of consumption the largest component of GDP which has been backsliding for a while, the agency said.

Factors contributing to the broad-based rise in inflation will include the impact of this year's heatwave on domestic food production, coupled with persisting high international commodity prices and input costs, it said.

The agency also said that with higher commodity prices, slowing global growth and supply chain snarls, the current account will be impacted, and estimated the current account deficit to widen to 3 per cent of GDP in FY23 from 1.2 per cent in FY22.

This will put pressure on the currency, and the rupee is estimated by the agency to be at 78 to the US dollar in March 2023, compared to 76.2 in March 2022.

The rupee-dollar exchange rate will remain volatile with a depreciation bias in the near term due to a widening trade deficit, foreign portfolio investment (FPI) outflows and strengthening of the US dollar index (owing to rate hikes by the US Federal Reserve, or Fed, and safe-haven demand for the dollar amid geopolitical risks), it said.

The agency expects global crude to average between USD 105-110 per barrel in FY23, which is higher by 35 per cent when compared to the last fiscal year's and will be the highest price since 2013.

High commodity prices have a domino effect on India. As the terms of trade worsen with a rising import bill, imported inflation surges, it said.

With inflation rising, the RBI is expected to hike rate by another 75 basis points during the fiscal on top of the 90 basis points hikes already announced, it said.

It, however, said that the rising interest rates will not dent growth prospects in a big way as real interest rates are likely to remain lower than the pre-pandemic levels and monetary policy actions get transmitted with a lag, it said.

Click Here:- Want to Earn Good Profit  From Share Market 

India’s attempt to reform military recruitment — which has set off political convulsions that show no signs of abating — once again shows that its aspirations to superpower status are no match for a below-par economy.

India’s military — particularly its army — is antiquated in organisation and manpower-heavy. After some ill-advised, populist, and expensive tinkering with pensions early in its tenure, the government found it was spending all its military budget on personnel, leaving very little for modernisation or for hardware.

Meanwhile, for more than two decades, its own strategists have been calling for a leaner and younger army. The average Indian soldier is 32 or 33, making its army one of the oldest in the world.

So, after two years in which the army suspended its typical annual enlistment of 60,000 young men on 20-year contracts, the government announced it was shifting to a tour-of-duty type system in which new recruits will be taken on for four years and then sent off with a handsome and tax-free discharge bonus of $15,000.

This has set off a firestorm of protest. Literally, in some cases, as angry would-be army recruits set trains — a very visible symbol of the Union government even the most remote parts of India — alight.

The problem is that, for many young men in the most economically disadvantaged parts of India, the army is their only hope of a career — or, for that matter, of getting married, given that years of sex-selective abortions have caused the gender ratio in those parts of India to skew heavily male.

These men — or boys, since they’re mostly teenagers — have spent years running and practicing drills in hopes of getting selected.

Before the new recruitment system was announced, a typical applicant told a reporter for the Print: “If I don’t get a job in the army, my chances of living with dignity in my society are very low. My chances of marrying go down. People will mock me at every function.” Those who do return to their villages after their 20 years of service, on the other hand, tend to be respected and wind up in positions of local leadership.

It’s telling that the protests, and the anger, have largely been limited to the poorest parts of India, where other employment opportunities are scarce. The government has tried to emphasize the $15,000 payout the four-year men will receive and claimed that army training will make them more attractive on the job market. That argument holds less sway in areas where there’s little prospect of finding a good job today or four years from now.

The government has done itself no favours by obscuring its real motivations. Everyone knows this is about reducing the amount the military spends on salaries and creating an army that is younger and more agile technologically. At the same time, the government won’t reveal its plans for military transformation.

Forget about detailing how much money the programme would save; we don’t even know for certain how many people are currently employed by India’s military. For some reason, that’s treated as a state secret. (It’s estimated to be around 1.4 million, about half as many again as in China.)

Prime Minister Narendra Modi is generally credited with having an instinctive understanding of what voters want. Yet it’s astounding how often his government designs policies in secret that then elicit a furious public reaction. While military reform was inevitable and overdue, surely it could have been discussed in public so that at least the current generation of aspirants would have known better than to run kilometres a day to get themselves in shape.

As with farmer-led protests last year, there’s a chance the government will be forced to retreat in the face of this unwavering hostility in areas that remain politically powerful, if economically weak.

A reversal would carry its own costs, however. In an aspiring superpower the military should be an instrument designed to project power, ensure domestic security, and respond to emerging threats. What India is learning is that, given its failure to create jobs, its army must also remain something of an employment generation scheme. If the country wants to play a bigger role in its region and in the world, it will first need to fix its economy.

Click Here:- Want to Earn Good Profit in Share Market?

India's factory output expanded at its slowest pace in nine months in June as elevated price pressures continued to dampen demand and output, according to a private survey, which also showed business confidence was at its lowest in over two years.

Although inflation eased in May to 7.04% after touching an eight-year high of 7.79% in April, a meaningful decline is not seen anytime soon even as the Reserve Bank of India is expected to continue with aggressive rate hikes.

While the Manufacturing Purchasing Managers' Index, compiled by S&P Global, remained resilient, it fell to a nine-month low of 53.9 in June from May's 54.6, lower than the Reuters poll median prediction of 54.5.

It has been above the 50-level separating growth from contraction for a year, indicating growth in the sector has remained solid.

"The Indian manufacturing industry ended the first quarter of fiscal year 2022/23 on a solid footing, displaying encouraging resilience in the face of acute price pressures, rising interest rates, rupee depreciation and a challenging geopolitical landscape," noted Pollyanna De Lima, economics associate director at S&P Global Market.

"Yet, there was a broad-based slowdown in growth across a number of measures such as factory orders, production, exports, input buying and employment as clients and businesses restricted spending amid elevated inflation."

New orders and output grew at their weakest rate since September last year and firms hired at a slower pace in June.

However, a sub-index tracking delivery times of goods was above the 50-mark for the first time since February 2021 and at its highest in nearly three years, signalling an easing in supply chain pressures.

That partly helped both input and output prices, which increased at a slower rate last month, but a respite from the cost of living crisis still looks a distant possibility.

Indeed, business optimism declined to its lowest since the onset of the pandemic over two years ago.

Asserting that the GST had serious "birth defects" which became only worse over the last five years, the Congress on Friday said the GST laws and the manner of their implementation have "wrecked the economy" and the party will work toward its replacement by GST 2.0.

The Opposition party said demonetisation was the first "Tughlaqi farman" of the government while the Goods and Service Tax second that harmed the economy.

At a press conference here, senior Congress leader P Chidambaram said the GST "celebrates" its fifth birthday on Friday but there is nothing really to celebrate.

"The GST had serious birth defects. In the last five years these defects have only become worse and all those touched by GST have been seriously injured," the former finance minister said.

Click Here:Want To Earn Money From Share Market?

The Congress wishes to make it absolutely clear that the so-called GST that is in force today was not the GST envisaged by the UPA government, he said.

"The GST that we have today is a complex web of many rates, conditions, exceptions and exemptions that will leave even an informed taxpayer completely bewildered. Not all registered dealers are informed taxpayers; as a result, they are at the mercy of the tax-collector," he said.

A flawed GST has led to "large-scale destruction" of MSMEs, a sector that contributes up to 90 per cent of the jobs in the manufacturing sector, he said.

The worst consequence of the GST brought in by the government has been a complete breakdown of trust between the Centre and states, he said.

"As far as the Congress Party is concerned, we reject the current GST and, as promised in the Election Manifesto of 2019, we will work toward the replacement of the current GST by GST 2.0 that will be single, low-rate," Chidambaram said.

Finance Minister Nirmala Sitharaman has defended the government's move to impose a windfall tax on oil producers and levy a special additional cess on the export of fuel products, saying the current situation is "extraordinary".

"We are happy that exports are happening. We are happy that companies are making profits. We are happy that exports are giving them (companies) that kind of returns on what they invested, which is so required for anybody who makes those investments. But these are extraordinary times," Sitharaman said in the Capital on July 1 on the sidelines of an event marking the fifth anniversary of the implementation of the Goods and Services Tax (GST) regime.

"These are times when oil prices internationally are unbridled. They are just going on and on upwards. And for any country - like India for instance - which depends very much largely on imports, we also need to pay that kind of money to get it," the finance minister added.

Earlier today on July 1, the government announced it was imposing a cess of Rs 23,250 per tonne as special additional excise duty on crude as domestic crude producers are making "windfall gains" amid sharply higher crude oil prices. Further, cesses amounting to Rs 6 per litre on petrol and Rs 13 per litre on diesel have been imposed on their export, while a special additional excise duty of Rs 6 per litre has been imposed on the export of Aviation Turbine Fuel.

Shares of oil companies like Oil and Natural Gas Corporation and Oil India sank after the government measures were announced.