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Coronavirus – US Chamber of Commerce official sees risk that India could be a drag on the global economy

A US Chamber of Commerce official sees risk of a slowdown in India’s economy as a result of the Covid-19 jump, which could be a drag on the global economy.

Headlines via Reuters (perhaps today’s Captain Obvious award?)
  • “We expect that this could get worse before it gets better”
  • a “real risk” the Indian economy would falter given the circumstances
  • “There’s a big concern about the draft on the economy by a devastating, spreading virus in India.”

Raghuram Rajan may ask govt to help with infra exposure of PSBs

Reserve Bank of India Governor Raghuram Rajan is expected to ask the government for some clear interventions in the coal and road sector to stop the mounting of bad loans in the infrastructure sector with banks.

RBI has reason to be worried as the government plans to hold at least two major auctions within this fiscal for telecom spectrum and coal blocks.

But a clutch of leading public sector banks have informed the RBI they will not be able to lend to companies for these auctions since their infra lending has peaked.

The list includes State Bank of India, Bank of Baroda and others who informed Governor Rajan’s team about their problems in a meeting, last month.

The total exposure of the banking sector to the infrastructure sector is Rs 7,94,300 crore as on September 2013 (RBI data). The gross non-performing assets and restructured advances of public sector banks was almost 12 per cent (11.87) of their total loans.

The banks want some payments to come in from the power generation companies so that the level of their stiff exposure melts somewhat.

For the telecom auctions the banks will be expected to lay out about Rs 40,000 crore, while the sum for coal blocks is expected to be a bit lower. (more…)

India's GDP growth to crawl at 4.7% in second quarter: ZyFin

Barely over a week ahead of release of the official GDP data, research and analytical firm ZyFin today estimated India’s economy to expand by 4.7% in the  second quarter of the current financial year. The methodology used by ZyFin is distinct  and it claimed that it uses variables  which are lead indicators to the official data. If GDP indeed grows by this rate, the Finance  Ministry’s hopes of  GDP growth between 5-5.5%  in 2013-14 may be dashed.  

 
In the first quarter of the current financial year, the GDP expanded at a four-year bottom of 4.4%. At that time, ZyFin had estimated a growth of 4.5%. 
 
“We still believe that the economy is in a crisis mode and much below what the economy used to grow at a pace of around 8%”, Debopam Chaudhuri, Vice President of Research and Development at Zyfin told Business Standard.
 
However, even if the economy grows at this pace, it would be at a year high — both according to official and ZyFin estimates. In the second quarter of 2012-13, the economic growth was higher at 5.2% as per official estimates and by ZyFin’s calculations it was 5.1%.
 
“While the estimates indicate a sluggish recovery, high inflation, weak consumer sentiment and a slowing services sector will constrain any sustained recovery”, said the firm. (more…)

24 Scary Facts About the U.S. Economy

#1 Ten years ago, the United States was ranked number one in average wealth per adult.  In 2010, the United States has fallen to seventh.

#2 The United States once had the highest proportion of young adults with post-secondary degrees in the world.  Today, the U.S. has fallen to 12th

#3 In the 2009 “prosperity index” published by the Legatum Institute, the United States was ranked as just the ninth most prosperous country in the world.  That was down five places from 2008.

#4 In 2001, the United States ranked fourth in the world in per capita broadband Internet use.  Today it ranks 15th.

#5 The economy of India is projected to become larger than the U.S. economy by the year 2050.

#6 One prominent economist now says that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

#7 According to a new study conducted by Thompson Reuters, China could become the global leader in patent filings by next year.

#8 The United States has lost approximately 42,400 factories since 2001.  Approximately 75 percent of those factories employed at least 500 workers while they were still in operation.

#9 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#10 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#11 In 1959, manufacturing represented 28 percent of all U.S. economic output.  In 2008, it represented only 11.5 percent.

#12 The television manufacturing industry began in the United States.  So how many televisions are manufactured in the United States today?  According to Princeton University economist Alan S. Blinder, the grand total is zero.

#13 As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#14 Back in 1980, the United States imported approximately 37 percent of  the oil that we use.  Now we import nearly 60 percent of the oil that we use.

#15 The U.S. trade deficit is running about 40 or 50 billion dollars a month in 2010.  That means that by the end of the year approximately half a trillion dollars (or more) will have left the United States for good.

#16 Between 2000 and 2009, America’s trade deficit with China increased nearly 300 percent.

#17 Today, the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.

#18 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

#19 American 15-year-olds do not even rank in the top half of all advanced nations when it comes to math or science literacy.

#20 Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009.  That was the second yearly decline in a row.

#21 The United States has the third worst poverty rate among the advanced nations tracked by the Organization for Economic Cooperation and Development.

#22 Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power.

#23 U.S. government spending as a percentage of GDP is now up to approximately 36 percent.

#24 The Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.

Mera Bharat Mahan -75% rural households earned below Rs 5000

The highest earning member in about three-fourths of all rural households in the country made less than Rs 5,000 per month, according to the Socio Economic and Caste Census (SECC) 2011 released today.

As per the Census data, there were 13.34 crore or 74.49 per cent households where “monthly income of highest earning household member” was below Rs 5,000 a month.

There were only 1.48 crore or 8.29 per cent of rural households where the monthly income of such member was Rs 10,000 or more.

Further, the number of rural households with a salaried job was only 9.68 per cent.

Of these, 5.02 per cent were in government jobs, 1.12 per cent were employed in public sector and the remaining 3.58 per cent in private sector, the data said.

The Census was carried out in all the 640 districts of the country using 6.4 lakh electronic hand-held devices, the government said while releasing the socio-economic data for rural India. (more…)

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