Economy
Morgan Stanley sees 'Achhe Din' for India

Morgan Stanley has forecasted a sustainable lower inflation path of 5% to be achieved from April, and expects inflation to decelerate to 4.75% by December this year

 

With the rural wage growth coming down to a nine-year low at 5.5% this January and inflation seemingly stabilizing, India is bracing for a long period of higher sustainable growth and lower prices, financial services firm Morgan Stanley said on Monday.
 
"We are more constructive on inflation outlook and we expect the retail price index to decelerate to 4.75% by this December against the consensus estimate of 5.8%. We also expect growth momentum to pick up, but do not expect a rise in inflationary pressure," Chetan Ahya from US based Morgan Stanley said in a statement.
 
He said the rural wage, which is a crucial factor in the Indian economy, has come down to a nine-year low at 5.5% from a steep 20% during 2013-14 and a chain of "favourable factors" influencing retail inflation trend is on the way.
 
"Comparing the drivers of inflation between the two cycles we see that domestic factors are moving along similar lines as in the 2003-05 cycle and decline in global commodity prices are an added support in the current cycle," he said.
 
The firm has forecasted a sustainable lower inflation path of 5% to be achieved from April, and expects inflation to decelerate to 4.75% by December this year.
 
"Based on our expectation of the inflation trajectory, we believe the Reserve Bank (of India) could lower rates by a further 75-100 bps in 2015. Also we believe deposit rates are to decline significantly and more than policy rates," he said.
 
According to the company, while the growth rate exceeded nine percent and averaged at 7.9%, inflation remained stable and low averaging at four percent with food inflation averaging 3.2% and non-food inflation averaging 4.5%.

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Mineral, mining sector face test in sustaining growth: President

President Pranab Mukherjee said that the adverse impact of ecological degradation and climate change has emerged as a major concern the world over

 

India's mineral and mining sector face an acid test in sustaining growth potential of the economy with the country's mineral wealth posing both a challenge and an opportunity to geo-scientists, President Pranab Mukherjee said on Monday.
 
Speaking at the prentation ceremony of the National Geoscience Awards-2013 at Rashtrapati Bhavan here, he said that the adverse impact of ecological degradation and climate change has emerged as a major concern the world over.
 
"There is a need for more objective research by the geo-scientific community in the field of disaster management to mitigate environmental hazards and ensure greater resilience to such adversities," he said.
 
He said that the country's geo-scientific organizations and other institutes have, over the last few decades, invested heavily in analytical and instrumental infrastructure and the scientists should make good use of these instruments to "accomplish significant outcomes to shape geo-science of the future".
 
"India's mineral and mining sector faces an acid test for sustaining the growth potential of our economy. Our mineral endowment poses both a challenge and an opportunity for geo-scientists," he said.
 
"The geo-scientists should evolve an efficient work plan for development, conservation and augmentation of these precious mineral resources. They should put forward innovative ideas to achieve sustainable development of our country and at the same time address societal concerns," he added.
 

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Rajasthan assembly passes SEZ bill

The bill offers many sops to the investors including exemption from size of land holding

 

The Rajasthan assembly on Monday passed a bill to set up special economic zones (SEZs) in the state.
 
Passed by voice vote, The Rajasthan Special Economic Zones Bill, 2015, seeks to provide for the establishment, maintenance, management and administration of SEZs, growth and development of enterprises and to attract investment in such zones.
 
Tabling the bill, Industry Minister Gajendra Singh said that in 2003, the state government had brought out the Rajasthan Special Economic Zones Development Act, 2003 for the purpose, but then the central government enacted the Special Economic Zones Act, 2005 which came into force with effect from February 10, 2006.
 
He said the state act needed to be aligned to the central act and this purpose would be met by the bill passed on Monday. 
 
"This Bill seeks to achieve the aforesaid objectives," he said.
 
The bill offers many sops to the investors including exemption from size of land holdings.
 
As per the bill, the provisions of the Rajasthan Imposition of Ceiling on Agriculture Holdings Act, 1973 shall not apply in respect of any land acquired by the developer for the purpose of setting up an SEZ after in-principle approval has been granted to him under rule 6 of the Central SEZ rules.
 
The bill also makes arrangement of land easy. The state government may transfer land owned or controlled by it to an SEZ.
 
The developer may acquire land, if so required, in accordance with the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Central Act No. 30 of 2013) and the rules under it.
 
The developer may himself acquire land from any person by purchase, lease or allotment.
 
The bill also offers exemption from state taxes, duties, cess and other levies to developer, co-developer or a unit located in an SEZ.
 

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