GDP Data: Looking back to see where we are!
Lot of ground to cover?
1. GDP is less than 2018-19. Higher by 2.39% from 2017-18. Nearly Static over 4 years. 2. PFCE is less than 2017-18. Consumers, the biggest contributors are struggling.
#Inflation in #India 1. While general level at 4.3% for May is close to the target, it is closer to 5% for all sub-groups other than Food & Beverages (3.2% in May). 2. It implies that core inflation is now within the target range, though > target of 4%.
3. Groups where pricing power is with producer show higher inflation (health, education, clothing & footwear, personal care, etc.) 4. Inflation for transport & communications is low, as the gov. & telecom industry is not exercising their PP in view of elections, as reported.
1. India must grow at a higher pace, as it still houses one of the largest populations of poor people in the world, which can happen only if it increases its share of global value-added – a strategy that all large countries have used during last 50 years.
2. One of the most important strategies for building a high-growth resilient economy involves creating technology-based products and services for a global market, as has been demonstrated by the US, Germany, Japan and now China.
1. Household earnings drive consumption and investment and the savings provide the required risk-capital for businesses. Unless real earnings and savings rise, GDP growth rate will barely move an inch.
2. The growth in real wages and salaries has either been stagnant or negative for most workers, including entry-level white-collar workers.
1. India is low middle-income country with large inequality: Chart
2. Urban India generates 70-75% of GDP. business-standard.com/article/news-c…. 3. If I create population-income groups, I get to know that Top 1% of earners have developed country per capita. 4. Middle India's Per Capita is < USD 1,500 or ~100K pa - HH income of < 500K pa
5. Bottom half earns < USD 500 per annum.
6. Cost of living in India metros (Mumbai, NCR, Bangalore) is close to upper-income countries, adjusted for purchasing power.
#NMP#Financing#infrastructure
In current situation, we run the 'risk of mispricing risk, even for de-risked assets'.
Why: It is not easy to estimate cash flows from infrastructure assets in an uncertain environment with limited clarity about eco policy and potential growth?
I would host these assets in NIIF & do a Public issue for raising finance, so that the Indian public shares the upside, as they are ones who have been bearing the risk all these years. We need Indian HHs to start providing risk cap, if India has to grow.
We can use banking system or the shadow banking systems where we have debt bearing the cost of risk and uncertainty, arising our poor policy choices and business decision.
#Leadership in a Growth-constrained, Information-Age #Economy
Reflecting on conversations 2018 Conclave where business & academic leaders had shared their insights on the constraints that global & the #Indian economy faces & possible solutions. ideassansideology.org/engagements/le…
2. Demand was identified as the constraint on growth and wage/earnings growth was considered to be the solution. Pandemic has made it worse. But solution is still in growth in earnings - now more than ever.
3. At the end of the day, government is not spending, industry is not spending, and the individuals are not able to spend, and therefore growth is constrained.