curious to know. I remember fiscal strategy was quite different from other countries during covid.
the government focused on infrastructure related expenses rather than direct benefit transfer.
Honestly, government ain't doing a lot but it's people who r hustling n boosting GDP. Govt. is just an enabler.
Fpi+fdi+remittances+dollar sale by RBI is reason behind inr stability.
Due to festival demand we saw a zoom in manufacturing, real estate and mining which resulted in 7.8% q2 growth 📈.
Remove top 5cr tax paying citizens n nation will be like a sub saharan Africa 🌍 nation
Infrastructure boost by government causes cyclical effect in economy. Dbt or ubi ain't a solution in 1500M nation. It's suitable for small EU nations with 5-10M population.
I believe government including states should spend on education, skill development n health as much as possible. Currently we spend 20% on subsidy n less than 2% on education or health. It's happening since 1947.
We need to build capacity n not work less but paid bots.
We should be a knowledge economy not a labour economy.
Peace out ✌️
Relative size and stability are also a big factor. Per capita wise, SL was above India until the situation went sour. India's sheer size gives it a.big advantage in terms of numbers.
An interesting tale nonetheless. Hard to attribute things as definitions by nature are cyclical.
Specific to covid, here's what happened.
They also realised quickly (within 2Q) this is not sustainable as the multiplier on economic growth for putting cash in peoples hands is 0.9.
This decays growth.
To counter the lag, the food security was taken care of.
They chose to bet the house on the capex and we are where we are as a result.
Weirdly fiscal prudence >>> fiscal exuberance when times of trouble arrive. Else, fiscal exuberance wins hands down when you enter a bull market.
Since it’s hard to time the cycle, erring on the side of prudence is better to hedge downside risk for a country which has a significant chunk of populace close to poverty.
But thats precisely what this government has circumvented. There is no prudence/austerity because the mid/long term opportunity demands you to be bullish.
Fed 800 million people for free. Takes pressure off headlines that force you to engage with multiple small surface area schemes.
Invested the money in creating infrastructure++ and accelerated time to go-live. That way the lag that existed in capex spending impacting the broader economy has shrunk significantly.
Credit where it's due, RBI has done a great job keeping inflation in check also it is trying to keep the rupee stable also we have started tasting the fruits of the groundwork done by the government in the first term. Also kudos to people of India for rejecting the khichdi government in the last election, I hope people elect stable government in 2024 election as well ✌️
However, with all these positives, we need to be cautious. While most economies go from being resource driven to manufacturing driven to service driven, we jumped straight to being service driven. In the mid to short term that's great for the middle and upper class but the whole reason why the manufacturing stage exists is that it is a more sustainable way of uplifting people.
Over 70% of our women are still not part of the workforce and rural unemployment is high. A strong manufacturing base is needed if we are to make use of everyone in the best way.
Thanks to Richard Nixon and Kissinger.
And our sleeping politicians
@salt
It might just be simple answer. Cheap Russian Oil.
Idk if India is doing well,
but Indian Rupee is doing well.
INR value is determined by cross border transfers and our major import is Crude. We also have been processing cheap Russian Crude and exporting the same to Europe at higher market rates.
Ah Russian oil arbitrageur
Just to be safe, I prefer some exposure to USD whenever INR hasn't depreciated for more than a year. INR depreciation comes in volatile waves of commodity cycles.
Foreign funds (USD treasury or SPX) or Indian IT are my instruments.
Marketing it pretty well, i guess
Modi hai tho ?
Capex & Birthex
Manish Tewari, Mudi shud rejine. Debt/GDP in 14 = 52% odd Debt/GDP in 23 = 57% odd Plus new highways, air...
Debt number is meaningless. Check Debt by GDP. Compared to other nations, we have managed it really well. One thing w...
This is known issue but as an developing nation, this needs to improved and worked upon
Inspite of so many "better than earlier govts" reforms in the last 10 years...the govt hasnt done much needed reforms in the income tax regime.
The govt is doing a few good things like dissolving inept psu's, selling off entities like A...
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