How P Chidambaram's legal team plans to rescue former Finance Minister
Raghuram Rajan issues warning alert for Modi govt on economy
"Closed Consultation" At UN Security Council Today Over India's J&K Move
Job creation should be top priority; even skilled people are finding hard to get jobs, says L&T's AM Naik
Mukesh Ambani's RIL to form task force to invest in J&K, Ladakh after PM Modi's request
China had expressed its opposition to India's move to create a separate Union Territory of Ladakh
SBI home loan interest rates cut by 15 bps across all tenors after RBI policy announcement
Sushma Swaraj Cremated With State Honours. PM, Top Leaders Present
Kashmir Special Status (Article 370) Ends "At Once"
SBI becomes 1st Indian bank to link up with China's National Advance Payment System
Soon, Mumbai-Pune In 35 Minutes. World's First Hyperloop Project Is A Go
SBI cuts interest rates on FDs with effect from August 1
Finance Secretary Resigns After Being Shifted To Power Ministry
Sitharaman promises to reduce corporate tax to 25% for all companies
Virat Kohli Retains Number One Position In ICC Test Rankings
Andhra Pradesh becomes 1st state in India to reserve 75% private jobs for locals
Chandrayaan 2 Lifts Off; "Bounced Back With Flying Colours," Says ISRO
Pakistan will not open airspace until India withdraws fighter jets from IAF forward airbases
Good news! After NEFT, RTGS, SBI makes all IMPS transactions free
Karnataka Battle In Top Court, Rebel Lawmakers Told To Meet Speaker Today

Latest Posts

GDP growth hits 5-year low, unemployment rises: New FM Nirmala Sitharaman faces tough revival challenge

Nirmala Sitharaman on Friday was elevated to the post of Union Finance Minister under Narendra Modi's NDA 2.0 cabinet. She will also head the Corporate Affairs ministry in the new cabinet apart from her primary role as the finance minister.

Sitharaman, who became the first woman in 48 years to hold the top post after Indira Gandhi, faces a multitude of economic challenges as she takes the top post at North Block.

Improving growth

On Thursday, GDP growth data released for the last quarter of 2018-19 came in at 5.8 per cent, the lowest in at least 20 quarters. With the sharp slowdown in growth, India has lost its fastest growing economy tag to China after two years.

Meanwhile, India's overall GDP growth has touched a five year low as well at 6.8 per cent. This is in stark contrast from the 8 percent growth rate recorded a year ago.

Since the last financial year, GDP growth has sequentially dipped from over 8 percent to 7 percent in the second quarter while further coming down to 6.6 percent in the third quarter.

However, economists have raised several structural concerns after growth fell below 5.8 percent for the last quarter of 2018-19.

A slowdown in GDP growth in the last quarter has been attributed by economists to slow rural consumption demand, lapses in the manufacturing sector, agricultural distress, and unemployment. Key sectors including FMCG and automobile have also fallen sharply due to lowering rural demand.

While these are some of the top challenges for the new finance minister, she will also have to maintain a balance between growth and fiscal consolidation, as recommended by most economists.

Sitharaman will also have her work cut out in planning new sectoral reforms to iron out issues that have led to a slowdown in growth in a number of sectors.

The former defence minister will also have to look closely at the shadow-banking sector which has been under pressure since the defaults at IL&FS, which triggered a liquidity crisis in the economy.

Noted economists including Raghuram Rajan have said India has the potential to breach 10 percent GDP growth but added that it has to be supported by chiseled reforms.

Unemployment at 45-year-high

However, of all the challenges she faces, fixing the job crisis is likely to be on top of the agenda.

Unemployment in the country is at a 45-year high at 6.1 percent, according to latest figures released by the Ministry of Statistics and Program Implementation (MoSPI).

Earlier, an unreleased periodic labour force survey by the NSSO had shown a spike in unemployment in the country but was rejected by the government, which termed it as a draft report.

This is yet another concern for Nirmala Sitharaman and what makes her job tougher is the fact that the country offers limited fiscal room to boost growth through higher government expenditure.

Sitharaman will have to carefully work with the Reserve Bank of India (RBI) to tackle the dual-ended issue of balancing growth.

Among other challenges, Sitharaman will also have her hands full in solving the distress faced by farmers in the country. Farmers in the country have once again started protesting against weaker prices and burgeoning debt.

The average agricultural growth under NDA's first term has not been low at just 2.5 per cent. This is another area where Sitharaman needs to focus in order to prevent a further slump in the economy.

But the trickiest challenge for the new finance minister will be to balance growth and expenditure perfectly to ensure the speedy economic revival and fiscal consolidation.

Nirmala Sitharaman is Finance Minister: Facts about the senior-most woman in Modi's cabinet

Nirmala Sitharaman is all set to step into Arun Jaitley's shoes as she takes charge of the finance portfolio in Modi's Cabinet 2.0. She has served as the defence minister in the Modi government's first term from September 2017 to May 2019.

She took charge as the Finance Minister on Friday afternoon.

Here are quick facts about the new Finance Minister:

1. She is the country's second female finance minister. Previously, former prime minister Indira Gandhi had also handled the finance portfolio in 1970-71.

2. Sixty-year-old Sitharaman was the first woman to be appointed full-time Defence Minister of India in September 2017.

3. Although the defence portfolio was passed around to three ministers under Modi 1.0 government and Sitharaman was seen by many as a tail-end batsman coming in for the slog overs, she proved to be a tenacious player. She has, in fact, driven many of the policy changes like the new defence manufacturing policy and launched the UP and Tamil Nadu defence industrial corridors.

4. She previously served as Minister of State (Independent charge) of the Ministry of Commerce and Industry and had also handled the finance and corporate affairs portfolios as minister of state.

5. In 2003, during Prime Minister Atal Bihari Vajpayee's tenure, she became a member of National Women for Commission till 2005. The following year, she joined the BJP and became the national spokesperson of the party.

6. Since 2016, she has served as Member of the Rajya Sabha, the upper house of Parliament.

The US took India out of the Currency Monitoring Committee

The Trump administration on Tuesday removed India from its currency monitoring list of major trading partners, citing certain developments and steps being taken by New Delhi which address some of its major concerns. Switzerland is the other nation that has been removed by the US from its currency monitoring list which among others include China, Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia and Vietnam.

India has been removed from the monitoring list in this report, having met only one out of three criteria a significant bilateral surplus with the US for two consecutive reports, the Treasury Department said in its latest semi-annual report on macroeconomic and foreign exchange policies of major trading partners of the US sent to the Congress. After purchasing foreign exchange on net in 2017, the central bank steadily sold reserves for most of 2018, with net sales of foreign exchange reaching 1.7 per cent of GDP over the year, it said.

India maintains ample reserves according to the IMF metrics for reserve adequacy, it said. In both Switzerland and India, there was a notable decline in 2018 in the scale and frequency of foreign exchange purchases, the report said. Neither Switzerland nor India met the criteria for having engaged in persistent, one-sided intervention in either the October 2018 report or this report. Both Switzerland and India have been removed from the monitoring list, the Treasury said in its report running into over 40 pages.

India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in May 2018 along with five other countries - China, Germany, Japan, South Korea and Switzerland. In its next report in October 2018, the Treasury had said that India has made improvements and its name would be removed from the currency manipulation list in the next report.

"India's circumstances have shifted markedly, as the central bank's net sales of foreign exchange over the first six months of 2018 led net purchases over the four quarters through June 2018 to fall to USD 4 billion, or 0.2 per cent of the GDP," the Treasury had said in its October 2018 report.

PNB net loss narrows to Rs 9,975.49 crore in FY19 on lower provisions; asset quality improves

Punjab National Bank (PNB) on Tuesday reported narrowing of its net loss to Rs 9,975.49 crore in the financial year 2018-19, helped by decline in provisions and improvement in asset quality. The scam-hit lender had posted net loss of Rs 12,282.82 crore in FY18, after the bank discovered a banking fraud of Rs 14,000 crore which was orchestrated by fugitive billionaire Nirav Modi and Mehul Choksi.

"The total income of the bank declined marginally to Rs 58,687.66 crore versus Rs 56,876.63 crore in the last fiscal," PNB said in a filing to the Bombay Stock Exchange.

The operating profit for FY19 climbed by 26.23 per cent to Rs 12,995.24 crore as compared to Rs 10,294.20 crore in FY18. The bank's provisions and contingencies declined marginally to Rs 28,341.01 crore from Rs 29,869.28 crore in the last year.

PNB's asset quality improved in FY19 with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - declining to 15.50 per cent versus 18.38 per cent in the previous year. Net NPA also fell to 6.56 per cent as compared to 11.24 per cent in the last fiscal.

In accordance with the Reserve Bank of India guidelines, PNB made a provision of Rs. 11,940.15 crore towards its exposure to accounts covered under provisions of Insolvency and Bankruptcy Code (IBC), the bank said in its exchange filing.

During the January-March quarter, the bank's net loss narrowed to Rs 4,750 crore as compared to loss of 13,417 crore reported in the same quarter last year.

The public sector lender's net interest income (NII), which is the difference between interest earned and interest expended, grew 37.1 per cent year-on-year to Rs 4,200 crore in Q4 FY19. Net interest margin (NIM) of PNB increased to 2.45 per cent from 1.90 per cent in the March quarter of 2018.

During the March quarter, the bank restructured 13,682 MSME accounts worth Rs 622 crore.

The bank's board has not declared any dividend for the financial year ended March 31, 2019.

Meanwhile, PNB shares were trading at Rs 86.55 apiece, down 3.08 per cent, over its previous close on the BSE.

SBI's New Rules To Come Into Effect From May 1

With effect from May 1, customers of State Bank of India (SBI) savings account will get less interest on deposits of more than one lakh rupees. The interest rates on deposits above one lakh rupees will stand at 3.25 percent, which will be 2.75 percent below the repo rate, SBI mentioned on its website- sbi.co.in. Earlier this month, Reserve Bank of India (RBI) cut the repo rate by 25 basis points from 6.25 percent to 6 percent. Repo rate is the interest rate at which the central bank lends money to commercial banks such as SBI.

Here are 5 things to know about SBI's new rules that will come into effect from May 1:

1. SBI will link its key pricing decision for savings bank deposits and short term loans to the repo rate of the Reserve Bank of India (RBI), with effect from May 1, 2019.

2. According to the lending major, the step is in order to address the concern of rigidities in the balance sheet structure and for quick transmission of changes in RBI's policy rates.

3. For balances up to Rs. 1 lakh, SBI will offer an interest rate of 3.50 percent per annum, the lender said.

4. "In order to insulate the small deposit holders and small borrowers from the movement of external benchmarks, SBI has decided to exempt Savings Bank account holders with balances up to Rs. 1 lakh and borrowers with cash credit or overdraft limits up to Rs. 1 lakh from linkage to the repo rate," the bank earlier said in a statement.

5. Earlier this month, SBI also reduced its interest rate by 10 basis points or 0.10 percent on home loans of up to Rs. 30 lakh. The interest rate on SBI housing loans or home loans below Rs. 30 lakh now stands in the range of 8.60-8.90%. SBI also reduced its benchmark marginal cost of funds-based lending rate (MCLR) by 5 basis points (0.05 percent) across all tenors. The MCLR now stands at 8.50 percent for the one-year tenor, according to SBI.

×

Alert Message

Ok
Please Wait...

Share the Opinion Poll with your Friends At

Ok

Share the Survey with your
Friends At

Ok
×

Statistics

Ok
No
×

Statistics

Ok