ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Trends in Bank Deposits

Analysing trends in bank deposits between 2008 and 2012, this note argues that bank depositors by and large seemed to prefer to move their money to nationalised banks. Just like any investor, depositors responded to the crisis by moving their deposits from one bank group to another, from one maturity to another, or to other assets more rewarding than bank deposits.

Sixth Economic Census 2013

The provisional results of the Sixth Economic Census (2013) of establishments in the non-agricultural sector suggest that this is not a census count. A comparison with the National Sample Survey numbers shows that the number of workers in the latest census may be only a little over half the actual number. There also appear to be some serious omissions in individual states.

Trends in Corporate Profitability

This article examines trends in corporate profi tability based on data contained in the Reserve Bank of India's studies. It observes that the profit margin and real return on capital employed came down between 2009-10 and 2012-13. Though companies have increased profit distribution to shareholders, the note further observes, by working out Tobin's q, that stock market valuation did not favour investment.

Budget and the Financial Sector

Even as measures to modernise and revitalise the financial sector need to be taken, the government should not tamper with the vigilance exercised by the Reserve Bank of India and the Securities and Exchange Board of India.

ASI Results for 2011-12

The latest Annual Survey of Industries report, released for 2011-12, shows a high growth in the value of output, gross value added as well as employment generation. The ASI data suggests that over the past three decades Indian industry has spread to rural areas, creating more value and jobs than in industry located in urban areas. Industry is spending a smaller proportion of value added on interest paymen ts than it did in the earlier decades. However, compared to the 1980s, the share of profi t in gross value added has increased signifi cantly, while factory-floor workers' emoluments as a share of total earnings have reduced.

Reverberations of the US Fed's Taper o n Currency and Stock Markets

The US Federal Reserve's March 2014 decision to continue with tapering off of its asset purchases indicates that this may continue until the end of 2015. The effects of the gradual winding down of the quantitative easing programme in the developing economies are discussed here.

Advance Estimates of GDP (2013-14): An Analysis

The Central Statistics Office's advance estimates of GDP in 2013-14 place growth in the year at 4.9%. The regular differences every year between the advance and revised estimates of GDP suggest that the former will be modified either upwards or downwards when the final figures come in about two years hence. This is somethingthe CSO needs to look into though there are definite reasons for why the revisions take place, leading to more accurate estimates. The new series of GDP at basic prices is also discussed here.

The Puzzle That is India-UAE Trade

How is it that the United Arab Emirates has become India's largest trading partner in recent years, overtaking the United States, European Union and China? An unusual pattern of two-way flows in gold, diamonds and jewellery seems to underlie the boom in bilateral trade. There is reason to suspect that some of this trade involves round tripping of merchandise and to that extent the volume of India-UAE trade may be artificially inflated.

Bank and External Borrowings of the Corporate Sector

Large Indian corporate firms went on a borrowing spree abroad a few years ago attracted by the lower interests that came on external commercial loans. But sluggish profitability and currency depreciation are making it difficult for the firms to meet repayment obligations. In domestic borrowings, the corporate stress has led to higher non-performing assets of banks but there has been no sign of systemic risk to the banking sector.

RBI's Policy Rate

Reviewing the policy responses of the Reserve Bank of India over the past few years, it is argued that in recent times the RBI has sent mixed signals to the market. On the one hand a reduction of the marginal standing facility rate made funds cheaper for banks, but on the other, two successive hikes in the repo rate suggest a tightening of monetary policy. If the RBI's current approach to the twin challenges of reining in inflation and stimulating growth continues, the market will remain on tenterhooks

How the Gold Import Chickens Have Come Home to Roost

India's staggering gold import burden is to a large extent the result of liberal policies adopted towards the metal by the government in the post-reform years. Given Indian society's insatiable hunger for gold and that nearly all of it has to come in through imports paid for by savings that now cannot be used for productive purposes, these were bound to hit the wall sooner or later. Though stopping people from buying gold is not going to happen, public policies have to discourage gold purchases through the promotion of financial products, fiscal measures, and administrative controls.

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