Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

India Says It Expects Growth To Cut Deficit

Recommended Posts

http://www.nytimes.com/2011/03/01/business/global/01rupee.html?ref=business

MUMBAI — India is counting on faster economic growth to help reduce its large fiscal deficit and pay for increased spending on agriculture, education, health and infrastructure, according to a government budget presented on Monday.

But even as the government set those ambitious goals, a new report showed that India’s economy slowed more than anticipated at the end of last year.

Growth in the final three months of 2010 fell to 8.2 percent, from 8.9 percent in the previous quarter. Analysts had forecast that growth would fall to 8.6 percent.

The slowdown, which some economists said could continue into this year as higher inflation and weaker private investment sap growth, poses the biggest challenge to the Indian government’s plans for the coming year. The finance minister, Pranab Mukherjee, told Parliament on Monday that the government believed that gross domestic product would grow at between 8.75 percent and 9.25 percent in the coming fiscal year.

“Getting to 9 percent G.D.P. growth for next year might not be an easy task,” said Samiran Chakraborty, who heads research at Standard Chartered Bank in Mumbai. “That’s the risk he is now running. He has promised a lot, and he has to now deliver on that promise.”

Mr. Mukherjee was more sanguine about the economy, which he said was “back to its precrisis growth trajectory.” Before the financial crisis hit in 2008, India was growing at more than 9 percent a year.

He said the government deficit would fall to 4.6 percent of G.D.P. in India’s 2011-12 fiscal year, which begins on April 1, from 5.1 percent in the current fiscal year. Total government spending would go up by 13.4 percent, Mr. Mukherjee added.

So to cut the deficit the govt will be spending 13.4% more to increase GDP and growth....

It's a cunning plan why aren't we following this?

Share this post


Link to post
Share on other sites

.. well increasing government spending in order to boost GDP has been working so well for the Chinese. They are now so wealthy they don't even have to live in their Cities.

Share this post


Link to post
Share on other sites

So to cut the deficit the govt will be spending 13.4% more to increase GDP and growth....

It's a cunning plan why aren't we following this?

Do you ever get the feeling that this is getting completely out of control?

Share this post


Link to post
Share on other sites

http://www.nytimes.c...ml?ref=business

So to cut the deficit the govt will be spending 13.4% more to increase GDP and growth....

It's a cunning plan why aren't we following this?

We are!

Once you replace the word 'growth' with 'inflation' and in the UK the word 'austerity' with 'increased spending accompanied with privatisation to hide it' then you get a very logical, easy to understand picture of what both governments are up to.

Share this post


Link to post
Share on other sites

Do you ever get the feeling that this is getting completely out of control?

Have a look at control system theory - you will be hard pressed to find any examples of working positive feedback mechnisms that don't blow up or destroy the equipment they are deigned to control.

The "financial engineers" in control seem to noting other than postive feedback.

Chaos and breaking the system will ensue.

Share this post


Link to post
Share on other sites

India probably has 5 or 6% inflation. So 8% real gdp growth and 6% inflation equals 14% yoy nominal gdp increase. At 13.4% government expenditure growth the state would actually slightly shrink relative to gdp.

Share this post


Link to post
Share on other sites

India probably has 5 or 6% inflation. So 8% real gdp growth and 6% inflation equals 14% yoy nominal gdp increase. At 13.4% government expenditure growth the state would actually slightly shrink relative to gdp.

http://www.ft.com/cms/s/0/ba65d28e-380f-11e0-8257-00144feabdc0.html#axzz1FKeRv8dd

February 14 2011

India’s headline inflation eased in January, but not sufficiently to rule out the possibility that the country’s central bank will raise lending rates again next month.

Figures released on Monday showed that the wholesale price index had risen to a year-on-year rate of 8.23 per cent last month compared with 8.4 per cent in December. The data provide scant relief for the government, which forecasts that inflation will dip to 7 per cent by the end of March.

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/ba65d28e-380f-11e0-8257-00144feabdc0.html#ixzz1FKefjcbF

Rising food prices remained a big concern in India’s fast-growing economy, according to economists. Food inflation jumped to 15.7 per cent in January from 13.6 per cent the previous month.

India suffers the highest inflation of any big Asian economy. The Reserve Bank of India has raised interest rates seven times over the past year in a bid to cool rising prices while maintaining an economic growth rate of 8.5 per cent.

Try again aa3.

If your poor do you think your biggest expenditure in India will be food?

Edited by interestrateripoff

Share this post


Link to post
Share on other sites

If a country finds itself with :

GDP < (Inflation + Government Spending)

Isn't it technically eating its reserves/enlarging its deficit?

Looks like economic predictions of a Chindia future are overblown.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.