{"id":33871,"date":"2018-10-30T14:47:56","date_gmt":"2018-10-30T09:17:56","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=33871"},"modified":"2018-10-30T14:47:56","modified_gmt":"2018-10-30T09:17:56","slug":"its-the-real-economy","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/its-the-real-economy\/","title":{"rendered":"It\u2019s the real economy"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/opinion\/op-ed\/its-the-real-economy\/article20604315.ece\"><span style=\"font-weight: 400;\">It\u2019s the real economy<\/span><\/a><\/p>\n<p><b>Context:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Moody\u2019s has upgraded the Government of India\u2019s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.<\/span><\/li>\n<\/ul>\n<p><b>What are the benefits from the upgrade?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>The higher rating for India signals a lower risk grade <\/b><span style=\"font-weight: 400;\">for the government\u2019s debt.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It also <\/span><b>lowers the cost of raising it<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Other <\/span><b>borrowings benchmarked to the government<\/b><span style=\"font-weight: 400;\"> also stand to benefit.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The <\/span><b>likelihood of revisions by other rating agencies<\/b><span style=\"font-weight: 400;\"> has increased.<\/span><\/li>\n<\/ul>\n<p><b>What are the factors of concern?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Even though there has been a significant growth<\/span><b>, but non-agricultural production, investment and consumption<\/b><span style=\"font-weight: 400;\"> in the economy is not doing well.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It\u2019s the same with <\/span><b>infrastructure and construction<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Consumer and investor<\/b><span style=\"font-weight: 400;\"> sentiments haven\u2019t got any better.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Capital goods and consumer durables output<\/b><span style=\"font-weight: 400;\"> was lower in the first half of the year than that in the same period last year, as production contracted.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Festive and post-harvest season<\/b><span style=\"font-weight: 400;\"> spending was expected to boost demand, but it remained to be weak.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The <\/span><b>industrial performance this year so far is weaker than 2012-13<\/b><span style=\"font-weight: 400;\">, the worst year growth-wise under the United Progressive Alliance (UPA) government.<\/span><\/li>\n<\/ul>\n<p><b>What is the scenario for exports?<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Exports had been showing <\/span><b>encouraging signs of recovery<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">But as for <\/span><b>a month, there has been a slight decline <\/b><span style=\"font-weight: 400;\">in the employment-intensive sectors of leather, gems, jewellery, handicrafts, readymade apparel and carpets.<\/span><\/li>\n<\/ul>\n<p><b>Factors for the decline:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Exporters blame the <\/span><b>break in the trend on a liquidity crunch owing to the infirmities in the goods and services tax (GST) system<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">They complain that their <\/span><b>refund claims were not released for four months<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Smaller firms with limited access to working capital<\/b><span style=\"font-weight: 400;\"> have taken.<\/span><\/li>\n<\/ul>\n<p><b>What is the way ahead?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>The National Democratic Alliance (NDA) government will have to preserve its fiscal rectitude and encourage States<\/b><span style=\"font-weight: 400;\"> to shun populism and adventurism.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If corrective steps are not taken, at the current rate of loss in industrial growth momentum, this year\u2019s result may turn out to be worse.<\/span><\/li>\n<\/ul>\n<p><b>What is Moody\u2019s?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Moody\u2019s is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets.<\/span><\/li>\n<\/ul>\n<p><b>What is credit rating?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Credit rating is the assessment of the credit worthiness of a borrower in general terms or with respect to a particular debt or financial obligation.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A credit rating can be assigned to any entity that seeks to borrow money \u2013 an individual, corporation, state or provincial authority, or sovereign government.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Credit assessment and evaluation for companies and governments is generally done by a credit rating agency such as Standard &amp; Poor\u2019s or Moody\u2019s<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>It\u2019s the real economy Context: Moody\u2019s has upgraded the Government of India\u2019s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive. What are the benefits from the upgrade? The higher rating for India signals a lower risk grade for the government\u2019s debt. It&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/its-the-real-economy\/\">Continue reading <span class=\"screen-reader-text\">It\u2019s the real economy<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-33871","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704937389},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=33871"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33871\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=33871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=33871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=33871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}