India GDP growth rate has been overestimated by around 2.5 percentage points between 2011-12 and 2016-17, says former CEA Arvind Subramanian. India to impose retaliatory tariffs on 29 US products. Budget 2019 Expectations: Keep Budget projections realistic, reflecting state of economy, say economists. No tax relief for large companies in Budget 2019. Facebook invests in Indian social-commerce startup, Meesho. Facebook signs up Visa, Mastercard, Paypal and others to back its new cryptocurrency - Libra.
Moving on to the top Business news of the week.
India GDP growth rate has been overestimated by around 2.5 percentage points between 2011-12 and 2016-17, says former CEA Arvind Subramanian. India to impose retaliatory tariffs on 29 US products.
We Won’t Keep Calm: Less than a week after Washington withdrew duty-free benefits for Indian exporters, India has decided to impose the long due retaliatory tariffs on 29 US products.
India has repeatedly postponed imposing the retaliatory tariffs on US goods worth $235m since it first announced these on 20 June last year. The current deadline expires on 16 June.
US had earlier this month terminated India’s designation as a beneficiary developing nation under the key Generalized System of Preference (GSP) trade programme with effect from June which allowed $5.6bn worth of Indian exports to enter the US duty free.
Retail inflation touches seven-month high of 3.05% in May. IIP rises 3.4% in April. WPI inflation slips to near 2-year low in May, declines to 2.45%.
Retail Inflation: As per the data released by Central Statistics Office (CSO), retail inflation touched a seven-month high of 3.05% in May 2019 vs 2.99% in April. The previous high was in October 2018, when the retail inflation was recorded at 3.38%.
This sudden rise in retail inflation which is calculated on the basis of Consumer Price Index (CPI) has been linked to the hike in price of vegetable and food items.
Industrial Growth: Index of Industrial Production (IIP) grew by 3.4% in April 2019 vs 0.3% a month ago, primarily on back of better performance by mining and power generation segments.
14 out of the 23 industry groups in the manufacturing sector showed positive growth in comparison to the corresponding month of the previous year. The industry group 'Manufacture of Wearing Apparel' showed the highest positive growth of 33.6%.
In Other News: Wholesale price-based inflation slipped to 22-month low at 2.45% in May vs 3.07% in April and 4.78% in May 2018.
Budget 2019 Expectations: Keep Budget projections realistic, reflecting state of economy, say economists. No tax relief for large companies in Budget 2019. Finance Minister might retain fiscal deficit target at 3.4% of GDP.
No Corporate tax relief in sight for Large companies: Former Finance Minister Arun Jaitley had promised a cut in corporate tax rate to 25% from 30% for large companies, but things are looking bad for large companies as his successor has stepped in.
Finance Minister Nirmala Sitharaman, who is set to present the Budget 2019 on July 5th is unlikely to cut corporate tax rate. Additionally, the upcoming budget 2019 may increase long term capital gains tax.