Indian economy will recover from crisis with right policies: IMF official

 The Indian economy, severely hit by the coronavirus pandemic, would be well placed to start recovering from the horrible crisis with the government making efforts on both the fiscal and monetary side in addition to putting in place structural elements, a top IMF official has said.

The International Monetary Fund in its annual World Economic Outlook significantly downgrades India's growth for the fiscal year 2020 to minus 10.3 per cent.

At the same time, IMF said that India is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, but for this New Delhi needs to ramp up its efforts in various fields.

In terms of what can be done going forward, clearly on the fiscal side, the IMF believes there is more that can be done to provide support to households and firms that have been affected by the pandemic, Malhar Shyam Nabar, Division Chief, Research Department, IMF, told reporters on Tuesday at a news conference here on the eve of the annual meetings of the IMF and the World Bank.

He further said there is a need to tilt the composition of the fiscal support towards more of the direct spending and tax relief measures and to rely slightly less on the liquidity support measures, the credit guarantees, which are clearly important to support the provision of credit in the economy.

But if you look at the approach that was taken, there was more of an emphasis on that type of measure. We think that there is room to recalibrate and to provide more direct relief and spending support, which could have a first order impact on preventing even worse outcomes, Nabar said.

On the monetary policy side, the RBI had come in very aggressively early on, he said. "It has paused recently with its interest rate cuts, looking through this inflation, the spike in inflation that they have had recently, but we believe there is more that the RBI can do, too, in terms of there is room to cut if needed, and we think that should be done once this inflation spike is more under control," he added.

And together with these efforts, both on the fiscal side and the monetary side, we think that would put India on a path to recovery going forward, Nabar said.

There has also been some efforts recently on the structural side to improve medium-term growth prospects, he said.

We have had progress on labour reform bills and the farm bills. We think that this will advance their structural reform agenda in an important way, remove supply-side constraints in the agricultural sector and in the labour market, also allow for a better matching of workers with firms, provide firms with a little bit more flexibility in terms of hiring options, but at the same time also provide more social security and safety net options for workers as well, he said in response to a question.

So, with those structural elements in place as well to reinforce the cyclical support, the Indian economy would be well placed to start recovering from this horrible crisis that it is experiencing right now, Nabar said.

Slowdown has bottomed out, govt's measures will boost growth: SBI MD Khara

Slowdown in the Indian economy has bottomed out and measures taken by the government in the recent budget to improve capacity to spend in rural sector, infrastructure creation and inviting foreign investments will boost growth, State Bank of India Managing Director Dinesh Khara has said.

Khara told PTI here that for India to achieve its ambition of becoming a five trillion dollar economy, it required a 10-11 per cent growth rate.

India's economic growth slipped to hit an over six-year low of 4.5 per cent in July-September 2019.

He underlined that several initiatives and measures have been taken by the government to attract investment into the economy, including reduction in tax rates, terming it a "landmark decision" that will go a long way in attracting investment from overseas.

Khara was in the city and had addressed students at Columbia Business School on 'SME Lending in India', an event organised by SBI in association with the Business School, its student-run organisation South Asia Business Association (SABA) and School of International and Public Affairs (SIPA).

Highlighting that to achieve high growth, there was a need for much higher savings and investments, he said that currently the investment rate was about 32 per cent to the GDP and savings rate was about 27 per cent.

"There is a gap," he said, adding that if the economy has to grow at 10-11 per cent, the investment rate has to be about 40 per cent.

"For that there is a felt need for attracting investment from overseas. The infrastructure sector is another area where there is a whole lot of opportunity and there is a felt need in the economy to encourage this sector," Khara said.

He noted that in the recent budget the government announced various measures to support the infrastructure sector and a major one among them was to invite investments from the sovereign wealth funds and interest income of these funds will be tax exempt.

"This is a very major step which has been taken to attract investment," he said.

"These kinds of measures which have been taken will go a long way in terms of supporting the government's effort for building up infrastructure and revving up growth of the economy," Khara said.

Such measures have a very significant multiplier effect, he said.

"In the recent budget, there has been very clear focus on improving the capacity to spend for the rural sector, on infrastructure creation and inviting foreign investment. I think it's a very well directed budget for achieving the outcomes which are intended," he said.

When asked during an interactive session on the economic slowdown and if it has bottomed out, Khara referred to the Purchasing Managers' Index (PMI) for India which shot up to 55.3 in January from 52.7 in December.

"So that itself is a reflection that it has already bottomed out and we are on the upside. And apart from that the kind of initiatives which have been taken by the government in the recent budget will go a long way in terms of supporting the economy," he said.

Outlining reasons for the slowdown in the Indian economy, Khara said it was the consumption engine that had slowed down.

"My assessment is that demand from the rural sector is quite muted. That is one of the major reasons for the kind of slowdown which we are witnessing," he said.

The rural economy in India is supported by the money order economy - remittances which flow from the urban sector to the rural sector, he said , adding that the real estate and auto were two major sectors that used to offer opportunities for people from rural areas.

"I would say that the money order economy almost collapsed. That is another reason for this kind of muted demand seen from the rural sector," he said.

The government's focus on recreating and repairing the real estate sector by introducing the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund is a major step, he said, adding that focus on infrastructure creation will also go a long way in creating employment.

The PM Kisan Yojna, under which an income support of Rs 6000 per year will be provided to all farmer families across the country, will also bring in enough liquidity in the rural sector, Khara said.

"Liquidity in the rural sector is more important than anywhere else because the marginal propensity to consume is significantly higher in the rural sector than elsewhere. These are some other measures which have been taken which will go a long way in terms of supporting the build up of the economy once again," he said.

He said that once demand-related issues were addressed, it will help in boosting growth.

Khara also pointed out that looking into data for last for 30 years, it had been observed that in every cycle of 10 years, there has been a slowdown or single digit growth for at least two to three years.

"So, from that point of view this 4.5 per cent growth which we have seen in this current cycle of 10 years is one in line with the trend seen in the past two," he said.

Asked if India can become an economic success without manufacturing, Khara said that auto and auto-ancillary and pharma were the two manufacturing sectors which could integrate with the global supply chains and will continue to be the future sectors of growth.

Indian economy benefited from favourable external environment in 2019: DBS

The Indian economy benefited from "favourable external environment" in 2019, following which portfolio inflows into equity and debt touched a multi-year high, and if this momentum is sustained it will bode well for the country's external balance, a report said on Friday.

According to Singapore's DBS Banking Group, notwithstanding a challenging trade outlook, conducive global drivers, such as flush of liquidity owing to low interest rates and stable oil prices, provided a favourable external environment for the Indian economy in 2019.

The report noted that brent prices have averaged $65 per barrel year-to-date in FY20 as against $70 per barrel a year before.

However, crude oil prices are currently hovering around $68 per barrel after US President Donald Trump ordered the killing of Iran Revolutionary Guards commander Qasem Soleimani.

The US had called the strikes in response to a rocket attack days earlier that had killed an American contractor working in Iraq.

As per the DBS report, India attracted $19 billion worth net portfolio inflows in CY2019, strongest since 2017. Moreover, foreign flows into equities was the highest in nearly six years.

Net FDI has risen 16 per cent in first ten months of the FY20 compared to the same period year ago.

"A rerun of the positive flows outlook is likely in 2020 if conditions stay conducive," the report noted but cautioned that geopolitical risks, could append the risk environment.

The report further noted that near-term progress on the US-China trade war rests on the success of the phase one agreement (likely to be signed in mid-January).

US elections and Eurozone politics and Brexit developments are other watch factors, the report titled "India: Banking on conducive global catalysts said.

How India's economy came back down to earth in just a year's time

India's economy lost its sheen this year. As it stumbles through a deep slowdown and a credit crisis, the country has gone from being hailed as a colossus-in-waiting to placing among the also-rans.

Rarely has a major economy had such a humbling turn in fortunes. In the third quarter, gross domestic product rose 4.5 per cent from a year earlier, about half the pace notched in the first part of 2018. Consumer confidence has tumbled to the lowest level since 2014. The labor market, a vital indicator in a country with a population of 1.4 billion, is fragile: The jobless rate has climbed to a 45-year high of 6.1 per cent.

Just last year, India was the world’s fastest growing major economy. The past decade has been replete with predictions it would take up an increasing share of global commerce, alongside China and America. But the Philippines and Indonesia grew quicker than India last quarter and Malaysia was just a hair behind. China, grappling with its own slowdown, logged a respectable 6 per cent and Vietnam was way ahead at 7.3 per cent.

Much of this comes down to the country's broken financial system. Indian banks struggle with a load of bad loans that's among the biggest in the world. Overextended traditional lenders gave way to shadow banks. They, too, ran into walls. One of the most prominent, Infrastructure Leasing & Financial Services Ltd., defaulted last year, setting off a liquidity crisis. While the government took control of the company in an effort to contain the damage, their work was just beginning: Last month, the central bank removed the management of Dewan Housing Finance Corp., a big player in mortgages, and sent it to bankruptcy court. Lenders have pulled in their reins across the board.

Alarmingly for the Reserve Bank of India, these clogs in the financial pipes mean five interest-rate cuts this year haven't packed much punch.

Despite early and aggressive action to lower rates, all the benefits of looser monetary policy aren’t flowing through to the real economy. In difficult times, central bankers usually keep a firm and credible hand on the rudder. But the RBI has surprised investors a few times this year.

An unusual 35 basis-point cut in August, rather than the quarter percentage point economists anticipated, looked frivolous rather than clever.

A reduction this month seemed like a sure thing until officials balked. That was a shocking mistake.

Then there’s the issue of unreliable statistics. An academic paper by a former aide to Prime Minister Narendra Modi reckons growth over the past few years was actually a lot closer to the third quarter's 4.5 per cent figure. Repairing data during a slump is tough because even incremental progress will be overshadowed by unflattering year-ago comparisons.

India’s defenders bristle when it’s set beside China: Here’s a democracy with a robust federal system and an independent judiciary, they argue. That makes impossible the kind of sweeping change that Deng Xiaoping forced on China, which transformed the mainland into an export and manufacturing powerhouse. Fair enough; during good times, however, Indian leaders said little to rebut the comparison.

This slump doesn't have to be the end of India's run. As wrenching as the Asian financial crisis was for the “tiger economies” of Indonesia, Thailand, Malaysia and South Korea, they emerged stronger after painful recessions. Officials bolstered reserves, constrained foreign-currency borrowing and scrutinised debt levels while central banks became more independent. While growth is lower in the aftermath, it’s also more sustainable.

India will always be more important to the world economy than the Philippines or Malaysia. Even if activity slows to a snail's pace for a while, its sheer size makes its contribution to global growth far more valuable. As soon as next year, India's monetary and fiscal stimulus will begin to kick in. The economy will likely grow about 5 per cent this year and pick up to 6 per cent in 2020, says Shilan Shah of Capital Economics.

India may yet reclaim its mantle as the next big thing, albeit a toned-down and more durable version. The country and the world could be well-served by this brush with reality.

Year in Review: From job data to growth woes, India's 'shrinking' feeling

The challenges facing the Indian economy were one of the much-debated issues during the 2019 calendar year, which also saw in May the return of the Narendra Modi-led government at the Centre for a second term.

Among key policy announcements, Piyush Goyal — standing in for the then finance minister Arun Jaitley, who was ailing — had announced in the interim Budget presented ahead of the Lok Sabha elections an annual income support of Rs 6,000 for farmers with retrospective effect.

A Business Standard report on the then undisclosed National Sample Survey Office (NSSO) report, however, revealed that the country’s unemployment rate in 2017-18 had been at a four-decade high. This report was officially released only after the elections, in the second term of the Modi government.

After returning to power with a huge majority, Prime Minister Narendra Modi set a goal of making India a $5-trillion economy by 2024. Though the goal was hailed by corporate houses, a slowing economic growth rate presented the country with another challenge. India’s GDP growth rate declined in the July-September quarter to a six-year low of 4.5 per cent. Subsequently, Moody’s Investors Service revised its outlook on India’s sovereign rating from stable to negative. Following this, several global agencies lowered their India growth estimates for full 2019-20 financial year.

Here is a list of key events and policy decisions (in chronological order) that made the biggest impact on the Indian economy during 2019:

Interim Budget (Feb 1): Modi govt announces sops for farmers

Interim Budget (Feb 1): Modi govt announces sops for farmers1 / 11

Piyush Goyal, standing in for an ailing Arun Jaitley, presented the Interim Budget for 2019. He announced an income-tax waiver for those earning up to Rs 5 lakh, besides an annual income support of Rs 6,000 for farmers.

What Finance Minister Piyush Goyal presented hardly had any resemblance with the previous three interim Budgets presented by his predecessors — Jaswant Singh in 2004, Pranab Mukherjee in 2009 and Palaniappan Chidambaram in 2014. No interim Budget in the past had announced a new programme with as huge an annual expenditure outlay of Rs 75,000 crore as Goyal’s scheme, Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), to offer an annual income support of Rs 6,000 per year to all farmer families with a cultivable land of up to two hectares. Read more...

Report on unreleased NSSO jobs data raises alarm (Feb 6)

Report on unreleased NSSO jobs data raises alarm (Feb 6)2 / 11

A Business Standard report revealed that the government withheld an NSSO survey showing 2017-18 unemployment numbers at a four-decade high. After fiercely contesting the findings, the government released this survey after the 2019 elections

The country's unemployment rate stood at a 45-year-high of 6.1 per cent in 2017-18, according to the NSSO's periodic labour force survey (PLFS). The report was at the centre of a controversy after two National Statistical Commission (NSC) members, including acting chairman, resigned alleging the government had withheld the release despite the NSC's approval. Read more... 

Nirmala Sitharaman becomes first woman FM to present a Budget (July 4)

Nirmala Sitharaman becomes first woman FM to present a Budget (July 4)3 / 11

Nirmala Sitharaman, India’s first full-time woman finance minister, presented the first Union Budget of the Modi government in its second term. She introduced an income-tax surcharge for those earning more than Rs 2 crore a year

In her Union Budget for 2019-20, Finance Minister Nirmala Sitharaman said the country was well within its capacity to become a $5-trillion economy in the next five years. Read more... 

Modi govt cuts corporation tax rate (Sep 20)

Modi govt cuts corporation tax rate (Sep 20)4 / 11

In a bid to spur the economy, Finance Minister Sitharaman slashed the rate of corporation tax from 30 per cent to 22 per cent for companies that were not availing of any incentives, and from 25 per cent to 15 per cent for new manufacturing entities.

The government significantly reduced the rate of corporation tax, boosting investor sentiment in the midst of a severe slowdown. Read more...

India opts out of RCEP (Nov 4)

India opts out of RCEP (Nov 4)5 / 11

India finally decided to opt out of the Regional Comprehensive Economic Partnership (RCEP), saying the negotiations did not “address key concerns”.

The government on November 4 said India would not join the Regional Comprehensive Economic Partnership (RCEP) deal, adding that doing so would adversely affect its national interest. Read more...

Moody’s lowers its outlook on India’s rating (Nov 8)

Moody's lowers its outlook on India's rating (Nov 8)6 / 11

Moody’s Investors Service changed its outlook on India’s sovereign rating from stable to negative, saying there had been an increase in the risk that economic growth would remain materially lower than in the past.

On November 8, the third anniversary of the government’s demonetisation decision, global ratings agency Moody’s lowered its outlook on India’s credit ratings to “negative” from “stable”, citing an ongoing economic slowdown, financial stress among rural households, weak job creation, and the liquidity crunch in non-banking financial companies. Read more...

Govt scraps NSO’s consumer expenditure survey (Nov 16)

Govt scraps NSO's consumer expenditure survey (Nov 16)7 / 11

A day after a Business Standard report revealed that a survey by the National Statistical Office had shown consumer spending in 2017-18 falling for the first time in four decades, the central government scrapped the survey report.

The government decided to scrap the National Statistical Office’s (NSO’s) consumer expenditure survey conducted in 2017-18 over “data quality” issues This survey had revealed that the country’s consumer spending had seen its first decline of four decades in 2017-18. Read more... 

Labour Code on Industrial Relations Bill tabled in Parliament (Nov 27)

Labour Code on Industrial Relations Bill tabled in Parliament (Nov 27)8 / 11

The Labour Code on Industrial Relations Bill, consolidating three laws, amalgamating 44 codes into six and easing retrenchment norms to enable hiring flexibility for businesses, was tabled in Parliament on November 27

The Centre approved the Code on Industrial Relations (IR) Bill, 2019 — considered to be the most contentious labour law amendment. Read more...

GDP growth slows to 4.5% in Q2 (Nov 30)

GDP growth slows to 4.5% in Q2 (Nov 30)9 / 11

The economy posted its weakest growth in more than six years during the July-September quarter of the year, mainly on account of weak manufacturing activity

India’s Gross domestic product (GDP) in the July-September quarter of 2019-20 grew at a slow rate of 4.5 per cent when compared with the same quarter a year earlier, and 5 per cent lower than the previous quarter, the data released by the National Statistical Office showed. Read more... 

GST collection crosses Rs 1-trillion mark in Nov (Dec 1)

GST collection crosses Rs 1-trillion mark in Nov (Dec 1)10 / 11

India’s GST collections in November crossed the Rs 1-trillion mark after a gap of three months, growing 6 per cent to Rs 1.03 trillion, aided by festival demand

The government’s goods and services tax (GST) collections recovered to a seven-month high in November, crossing the Rs 1-trillion mark on account of festive-season demand and anti-evasion measures taken by the government. Read more...

Retail inflation hits a 40-month high in Nov ( Dec 12)

Retail inflation hits a 40-month high in Nov ( Dec 12)11 / 11

The rate of CPI-based inflation jumped to 5.54% in November, compared with 4.62% the previous month

Consumer price index (CPI)-based inflation rose to a 40-month high of 5.54 per cent in November when compared with the same month the previous year. Vegetables, which became costlier in neighbourhood markets, contributed the most to lift the headline number. Vegetable inflation in November touched 30 per cent in villages and a staggering 48.6 per cent in cities and towns, data from the National Statistics Office (NSO) showed. 

India Ratings pegs India's GDP growth in Q2 at 4.7%; FY20 forecast at 5.6%

Indian economy may have slowed for the sixth consecutive quarter in July-September to 4.7 per cent, Fitch group firm India Ratings and Research said on Tuesday, as it lowered GDP growth forecast for current fiscal for the fourth time.

The Indian economy expanded 5 per cent in April-June, its slowest annual pace since 2013. The 4.7 per cent projection for the second quarter of the current fiscal would mark six consecutive quarters of slowing growth, a first since 2012.

This comes despite a recent series of fiscal stimulus, including reduction in corporate tax rates.

"India Ratings and Research has revised its GDP growth forecast for FY20 to 5.6 per cent. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1 per cent," the rating agency said in a statement.

The revision, it said, became "inevitable as the high-frequency data now suggests that the agency's estimate of 2QFY20 GDP growth coming in a little higher than 5 per cent is unlikely to hold".

"The new projection suggests that 2QFY20 GDP growth is likely to be 4.7 per cent," it said.

Second-quarter GDP numbers are likely to be announced on Friday.

"Despite favourable base effect, declining growth momentum suggests that even the 2HFY20 will now be weaker than previously forecasted and is likely to come in at 6.2 per cent," India Ratings said.

India's growth outlook has weakened sharply this year, with a crunch that started with the non-banking finance institutions spreading to retail businesses, car-makers, home sales and heavy industries.

India Ratings' growth forecast is a tad lower than 5.8 per cent revised outlook for India projected by Moody's Investors Service.

This comes despite the measures taken by the Modi government to arrest the growth slowdown. In September, it announced a cut in the corporate tax rate to 22 per cent from 30 per cent. It also lowered the tax rate for new manufacturing companies to 15 per cent to attract fresh foreign direct investments.

The tax rate reductions bring India in line with rates in other Asian countries.

The government's other initiatives include bank recapitalization, the mergers of 10 public sector banks into four, support for the auto sector, plans for infrastructure spending, as well as tax benefits for startups.

India Ratings (Ind-Ra) said the 5.6 per cent GDP growth will require "heavy lifting by the government".

"Although government expenditure did not witness much traction in 1QFY20 due to parliamentary elections, it picked up significantly in 2QFY20. Combined capital and consumption expenditure of central and 20 states government in 2QFY20 grew 37.8 per cent and 20.1 per cent, respectively, and Ind-Ra expects it to continue in 2HFY20 leading to the central government's fiscal deficit coming in at 3.6 per cent of GDP," the statement said.

If the central government adheres to the budgeted fiscal deficit of 3.3 per cent of GDP by cutting/rolling over expenditure, then Ind-Ra believes FY20 GDP growth could be even lower than 5.6 pre cent.

It put growth in private final consumption expenditure (PFCE) at 4.9 per cent in FY20, slowest since FY13.

"Ongoing agrarian distress and dismal income growth so far, coupled with subdued income growth expectations in urban areas have weakened the consumption demand considerably. Even the festive demand has failed to revive it and this is reflected in the current data of non-food credit, auto sales and select fast-moving consumer goods," it said.

Despite the likely fiscal stress arising out of the reduction in the corporate tax rate, the government has not announced any change in its 2HFY20 borrowing programme.

Ind-Ra expected current account deficit to decline to 1.8 per cent of GDP in FY20 aided by the softer crude oil prices and lower capital goods import and Indian rupee to average 71.06 against the US dollar in FY20.

Why economists watered down India's July-Sept growth estimate to 4.2-4.7%

How low could Q2 FY20 growth really be? An SBI Research Report puts the number at a dismal 4.2%.

A severe contraction in factory output has prompted observers of the Indian economy to downsize their GDP estimates. Most have put the headline number at 4.2-4.7 per cent.

September saw the manufacturing sector, which makes up 78 per cent of the index, slow down at a faster pace. Industrial output in September contracted by 4.3 per cent for the second straight month, falling to an eight-year low. But this time around, service sector activity too has pulled down growth in Q2, economists said.

State Bank of India (SBI) joins global agencies such as the ADB, World Bank, OECD, RBI and the IMF in downgrading India's FY20 growth rates.

According to India’s largest public sector bank, India’s GDP growth will slow down further in the second quarter (July to August) after it hit a six-year low of 5% in the first quarter (April to June) of the current financial year. For the full fiscal year, it has given the lowest estimate so far, at 5 per cent. Nomura chief economist Sonal Varma has put the Q2 growth at 4.2 per cent, similar to what SBI has estimated.

Listen to the podcast to know why have economists dialled down growth estimate

India's economic slowdown will reverse in coming quarters: Mukesh Ambani

Two top leaders of India Inc — Reliance Industries Chairman Mukesh Ambani and auto major Mahindra & Mahindra Chairman Anand Mahindra (M&M) — have said the Indian economy is showing signs of a pick-up and recent sales indicators show the worst is now behind the nation.

Both business leaders were speaking at the Future Investment Initiative summit in Riyadh. “India’s slight economic slowdown will reverse in the coming quarters. What I see happening in the past 2-3 years is transformation,” said Ambani.

“As a businessman and as an investor, I am all in, in terms of investing in this country,” Ambani said.

“If you look at what happened, yes, there has been a slight slowdown but in my view it’s temporary,” said he. “All the reform measures that have been taken in the last few months will show the outcome. I am quite sure that in the coming quarters this will reverse,” he said.

Ambani, who is in talks with Saudi Arabian oil giant Aramco to sell one-fifth of his oil-to-chemicals business in India for $15 billion, said the two countries have almost factors to drive growth — technology, young demography, and leadership.

“Above all, there is a leadership accelerator. Both the countries are blessed with leadership that is unique in the whole world, at least in today’s time,” he said, referring to Prime Minister Narendra Modi and Saudi King Salman bin Abdulaziz Al-Saud and his son Prince Mohammed bin Salman bin Abdulaziz.

Saudi Arabia, he said, has seen tremendous transformation in the past 2-3 years. “For me, this is 1980 vintage China or India of the 1990s where India took on the world map.”

Ambani had in August announced that Saudi Aramco has agreed to take a 20 per cent stake in Reliance Industries’ refining and petrochemicals business, as the world’s largest crude oil exporter deepens its ties with India, the fastest-growing energy consumer.

On the other hand, Mahindra said Diwali sales have been very good for the Mahindra Group and it has reported double-digit growth in sales over last year. Diwali, he told a TV channel, is like Christmas in India and it has shown a significant jump in consumption for the company. M&M has cut excess inventories and most car companies have sanitised their pipelines and are looking ahead to the festive season with hope, he said.

When asked about the trade war, Mahindra said the global trade tensions gave an opportunity to India to use its clout and negotiate bilateral trade deals. “The more tension there is outside, the more leverage India gets,” Mahindra told Bloomberg TV. In the event of a Brexit, Mahindra said the United Kingdom would reach out to large economies like China and India for bilateral deals which would be beneficial for India.

Indian economy loses Rs 1.17 trillion due to smuggling, says study

Indian economy loses Rs 1.17 trillion due to smuggling in five key sectors, revealed a study. The study, conducted by the Federation of Indian Chambers of Commerce and Industry (Ficci) and the Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) measures this impact through impact of smuggling in five areas — textiles, tobacco products, readymade garments, capital goods, and consumer electronics — taking into consideration their backward and forward linkages.

India needs more reforms to remain the fastest-growing large economy: IMF

India has been one of the fastest growing large economies in the world, the International Monetary Fund (IMF) has said, asserting that the country has carried out several key reforms in the last five years, but more needs to be done.

Responding to a question on India's economic development in the last five years at a fortnightly news conference here, IMF communications director Gerry Rice Thursday said, "India has of course been one of the world's fastest growing large economies of late, with growth averaging about seven per cent over the past five years."

"Important reforms have been implemented and we feel more reforms are needed to sustain this high growth, including to harness the demographic dividend opportunity, which India has," he said.

Details about the Indian economy would be revealed in the upcoming World Economic Outlook (WEO) survey report to be released by the IMF ahead of the annual spring meeting with the World Bank next month, he said.

This report would be the first under Indian American economist Gita Gopinath, who is now IMF's chief economist.

"The WEO will go into more details. But amongst the policy priorities, we would include accelerate the cleanup of banks and corporate balance sheets, continue fiscal consolidation, both at centre and state levels, and broadly maintain the reform momentum in terms of structural reforms in factor markets, labour, land reforms and further enhancing the business climate to achieve faster and more inclusive growth," Rice said.