Indian economy to contract by 7% in FY21: SBI Research

Agencies
February 10, 2021

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New Delhi, Feb 10: Pencilling in a GDP growth in third and fourth quarters, SBI Research on Wednesday revised its contraction forecast for the current fiscal year to 7 per cent.

The agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers. In April-September, the economy contracted 15.7 per cent but the second half may see a surprise 2.8 per cent growth if the SBI analysis turns out to be correct.

Soumya Kanti Ghosh, group chief economic adviser at State Bank of India (SBI) said of the 41 high frequency leading indicators, 51 per cent are showing acceleration which should help the economy turn around to the green from the third quarter with a 0.3 percentage point growth which is likely to surprise positively when the final numbers are out.

Read | Govt aims to raise MSMEs' share in GDP to 40%: Nitin Gadkari

In April-June, the Indian economy contracted by a record 23.9 per cent, but dramatically improved to -7.5 per cent in the second quarter. In 2019-20, the economy had grown 4 per cent and in the current fiscal year, it is on course to tank by 7 per cent.

The consensus is -7.5-8 per cent with the NSO pegging it at -7 per cent and RBI at -7.5 per cent.

“We now expect GDP decline for the full year to be around -7 per cent compared to our earlier prediction of –7.4 per cent. Also, Q4 growth will also be in positive territory at around 2.5 per cent,” Ghosh said, adding promptly that the projections are conditional to the absence of any rise in infections.

“We retain our GDP forecast for FY22 at 11 per cent (RBI has pegged it at 10.5 per cent and the economy survey at 11.5 per cent and the budget did not offer a GDP estimate), but with the caveat that 11 per cent will be the floor below which it cannot fall,” he said.

Corporate results so far also reinstate the fact that third quarter would be much better than the previous one. The corporate GVA of 1,129 companies has expanded by 14.7 per cent in October-December compared to 8.6 per cent in second quarter (of 3,758 companies ex- telecom)

On the fiscal gaps, it said 9.5 per cent may be on the higher side. Excluding off-balance sheet liabilities, fiscal deficit will be 8.7 per cent gross tax collection estimate based on revised 2020-21 numbers and collections till December show tax collections will have a degrowth of 8.9 per cent in March quarter on a sequential basis. But in 2021-22 collection may top the budget estimate of Rs 22.17 lakh crore, or 9.9 per cent of GDP.

Also Read | Wrong to term economic crisis act of God, govt policies responsible: CPI

Meanwhile, cash balances of the Centre has declined from the peak Rs 3.4 lakh crore to around Rs 2.3 lakh crore as on February 8.

Given that 85-90 per cent of such cash balances belonged to states that was invested with the Centre, it is possible that states before the closing of accounts of 2020-21 want to spend the cash rather than preserving. 

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News Network
October 2,2024

The Ministry of External Affairs (MEA) has issued a travel advisory for Indian citizens in light of the escalating tensions in the Middle East, specifically advising against non-essential travel to Iran.

"We are closely monitoring the recent escalation in the security situation in the region. Indian nationals are advised to avoid all non-essential travel to Iran. Those currently residing in Iran are requested to remain vigilant and stay in contact with the Indian Embassy in Tehran," the Ministry of External Affairs said.

For those already residing in the country, the MEA advised vigilance and recommended staying in close contact with the Indian Embassy in Tehran for any assistance. The situation continues to be under observation as tensions in the region unfold.

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News Network
September 23,2024

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New Delhi: Downloading and watching child pornography is an offence under the Protection of Children from Sexual Offences (POCSO) Act, the Supreme Court ruled today in a landmark judgment on the stringent law to prevent child abuse.

The bench of Chief Justice of India DY Chandrachud and Justice JB Pardiwala set aside the Madras High Court order that had ruled that merely downloading and watching child pornography was not an offence under the POCSO Act. The Supreme Court noted that the high court had committed an "egregious error" in passing the judgment.

The Madras High Court's order had come in a case in which a 28-year-old man was charged with downloading child pornography on his phone. The court had quashed the criminal proceedings against the man and said children these days are grappling with the serious issue of watching pornography and society must be mature enough to educate them instead of punishing them.

The Supreme Court today restored the criminal proceedings against the man.

At the outset, Justice Pardiwala thanked the Chief Justice for the opportunity to pen this judgment. The order focused on Section 15 of the POCSO Act which lays down punishment for the storage of pornographic material involving children.

"Any person who stores any pornographic material involving a child and fails to report or destroy it is punishable with a fine of not less than five thousand rupees., and repeat offence will be punishable with fine of not less than ten thousand rupees. If the material is stored for further transmitting or propagating, then along with fine, it is punishable with upto three years of imprisonment. For storing child pornographic material for commercial purpose is punishable with three to five years of imprisonment, and in subsequent conviction, upto seven years of imprisonment," the Section says.

Justice Pardiwala said that in this case, mens rea is to be gathered from actus rea -- mens rea refers to the intent behind the crime and actus rea is the actual criminal act.

"We have said on the lingering impact of child pornography on the victimisation and abuse of children... We have suggested to the Parliament to bring an amendment to POCSO... so that child pornography can be referred to as child sexually abusive and exploitative material. We have suggested an ordinance can be brought in. We have asked all courts not to refer to child pornography in any order," the bench said.

The Chief Justice called it a "landmark judgment" and thanked Justice Pardiwala.

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News Network
October 2,2024

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Israel will launch a “significant retaliation” to Iran’s missile attack within days that could target oil production facilities inside Iran, Axios reports citing Israeli officials.

The Israeli military late on Tuesday said Iran launched around 180 missiles at its territory, most of which were intercepted.

Iranian media carried online footage of what they said were missiles being fired, which the Islamic Revolutionary Guard Corps said were targeting “three military bases” around Tel Aviv and other bases.

The Revolutionary Guards said “90 percent” of the missiles “hit their targets” late Tuesday.

Israeli Prime Minister Benjamin Netanyahu has vowed to hit back following the attack.

“Iran made a big mistake tonight - and it will pay for it,” he said at the outset of an emergency political security cabinet meeting late on Tuesday, according to a statement.

Washington said it would work with longtime ally Israel to ensure Iran faced “severe consequences” for Tuesday’s attack.

US Secretary of Defense Lloyd Austin spoke to Israeli Defense Minister Yoav Gallant late on Tuesday and said Washington was “well-postured” to defend its interests in the Middle East, the Pentagon said in a statement.

“The minister and I expressed mutual appreciation for the coordinated defense of Israel against nearly 200 ballistic missiles launched by Iran and committed to remain in close contact,” Austin said separately in a post on X.

US Navy warships fired about a dozen interceptors against Iranian missiles headed toward Israel, the Pentagon said. Britain said its forces played a part “in attempts to prevent further escalation in the Middle East”, without elaborating.

The Pentagon said Tuesday’s airstrikes by Iran were about twice the size of April’s assault by Iran on Israel.

A painful response

Israel activated air defenses against Iran’s bombardment on Tuesday and most missiles were intercepted “by Israel and a defensive coalition led by the United States,” Israeli Rear Admiral Daniel Hagari said in a video on X, adding: “Iran’s attack is a severe and dangerous escalation.”

Iran’s forces on Tuesday used hypersonic Fattah missiles for the first time, and 90 percent of its missiles successfully hit their targets in Israel, the Revolutionary Guards said.

In a statement on state media, the general staff of Iran’s armed forces said any Israeli response would be met with “vast destruction” of the latter’s infrastructure.

It also said it would target the regional assets of any Israeli ally that got involved.

Fears that Iran and the US could be drawn into a regional war have risen with Israel’s growing assault on Lebanon in the past two weeks, including the start of a ground operation there on Monday, while its conflict in the Gaza Strip is a year old.

US President Joe Biden expressed full US support for Israel and described Iran’s attack as “ineffective.” Vice President Kamala Harris, the Democratic presidential candidate, backed Biden’s stance and said the United States would not hesitate to defend its interests against Iran.

“We will act. Iran will soon feel the consequences of their actions. The response will be painful,” Israel’s UN Ambassador Danny Danon told reporters.

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