Economy Current Affairs - 2019

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Ind-Ra lowers India’s GDP growth forecast in 2019-20 to 6.1% from 6.7% in August 2019

India Ratings and Research (Ind-Ra), a part of Fitch group has lowered India’s gross domestic product (GDP) forecast for financial year (FY) 2019-20 to 6.1%. This was second downgrade in the last two months. Earlier in August 2019, Ind-Ra had revised GDP growth estimate to 6.7% from its earlier forecast of 7.3%. It has cited slowdown in both rural and urban consumption demand growth as one of the key reasons for the downward revision of GDP in its August 2019 forecast.

Ind-Ra Projections

Growth Forecast: GDP growth in the first half of FY 2019-20 to be 5.2% and forecasts it to recover to 6.9% in 2HFY20, mainly on account of the base effect.

Government Measures: The recent measures announced by government to arrest economic slowdown are likely to support growth only in medium-to-long term. Most of the measures announced by government are essentially supply-side response to revive growth.

Bigger challenges faced by economy: It is from demand side as consumption demand has collapsed and private corporate investment is not forthcoming.

Way Forward: There is need is to take measures that will enhance disposable income and put additional money in the hands of rural and urban households. Government-initiated spend on rural infrastructure activities will help to generate large-scale employment that could add/stimulate consumption demand.

Key drivers of inflation in India: They are food and crude oil prices and they stand favourable/benign currently. They are likely to remain the same during the remainder of the financial year.

Fiscal deficit: It has been budgeted at 3.3% of GDP. It could increase to 3.6% of GDP in FY20. Additionally, current account deficit is expected to decline to 1.8% of GDP in FY20 from 2.1% of GDP in FY19, aided by softer crude oil prices. In terms of the domestic currency, Indian rupee will average 70.86 against the dollar in FY20.

India International Cooperatives Trade Fair held in India

The First Ever India International Cooperatives Trade Fair (IICTF) will commence from 11 October 2019 at Pragati Maidan in New Delhi. The three day fair is scheduled from 11-13 October 2019. It is unique initiative that provides single platform to farmers, artisans & other members of cooperatives directly to global trade arena.

Key Highlights of IICTF

It is conceived as a major platform to promote exports of Indian cooperative produce and is packed with exhibitions, B2B/C2C meetings, conferences, cultural programmes etc.

Objective: (i)To double farmers’ income by promoting cooperative to cooperative trade within India and abroad (ii) To promote exports of key agriculture commodities and products leading to enhanced rural and farm prosperity.

Why Cooperative sector? This initiative is part of Agriculture Export Policy (AEP) 2018 which aims at doubling agriculture export and integrating Indian farmers and agriculture products with global value chains. As per AEP 2018, the Cooperative sector has big role to play in doubling agriculture exports from present $30 billion to $60 billion by 2022.

Organizations Involved: IICTF has been steered by National Cooperative Development Corporation (NCDC) with support of one international organization-NEDAC (Network for the Development of Agricultural Cooperatives), 3 Ministries, 4 State Governments and several apex level Indian cooperative organizations.