Domestic consumption, backed by Pay Commission awards, MSP hikes and NREGA, was the main warhorse of India's high-growth period. The effort since has been to make investment the horse before the cart, with doles such as corporate tax cut, lined up to boost that process. As a growth driver, this has created a chicken-and-egg situation, as investment and capex recovery require demand visibility as a precondition. As one economist points out, monetary policy can help restore demand only up to a point in a relatively under-leveraged economy. That's where India is wrestling with a growth conundrum.
STREET PULSE: Where we stand Asian shares edged higher on Monday after data showed the US unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world's largest economy.
Read More  | SGX Nifty traded nearly 29 points higher at 7 am (IST), signalling positivity on Dalal Street. MSCI index for Asia-Pacific shares outside Japan rose 0.25%. Japan's Nikkei rose 0.29%, while Australian shares were up 0.48% |
| US stock futures fell 0.35% in Asia on Monday after the S&P500 ended 1.4% higher on Friday. |
US crude dipped 0.34% to $52.63 a barrel early Monday as worries about oversupply regularly weigh on oil futures prices.
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Bottomline Booster… A lower corporate tax is likely to boost India Inc's bottomline for the September 2019 quarter amid slower topline growth and shrinking operating margin due to sluggish demand. According to the ET Intelligence Group's estimates of the Nifty50 companies, aggregate net sales is expected to increase at a nine-quarter low rate of 5.5% compared with the year-ago quarter. The operating profit is likely to fall by 4.5 per cent.
Read More Look, Who's Saying YES… The biggest names in global private equity — TPG, The Carlyle Group and Farallon Capital — are seeking to buy large strategic stakes in Yes Bank, the private sector lender where all pledged shares have now been sold and business fundamentals present a compelling value proposition at current market price. The talks have advanced substantially in the past few days and could result in one or more private equity firms taking a significant stake in the bank, providing the lender with growth capital.
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FII No Show… The corporate tax cut last month was greeted as the biggest market-friendly step in recent years but overseas funds remain indifferent to the government's attempts to revive the economy. Out of the 10 trading sessions since September 20 when finance minister Nirmala Sitharaman announced the stimulus, foreign investors have dumped shares in seven.
Read More Jio's Loss is Rivals' Gain… Reliance Jio's average revenue per user is likely to continue falling for the seventh successive quarter as the Mukesh Ambani-led telco is still largely adding low-value customers, analysts said. Axis Capital estimates Jio's ARPU to decline 3% sequentially to Rs 118 in the September quarter, while incumbents Bharti Airtel and Vodafone Idea are estimated to report modest ARPU gains on quarter to Rs 130 and Rs 109, respectively.
Read More Meanwhile...Chinese officials are signaling they're increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump, ahead of negotiations this week that have raised hopes of a potential truce. Chinese officials suggest a broad pact is off the table, while the US President still insists any deal has to be '100% for us'. Vice Premier Liu He, who will lead negotiations for China, said his offer to the US would not include commitments on reforming Chinese industrial policy or subsidies.
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