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China’s economy is besieged with several problems currently, which have had adverse repercussions for the global growth too. The rebalancing towards domestic consumption from an export and investment-led growth path has not been as successful as was planned. Elsewhere, in the last few months, Central Banks of three emerging economies viz. Indonesia, Turkey and Brazil have gone against the tide in raising interest rates to support their currencies and curb inflationary pressures. We discuss this in detail in the section on Global Trends in this month’s issue of Economy Matters.
In the section on Domestic Trends, we discuss the progress of the monsoons so far, given its importance in shaping the domestic growth outlook. Additionally, the fiscal situation in the first-half of the current fiscal is also scrutinized.
In Corporate Performance, we examine the financial performance of firms in the first quarter of the current year, in order to decipher the evolving trends.
The Sectoral spotlight for this issue is on Textiles, one of the leading sectors of the Indian economy. It contributes significantly to the industrial output, employment generation and foreign exchange earnings in India. However, currently, the sector is facing challenges due to various issues related to FTAs, technology, labour and power that are crucial for its growth. We discuss the sector’s challenges and suggest measures to bolster its output.
In the Special Article, we discuss the benefits and concerns emanating from the promulgation of an ordinance on National Food Security by the government. The ordinance provides a legal entitlement to persons belonging to specified households to receive specific quantities of food grains at subsidised prices from the state. If implemented properly, the ordinance will address the concerns on hunger and malnutrition. However, there are some serious challenges to its implementation. Some of the challenges are in terms of distribution and logistics, rising food subsidy outgo, and increasing food inflation. How well the government is able to address these challenges will be critical in scripting the success of the National Food Security Ordinance.