India’s Growth Numbers “Overstated,” Says US, Modi Surprises With Govt Overhaul And Other News

Over optimistic? India’s 7.6 percent growth rate, which makes it the fastest-growing major economy in the world, may be “overstated,” the US state department said. The Modi government has been slow to follow-up on its “rhetoric” on economic reforms, it added. Specifically it has pointed to the failure to pass through the land reform bill and the GST tax bill through Parliament. Part of the reason may be the new GDP data series that has confused a lot of economists and still raises questions in the mind of investors. The US government is not alone. Just last weekend, Morgan Stanley’s chief global strategist Ruchir Sharma said pretty much the same thing, and added that more private investment is needed to bring about the kind of growth numbers India is targeting and pointed to high inflation that may cripple growth too.

“I have always said about India, this is a country which always disappoints the optimist and pessimist,” he said.

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Government Reshuffle: So the long awaited government reshuffle is done and there are quite a few big changes in there. For starters, human resources minister Smriti Irani has moved into textiles (not a surprise, considering the student revolt of last year happened during her tenure), and junior finance minister Jayant Sinha has moved into aviation (big surprise as this Harvard educated former investment banker was seen as a good fit into finance). Clearly, the Modi government has one eye on the all-important Uttar Pradesh elections early next year. This report talks about the behind-the-scene thinking in the rejig, and this report lists out the challenges before the new ministers.

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“Messi” business: While football fans read in disbelief that their idol Lionel Messi was convicted of tax fraud, there was some company executives who were scratching their heads thinking about what to do next. Tata Motors, which recently signed a two year endorsement deal with the player for its Tiago hatchback car, may have to rethink its agreement after the conviction. Last week, the company said Messi’s retirement from international football will make no difference to the deal, but this is a different cup of tea.

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#Stat

18.8%: The growth in Indian passenger domestic air traffic in 2015, the fastest in the world, according to IATA.

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Sweet success: It only took eight years. Ferrero India, the maker of Kinder Joy chocolates and Nutella chocolate-hazelnut spread has overtaken Nestle to become the second biggest maker of chocolates in India. They are both still way behind industry leader Mondelez, which sells the Cadbury’s brand of chocolates, at about a sixth of its revenue.

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Consolidate some more: Vodafone Plc is the front-runner to buy out Nordic telecom company Telenor’s India operations as tough competition and rising costs make it harder for smaller operators to make money.

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Cover Image: The new Team Finance. FinMin Arun Jaitley flanked by his new ministers Santosh Kumar Gangwar (R) and Arjun Ram Meghwal. Gangwar is already batting for GST and Meghwal (L), who famously rode a bicycle to Parliament, is talking up growth.

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