Farm loan waivers to shave off GDP by 0.7%: Economic Survey Vol-2

Cut in states' capital expenditure and higher borrowings to weigh on growth

by Manasi Swamy

Farm loan waivers are expected shave off India’s GDP by 0.7 per cent or Rs.1.1 trillion, as per the vol-2 of Economic Survey released yesterday. The survey assumes that most states will follow suit after the announcement of farm loan waivers by UP, TN, Karnataka, Punjab, and Maharashtra and the total waiver would amount to around Rs.2.7 trillion. The waivers would increase the farming community’s net worth by Rs.550 billion, while the states, who will have to cut down on their capital expenditure to accommodate the waivers, will pull down the aggregate demand by Rs.1.9 trillion. The outlook for private investments will stay neutral, as one hand, higher borrowings by the states to finance the waivers may crowd out the private investment, and on the other, reduction in banks’ NPAs would create room for them to lend more to the private sector.

References
1. http://indiabudget.gov.in/es2016-17/echapter_vol2.pdf
CMIE STATISTICS
Unemployment Rate
Per cent
5.5 +0.1
Consumer Sentiments Index
Base September-December 2015
96.1 +0.6
Consumer Expectations Index
Base September-December 2015
96.5 +0.6
Current Economic Conditions Index
Base September-December 2015
95.5 +0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Sep 17 Dec 17 Mar 18 Jun 18
New projects 1.26 1.49 3.43 2.27
Completed projects 1.25 1.16 1.43 0.82
Stalled projects 0.69 0.88 3.41 0.30
Revived projects 0.34 0.24 0.26 0.22
Implementation stalled projects 0.78 0.71 1.92 0.03
Updated on: 22 Jul 2018 8:20PM
Quarterly Financials of Listed Companies
(% change) Sep 17 Dec 17 Mar 18 Jun 18
All listed Companies
 Income 7.9 12.0 10.0 18.9
 Expenses 9.0 13.0 16.8 20.7
 Net profit -18.0 -14.3 -82.1 11.9
 PAT margin (%) 5.5 4.8 1.2 14.9
 Count of Cos. 4,502 4,493 4,288 134
Non-financial Companies
 Income 8.2 13.3 11.5 18.6
 Expenses 8.1 12.3 12.4 21.4
 Net profit -6.1 13.2 -2.6 7.5
 PAT margin (%) 6.2 6.4 6.5 14.4
 Net fixed assets 9.2 11.9
 Current assets 2.9 8.0
 Current liabilities 11.0 10.3
 Borrowings 3.4 1.8
 Reserves & surplus 7.9 7.8
 Count of Cos. 3,461 3,464 3,319 99
Numbers are net of P&E
Updated on: 22 Jul 2018 8:20PM
Annual Financials of All Companies
(% change) FY15 FY16 FY17 FY18
All Companies
 Income 5.6 1.8 5.9 11.6
 Expenses 5.7 1.9 5.9 16.1
 Net profit 0.1 -9.7 25.3 -43.1
 PAT margin (%) 3.0 2.8 3.4 4.3
 Assets 9.5 10.2 7.4 14.3
 Net worth 8.5 11.3 7.6 13.7
 RONW (%) 5.8 4.9 5.8 5.3
 Count of Cos. 26,129 24,412 21,971 368
Non-financial Companies
 Income 4.9 1.0 5.7 9.9
 Expenses 5.0 0.3 6.1 9.2
 Net profit -8.6 19.9 20.2 8.9
 PAT margin (%) 2.0 2.4 3.0 12.1
 Net fixed assets 13.3 17.8 6.6 55.5
 Net worth 7.0 12.1 6.5 10.3
 RONW (%) 4.6 5.1 5.9 15.0
 Debt / Equity (times) 1.1 1.1 1.0 0.3
 Interest cover (times) 1.9 1.9 2.1 8.8
 Net working capital cycle (days) 66 65 62 7
 Count of Cos. 21,306 20,431 18,292 255
Numbers are net of P&E
Updated on: 20 Jul 2018 4:05PM