Indian economy faced abrupt slowdown in 2019; it's not in recession: IMF MD

Kristalina Georgieva said India had undertaken some important reforms that over the longer term would be beneficial for the country, but they do have some short-term impact.

The Indian economy experienced some abrupt slowdown in 2019 due to turbulence in non-banking financial institutions and major reform measures such as GST and demonetisation, but it is not in a recession, IMF Managing Director Kristalina Georgieva has said.

"The Indian economy indeed has experienced an abrupt slowdown in 2019. We had to revise our growth projections, downwards to four percent for last year. We are expecting 5.8 per cent (growth rate) in 2020 and then an upward trajectory to 6.5 percent in 2021," Georgieva told a group of foreign journalists here on Friday.

"It appears that the main reason for this slowdown was the non-banking financial institutions experiencing a turbulence," she said on the eve of Union Finance Minister Nirmala Sitharaman presenting the annual budget in Parliament on Saturday.

She said India had undertaken some important reforms that over the longer term would be beneficial for the country, but they do have some short-term impact.

ALSO READ: Budget 2020 LIVE updates

"For example, coming with the unified tax system, and the demonetisation that took place. These are steps that over time are beneficial, but of course they might, might be somewhat disruptive over short term," Georgieva said in response to a question.

The International Monetary Fund (IMF) Managing Director said that there is not a lot of fiscal space in India. But we also recognise that the policies of the government on that side, on the fiscal side have been prudent. We will see how the reading of the budget, the submission of the budget goes, tomorrow, she said.

In the medium-term, she said, the IMF remains optimistic about India. This is why we see that upswing potential for the growth in the country, she said.

Georgieva said that the current economic slowdown cannot be described as a recession. "No.... You're far from that. But it is a significant slowdown, not the recession," she said.

The IMF managing Director noted that the consumption in India also slowed down and that contributed to the overall slowdown in the economy. The IMF would be keen to see what India does to get relatively sound macroeconomic fundamentals to pay off in terms of better growth trajectory, she said ahead of the budget.

Economic Survey 2019: Rs 2-trn Smart City Mission projects underway

The Survey noted that about 1,290 projects worth Rs 22,569 crores have been completed and are operational.

The government's Smart City mission seems to be moving smoothly with the Economic Survey on Friday suggesting that under the initiative, more than 5,000 projects worth more than Rs 2-trillion were under different stages of implementation in 100 cities across the country.

The Survey noted that in all the target cities, Special Purpose Vehicles (SPVs) have already been incorporated while City Level Advisory Forums (CLAFs) and Project Management Consultants (PMCs) have been set up.

"Since the launch of the mission, 5,151 projects worth more than Rs 2-trillion are at various stages of implementation in the 100 cities," the Survey said.

As on November 14, 2019, 4,154 SCM projects worth Rs 1.49-trillion (72 per cent of the total proposals) have been tendered, out of which 3,359 projects worth Rs 1.05-trillion (51 per cent of total proposals) have been issued work orders.

Additionally, about 1,290 projects worth Rs 22,569 crores have been completed and are operational.

Breaking down the developments in creating smart cities across the length and breadth of the country, the Survey said that smart command and control centres worth Rs 4,135 crore have been completed in 26 cities.

As many as 51 smart water works worth Rs 2,136 crore have been completed, 127 smart road projects worth Rs 1,784 crore have been completed and 39 smart solar projects worth Rs 204 crore have been completed under the Mission, it said.

The Smart Cities Mission was launched on June 25, 2015. The first list of 20 cities announced on January 28, 2016. The fast tracklist of 13 cities was announced on May 24, 2016. The second list of 27 cities was announced on September 20, 2016. The third list of 30 cities announced on June 23, 2017, and the final list was announced in January 2018.

Under the mission, the Centre allocates Rs 500 crore to each of the cities for implementing projects proposed by it. This amount is matched with a grant of the same amount by the respective state.

Budget 2020: IT sector for wider use of artificial intelligence in economy

AI is expected to have a huge impact not only in commerce, but also in health, national security, cybersecurity, food security, education and global warming.

Budget 2020 : With disruptive technologies like Artificial Intelligence (AI) driving businesses, the IT sector wants the Union Budget for fiscal 2020-21 to ensure greater use of these to spur a sluggish economy among other measures for the sector, industry experts said on Friday.

"The budget should announce a fund like Singapore's Temasek that will invest only in early-stage Indian AI start-ups and lower long-term capital gain's tax for investing in AI-based firms," digital intelligence firm Germin8 founder chief executive Ranjit Nair told IANS.

With the US and China racing ahead of India in AI research, AI entrepreneurship and government investment in AI, he said the budget should make it easier for start-ups to access capital, as they face an uphill task in early-stage funding.

"The government bring policies that encourage AI companies. Ease of doing business means less bureaucracy so that entrepreneurs can build solutions without distractions," he said.

AI is expected to have a huge impact not only in commerce, but also in health, national security, cybersecurity, food security, education and global warming.

"The government should announce AI challenges, which make academia and industry solve an important problem in the country. The state's role should give a crisp problem definition, provide access to data and provide a good cash prize," Nair said.

Though thousands of engineering graduates pass out every year across the country, India is behind other nations in AI PhDs and AI research. Hence, the budget should allot more grants for AI research and offer incentives to institutes investing in AI training, he added.

Noting that IT was one of the few sectors that remained growth-driven despite the eonomic slowdown since the last fiscal, Cigniti Technologies chairman C.V. 

Subramanyam said the budget should give relief or reduce dividend distribution tax (DDT) for IT firms operating in the country.

Where's FM Sitharaman, asks Opposition as PM Modi holds pre-Budget meet

Bhupender Yadav and Arun Singh, and party's spokesperson on economic affairs, Gopal Krishna Agarwal were among those who attended the meeting.

Union Budget 2020 Expectations : Around a similar time Prime Minister Narendra Modi met market analysts and others for pre-Budget proposals, Finance Minister Nirmala Sitharaman on Thursday independently associated with Bharatiya Janata Party (BJP) pioneers, offering ammo to the Opposition to assault her nonattendance from the occasion.

"What is happening here? Account Minister incapacitated?" Congress pioneer Shashi Tharoor said in a tweet that shows photo of the PM's gathering. "Where is the fund serve? Or then again has the pair (Modi and home pastor Amit Shah) overlooked they have one," he tweeted.

The fund clergyman's office answered: "Sir, the pastor has just met financial specialists on December 20 as a piece of the pre-Budget interviews." At its connection with Sitharaman at the gathering's national base camp toward the evening, the BJP communicated certainty that a "star individuals" Union spending will be displayed on February 1.

The BJP, under the authority of general secretary (association) B L Santhosh, had held month-long interviews with various partners on the Budget. Sitharaman held four rounds of gatherings with BJP pioneers for their input from the discussions.

BJP working president JP Nadda, general secretaries Santhosh, Bhupender Yadav and Arun Singh, and gathering's representative on financial undertakings, Gopal Krishna Agarwal were among the individuals who went to the gathering.

The four gatherings went to by Nirmala Sitharaman, included one each with office bearers, spokespersons, and functionaries of different "morchas".

"Executive Modi has been running an administration committed to individuals' welfare. This is the plan of the legislature and that of the gathering too," Singh said.

The BJP has been holding a progression of gatherings with different partners, including business pioneers, rancher bodies, and worker's guilds, as a feature of its for every spending discourse, Agarwal said.

The thought behind these gatherings is to look for recommendations for the spending limit from business pioneers, rancher associations, worker's organizations and expert bodies, for example, ICAI and others, he said.

Agarwal said 11 gatherings had been arranged, out of which seven have just been held at the gathering office. "One gathering for every particular area is being held, and the report of each gathering is being submitted to the gathering's working president J P Nadda," he said.