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State of economy a cause of extreme concern: Congress

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The Congress on Saturday said that state of the Indian economy is a cause of extreme concern as the foreign exchange has depleted by $36 billion, calling for a re-set of the economic policies.

Stating that in the ongoing ‘Chintan Shivir’ the state of the economy featured prominently in the deliberations, the convenor of the committee on economy P. Chidbambaram told a press conference: “There are 60 members in our group. Yesterday, 37 members expressed their views over four hours. The discussions will continue today and tomorrow.”

The party has concluded that the state of the Indian economy is a cause of extreme concern. A slower rate of growth has been the hallmark of the present government in the last eight years. The post-pandemic recovery has been indifferent and halting. The growth estimates of 2022-23 have been lowered from time to time in the last five months.”

It said that the inflation has risen to unacceptable levels, and threatens to rise further. WPI inflation is at 14.55 per cent and CPI inflation is at 7.79 per cent.

“The government is actually fueling the rise of inflation by its wrong policies, especially through high taxes on petrol and diesel, high administered prices and high GST tax rates,” Chidambaram said.

The party, in its deliberations, said that the job situation has never worse. The Labour Force Participation Rate (LFPR) is at a historic low of 40.38 per cent and the unemployment rate stands at 7.83 per cent.

“We reiterate our charge that social services expenditure as a proportion of total expenditure has fallen to an average of 5 per cent (in 8 years) from an average of 9 per cent in the 10 years between 2004 and 2014,” he added.

Chidambaram asserted that the external situation has added to the pressures on the economy and the government appears clueless on the ways to deal with these development as: “$22 billion has flowed out of the country in the last seven months. The foreign exchange reserves have depleted by $36 billion. The exchange rate stands at Rs 77.48 to a dollar, the highest ever.”

He said that the Congress-led government ushered in a new era of liberalisation in 1991. The country has reaped enormous benefits in terms of wealth creation, new businesses and new entrepreneurs, a huge middle class, millions of jobs, exports and lifting 27 crore people out of poverty during a 10-year period. After 30 years, it is felt that taking into account global and domestic developments, it may be necessary to contemplate a re-set of the economic policies.

The party said that re-set of economic policies must also address the questions of rising inequalities, extreme poverty among the bottom 10 per cent of the population, India’s rank in the Global Hunger Index 2021 (101 out of 116 countries) and evidence of widespread nutritional deficiency among women and children and a comprehensive review would also be justified by the health and education outcomes as revealed by the Annual State of Education Report 2021 (ASER 2021) and the National Family Health Survey-5 (NFHS-5).

Over 400 Congressmen and women have assembled in Udaipur to reflect on the state of the country, the political situation, the state of the economy, the role of political parties, the organisational strengths and weaknesses of the Congress party among other issues.

Business

Indian stock market ends holiday-shortened week on positive note

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Mumbai, Oct 4: The Indian equities closed the holiday-shortened week with a positive bias after recent corrections as investors’ confidence was reinforced with the RBI’s growth stance, analysts said on Saturday.

On Friday, Sensex ended the session at 81,207.17, up 223.86 points or 0.28 per cent. Nifty closed at 24,894.25, up 57.95 points or 0.23 per cent. The Nifty extended its pullback for the second straight session, crossing above its key 50-DMA at 24,830 and forming a bullish candle on the daily chart. After last week’s steep decline, the index displayed signs of recovery by closing above the 24,800 mark.

According to market watchers, upgrading the FY26 GDP growth forecast by the RBI to 6.8 per cent and announcing landmark reforms led to outperformance in the banking sector.

“Metals continued their upward momentum, supported by optimism over an anticipated Fed rate cut in October, a softer dollar index, and steady base metal prices,” said Vinod Nair, Head of Research, Geojit Investments Ltd.

Meanwhile, gold extended its safe-haven appeal, while silver rose on the back of strong industrial demand and supply-side constraints.

Consumer-facing sectors gained momentum on expectations of festive demand, whereas IT and pharma lagged amid the lack of progress on the US-India trade pact, said analysts.

According to a note by Bajaj Broking Research, benchmark indices ended the truncated week on a positive note, posting gains of nearly 1 per cent.

PSU bank stocks were another major contributor, with the Nifty PSU Bank index climbing over 4 per cent for the week. In Friday’s session, metals, PSU banks, and consumer durables led the gains, each rising between 1 per cent and 2 per cent.

Bank Nifty continue to demonstrate notable strength over the past 3-4 sessions. The formation of a bullish candle with a higher high and higher low in the daily chart signals continuation of the positive momentum underpinned by strength in large cap banking stocks.

Looking ahead, market momentum is expected to be supported by strong H2 FY26 earnings and seasonal demand tailwinds, though global trade developments and US policy actions could inject short-term volatility, said analysts.

The Fed’s recent 25-bps rate cut, coupled with prospects of further easing, is likely to bolster FII inflows into emerging markets, they added.

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India’s growth firmly anchored in domestic factors amid global volatility: FM Sitharaman

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New Delhi, Oct 3: We are in an era of an unprecedented global volatility where rules of international engagement are being rewritten, but India’s growth is firmly rooted in domestic factors and the country’s capacity to absorb global shocks is strong, Finance Minister Nirmala Sitharaman said here on Friday.

She highlighted that India’s robust domestic factors minimise impact of global uncertainties.

“We are in a shifting global landscape which resembles a zero-sum approach. Indian economy is resilient and continues to grow sustainably,” FM Sitharaman said while delivering an inaugural address at the ‘Kautilya Economic Conclave 2025’ in the national capital.

“By 2047, becoming Viksit Bharat by self reliance does not mean we wish to be a closed economy. We have to reach 8 per cent GDP growth to get to the goal for a developed nation,” she told the gathering.

According to the Finance Minister, we cannot afford to be passive spectators in today’s era.

“We must be active participants. Nations need to make choices between new monetary architecture. No nation can insulate itself from systemic changes, we must prepare to engage with them. Tariffs, sanctions and decoupling strategies are reshaping supply chains. International institutions need to reflect today’s realities,” she stressed.

Finance Minister further stated that what we face is not a temporary disruption but a structural transformation.

“The scale of challenge is too big. We will be understating the challenge at hand; it is structural transformation,” she said.

“The world as a whole is looking to come out of uncertainty, the global order is shifting. The world that emerged out of cold war and pushed for globalisation seems to be a thing of the past. Rules of international engagement are being rewritten,” she mentioned.

FM Sitharaman pointed out that the global order is shifting, with multilateral institutions currently undermining confidence in the international community. She cited the recent G20 discussions, where experts deliberated on the need for reforms in multilateral institutions to restore stability.

Highlighting India’s twin-track approach, the finance minister said the nation aims to simultaneously attain developed economy status by 2047 and strengthen self-reliance, clarifying that self-reliance does not imply pursuing a closed economy.

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Sensex, Nifty open lower over sustained FII selling

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Mumbai, Oct 3: The Indian benchmark indices opened with mild losses on Friday due to sustained FII selling, despite positive global cues and market optimism driven by the Reserve Bank of India’s dovish pause.

As of 9.20 am, the Sensex was down 191 points, or 0.24 per cent at 80,792 and the Nifty declined 56 points, or 0.23 per cent at 24,780.

The broad cap indices, Nifty Midcap 100 and Nifty Smallcap 100, inched up 0.22 and 0.14 per cent respectively. Tata Steel, Axis Bank, Kotak Mahindra Bank, Tata Motors and Asian Paints were among major gainers on the Nifty pack, while losers included Max Healthcare, Bajaj Finance, Shriram Finance and ICICI Bank, among others.

Among sectoral indices, Nifty Metal, the top gainer, advanced 0.89 per cent. Nifty PSU Bank (up 0.59 per cent) and Nifty Pharma (up 0.30 per cent) were other major gainers. Nifty Media and Nifty FMCG were the top losers down 0.65 per cent and 0.45 per cent respectively.

Analysts said that from a technical perspective, a sustained move above 24,900 could pave the way for a rally toward 25,000 and 25,150. The immediate support is placed at 24,750 and 24,600, which may act as potential entry points for long trades.

The US markets ended in the green zone overnight, as Nasdaq edged up 0.39 per cent, the S&P 500 added 0.06 per cent, and the Dow moved up 0.17 per cent in the last trading session.

Asia-Pacific markets mostly rose Friday, tracking Wall Street gains as investors shrugged off the US government shutdown. Investors are waiting to see how long the shutdown will last to assess the gravity of its economic repercussions.

While China’s Shanghai index added 0.52 per cent, and Shenzhen advanced 0.35 per cent, Japan’s Nikkei added 1.44 per cent, while Hong Kong’s Hang Seng Index declined 0.84 per cent. South Korea’s Kospi added 2.70 per cent.

Analysts said that the central bank’s bold initiatives to boost credit growth in the economy can positively sustain the momentum in the market, particularly in Bank Nifty. However, the sustained selling by FIIs in the market is unlikely to sustain this momentum.

FIIs are likely to further accelerate selling since the market construct provides them the opportunity to sell aggressively. Robust buying from DIIs can provide some support to the market, particularly in large-cap auto stocks, which have strong fundamental support now, they added.

In the last trading session on Wednesday, foreign institutional investors (FIIs) sold equities worth Rs 1,605 crore, while domestic institutional investors (DIIs) were net buyers of equities worth Rs 2,916 crore.

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