India’s consumer confidence highest among emerging markets: Credit Suisse

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India’s buoyant consumer sentiment was supported by consumers’ greater confidence in their current and future finances, as well as relatively lower inflation expectations.

India’s consumer confidence is highest compared to other emerging market peers despite the near-term sentiment being adversely impacted by the Centre’s demonetisation move, says a survey.

According to the Credit Suisse Emerging Consumer Scorecard, India has the highest consumer confidence score among the eight emerging markets surveyed — Brazil, China, India, Indonesia, Mexico, Russia, South Africa and Turkey — while China slipped to third place.

India’s buoyant consumer sentiment was supported by consumers’ greater confidence in their current and future finances, as well as relatively lower inflation expectations.

India saw strong improvement in personal finances expectations; a net 47 per cent of the respondents expect the state of their personal finances to improve over the next six months, up from 27 per cent in last year’s survey.

However, only 57 per cent of respondents thought it was a good time to make a major purchase, a sharp drop compared to 80 per cent last year.

“A further 10 per cent of surveyed households have succeeded in entering middle income territory in last three years. This creates a consumer base of 1.25 billion people across eight countries covered, confirming the significance of emerging consumer story and growth opportunity for investors,” said Richard Kersley Head of Global Equity Research Product and Thematic Research at Credit Suisse.

The report said combined effect of demonetisation and GST will help to drive the adoption of non-cash payment modes by consumers and will likely lead to acceleration in the switch to consumption of branded goods.

The government in November last year had announced the demonetisation of Rs 500 and 1,000 currency notes to crack down against black money and terror financing.

The survey also said, as the emerging market consumer has developed, local brands are increasingly  gaining leading market share in lucrative consumer segments previously the preserve of large global brands owned by Western multinational companies.

Source: http://economictimes.indiatimes.com/articleshow/57920862.cms

India giving World Bank all evidence of improved ease of doing business

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India is providing detailed evidence to the World Bank on ease of doing business as it seeks to break into the top 100 countries on the bank’s index from its current rank of 130.

Officials said logs of construction permits, containerised cargo movement at ports and setting up of a company are being provided to World Bank as part of the Narendra Modi government’s efforts to ensure it does not miss any point to score to improve India’s rank.

World Bank officials had a few queries for the Department of Industrial Policy & Promotion (DIPP) when they met on August 1 after completing field inspection and verification of claims over the 14 parameters on ease of doing business.

While the World Bank does not share its findings, one observation made by its team was that people were carrying paperwork to the offices of the Employees’ Provident Fund Organisation even as registration was made free of all physical touch-points. “We clarified that it is only for claims that one needs to file the papers,” said a senior DIPP official, who did not wish to be identified.

Besides, DIPP is now gathering its own evidence for cases where it feels respondents have not have kept in mind the assumptions made by the World Bank study.

“In case of construction permits the study is limited to warehouses or buildings on the outskirts or setting up of a company parameter is only for domestic enterprises and not how long it takes for a foreign entity,” the official said.

DIPP is taking a proactive approach to provide evidence on its part even after the field investigations have been wrapped by the World Bank team. Final rankings will be announced in October. The ranking considers business environment in Delhi and Mumbai. India compares unfavourably even with countries such as Mexico, which is ranked 38, and Russia, which is at 51. Prime Minister Modi has set a target for India to be in the top 50 in three years.

Specific areas DIPP has targeted are starting business, insolvency procedures, construction permits, ease of trade across borders and electricity connections. According to the department, total number of days required to start a business has been reduced to 12 from 29 in the past year. A team of researchers spent two weeks in Delhi and Mumbai talking to actual users and stakeholders to study and verify implementation of reforms, officials said.

Source : http://economictimes.indiatimes.com/articleshow/53716006.cms

US, Europe combined infra spending less than China’s

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Despite a crying need for better infrastructure, investment in it has actually fallen in 10 major economies since the financial crisis, including the US, according to a new study by the McKinsey Global Institute. Meanwhile, China is still going gangbusters on roads, bridges, sewers, and everything else that makes a country run.

“China spends more on economic infrastructure annually than North America and Western Europe combined,” according to the report published Wednesday.

Economists around the world have been arguing that now is a great time to invest in infrastructure because interest rates are super-low and the global economy could use the spending jolt. “Is anyone proud of Kennedy airport?” Harvard University economist Lawrence Summers likes to ask.

The MGI report cites 10 countries where infrastructure spending fell as a share of gross domestic product from 2008 to 2013: the US, UK, Italy, Australia, South Korea, Brazil, India, Russia, Mexico, and Saudi Arabia. The study counts 11 economies, but that’s because it lists the European Union as a separate entity.

In contrast to the widespread declines, the institute says, infrastructure spending grew as a share of GDP in Japan, Germany, France, Canada, Turkey, South Africa and China. The chart from the MGI report shows China’s strength in infrastructure spending. Its bar is the highest. There’s such a thing as too much infrastructure spending, of course. At current rates of investment, China, Japan, and Australia are likely to exceed their needs between now and 2030, the McKinsey & Co-affiliated think tank says. To fund more public infrastructure, the report favours raising user charges such as highway tolls, among other measures.

To encourage more private investment in infrastructure, MGI argues for increasing “regulatory certainty” and giving investors “the ability to charge prices that produce an acceptable risk-adjusted return.”

 

Source:  http://www.business-standard.com/article/international/us-europe-combined-infra-spending-less-than-china-s-116061600030_1.html