The Core Report #453 Markets Pause After 5-Day Streak
Dec 8, 2024
Shankar Aiyar, a veteran economic journalist and author, shares his profound insights on India’s financial landscape. He discusses the recent pause in market momentum after a five-day surge and speculations about the Sensex reaching 105,000. Aiyar delves into India's rising forex reserves amidst economic turbulence and debates on increasing GST rates for various goods. With a focus on the challenges of currency internationalization, he also critically examines the government’s budgeting strategies and their impact on economic growth.
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Rupee Internationalization
- Internationalizing the rupee could lower cross-border transaction costs.
- However, it may challenge domestic monetary policy stability.
GST Council's Opacity
- The GST Council's processes lack transparency and taxpayer involvement.
- Shankar Aiyar suggests greater transparency and public consultation.
Managing Government Budgets
- Governments should prioritize expenditure control and efficiency.
- They must consider the impact of growth tapering on consumption.