Since India’s April-June 2017 (Q1FY18) numbers are printed below market expectations, there has been some discussions whether demonetization is responsible for the low GDP print.
The Indian GDP growth rate came significantly below expectation at 5.7% in the Q1FY18 (Apr-June 2017).
The table below shows the contribution to the GDP growth by type of expenditure.
We estimate Central Fiscal Deficit for April-June 2017 quarter for India to be at approximately 10.75% of the GDP of that quarter. This is because of planned increase in capital expenditure by the central government in that quarter. To maintain the preannounced target of 3.20% of GDP for fiscal deficit for the year April 2017 till March 2018, the deficit for the nine-month period July 2017 till March 2018 should not significantly exceed 0.75% of GDP of that period.
The low inflation print in recent months has raised some important methodological questions. RBI relies heavily on the internal models that it has developed for its inflation forecast and hence for making interest rate decisions.
In one of my previous write ups, I sketched the most likely scenario of India facing deflation pretty soon. In this write up, I will describe various responses that RBI should have to have for this emerging black swan event. (Black Swan as far as markets and policy makers are concerned.)
In response to one of my previous blogs, some readers privately raised questions as to why I think AI will emerge spontaneously. Here is my detailed reasoning.
The latest reading of Indian CPI came in at 1.54% for June 2017. This is the first time the inflation has breached RBI band of 2% to 6%. I am sure there would be a lot of soul searching going on at offices of many authorities as to what it means.
In this note we will see how behavior of RBI in recent years is proving a relative impediment to economic growth.
Nearly all futurists, who think about technology, agree that singularity is between half a generation to two generations away from today. Most of them, except notably Ray Kurtzweil, think that a superintelligent AI will be as indifferent to the needs and aspirations of humans just the way we humans are indifferent to those of ants.
Recently, I became aware of a philosophical topic “The Repugnant Paradox” via an excellent YouTube Video http://bit.ly/2tWEgf5. A more technical description of the paradox can be found at http://stanford.io/2tAbE9a.
Across the world, AI is the talk of town for last two years or so. This area of enquiry is making significant strides day by day, covering more and more ground, and will catch up with animal level intelligence sooner rather than later.
Recently, our Head of Talent Management pointed out to me that AI applications, mainly chatbots, seem carry the same biases that humans display.
In my blog report published on the website of Decimal Point Analytics on 14th March 2011, I had posited that Jasmine Revolution (Arab Spring) is indicative of slow emergence of collective human consciousness, enabled by the Internet, while the problems in the Eurozone currency area at that time are indicative of the fact that our collective consciousness is not at the same level as that of a colony of honeybee.