HOPES UNDER DISTRESS

US ECONOMY GROWING

US President Barack Obama has credited the turnaround of American economy to the historic reforms in the Wall Street, put in place after the catastrophic financial crisis in 2008. Five years after the catastrophic collapse of the Wall Street, the American economy is growing and the businesses are creating jobs, Obama said yesterday while nominating Timothy Massad to run the Commodity Futures Trading Commission (CFTC). Massad is a Treasury Department official who has overseen the Troubled Asset Relief Program, the bank rescue plan known as TARP. Obama attributed the turnaround to rules that are smarter, tougher and are ruled by common-sense to protect consumers and to end taxpayer-funded bailouts. "Five years later, our economy is growing. Our businesses are creating jobs. Our markets have hit record highs and there's no doubt our financial system is more stable," Obama said. The 2010 financial overhaul law gave the CFTC, an independent agency, the task of laying down rules for oversight of derivatives, the complex instruments traded in a USD 700 trillion worldwide market that had been unregulated and contributed to the 2008 financial crisis.

BETTER GROWTH IN SECOND HALF

India will see "distinctly better" economic growth in the second half of the current fiscal on improvement in manufacturing and good monsoon this season, PMEAC Chairman C Rangarajan said today. "I think it (growth) will happen. For the second half of the year, it will be distinctly better," Rangarajan told reporters on the sidelines of an industry event here. "The impact of the good monsoon will be only seen in the second half. Apart from increasing agricultural production, this will also increase the rural demand," he said at a CII seminar on Financial Inclusion for Reviving Growth. Besides, Rangarajan said, there has been improvement in the manufacturing sector and in the second half of the current fiscal the growth of this sector could be about 3 per cent. "As far as manufacturing is concerned, we have seen some improvement... Going ahead, in the second half of the year, we think that the manufacturing growth rate will be about 3 per cent," he said. "Therefore, for the year (2013-14) as a whole, it will be about 1.5 per cent which will be consistent with an aggregate growth rate of the economy of a little over 5 per cent," he added. The economy grew by 4.4 per cent in the first (April- June) quarter of current fiscal. In 2012-13, the GDP growth fell to a decade low of 5 per cent. Rangarajan said the impact of various measures that the government has taken in the recent past will be seen in the second half only. He also maintained PMEAC's growth projection of about 5.3 per cent which can be achieved with the present trend in the manufacturing. The Prime Minister's Economic Advisory Council had initially projected growth target of 6.4 per cent for 2013-14 which was lowered to 5.3 per cent in September. In reply to a question as to whether India is ready to cope with the financial stress that might arise due to the US fiscal tapering, Rangarajan said: "I think we must get ready for it because we don't know when it will happen. The good news is that the current account deficit is coming down. "In fact the CAD should be much lower than what one had expected. If the CAD come down below 3 per cent of the GDP, the capital flows should be adequate to control the CAD." Finance Minister P Chidambaram said last month that India will be able to contain CAD below USD 60 billion in 2013-14 as against an earlier estimate of USD 70 billion.