IMF advises India to adopt Universal Basic Income

Expects elimination of food and fuel subsidies

by Arjit Singh Bhambra

The IMF, in its report Fiscal Monitor, has suggested that India should adopt a fiscally neutral universal basic income and eliminate the food and fuel subsidies.The fund has proposed a transfer of Rs.2,600 (in 2011-12 prices) to every Indian’s account. It believes that the concept, if implemented, will provide a better alternative to the existing inefficient and inequitable state subsidies by increasing the coverage of lower income groups by 20 per cent. However, eliminating energy tax subsidies will substantially increase the fuel taxes and retail fuel prices for petrol (67 per cent), diesel (69 per cent), kerosene (10 per cent), LPG (94 per cent), and coal (455 per cent). The IMF has also cautioned against the prevailing weakness in Indian banks and highly leveraged corporate sector which makes the country vulnerable to a tightening in global financial conditions.

References
1. http://economictimes.indiatimes.com/news/economy/finance/india-could-provide-universal-basic-income-of-rs-2600-a-year-imf/articleshow/61044592.cms
2. http://www.livemint.com/Politics/84BvOY2cNh282ZYfNB1fKI/IMF-backs-UBI-serves-up-a-political-opportunity-for-NDA.html
3. http://economictimes.indiatimes.com/news/economy/indicators/weak-banks-and-corporates-leave-india-vulnerable-imf/articleshow/61040305.cms
CMIE STATISTICS
Unemployment Rate
Per cent
4.5 -0.1
Consumer Sentiments Index
Base September-December 2015
96.5 +0.2
Consumer Expectations Index
Base September-December 2015
95.7 0.0
Current Economic Conditions Index
Base September-December 2015
97.8 +0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Dec 16 Mar 17 Jun 17 Sep 17
New projects 2.33 3.84 2.07 1.03
Completed projects 1.01 1.94 1.16 1.00
Stalled projects 1.14 0.73 2.67 0.67
Revived projects 0.18 0.67 0.30 0.29
Implementation stalled projects 0.83 0.33 0.68 0.62
Updated on: 16 Dec 2017 8:20PM
Quarterly Financials of Listed Companies
(% change) Dec 16 Mar 17 Jun 17 Sep 17
All listed Companies
 Income 6.2 10.2 9.8 8.2
 Expenses 6.3 11.9 10.0 9.5
 Net profit 40.2 16.0 -19.6 -18.1
 PAT margin (%) 6.0 6.0 5.3 5.6
 Count of Cos. 4,509 4,444 4,325 4,177
Non-financial Companies
 Income 5.9 11.8 10.4 8.1
 Expenses 7.2 15.6 10.6 8.1
 Net profit 24.5 -2.3 -25.0 -5.4
 PAT margin (%) 6.2 6.2 5.2 6.4
 Net fixed assets 6.9 9.3
 Current assets 2.7 79.6
 Current liabilities 8.8 10.0
 Borrowings 4.8 10.6
 Reserves & surplus 6.3 5.3
 Count of Cos. 3,484 3,440 3,358 3,245
Numbers are net of P&E
Updated on: 16 Dec 2017 8:20PM
Annual Financials of All Companies
(% change) FY14 FY15 FY16 FY17
All Companies
 Income 10.0 5.2 1.1 6.7
 Expenses 9.9 5.2 1.2 6.9
 Net profit -2.3 1.4 -13.1 20.6
 PAT margin (%) 3.2 3.2 2.9 6.4
 Assets 12.3 9.4 9.7 8.6
 Net worth 9.6 8.7 10.6 7.9
 RONW (%) 6.2 6.1 5.1 9.2
 Count of Cos. 24,045 23,818 20,791 4,756
Non-financial Companies
 Income 9.7 4.3 0.1 6.7
 Expenses 9.3 4.5 -0.6 7.5
 Net profit -2.7 -5.8 11.6 14.6
 PAT margin (%) 2.2 2.1 2.6 6.3
 Net fixed assets 11.6 13.3 15.5 7.3
 Net worth 8.1 7.1 11.0 6.3
 RONW (%) 5.1 4.9 5.4 10.3
 Debt / Equity (times) 1.1 1.1 1.1 0.7
 Interest cover (times) 2.0 1.9 2.0 3.4
 Net working capital cycle (days) 69 67 66 49
 Count of Cos. 19,288 19,270 17,281 3,624
Numbers are net of P&E
Updated on: 04 Dec 2017 11:59AM

Data added for HPI at Assessment prices and HPI at Market prices