Stagnant Indian Economy To Emerge As Key Campaigning Issue
News : Analysts have warned that the Indian economy has entered a state akin to stagflation, according to Reuters. The first three quarters of 2013 saw economic growth drop below 5% y-o-y , a situation compounded by the fast pace of inflation. The economic situation is expected to become a key campaigning issue in the May 2014 national elections.
BMI View: The Indian central bank received 26 applications for new bank licences on July 1 2013, which will eventually culminate in the first issuance of new permits in more than a decade. Overall, we believe that the entry of new private players in India's banking sector should bode well for its long-run development as the consequent increase in competition fosters a more efficient microenvironment, which is still dominated by poorly performing state-run entities. By most measures, the country remains underbanked and thus opportunity abounds for existing and prospective commercial banks.