TMS Ep90: Two-wheelers, informal sector, markets, Fiscal Deficit

Riding high on nostalgia, Classic Legends recently relaunched the iconic Yezdi motorcycle. The Mahindra Group-backed company hopes to make a cut into the mid-size motorcycle segment, with an eye on the affluent class. But what about the other sections of population for which bike is a necessity? The sales of two-wheelers plunged to lowest in nine years in 2021. Does the trend reflect the declining purchasing power of people in the middle and lower income group? 

The impact of pandemic was a tad more devastating for the informal sector. Even the ruling BJP, which is facing elections in five states next month, has in a way acknowledged it. Its representatives raised this concern with Union Finance Minister Nirmala Sitharaman this week and asked her to extend support to the informal sector and MSMEs in the upcoming Union Budget. We take a peek into the condition of this sector which accounts for over 45% of country’s economic activity. 

Spooked by the pandemic, markets too are keenly awaiting the budget. After two straight days of bear hammering, equity markets may stabilize today. The BSE Sensex is holding the 60,000-mark while the Nifty50 is just above 17,900 level. Now, a sharp move on either side could be triggered by the earnings report card of index heavyweight Reliance Industries. The Mukesh Ambani-led company is set to announce its Q3 results on Friday, and analysts have extremely optimistic earnings expectations from two key segments.

Equity markets will have a reason to cheer if the government reins in its fiscal deficit target at 6.25% of gross domestic product, a recent survey claimed. So as the government presents the Union budget on February 1, all eyes will be on the fiscal deficit. It is the difference between its earnings and expenditure. Find out how the fiscal deficit is calculated, how the government manages it and more in this episode of the podcast.
 

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