India with 2nd Stimulus Plan in a Month

Take that Obama! 2 stimulus plans in 1 month. Singh! Singh! Singh! (not quite so fun to chant as 'O-bam-a') I'm watching India just because it appears no one else does, in their love affair with all things China. Plus the banks are kicking tail of late [Dec 29: India Banks Perking my Interest from a Technical Viewpoint]- another +7% each on Friday.

• India will announce its second stimulus package in a month today to counter the impact of a global recession on Asia's third-largest economy.
• The government cut excise duty and added 200 billion rupees ($4 billion) of spending for roads, ports and infrastructure last month. Prime Minister Manmohan Singh, seeking re-election before May, wants to boost consumption as a decline in exports forces companies to reduce production and fire workers.
• ``The manufacturing sector continues to show falling output on the sharp downturn in foreign demand,'' said Gaurav Kapur, senior economist at ABN Amro Bank in Mumbai. ``The weaker financial and economic conditions worldwide negatively impacted both confidence and demand.''
• India's government is working on more measures to help exporters and labor-intensive industries, Trade Minister Kamal Nath said Dec. 11, without elaborating. Exporters have cut about 65,500 jobs as recessions in the U.S. and Europe, the nation's biggest markets, damped overseas demand. Industrial production fell 0.4 percent in October, the first decline in 15 years, and exports plunged 9.9 percent in November after falling for the first time in seven years the previous month.
• Manufacturing contracted for the second consecutive month in December, according to a survey by ABN Amro. The Dutch bank's Purchasing Managers' Index declined to 44.4 compared with 45.8 in October, according to a report released today. A reading below 50 indicates factory output is declining. (this is actually far better than China)
• Still, any additional spending plans are constrained by an increasing shortfall in government revenue as the economy slows. (why is that a constraint? Follow the US model - print more money and run bigger deficits - works like a charm) Last month's stimulus package and other off-budget spending plans, including higher salaries for government workers, oil subsidies and farm-loan waivers, are likely to widen the fiscal deficit to ``at least 5 percent'' of gross domestic product in the current financial year, Arvind Virmani, the finance ministry's top economic adviser said Dec. 23.
• Weakening output and overseas sales will slow the pace of growth in India. South Asia's biggest economy may expand as little as 7 percent in the year to March 31, down from 9 percent or more in the previous three years, the government said Dec. 23. India's economy expanded 7.6 percent in the three months to Sept. 30 from a year earlier, the slowest pace since 2004. (we'll see)

Still looking at those banks to enter...