As per our recent posts, things are getting accurate with regard to tax policies and unforeseen monsoon messing it up with Indian economical pace. Yes, Indian export oriented farmer has so much agony to worry. It is already started having adverse impact on its agricultural production as seasonal rainfall has been brutal as per IMT's (Indian meteorological department) declaration, quantitatively seasonal rainfall is expected to be unusual and be diminished.
According to our projections, it will have toll of 0.50 % on GDP bringing the forecast to 7.9% for fiscal 2016 if the IMT's guidance finds to be true. A weak monsoon will undoubtedly cut the efficiency of irrigation to hit the agricultural output and farmers adversely. Probably affected crops in turn are indicating decline in exports. The Indian Meteorological Department (IMD) on Wednesday had mentioned "the country is likely to witness a "below normal" monsoon this season because of the El Nino phenomenon." In addition to this, more distressingly the businessmen in India are about to suffer from the new GST (Goods & Service tax) bill which is yet to be taken out in parliament shortly and roll out in 2016.
We could foresee the slump in rupee on likely events of tepid export growth, fragile investment situations and weaker consumption and now in addition a failure in normal monsoon which is crucial to drive the economic growth this year. On the contrary, other major hard currencies except EUR look very lucrative. An audacious call with sensible optimism, one can go long on futures of major hard currencies against INR but except EUR. Currently, spot INR is trading at 67.6869 vs EUR, 63.2064 vs USD and 94.9791 vs GBP.
