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Asia and Pacific > India

You are looking at 1 - 10 of 17 items for :

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Cover IMF Working Papers
Corporate Sector Resilience in India in the Wake of the COVID-19 Shock
Lucyna Gornicka
,
Ms. Sumiko Ogawa
, and
Ms. TengTeng Xu
To assess the resilience of India’s corporate sector against COVID-19-related shocks, we conducted a series of stress tests using firm-level corporate balance sheet data. The results reveal a differential impact across sectors, with the most severe impact on contact-intensive services, construction, and manufacturing sectors, and micro, small, and medium enterprises. On policy impact, the results highlight that temporary policy measures have been particularly effective in supporting firm liquidity, but the impact on solvency is less pronounced. On financial sector balance sheets, we found that public sector banks are more vulnerable to stress in the corporate sector, partly due to their weaker starting capital positions. When considering forward-looking multiperiod growth scenarios, we find that the overall corporate performance will depend on the speed of recovery. A slower pace of recovery could lead to persistently high levels of debt at risk, especially in some services and industrial sectors.
Keywords:
balance sheet data; micro firm; firm liquidity; firm's equity; firm's ability; manufacturing firm; Stress testing; Corporate sector; COVID-19; Financial statements; Solvency stress testing; Global
Cover IMF Working Papers
A Sentiment-Enhanced Corruption Perception Index
Yongquan Cao
,
Ms. Yingjie Fan
,
Sandile Hlatshwayo
,
Monica Petrescu
, and
Zaijin Zhan
Direct measurement of corruption is difficult due to its hidden nature, and measuring the perceptions of corruption via survey-based methods is often used as an alternative. This paper constructs a new non-survey based perceptions index for 111 countries by applying sentiment analysis to Financial Times articles over 2005–18. This sentiment-enhanced corruption perception index (SECPI) captures not only the frequncy of corruption related articles, but also the articles’ sentiment towards corruption. This index, while correlated with existing corruption perception indexes, offers some distinct advantages, including heightened sensitivity to current events (e.g., corruption investigations and elections), availability at a higher frequency, and lower costs to update. The SECPI is negatively correlated with business environment and institutional quality. Increases in the perceived incidence or scope of corruption influences economic agents’ behaviors, and thus economic dynamics. We found that when the SECPI is at least one standard deviation above the mean, the growth per capita falls by 0.65 percentage point on average, with more pronounced impacts for emerging market and low income countries.
Keywords:
sentiment analysis method; perception index; statistic department; articles' sentiment; summary statistics; Corruption; Emerging and frontier financial markets; Business environment; Global
Cover IMF Working Papers
Does the Business Environment Affect Corporate Investment in India?
Kiichi Tokuoka
Since the global financial crisis, corporate investment has been weak in India. Sluggish corporate investment would not only moderate growth from the demand side but also constrain growth from the supply side over time. Against this background, this paper analyzes the reasons for the slowdown and discusses how India can boost corporate investment, using both macro and firm-level micro data. Analysis of macro data indicates that macroeconomic factors can largely explain corporate investment but that they do not appear to account fully for recent weak performance, suggesting a key role of the business environment in reviving corporate investment. Analysis of micro panel data suggests that improving the business environment by reducing costs of doing business, improving financial access, and developing infrastructure, could stimulate corporate investment.
Keywords:
WP; firm; panel data; real GDP; Corporate investment; Business environment; Costs of doing business; Infrastructure; corporate investment; investment function; business cost; investment in India; firm size dummy; Gross fixed investment; Real interest rates; Global
Cover IMF Working Papers
Sources of Corporate Profits in India: Business Dynamism or Advantages of Entrenchment?
Michael Walton
,
Anusha Nath
, and
Mr. Ashoka Mody
Some see India’s corporate sector as the fundamental driver of recent and future prosperity. Others see it as a source of excessive market power, personal enrichment, and influence over the State, with an ultimately distorting influence. To inform this debate, this paper analyses the correlates of profitability of firms listed on the Bombay Stock Exchange, covering a dynamic period-in terms of firm entry and growth-from the early 1990s to the late 2000s. Overall, the results do not provide support for the systematic exercise of market power via the product market. At least for this period, the story is more consistent with a competitive and dynamic business sector, despite the continued dominance of business houses and public sector firms in terms of sales and assets. Those with opposing views can, with justification, argue that our analysis does not cover influences, such as corporate governance and state-corporate relations, which may paint a less flattering picture of the corporate sector’s role. Those broader themes deserve further attention.
Keywords:
WP; business house; profit rate; BSE firm; sales growth; market power; Corporate sector; India; profitability; growth; firm growth; Housing; Business enterprises; Competition; Global
Cover IMF Staff Country Reports
Bhutan: Statistical Appendix
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
Keywords:
ISCR; CR; debt service; capital account; convertible currency; Bhutan Board product; mineral products incl.stone; Bhutan fruit product; handicrafts products incl.; Agricultural commodities; Metals; Business enterprises; Interest payments; Exports; Europe
Cover IMF Staff Country Reports
India: Selected Issues
International Monetary Fund
Despite the external origin of the financial crisis, the potential impact on India’s corporate sector could be large, as India has become increasingly integrated with the global economy in the past decade. The Selected Issues paper discusses India’s economic development and policies. The impact on the corporate sector will in turn feed into India’s overall economic growth. The significant volatility in the exchange equity prices, and interest rates triggered by the global crisis, together with the decline in global economic activity and capital flows, will weight on India’s firms.
Keywords:
ISCR; CR; pass-through; inflation; India; return; debt; government; pass-through elasticity; asset price volatility; volatility matter; flows to India; pass-through elasticities rise; Corporate sector; Debt default; Capital flows; Fiscal rules; Exchange rate pass-through; Global; Asia and Pacific
Cover IMF Working Papers
Financial Development and Growth in India: A Growing Tiger in a Cage?
Ms. Hiroko Oura
This paper examines the efficiency of the different segments of India's financial system using firm-level data on corporate financing patterns. Firms are increasingly relying on external funds to finance their investment in most recent years. Empirical analyses indicate that (1) the financial system in India is not channeling funds into industries with higher external finance dependence; (2) the debt financing system does not allocate funds according to firms' external finance dependence, while equity financing system does; and (3) firms in an industry that are more dependent on external finance grow more slowly.
Keywords:
WP; firm; fund; firm growth
Cover IMF Staff Country Reports
Pakistan: Selected Issues and Statistical Appendix
International Monetary Fund
This Selected Issues paper on Pakistan reports that fiscal adjustment, supported by official and private inflows and debt relief, has led to a substantial improvement in public and external debt indicators. International reserves have recovered close to US$10 billion. Financial sector reforms have resulted in a healthy banking system. With these achievements, vulnerabilities have been greatly reduced, and Pakistan’s prospects look favorable. A continuation of prudent fiscal policies, as anchored by the financial responsibility law, is needed to ensure that debt ratios continue on their downward trajectory.
Keywords:
ISCR; CR; Pakistan; GDP; ratio; investment ratio; coverage ratio; debt situation; investment indicator; SBP data; Corporate sector; Commercial banks; Credit; Market capitalization; Asia and Pacific; Global; South Asia; Africa
Cover IMF Staff Country Reports
Indonesia: Selected Issues
International Monetary Fund
This Selected Issues paper takes stock of the progress made in meeting the objectives under Indonesia’s Extended Arrangements (1998–2003) program. The paper addresses progress in achieving the programs’ core macroeconomic objectives, with an emphasis on how Indonesia’s economic recovery compares with those of the other major Asian “crisis” countries. A major conclusion of the paper is that, while significant progress has been made against many of the key objectives of the arrangements, Indonesia’s overall economic performance has lagged behind others in the region.
Keywords:
ISCR; CR; Indonesia; export; bank; asset; IBRA; export growth; investment climate; export performance; equity ratio; ICRG risk rating; banking assets; Exports; Export performance; Commercial banks; Loans; Legal support in revenue administration; Global; Asia and Pacific; Europe
Cover IMF Working Papers
Overview of the Indian Corporate Sector: 1989-2002
Petia Topalova
This paper uses firm-level data to examine the performance of India's nonfinancial corporate sector since 1989 and evaluate its financial vulnerabilities. While promising trends in liquidity, profitability, and leverage of the sector emerged in the early 1990s, they experienced a reversal after 1996. Nonetheless, most indicators were still at comfortable levels, and there is evidence of improvement in 2002, the last year in our sample. However, a number of firms still face problems servicing their debt obligations, posing a risk to lenders. In particular, the aggregate interest coverage of the corporate sector indicates that potential nonperforming loans of the corporate sector remain high. This underscores the need for close monitoring of the corporate sector in the future.
Keywords:
WP; company; Interest coverage; experience difficulty; board of directors; private company; Indian corporate sector; Indian financial sector; company transaction; long-term debt; public sector company; indebted company; companies increasing; Nongovernment company; government company; Corporate sector; Nonperforming loans; Corporate governance; Stock markets; Commercial banks; Asia and Pacific