INTEGRAL TO INDIAS ECONOMIC GROWTH
India can become world's 2nd largest economy by 2031: RBI deputy guv Michael Patra
Reserve Bank of India Deputy Governor Michael D Patra outlined India's potential to become the world's second-largest economy by 2031 and the largest by 2060, citing the country's inherent strengths. He addressed challenges such as labor productivity, infrastructure development, manufacturing sector contribution to GDP, and sustainable economic practices during a speech at the Lal Bahadur Shastri National Academy of Administration in Mussoorie.
Bank credit growth outpaces deposits again, albeit at a sluggish pace
Bank credit grew 14% while deposits grew 11% year-on-year, highlighting concerns over asset-liability mismatches. RBI emphasizes the need for banks to address the gap. Governor stresses the importance of maintaining a balance between assets and liabilities.
PM Modi stresses on BIMSTEC's role as engine for economic, social growth
Prime Minister Modi reiterates India's commitment to BIMSTEC during a meeting with foreign ministers of member states. Discussions revolved around strengthening cooperation in connectivity, energy, trade, health, and security. The focus remains on utilizing BIMSTEC as a catalyst for economic and social development in the region.
India's economic growth masks deepening income inequality & sectoral disparities
The Indian economy is experiencing robust GDP growth, macroeconomic stability, and significant foreign capital inflows. However, there is a stark disparity in growth rates between the top 20% and the rest of the population. Despite a GDP growth rate of 8% for FY24, domestic consumption growth remains sluggish at 4%, highlighting income inequality as the wealthiest 20% accumulate 92% of the country's savings.
Union Budget 2024-25: Extension of concessional tax regime for India’s manufacturing sector
BUDGET EXPECTATIONS: India's upcoming Union Budget for FY 2024-25 is anticipated to extend the 15% concessional tax rate for new manufacturing companies, boosting investor confidence in the sector. This measure aligns with India's "Make in India" initiative, promoting self-reliance and economic growth. The move aims to sustain GDP growth, projected at 6.9% in 2024, and position India as a competitive global manufacturing hub.
India's PMI surges in June, steel and services sectors drive economic growth: SBI
In June 2024, India's manufacturing sector saw a surge in the Purchasing Managers' Index and hiring activity, while the Eight Core Industries Index expanded by 6.5%. Steel demand boomed, driven by real estate, but auto sales slowed. The services sector excelled in digital payments, with strong domestic and international sales growth. Power consumption and UPI transactions also hit record highs, indicating a robust economic landscape for India in FY25.
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ETMarkets Smart Talk: India’s small & midcap are commanding premium valuation than the world SMID: Sahil Kapoor
Equity markets continue to scale new highs and trade at rich valuations. Small & Midcap stocks continue to trade at expensive valuations, which is a sign of caution.The Nifty 100 Index is trading at 22x 12-month forward earnings, Nifty Midcap 150 is at 32x, Nifty Smallcap 250 Index is at 24x 12-month forward earnings.
Commercial vehicle sales surpass expectations, indicating strong economic activity
Sales of commercial vehicles increased last quarter, driven by strong replacement demand and continued government infrastructure spending. More than 234,000 trucks and buses were sold in the local market in the three months ended June, exceeding expectations. This marks a 4.5% rise compared to the 224,000 vehicles sold in the same period last year.
India's June fuel demand edges up 2.6%
Total consumption totalled 19.99 million metric tons in June, up from 19.48 million tons last year, data showed. Demand was down 3.5% on a monthly basis from the 20.72 million metric tons consumed in May. Sales of diesel, mainly used by trucks and commercially run passenger vehicles, fell 5% month-on-month to 7.98 million tons in June.
India Ratings’ Devendra Pant on how water shortage can impact economic growth
Devendra Pant, Chief Economist at India Ratings, highlights the long-term impact of water scarcity in India on agriculture, manufacturing, and hydroelectricity production. He emphasizes the need for immediate action by policymakers and citizens to address this critical issue. Pant says water scarcity is going to have an impact. and not only in agriculture, unless we develop or have those seeds and crops that can withstand extreme weather conditions.
Stable economy boosts India's housing market to new heights, scales 11-year peak
The housing property market across India is seeing substantial growth in sales volumes, driven by stable economic conditions and continued confidence, even amidst higher mortgage rates. This uptrend is led by the top eight cities, including Mumbai, Delhi-NCR, Bengaluru, Pune, and Hyderabad, propelling the country’s residential real estate market to an 11-year high in sales volumes during the first half of the year.
Britain’s economy isn’t seeing growth anywhere near India’s 7% GDP rise — this has caused fewer differences between the Conservatives and Labour: Jaideep Prabhu
The UK election landscape is marked by economic uncertainties post-Brexit, minimal policy distinctions between parties, and environmental concerns driving voter engagement. Influential figures like Farage, Johnson, and Sunak shape political narratives, while climate change discussions underscore the urgency for sustainable solutions amidst global warming threats.
India's rating upgrade possible in next 24 months if fiscal deficit falls to 4%: S&P
India could receive a sovereign rating upgrade in the next 24 months if the central government manages its finances prudently and reduces the fiscal deficit to 4% of GDP. The trigger for the upgrade would be a general government deficit falling below 7% of the GDP, with a significant portion driven by the central government. The central government estimates a fiscal deficit of 5.1% of GDP in the current fiscal, down from 5.63% in 2023-24.
Poverty in India declines to 8.5% from 21.2% in 2011-12: NCAER paper
Poverty in India declined from 21.2% in 2011-12 to 8.5% in 2022-24, despite pandemic challenges, according to NCAER's report "Rethinking Social Safety Nets in a Changing Society." Using data from the India Human Development Survey, the study highlights the need for adaptable social protection systems to match rapid economic and social transformations.
Women in India face a jobs crisis. Are factories the solution?
As international brands limit their dependence on China by shifting some manufacturing to India, the trend holds the potential to generate significant numbers of manufacturing jobs - especially for women, who have largely been excluded from the ranks of formal Indian employment.
Integrating climate finance into India's economic blueprint
Pradeep S. Mehta, Secretary-General of CUTS International, suggested that India's 2024-25 Budget should include dedicated climate finance institutions through public-private partnerships during a webinar on accelerating private investment in climate finance. Mehta stressed the importance of private sector involvement for a sustainable and resilient future, highlighting the need for collaboration, innovation, and commitment.
AI: the supercharger for India’s MSMEs
Artificial intelligence (AI) is not only reshaping India’s landscape but also fostering economic growth through innovative tech solutions. According to Stanford University’s annual AI Index report, India saw the fifth highest investments last year in startups offering AI-based products and services.
India set for more global attention as bond inclusion begins
India's government bonds enter JPMorgan's index, attracting billions in inflows, driven by positive economic indicators, high yields, and market performance, positioning India as a top choice for global investors.
India likely to grow at 7.5% in FY25: NCAER
The National Council of Applied Economic Research (NCAER) forecasts India's FY25 GDP growth at about 7.5%, driven by strong economic activity. NCAER's Director General, Poonam Gupta, highlighted buoyancy in the first quarter, robust investment policies, and macroeconomic stability. While the RBI projects 7.2% growth, Gupta noted that addressing rising food prices remains challenging, calling for climate-resilient and innovative food supply solutions.
Mass entrepreneurship movement: How India's economy is getting reshaped
India's mass entrepreneurship movement, supported by cross-sector partnerships, aims to create 90 million non-farm jobs by 2030.
India central bank policymakers divided over rate-growth debate
Internal members maintain hawkish stance on inflation, with Governor Das cautioning against hasty actions for fear of worsening the situation
RBI needs to shift focus from inflation management to growth promotion: MPC member Varma
With retail inflation nearing the Reserve Bank of India's (RBI) 4% target, RBI Monetary Policy Committee (MPC) member Jayanth R. Varma emphasized a shift towards promoting growth. He noted that core inflation is benign and projected CPI inflation for 2024-25 is only 0.5 percentage points above target. Varma advocated for a less restrictive monetary policy to balance disinflation and support economic growth, which is expected to be slightly lower in the coming years.
India bond yields seen little changed amid lack of fresh cues
Indian government bond yields are expected to hold steady on Monday, moving in a 6.95%-6.99% range. Inflows under the FAR, crossing $10 billion, and foreign banks' increased bond purchases ahead of the inclusion affect U.S. Treasury yields.
NRIs of the world, keep on depositing
Non-resident deposits in India are growing steadily due to various positive factors, including the impact of the pandemic on savings patterns and stable remittances. Factors such as interest rates and exchange rates have made NRI deposits more rewarding.
India bond yields seen rising tracking US peers
Indian government bond yields are expected to rise due to a spike in U.S. Treasury yields after strong economic data. The benchmark 10-year yield in India is likely to move in a 7.01%-7.06% range on Monday.
Asian earnings growth to outpace US and Europe, India's growth momentum strong: Report
The analysis by CLSA, citing Bloomberg's projections, forecasts that Asian earnings growth will surpass that of the US and Europe for both this year and the next. This positive outlook is in line with the Reserve Bank of India's (RBI) prediction of a robust 7.2 per cent growth rate for India in fiscal year 2025.
India Inc cheers continuity at the Centre, but rues fragility
Indian industry leaders express confidence in the economy's resilience despite the NDA-BJP government's unexpected outcome without an absolute majority. They anticipate policy continuity but caution about potential hurdles due to a stronger opposition and diverse political ideologies. The focus may shift to consumption, welfare schemes, and rural sectors. Stability is crucial for reforms, but the BJP's shortfall could complicate passing contentious reforms. However, the economy's growth agenda is expected to continue, with an emphasis on inclusivity and job creation.
Brute majority or coalition pressure, India's growth to be perpetual theme
India's growth story may thrive under a coalition rule despite no party having an absolute majority. Past data suggests coalition governments have effectively boosted growth but struggled with inflation. Inflation rates varied under different regimes, with Narendra Modi's government seeing 5.4% inflation during its tenures.
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