ECONOMIC GROWTH
Indian economy remains resilient amid global uncertainties: NCAER
Personal loan credit growth and bank credit for the services sector has decelerated, it added. The economic think tank said: "The Purchasing Managers' Index (PMI) for manufacturing and services declined marginally in July 2024 but maintained its expansionary momentum".
British PM Keir Starmer attempts post-Brexit reset with Europe visits
British Prime Minister Keir Starmer is in Germany and will visit France to focus on post-Brexit relationships. He met German Chancellor Olaf Scholz to discuss a new bilateral treaty aimed at boosting trade, defense cooperation, and tackling illegal migration. Starmer aims to rebuild vital European relationships for economic growth and joint action on pressing issues.
3 new rail projects will greatly benefit Odisha, Jharkhand, Bengal, Chhattisgarh: PM Modi
According to the ministry, the projects are result of PM-Gati Shakti National Master Plan for multi-modal connectivity which have been possible through integrated planning and will provide seamless connectivity for movement of people, goods and services.
Go forth and multiply (income)
For an economy that is the world's biggest recipient of remittances, the policy objective would be to improve the skills of a larger proportion of its workforce. This accomplishes the dual objective of domestic industry being able to absorb some of these skills while those exported are also less likely to be stranded abroad due to wage arbitration. The broader objective would be accelerating low-skill income growth at home through high-skilled manufacturing and services. The second-order effects on intermediate and low-skilled employment can be impressive.
SBI Research anticipates Q1 GDP growth at 7.1%, in line with RBI forecast
The Indian economy is projected to grow by 7.0-7.1% in Q1 of 2024-25, according to an SBI Research report. This forecast, however, carries a downward bias. The Reserve Bank of India has predicted a 7.2% GDP growth for the entire fiscal year, with quarterly growth estimates of 7.1% for Q1.
Job scenario improving but still not as good as pre-pandemic levels
In the first four months of this financial year, work completed under the MGNREGS scheme has surpassed pre-pandemic levels by 13 crore person-days, though employment remains below 2019-20 levels.
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India's Q1 GDP growth likely slowed to 6.9% as government spending lagged
India's economic growth for the April-June quarter likely slowed to 6.9%, down from 7.8% in the preceding quarter, due to decreased government spending during the national election, as per a Reuters poll. Despite the BJP retaining power, it lost its majority. Future growth is expected to stabilize around 7.0%. Official data will be released soon.
Q1 growth seen in slow motion on manufacturing slump, lower government spending amid polls
India's growth in Q1 FY25 slowed to a median 6.85%, impacted by lower urban consumption, weakened manufacturing, and reduced government spending during elections. Economists anticipate recovery in subsequent quarters despite an uneven monsoon and tepid commodity gains. The government will release detailed growth data by August 30.
Goldman Sachs cuts India’s 2024 and 2025 GDP growth forecasts
Goldman Sachs lowered India's economic growth projection by 20 basis points for the next two years, highlighting a significant drop in government spending as a key factor. The new forecasts are 6.7% for 2024 and 6.4% for 2025. The Reserve Bank of India's stricter lending rules and fiscal constraints are expected to slow growth, despite potential easing of monetary policy.
India should retain headline inflation as target, external rate panel members say
External members of India's rate-setting panel suggested keeping headline inflation as the target for monetary policy. They emphasized that headline inflation captures overall price pressures including volatile food and fuel prices. While core inflation has been low, targeting headline inflation is crucial as it directly impacts the public. Persistently high food prices have influenced recent monetary policy decisions.
Economic momentum remains 'intact': Finance Ministry
The report said the FY25 budget has laid out a glide path of fiscal consolidation. Supported by strong revenue collection, discipline in revenue expenditure and robust economic performance, the fiscal deficit is projected to decline. At the same time, it said, capital expenditure is maintained at high levels, supporting the fledgling private investment cycle.
'Excessively restrictive' MPC may be sacrificing India's growth potential, says dissenting member Jayant Varma
RBI's Monetary Policy Committee member Prof. Jayant Varma voiced concern at the August meeting over the restrictive monetary policy's negative impact on India's economic growth. Despite his vote for a repo rate cut, the committee kept the policy rate at 6.50%. Varma believes this stance overlooks the economy's true growth potential.
India retained its growth momentum in Q1 of FY25, says FinMin's monthly economic review
As highlighted by the report, India's key economic indicators present a positive outlook, underpinned by robust domestic activity, improving external trade, and growing capital flows. It also showed that perceived employment conditions show mixed signals, overall growth indicators suggest sustained momentum as FY25 progresses.
Significant decline in job growth in FY24, IT & Textile sector labelled 'job destroyers': Report
India Inc. experienced a sharp slowdown in employment growth in FY24, with a mere 1.5% increase compared to 5.7% in FY23, according to a Bank of Baroda report. Only 90,840 jobs were added in FY24, down from 333,000 in the previous year. By March 2024, total employment across 1,196 companies reached 6.25 million, indicating a cautious approach by businesses amid economic uncertainty.
ICRA forecasts India's Q1 GDP growth to fall to 6%, a six-quarter low
The insights by ICRA indicate a temporary slowdown in India's economic growth, with several sectors witnessing a downturn influenced by government actions, urban consumer sentiment, and weather conditions, but project a recovery in the latter half of the fiscal year.
Delhi Govt finalises policies to turn national capital into industrial hub; approval awaited
Delhi has completed drafts for three policies aiming to define industrial and economic growth. These include promoting a sustainable industrial hub, enhancing electronics design and manufacturing, and improving city logistics. Feedback from stakeholders will refine the policies before they are proposed to the cabinet for approval.
Rural economy is driving India's growth, Govt capex in infra will stimulate it: Report
India's rural economy has grown more robust than urban areas, driven by higher government spending. Future growth is anticipated to remain strong, bolstered by capital expenditure plans and good monsoon conditions. The report by Anand Rathi also projected a promising financial outlook and potential credit rating improvements due to strong tax revenues and lower fiscal deficits.
RBI MPC meeting: India's real GDP growth for FY25 retained at 7.2%, Governor Das says
The Reserve Bank of India's policy panel retained a 7.2% growth forecast for FY25, but the outlook for Q1 was tweaked lower, as stated by Governor Shaktikanta Das. The Economic Survey projected a conservative 6.5-7% growth for FY25, citing global uncertainties and domestic challenges. Analysts like IMF and ADB set the growth forecast at 7%.
Work demand falls sharply under MGNREGS in July
Work demand under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) saw a significant decline in July, dropping 21.6% year-over-year and 33.4% from the previous month. The decrease is attributed to strong economic activity and ample monsoon rains, which have shifted unskilled labor towards agriculture.
India stands out on growth and external fronts amongst South Asian economies: S&P Ratings
S&P Global Ratings highlighted India's strong position in South Asia in terms of growth and external factors. It emphasised that the trajectory of the government's fiscal deficit will impact sovereign ratings. S&P Director Andrew Wood expressed optimism in India's economic growth despite global challenges and stated that a significant narrowing of fiscal deficit could lead to a rating upgrade. The agency sees promise in India's growth story and expects fiscal deficit to remain a crucial factor in determining India's ratings direction.
Inflation to remain around 5 per cent this fiscal: SBI report
The Consumer Price Inflation in India is projected to hover around 5 percent for the financial year 2024-25, with the exception of September and October, as per a research report by SBI. This outlook remains a critical focus for the Reserve Bank of India (RBI). Recent data revealed that the Consumer Price Index (CPI) inflation rose to 5.08 percent in June 2024, primarily driven by higher food and beverage prices.
Budget 2024: Government seeks to script long-term India growth story
Sitharaman's seventh budget stresses growth and fiscal discipline, projecting a 4.9% FY25 deficit and a 17% capex rise. Key areas include state support, youth employment, women's participation, agriculture, social welfare, private capex, Digital Public Infrastructure, RBI dividend, employment-linked incentives, lower individual tax burden, skilled workforce, Industrial Training Institutes, aligning with the Economic Survey for 2047.
Conservative growth estimate due to global uncertainties, experts on Economic Survey
India's Economic Survey has projected a conservative growth of 6.5-7 per cent for the current fiscal year due to global uncertainties and domestic challenges. This is lower than the 8.2% growth rate estimated in 2023-24 and a bit lower than the Reserve Bank's forecast of 7.2% for the current financial year. The survey has proposed a compact between central and state governments, corporate sector, and academia to overcome the unprecedented economic scenario.
Economic Survey: Indian economy on a strong wicket and stable footing in face of geopolitical uncertainties
Economic Survey 2024: On Monday, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament, highlighting that the Indian economy has demonstrated resilience and stability despite geopolitical challenges.
Economic Survey: India's real GDP for FY25 projected at 6.5-7%, govt anticipating inclusive growth
Economic Survey: India's real Gross Domestic Product (GDP) growth for FY25 is projected to be between 6.5 to 7 per cent, according to the Economic Survey 2023-24. The survey noted a significant increase in real GDP in FY24, which was 20 per cent higher than its level in FY20. It highlighted that achieving this milestone is rare among major economies, paving the way for strong growth prospects in FY25 and beyond.
Household Financial wealth still higher than the pre pandemic levels
A research paper by RBI economists has found that the net financial wealth (NFW) of Indian households is still higher than pre-pandemic levels, at 97% as of March 2023. The total household financial assets are estimated at Rs 363.8 lakh crore, equivalent to 135.0% of the GDP, while the outstanding liabilities amount to ₹101.8 lakh crore, accounting for 37.8% of GDP.
Upward march: IMF raises India's GDP growth forecast for FY25 to 7%
IMF upgrades India's FY25 growth forecast to 7% and maintains the country's fastest-growing economy status. The outlook also highlights risks related to inflation, currency volatility, and trade tensions, emphasizing the importance of prudent policy decisions and multilateral cooperation.
India sees 12% surge in company registrations, 73% jump in LLPs in June
Company registrations in India showed a notable rebound in June, marking a 12% increase compared to the previous year, according to data from the corporate affairs ministry. Limited liability partnerships (LLPs) also surged by 73% year-on-year in June, contributing to the overall growth in business formations. Experts attribute this resurgence to a positive economic outlook, relaxed investment rules, and government initiatives aimed at improving ease of doing business. The robust growth reflects confidence in India's growth potential and economic resilience post-pandemic, despite initial moderation earlier in the fiscal year.
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.
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