The Reserve Bank of India is widely expected to cut interest rates for the first time in nearly five years. This is according to a Reuters survey of economists and analysts. Inflation in India has declined; however, it still remains above the RBI's medium-term target of four percent. Still, the expected rate cut is to revive the flagging economy, which has seen growth hit a four-year low.

India's RBI to cut rates  for the first time since 2020

A Reuters report quoting government sources showed the Indian government is considering cutting personal income tax for the middle class to boost consumption.
However, the sources said the discussions are ongoing and no concrete decisions have been taken yet.
The announcement will come in the budget on February 1.
Even if the government does decide to go ahead with tax cuts, it would be under the new regime introduced in 2020.
According to the discussions, individuals with earnings up to ₹1.5 million will not pay any tax.
Currently, for income between ₹300,000 and ₹1.5 million the tax rate is 5 to 20 &nbsp;per cent, while higher income is taxed at 30 &nbsp;per cent.
Under the new regime, though, there are no exemptions allowed, compared to the older regime, which allows exemptions on housing rentals, home loan interest and principal repayment, and insurance.
However, filing tax returns under the 2020 regime is less complicated.
<h2>Default and options</h2>
The new regime was the default tax structure, with Indians given a choice to opt for the old regime.
While some murmurs are floating the government will mandate the new regime, reports suggest India will continue with both regime options similar to the current fiscal year's choices.
Individuals have the option of choosing the old regime, although, they cannot alter their choice once the new regime is opted for.
<h2>New vs old regime</h2>
Individuals need to look at the tax burden based on both regime's based on their investment choices for the year and make choice.
Take a look at the tax rates under both regimes for comparison and making the choice.
<figure class="image"><img alt="Taxation regimes" src="https://img-cdn.thepublive.com/fit-in/1920x1080/filters:format(webp)/wion/media/media_files/2024/12/27/TTGSHhgt4mDpmcgUHpJ8.jpg" style="width: 1920px;">
<figcaption>Taxation regimes Photograph: (WION)</figcaption>
</figure>
<h2>Government's plan to stimulate growth</h2>
Sources reveal that this move aims to provide relief to the middle class and stimulate consumption in response to the country&rsquo;s slowing economy.
The tax cuts would primarily impact city dwellers, who are facing high living costs, and could encourage more taxpaye₹to opt for the newer 2020 tax system.
The potential tax reductions could make the simplified 2020 system more attractive to taxpayers, as it removes many exemptions but offe₹lower rates.
India&rsquo;s central government sources quoted by Reute₹indicate that such tax reforms could encourage wider adoption of this system,
Especially in the face of rising food inflation and weaker consumer demand.
The government has not yet specified the exact revenue loss from any cuts, but the goal is to stimulate economic activity amid sluggish growth.
India&rsquo;s economy has faced a significant slowdown, with growth dropping to its slowest pace in seven quarters between July and September unexpectedly.
Despite this, the government is optimistic that rural demand will continue to show resilience, and urban demand is expected to pick up.
The country&rsquo;s growth forecast for the fiscal year 2024/25 stands at 6.5 percent, at the lower end of its projected range.
With challenges such as high inflation and global uncertainties, including a stronger US dollar, India&rsquo;s tax reforms could play a critical role in boosting domestic consumption and supporting the middle class, which remains politically vocal about high tax burdens.
<h2>Changes to tax structure this year</h2>
Modifications to the income tax system occurred midway through the year 2024.
The reason behind this is that the government announced the Union Budget 2024 in July, following the general elections that took place between April and June of that year.
The income tax law amendments that were revealed in July 2024 may have slipped the minds of many taxpayers due to the budget's mid-year presentation.
Beginning with the fiscal year 2024&ndash;25, the majority of the income tax adjustments that were announced in July 2024 go into effect.
When you file your income tax return (ITR) in July 2025, you'll be able to claim different tax deductions and exemptions because of these changes.
The government adjusted the income tax brackets under the new tax system.
<a href="https://www.wionews.com/india-news/major-relief-for-indian-middle-class-govt-considering-tax-cut-amid-rising-economic-challenges-reports-8569145">Major relief for Indian middle class? Govt mulls tax cuts amid economic challenges: Reports</a>
For the current fiscal year 2024&ndash;25, taxpayers will benefit from increased savings due to the reduced income tax brackets of the new tax system.
The government raised the standard deduction limit and modified the income tax brackets under the new tax system.
<h2>Standard deduction changes</h2>
The standard deduction for people filing under the new tax regime for FY 2024-25 is ₹75,000, an increase from ₹50,000 in the prior regime.
The revised tax structure raises the standard deduction for family pensioners from ₹15,000 to ₹25,000.
For the fiscal year 2024&ndash;25 (modified for 2025&ndash;26), the standard deduction limit stays constant for individuals opting to utilise the prior tax framework.
<a href="https://www.wionews.com/videos/india-considers-income-tax-cuts-to-boost-consumption">India considers income tax cuts to boost consumption</a>
The old tax system provided a standard deduction of ₹50,000 for salaried and pensioner individuals, and ₹15,000 for family pensioners.
Salary earners and retirees can reduce their tax liability via the new regime's increased standard deduction, which they can use to their advantage.
Salary, pension, or family pension recipients are eligible to take a standard deduction from their gross income before determining their tax liability.
Funds paid out by insurance firms cannot be claimed as a standard deduction.
<h2>National Pension Scheme changes</h2>
An individual can get a bigger break on their employer's National Pension System (NPS) contribution if they choose the new tax system in FY 2024-25.
Under the new system, worke₹can deduct their employers' NPS contributions up to 14 per cent of their base income.
Up to 10 per cent of a worker's base income can be deducted in the past.
To determine taxable income, this deduction is taken from gross income in accordance with Section 80CCD (2) of the Income Tax Act, 1961.&nbsp;
This deduction is the sole one available under the new tax system, aside from the standard deduction.
The previous tax system allowed for an additional deduction of ₹50,000 for NPS investments made under Section 80CCD (1b) and a Section 80C deduction of ₹1.5 lakh.
Under the older tax system, the maximum amount that an employer may deduct from their NPS contributions for tax reasons remained unchanged.
People who want to pay less tax under the new system will be able to do so thanks to a larger deduction offered under the new system compared to the previous one.
Keep in mind that you would be responsible for paying taxes on employer contributions to EPF, NPS, and Superannuation funds if their combined value exceeds ₹7.5 lakh in a given fiscal year.
Additionally, taxes will be withheld on both the interest and return that is generated on the excess contribution.
<h2>Tax on capital gains changes</h2>
In the fiscal year 2024&ndash;25, the government will enforce new laws on capital gains taxes. The objective of the amendments was to optimise the framework for taxing capital gains.
A 20 per cent tax will be imposed on all short-term capital gains derived from shares and equity-oriented mutual funds. This has been increased from 15 per cent to 20 per cent.
Income tax brackets applicable to earnings will be imposed on short-term capital gains derived from diverse assets, such as real estate, gold, and other non-financial holdings.
The taxation rate for long-term capital gains is 12.5 per cent, irrespective of the asset type. The long-term capital gains tax rates will now be standardised across all asset classes.
Long-term capital gains (LTCG) on investments in stocks and equity-oriented mutual funds are now exempt from taxes up to ₹1.25 lakh every fiscal year, an increase from the previous threshold of ₹1 lakh.
The income tax on long-term capital gains (LTCG) on the sale of residential property is no longer entirely indexable.
If an individual acquires a residence on or before July 22, 2024, and then divests it, they will incur taxation on long-term capital gains (LTCG) in two manners, as stipulated by the new regulations.
Two methodologies exist:
(a) LTCG tax with indexation, calculated at 20 per cent, and
(b) LTCG tax without indexation, calculated at 12.5 per cent. In the absence of indexation benefits, long-term capital gains (LTCG) on the sale of a house acquired on or after July 23, 2024, will be subject to a tax rate of 12.5 per cent.
Only residents and Hindu Undivided Families (HUFs) may elect the LTCG taxation option for homes acquired before July 23, 2024.
Other taxable entities, including non-residents, will be obligated to remit 12.5 per cent without indexation.
The revised capital gains tax framework simplifies the method by which individuals ascertain their taxable income from capital gains.
In the past, various capital assets were subject to separate regulations for determining capital gains tax.
<h2>Capital gains holding period changes</h2>
The government has modified the time period for capital assets to further categorise capital gains as long-term or short-term.
The new criteria stipulate two holding periods for capital assets to determine whether earnings are classified as short-term or long-term.
Profits from the sale of any listed investment held for twelve months are classified as long-term capital gains.
Conversely, for capital gains on non-listed assets to qualify as long-term, the holding period for these securities must be 24 months.
Adjusting the holding period will facilitate taxpayers in monitoring the duration for which they must retain specific assets prior to sale, ensuring that their capital gains qualify as long-term capital gains.

Sources reveal that this move aims to provide relief to the middle class and stimulate consumption in response to the country’s slowing economy. 

A Reuters report quoting government sources showed the Indian government is considering cutting personal income tax for the middle class to boost consumption. However, the sources said the discussions are ongoing and no concrete decisions have been taken yet. The announcement will come in the budget on February 1. Even if the government does decide to go ahead with tax cuts, it would be under the new regime introduced in 2020. According to the discussions, individuals with earnings up to ₹1.5 million will not pay any tax. Currently, for income between ₹300,000 and ₹1.5 million the tax rate is 5 to 20 per cent, while higher income is taxed at 30 per cent. Under the new regime, though, there are no exemptions allowed, compared to the older regime, which allows exemptions on housing rentals, home loan interest and principal repayment, and insurance. However, filing tax returns under the 2020 regime is less complicated. Default and options The new regime was the default tax structure, with Indians given a choice to opt for the old regime. While some murmurs are floating the government will mandate the new regime, reports suggest India will continue with both regime options similar to the current fiscal year's choices. Individuals have the option of choosing the old regime, although, they cannot alter their choice once the new regime is opted for. New vs old regime Individuals need to look at the tax burden based on both regime's based on their investment choices for the year and make choice. Take a look at the tax rates under both regimes for comparison and making the choice. Taxation regimes Photograph: (WION) Government's plan to stimulate growth Sources reveal that this move aims to provide relief to the middle class and stimulate consumption in response to the country’s slowing economy. The tax cuts would primarily impact city dwellers, who are facing high living costs, and could encourage more taxpaye₹to opt for the newer 2020 tax system. The potential tax reductions could make the simplified 2020 system more attractive to taxpayers, as it removes many exemptions but offe₹lower rates. India’s central government sources quoted by Reute₹indicate that such tax reforms could encourage wider adoption of this system, Especially in the face of rising food inflation and weaker consumer demand. The government has not yet specified the exact revenue loss from any cuts, but the goal is to stimulate economic activity amid sluggish growth. India’s economy has faced a significant slowdown, with growth dropping to its slowest pace in seven quarters between July and September unexpectedly. Despite this, the government is optimistic that rural demand will continue to show resilience, and urban demand is expected to pick up. The country’s growth forecast for the fiscal year 2024/25 stands at 6.5 percent, at the lower end of its projected range. With challenges such as high inflation and global uncertainties, including a stronger US dollar, India’s tax reforms could play a critical role in boosting domestic consumption and supporting the middle class, which remains politically vocal about high tax burdens. Changes to tax structure this year Modifications to the income tax system occurred midway through the year 2024. The reason behind this is that the government announced the Union Budget 2024 in July, following the general elections that took place between April and June of that year. The income tax law amendments that were revealed in July 2024 may have slipped the minds of many taxpayers due to the budget's mid-year presentation. Beginning with the fiscal year 2024–25, the majority of the income tax adjustments that were announced in July 2024 go into effect. When you file your income tax return (ITR) in July 2025, you'll be able to claim different tax deductions and exemptions because of these changes. The government adjusted the income tax brackets under the new tax system. Major relief for Indian middle class? Govt mulls tax cuts amid economic challenges: Reports For the current fiscal year 2024–25, taxpayers will benefit from increased savings due to the reduced income tax brackets of the new tax system. The government raised the standard deduction limit and modified the income tax brackets under the new tax system. Standard deduction changes The standard deduction for people filing under the new tax regime for FY 2024-25 is ₹75,000, an increase from ₹50,000 in the prior regime. The revised tax structure raises the standard deduction for family pensioners from ₹15,000 to ₹25,000. For the fiscal year 2024–25 (modified for 2025–26), the standard deduction limit stays constant for individuals opting to utilise the prior tax framework. India considers income tax cuts to boost consumption The old tax system provided a standard deduction of ₹50,000 for salaried and pensioner individuals, and ₹15,000 for family pensioners. Salary earners and retirees can reduce their tax liability via the new regime's increased standard deduction, which they can use to their advantage. Salary, pension, or family pension recipients are eligible to take a standard deduction from their gross income before determining their tax liability. Funds paid out by insurance firms cannot be claimed as a standard deduction. National Pension Scheme changes An individual can get a bigger break on their employer's National Pension System (NPS) contribution if they choose the new tax system in FY 2024-25. Under the new system, worke₹can deduct their employers' NPS contributions up to 14 per cent of their base income. Up to 10 per cent of a worker's base income can be deducted in the past. To determine taxable income, this deduction is taken from gross income in accordance with Section 80CCD (2) of the Income Tax Act, 1961. This deduction is the sole one available under the new tax system, aside from the standard deduction. The previous tax system allowed for an additional deduction of ₹50,000 for NPS investments made under Section 80CCD (1b) and a Section 80C deduction of ₹1.5 lakh. Under the older tax system, the maximum amount that an employer may deduct from their NPS contributions for tax reasons remained unchanged. People who want to pay less tax under the new system will be able to do so thanks to a larger deduction offered under the new system compared to the previous one. Keep in mind that you would be responsible for paying taxes on employer contributions to EPF, NPS, and Superannuation funds if their combined value exceeds ₹7.5 lakh in a given fiscal year. Additionally, taxes will be withheld on both the interest and return that is generated on the excess contribution. Tax on capital gains changes In the fiscal year 2024–25, the government will enforce new laws on capital gains taxes. The objective of the amendments was to optimise the framework for taxing capital gains. A 20 per cent tax will be imposed on all short-term capital gains derived from shares and equity-oriented mutual funds. This has been increased from 15 per cent to 20 per cent. Income tax brackets applicable to earnings will be imposed on short-term capital gains derived from diverse assets, such as real estate, gold, and other non-financial holdings. The taxation rate for long-term capital gains is 12.5 per cent, irrespective of the asset type. The long-term capital gains tax rates will now be standardised across all asset classes. Long-term capital gains (LTCG) on investments in stocks and equity-oriented mutual funds are now exempt from taxes up to ₹1.25 lakh every fiscal year, an increase from the previous threshold of ₹1 lakh. The income tax on long-term capital gains (LTCG) on the sale of residential property is no longer entirely indexable. If an individual acquires a residence on or before July 22, 2024, and then divests it, they will incur taxation on long-term capital gains (LTCG) in two manners, as stipulated by the new regulations. Two methodologies exist: (a) LTCG tax with indexation, calculated at 20 per cent, and (b) LTCG tax without indexation, calculated at 12.5 per cent. In the absence of indexation benefits, long-term capital gains (LTCG) on the sale of a house acquired on or after July 23, 2024, will be subject to a tax rate of 12.5 per cent. Only residents and Hindu Undivided Families (HUFs) may elect the LTCG taxation option for homes acquired before July 23, 2024. Other taxable entities, including non-residents, will be obligated to remit 12.5 per cent without indexation. The revised capital gains tax framework simplifies the method by which individuals ascertain their taxable income from capital gains. In the past, various capital assets were subject to separate regulations for determining capital gains tax. Capital gains holding period changes The government has modified the time period for capital assets to further categorise capital gains as long-term or short-term. The new criteria stipulate two holding periods for capital assets to determine whether earnings are classified as short-term or long-term. Profits from the sale of any listed investment held for twelve months are classified as long-term capital gains. Conversely, for capital gains on non-listed assets to qualify as long-term, the holding period for these securities must be 24 months. Adjusting the holding period will facilitate taxpayers in monitoring the duration for which they must retain specific assets prior to sale, ensuring that their capital gains qualify as long-term capital gains.

Explainer : India considers income tax cuts, all you need to know

India's contribution to global trade has seen significant growth over the last two decades, with its share in both exports and imports doubling during this period, according to a report by the National Stock Exchange (NSE).
The report revealed that India's share in global merchandise exports rose from 0.9 per cent in 2005 to 1.8 per cent in 2023, while its share in services exports more than doubled from 2 per cent to 4.3 per cent.
Overall, India's export share grew from 1.2 per cent in 2005 to 2.4 per cent in 2023. This growth has been driven by factors such as robust trade agreements, a diversified export portfolio, improved logistics infrastructure, and government initiatives like the Make in India campaign and the Production-Linked Incentive (PLI) scheme.
It also said "India's performance in services exports better than goods: India ranks 16th globally in merchandise exports and the seventh in services exports Similarly, India's share in global imports also witnessed an increase. Merchandise imports rose from 1.3 per cent in 2005 to 2.8 per cent in 2023, while services imports increased from 2.4 per cent to 3.4 per cent. Overall, India's share in global imports grew from 1.5 per cent to 2.9 per cent during this period.
<h2>Performance in services stand out</h2>
India's performance in services exports stands out. Services account for 43.8 per cent of India's total exports, the highest share among major global economies, compared to the global average of 24.7 per cent.
The report says that India's export growth was robust in the first two decades post-liberalization, with a CAGR of 11.1 per cent during FY 94 to FY04 and 17.3 per cent during FY04 to FY14.
However, the last decade (FY14-FY24) saw a significant moderation in export growth. Export growth slowed to a CAGR of 3.3 per cent due to subdued global demand, trade protectionism, and disruptions like the COVID-19 pandemic and geopolitical tensions.
<a href="https://www.wionews.com/opinions-blogs/india-needs-to-build-ip-driven-companies-to-escape-middle-income-trap-786195" rel="dofollow">Also read: India needs to build IP-driven companies to escape middle-income trap</a>
Services exports too moderated but sustained a higher CAGR of 8.4 per cent in the last decade, reflecting India's comparative advantage in sectors like IT, financial and consulting services.
This growth has been driven mainly by factors like multilateral and bilateral trade agreements, initiatives like Make in India and Production Linked Incentive (PLI) schemes, diversification of export baskets, and development of logistics infrastructure.
The report also stated that India holds a Relative Comparative Advantage (RCA) in key sectors such as agriculture, textiles, chemicals, and pharmaceuticals. However, the country lags in machinery, transport equipment, and electronics, indicating areas for further development.
The report highlighted global trade dynamics over the past two decades. China's share in global merchandise exports increased significantly, largely at the expense of traditional export leaders like Japan, Germany, France, the UK, and the USA. In services, India and Singapore improved their shares, while the USA experienced a decline.
It said, "global merchandise exports have shifted towards China, largely at the expense of Japan, Germany, France, UK and USA".
Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

India News | This growth has been driven by factors such as robust trade agreements, a diversified export portfolio, improved logistics infrastructure, and government initiatives.

India's contribution to global trade has seen significant growth over the last two decades, with its share in both exports and imports doubling during this period, according to a report by the National Stock Exchange (NSE). The report revealed that India's share in global merchandise exports rose from 0.9 per cent in 2005 to 1.8 per cent in 2023, while its share in services exports more than doubled from 2 per cent to 4.3 per cent. Overall, India's export share grew from 1.2 per cent in 2005 to 2.4 per cent in 2023. This growth has been driven by factors such as robust trade agreements, a diversified export portfolio, improved logistics infrastructure, and government initiatives like the Make in India campaign and the Production-Linked Incentive (PLI) scheme. It also said "India's performance in services exports better than goods: India ranks 16th globally in merchandise exports and the seventh in services exports Similarly, India's share in global imports also witnessed an increase. Merchandise imports rose from 1.3 per cent in 2005 to 2.8 per cent in 2023, while services imports increased from 2.4 per cent to 3.4 per cent. Overall, India's share in global imports grew from 1.5 per cent to 2.9 per cent during this period. Performance in services stand out India's performance in services exports stands out. Services account for 43.8 per cent of India's total exports, the highest share among major global economies, compared to the global average of 24.7 per cent. The report says that India's export growth was robust in the first two decades post-liberalization, with a CAGR of 11.1 per cent during FY 94 to FY04 and 17.3 per cent during FY04 to FY14. However, the last decade (FY14-FY24) saw a significant moderation in export growth. Export growth slowed to a CAGR of 3.3 per cent due to subdued global demand, trade protectionism, and disruptions like the COVID-19 pandemic and geopolitical tensions. Also read: India needs to build IP-driven companies to escape middle-income trap Services exports too moderated but sustained a higher CAGR of 8.4 per cent in the last decade, reflecting India's comparative advantage in sectors like IT, financial and consulting services. This growth has been driven mainly by factors like multilateral and bilateral trade agreements, initiatives like Make in India and Production Linked Incentive (PLI) schemes, diversification of export baskets, and development of logistics infrastructure. The report also stated that India holds a Relative Comparative Advantage (RCA) in key sectors such as agriculture, textiles, chemicals, and pharmaceuticals. However, the country lags in machinery, transport equipment, and electronics, indicating areas for further development. The report highlighted global trade dynamics over the past two decades. China's share in global merchandise exports increased significantly, largely at the expense of traditional export leaders like Japan, Germany, France, the UK, and the USA. In services, India and Singapore improved their shares, while the USA experienced a decline. It said, "global merchandise exports have shifted towards China, largely at the expense of Japan, Germany, France, UK and USA". Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

India's share in global trade has doubled since 2005, report shows

The Indian rupee plunged to an all-time low on November 4, reaching 84.1150 against the US dollar, as continued foreign investment outflows from Indian stocks overshadowed a weaker dollar that supported other regional currencies according to a report by Reuters.

The rupee briefly touched 84.1225 during the trading session, marking its weakest level ever, the Reuters report elaborated further.

Indian equity markets also faced significant pressure, with the benchmark BSE Sensex and Nifty 50 indices both falling more than 1 per cent, marking their worst daily performance in a month.

The indices are down nearly 8 per cent from their record highs in late September, primarily due to the ongoing exodus of foreign investors in response to a sluggish earnings season.

Despite these challenges, the Reserve Bank of India (RBI) has intervened regularly to cushion the rupee, preventing a steeper decline. The central bank’s actions, including direct market interventions, have played a key role in stabilizing the currency amid foreign outflows and elevated US bond yields.

Uncertainty looms<o:p></o:p>

Further uncertainty looms as global attention shifts to the upcoming US presidential election, with potential implications for both the US dollar and Indian markets. According to sources familiar with RBI’s strategy, the central bank is prepared to manage increased volatility if Republican candidate Donald Trump secures a victory next week. Such a scenario could worsen market pressures, though the RBI is said to be well-equipped to handle any fallout.

While the US dollar index dropped by 0.2 per cent on Monday, most Asian currencies strengthened, including the offshore Chinese yuan, which rose to a near three-week high. The dollar’s weakness is attributed to investors unwinding positions ahead of the election, as they brace for potential market swings.

Market analysts predict that a victory for Trump could drive the dollar higher, but likely to a lesser extent than if Democratic candidate Kamala Harris wins. If Trump secures a win but the Democrats hold onto the US House of Representatives, the dollar might not rally at all, according to a note by ING Bank.

As the US election outcome remains uncertain, investors are wary of the potential for delayed results and its impact on global markets, adding to the pressure on the rupee and Indian equities. The coming days will be crucial as market participants digest election results and assess their broader implications for global currency and equity markets.

The Indian rupee plunged to an all-time low on November 4, reaching 84.1150 against the US dollar, as continued foreign investment outflows from Indian stocks overshadowed a weaker dollar that supported other regional currencies according to a report by Reuters.

The Indian rupee plunged to an all-time low on November 4, reaching 84.1150 against the US dollar, as continued foreign investment outflows from Indian stocks overshadowed a weaker dollar that supported other regional currencies according to a report by Reuters. The rupee briefly touched 84.1225 during the trading session, marking its weakest level ever, the Reuters report elaborated further. Indian equity markets also faced significant pressure, with the benchmark BSE Sensex and Nifty 50 indices both falling more than 1 per cent, marking their worst daily performance in a month. The indices are down nearly 8 per cent from their record highs in late September, primarily due to the ongoing exodus of foreign investors in response to a sluggish earnings season. Despite these challenges, the Reserve Bank of India (RBI) has intervened regularly to cushion the rupee, preventing a steeper decline. The central bank’s actions, including direct market interventions, have played a key role in stabilizing the currency amid foreign outflows and elevated US bond yields. Uncertainty looms Further uncertainty looms as global attention shifts to the upcoming US presidential election, with potential implications for both the US dollar and Indian markets. According to sources familiar with RBI’s strategy, the central bank is prepared to manage increased volatility if Republican candidate Donald Trump secures a victory next week. Such a scenario could worsen market pressures, though the RBI is said to be well-equipped to handle any fallout. While the US dollar index dropped by 0.2 per cent on Monday, most Asian currencies strengthened, including the offshore Chinese yuan, which rose to a near three-week high. The dollar’s weakness is attributed to investors unwinding positions ahead of the election, as they brace for potential market swings. Market analysts predict that a victory for Trump could drive the dollar higher, but likely to a lesser extent than if Democratic candidate Kamala Harris wins. If Trump secures a win but the Democrats hold onto the US House of Representatives, the dollar might not rally at all, according to a note by ING Bank. As the US election outcome remains uncertain, investors are wary of the potential for delayed results and its impact on global markets, adding to the pressure on the rupee and Indian equities. The coming days will be crucial as market participants digest election results and assess their broader implications for global currency and equity markets.

Rupee hits record low amid equity outflows and US election uncertainty

India’s economy is poised for significant growth, with real Gross Domestic Product (GDP) projected to rise by 7.2 per cent in the fiscal year 2024-25, according to Union Finance Minister Nirmala Sitharaman as explained in a report by the Press Trust of India.

Addressing the 50th International Monetary and Financial Committee (IMFC) meeting on October 26, she highlighted the vital role of investment and consumption as fundamental drivers of this optimistic forecast the PTI report detailed further.

Sitharaman emphasised several factors contributing to this growth outlook. Healthy balance sheets among banks and corporations, a return to normalcy in supply chains, and an increase in business optimism create a favourable economic environment. Additionally, the government’s robust capital expenditure plans are expected to further bolster growth, with inflation projected at a manageable 4.5 per cent, the report detailed further.

The Finance Minister also discussed India’s commitment to inclusive growth and social empowerment, aligning with the nation’s long-term vision of becoming a high-income economy by 2047. She remarked, “As India pursues its long-term vision of becoming a high-income economy by 2047, it remains committed to global collaboration.” The government aims for USD one trillion in merchandise exports by 2030, focusing on improved logistics, trade reforms, and deeper integration into global value chains.

Sitharaman’s remarks also touched on India's fiscal discipline. The country has adhered to its budgeted gross fiscal deficit target of 5.6 per cent of GDP for 2023-24, which has been lowered to 4.9 per cent for the upcoming fiscal year. Central government revenue expenditure saw a healthy rise of 9.6 per cent during July-August, bouncing back from a 1.5 per cent contraction in the previous quarter.

Increase in female labour force participation<o:p></o:p>

Another significant achievement highlighted was the increase in female labour force participation, which surged from 23.3 per cent in 2017-18 to 37 per cent in 2022-23. This improvement is crucial for enhancing economic productivity and fostering social development.

Investment trends also signal positive momentum. The central government’s capital expenditure rose by an impressive 25.8 per cent in July-August 2024, following a challenging first quarter. This emphasis on infrastructure development is anticipated to attract more private investment, further stimulating economic activity.

Sitharaman also addressed an important milestone: the complete electrification of villages across India. She stated, “I don't think any village in India is unelectrified today,” reflecting on the substantial progress made since 2014 when many areas lacked basic electrification infrastructure, according to another report by ANI.

Therefore, Nirmala Sitharaman's confidence in India's economic trajectory and its appeal to global investors reinforces the nation’s position as a key player in the global economy. With strategic focus on investment, infrastructure, and inclusive growth, India is well on its way to achieving its ambitious economic goals for the future.

Market participants and global investors will closely follow these developments and make informed investment decisions depending on how the Indian economy evolves and develops going ahead.

<o:p>&nbsp;</o:p>

India’s economy is poised for significant growth, with real Gross Domestic Product (GDP) projected to rise by 7.2 per cent in the fiscal year 2024-25, according to Union Finance Minister Nirmala Sitharaman as explained in a report by the Press Trust of India.

India’s economy is poised for significant growth, with real Gross Domestic Product (GDP) projected to rise by 7.2 per cent in the fiscal year 2024-25, according to Union Finance Minister Nirmala Sitharaman as explained in a report by the Press Trust of India. Addressing the 50th International Monetary and Financial Committee (IMFC) meeting on October 26, she highlighted the vital role of investment and consumption as fundamental drivers of this optimistic forecast the PTI report detailed further. Sitharaman emphasised several factors contributing to this growth outlook. Healthy balance sheets among banks and corporations, a return to normalcy in supply chains, and an increase in business optimism create a favourable economic environment. Additionally, the government’s robust capital expenditure plans are expected to further bolster growth, with inflation projected at a manageable 4.5 per cent, the report detailed further. The Finance Minister also discussed India’s commitment to inclusive growth and social empowerment, aligning with the nation’s long-term vision of becoming a high-income economy by 2047. She remarked, “As India pursues its long-term vision of becoming a high-income economy by 2047, it remains committed to global collaboration.” The government aims for USD one trillion in merchandise exports by 2030, focusing on improved logistics, trade reforms, and deeper integration into global value chains. Sitharaman’s remarks also touched on India's fiscal discipline. The country has adhered to its budgeted gross fiscal deficit target of 5.6 per cent of GDP for 2023-24, which has been lowered to 4.9 per cent for the upcoming fiscal year. Central government revenue expenditure saw a healthy rise of 9.6 per cent during July-August, bouncing back from a 1.5 per cent contraction in the previous quarter. Increase in female labour force participation Another significant achievement highlighted was the increase in female labour force participation, which surged from 23.3 per cent in 2017-18 to 37 per cent in 2022-23. This improvement is crucial for enhancing economic productivity and fostering social development. Investment trends also signal positive momentum. The central government’s capital expenditure rose by an impressive 25.8 per cent in July-August 2024, following a challenging first quarter. This emphasis on infrastructure development is anticipated to attract more private investment, further stimulating economic activity. Sitharaman also addressed an important milestone: the complete electrification of villages across India. She stated, “I don't think any village in India is unelectrified today,” reflecting on the substantial progress made since 2014 when many areas lacked basic electrification infrastructure, according to another report by ANI. Therefore, Nirmala Sitharaman's confidence in India's economic trajectory and its appeal to global investors reinforces the nation’s position as a key player in the global economy. With strategic focus on investment, infrastructure, and inclusive growth, India is well on its way to achieving its ambitious economic goals for the future. Market participants and global investors will closely follow these developments and make informed investment decisions depending on how the Indian economy evolves and develops going ahead.

FM Nirmala Sitharaman projects 7.2% GDP growth for India in FY25

Growth in India's business activity picked up slightly in October after softening last month, led by stronger demand in the manufacturing sector, according to a survey that also showed job creation rose at the fastest pace since February 2006 as detailed in a report by Reuters.

India's Composite Purchasing Managers' Index rose

The Reuters report further stated that, HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&amp;P Global, rose to 58.6 this month from September's final reading of 58.3, which was a 10-month low. The headline index has been above the 50-level separating growth from contraction for 39 consecutive months - the longest expansionary streak since June 2013.

"India's flash manufacturing PMI indicated that the manufacturing industry regained growth momentum in October. Several components accelerated after a modest slowdown over the past two to three months," noted Pranjul Bhandari, chief India economist at HSBC.

"New orders and new export orders expanded at faster rates, providing a good omen for industrial production for the remaining months of 2024."

Backed by strong sales, the manufacturing index showed bigger gains to 57.4 from 56.5 in September, while the dominant services industry reading rose slightly to 57.9 this month from 57.7. Goods production growth was at a two-month high.

That's encouraging news for India's manufacturing sector which accounts for less than one-fifth of the economy. Prime Minister Narendra Modi's government has been trying to boost goods production.

A government official recently said since the production-linked incentive scheme was launched, the country has attracted over $17 billion of investment, resulting in production worth about 11 trillion Indian rupees ($131 billion) and nearly a million jobs. The survey also noted increased international demand in October with a faster rise in overall exports.

That prompted companies to hire more staff with overall employment generation rising at the fastest pace in around eighteen-and-a-half years. Job creation in the services sector was higher than manufacturing.

Robust demand gave firms the leeway to pass on an acceleration in input costs to customers with prices charged rising at the steepest pace in three months. Companies reported higher prices for chemicals, eggs, meat, packaging, steel and vegetables. "Manufacturers' profit margins are still under pressure as input price inflation continued to pick up pace," Bhandari said.

The business outlook over the coming year was mixed with manufacturers at their most upbeat since July, while the sentiment faded somewhat for services companies, the survey showed, as concluded in the report.

Growth in India's business activity picked up slightly in October after softening last month, led by stronger demand in the manufacturing sector, according to a survey that also showed job creation rose at the fastest pace since February 2006 as detailed in a report by Reuters.

Growth in India's business activity picked up slightly in October after softening last month, led by stronger demand in the manufacturing sector, according to a survey that also showed job creation rose at the fastest pace since February 2006 as detailed in a report by Reuters. India's Composite Purchasing Managers' Index rose The Reuters report further stated that, HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 58.6 this month from September's final reading of 58.3, which was a 10-month low. The headline index has been above the 50-level separating growth from contraction for 39 consecutive months - the longest expansionary streak since June 2013. "India's flash manufacturing PMI indicated that the manufacturing industry regained growth momentum in October. Several components accelerated after a modest slowdown over the past two to three months," noted Pranjul Bhandari, chief India economist at HSBC. "New orders and new export orders expanded at faster rates, providing a good omen for industrial production for the remaining months of 2024." Backed by strong sales, the manufacturing index showed bigger gains to 57.4 from 56.5 in September, while the dominant services industry reading rose slightly to 57.9 this month from 57.7. Goods production growth was at a two-month high. That's encouraging news for India's manufacturing sector which accounts for less than one-fifth of the economy. Prime Minister Narendra Modi's government has been trying to boost goods production. A government official recently said since the production-linked incentive scheme was launched, the country has attracted over $17 billion of investment, resulting in production worth about 11 trillion Indian rupees ($131 billion) and nearly a million jobs. The survey also noted increased international demand in October with a faster rise in overall exports. That prompted companies to hire more staff with overall employment generation rising at the fastest pace in around eighteen-and-a-half years. Job creation in the services sector was higher than manufacturing. Robust demand gave firms the leeway to pass on an acceleration in input costs to customers with prices charged rising at the steepest pace in three months. Companies reported higher prices for chemicals, eggs, meat, packaging, steel and vegetables. "Manufacturers' profit margins are still under pressure as input price inflation continued to pick up pace," Bhandari said. The business outlook over the coming year was mixed with manufacturers at their most upbeat since July, while the sentiment faded somewhat for services companies, the survey showed, as concluded in the report.

India's business activity accelerates in October, PMI reports

India is grappling with a significant skills gap among its young workforce, a challenge that Finance Minister Nirmala Sitharaman addressed during her recent visit to New York. Speaking at an event hosted by The Economic Club of New York, she emphasised the urgent need for enhancing employability through improved skill sets tailored to meet the demands of the job market as detailed in a report by Bloomberg.

Sitharaman stated, "The biggest challenge that we had is the employability level or the skill set which is so required." She pointed out that many businesses report that graduate students often lack the necessary skills to be effective in their roles. "For being employed, they need something more and it is that gap that the government of India is trying to now fill," she added.

The finance minister's remarks come at a time when India is focusing on skilling initiatives aimed at bridging this gap. With a vast young population, enhancing employability through targeted training and education has become a priority for the government, the Bloomberg report added further.

Navigating global economic challenges<o:p></o:p>

In addition to addressing domestic concerns, Sitharaman spoke about the broader global economic landscape and its implications for India. She noted that while previous decades were characterised by broad multilateral trade, the future will likely be shaped by strategic economic partnerships. "India is well-poised to take advantage of this transition," she asserted.

As nations re-evaluate their supply chains in response to geopolitical shifts, India aims to position itself as a key partner for countries looking to diversify their sources of goods and services. This strategic pivot could provide significant opportunities for Indian businesses and enhance the country's role in global trade.

During her visit, Sitharaman chaired the Tech Leaders Roundtable and engaged with leaders from various sectors, including a discussion on investment opportunities at the New York Stock Exchange. She also participated in a fireside chat with IBM Chairman and CEO Arvind Krishna, focusing on India's ongoing economic reforms and growth trajectory.

Addressing global uncertainties<o:p></o:p>

Sitharaman did not shy away from discussing the multiple global challenges currently facing economies worldwide. She highlighted issues such as ongoing conflicts in West Asia and Ukraine, potential dollar liquidity shocks, trade wars, and rising oil prices. These factors, coupled with China's growing influence, necessitate a protective approach towards domestic production. To grow nations will have to work in a strategic and planned manner.

In her discussions with Citibank CEO Jane Fraser, Sitharaman explored the future of India's banking sector in light of recent reforms. They also delved into the role of artificial intelligence in critical areas such as agriculture and urban development, showcasing India's potential as a burgeoning hub for pharmaceuticals and technology.

Looking ahead<o:p></o:p>

Following her engagements in New York, Sitharaman is set to head to Washington, DC, for the Annual Meetings of the International Monetary Fund (IMF) and World Bank. She will also participate in discussions involving G20 Finance Ministers and Central Bank Governors.

As India continues to tackle its skills gap issue amidst shifting global dynamics, the government's proactive approach may pave the way for enhanced employability and economic resilience in an increasingly competitive landscape.

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India is grappling with a significant skills gap among its young workforce, a challenge that Finance Minister Nirmala Sitharaman addressed during her recent visit to New York.

India is grappling with a significant skills gap among its young workforce, a challenge that Finance Minister Nirmala Sitharaman addressed during her recent visit to New York. Speaking at an event hosted by The Economic Club of New York, she emphasised the urgent need for enhancing employability through improved skill sets tailored to meet the demands of the job market as detailed in a report by Bloomberg. Sitharaman stated, "The biggest challenge that we had is the employability level or the skill set which is so required." She pointed out that many businesses report that graduate students often lack the necessary skills to be effective in their roles. "For being employed, they need something more and it is that gap that the government of India is trying to now fill," she added. The finance minister's remarks come at a time when India is focusing on skilling initiatives aimed at bridging this gap. With a vast young population, enhancing employability through targeted training and education has become a priority for the government, the Bloomberg report added further. Navigating global economic challenges In addition to addressing domestic concerns, Sitharaman spoke about the broader global economic landscape and its implications for India. She noted that while previous decades were characterised by broad multilateral trade, the future will likely be shaped by strategic economic partnerships. "India is well-poised to take advantage of this transition," she asserted. As nations re-evaluate their supply chains in response to geopolitical shifts, India aims to position itself as a key partner for countries looking to diversify their sources of goods and services. This strategic pivot could provide significant opportunities for Indian businesses and enhance the country's role in global trade. During her visit, Sitharaman chaired the Tech Leaders Roundtable and engaged with leaders from various sectors, including a discussion on investment opportunities at the New York Stock Exchange. She also participated in a fireside chat with IBM Chairman and CEO Arvind Krishna, focusing on India's ongoing economic reforms and growth trajectory. Addressing global uncertainties Sitharaman did not shy away from discussing the multiple global challenges currently facing economies worldwide. She highlighted issues such as ongoing conflicts in West Asia and Ukraine, potential dollar liquidity shocks, trade wars, and rising oil prices. These factors, coupled with China's growing influence, necessitate a protective approach towards domestic production. To grow nations will have to work in a strategic and planned manner. In her discussions with Citibank CEO Jane Fraser, Sitharaman explored the future of India's banking sector in light of recent reforms. They also delved into the role of artificial intelligence in critical areas such as agriculture and urban development, showcasing India's potential as a burgeoning hub for pharmaceuticals and technology. Looking ahead Following her engagements in New York, Sitharaman is set to head to Washington, DC, for the Annual Meetings of the International Monetary Fund (IMF) and World Bank. She will also participate in discussions involving G20 Finance Ministers and Central Bank Governors. As India continues to tackle its skills gap issue amidst shifting global dynamics, the government's proactive approach may pave the way for enhanced employability and economic resilience in an increasingly competitive landscape.

India's main challenge is skills gap for young workforce, says FM Nirmala Sitharaman

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India.

The global economy remained resilient in the first half of 2024, with declining inflation supporting household spending. Stable growth momentum amid monetary policy easing is becoming the prevailing theme across most economies, according to an article on 'State of the Economy' published in the bulletin that was released on October 21.

The article further stated that as per its economic activity index (EAI), the gross domestic product (GDP) growth is projected at 6.8 per cent in the July-September 2024 quarter, lower than the RBI’s projection of 7 per cent for the same period.

Whereas, in the quarter ended June 2024, the real GDP growth slipped to a five-quarter low of 6.7 per cent due to slower growth in agriculture, government spending and services. "In spite of geopolitical tensions, India’s growth outlook is supported by robust domestic engines," it said, the PTI report detailed&nbsp;further.

It also noted that some high-frequency indicators have, however, shown a slackening of momentum in the second quarter of 2024-25, partly attributable to factors like unusually heavy rains in August and September.

"Looking ahead, private investment is showing some encouraging signs in terms of lead indicators while consumption spending is shaping up for a festival season revival," said the article authored by a team led by RBI deputy governor Michael Debabrata Patra.

After remaining below target for two consecutive months, inflation surged in September, as an adverse statistical base effect was compounded by a resurgence in food price momentum. The central bank said the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India.

Focus on the private sector<o:p></o:p>

“The stage is set for the private sector to deploy capital and invest in growth, build capacities, create employment and improve efficiencies,” the article stated.

It further said that with the financial sector ready to intermediate resources for productive investment, buffered by healthy balance sheets, and the government’s continued thrust on capex, the investment outlook appears bright.<o:p></o:p>

“The ongoing strengthening of global trade could provide a fillip to external demand for India’s exports although escalation of geopolitical tensions remains a potential threat,” the article also stated.

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India.

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India. The global economy remained resilient in the first half of 2024, with declining inflation supporting household spending. Stable growth momentum amid monetary policy easing is becoming the prevailing theme across most economies, according to an article on 'State of the Economy' published in the bulletin that was released on October 21. The article further stated that as per its economic activity index (EAI), the gross domestic product (GDP) growth is projected at 6.8 per cent in the July-September 2024 quarter, lower than the RBI’s projection of 7 per cent for the same period. Whereas, in the quarter ended June 2024, the real GDP growth slipped to a five-quarter low of 6.7 per cent due to slower growth in agriculture, government spending and services. "In spite of geopolitical tensions, India’s growth outlook is supported by robust domestic engines," it said, the PTI report detailed further. It also noted that some high-frequency indicators have, however, shown a slackening of momentum in the second quarter of 2024-25, partly attributable to factors like unusually heavy rains in August and September. "Looking ahead, private investment is showing some encouraging signs in terms of lead indicators while consumption spending is shaping up for a festival season revival," said the article authored by a team led by RBI deputy governor Michael Debabrata Patra. After remaining below target for two consecutive months, inflation surged in September, as an adverse statistical base effect was compounded by a resurgence in food price momentum. The central bank said the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India. Focus on the private sector “The stage is set for the private sector to deploy capital and invest in growth, build capacities, create employment and improve efficiencies,” the article stated. It further said that with the financial sector ready to intermediate resources for productive investment, buffered by healthy balance sheets, and the government’s continued thrust on capex, the investment outlook appears bright. “The ongoing strengthening of global trade could provide a fillip to external demand for India’s exports although escalation of geopolitical tensions remains a potential threat,” the article also stated.

Robust domestic engines supporting India's growth outlook: RBI Bulletin

India is on track to become the world’s third-largest economy by 2030, according to a recent report by S&amp;P Global. With its rapid economic growth and expanding middle class, India is set to overtake major economies, trailing only the United States and China.

It said emerging economies have high ambitions for the next decade and beyond with India aiming to become a $30 trillion economy by 2047, from the current $3.6 trillion. India is currently the fifth largest economy.

"India is poised to be the fastest-growing major economy over the next three years and the third largest globally by 2030. Its 2024 entry into JP Morgan's Government Emerging Market Bond Index could provide additional government funding and unlock significant resources in domestic capital markets. This is only a first step, investors will continue looking for improved market access and settlement procedures," S&amp;P said.

However, the country's rising population and the pressures it places on infrastructure and resources are key challenges that could hinder long-term sustainability as detailed in a report by the Press Trust of India.

Economic growth and global positioning

S&amp;P Global's report outlines India's projected economic rise, emphasising its robust industrial sector, growing consumer base, and advancements in technology. The country’s gross domestic product (GDP) is expected to surpass that of Japan and Germany within the next six years, marking a significant shift in global economic dynamics. This would place India just behind the US and China in terms of economic output, cementing its position as a dominant player on the world stage.<o:p></o:p>

The country’s economic ascent has been driven by a combination of government reforms, increased foreign investment, and a youthful workforce eager to capitalise on opportunities in technology and manufacturing. India has already made strides in sectors like pharmaceuticals, information technology, and renewable energy, positioning itself as a key destination for global capital.

Population growth: Opportunity and challenge

The PTI report further elaborated that, while India's economic future looks promising, S&amp;P Global also highlights the significant challenges posed by the country's rapidly growing population. India recently surpassed China to become the world’s most populous country, and this population boom presents both opportunities and obstacles.<o:p></o:p>

On the one hand, a large population offers a massive labour force and consumer market, giving India a competitive edge in terms of human capital and consumption. However, it also worsens&nbsp;issues related to infrastructure, healthcare, education, and employment. The rapid urbanisation and increasing demand for resources could strain public services and put pressure on the government to address socio-economic disparities.<o:p></o:p>

S&amp;P Global’s report notes that managing the needs of such a vast population will require substantial investments in infrastructure, from transportation to digital networks. The country's policymakers must focus on creating inclusive growth strategies that not only harness the potential of its population but also mitigate risks associated with overpopulation, such as environmental degradation and unemployment.<o:p></o:p>

Global challenges and policy responses

India’s journey to becoming a global economic powerhouse is not without hurdles, particularly in the face of global economic uncertainties. S&amp;P Global’s forecast also accounts for inflationary pressures, global supply chain disruptions, and geopolitical tensions, which could affect the country's economic trajectory.<o:p></o:p>

In response, India has been proactive in formulating policies to strengthen its domestic industries and attract foreign direct investment (FDI). Initiatives like “Make in India” and the push for green energy have further cemented its appeal as an investment destination.

Additionally, the government has ramped up its focus on digital transformation, aiming to bridge the digital divide and expand internet access across rural areas, thereby unlocking new avenues for growth.<o:p></o:p>

Despite these efforts, India must also navigate the complexities of climate change and resource management, which are critical to ensuring long-term sustainability as the country’s population continues to expand.<o:p></o:p>

Hence, India's potential to become the world’s third-largest economy by 2030 is an evidence to its economic resilience and innovation. However, S&amp;P Global’s report serves as a reminder that population growth, while offering tremendous opportunities, presents serious challenges that must be addressed through sound policies and infrastructure development. Balancing economic ambitions with sustainable growth will be key to India’s success in the coming decades.<o:p></o:p>

India is on track to become the world’s third-largest economy by 2030, according to a recent report by S&P Global. With its rapid economic growth and expanding middle class, India is set to overtake major economies, trailing only the United States and China.

India is on track to become the world’s third-largest economy by 2030, according to a recent report by S&P Global. With its rapid economic growth and expanding middle class, India is set to overtake major economies, trailing only the United States and China. It said emerging economies have high ambitions for the next decade and beyond with India aiming to become a $30 trillion economy by 2047, from the current $3.6 trillion. India is currently the fifth largest economy. "India is poised to be the fastest-growing major economy over the next three years and the third largest globally by 2030. Its 2024 entry into JP Morgan's Government Emerging Market Bond Index could provide additional government funding and unlock significant resources in domestic capital markets. This is only a first step, investors will continue looking for improved market access and settlement procedures," S&P said. However, the country's rising population and the pressures it places on infrastructure and resources are key challenges that could hinder long-term sustainability as detailed in a report by the Press Trust of India. Economic growth and global positioning S&P Global's report outlines India's projected economic rise, emphasising its robust industrial sector, growing consumer base, and advancements in technology. The country’s gross domestic product (GDP) is expected to surpass that of Japan and Germany within the next six years, marking a significant shift in global economic dynamics. This would place India just behind the US and China in terms of economic output, cementing its position as a dominant player on the world stage. The country’s economic ascent has been driven by a combination of government reforms, increased foreign investment, and a youthful workforce eager to capitalise on opportunities in technology and manufacturing. India has already made strides in sectors like pharmaceuticals, information technology, and renewable energy, positioning itself as a key destination for global capital. Population growth: Opportunity and challenge The PTI report further elaborated that, while India's economic future looks promising, S&P Global also highlights the significant challenges posed by the country's rapidly growing population. India recently surpassed China to become the world’s most populous country, and this population boom presents both opportunities and obstacles. On the one hand, a large population offers a massive labour force and consumer market, giving India a competitive edge in terms of human capital and consumption. However, it also worsens issues related to infrastructure, healthcare, education, and employment. The rapid urbanisation and increasing demand for resources could strain public services and put pressure on the government to address socio-economic disparities. S&P Global’s report notes that managing the needs of such a vast population will require substantial investments in infrastructure, from transportation to digital networks. The country's policymakers must focus on creating inclusive growth strategies that not only harness the potential of its population but also mitigate risks associated with overpopulation, such as environmental degradation and unemployment. Global challenges and policy responses India’s journey to becoming a global economic powerhouse is not without hurdles, particularly in the face of global economic uncertainties. S&P Global’s forecast also accounts for inflationary pressures, global supply chain disruptions, and geopolitical tensions, which could affect the country's economic trajectory. In response, India has been proactive in formulating policies to strengthen its domestic industries and attract foreign direct investment (FDI). Initiatives like “Make in India” and the push for green energy have further cemented its appeal as an investment destination. Additionally, the government has ramped up its focus on digital transformation, aiming to bridge the digital divide and expand internet access across rural areas, thereby unlocking new avenues for growth. Despite these efforts, India must also navigate the complexities of climate change and resource management, which are critical to ensuring long-term sustainability as the country’s population continues to expand. Hence, India's potential to become the world’s third-largest economy by 2030 is an evidence to its economic resilience and innovation. However, S&P Global’s report serves as a reminder that population growth, while offering tremendous opportunities, presents serious challenges that must be addressed through sound policies and infrastructure development. Balancing economic ambitions with sustainable growth will be key to India’s success in the coming decades.

India set to become the world’s third-largest economy by 2030, but rising population poses challenges: S&P

As the festive season unfolds, India's housing market is heating up! With buyers eager to invest in their dream homes, developers are rolling out enticing offers and flexible payment plans. This surge in demand not only reflects changing consumer preferences but also signals a robust boost for the Indian economy.

India: Homebuyers Celebrate Festive Season Boost

This report explores India's consumer confidence as the festive season gets busier with some of the country's largest spending spikes expected soon. But can the spending boom support India's growing economy? Watch to know more.

India: Experts Predict Spending Surge Ahead Of Diwali

The Reserve Bank of India (RBI) kept its key interest rate unchanged on Wednesday as widely expected, but changed its policy stance to "neutral", opening the door for rate cuts as early as December.

The Reserve Bank of India (RBI) kept its key interest rate unchanged on Wednesday as widely expected, but changed its policy stance to "neutral", opening the door for rate cuts as early as December. India has lagged global peers in easing policy as inflation has remained above target due to high food prices. Central banks in developed economies, led by the US Federal Reserve, in September delivered their biggest collective push on interest rate cuts since the COVID-19 pandemic. But RBI Governor Shaktikanta Das said there was greater confidence now on the last mile of disinflation towards the central bank's four per cent target. "It is with a lot of effort that the inflation horse has been brought to the stable - that is, closer to the target," Das said, announcing the rate decision. "We have to be very careful about opening the gate as the horse may simply bolt again. We must keep the horse on (a) tight leash so that we do not lose control," Das said. The change in policy stance gives the central bank more "flexibility" and "optionality", Das added at a press conference which followed the statement. "Considering the significant risks that lie ahead of us and that are staring at us, it will not be appropriate to specifically talk of the timing of a rate cut," Das said. Also Read |Indian govt extends RBI deputy governor M. Rajeshwar Rao's tenure by one year| The Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the repo rate unchanged at 6.50 per cent for a tenth straight policy meeting. The committee, however, voted unanimously to change its policy stance to "neutral" from "withdrawal of accommodation". Rates were predicted to be kept on hold by 80% of the 76 economists polled by Reuters but many expected cuts starting in December. The MPC last changed rates in February 2023, when the policy rate was raised to 6.50 per cent. It raised rates by a cumulative 250 basis points (bps) between April 2022 and February 2023, as the economy emerged from the COVID-19 pandemic and inflation took off. "We continue to expect the onset of rate-easing from December with a 25-bps cut, but the scale of easing in this cycle is expected to be shallow with limited scope for back-to-back easing in each policy (meeting)," said Upasna Bhardwaj, chief economist Kotak Mahindra Bank. IDFC FIRST Bank expects a total of 50 bps points in rate cuts by March 2025, beginning with a 25 bps cut in December. Equity markets gained, led by interest rate sensitive sectors, and bond yields fell as the central bank indicated rate cuts ahead. The Indian rupee was marginally higher. The central bank expects inflation to average 4.5 per cent in the financial year 2024-25, unchanged from the forecast provided at the August meeting. Also Read |Global markets surge as $8 trillion rally faces key tests| Annual retail inflation remained below the central bank's target of 4% for a second consecutive month in August but is seen rising to five per cent in September, according to Barclays. The central bank will see through the upcoming "hump" carefully and then make a decision, deputy governor Michael Patra said at the post-policy press conference. While the recent escalation of tensions in the Middle East has shrouded the outlook on the inflation trajectory, concerns about economic growth have also begun to emerge. High-frequency indicators such as the manufacturing PMI slowed to an eight-month low in September, while the services PMI eased to a 10-month trough, latest data showed. India's overall growth slowed to 6.7 per cent in the June quarter. The central bank, however, retained its GDP growth forecast for the current financial year at 7.2 per cent. It said that prospects for private consumption, the mainstay of demand in the economy, look bright on the back of an improved agricultural outlook and rural demand. The prevailing and expected inflation-growth balance have created conditions for a shift in the monetary policy stance, Das said. But he added that significant risks persist from adverse weather conditions, geopolitical conflict and the recent increase in some commodity prices. The committee's latest meeting included three new external members, who were appointed for a four-year term earlier this month. Five out of six members voted in favour of holding rates. Newly appointed Nagesh Kumar voted to cut the policy rate by 25 basis points. In August, two of six committee members had voted for a cut in rates. Separately, the central bank asked the country's non-bank lenders to avoid a "growth-at-any-cost" approach, adding to its warnings to the financial sector against "all forms of exuberance." Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

India Central Bank leaves interest rates unchanged, shifts stance to ‘neutral’ signalling rate cuts ahead

Foreign investors have made a remarkable return to the Indian equity markets, injecting Rs 57,359 crore in September alone. This influx marks the highest level of foreign portfolio investment (FPI) in nine months and has propelled total FPI investments in Indian equities to over Rs 1 lakh crore for the year 2024, according to data from depositories as detailed in a Press Trust of India report. <o:p></o:p>

The surge in investment is largely attributed to a recent interest rate cut by the US Federal Reserve the report further stated. Analysts suggest that this easing of global interest rates, coupled with India's robust economic fundamentals, will likely sustain FPI inflows moving forward. Robin Arya, founder and CEO of research analyst firm GoalFi, noted that the Reserve Bank of India's (RBI) policies on inflation and liquidity will be crucial in maintaining this positive trend.<o:p></o:p>

As of September 27, FPIs recorded a net investment of Rs 57,359 crore in equities, with one trading session still remaining in the month. This figure represents the highest net inflow since December 2023 when FPIs invested Rs 66,135 crore. After withdrawing Rs 34,252 crore during April and May, FPIs have consistently returned to the market since June, demonstrating a strong buying trend throughout most of 2024.<o:p></o:p>

Several factors have contributed to this revival in FPI interest. The commencement of an interest rate cut cycle by the US Federal Reserve has enhanced liquidity in Indian markets. Additionally, India's increasing weightage in global indices and promising growth prospects have attracted foreign investors. Himanshu Srivastava from Morningstar Investment Research India highlighted that a series of large initial public offerings (IPOs) has also played a significant role in drawing foreign capital.<o:p></o:p>

The recent 50 basis points rate cut by the US Fed on September 18 has further increased liquidity within Indian markets. Manoj Purohit from BDO India explained that this interest rate differential is expected to lure more FPI investments into India. Bharat Gala, COO of Ventura Securities, added that numerous mainboard IPOs with appealing valuations have opened new opportunities for foreign money.<o:p></o:p>

The PTI report further stated that, in terms of performance across markets, Hong Kong emerged as a standout performer in September with its Hang Seng index rising by 14 per cent. Analysts predict that China's monetary and fiscal stimulus measures will bolster its economy and benefit Chinese stocks listed in Hong Kong. VK Vijayakumar from Geojit Financial Services stated that if the Hang Seng continues its upward trajectory, it may attract additional funds into this undervalued market.<o:p></o:p>

In the debt segment, FPIs infused Rs 8,543 crore through the Voluntary Retention Route (VRR) and Rs 22,023 crore via the Fully Accessible Route (FRR) during September. With declining US bond yields making Indian government securities more attractive due to higher yields and liquidity, GoalFi's Arya noted that sustained foreign participation is likely through both VRR and FRR routes. The RBI's supportive approach towards debt markets is also expected to foster continued foreign investment activity.<o:p></o:p>

<o:p>&nbsp;</o:p>

Foreign investors have made a remarkable return to the Indian equity markets, injecting Rs 57,359 crore in September alone. This influx marks the highest level of foreign portfolio investment (FPI) in nine months and has propelled total FPI investments in Indian equities to over Rs 1 lakh crore for the year 2024, according to data from depositories as detailed in a Press Trust of India report.

Foreign investors have made a remarkable return to the Indian equity markets, injecting Rs 57,359 crore in September alone. This influx marks the highest level of foreign portfolio investment (FPI) in nine months and has propelled total FPI investments in Indian equities to over Rs 1 lakh crore for the year 2024, according to data from depositories as detailed in a Press Trust of India report. The surge in investment is largely attributed to a recent interest rate cut by the US Federal Reserve the report further stated. Analysts suggest that this easing of global interest rates, coupled with India's robust economic fundamentals, will likely sustain FPI inflows moving forward. Robin Arya, founder and CEO of research analyst firm GoalFi, noted that the Reserve Bank of India's (RBI) policies on inflation and liquidity will be crucial in maintaining this positive trend. As of September 27, FPIs recorded a net investment of Rs 57,359 crore in equities, with one trading session still remaining in the month. This figure represents the highest net inflow since December 2023 when FPIs invested Rs 66,135 crore. After withdrawing Rs 34,252 crore during April and May, FPIs have consistently returned to the market since June, demonstrating a strong buying trend throughout most of 2024. Several factors have contributed to this revival in FPI interest. The commencement of an interest rate cut cycle by the US Federal Reserve has enhanced liquidity in Indian markets. Additionally, India's increasing weightage in global indices and promising growth prospects have attracted foreign investors. Himanshu Srivastava from Morningstar Investment Research India highlighted that a series of large initial public offerings (IPOs) has also played a significant role in drawing foreign capital. The recent 50 basis points rate cut by the US Fed on September 18 has further increased liquidity within Indian markets. Manoj Purohit from BDO India explained that this interest rate differential is expected to lure more FPI investments into India. Bharat Gala, COO of Ventura Securities, added that numerous mainboard IPOs with appealing valuations have opened new opportunities for foreign money. The PTI report further stated that, in terms of performance across markets, Hong Kong emerged as a standout performer in September with its Hang Seng index rising by 14 per cent. Analysts predict that China's monetary and fiscal stimulus measures will bolster its economy and benefit Chinese stocks listed in Hong Kong. VK Vijayakumar from Geojit Financial Services stated that if the Hang Seng continues its upward trajectory, it may attract additional funds into this undervalued market. In the debt segment, FPIs infused Rs 8,543 crore through the Voluntary Retention Route (VRR) and Rs 22,023 crore via the Fully Accessible Route (FRR) during September. With declining US bond yields making Indian government securities more attractive due to higher yields and liquidity, GoalFi's Arya noted that sustained foreign participation is likely through both VRR and FRR routes. The RBI's supportive approach towards debt markets is also expected to foster continued foreign investment activity.

Foreign investments surge into Indian equities with record Rs 57,359 crore inflow in September

India is poised to achieve the status of the third-largest economy by the fiscal year 2030-31, propelled by a robust projected annual growth rate of 6.7 per cent, as outlined in a recent report by credit rating agency S&amp;P Global titled “India Forward Emerging Perspectives”. The report not only highlights this optimistic projection but also suggests essential measures to sustain economic growth as detailed in a report by Press Trust of India. 

Robust growth projections<o:p></o:p>

S&amp;P Global's analysis indicates that maintaining the momentum of economic growth will require continued reforms aimed at enhancing business transactions and logistics. The report underlines the importance of boosting private sector investment while simultaneously reducing dependence on public capital. Furthermore, it anticipates that the Indian equity market will remain dynamic and competitive, bolstered by strong growth prospects and improved regulatory frameworks. Notably, foreign inflows into Indian government bonds have surged since the country joined major emerging market indices, a trend expected to continue.

Key measures for economic development<o:p></o:p>

To fully leverage its potential, S&amp;P Global recommends that India evolves its infrastructure and geopolitical strategies, particularly concerning its extensive coastline. This development is crucial for maximising trade benefits, as approximately 90 per cent of India's trade is maritime. The agency emphasises the need for robust port infrastructure to accommodate rising exports and bulk commodities imports.

Additionally, the report addresses India's increasing domestic energy demands. It advocates for the development of sustainable technologies, including renewable energy sources and low-emission fuels, to balance energy security with ongoing energy transition plans. The agricultural sector is also highlighted as needing advanced technologies and new policies to enhance infrastructure and productivity. Addressing critical issues such as irrigation, storage, and supply distribution is vital for ensuring food security and economic stability.

Sustainable energy and agriculture innovations<o:p></o:p>

S&amp;P Global further stated that leveraging artificial intelligence (AI) will significantly boost India's economic growth. The integration of AI presents opportunities for public-private partnerships that can replicate the successes achieved in India's digital infrastructure.

India's GDP has shown impressive growth, expanding by 8.2 per cent during the financial year 2023-24, thus maintaining its position as the fastest-growing major economy globally. Historical data reveals that the economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. This consistent upward trajectory has prompted numerous global rating agencies and multilateral organisations to revise their growth forecasts for India positively.

In July, the International Monetary Fund (IMF) revised India's growth projections for 2024 from 6.8 per cent to 7 per cent, reinforcing India's reputation as the fastest-growing economy among emerging markets and developing economies. The IMF attributes this robust growth to strong domestic demand and a rising working-age population.

Hence, as India gears up for its ambitious economic future, the insights provided by S&amp;P Global serve as a roadmap for policymakers and investors alike. By focusing on sustainable practices and infrastructural development, India can solidify its position as a global economic powerhouse in the coming years.

India is poised to achieve the status of the third-largest economy by the fiscal year 2030-31, propelled by a robust projected annual growth rate of 6.7 per cent, as outlined in a recent report by credit rating agency S&P Global titled “India Forward Emerging Perspectives”.

India is poised to achieve the status of the third-largest economy by the fiscal year 2030-31, propelled by a robust projected annual growth rate of 6.7 per cent, as outlined in a recent report by credit rating agency S&P Global titled “India Forward Emerging Perspectives”. The report not only highlights this optimistic projection but also suggests essential measures to sustain economic growth as detailed in a report by Press Trust of India. Robust growth projections S&P Global's analysis indicates that maintaining the momentum of economic growth will require continued reforms aimed at enhancing business transactions and logistics. The report underlines the importance of boosting private sector investment while simultaneously reducing dependence on public capital. Furthermore, it anticipates that the Indian equity market will remain dynamic and competitive, bolstered by strong growth prospects and improved regulatory frameworks. Notably, foreign inflows into Indian government bonds have surged since the country joined major emerging market indices, a trend expected to continue. Key measures for economic development To fully leverage its potential, S&P Global recommends that India evolves its infrastructure and geopolitical strategies, particularly concerning its extensive coastline. This development is crucial for maximising trade benefits, as approximately 90 per cent of India's trade is maritime. The agency emphasises the need for robust port infrastructure to accommodate rising exports and bulk commodities imports. Additionally, the report addresses India's increasing domestic energy demands. It advocates for the development of sustainable technologies, including renewable energy sources and low-emission fuels, to balance energy security with ongoing energy transition plans. The agricultural sector is also highlighted as needing advanced technologies and new policies to enhance infrastructure and productivity. Addressing critical issues such as irrigation, storage, and supply distribution is vital for ensuring food security and economic stability. Sustainable energy and agriculture innovations S&P Global further stated that leveraging artificial intelligence (AI) will significantly boost India's economic growth. The integration of AI presents opportunities for public-private partnerships that can replicate the successes achieved in India's digital infrastructure. India's GDP has shown impressive growth, expanding by 8.2 per cent during the financial year 2023-24, thus maintaining its position as the fastest-growing major economy globally. Historical data reveals that the economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. This consistent upward trajectory has prompted numerous global rating agencies and multilateral organisations to revise their growth forecasts for India positively. In July, the International Monetary Fund (IMF) revised India's growth projections for 2024 from 6.8 per cent to 7 per cent, reinforcing India's reputation as the fastest-growing economy among emerging markets and developing economies. The IMF attributes this robust growth to strong domestic demand and a rising working-age population. Hence, as India gears up for its ambitious economic future, the insights provided by S&P Global serve as a roadmap for policymakers and investors alike. By focusing on sustainable practices and infrastructural development, India can solidify its position as a global economic powerhouse in the coming years.

India on track to be third-largest economy by 2030-31

Recently released report on the Indian economy by the reserve bank of India shows robust growth and strong recovery from the pandemic-driven decline.

India’s GDP growth shows strong recovery in 2023-24

Seen as a concerning development, tax evasion under the Goods and Services Tax (GST) regime has surged to a staggering Rs 2.01 lakh crore for the financial year 2023-24, nearly doubling from Rs 1.01 lakh crore in the previous fiscal year. This alarming increase, as reported by the Directorate General of GST Intelligence (DGGI), underscores the growing challenge in GST enforcement and the urgent need for stricter measures to curb this trend.

The DGGI report has identified the online gaming and banking, financial services, and insurance (BFSI) sectors as the most susceptible to GST evasion. The online gaming sector alone accounted for a massive Rs 81,875 crore in evasion, while the BFSI sector saw Rs 18,961 crore in evasion. Among goods, the iron, copper, scrap, and alloys sectors faced Rs 16,806 crore in evasion, with pan masala, tobacco, cigarette, and beedi following at Rs 5,794 crore as detailed in a PTI report.

&nbsp;Evasion capital: Mumbai takes the lead<o:p></o:p>

Mumbai has emerged as the highest zone for GST evasion detection, with a total of Rs 70,985 crore, followed by Delhi at Rs 18,313 crore, Pune at Rs 17,328 crore, Gurugram at Rs 15,502 crore, and Hyderabad at Rs 11,081 crore. This concentration of evasion in major metropolitan areas highlights the need for enhanced monitoring and enforcement measures in these regions.

The breakdown of evasion types showed that non-payment of tax, including clandestine supply and undervaluation, constituted 46 per cent of cases, followed by fake input tax credit at 20 per cent and wrong or non-reversal of ITC or blocked credit at 19 per cent. These findings underscore the various methods employed by businesses and individuals to evade their tax obligations.

A steady rise in GST evasion since the introduction<o:p></o:p>

Since the introduction of GST in 2017, detected evasion has been steadily increasing, with previous figures of Rs 7,879 crore in 2017-18, Rs 19,319 crore in 2018-19, Rs 21,739 crore in 2019-20, Rs 31,908 crore in 2020-21, and Rs 50,325 crore in 2021-22. This consistent upward trend highlights the need for continuous improvement in GST enforcement mechanisms and the implementation of robust anti-evasion strategies.

Signals need for stricter regulations and enforcement<o:p></o:p>

The alarming rise in GST evasion, reaching over Rs 2.37 lakh crore across 20,576 cases in FY24, has prompted calls for stricter regulations and enhanced enforcement measures. Experts emphasize the importance of tightening regulations across sectors, particularly in the online gaming and BFSI industries, to prevent further losses to the national exchequer.

As the government works to address this pressing issue, businesses and individuals are urged to comply with GST regulations and contribute their fair share to the nation's economic growth. The successful implementation of anti-evasion strategies and the cooperation of all stakeholders will be crucial in curbing this concerning trend and ensuring the effective collection of GST revenues.

Seen as a concerning development, tax evasion under the Goods and Services Tax (GST) regime has surged to a staggering Rs 2.01 lakh crore for the financial year 2023-24, nearly doubling from Rs 1.

Seen as a concerning development, tax evasion under the Goods and Services Tax (GST) regime has surged to a staggering Rs 2.01 lakh crore for the financial year 2023-24, nearly doubling from Rs 1.01 lakh crore in the previous fiscal year. This alarming increase, as reported by the Directorate General of GST Intelligence (DGGI), underscores the growing challenge in GST enforcement and the urgent need for stricter measures to curb this trend. The DGGI report has identified the online gaming and banking, financial services, and insurance (BFSI) sectors as the most susceptible to GST evasion. The online gaming sector alone accounted for a massive Rs 81,875 crore in evasion, while the BFSI sector saw Rs 18,961 crore in evasion. Among goods, the iron, copper, scrap, and alloys sectors faced Rs 16,806 crore in evasion, with pan masala, tobacco, cigarette, and beedi following at Rs 5,794 crore as detailed in a PTI report. Evasion capital: Mumbai takes the lead Mumbai has emerged as the highest zone for GST evasion detection, with a total of Rs 70,985 crore, followed by Delhi at Rs 18,313 crore, Pune at Rs 17,328 crore, Gurugram at Rs 15,502 crore, and Hyderabad at Rs 11,081 crore. This concentration of evasion in major metropolitan areas highlights the need for enhanced monitoring and enforcement measures in these regions. The breakdown of evasion types showed that non-payment of tax, including clandestine supply and undervaluation, constituted 46 per cent of cases, followed by fake input tax credit at 20 per cent and wrong or non-reversal of ITC or blocked credit at 19 per cent. These findings underscore the various methods employed by businesses and individuals to evade their tax obligations. A steady rise in GST evasion since the introduction Since the introduction of GST in 2017, detected evasion has been steadily increasing, with previous figures of Rs 7,879 crore in 2017-18, Rs 19,319 crore in 2018-19, Rs 21,739 crore in 2019-20, Rs 31,908 crore in 2020-21, and Rs 50,325 crore in 2021-22. This consistent upward trend highlights the need for continuous improvement in GST enforcement mechanisms and the implementation of robust anti-evasion strategies. Signals need for stricter regulations and enforcement The alarming rise in GST evasion, reaching over Rs 2.37 lakh crore across 20,576 cases in FY24, has prompted calls for stricter regulations and enhanced enforcement measures. Experts emphasize the importance of tightening regulations across sectors, particularly in the online gaming and BFSI industries, to prevent further losses to the national exchequer. As the government works to address this pressing issue, businesses and individuals are urged to comply with GST regulations and contribute their fair share to the nation's economic growth. The successful implementation of anti-evasion strategies and the cooperation of all stakeholders will be crucial in curbing this concerning trend and ensuring the effective collection of GST revenues.

Goods and Services Tax evasion surges to Rs 2.01 lakh crore in FY24

The Goods and Services Tax (GST) Council is gearing up for a crucial meeting where it will deliberate on the taxation of insurance premiums and online gaming, two sectors that have been under scrutiny for their tax implications. This discussion is expected to have far-reaching consequences for both the industries i.e., insurance and gaming, thus affecting consumers, businesses, and the overall economic landscape as detailed in a report by the Press Trust of India.

The Taxation of Insurance Premiums and Online Gaming<o:p></o:p>

Insurance premiums have long been a subject of debate when it comes to GST. Currently, the GST rate on health insurance is 18 per cent, but there is a growing consensus that a uniform lower rate could simplify the tax structure and make it more affordable. The council will consider whether to impose a uniform GST rate on all types of insurance premiums, which could include life insurance, health insurance, and general insurance. More details on this particular issue will emerge as the meeting takes place.

The deliberations will also take place with regards to a GST cut on life insurance premiums. Notably, the Centre and states mopped up Rs 8,262.94 crore from GST on health insurance premiums and Rs 1,484.36 crore from GST on health reinsurance premiums, the PTI report added.

Implications of change in the Goods and Services Tax

For consumers, a change in the GST rate on insurance premiums could mean an increase or decrease in their premiums. For instance, if the GST rate is increased, consumers might see a rise in their insurance costs, which could be a deterrent for those already hesitant to invest in insurance products. On the other hand, a reduction in the GST rate could make insurance more affordable, potentially boosting the number of policyholders.

Further, online gaming has emerged as a significant sector in recent years, with millions of users engaging in various forms of digital entertainment. However, the taxation of online gaming has been a contentious issue. Since October last year, the government has imposed 28 per cent GST on entry-level bets placed on online gaming platforms and casinos. In its August 2023 meet, the GST Council recommended the tax levy, which was subsequently amended into the Central GST law to make the provision clear, the report added.

The GST Council will hence discuss whether to impose a GST on the gross gaming revenue or the net gaming revenue. This distinction is crucial because it affects how much tax operators will have to pay.

If the council decides to tax the gross gaming revenue, it could lead to higher tax liabilities for online gaming operators. This might result in higher costs for players, as operators could pass on the increased tax burden. Conversely, taxing the net gaming revenue could be more favorable for operators, potentially leading to more competitive pricing and better user experiences.

Impact on the industry and consumers<o:p></o:p>

The decisions made by the GST Council will have profound implications for both the insurance and online gaming industries. For insurance companies, a uniform GST rate could streamline their operations and reduce compliance costs. However, it could also impact their profitability if the rate is set too high.

For online gaming operators, the tax structure will determine their operational costs and profitability. A favorable tax regime could encourage more investment in the sector, leading to better services and more job opportunities. However, an unfavorable regime could stifle growth and drive operators to seek more tax-friendly jurisdictions.

Further, consumers will be closely watching the outcomes of this meeting, as it will directly affect their wallets. For insurance policyholders, any change in the GST rate will impact their premiums. For online gamers, the tax structure could influence the cost of playing and the variety of games available.

In addition to the financial implications, consumers are also concerned about the fairness and transparency of the tax system. A clear and consistent tax policy can build trust and encourage more people to engage with these services.

Therefore, it is to be noted that the upcoming GST Council meeting is a critical juncture for the insurance and online gaming sectors. The decisions made will shape the future of these industries and have a direct impact on consumers. As the council deliberates, it must balance the need for revenue generation with the need to promote growth and consumer welfare. The outcome will be closely watched by stakeholders across the board, as it sets the stage for the future of taxation in these dynamic sectors.

<o:p>&nbsp;</o:p>

The Goods and Services Tax (GST) Council is gearing up for a crucial meeting where it will deliberate on the taxation of insurance premiums and online gaming, two sectors that have been under scrutiny for their tax implications.

The Goods and Services Tax (GST) Council is gearing up for a crucial meeting where it will deliberate on the taxation of insurance premiums and online gaming, two sectors that have been under scrutiny for their tax implications. This discussion is expected to have far-reaching consequences for both the industries i.e., insurance and gaming, thus affecting consumers, businesses, and the overall economic landscape as detailed in a report by the Press Trust of India. The Taxation of Insurance Premiums and Online Gaming Insurance premiums have long been a subject of debate when it comes to GST. Currently, the GST rate on health insurance is 18 per cent, but there is a growing consensus that a uniform lower rate could simplify the tax structure and make it more affordable. The council will consider whether to impose a uniform GST rate on all types of insurance premiums, which could include life insurance, health insurance, and general insurance. More details on this particular issue will emerge as the meeting takes place. The deliberations will also take place with regards to a GST cut on life insurance premiums. Notably, the Centre and states mopped up Rs 8,262.94 crore from GST on health insurance premiums and Rs 1,484.36 crore from GST on health reinsurance premiums, the PTI report added. Implications of change in the Goods and Services Tax For consumers, a change in the GST rate on insurance premiums could mean an increase or decrease in their premiums. For instance, if the GST rate is increased, consumers might see a rise in their insurance costs, which could be a deterrent for those already hesitant to invest in insurance products. On the other hand, a reduction in the GST rate could make insurance more affordable, potentially boosting the number of policyholders. Further, online gaming has emerged as a significant sector in recent years, with millions of users engaging in various forms of digital entertainment. However, the taxation of online gaming has been a contentious issue. Since October last year, the government has imposed 28 per cent GST on entry-level bets placed on online gaming platforms and casinos. In its August 2023 meet, the GST Council recommended the tax levy, which was subsequently amended into the Central GST law to make the provision clear, the report added. The GST Council will hence discuss whether to impose a GST on the gross gaming revenue or the net gaming revenue. This distinction is crucial because it affects how much tax operators will have to pay. If the council decides to tax the gross gaming revenue, it could lead to higher tax liabilities for online gaming operators. This might result in higher costs for players, as operators could pass on the increased tax burden. Conversely, taxing the net gaming revenue could be more favorable for operators, potentially leading to more competitive pricing and better user experiences. Impact on the industry and consumers The decisions made by the GST Council will have profound implications for both the insurance and online gaming industries. For insurance companies, a uniform GST rate could streamline their operations and reduce compliance costs. However, it could also impact their profitability if the rate is set too high. For online gaming operators, the tax structure will determine their operational costs and profitability. A favorable tax regime could encourage more investment in the sector, leading to better services and more job opportunities. However, an unfavorable regime could stifle growth and drive operators to seek more tax-friendly jurisdictions. Further, consumers will be closely watching the outcomes of this meeting, as it will directly affect their wallets. For insurance policyholders, any change in the GST rate will impact their premiums. For online gamers, the tax structure could influence the cost of playing and the variety of games available. In addition to the financial implications, consumers are also concerned about the fairness and transparency of the tax system. A clear and consistent tax policy can build trust and encourage more people to engage with these services. Therefore, it is to be noted that the upcoming GST Council meeting is a critical juncture for the insurance and online gaming sectors. The decisions made will shape the future of these industries and have a direct impact on consumers. As the council deliberates, it must balance the need for revenue generation with the need to promote growth and consumer welfare. The outcome will be closely watched by stakeholders across the board, as it sets the stage for the future of taxation in these dynamic sectors.

GST council to deliberate on taxation of insurance premium and online gaming

India's economic growth eases to the slowest in five quarters as concerns mount over outlook. Risks to the outlook are growing, and the pressure is building on the central bank to cut interest rates.

India's GDP grows at the slowest pace in five quarters | World Business Watch | WION News

Foxconn chief Young Liu recently visited India and met Prime Minister Modi. The Indian government and Foxconn leadership are clear about the Taiwanese firm's big future in India. From iPhones to EVs to battery infrastructure and more, Foxconn is looking to expand in India. This has led to competition between Indian states to woo the world's largest contract manufacturer of electronics

Southern Indian states vie for 'Foxconn City' | World Business Watch | WION News

The Indian economy continues to be robust amidst global challenges, with the outlook having softened somewhat due to the slowing of some critical economic measures, according to the latest Monthly Economic Review of the National Council of Applied Economic Research (NCAER), as detailed by PTI.&nbsp;

Further, the report, released on August 28, underlines the fact that bank credit growth in both food and non-food sectors witnessed a deceleration in June 2024. This was more pronounced in personal loans and bank credit to the services sector, where growth rates declined.&nbsp;

However, the report from NCAER showed that the purchasing managers' index (PMI) for manufacturing and services declined marginally in July 2024 but still remained in an expansionary momentum. This particular index indicates that expansion remains in the sectors for manufacturing and services, although at a slower pace.&nbsp;

Another bright spot, according to the report, is that the growth of the Index of Industrial Production (IIP) registered moderate to lower growth in June 2024, on similar lines to the IIP for core industries. Such a trend reflects a slackening momentum in industrial output- an indication that will influence overall economic growth if sustained.&nbsp;

On a positive note, the report indicated that headline inflation at the Consumer Price Index in July 2024 moderated due to the easing of food inflation. Given the reduction of the increase of prices, thus would further mean that consumer prices have stabilised, which would be seen as a break for households and the business community. Likewise, wholesale price inflation eased during the month of July 2024, consolidating the trend of easing price pressures in the economy.&nbsp;

The merchandise trade deficit, however, has been widening, as the report pointed out, in July 2024. On the other hand, there was an increase in the services trade surplus sequentially in the same period, and that acted as a counterbalance to the overall trade scenario.

The Indian economy continues to be robust amidst global challenges, with the outlook having softened somewhat due to the slowing of some critical economic measures, according to the latest Monthly Economic Review of the National Council of Applied Economic Research (NCAER), as detailed by PTI.

The Indian economy continues to be robust amidst global challenges, with the outlook having softened somewhat due to the slowing of some critical economic measures, according to the latest Monthly Economic Review of the National Council of Applied Economic Research (NCAER), as detailed by PTI. Further, the report, released on August 28, underlines the fact that bank credit growth in both food and non-food sectors witnessed a deceleration in June 2024. This was more pronounced in personal loans and bank credit to the services sector, where growth rates declined. However, the report from NCAER showed that the purchasing managers' index (PMI) for manufacturing and services declined marginally in July 2024 but still remained in an expansionary momentum. This particular index indicates that expansion remains in the sectors for manufacturing and services, although at a slower pace. Another bright spot, according to the report, is that the growth of the Index of Industrial Production (IIP) registered moderate to lower growth in June 2024, on similar lines to the IIP for core industries. Such a trend reflects a slackening momentum in industrial output- an indication that will influence overall economic growth if sustained. On a positive note, the report indicated that headline inflation at the Consumer Price Index in July 2024 moderated due to the easing of food inflation. Given the reduction of the increase of prices, thus would further mean that consumer prices have stabilised, which would be seen as a break for households and the business community. Likewise, wholesale price inflation eased during the month of July 2024, consolidating the trend of easing price pressures in the economy. The merchandise trade deficit, however, has been widening, as the report pointed out, in July 2024. On the other hand, there was an increase in the services trade surplus sequentially in the same period, and that acted as a counterbalance to the overall trade scenario.

Indian economy shows resilience amid global challenges: NCAER Report

India's Gross Domestic Product (GDP) growth slowed to 6.7 per cent&nbsp;in the first quarter of the 2024-25 financial year, marking the lowest increase in five quarters, a decline from the 7.8 per cent&nbsp;growth recorded in the previous quarter.

The latest GDP figures also fall short of the 8.2 per cent&nbsp;growth seen in the same period last year, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday (August 30).

Also read:&nbsp;<a href="https://www.wionews.com/india-news/today-i-bow-my-head-pm-modi-issues-apology-over-shivaji-statue-collapse-754604">‘Today I bow my head,’ PM Modi issues apology over Shivaji statue collapse</a>

In a statement, the Indian finance ministry said, “Real GDP or GDP at constant prices in Q1 of 2024-25 is estimated at Rs 43.64 lakh crore, against Rs 40.91 lakh crore in Q1 of 2023-24, showing a growth rate of 6.7 per cent.”

While the 6.7 per cent&nbsp;growth is broadly in line with what experts had estimated, it falls short of the Reserve Bank of India's (RBI) projection of 7.2 per cent&nbsp;for the same period.

The GDP in nominal terms, which includes the effects of inflation, saw a 9.7 per cent&nbsp;increase in the first quarter of the 2024-25 financial year. This is an improvement compared to the 8.5 per cent&nbsp;growth observed during the same period last year.

Investment activity, as measured by Gross Fixed Capital Formation (GFCF), rose by 7.5 per cent&nbsp;in the June 2024 quarter, reaching ₹15.20 lakh crore ($18,313.25 million).

On the other hand, Government Final Consumption Expenditure (GFCE) saw a slight decline of 0.24 per cent&nbsp;year-on-year, totalling ₹4.14 lakh crore ($4,987.95 million).

(With inputs from agencies)

India's Gross Domestic Product (GDP) growth slowed to 6.7 per cent in the first quarter of the 2024-25 financial year, marking the lowest increase in five quarters, a decline from the 7.

India's Gross Domestic Product (GDP) growth slowed to 6.7 per cent in the first quarter of the 2024-25 financial year, marking the lowest increase in five quarters, a decline from the 7.8 per cent growth recorded in the previous quarter. The latest GDP figures also fall short of the 8.2 per cent growth seen in the same period last year, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday (August 30). Also read: ‘Today I bow my head,’ PM Modi issues apology over Shivaji statue collapse In a statement, the Indian finance ministry said, “Real GDP or GDP at constant prices in Q1 of 2024-25 is estimated at Rs 43.64 lakh crore, against Rs 40.91 lakh crore in Q1 of 2023-24, showing a growth rate of 6.7 per cent.” While the 6.7 per cent growth is broadly in line with what experts had estimated, it falls short of the Reserve Bank of India's (RBI) projection of 7.2 per cent for the same period. The GDP in nominal terms, which includes the effects of inflation, saw a 9.7 per cent increase in the first quarter of the 2024-25 financial year. This is an improvement compared to the 8.5 per cent growth observed during the same period last year. Investment activity, as measured by Gross Fixed Capital Formation (GFCF), rose by 7.5 per cent in the June 2024 quarter, reaching ₹15.20 lakh crore ($18,313.25 million). On the other hand, Government Final Consumption Expenditure (GFCE) saw a slight decline of 0.24 per cent year-on-year, totalling ₹4.14 lakh crore ($4,987.95 million). (With inputs from agencies)

India’s GDP growth rate slips to 6.7 per cent in Q1 FY25, lowest in five quarters

Let’s take a closer look at the financial reality of India's growing gig economy. A new survey sheds light on the challenges faced by gig workers, from low earnings to a lack of financial literacy. Watch for more information

Financial struggles of India's gig workers | World Business Watch | WION

The micro, small, and medium enterprises (MSME) sector stand as a cornerstone of India's economic vitality, driving growth, development, and employment. Technological advancements present vast opportunities for MSMEs to innovate and further enhance their operations, with around 70 per cent of MSMEs reporting significant improvements in efficiency and growth after adopting new technologies.

Going digital allow MSMEs to streamline their operations, reduce costs, and gain real-time insights into market trends and customer preferences, thereby fostering a more agile and responsive business environment.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/over-43-of-indian-women-working-in-manufacturing-sector-hail-from-this-state-656467">Over 43% of Indian women working in manufacturing sector hail from this state</a>

To leverage these opportunities, MSMEs should follow strategic approaches to advance in the industry.

<h2>Strategies MSMEs Can Adopt for Growth and Innovation</h2>

1. Customer Centric Approach: To navigate the complexities of today’s digital landscape, MSMEs need clear, actionable strategies that promote growth and innovation. Understanding and meeting customer needs should be a priority for any business. Digital tools can help MSMEs gain insights into customer behavior and preferences, enabling them to tailor their products and services accordingly. By having the right combination of CRM systems, online marketing tools, customer feedback tools, live chat solutions, analytics software, customer support systems, and personalisation tools will empower businesses to build stronger, more meaningful relationships with their customers. By placing customers at the center of their strategies, businesses can improve customer satisfaction and loyalty.

Also watch |&nbsp;India's economic growth faces ‘jobs’ threat

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2. Adopting a Digital-First Approach: The transition from physical to digital domains has become increasingly pronounced, impacting both business operations and customer interactions. For MSMEs, embracing advanced technologies is no longer optional but crucial for maintaining competitiveness. Modern consumers expect seamless online experiences, prompting MSMEs to adapt swiftly. By leveraging digital solutions, MSMEs can revolutionize their operations, boost productivity and expand market reach. For instance, cloud-based communication solutions ensure secured seamless connectivity and improve customer interactions, while solutions incorporated to manage human resources will effectively simplify tasks and boost their productivity. Automating routine tasks allows businesses to focus on core activities that drive growth. Moreover, technologies such as artificial intelligence, the Internet of Things (IoT), and blockchain offer immense potential to revolutionize traditional industries and drive innovation. These tools streamline operations and provide valuable data insights for future strategic decisions. Adopting a digital-first approach not only streamlines operations but also enhances customer engagement, positioning MSMEs for sustained success in a dynamic market environment.

3. Embracing Service Models: MSMEs often struggle with budget limitations and a lack of technical expertise, which can impede their ability to adopt new technologies. However, the rise of “as a service” models—such as Software as a Service (SaaS),&nbsp;

Infrastructure as a Service (IaaS), and Platform as a Service (PaaS)—along with pay-as-you-use or pay-as-you-grow pricing structures, is revolutionizing how MSMEs can harness technology. These models provide a flexible, cost-effective, and scalable solution, allowing MSMEs to experiment with new technologies before committing to significant investments.

4. Fostering Entrepreneurial Ecosystems and Employee Development for Growth: Establishing incubation centers and accelerator programs provides startups with invaluable resources, mentorship, and networking opportunities, fostering a nurturing environment for growth, innovation, and scalability. By fostering a supportive ecosystem, policymakers nurture the next generation of entrepreneurs and drive economic growth. For the same, MSMEs should focus on employee development for building a skilled and agile workforce, a much-needed necessity in today’s digital age. Offering continual training modules through workshops, online courses, and mentoring helps employees adapt to evolving market conditions and technological advancements.&nbsp;

Encouraging a culture of creativity and innovation helps in new product and service development, achievable through idea-sharing platforms and partnerships with research institutions and businesses. Integrating digital tools can streamline employees' daily operations and enhance productivity.

For example, digital workplaces seamlessly bind all the core applications of work, like email, chat, voice and video calling, collaboration, storage, task management, security tools etc. All these come with service assurance, customised plans, and in-built features that meets the data, voice, productivity, security, and cloud solutions requirements of the businesses.

Since these digital workplace tools are nimble, quick to install, quick to scale up and most importantly affordable, they can empower MSMEs to develop operational resilience, collaborate with their employees and customers across geographies, boost communication, increase productivity, and positively influence innovation.&nbsp;

5. Environmental and Sustainability Focus:&nbsp;Integrating sustainability into business operations is increasingly important. By adopting eco-friendly practices and technologies, MSMEs can aim to reduce their carbon footprint and contribute to environmental conservation. This approach not only helps in cost savings but also enhances the company’s reputation among environmentally conscious consumers.

Innovation and resilience are the twin pillars upon which the MSME sector stands, poised to navigate the dynamic contours of India's economic landscape.

As the sector continues to evolve, propelled by technological advancements and proactive government interventions, it remains a pivotal force in driving growth, development, and employment across the nation.

By adopting a customer-centric approach, leveraging government support initiatives, and fostering entrepreneurial ecosystems, MSMEs can chart a course towards sustainable growth and global competitiveness. Furthermore, integrating digital solutions into every facet of business operations, prioritising employee development, and embracing environmental sustainability are essential steps towards building resilience and futureproofing the sector against external disruptions.

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

The micro, small, and medium enterprises (MSME) sector stand as a cornerstone of India's economic vitality, driving growth, development, and employment. Technological advancements present vast opportunities for MSMEs to innovate and further enhance their operations, with around 70 per cent of MSMEs reporting significant improvements in efficiency and growth after adopting new technologies.

The micro, small, and medium enterprises (MSME) sector stand as a cornerstone of India's economic vitality, driving growth, development, and employment. Technological advancements present vast opportunities for MSMEs to innovate and further enhance their operations, with around 70 per cent of MSMEs reporting significant improvements in efficiency and growth after adopting new technologies. Going digital allow MSMEs to streamline their operations, reduce costs, and gain real-time insights into market trends and customer preferences, thereby fostering a more agile and responsive business environment. Also read | Over 43% of Indian women working in manufacturing sector hail from this state To leverage these opportunities, MSMEs should follow strategic approaches to advance in the industry. Strategies MSMEs Can Adopt for Growth and Innovation 1. Customer Centric Approach: To navigate the complexities of today’s digital landscape, MSMEs need clear, actionable strategies that promote growth and innovation. Understanding and meeting customer needs should be a priority for any business. Digital tools can help MSMEs gain insights into customer behavior and preferences, enabling them to tailor their products and services accordingly. By having the right combination of CRM systems, online marketing tools, customer feedback tools, live chat solutions, analytics software, customer support systems, and personalisation tools will empower businesses to build stronger, more meaningful relationships with their customers. By placing customers at the center of their strategies, businesses can improve customer satisfaction and loyalty. Also watch | India's economic growth faces ‘jobs’ threat × 2. Adopting a Digital-First Approach: The transition from physical to digital domains has become increasingly pronounced, impacting both business operations and customer interactions. For MSMEs, embracing advanced technologies is no longer optional but crucial for maintaining competitiveness. Modern consumers expect seamless online experiences, prompting MSMEs to adapt swiftly. By leveraging digital solutions, MSMEs can revolutionize their operations, boost productivity and expand market reach. For instance, cloud-based communication solutions ensure secured seamless connectivity and improve customer interactions, while solutions incorporated to manage human resources will effectively simplify tasks and boost their productivity. Automating routine tasks allows businesses to focus on core activities that drive growth. Moreover, technologies such as artificial intelligence, the Internet of Things (IoT), and blockchain offer immense potential to revolutionize traditional industries and drive innovation. These tools streamline operations and provide valuable data insights for future strategic decisions. Adopting a digital-first approach not only streamlines operations but also enhances customer engagement, positioning MSMEs for sustained success in a dynamic market environment. 3. Embracing Service Models: MSMEs often struggle with budget limitations and a lack of technical expertise, which can impede their ability to adopt new technologies. However, the rise of “as a service” models—such as Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS)—along with pay-as-you-use or pay-as-you-grow pricing structures, is revolutionizing how MSMEs can harness technology. These models provide a flexible, cost-effective, and scalable solution, allowing MSMEs to experiment with new technologies before committing to significant investments. 4. Fostering Entrepreneurial Ecosystems and Employee Development for Growth: Establishing incubation centers and accelerator programs provides startups with invaluable resources, mentorship, and networking opportunities, fostering a nurturing environment for growth, innovation, and scalability. By fostering a supportive ecosystem, policymakers nurture the next generation of entrepreneurs and drive economic growth. For the same, MSMEs should focus on employee development for building a skilled and agile workforce, a much-needed necessity in today’s digital age. Offering continual training modules through workshops, online courses, and mentoring helps employees adapt to evolving market conditions and technological advancements. Encouraging a culture of creativity and innovation helps in new product and service development, achievable through idea-sharing platforms and partnerships with research institutions and businesses. Integrating digital tools can streamline employees' daily operations and enhance productivity. For example, digital workplaces seamlessly bind all the core applications of work, like email, chat, voice and video calling, collaboration, storage, task management, security tools etc. All these come with service assurance, customised plans, and in-built features that meets the data, voice, productivity, security, and cloud solutions requirements of the businesses. Since these digital workplace tools are nimble, quick to install, quick to scale up and most importantly affordable, they can empower MSMEs to develop operational resilience, collaborate with their employees and customers across geographies, boost communication, increase productivity, and positively influence innovation. 5. Environmental and Sustainability Focus: Integrating sustainability into business operations is increasingly important. By adopting eco-friendly practices and technologies, MSMEs can aim to reduce their carbon footprint and contribute to environmental conservation. This approach not only helps in cost savings but also enhances the company’s reputation among environmentally conscious consumers. Innovation and resilience are the twin pillars upon which the MSME sector stands, poised to navigate the dynamic contours of India's economic landscape. As the sector continues to evolve, propelled by technological advancements and proactive government interventions, it remains a pivotal force in driving growth, development, and employment across the nation. By adopting a customer-centric approach, leveraging government support initiatives, and fostering entrepreneurial ecosystems, MSMEs can chart a course towards sustainable growth and global competitiveness. Furthermore, integrating digital solutions into every facet of business operations, prioritising employee development, and embracing environmental sustainability are essential steps towards building resilience and futureproofing the sector against external disruptions. (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

How MSMEs can adapt to changing market dynamics

Now, we look at the record rally in Indian stocks, marking a strong recovery from election results day loss. After near-400 billion-dollar wipe-out on the voting count day, Indian shares recovered those losses in just three days. That is the fastest pace of recovery in the last decade.

Indian stocks gain after record rally

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India's RBI to cut rates for the first time since 2020